SUBSCRIPTION AGREEMENT
EXHIBIT
10.1
SUBSCRIPTION
AGREEMENT (“Subscription Agreement”) made as of this 17th day of October, 2006,
by and among SRKP 1, INC., a Delaware corporation (the “Company”); Full Art
International, Ltd., a company incorporated in Hong Kong and upon the Closing
Date (as defined below) a wholly-owned subsidiary of the Company (“KGE”); and
the undersigned (the “Subscriber”).
WHEREAS,
the Company, KGE, and the shareholders of KGE are parties to a certain Share
Exchange Agreement dated as of August 21, 2006 (the “Exchange Agreement”),
pursuant to which KGE will become a wholly-owned subsidiary of the Company
and
100% of the outstanding securities of KGE will be exchanged for securities
in
the Company (the “Share Exchange”). Immediately after the effective time of the
Share Exchange (the “Closing Date”), the Company will assume the business and
operations of KGE.
WHEREAS,
as a condition to the closing of the Share Exchange, the Company intends to
obtain subscriptions for the purchase and sale, in a private placement
transaction (the “Offering”) pursuant to Regulation D promulgated under the
Securities Act of 1933, as amended (the “Act”), of shares of common stock (the
“Shares”) of the Company, par value $0.001 per share (“Common Stock”) on the
terms and conditions hereinafter set forth, and the Subscriber desires to
acquire that number of Shares set forth on the signature page
hereof.
NOW,
THEREFORE, for and in consideration of the promises and the mutual covenants
hereinafter set forth, the parties hereto do hereby agree as
follows:
1. Subscription
Procedure
1.1 Subject
to the terms and conditions hereinafter set forth, the Subscriber hereby
subscribes for and agrees to purchase from the Company such number of Shares
as
is set forth upon the signature page hereof at a price of $1.60 per Share (the
“Purchase Price”). The Company agrees to sell such Shares to the Subscriber for
the Purchase Price.
1.2 The
subscription period will begin as of August 21, 2006 and will terminate (if
the
Closing Date has not earlier occurred) at 5:00 PM Eastern Standard Time on
October 30, 2006, unless extended by the Company, KGE and the Placement Agent
(as defined below) for up to an additional 90 days (the “Termination Date”). The
Shares will be offered on a “best efforts” basis as more particularly set forth
in a Confidential Private Placement Memorandum and any supplements thereto
(the
“Offering Memorandum”) which shall supersede in its entirety that Executive
Summary dated September 7, 2006. The final Offering Memorandum will be provided
to Subscribers in the Offering no later than two days prior to the Termination
Date. The consummation of the Offering is subject to the satisfaction of a
number of conditions to be further described in the Offering Memorandum, one
or
more of which conditions may not occur.
1.3 Placement
of Shares will be made by WestPark Capital, Inc. (the “Placement Agent”), which
will receive certain compensation therefore as will be more fully described
in
the Offering Memorandum.
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1.4 The
Purchase Price will be placed in escrow pursuant to an escrow agreement (the
“Escrow Agreement”) by and among the Placement Agent, the Company and Xxxxx
Xxxxx, Esq. as escrow agent, and shall be paid over to the Company at the
closing of the purchase of the Shares in the Offering (the “Closing”) to occur
on the Closing Date.
1.5 The
certificates for the Common Stock bearing the name of the Subscriber will be
delivered by the Company no later than thirty (30) days following the Closing
Date. The Subscriber hereby authorizes and directs the Company to deliver the
securities to be issued to such Subscriber pursuant to this Subscription
Agreement to the residential or business address indicated in the Investor
Questionnaire, as attached.
1.6 The
Purchase Price for the Shares purchased hereunder shall be paid by certified
check, payable to Law Offices of Xxxxx X. Xxxxx, a Professional Corporation,
as
escrow agent, or by wire transfer to Law Offices of Xxxxx X. Xxxxx pursuant
to
the following instructions:
Law
Offices of Xxxxx X. Xxxxx, a Professional Corporation
Subscription
Escrow Account #2
Xxxxx
Fargo Bank
1801
Avenue of the Stars
Xxx
Xxxxxxx, XX 00000
Account
#
5763556098
ABA
#
000000000
1.7 The
Company and/or KGE may, in their sole discretion, reject any subscription,
in
whole or in part, or terminate or withdraw the Offering in its entirety at
any
time prior to a closing in relation thereto. Neither the Company nor the
Placement Agent shall be required to allocate among investors on a pro rata
basis in the event of an over-subscription.
2. Representations
and Covenants of Subscriber
2.1 The
Subscriber recognizes that the purchase of Shares involves a high degree of
risk
in that (i) the Company will need additional capital to operate its business
but
has no assurance of additional necessary capital; (ii) an investment in the
Company is highly speculative and only investors who can afford the loss of
their entire investment should consider investing in the Company and the Shares;
(iii) an investor may not be able to liquidate his or her investment; (iv)
transferability of the securities comprising the Shares is extremely limited;
(v) an investor could sustain the loss of his or her entire investment; and
(vi)
the Company is and will be subject to numerous other risks and uncertainties,
including without limitation, significant and material risks relating to the
Company’s business and the business and operations of KGE, and the industries,
markets and geographic regions in which the Company will compete, as well as
risks associated with the Offering, the Share Exchange and the other
transactions contemplated herein, in the Offering Memorandum and in the Exchange
Agreement, all as more fully set forth herein and in the Offering Memorandum.
For the avoidance of doubt, all references to the Company in this Section 2.1
include the Company’s business and operations after it acquires the business and
operations of KGE through the Share Exchange.
2.2 The
Subscriber represents that he or she is an “accredited investor” as such term is
defined in Rule 501 of Regulation D promulgated under the Act, as indicated
by
his or her responses to the Investor Questionnaire, the form of which is
attached hereto as Exhibit
A,
and
that he or she is able to bear the economic risk of an investment in the Shares.
The Subscriber must complete the applicable Investor Questionnaire to enable
the
Company and KGE to access the Subscriber’s eligibility for the
Offering.
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2.3 The
Subscriber acknowledges that he or she has prior investment experience,
including without limitation, investment in non-listed and non-registered
securities, or he or she has employed the services of an investment advisor,
attorney or accountant to read all of the documents furnished or made available
by the Company or KGE both to him and to all other prospective investors in
the
Shares and to evaluate the merits and risks of such an investment on his or
her
behalf, and that he or she recognizes the highly speculative nature of this
investment.
2.4 The
Subscriber acknowledges receipt and careful review of the Offering Memorandum,
this Subscription Agreement, and the attachments hereto and thereto
(collectively, the “Offering Documents”) and hereby represents that he or she
has been furnished or given access by the Company or KGE during the course
of
this Offering with or to all information regarding the Company and KGE and
their
respective financial conditions and results of operations which he or she had
requested or desired to know; that all documents which could be reasonably
provided have been made available for his or her inspection and review; that
he
or she has been afforded the opportunity to ask questions of and receive answers
from duly authorized representatives of the Company and KGE concerning the
terms
and conditions of the Offering, and any additional information which he or
she
had requested. The Subscriber further represents and acknowledges that the
Subscriber has not seen or received any advertisement or general solicitation
with respect to the sale of any of the securities of the Company, including,
without limitation, the Shares.
2.5 The
Subscriber acknowledges that this Offering of Shares may involve tax
consequences, and that the contents of the Offering Documents do not contain
tax
advice or information. The Subscriber acknowledges that he or she must retain
his or her own professional advisors to evaluate the tax and other consequences
of an investment in the Shares.
2.6 The
Subscriber acknowledges that this Offering of Shares has not been reviewed
or
approved by the United States Securities and Exchange Commission (“SEC”) because
the Offering is intended to be a nonpublic offering pursuant to Section 4(2)
of
the Act. The Subscriber represents that the Shares are being purchased for
his
or her own account, for investment and not for distribution or resale to others.
The Subscriber agrees that he or she will not sell or otherwise transfer any
of
the securities comprising the Shares unless they are registered under the Act
or
unless an exemption from such registration is available and, upon the Company’s
request, the Company receives an opinion of counsel reasonably satisfactory
to
the Company confirming that an exemption from such registration is available
for
such sale or transfer.
2.7 The
Subscriber understands that the Shares have not been registered under the Act
by
reason of a claimed exemption under the provisions of the Act which depends,
in
part, upon his investment intention. The Subscriber realizes that, in the view
of the SEC, a purchase now with the intention to distribute would represent
a
purchase with an intention inconsistent with his or her representation to the
Company, and the SEC might regard such a distribution as a deferred sale to
which such exemption is not available.
2.8 The
Subscriber understands that Rule 144 (the “Rule”) promulgated under the Act
requires, among other conditions, a one year holding period prior to the resale
(in limited amounts) of securities acquired in a non-public offering, such
as
the Offering, without having to satisfy the registration requirements under
the
Act. Except as specifically set forth in Section 4.1, the Subscriber understands
that the Company makes no representation or warranty regarding its fulfillment
in the future of any reporting requirements under the Securities Exchange Act
of
1934, as amended (the “Exchange Act”), or its dissemination to the public of any
current financial or other information concerning the Company, as is required
by
Rule 144 as one of the conditions of its availability. The Subscriber consents
that the Company may, if it desires, permit the transfer of the Shares out
of
his or her name only when his or her request for transfer is accompanied by
an
opinion of counsel reasonably satisfactory to the Company that neither the
sale
nor the proposed transfer results in a violation of the Act, any applicable
state “blue sky” laws or any applicable securities laws of any other country,
province or jurisdiction (collectively, “Securities Laws”). The Subscriber
agrees to hold the Company, KGE and their respective directors, officers and
controlling persons and their respective heirs, representatives, successors
and
assigns harmless and to indemnify them against all liabilities, costs and
expenses incurred by them as a result of any misrepresentation made by him
contained herein or in the Investor Questionnaire or any sale or distribution
by
the undersigned Subscriber in violation of any Securities Laws.
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2.9 The
Subscriber consents to the placement of one or more legends on any certificate
or other document evidencing his or her Shares and the Common Stock included
in
the Shares stating that they have not been registered under the Act and are
subject to the terms of this Subscription Agreement, and setting forth or
referring to the restrictions on the transferability and sale
thereof.
2.10 The
Subscriber understands that the Company and KGE will review this Subscription
Agreement and the Investor Questionnaire and, if the Subscriber is a natural
person, the Company and KGE are hereby given authority by the undersigned to
call his or her bank or place of employment. The Subscriber further authorizes
the Company and KGE to review the financial standing of the Subscriber; and
the
Subscriber agrees that the Company and KGE reserve the unrestricted right to
reject or limit any subscription and to close the offer at any
time.
2.11 The
Subscriber hereby represents that the address of Subscriber furnished by him
at
the end of this Subscription Agreement and in the Investor Questionnaire is
the
undersigned’s principal residence if he or she is an individual or its principal
business address if it is a corporation or other entity.
2.12 The
Subscriber acknowledges that if the Subscriber is a Registered Representative
of
a National Association of Securities Dealers, Inc. (“NASD”) member firm, he or
she must give such firm the notice required by the NASD Conduct Rules, or any
applicable successor rules of the NASD, receipt of which must be acknowledged
by
such firm on the signature page hereof. The Subscriber shall also notify the
Company if the Subscriber or any affiliate of Subscriber is a registered
broker-dealer with the SEC, in which case the Subscriber represents that the
Subscriber is purchasing the Shares in the ordinary course of business and,
at
the time of purchase of the Shares, has no agreements or understandings,
directly or indirectly, with any person to distribute the Shares or any portion
thereof.
2.13 The
Subscriber hereby represents that, except as set forth in the Offering
Documents, no representations or warranties have been made to the Subscriber
by
either the Company or KGE or their agents, employees or affiliates and in
entering into this transaction, the Subscriber is not relying on any
information, other than that contained in the Offering Documents and the results
of independent investigation by the Subscriber.
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2.14 The
Subscriber agrees that he or she will purchase securities in the Offering only
if his or her intent at such time is to make such purchase for investment
purposes and not with a view toward resale.
2.15 If
the
undersigned Subscriber is a partnership, corporation, trust or other entity,
such partnership, corporation, trust or other entity further represents and
warrants that: (i) it was not formed for the purpose of investing in the
Company; (ii) it is authorized and otherwise duly qualified to purchase and
hold
the Shares; and (iii) that this Subscription Agreement has been duly and validly
authorized, executed and delivered and constitutes the legal, binding and
enforceable obligation of the undersigned.
2.16 If
the
Subscriber is not a United States person, such Subscriber hereby represents
that
it has satisfied itself as to the full observance of the laws of its
jurisdiction in connection with any invitation to subscribe for the Shares
or
any use of this Subscription Agreement, including (i) the legal requirements
within its jurisdiction for the purchase of the Shares, (ii) any foreign
exchange restrictions applicable to such purchase, (iii) any governmental or
other consents that may need to be obtained, and (iv) the income tax and other
tax consequences, if any, that may be relevant to the purchase, holding,
redemption, sale or transfer of the Shares. Such Subscriber’s subscription and
payment for, and his or her continued beneficial ownership of the Shares, will
not violate any applicable securities or other laws of the Subscriber’s
jurisdiction.
2.17 The
undersigned hereby covenants and agrees that neither it nor any of its
affiliates has or will have an open position (e.g., short sale) in the Common
Stock prior to the Registration Statement (as defined below) being declared
effective by the SEC with the intent of covering such open position with Common
Stock being registered in the Registration Statement. The undersigned hereby
acknowledges and understands that the SEC has taken the position that such
an
open position would constitute a violation of Section 5 of the Act.
2.18 The
Subscriber acknowledges that (i) the Offering Memorandum contains material,
non-public information concerning the Company within the meaning of Regulation
FD promulgated by the SEC, and (ii) the Subscriber is obtaining such material,
non-public information solely for the purpose of considering whether to purchase
the Shares pursuant to a private placement that is exempt from registration
under the Act. In accordance with Regulation FD and other applicable provisions
of the Securities Laws, the Subscriber agrees to keep such information
confidential and not to disclose it to any other person or entity except the
Subscriber’s legal counsel, other advisors and other representatives who have
agreed (i) to keep such information confidential, (ii) to use such information
only for the purpose set forth above, and (iii) to comply with applicable
securities laws with respect to such information. In addition, the Subscriber
further acknowledges that the Subscriber and such legal counsel, other advisors
and other representatives are prohibited from trading in the Company’s
securities while in possession of material, non-public information and agrees
to
refrain from purchasing or selling securities of the Company until such
material, non-public information has been publicly disseminated by the Company.
The Subscriber agrees to indemnify and hold harmless the Company, KGE and their
respective officers, directors, employees and affiliates and each other person,
if any, who controls any of the foregoing, 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 by the Subscriber,
or
the Subscriber’s breach of, or failure to comply with, any covenant or agreement
made by the Subscriber herein or in any other document furnished by the
Subscriber to the Company, KGE or their respective officers, directors,
employees or affiliates or each other person, if any, who controls any of the
foregoing in connection with this transaction.
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2.19 The
Subscriber understands and acknowledges that (i) the Shares are being
offered and sold to Subscriber without registration under the Act in a private
placement that is exempt from the registration provisions of the Act under
Section 4(2) of the Act and (ii) the availability of such exemption depends
in part on, and that the Company will rely upon the accuracy and truthfulness
of, the foregoing representations, and such Subscriber hereby consents to such
reliance.
3. Representations
by the Company and KGE
Except
as
set forth in the reports filed by the Company pursuant to the Securities
Exchange Act of 1934, as amended (the “SEC Reports”), each of the Company and,
as applicable, KGE severally represent and warrant to the Subscriber that:
3.1 Organization
and Authority.
The
Company and KGE, and each of their respective subsidiaries, (i) is a corporation
and company, respectively, validly existing and in good standing under the
laws
of the jurisdiction of its incorporation and formation, respectively, (ii)
has
all requisite corporate power and company power, respectively, and authority
to
own, lease and operate its properties and to carry on its business as presently
conducted, and (iii) has all requisite corporate power and company power,
respectively, and authority to execute, deliver and perform their obligations
under this Subscription Agreement and the Offering Documents being executed
and
delivered by it in connection herewith, and to consummate the transactions
contemplated hereby and thereby.
3.2 Qualifications.
The
Company and KGE, and each of their respective subsidiaries, is duly qualified
to
do business as a foreign corporation and foreign company, respectively, and
is
in good standing in all jurisdictions where such qualification is necessary
and
where failure so to qualify could have a material adverse effect on the
business, properties, operations, condition (financial or other), results of
operations or prospects of the Company and its subsidiaries (after the effective
time of the Share Exchange), taken as a whole.
3.3 Capitalization
of the Company.
Immediately after the effective time of the Share Exchange (but before the
closing of this Offering), the authorized capital stock the capitalization
of
the Company will consist of 100,000,000 shares of Common Stock, $0.001 par
value
per share and 10,000,000 shares of “blank check” Preferred Stock, par value
$0.001 per share. Of the authorized capital stock of the Company, immediately
after the effective time of the Share Exchange (taking into account the
cancellation of 3,025,000 shares of the Company’s outstanding Common Stock, but
before the closing of this Offering), there will be outstanding 2,375,000 shares
of Common Stock, no warrants to purchase shares of Common Stock (excluding
warrants to be issued to the Placement Agent as described in the Offering
Documents), and no options to purchase shares of Common Stock. Except as
disclosed in the SEC Reports or the Offering Documents, there are no additional
outstanding options, warrants, script rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities, rights
or
obligations convertible into or exchangeable for, or giving any person any
right
to subscribe for or acquire from the Company, any shares of Common Stock, or
contracts, commitments, understandings or arrangements by which the Company
or
any subsidiary is or may become bound to issue additional shares of Common
Stock, or securities or rights convertible or exchangeable into shares of Common
Stock. Except as described in the Offering Documents, the issuance and sale
of
the Shares will not obligate the Company to issue shares of Common Stock or
other securities to any person (other than the Subscribers) and will not result
in a right of any holder of Company securities to adjust the exercise,
conversion, exchange or reset price under such securities. The shares of the
Company’s capital stock outstanding immediately after the effective time of the
Share Exchange (but before the closing of the Offering) are or will be duly
authorized and validly issued and are or will be fully paid and nonassessable.
None of the outstanding shares of Common Stock or options, warrants, or rights
or other securities entitling the holders to acquire Common Stock has been
issued in violation of the preemptive rights of any security holder of the
Company. No holder of any of the Company’s securities has any rights, “demand,”
“piggy-back” or otherwise, to have such securities registered by reason of the
intention to file, filing or effectiveness of the Registration Statement (as
defined below), except as contemplated by the Exchange Agreement. The Shares
to
be issued to the Subscriber have been duly authorized, and when issued and
paid
for in accordance with this Subscription Agreement, the Common Stock will be
duly and validly issued, fully paid and non-assessable will be duly and validly
issued, fully paid and non-assessable.
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3.4 Authorization.
The
Offering Documents have been duly and validly authorized by the Company and
KGE.
This Subscription Agreement, assuming due execution and delivery by the
Subscriber, when the Subscription Agreement is executed and delivered by the
Company, will be, valid and binding obligations of the Company, enforceable
in
accordance with their respective terms, except as the enforceability hereof
and
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium
or
other similar laws now or hereafter in effect relating to or affecting
creditors’ rights generally and general principles of equity, regardless of
whether enforcement is considered in a proceeding in equity or at
law.
3.5 Non-Contravention.
The
execution and delivery of the Offering Documents by the Company and KGE, the
issuance of the Shares as contemplated by the Offering Documents and the
completion by the Company and KGE of the other transactions contemplated by
the
Offering Documents do not and will not, with or without the giving of notice
or
the lapse of time, or both, (i) result in any violation of any provision of
the
articles of incorporation or by-laws or similar instruments of the Company
or
KGE or their respective subsidiaries, (ii) conflict with or result in a breach
by the Company or KGE or their respective subsidiaries of any of the terms
or
provisions of, or constitute a default under, or result in the modification
of,
or result in the creation or imposition of any lien, security interest, charge
or encumbrance upon any of the properties or assets of the Company or KGE or
their respective subsidiaries, pursuant to any agreements, instruments or
documents filed as exhibits to the SEC Reports or any indenture, mortgage,
deed
of trust or other agreement or instrument to which KGE or any of its
subsidiaries is a party or by which KGE or any of its subsidiaries or any of
its
properties or assets are bound or affected, in any such case which would have
a
material adverse effect on the business, properties, operations, condition
(financial or other), results of operations or prospects of the Company and
KGE
and their respective subsidiaries, taken as a whole, or the validity or
enforceability of, or the ability of the Company or KGE to perform their
obligations under, the Offering Documents, (iii) violate or contravene any
applicable law, rule or regulation or any applicable decree, judgment or order
of any court, United States federal or state regulatory body, administrative
agency or other governmental body having jurisdiction over KGE or any of its
subsidiaries or any of its respective properties or assets that would have
a
material adverse effect on the business, properties, operations, condition
(financial or other), results of operations or prospects of the Company and
its
subsidiaries (after the effective time of the Share Exchange), taken as a whole,
or the validity or enforceability of, or the ability of the Company or KGE
to
perform its obligations under, the Offering Documents, or (iv) have any material
adverse effect on any permit, certification, registration, approval, consent,
license or franchise necessary for the Company or its subsidiaries (after the
effective time of the Share Exchange) to own or lease and operate any of its
properties and to conduct any of its business or the ability of the Company
or
its subsidiaries to make use thereof.
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3.6 Information
Provided.
The
Company hereby represents and warrants to the Subscriber that the information
set forth in the Offering Memorandum, the SEC Reports and any other document
provided by the Company (or the Company’s authorized representatives) to the
Subscriber in connection with the transactions contemplated by this Subscription
Agreement, does not contain any untrue statement of a material fact or omit
to
state any material fact necessary in order to make the statements therein,
in
the light of the circumstances under which they are made, not misleading, it
being understood that for purposes of this Section 3.6, any statement contained
in such information shall be deemed to be modified or superseded for purposes
of
this Section 3.6 to the extent that a statement in any document included in
such
information which was prepared and furnished to the Subscriber on a later date
or filed with the SEC on a later date modifies or replaces such statement,
whether or not such later prepared and furnished or filed statement so states.
KGE hereby represents and warrants to the Subscriber that the information set
forth in the Offering Memorandum and any other document provided by KGE (or
KGE’s authorized representatives) to the Subscriber in connection with the
transactions contemplated by this Subscription Agreement, does not contain
any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
under
which they are made, not misleading.
3.7 Absence
of Certain Proceedings.
Except
as disclosed in the SEC Reports, neither the Company nor KGE is aware of any
action, suit, proceeding, inquiry or investigation before or by any court,
public board or body, or governmental agency pending or threatened against
or
affecting the Company or KGE or any of their respective subsidiaries, in any
such case wherein an unfavorable decision, ruling or finding would have a
material adverse effect on the business, properties, operations, condition
(financial or other), results of operations or prospects of the Company or
KGE,
or the transactions contemplated by the Offering Documents or which could
adversely affect the validity or enforceability of, or the authority or ability
of the Company or KGE to perform its obligations under, the Offering Documents;
and to the Company’s and KGE’s knowledge there is not pending or contemplated
any, and there has been no, investigation by the SEC involving the Company
or
KGE or any of their current or former directors or officers.
3.8 Compliance
with Law.
Neither
the Company nor KGE nor any of their respective subsidiaries is in violation
of
or has any liability under any statute, law, rule, regulation, ordinance,
decision or order of any governmental agency or body or any court, domestic
or
foreign, except where such violation or liability would not individually or
in
the aggregate have a material adverse effect on the business, properties,
operations, condition (financial or other), results of operations or prospects
of the Company and its subsidiaries (after the effective time of the Share
Exchange), taken as a whole; and to the knowledge of the Company and KGE there
is no pending investigation that would reasonably be expected to lead to such
a
claim.
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3.9 Tax
Matters.
The
Company and KGE and each of their respective subsidiaries has filed all federal,
state and local income and franchise tax returns required to be filed and has
paid all taxes shown by such returns to be due, and no tax deficiency has been
determined adversely to the Company or KGE or any of their respective
subsidiaries which has had (nor does the Company or KGE or any of their
respective subsidiaries have any knowledge of any tax deficiency which, if
determined adversely to the Company or KGE or any of their respective
subsidiaries, might have) a material adverse effect on the business, properties,
operations, condition (financial or other), results of operations, or prospects
of the Company or any of its subsidiaries (after the effective time of the
Share
Exchange), taken as a whole.
4. Registration
Rights
4.1 Registration
Requirement.
Subject
to the terms and limitations hereof, the Company shall file a registration
statement on Form SB-2 or other appropriate registration document under the
Act
(the “Registration Statement”) for resale of the Shares, all shares held by the
shareholders of the Company immediately prior to the Close, and those shares
held by certain designees of the shareholder of KGE (the “Registrable
Securities”) and shall use its reasonable best efforts to maintain the
Registration Statement effective for a period of twenty-four (24) months at
the
Company’s expense (the “Effectiveness Period”). The Company shall file such
Registration Statement no later than thirty (30) days after the Closing Date
(the “Registration Filing Date”), and shall use reasonable best efforts to cause
such Registration Statement to become effective within one hundred and fifty
(150) days after the Closing Date, or one hundred eighty (180) days after the
Closing Date if the Registration Statement is subject to a full review by the
SEC. Subject to the conditions and limitations hereof, including the limitations
set forth in Section 4.2, the Company’s failure to satisfy the obligations
specified in the immediately preceding sentence shall require the Company to
make a cash payment, as liquidated damages, to the Subscriber of 0.0333% of
the
Purchase Price of the Shares sold to the Subscriber under this Subscription
Agreement for each business day of such failure. For the avoidance of doubt,
any
right to receive such cash payment shall be Subscriber’s sole and exclusive
remedy for the failure of the Company to satisfy the obligations under this
Section 4.1.
4.2 Limitation
to Registration Requirement.
Notwithstanding the foregoing, the Company shall not be obligated to effect
any
registration of the Registrable Securities or take any other action pursuant
to
this Section 4: (i) in any particular jurisdiction in which the Company would
be
required to execute a general consent to service of process in effecting such
registration, qualification or compliance unless the Company is already subject
to service in such jurisdiction and except as may be required by the Act, or
(ii) during any period in which the Company suspends the rights of a subscriber
after giving the Subscriber written notification of a Potential Material Event
(defined below) pursuant to Section 4.6 hereof.
4.3 Expenses
of Registration.
Except
as otherwise expressly set forth, the Company shall bear all expenses incurred
by the Company in compliance with the registration obligation of the Company,
including, without limitation, all registration and filing fees, printing
expenses, fees and disbursements of counsel for the Company incurred in
connection with any registration, qualification or compliance pursuant to this
Subscription Agreement and all underwriting discounts, selling commissions
and
expense allowances applicable to the sale of any securities by the Company
for
its own account in any registration. All underwriting discounts, selling
commissions and expense allowances applicable to the sale by Subscriber of
Registrable Securities and all fees and disbursements of counsel for the
Subscriber shall be borne by the Subscriber.
9
4.4 Indemnification.
(a) To
the
extent permitted by law the Company will indemnify each Subscriber, each of
its
officers, directors, agents, employees and partners, and each person controlling
such Subscriber, with respect to each registration, qualification or compliance
effected pursuant to this Agreement, and each underwriter, if any, and each
person who controls any underwriter, and their respective counsel against all
claims, losses, damages and liabilities (or actions, proceedings or settlements
in respect thereof) arising out of or based on (i) any untrue statement (or
alleged untrue statement) of a material fact contained in any prospectus,
offering circular or other document prepared by the Company (including any
related registration statement, notification or the like) incident to any such
registration, qualification or compliance, or (ii) any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by
the
Company of the Act or any rule or regulation thereunder applicable to the
Company and relating to action or inaction required of the Company in connection
with any such registration, qualification or compliance, and subject to the
provisions of Section 4.4(c) below, will reimburse each such Subscriber, each
of
its officers, directors, agents, employees and partners, and each person
controlling such Subscriber, each such underwriter and each person who controls
any such underwriter, for any legal and any other expenses as they are
reasonably incurred in connection with investigating and defending any such
claim, loss, damage, liability or action, provided that the Company will not
be
liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue statement (or
alleged untrue statement) or omission (or alleged omissions) based upon written
information furnished to the Company by (or on behalf of) such Subscriber or
underwriter, or if the person asserting any such loss, claim, damage or
liability (or action or proceeding in respect thereof did not receive a copy
of
an amended preliminary prospectus or the final prospectus (or the final
prospectus as amended and supplemented) at or before the written confirmation
of
the sale of such Registrable Securities to such person because of the failure
of
the Subscriber or underwriter to so provide such amended preliminary or final
prospectus (or the final prospectus as amended and supplemented); provided,
however, that the indemnity agreement contained in this subsection shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability
or action if such settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld), nor shall the Company be
liable in any such case for any such loss, claim, damage, liability or action
to
the extent that it arises out of or is based upon a violation which occurs
in
reliance upon and in conformity with written information furnished expressly
for
use in connection with such registration by the Subscriber, any such partner,
officer, director, employee, agent or controlling person of such Subscriber,
or
any such underwriter or any person who controls any such underwriter; provided,
however, that the obligations of the Company hereunder shall be limited to
an
amount equal to the portion of net proceeds represented by the Registrable
Securities pursuant to this Subscription Agreement.
10
(b) To
the
extent permitted by law, each Subscriber whose Registrable Securities are
included in any registration, qualification or compliance effected pursuant
to
this Subscription Agreement will indemnify the Company, and its directors,
officers, agents, employees and each underwriter, if any, of the Company’s
securities covered by such a registration statement, each person who controls
the Company or such underwriter within the meaning of the Act and the rules
and
regulations thereunder, each other such Subscriber and each of their officers,
directors, partners, agents and employees, and each person controlling such
Subscriber, and their respective counsel against all claims, losses, damages
and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained
in
any such registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material
fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company and such Subscribers, directors,
officers, partners, persons, underwriters or control persons for any legal
or
any other expenses as they are reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action,
in
each case to the extent, but only to the extent, that such untrue statement
(or
alleged untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information furnished to the
Company by such Subscriber; provided,
however,
that
the obligations of any Subscriber hereunder shall be limited to an amount equal
to the net proceeds to such Subscriber from Registrable Securities sold under
such registration statement, prospectus, offering circular or other document
as
contemplated herein; provided, further, that the indemnity agreement contained
in this subsection shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Subscriber, which consent shall not be unreasonably withheld
or delayed.
(a) Each
party entitled to indemnification under this Section (the “Indemnified Party”)
shall give notice to the party required to provide indemnification (the
“Indemnifying Party”) promptly after such Indemnified Party has actual knowledge
of any claim as to which indemnity may be sought, and shall permit the
Indemnifying Party to assume the defense of any such claim or any litigation
resulting therefrom, provided that counsel for the Indemnifying Party, who
shall
conduct the defense of such claim or any litigation resulting therefrom, shall
be approved by the Indemnified Party (whose approval shall not unreasonably
be
withheld), and the Indemnified Party may participate in such defense at such
party’s expense; and provided further that if any Indemnified Party reasonably
concludes that there may be one or more legal defenses available to it that
are
not available to the Indemnifying Party, or that such claim or litigation
involves or could have an effect on matters beyond the scope of this Agreement,
then the Indemnified Party may retain its own counsel at the expense of the
Indemnifying Party; and provided further that the failure of any Indemnified
Party to give notice as provided herein shall not relieve the Indemnifying
Party
of its obligations under this Agreement unless and only to the extent that
such
failure to give notice results in material prejudice to the Indemnifying Party.
No Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnified Party
of a release from all liability in respect to such claim or litigation. Each
Indemnified Party shall furnish such information regarding itself or the claim
in question as an Indemnifying Party may reasonably request in writing and
as
shall be reasonably required in connection with defense of such claim and
litigation resulting therefrom.
11
(b) If
the
indemnification provided for in this Section is held by a court of competent
jurisdiction to be unavailable to an Indemnified Party with respect to any
loss,
liability, claim, damage or expense referred to herein, then the Indemnifying
Party, in lieu of indemnifying such Indemnified Party hereunder, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such loss, liability, claim, damage or expense in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party on the
one
hand and of the Indemnified Party on the other in connection with the statements
or omissions which resulted in such loss, liability, claim, damage or expense
as
well as any other relevant equitable considerations. The relative fault of
the
Indemnifying Party and of the Indemnified Party shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission to state a material fact relates to information
supplied by the Indemnifying Party or by the Indemnified Party and the parties’
relative intent, knowledge, access to information and opportunity to correct
or
prevent such statement or omission.
4.5 Transfer
or Assignment of Registration Rights.
The
Registrable Securities, and any related benefits to the Subscriber hereunder
may
be transferred or assigned by the Subscriber to a permitted transferee or
assignee, provided that the Company is given written notice of such transfer
or
assignment, stating the name and address of said transferee or assignee and
identifying the Registrable Securities with respect to which such registration
rights are being transferred or assigned; provided further that the transferee
or assignee of such Registrable Securities shall be deemed to have assumed
the
obligations of the Subscriber under this Subscription Agreement by the
acceptance of such assignment and shall, upon request from the Company, evidence
such assumption by delivery to the Company of a written agreement assuming
such
obligations of the Subscriber.
4.6 Registration
Procedures.
In the
case of the registration effected by the Company pursuant to this Subscription
Agreement, the Company will keep the Subscriber advised in writing as to the
initiation of each registration and as to the completion thereof. The Company
will:
(a) Prepare
and file with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection with such registration statement
as may be necessary to comply with the provisions of the Act with respect to
the
disposition of securities covered by such registration statement;
(b) Respond
as promptly as reasonably practicable to any comments received from the SEC
with
respect to a registration statement or any amendment thereto.
(c) Notify
the Subscriber as promptly as reasonably practicable and (if requested by any
such person) confirm such notice in writing no later than one trading day
following the day (A) when a prospectus or any prospectus supplement or
post-effective amendment to a registration statement is proposed to be filed
and
(B) with respect to a registration statement or any post-effective amendment,
when the same has become effective;
(d) Furnish
such number of prospectuses and other documents incident thereto, including
supplements and amendments, as the Subscriber may reasonably request;
12
(e) Furnish
to the Subscriber, upon request, a copy of all documents filed with and all
correspondence from or to the SEC in connection with any such registration
statement other than non-substantive cover letters and the like;
(f) Use
its
reasonable best efforts to avoid the issuance of, or, if issued, obtain the
withdrawal of (i) any order suspending the effectiveness of a registration
statement, or (ii) any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any
jurisdiction, at the earliest practicable moment; and
(g) Use
its
reasonable best efforts to comply with all applicable rules and regulations
of
the SEC.
Notwithstanding
the foregoing, if at any time or from time to time after the date hereof, the
Company notifies the Subscriber in writing of the existence of an event or
circumstance that is not disclosed in the Registration Statement and that may
have a material effect on the Company or its business (a “Potential Material
Event”), the Subscriber shall not offer or sell any Registrable Securities, or
engage in any other transaction involving or relating to the Registrable
Securities, from the time of the giving of notice with respect to a Potential
Material Event until the Company notifies the Subscriber that such Potential
Material Event either has been added to the Registration Statement by amendment
or supplement or no longer constitutes a Potential Material Event; provided,
that
the Company may not so suspend the right of Subscriber for more than 120 days
in
the aggregate.
4.7 Statement
of Beneficial Ownership.
The
Company may require the Subscriber to furnish to the Company a certified
statement as to the number of shares of Common Stock beneficially owned by
such
Subscriber and the controlling person thereof and any other such information
regarding the Subscriber, the Registrable Securities held by the Subscriber
and
the intended method of disposition of such securities as shall be reasonably
required with respect to the registration of the Subscriber’s Registrable
Securities. The Subscriber hereby understands and agrees that the Company may,
in its sole discretion, exclude the Subscriber’s shares of Common Stock from the
Registration Statement in the event that the Subscriber fails to provide such
information requested by the Company within the time period reasonably specified
by the Company or is required to do so by law or the SEC.
4.8 Compliance.
Subscriber covenants and agrees that such Subscriber will comply with the
prospectus delivery requirements of the Act as applicable to such Subscriber
in
connection with sales of Registrable Securities pursuant to the registration
statement required hereunder.
4.9 Piggy-Back
Registrations.
If at
any time during the Effectiveness Period there is not an effective registration
statement covering all of the Registrable Securities and the Company shall
determine to prepare and file with the SEC a registration statement relating
to
an offering for its own account or the account of others under the Act of any
of
its Common Stock, other than an offering of securities issued pursuant to a
Strategic Issuance (as defined below) and other than a Form S-4 or Form S-8
registration statement (each as promulgated under the Act or their then
equivalents relating to equity securities to be issued solely in connection
with
any business combination transaction, acquisition of any entity or business
or
equity securities issuable in connection with stock option or other employee
benefit plans), then the Company shall send to the Subscriber (together with
any
other holders of its Common Stock possessing “piggyback registration rights”
comparable to those granted to the Subscriber hereunder (“Rightsholders”))
written notice of such determination and, if within fifteen (15) days after
receipt of such notice, the Subscriber shall so request in writing, the Company
shall include in such registration statement all or any part of such Registrable
Securities such Subscriber requests to be registered; provided that the Company
shall not be required to register any Registrable Securities pursuant to this
Section that are eligible for resale pursuant to Rule 144(k) promulgated under
the Act; and provided further that the Company may, without the consent of
the
Subscriber, withdraw such registration statement before its becoming effective
if the Company or other stockholders have elected to abandon the proposal to
register the securities proposed to be registered thereunder. If the
registration statement is being filed for an underwritten public offering,
the
Subscriber must timely execute and deliver the usual and customary agreement
among the Company, such Subscriber and the underwriters relating to the
registration including a lock-up agreement if requested by the underwriters
with
respect to any shares of Common Stock not included in the registration, on
terms
no less favorable than those agreed to by the Company, its directors and its
officers. If the registration statement is being filed for an underwritten
offer
and sale by the Company of securities for its own account and the managing
underwriters advise the Company in writing that in their opinion the offering
contemplated by the registration statement cannot be successfully completed
if
the Company were to also register the Registrable Shares of the Subscriber
requested to be included in such registration statement, then the Company will
include in the registration: (i) first, any securities the Company proposes
to
sell, (ii) second, any securities of any person whose securities are being
registered as a result of the exercise of a demand registration right, and
(iii)
third, that portion of the aggregate number of shares being requested for
inclusion in the registration statement by (X) the Subscriber and (Y) all other
Rightsholders, which in the opinion of such managing underwriters can
successfully be sold, such number of shares to be taken pro
rata
from the
Rightsholders on the basis of the total number of shares being requested for
inclusion in the registration statement by each Rightsholder. “Strategic
Issuance” shall mean an issuance of securities: (i) in connection with a
“corporate partnering” transaction or a “strategic alliance” (as determined by
the Board of Directors of the Company in good faith); (ii) in connection with
any financing transaction in respect of which the Company is a borrower; or
(iii) to a vendor, lessor, lender, or customer of the Company, or a research,
manufacturing or other commercial collaborator of the Company, in a transaction
approved by the Board of Directors, provided in any case, that such issuance
is
not being made primarily for the purpose of avoiding compliance with this
Subscription Agreement.
13
5. Miscellaneous
5.1 Any
notice or other communication given hereunder shall be deemed sufficient if
in
writing and sent by registered or certified mail, return receipt requested,
addressed to the Company, at 000
Xxxxxx Xxxx, Xxxxxxx Xxxxxx
Xxxxxx,
P.R.C., Attention: Xx. Xxx Xxx Yi with
a copy to
(which
shall not constitute notice) Xxxxxxxxxxx & Xxxxxxxx Xxxxxxxxx Xxxxxx LLP,
00000 Xxxxx Xxxxxx Xxxx., Xxxxxxx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000,
Attention: Xxxxxx X. Xxxxxxx, Esq., and to the Subscriber at his address
indicated on the signature page of this Subscription Agreement. Notices shall
be
deemed to have been given three (3) business days after the date of mailing,
except notices of change of address, which shall be deemed to have been given
when received.
5.2 This
Subscription Agreement may be amended through a written instrument signed by
the
Subscriber, KGE and the Company; provided, however, that the terms of Section
4
of this Subscription Agreement may be amended without the consent or approval
of
the Subscriber so long as such amendment applies in the same fashion to the
subscription agreements of all of the other subscribers for Shares in the
Offering and at least holders of a majority of the Shares sold in the Offering
have given their approval of such amendment, which approval shall be binding
on
all holders of Shares.
14
5.3 This
Subscription Agreement shall be binding upon and inure to the benefit of the
parties hereto and to their respective heirs, legal representatives, successors
and assigns. This Subscription Agreement sets forth the entire agreement and
understanding between the parties as to the subject matter hereof and merges
and
supersedes all prior discussions, agreements and understandings of any and
every
nature among them.
5.4 Notwithstanding
the place where this Subscription Agreement may be executed by any of the
parties hereto, the parties expressly agree that all the terms and provisions
hereof shall be construed in accordance with and governed by the laws of the
State of Delaware.
5.5 This
Subscription Agreement may be executed in counterparts. It shall not be binding
upon the Company and KGE unless and until it is accepted by the Company and
KGE.
Upon the execution and delivery of this Subscription Agreement by the
Subscriber, this Subscription Agreement shall become a binding obligation of
the
Subscriber with respect to the purchase of Shares as herein provided; subject,
however, to the right hereby reserved to the Company to enter into the same
agreements with other subscribers and to add and/or to delete other persons
as
subscribers. This Agreement may be executed and delivered by
facsimile.
5.6 The
holding of any provision of this Subscription Agreement to be invalid or
unenforceable by a court of competent jurisdiction shall not affect any other
provision of this Subscription Agreement, which shall remain in full force
and
effect.
5.7 It
is
agreed that a waiver by either party of a breach of any provision of this
Subscription Agreement shall not operate, or be construed, as a waiver of any
subsequent breach by that same party.
5.8 The
parties agree to execute and deliver all such further documents, agreements
and
instruments and take such other and further action as may be necessary or
appropriate to carry out the purposes and intent of this Subscription
Agreement.
5.9 The
Company agrees not to disclose the names, addresses or any other information
about the Subscribers, except as required by law, provided that the Company
may
provide information relating to the Subscriber as required in any registration
statement under the Act that may be filed by the Company pursuant to the
requirements of this Subscription Agreement.
5.10 The
obligation of the Subscriber hereunder is several and not joint with the
obligations of any other subscribers for the purchase of Shares in the Offering
(the “Other Subscribers”), and the Subscriber shall not be responsible in any
way for the performance of the obligations of any Other Subscribers. Nothing
contained herein or in any other agreement or document delivered at the Closing,
and no action taken by the Subscriber pursuant hereto, shall be deemed to
constitute the Subscriber and the Other Subscribers as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Subscriber and the Other Subscribers are in any way acting
in concert with respect to such obligations or the transactions contemplated
by
this Subscription Agreement. The Subscriber shall be entitled to protect and
enforce the Subscriber’s rights, including without limitation the rights arising
out of this Subscription Agreement, and it shall not be necessary for any Other
Subscriber to be joined as an additional party in any proceeding for such
purpose. The language used in this Agreement will be deemed to be the language
chosen by the parties to express their mutual intent, and no rules of strict
construction will be applied against any party. The Subscriber is not acting
as
part of a “group” (as that term is used in Section 13(d) of the 0000 Xxx) in
negotiating and entering into this Subscription Agreement or purchasing the
Shares or acquiring, disposing of or voting any of the underlying shares of
Common Stock. The Company hereby confirms that it understands and agrees that
the Subscriber is not acting as part of any such group.
[SIGNATURE
PAGE FOLLOWS]
15
IN
WITNESS WHEREOF, the parties have executed this Subscription Agreement as of
the
day and year first written above.
|
|
|
|
Full Legal Name of Subscriber (Please print) |
Full Legal Name of Co-Subscriber (if applicable) |
|
|
|
|
Signature of (or on behalf of) Subscriber |
Signature of or on behalf of Co-Subscriber (if applicable) |
|
Name:
|
|
|
Title:
|
|
|
|
|
|
Address of Subscriber |
Address of Co-Subscriber (if applicable) |
|
|
|
|
Social Security or Taxpayer |
Social Security or Taxpayer Identification |
|
Identification
Number of Subscriber
|
Number
of Co-Subscriber (if applicable)
|
|
|
|
|
Number of Shares Subscribed For |
Subscription
Agreed to and Accepted
| SRKP 1, INC. | FULL ART INTERNATIONAL, LTD. | ||
| By: | By: | ||
|
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||
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16
Exhibit
A-1
Corporate
Investor Questionnaire
Name:
IMPORTANT:
Please
Complete
CORPORATE
INVESTOR
QUESTIONNAIRE
SRKP
1, INC.
FULL
ART INTERNATIONAL, LTD.
SRKP
1,
INC.
0000
Xxxxxx xx xxx Xxxxx, Xxxxx 000
Xxx
Xxxxxxx, XX 00000
Attn:
Xxxxxxx Xxxxxxxxx
Full
Art
International, Ltd.
000
Xxxxxx Xxxx, Xxxxxxx Xxxxxx
Xxxxxx,
X.X.X.
Attn:
Mr. Xxx You Li
The
information contained in this Corporate Investor Questionnaire is being
furnished
in
order to determine whether the undersigned Corporation’s
subscription
to
purchase shares of common stock (the “Shares”) of
Full
Art International, Ltd. and SRKP 1, INC. (the
“Company”) may proceed.
This
Questionnaire should be completed, signed, dated and
a copy
should be sent to WestPark Capital, Inc. (the “Placement Agent”) via facsimile
at (000) 000-0000 or electronic format (e.g., PDF) to xxxxxxxxx@xxxxxxxxx.xxx
and the original delivered to WestPark Capital, Inc. at 0000 Xxxxxx xx xxx
Xxxxx, Xxxxx 000, Xxx Xxxxxxx, XX 00000, Attention: Xxxxx XxXxxxxx.
Please
keep a copy for your files.
A-1
(1)
ALL
INFORMATION CONTAINED IN THIS QUESTIONNAIRE WILL BE TREATED CONFIDENTIALLY.
The
undersigned Corporation understands, however, that the Company may present
this
Questionnaire to such parties as it deems appropriate
if called upon to establish that the proposed offer and sale of the Shares
in
the Company is
exempt
from registration under the Securities Act
of
1933, as
amended, or meets
the
requirements of applicable state securities or “blue sky” laws. Further, the
undersigned
Corporation understands that the offering required to be reported to the
Securities
and Exchange Commission and to various state securities or “blue sky”
regulators.
| I. |
PLEASE
CHECK ANY OF STATEMENTS 1-3 BELOW THAT APPLY TO THE
CORPORATION.
|
|
o
1.
|
Each
of the shareholders of the undersigned Corporation is able to certify
that
such shareholder meets at least one of the following two
conditions:
|
| (a) |
The
shareholder is a natural person whose individual net worth* or joint
net
worth with his or her spouse exceeds $1,000,000;
or
|
| (b) |
The
shareholder is a natural person who had an individual income* in
excess of
$200,000 in each of the previous two years and who reasonably expects
an
individual income in excess of $200,000 this
year.
|
|
¨
2.
|
Each
of the shareholders of the undersigned Corporation is able to certify
that
such shareholder is a natural person who, together with his or her
spouse,
has had a joint income in excess of $300,000 in each of the previous
two
years and who reasonably expects a joint income in excess of $300,000
this
year.
|
|
¨
3.
|
The
undersigned Corporation: (a) was not formed for the specific purpose
of
acquiring the Shares; and (b) has total assets in excess of
$5,000,000.
|
|
*
|
For
purposes of this Questionnaire, the term “net worth” means the excess of
total assets over total liabilities. In determining income, an investor
should add to his or her adjusted gross income any amounts attributable
to
tax-exempt income received, losses claimed as a limited partner in
any
limited partnership, deductions claimed for depletion, contributions
to
XXX or Xxxxx retirement plans, alimony payments and any amount by
which
income from long-term capital gains has been reduced in arriving
at
adjusted gross income.
|
A-1
(2)
IF
YOU
CHECKED STATEMENT 1 OR STATEMENT 2 IN SECTION I, ABOVE, AND DID NOT
CHECK STATEMENT 3, YOU MUST PROVIDE A LETTER SIGNED BY AN OFFICER OF THE
UNDERSIGNED CORPORATION LISTING THE NAME
OF
EACH SHAREHOLDER AND THE REASON (UNDER STATEMENT 1 OR STATEMENT 2) WHY
SUCH SHAREHOLDER QUALIFIES AS AN ACCREDITED INVESTOR (ON THE BASIS OF NET WORTH,
INDIVIDUAL INCOME OR JOINT INCOME), OR EACH SHAREHOLDER MUST PROVIDE A
COMPLETED
INDIVIDUAL INVESTOR QUESTIONNAIRE (PAGES A-1 (2) TO
A-1 (6)).
| II. |
OTHER
CERTIFICATIONS
|
By
signing the Signature Page, the undersigned certifies the
following:
| (a) |
that
the Corporation’s purchase of Shares will be solely for the Corporation’s
own account and not for the account of any other person or
entity;
|
| (b) |
that
the Corporation’s name, address of principal office, place of
incorporation and taxpayer identification number as set forth in
this
Questionnaire are true, correct and complete;
and
|
| (c) |
that
one of the following is true and correct (check
one):
|
|
¨
(i)
|
the
Corporation is a corporation organized in or under the laws of the
United
States or any political subdivision
thereof.
|
| ¨ (ii) |
the
Corporation is a corporation which is neither created nor
organized in or under the United States or any political subdivision
thereof, but which has made an election under either Section 897(1)
or
897(k) of the United States Internal Revenue Code of 1986, as amended,
to
be treated as a domestic corporation for certain purposes of United
States
federal income taxation (A COPY OF THE INTERNAL REVENUE SERVICE
ACKNOWLEDGMENT OF THE UNDERSIGNED’S ELECTION MUST BE ATTACHED TO THIS
QUESTIONNAIRE IF THIS PROVISION IS
APPLICABLE).
|
| ¨ (iii) |
neither
(i) nor (ii) above is true.
|
A-1
(3)
| III. |
GENERAL
INFORMATION
|
(a) PROSPECTIVE
PURCHASER (THE CORPORATION)
Name:
_________________________________________________________________________________________
Principal
Place of
Business: _________________________________________________________________________
(Number
and Street)
| (City) |
(State)
|
(Zip Code) |
Address
for Correspondence (if different):
_____________________________________________________________
(Number
and Street)
| (City) |
(State)
|
(Zip Code) |
Telephone
Number: _______________________________________________________________________________
(Area
Code) (Number)
Facsimile
Number:
________________________________________________________________________________
(Area
Code) (Number)
State
of
Incorporation:
____________________________________________________________________________
Date
of
Formation:
________________________________________________________________________________
Taxpayer
Identification Number:
_____________________________________________________________________
NASD
Affiliation or Association of the Corporation, if
any: _________________________________________________
|
If
none, check here
¨
|
|
Number
of
Shareholders: ___________________________________________________________________________
| (b) |
INDIVIDUAL
WHO IS EXECUTING THIS QUESTIONNAIRE ON BEHALF OF THE
CORPORATION
|
Name: _________________________________________________________________________________________
Position
or
Title: _________________________________________________________________________________
A-1
(4)
| IV. |
BENEFICIAL,
OWNERSHIP
|
List
the
name, address, title, phone number and email address of the natural
person
or persons who will possess voting and investment power over the Shares
subscribed for herein:
Name
of
Natural
Person(s): __________________________________________________________________
Address:
________________________________________________________________________________
_______________________________________________________________________________________
Title
(if
any): _____________________________________________________________________________
Phone: __________________________________________________________________________________
Email
address (if
any): ______________________________________________________________________
| V. |
SIGNATURE
|
The
Signature Page to this Questionnaire is contained on page A-1 (6), entitled
Corporation Signature Page.
A-1
(5)
Corporation
Signature Page
SRKP
1, INC.
FULL
ART INTERNATIONAL, LTD.
1. The
undersigned Corporation represents that (a) the information contained in this
Questionnaire is complete and accurate and (b) the Corporation will immediately
notify (i) WestPark Capital, Inc., 0000 Xxxxxx xx xxx Xxxxx, Xxxxx 000, Xxx
Xxxxxxx, XX 00000, Attention: Xxxxx XxXxxxxx,
phone
number (000) 000-0000, facsimile
(000) 000-0000 and (ii) Xxxxx Xxxxx, Esq., counsel to WestPark Capital,
Inc., at Xxxxxx, Xxxxxxxx & Markiles, LLP, 00000 Xxxxxxx Xxxxxxxxx,
00xx
Xxxxx,
Xxxxxxx Xxxx, Xxxxxxxxxx 00000, phone number (000) 000-0000, facsimile
(000) 000-0000 if any material change in any of the information occurs prior
to
the acceptance of the undersigned Corporation’s subscription and will promptly
send the foregoing written confirmation of such change.
2. The
undersigned Corporation hereby represents and warrants that the person signing
this Questionnaire on behalf of the Corporation has been duly authorized by
all
requisite action on the part of the Corporation to acquire the Shares and sign
this Questionnaire and this Subscription Agreement on behalf of the Corporation
and, further, that the undersigned Corporation has all requisite authority
to
purchase the Shares and enter into the Subscription Agreement.
|
Date
|
||
|
Name
of Corporation
(Please
Type or Print
|
||
| |
|
|
| By: | ||
|
Signature
|
||
| Name: | ||
|
(Please Type or Print) |
||
| Title: | ||
|
(Please Type
or Print)
|
||
THE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS SUCH
SECURITIES ARE INCLUDED IN AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT
OR
AN OPINION OF COUNSEL HAS BEEN DELIVERED TO THE EFFECT THAT REGISTRATION OF
SUCH
SECURITIES IS NOT REQUIRED.
A-1
(6)
Exhibit
A-2
Individual
Investor
Questionnaire
Name:
__________________________________________________
IMPORTANT:
Please
Complete
INDIVIDUAL
INVESTOR QUESTIONNAIRE
SRKP
1, INC.
FULL
ART INTERNATIONAL, LTD.
SRKP
1,
INC.
0000
Xxxxxx xx xxx Xxxxx, Xxxxx 000
Xxx
Xxxxxxx, XX 00000
Attn:
Xxxxxxx Xxxxxxxxx
Full
Art
International, Ltd.
000
Xxxxxx Xxxx, Xxxxxxx Xxxxxx
Xxxxxx,
X.X.X.
Attn:
Mr. Xxx You Li
The
information contained in this Individual Investor Questionnaire is being
furnished in order to determine whether the undersigned’s subscription to
purchase Shares (the “Shares”) of Full Art International, Ltd., and SRKP 1, INC.
(the “Company”) may proceed.
This
Questionnaire should be completed, signed,
dated
and
a copy
should be sent to WestPark Capital, Inc. (the “Placement Agent”) via facsimile
at (000) 000-0000 or electronic format (e.g., PDF) to xxxxxxxxx@xxxxxxxxx.xxx
and the original delivered to WestPark Capital, Inc. at 0000 Xxxxxx xx xxx
Xxxxx, Xxxxx 000, Xxx Xxxxxxx, XX 00000, Attention: Xxxxx XxXxxxxx.
Please
keep a copy for your files.
ALL
INFORMATION CONTAINED IN THIS QUESTIONNAIRE WILL BE TREATED CONFIDENTIALLY.
The
undersigned Corporation understands, however, that the Company may present
this
Questionnaire to such parties as it deems appropriate
if called
upon to
establish that the proposed offer and sale of the Shares in the
Company is
exempt
from registration under the Securities Act
of
1933, as
amended, or meets
the
requirements of applicable state securities or “blue sky” laws. Further, the
undersigned
Corporation understands that the offering required to be reported to the
Securities
and Exchange Commission and to various state securities or “blue sky”
regulators.
A-2
(1)
IF
YOU
ARE PURCHASING SHARES WITH YOUR SPOUSE, YOU MUST BOTH SIGN THE SIGNATURE PAGE
(PAGE A-2 (5)).
IF
YOU
ARE PURCHASING SHARES WITH ANOTHER PERSON NOT YOUR SPOUSE, YOU MUST EACH FILL
OUT A SEPARATE QUESTIONNAIRE. Please make a photocopy of
pages
A-2
(1) to
A-2 (5)
and
return both completed Questionnaires to WestPark Capital, Inc.
in the
same envelope.
| I. |
PLEASE
INDICATE DESIRED TYPE OF OWNERSHIP OF
SHARES:
|
| ¨ |
Individual
|
| ¨ |
Joint
Tenants (rights of survivorship)
|
| ¨ |
Tenants
in Common (no rights of
survivorship)
|
| II. |
PLEASE
CHECK ANY OF STATEMENTS 1-4 BELOW THAT APPLY TO
YOU.
|
| ¨ |
1. I
have an individual net worth* or joint net worth with my spouse in
excess of $1,000,000.
|
| ¨ |
2. I
have had an individual income* in excess of $200,000 in each
of the
previous two years and I reasonably expect an individual income
in excess
of $200,000 this year. NOTE: IF YOU ARE BUYING JOINTLY WITH
YOUR SPOUSE, YOU MUST EACH HAVE AN INDIVIDUAL INCOME
IN EXCESS OF $200,000 IN EACH OF THESE YEARS IN ORDER
TO CHECK THIS BOX.
|
| ¨ |
3.
My
spouse and I have had a joint income* in excess of $300,000
in each
of the previous two years and I reasonably expect a joint income
in excess
of $300,000 this year.
|
| ¨ |
4. I
am a director and/or an executive officer of Company as
such terms
are defined in Regulation D promulgated under the Securities Act
of 1933,
as amended.
|
*
For
purposes of this Questionnaire, the term “net worth” means the excess of total
assets over total liabilities. In determining income, an investor should add
to
his or her adjusted gross income any amounts attributable to tax-exempt income
received, losses claimed as a limited partner in any limited partnership,
deductions
claimed for depletion, contributions to XXX or Xxxxx retirement
plans, alimony
payments and any amount by which income from long-term capital gains
has been
reduced in arriving at adjusted gross income.
A-2
(2)
| III. |
OTHER
CERTIFICATIONS
|
By
signing the Signature Page, I certify the following (or, if I am purchasing
Shares with my spouse as co-owner, each of us certifies the
following):
| (a) |
that
I am at least 21 years of age;
|
| (b) |
that
my purchase of Shares will be solely for my own account and not for
the
account of any other person (other than my spouse, if
co-owner);
|
| (c) |
that
the name, home address and social security number or taxpayer
identification number as set forth in this Questionnaire are true,
correct
and complete; and
|
| (d) |
that
one of the following is true and correct (check
one):
|
Spouse,
if Co-owner
|
¨
|
¨
|
(i)
|
I
am a United States citizen or resident of the United States for
United
States federal income tax purposes.
|
|
¨
|
¨
|
(ii)
|
I
am neither a United States citizen nor a resident of the
United
States for United States federal income tax
purposes.
|
| IV. |
GENERAL
INFORMATION
|
(a) PERSONAL
INFORMATION
Name: _________________________________________________________________________________________
Social
Security or Taxpayer Identification
Number: ________________________________________________________
Residence
Address: _______________________________________________________________________________
(Number
and Street)
|
(City)
|
(State)
|
(Zip Code) |
Residence
Telephone Number:
_______________________________________________________________________
(Area
Code) (Number)
Residence
Facsimile
Number: _______________________________________________________________________
(Area
Code) (Number)
Name
of
Business: ________________________________________________________________________________
Business Address: _______________________________________________________________________________
(Number
and Street)
|
(City)
|
(State)
|
(Zip Code) |
A-2
(3)
Business Telephone
Number: _______________________________________________________________________
(Area
Code) (Number)
Business
Facsimile
Number: ________________________________________________________________________
(Area
Code) (Number)
I
prefer
to have correspondence sent to: ¨
Residence
¨
Business
NASD
Affiliation or Association, if
any: _______________________________________________________________
If
none,
check here ¨
Spouse,
if Potential Co-owner
Name: _________________________________________________________________________________________
Social
Security or Taxpayer Identification
Number: ________________________________________________________
Residence
Address: ______________________________________________________________________________
(Number
and Street)
|
(City)
|
(State)
|
(Zip Code) |
Residence
Telephone
Number: ______________________________________________________________________
| Name of Business: | ||
| Business Address: | ||
|
(Number
and Street)
|
|
(City)
|
(State)
|
I
prefer
to have correspondence sent to: ¨ Residence
¨ Business
NASD
Affiliation or Association, if
any: _______________________________________________________________
If
none,
check here ¨
V.
SIGNATURE
The
Signature Page to this Questionnaire is contained on page A-2 (5), entitled
Individual Signature Page.
A-2
(4)
INDIVIDUAL
SIGNATURE PAGE
SRKP
1, INC.
FULL
ART INTERNATIONAL, LTD.
1. The
undersigned represents that (a) the information contained in this Questionnaire
is complete and accurate, and (b) he/she will immediately notify
(i) WestPark Capital, Inc., 0000 Xxxxxx xx xxx Xxxxx, Xxxxx 000, Xxx
Xxxxxxx, XX 00000, Attention: Xxxxx XxXxxxxx,
phone
number (000) 000-0000, facsimile
(000) 000-0000 and (ii) Xxxxx Xxxxx, Esq., counsel to WestPark Capital,
Inc., at Xxxxxx, Xxxxxxxx & Markiles, LLP, 00000 Xxxxxxx Xxxxxxxxx,
00xx
Xxxxx,
Xxxxxxx Xxxx, Xxxxxxxxxx 00000, phone number (000) 000-0000, facsimile
(000) 000-0000 if any material change in any of the information occurs prior
to
the acceptance of the undersigned’s subscription and will promptly send the
foregoing written confirmation of such change.
|
Date |
|||
|
Name
(Please Type or Print)
|
|||
|
Signature
|
|||
|
Name
of Spouse if Co-owner
(Please
Type or Print)
|
|||
|
Signature of
Spouse if Co-owner
|
IF
YOU
ARE PURCHASING SHARES WITH YOUR SPOUSE, YOU MUST BOTH SIGN THIS SIGNATURE PAGE
(PAGE A-2 (5)). IF YOU ARE PURCHASING SHARES WITH ANOTHER PERSON NOT YOUR
SPOUSE, YOU MUST EACH FILL OUT A SEPARATE QUESTIONNAIRE. Please make a photocopy
of pages A-2 (1) to A-2 (5) and return both completed Questionnaires to WestPark
Capital, Inc. in the same envelope.
THE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS SUCH
SECURITIES ARE INCLUDED IN AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT
OR
AN OPINION OF COUNSEL HAS BEEN DELIVERED TO THE EFFECT THAT REGISTRATION OF
SUCH
SECURITIES IS NOT REQUIRED.
A-2
(5)
Exhibit
A-3
Limited
Partnership Investor Questionnaire
Name:
IMPORTANT:
Please
Complete:
LIMITED
PARTNERSHIP INVESTOR QUESTIONNAIRE
SRKP
1, INC.
FULL
ART INTERNATIONAL, LTD.
SRKP
1,
INC.
0000
Xxxxxx xx xxx Xxxxx, Xxxxx 000
Xxx
Xxxxxxx, XX 00000
Attn:
Xxxxxxx Xxxxxxxxx
Full
Art
International, Ltd.
000
Xxxxxx Xxxx, Xxxxxxx Xxxxxx
Xxxxxx,
X.X.X.
Attn:
Mr. Xxx You Li
The
information contained in this Limited Partnership Investor Questionnaire is
being furnished in order to determine whether the undersigned Limited
Partnership’s subscription to purchase Shares of Full
Art
International, Ltd. and SRKP 1, INC. (the
“Company”) may proceed.
This
Questionnaire should be completed, signed, dated and
a copy
should be sent to WestPark Capital, Inc. (the “Placement Agent”) via facsimile
at (000) 000-0000 or electronic format (e.g., PDF) to xxxxxxxxx@xxxxxxxxx.xxx
and the original delivered to WestPark Capital, Inc. at 0000 Xxxxxx xx xxx
Xxxxx, Xxxxx 000, Xxx Xxxxxxx, XX 00000, Attention: Xxxxx XxXxxxxx.
Please
keep a copy for your files.
A-3
(1)
| I. |
PLEASE
CHECK THE STATEMENT BELOW, IF IT APPLIES TO THE
LP.
|
|
¨
|
The
undersigned Limited Partnership: (a) was not formed for the specific
purpose of acquiring the Shares, and
(b) has total assets in excess of
$5,000.000.
|
| II. |
OTHER
CERTIFICATIONS
|
By
signing the Signature Page, the undersigned certifies that the Limited
Partnership’s name,
address of principal office, place of organization and taxpayer identification
number as set
forth in
this Questionnaire are true, correct and complete; and
| III. |
GENERAL
INFORMATION
|
(a)
PROSPECTIVE
PURCHASER (THE LIMITED PARTNERSHIP)
Name:
_________________________________________________________________________________________
Principal
Place of
Business: _________________________________________________________________________
(Number
and Street)
| (City) |
(State)
|
(Zip Code) |
Address
for Correspondence (if different):
_____________________________________________________________
(Number
and Street)
| (City) |
(State)
|
(Zip Code) |
Telephone
Number: _______________________________________________________________________________
(Area
Code) (Number)
Facsimile
Number:
________________________________________________________________________________
(Area
Code) (Number)
A-3
(2)
State
of
Formation:
_______________________________________________________________________________
Date
of
Formation:
_______________________________________________________________________________
Taxpayer
Identification
Number: _____________________________________________________________________
NASD
Affiliation or Association of the Corporation, if
any: _________________________________________________
If
none,
check here ¨
| (c) |
INDIVIDUAL
WHO IS EXECUTING THIS QUESTIONNAIRE ON BEHALF OF THE LIMITED
PARTNERSHIP
|
Name: _________________________________________________________________________________________
Position
or
Title: _________________________________________________________________________________
| IV. |
SIGNATURE
|
The
Signature Page to this Questionnaire is contained on page A-3 (4), entitled
Limited Partnership Signature Page.
A-3
(3)
Limited
Partnership Signature Page
SRKP
1, INC.
FULL
ART INTERNATIONAL, LTD.
1. The
undersigned Limited Partnership represents that (a) the information contained
in
this Questionnaire is complete and accurate, and (b) the Limited Partnership
will immediately notify (i) WestPark
Capital, Inc., 0000 Xxxxxx xx xxx Xxxxx, Xxxxx 000, Xxx Xxxxxxx, XX 00000,
Attention: Xxxxx XxXxxxxx,
phone
number (000) 000-0000, facsimile
(000) 000-0000 and (ii) Xxxxx Xxxxx, Esq., counsel to WestPark Capital,
Inc., at Xxxxxx, Xxxxxxxx & Markiles, LLP, 00000 Xxxxxxx Xxxxxxxxx,
00xx
Xxxxx,
Xxxxxxx Xxxx, Xxxxxxxxxx 00000, phone number (000) 000-0000, facsimile
(000) 000-0000 if
any
material change in any of the information occurs prior to the acceptance of
the
undersigned’s subscription and will promptly send the foregoing written
confirmation of such change.
2. The
undersigned Limited Partnership hereby represents and warrants that the person
or entity signing this Questionnaire on behalf of the Limited Partnership has
been
duly
authorized by all requisite action on the part of the Limited
Partnership to sign this Questionnaire and this Subscription Agreement on behalf
of the
Limited
Partnership and, further, that the undersigned Limited Partnership has all
requisite authority to purchase the Shares and enter into the Subscription
Agreement.
|
Date
|
|||
|
Name of Limited Partnership (Please
Type or Print)
|
|||
| By: | |||
|
Signature |
|||
|
Name:
|
|||
|
(Please
Type or Print)
|
|||
| Title: | |||
|
(Please Type
or Print)
|
THE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS SUCH
SECURITIES ARE INCLUDED IN AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT
OR
AN OPINION OF COUNSEL HAS BEEN DELIVERED TO THE EFFECT THAT REGISTRATION OF
SUCH
SECURITIES IS NOT REQUIRED.
A-3
(4)
