a Delaware corporation SUBSCRIPTION AGREEMENT AND INVESTOR QUESTIONNAIRE
Exhibit
99.1
a
Delaware corporation
AND
INVESTOR QUESTIONNAIRE
1. SUBSCRIPTION: The
undersigned (the “Subscriber”) hereby irrevocably offers to purchase ___________
units (the “Units”) of Solar Energy Initiatives, Inc., a Delaware corporation
(the “Company”), for $0.30 per Unit, for a total purchase price of
$__________________, which amount, when and if accepted by the Company, will
constitute the payment by the Subscriber of the purchase price for the
Units. Each Unit consists of one (1) share of common stock and one
(1) warrant to purchase one (1) share of common stock.
2. REPRESENTATIONS, WARRANTIES
AND AGREEMENTS BY SUBSCRIBER: The Subscriber hereby
represents, warrants and agrees as follows:
(a) The
Units are being purchased by the Subscriber and not by any other person, with
the Subscriber’s own funds and not with the funds of any other person, and for
the account of the Subscriber, not as a nominee or agent and not for the account
of any other person. On acceptance of this Subscription Agreement by
the Company, no other person will have any interest, beneficial or otherwise, in
the Units. The Subscriber is not obligated to transfer the Units to
any other person nor does the Subscriber have any agreement or understanding to
do so. The Subscriber is purchasing the Units for investment for an
indefinite period not with a view to the sale or distribution of any part or all
thereof by public or private sale or other disposition. The
Subscriber has no immediate intention of selling, granting any participation in,
or otherwise distributing or disposing of any Units. The Subscriber
does not intend to subdivide the Subscriber’s purchase of Units with any
person.
(b) The
Subscriber has been advised that the Units have not been registered under the
Securities Act of 1933, as amended (the “Act”), or qualified under the
securities law of any state, on the ground, among others, that no distribution
or public offering of the Units is to be effected and the Units will be issued
by the Company in connection with a transaction that does not involve any public
offering within the meaning of section 4(2) and Rule 506 of Regulation D of the
Act under the respective rules and regulations of the Securities and Exchange
Commission and any applicable state blue sky authority. The
Subscriber understands that the Company is relying in part on the Subscriber’s
representations as set forth herein for purposes of claiming such exemptions and
that the basis for such exemptions may not be present if, notwithstanding the
Subscriber’s representations, the Subscriber has in mind merely acquiring the
Units for resale on the occurrence or nonoccurrence of some predetermined
event. The Subscriber has no such intention.
(c) The
Subscriber, either alone or with the Subscriber’s professional advisers (i) are
unaffiliated with, have no equity interest in (other than as set forth in the
Investor Questionnaire attached hereto), and are not compensated by, the Company
or any affiliate or selling agent of the Company, directly or indirectly; (ii)
has such knowledge and experience in financial and business matters that the
Subscriber is capable of evaluating the merits and risks of an investment in the
Units; and (iii) has the capacity to protect the Subscriber’s own interests in
connection with the Subscriber’s proposed investment in the Units.
(d) The
Subscriber acknowledges receipt of the Confidential Private Placement Memorandum
dated April 3, 2009 (the “Memorandum”), and each exhibit thereto as indicated
therein and acknowledges that the Subscriber has been furnished with such
financial and other information concerning the Company, the directors and
officers of the Company, and the business and proposed business of the Company
as the Subscriber considers necessary in connection with the Subscriber’s
investment in the Units. The Subscriber has carefully reviewed the
Memorandum and each exhibit thereto, and is thoroughly familiar with the
proposed business, operations, properties and financial condition of the Company
and has discussed with officers of the Company any questions the Subscriber may
have had with respect thereto. The Subscriber
understands:
1
|
|
(i)
|
The
risks involved in this offering, including the speculative nature of the
investment;
|
|
|
(ii)
|
The
financial hazards involved in this offering, including the risk of losing
the Subscriber’s entire investment;
|
|
|
(iii)
|
The
lack of liquidity and restrictions on transfers of the Units;
and
|
|
|
(iv)
|
The
tax consequences of this
investment.
|
The
Subscriber has consulted with the Subscriber’s own legal, accounting, tax,
investment and other advisers with respect to the tax treatment of an investment
by the Subscriber in the Units and the merits and risks of an investment in the
Units.
(e) Understanding
that the investment in the Units is highly speculative, the Subscriber is able
to bear the economic risk of such investment. The Subscriber is an
“Accredited Investor” because Subscriber either:
(i) has
a net worth of at
least $1,000,000 (including home and personal property), or
(ii) had
an individual income of more than $200,000 in each of the two most recent
calendar years, and reasonably expects to have an individual income in excess of
$200,000 in the current calendar year; or along with Subscriber’s spouse had
joint income in excess of $300,000 in each of the two most recent calendar
years, and reasonably expects to have a joint income in excess of $300,000 in
the current calendar year.
For
purposes of this Subscription Document, “individual income” means “adjusted
gross income” as reported for Federal income tax purposes, exclusive of any
income attributable to a spouse or to property owned by a
spouse: (i) the amount of any interest income received which is
tax-exempt under Section 103 of the Internal Revenue Code of 1986, as
amended, (the “Code”), (ii) the amount of losses claimed as a limited
partner in a limited partnership (as reported on Schedule E of form 1040),
(iii) any deduction claimed for depletion under Section 611 et seq. of
the Code and (iv) any amount by which income from long-term capital gains
has been reduced in arriving at adjusted gross income pursuant to the provisions
of Sections 1202 of the Internal Revenue Code as it was in effect prior to
enactment of the Tax Reform Act of 1986.
For
purposes of this Subscription Document, “joint income” means, “adjusted gross
income,” as reported for Federal income tax purposes, including any income
attributable to a spouse or to property owned by a spouse, and increased by the
following amounts: (i) the amount of any interest income
received which is tax-exempt under Section 103 of the Internal Revenue Code
of 1986, as amended (the “Code”), (ii) the amount of losses claimed as a limited
partner in a limited partnership (as reported on Schedule E of
Form 1040), (iii) any deduction claimed for depletion under
Section 611 et seq. of the Code and (iv) any amount by which
income from long-term capital gains has been reduced in arriving at adjusted
gross income pursuant to the provisions of Section 1202 of the Internal
Revenue Code as it was in effect prior to enactment of the Tax Reform Act of
1986.
For the
purposes of the Subscription Document, “net worth” means (except as otherwise
specifically defined) the excess of total assets at fair market value, including
home and personal property, over total liabilities, including mortgages and
income taxes on unrealized appreciation of assets.
2
(f) If
the Subscriber is an individual, the Subscriber is over 21 years of age; and if
the Subscriber is an unincorporated association, all of its members are of such
age.
(g) If
the Subscriber is a corporation, partnership, employee benefit plan or XXX, the
Subscriber was either:
|
|
(i)
|
not
formed for the purpose of investing in the Units, has or will have other
substantial business or investments, and is (please check
one):
|
|
|
|
an
employee benefit plan within the meaning of Title I of the Employee
Retirement Income Security Act of 1974, provided that the investment
decision is made by a plan fiduciary, as defined in section 3(21) of
such Act, and the plan fiduciary is a bank, savings and loan association,
insurance company or registered investment adviser; or
|
|
|
|
an
employee benefit plan within the meaning of Title I of the Employee
Retirement Income Security Act of 1974 that has total assets in excess of
$5,000,000; or
|
|
|
|
each
of its shareholders, partners, or beneficiaries is an Accredited Investor;
or
|
|
|
|
the
plan is a self directed employee benefit plan and the investment decision
is made solely by a person that is an Accredited Investor; or
|
|
|
|
a
corporation, a partnership, or a Massachusetts or similar business trust
with total assets in excess of
$5,000,000.
|
|
|
(ii)
|
formed
for the specific purpose of investing in the Units, and is an Accredited
Investor because each of its shareholders or beneficiaries is an
Accredited Investor.
|
(h) If
the Subscriber is a Trust, the Subscriber was either:
|
|
(i)
|
not
formed for the specific purpose of investing in the Units, and is an
Accredited Investor because (please check
one):
|
|
|
|
the
trust has total assets in excess of $5,000,000 and the investment decision
has been made by a “sophisticated person”; or
|
|
|
|
the
trustee making the investment decision on its behalf is a bank (as defined
in Section 3(a)(2) of the Act), a saving and loan association or
other institution as defined in Section 3(a)(5)(A) of the Securities
Act, acting in its fiduciary capacity; or
|
3
|
|
|
the
undersigned trustee certifies that the trust is an Accredited Investor
because the grantor(s) of the trust may revoke the trust at any time and
regain title to the trust assets and has (have) retained sole investment
control over the assets of the trust and the (each) grantor(s) is an
Accredited Investor; or
|
|
|
|
the
undersigned trustee certifies that the trust is an Accredited Investor
because all of the beneficial owners of the trust are Accredited
Investors
|
|
|
(ii)
|
formed
for the specific purpose of investing in the Units, and the undersigned
trustee certifies that the trust is an Accredited Investor because the
grantor(s) of the trust may revoke the trust at any time and regain title
to the trust assets and has (have) retained sole investment control over
the assets of the trust and the (each) grantor(s) is an Accredited
Investor.
|
(i) The
Subscriber, if not an individual, is empowered and duly authorized to enter into
this Subscription Agreement under any governing document, partnership agreement,
trust instrument, pension plan, charter, certificate of incorporation, bylaw
provision or the like; this Subscription Agreement constitutes a valid and
binding agreement of the Subscriber enforceable against the Subscriber in
accordance with its terms; and the person signing this Subscription Agreement on
behalf of the Subscriber is empowered and duly authorized to do so by the
governing document or trust instrument, pension plan, charter, certificate of
incorporation, bylaw provision, board of directors or stockholder resolution, or
the like.
(j) The
Social Security Number or taxpayer identification shown in this Subscription
Agreement is correct, and the Subscriber is not subject to backup withholding
because (i) the Subscriber has not been notified that he or she is subject to
backup withholding as a result of a failure to report all interest and dividends
or ii) the Internal Revenue Service has notified the Subscriber that he or she
is not longer subject to backup withholding.
(k) The
Subscriber hereby acknowledges and agrees that this Subscription Agreement is an
offer by the Subscriber to purchase the Units, which offer may be accepted or
declined by the Company. The Subscriber understands that the Company
is relying solely on the Subscriber’s representations as set forth herein for
purposes of deciding whether to accept Subscriber’s offer to purchase the
Units. The Subscriber hereby further acknowledges that this
Subscription Agreement does not constitute an offer by the Company to sell
securities or a solicitation of an offer to buy securities.
(l) The
Subscriber has accurately completed the Investor Questionnaire attached hereto
as Exhibit A
and incorporated by reference herein.
(m) The
Subscriber hereby acknowledges and agrees that the Company may modify the
offering contemplated by the Memorandum as it deems fit. The
Subscriber hereby further acknowledges that the Company has sole discretion over
the use of the proceeds of the offering contemplated by the
Memorandum.
4
3. AGREEMENT TO REFRAIN FROM
RESALES: Without in any way limiting the representations and
warranties herein, the Subscriber further agrees that the Subscriber shall in no
event pledge, hypothecate, sell, transfer, assign or otherwise dispose of any of
the Units, nor shall the Subscriber receive any consideration for the Units from
any person, unless and until prior to any proposed pledge, hypothecation, sale,
transfer, assignment or other disposition:
(a) A
registration statement on Form S-1 under the Act (or any other form appropriate
for the purpose under the Act or any form replacing such form) with respect to
the Units proposed to be so disposed of shall be then effective and such
disposition shall have been appropriately qualified in accordance with
applicable state law and any other applicable securities law; or
(b) (i)
The Subscriber shall have furnished the Company with a detailed explanation of
the proposed disposition, (ii) the Subscriber shall have furnished the Company
with an opinion of the Subscriber’s counsel in form and substance satisfactory
to the Company to the effect that such disposition will not require registration
of such Units under the Act or qualification of such Units under any applicable
blue sky law or any other securities law, and (iii) counsel for the Company
shall have concurred in such opinion and the Company shall have advised the
Subscriber of such concurrence.
4. CERTIFICATES REPRESENTING
THE UNITS TO BE LEGENDED: The Subscriber understands and
agrees that any certificate representing the Units or relating to the Units may
bear such legends as the Company may consider necessary or advisable to
facilitate compliance with the Act, applicable state blue sky laws, and any
other securities law, including without limitation legends stating that the
Units have not been registered under the Act or qualified under the Law and
setting forth the limitations on dispositions imposed hereby.
5. UNITS WILL BE RESTRICTED
SECURITIES: The Subscriber understands that the Units will be
“restricted securities” as that term is defined in Rule 144 under the Act and,
accordingly, that the Units must be held indefinitely unless they are
subsequently registered under the Act and qualified under applicable state blue
sky law and any other applicable securities law or exemptions from such
registration and qualification as are available. The Subscriber
understands that the Company is under no obligation to register the Units under
the Act, to qualify the Units under any securities law, or to comply with any
exemption under the Act or any other law. The Subscriber understands
that Rule 144 prevents the sale of any of the Units for at least one year, and
only then under certain specific circumstances.
6. COMPANY MAY REFUSE TO
TRANSFER: Notwithstanding the foregoing, if, in the opinion of
counsel for the Company, the Subscriber has acted in a manner inconsistent with
the representations and warranties in this Subscription Agreement, the Company
may refuse to transfer the Subscriber’s Units until such time as counsel for the
Company is of the opinion that such transfer will not require registration of
the Units under the Act or qualification of the Units under applicable blue sky
law or any other securities law. The Subscriber understands and
agrees that the Company may refuse to acknowledge or permit any disposition of
the Units that is not in all respects in compliance with this Subscription
Agreement and that the Company intends to make an appropriate notation in its
records to that effect.
7. INDEMNIFICATION: The
Subscriber hereby agrees to indemnify and defend the Company and its directors
and officers and hold them harmless from and against any and all liability,
damage, cost or expense incurred on account of or arising out of:
(a) Any
breach of or inaccuracy in the Subscriber’s representations, warranties or
agreements herein;
5
(b) Any
disposition of any Units contrary to any of the Subscriber’s representations,
warranties or agreements herein;
(c) Any
action, suit or proceeding based on (i) a claim that any of said
representations, warranties or agreements were inaccurate or misleading or
otherwise cause for obtaining damages or redress from the Company or any
director or officer of the Company under the Act, or (ii) any disposition of any
Units.
8. SUCCESSORS: The
representations, warranties and agreements contained in this Subscription
Agreement shall be binding on the Subscriber’s successors, assigns, heirs and
legal representatives and shall inure to the benefit of the respective
successors and assigns of the Company and its directors and
officers.
| Number of Units Subscribed: | __________ | ||
| Amount of Enclosed Check: | $ __________ | ($0.30 per Unit; $1,000 minimum) | |
| Please make check payable: | The Lebrecht Group, APLC | ||
| and deliver to: | fbo Solar Energy Initiatives, Inc. | ||
| 000 X. Xxxxx Xxxxxx Xxxxxxx, Xxxxx 000 | |||
| Xxxxx Xxxxxx, XX 00000 | |||
TYPE OF
OWNERSHIP (Check One):
|
____
INDIVIDUAL OWNERSHIP
|
____
PARTNERSHIP
|
|||
|
(One
signature required)
|
(Please
include a copy of the Statement of Partnership of Partnership Agreement
authorizing signature)
|
|||
|
____
COMMUNITY PROPERTY
|
____
CORPORATION
|
|||
|
(One
signature required)
|
(Please
include Articles of Incorporation and Certified Corporate Resolution
authorizing signature)
|
|||
|
____
TENANTS IN COMMON
|
____
TRUST
|
|||
|
(Both
parties must sign)
|
(Please
include name of trust, name of trustee, and date trust was formed and
include copy of the Trust Agreement or other
authorization)
|
|||
|
____
JOINT TENANTS
|
||||
|
(Both
parties must sign)
|
6
I, the
undersigned, hereby certify under penalty of perjury under the laws of the State
of Delaware, that the information contained herein is complete and accurate and
may be relied on by the Company. I will notify the Company promptly
of any material change in any of such information.
| Investor: | Co-investor: | |||
|
|
|
|||
|
Print
or type name
|
Print
or type name
|
|||
|
|
|
|||
| Signature | Signature | |||
| Dated: ______________, 20___ | Dated: ______________, 20___ | |||
| Name and title of person signing | Relation, if any, to Investor | |||
| on behalf of investor, if applicable | ||||
| Soc. Security or Tax ID Number |
Soc.
Security or Tax ID Number
|
|||
| Address: | Address: | |||
| Agreed to and accepted by Solar Energy Initiatives, Inc. | ||||
| Xxxxx Xxxx, Chief Executive Officer |
By
signing below, and including his/her/its electronic mail (“e-mail”) address, the
undersigned agrees that all notices to shareholders of the Company may be
transmitted by the Company, or others on the Company’s behalf, to the
undersigned by e-mail. The Company will only utilize this information
to transmit official communications being sent to all shareholders of the
Company.
|
|
|
|||
|
Signature
|
Signature
|
|||
|
E-mail
address:
|
E-mail
address:
|
7
Exhibit
A
Investor
Questionnaire
(to be
completed by each Subscriber)
Name: ___________________________________________________________________________
Home
Phone:
___________________________________________________________________________
Work
Phone: ___________________________________________________________________________
1. a. State
of
Residence: _________________________________________________________________________
b. For
how long?
_____________________________________________________________________________
c. Do
you maintain a residence in any other state?
_____________________________________________________
2. In
which state(s) do you
b. Vote:
____________________________________________________________________________________
c. Hold
current driver's license:
___________________________________________________________________
d. Maintain
a house or apartment:
_________________________________________________________________
3. What
is your present age? _________ . What is your date of birth?
_______________________________________
4. Is
your net worth in excess of $1,000,000? (For purposes of this question, you may
include your spouse's net worth and may include the fair market value of your
home, home furnishings and automobiles).
Yes
( ) No
( )
5. Was
your individual gross income during each of the past two years in excess of
$200,000?
Yes
( ) No
( )
6. If
your answer to question 5 was yes, do you reasonably anticipate that your gross
income for the current year will be in excess of $200,000?
Yes
( ) No ( )
7. Was
your joint gross income with your spouse in excess of $300,000 in each of the
last two years?
Yes ( ) No ( )
8
8. If
your answer to question 7 was yes, do you reasonably anticipate that your joint
gross income with your spouse for the current year will be in excess of
$300,000?
Yes
( ) No
( )
9. Does
this investment exceed twenty percent (20%) of your net worth? (For
purposes of this question, you may include your spouse's net worth and the fair
market value of your home, home furnishings and automobiles).
Yes ( ) No ( )
10. Does
this investment exceed ten percent (10%) of your net worth? (For
purposes of this question, you may include your spouse's net worth and the fair
market value of your home, home furnishings and automobiles).
Yes ( ) No ( )
11. Your
estimated gross income for 2009 is:
|
Less
than $75,000
|
_____
|
|
$75,000
- $200,000
|
_____
|
|
|
Over
$200,000
|
_____
|
12. Your
gross income for 2008 was:
|
Less
than $75,000
|
_____
|
|
$75,000
- $200,000
|
_____
|
|
Over
$200,000
|
_____
|
|
|
|
|
13. Your
gross income for 2007 was:
|
Less
than $75,000
|
_____
|
|
$75,000
- $200,000
|
_____ |
|
Over
$200,000
|
_____
|
14. Current
estimated Net Worth (exclusive of home, automobiles):
Less
than
$150,000 _____
$150,000
-
$250,000 ____
|
|
Over
$250,000
|
_____
|
15. Investment
Experience:
(A) Please
indicate the frequency of your investment in securities that are registered and
transferred on one or more of the major United States securities
exchanges: Often _____ Occasionally _____ Seldom _____ Never
_____
(B) Please
indicate the frequency of your investment in securities which are purchased,
sold or transferred in private transactions: Often _____ Occasionally
_____ Seldom _____ Never _____
9
(C) If
your answer to (A) or (B) above was Seldom or Never, please provide your
qualifications in evaluating the merits and risks of this
investment?
16. Describe
below any business or personal relationship you have with any affiliates of the
officers or directors of the Company or any of its affiliates, subsidiaries or
business entities in conjunction with this purchase of Units in the Company,
including a statement of the name of the individual(s)and the length of time you
have know such individual(s).
17. Have you participated in any prior investments or other business transactions with the Company or its officers, directors, employees, agents or any of its affiliates?
Yes
( ) No ( ) -- If yes, please
describe:
18. Do you currently have an equity interest in the Company?
Yes
( ) No ( ) -- If yes, please
describe:
