THE SECURITIES REPRESENTED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED FOR OFFER OR SALE WITH, AND HAVE NOT BEEN REVIEWED OR APPROVED BY, THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION, THE FLORIDA OFFICE OF FINANCIAL REGULATION- DIVISION OF...
THE
SECURITIES REPRESENTED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED FOR OFFER OR
SALE WITH, AND HAVE NOT BEEN REVIEWED OR APPROVED BY, THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION, THE FLORIDA OFFICE OF FINANCIAL
REGULATION-DIVISION OF SECURITIES, OR ANY OTHER LOCAL, STATE OR FEDERAL AGENCY
AND ARE SUBJECT TO RESTRICTIONS AND LIMITATIONS ON RESALE OR OTHER TRANSFER BY
FEDERAL AND STATE SECURITIES LAWS. AN INVESTMENT IN THE SECURITIES
COVERED BY THIS AGREEMENT IS SPECULATIVE AND INVOLVES A HIGH DEGREE OF
RISK.
(a
Florida corporation)
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From:
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(Name of
Subscriber)
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To:
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Shades
Holdings, Inc. (the
“Company”)
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LADIES
& GENTLEMEN:
The
undersigned is in possession of that certain Confidential Private Placement
Memorandum, dated February 1, 2010, accompanied by Exhibits A - B thereto
(collectively, the “Memorandum”), prepared by the
Company relating to and describing an offering of 250,000 shares of its common
stock (the “Securities”)
at a price of $0.25 per share (the “Offering”). The
Securities are being offered by the Company through its executive officers on an
ongoing, continuous, “best efforts” basis. The Securities are not
being sold through commissioned sales agents or underwriters. There
is no minimum purchase requirement, however, each offeree will only be permitted
to purchase a maximum of 20,000 shares of common stock (the “Maximum Individual
Subscription”), subject to the Company’s right to offer more than the
Maximum Individual Subscription in certain circumstances. There is no
arrangement to place funds in an escrow, trust, or similar account and all
subscription deposits will be paid directly to the Company.
The
undersigned is informed that: (a) Shades Holdings, Inc. is a development stage
Florida corporation; (b) there are factors relating to the subsequent transfer
of any Securities acquired which could make their resale difficult; (c) there is
no guarantee that the subscriber will realize any gain from an investment in the
Securities; (d) the Company has very limited financial resources and operating
history; and (e) you could lose your entire investment in the
Securities.
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1.
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Offering and
Subscription.
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(a) The
Subscriber hereby irrevocably tenders this Subscription Agreement and subscribes
for the purchase of ______ shares1 of
common stock at a purchase price of $0.25 per share (aggregate
purchase price of $_____________________), on the terms set forth in this
Subscription Agreement. Payment for the Securities must be made
entirely in cash or other immediately available funds.
(b)
The Subscriber acknowledges his, her or its awareness that all
questions as to the validity, form, eligibility (including time of receipt) and
acceptance of any Subscription Agreement will be determined by the Company and
that the Company has reserved the right to accept or reject this Subscription
Agreement, as made, and to waive any condition of its offer, except as otherwise
herein stated. If, for any reason, the Company rejects this
Subscription Agreement and the purchase price for the Securities tendered
herewith, or if the Offering is withdrawn, the funds tendered with this
Subscription Agreement will be returned to the Subscriber, without interest or
deduction, together with all of the executed documents presented with the
subscription.
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1
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No
investor may subscribe for more than twenty thousand (20,000) shares of
common stock unless expressly authorized by the
Company.
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2. Representations and
Warranties of Subscriber. In order to induce the Company to
accept this subscription, the Subscriber hereby represents and warrants to and
agrees with the Company as follows:
(a) The
Subscriber, if a natural person, is at least 21 years of age. The
residence of the Subscriber set forth below is the true and correct residence of
the Subscriber, and the Subscriber has no present intention of becoming a
resident or domiciliary of any other state or jurisdiction.
(b)
If the Subscriber is not a natural person, the Subscriber was
not formed for the purpose
of acquiring the Securities, unless each equity owner of the Subscriber can
check one of the boxes set forth in Section 2(c)(1)-(4) below. The
Subscriber understands that he may be required to provide additional information
in support of the representation set forth in the preceding
sentence. The principal place of business of the Subscriber is as set
forth on the signature pages below.
(c) One
or more of the descriptions set forth below is applicable to the Subscriber
(such applicable item(s) being marked “X” below by the Subscriber) and
accurately reflect(s) the Subscriber’s financial situation [please xxxx as many
as are applicable]:
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1.
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The
Subscriber is a natural person whose individual net worth, or joint net
worth with that person’s spouse, at the time of the purchase of the
Securities exceeds $1,000,000.
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____
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2.
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The
Subscriber is a natural person whose income for each of 2008 and 2009 has
exceeded $200,000, and there is a reasonable expectation that the
Subscriber’s income for 2010 will also be in excess of
$200,000. Such income is solely that of the Subscriber and
excludes the income of the Subscriber’s spouse.
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____
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3.
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The
Subscriber is a natural person whose income, together with that of his/her
spouse, for each of 2008 and 2009 has exceeded $300,000, and there is a
reasonable expectation that the Subscriber’s income (combined with
spouse’s) for 2010 will also be in excess of $300,000.
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____
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4.
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The
Subscriber is a corporation, limited liability company, or partnership
that was not formed for the specific purpose of acquiring the Securities
and has total assets in excess of $5,000,000.
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____
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5.
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The
Subscriber is a trust, with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the Securities offered, and
directed by a “sophisticated person” as defined in Rule 506(b)(2)(ii) of
the Securities Act.
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____
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6.
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The
Subscriber is an entity in which all
of the beneficial owners of the entity are persons presently
capable of answering one of the subsections (1)-(5) above in the
affirmative.
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(d)
If the undersigned individual is executing this Subscription
Agreement on behalf of a corporation, partnership or other entity, he or she has
been duly authorized to execute this Subscription Agreement and all other
instruments in connection with the purchase of the Securities; his or her
signature is binding upon such corporation, partnership, or other entity; and he
or she represents and warrants that the acquisition of the Securities is an
authorized investment of the corporation, partnership, or other
entity.
(e) The
Securities are being acquired solely for the account of the Subscriber, for
investment, and not with a view to, or in connection with, any resale or
distribution of the Securities in violation of the registration requirements of
applicable federal or state securities laws. The Subscriber has no
contract, understanding or arrangement with any person to sell, transfer or
pledge to such person, or anyone else, any of the Securities, and the Subscriber
has no present plans or intentions to enter into any such contract,
understanding or arrangement.
2
(f) Either
the Subscriber acting alone, or the Subscriber with the assistance of the
investment advisor described below, has the requisite knowledge, experience and
sophistication in financial and business matters to enable the Subscriber and
his/her advisor, if any, to evaluate the merits, risks and other factors bearing
on a decision to invest in the Company and so as to qualify Subscriber as a
“sophisticated investor” as established under relevant statutory, regulatory and
judicial authority promulgated or created with regard to the Securities
Act.
(g) The
Subscriber and his/her investment advisor, if any, have had an opportunity to
meet with representatives of the Company and to ask questions and receive
answers to their satisfaction regarding the proposed business of the Company and
its financial condition in order to assist them in evaluating the merits and
risks of purchasing the Securities. All material documents and
information pertaining to the Company and the investment therein that have been
requested have been made available to Subscriber.
(h) The
Subscriber has relied upon the consultation and advice of the individual named
below (the “Purchaser Representative”) in assessing the merits and risks of
making an investment in the Company. Such individual has agreed to
act as such investment advisor and such individual has represented to the
Subscriber that he/she has no material relationship with the Company or any of
its affiliates. [If
no person was consulted, please insert the word “None.” If no person
is named, “None” will be assumed.]
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Advisor’s
Name
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Position
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(i) Subscriber
has adequate net worth and annual income to provide for current needs and
possible future contingencies and does not have an existing or foreseeable
future need for liquidity of the investment in the Securities. Also, Subscriber
is otherwise able to bear the economic risks of the proposed investment in the
Securities, including loss of the entire investment, without impairing his
ability to provide for himself and his family in the same manner as he is able
to do at the present time, without regard to the funds proposed to be invested
in the Securities.
(j) At
no time was the Subscriber presented with or solicited by any advertisement,
article, notice or other communication published in any newspaper, magazine or
similar medium or broadcast over radio or television or by any other form of
general solicitation or general advertising.
(k) The
Subscriber has received, read and reviewed, and is familiar with this
Subscription Agreement and confirms that all Company and other documents,
records and books pertaining to his, her or its prospective purchase of the
Securities or to the Company’s business affairs and prospects and requested by
the Subscriber have been made available or delivered to the
Subscriber. In subscribing for the Securities, Subscriber is not
relying upon any information, other than the results of his own or Purchaser
Representative’s independent review of the written information provided to
Subscriber at Subscriber’s request by the Company.
(l) Subscriber
understands that none of the Company, its management, or any professional
advisor of the Company has made or makes any representation or warranty to
Subscriber with respect to, or assumes any responsibility for, the federal
income tax consequences to Subscriber of an investment in the
Securities.
(m) Subscriber
is not subject to the fiduciary standards of the Employee Retirement and Income
Security Act of 1974, as amended, and is not exempt from income under Section
501 of the Internal Revenue Code of 1986, as amended.
3. Additional Acknowledgments,
Representations, Warranties and Agreements of Subscriber. In
addition to the above representations and warranties, Subscriber represents,
warrants and acknowledges to the Company that Subscriber is aware of and fully
understands the following:
3
(a)
Subscriber is aware that the purchase of the Securities sought to be acquired
involves a speculative investment with a high degree of risk of loss to the
Subscriber of his, her or its investment in the Securities.
(b) Subscriber
further confirms that he, she or it has been furnished with (i) a copy of this
Subscription Agreement, and (ii) a copy of the Confidential Private Placement
Memorandum.
(c) The
financial information and certain other information regarding the Company set
forth in written materials provided to Subscriber may contain forward-looking
statements based on what the Company believes to be reasonable assumptions
regarding the future operations of the Company and various other financial and
economic conditions. Subscriber acknowledges that these statements
are not intended and should not be viewed as anticipated performance or
guarantees of future performance of the Company, and that the actual results of
the Company’s operations could differ materially from those assumed for purposes
of such forward-looking statements.
(d) Subscriber
is aware that the Securities have not been registered under the Securities Act
or under any state securities law in reliance upon applicable federal or state
transactional exemptions and further that he, she or it is purchasing an equity
interest in the Company without being furnished any offering literature or
prospectus other than as referenced herein.
(e) Neither
the United States Securities and Exchange Commission nor any other federal or
state agency has reviewed the Offering or made any finding or determination as
to the suitability or fairness of an investment in the Securities, nor has any
such agency made any recommendation or endorsement with respect to the
Securities.
(f) There
exist substantial restrictions on the transferability of the Securities, under
federal and state law; there will be no public market for the Securities; the
undersigned may not be able to rely upon the provisions of Rule 144 adopted by
staff of the United States Securities and Exchange Commission under the Act with
respect to the resale of the Securities and, accordingly, the Subscriber may
have to hold the Securities indefinitely and may not be able to liquidate his,
her or its investment in the Company.
(g) The
Securities will be issued pursuant to applicable exemptions from the
registration requirements of the Securities Act, including those provided by
Section 4(2) of the Securities Act and/or rules promulgated thereunder
(including without limitation Rule 506 under Regulation D), and applicable state
securities laws, including the Florida Securities and Investor Protection Act
(the “Florida Act”). Subscriber agrees to provide such additional
information, certifications and assurances to the Company as reasonably
requested by the Company to assure to suitability of the investment for
Subscriber and Subscriber’s eligibility to purchase Securities
hereunder.
(h) None
of the following has ever been represented, guaranteed or warranted to the
Subscriber by the Company, its founder(s), agents or employees, or other
persons, expressly or by implication:
i. the
approximate or exact length of time that the Subscriber will be required to
remain as owner of the Securities;
ii. the
amount or type of consideration, profit or loss (including tax benefits) which
reasonably may be expected to be realized, if any, as a result of the activities
of the Company; or
iii. that
the past performance or experience of any entity or other person associated with
this investment, directly or indirectly, will in any way indicate the
predictable results of the ownership of the Securities or of the Company’s
intended activities. There is and likely will be no public market for
the Securities; it will likely not be possible for the Subscriber to liquidate
the investment readily in the case of an emergency. Accordingly,
Subscriber understands that he should consider the investment in the Securities
illiquid and that he is prepared to maintain his investment in the Company
indefinitely.
4
(i) THE
SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE FLORIDA ACT AND ARE
BEING OFFERED AND SOLD IN RELIANCE UPON EXEMPTIONS FROM REGISTRATION IN SUCH
ACT. ANY SALES OF SECURITIES TO FIVE OR MORE PERSONS IN FLORIDA MADE
IN RELIANCE UPON SECTION 517.061(11)(A) OF THE FLORIDA ACT ARE VOIDABLE BY THE
PURCHASER WITHIN THREE (3) DAYS AFTER THE LATER OF (A) THE DATE THAT THE
AVAILABILITY OF THIS PRIVILEGE IS COMMUNICATED TO THE PURCHASER, OR (B) THE DATE
THAT SUCH PURCHASER TENDERS CONSIDERATION TO THE ISSUER, AN AGENT OF THE ISSUER
OR AN ESCROW AGENT. UPON DELIVERY OF THIS SUBSCRIPTION AGREEMENT, THE
COMPANY SHALL HAVE BEEN DEEMED TO HAVE PROVIDED NOTICE TO THE PURCHASER OF THIS
PRIVILEGE. The Subscriber acknowledges this right granted by the
Florida Act and further acknowledges that if the Subscriber is to exercise this
right, the Subscriber must do so in writing within the applicable time period
and that such writing must be received by the Company within such time
period.
(j) The
Subscriber acknowledges that:
i. a
legend will be placed on any certificates issued by the Company to evidence the
interest of the undersigned in Securities of such Company, in such form as the
Company may deem appropriate to describe the restrictions which are imposed upon
any resale effort;
ii. a
notation in the appropriate records of the Company will be made with respect to
any restrictions on transfer of the Securities.
4. Covenants and Further
Agreements. In order to induce the Company to accept this
subscription, the Subscriber hereby covenants and agrees as
follows:
(a) The
Subscriber agrees not to dispose, or attempt to dispose, of any of the
Securities except in compliance with the requirements of this Subscription
Agreement, the Securities Act, the Florida Act, and any other applicable state
securities laws, and the applicable rules and regulations promulgated
thereunder, and unless and until the Company shall have received from the
Subscriber an opinion of counsel satisfactory to it that any proposed
disposition of any of the Securities may be effected without violation
thereof.
(b) The
Subscriber agrees to furnish promptly to the Company and its counsel such
information and material with respect to the manner and circumstances of any
proposed disposition of any of the Securities as the Company or its counsel may
reasonably request. The Company is not required to provide any
information or assistance to any person desiring to effectuate the sale or other
disposition of any of the Securities acquired hereunder.
(c) The
Subscriber understands that the Company is relying upon the representations and
warranties of the Subscriber in claiming the exemptions described
above. Accordingly, the Subscriber agrees to indemnify the Company
and to hold the Company harmless, in respect of any and all claims, losses and
expenses (including costs and reasonable attorneys’ fees) that it may incur in
connection with or arising out of any breach of any of the representations,
warranties, covenants or agreements of the Subscriber set forth in this
Subscription Agreement.
(d) The
Subscriber agrees that, except for the three day right of rescission referred to
in this Subscription Agreement, the Subscriber is not entitled to cancel,
terminate or revoke this Subscription Agreement or any agreements of the
Subscriber hereunder and that this Subscription Agreement and the agreements of
the Subscriber shall survive (i) changes in the transactions, forms of documents
and instruments related to the Offering that are not materially adverse to the
Subscriber and (ii) the death or disability of the Subscriber.
The representations and warranties set
forth in this Subscription Agreement are complete and correct as of
the date hereof and shall be complete and correct and deemed restated up to and
including the date of closing by the Subscriber of his, her or its purchase of
any Securities sold by the Company (the “Date of Closing”), and the same shall
survive such date. If such representations and warranties shall not
be complete and correct in all respects and at all times from the date hereof up
to and including the Date of Closing, the Subscriber represents and covenants
that he, she or it shall give written notice of such fact to the Company,
specifying which representations and warranties are not complete and correct and
the reasons therefor.
5
5. Miscellaneous.
(a) Notice. Any
notice that either party is required or may desire to give to the other under or
in conjunction with this Subscription Agreement shall be in writing, and shall
be given by addressing the same to such other party at the address set forth at
the end of this Subscription Agreement, and by depositing the same so addressed,
postage prepaid, in the United States mail, or by delivering the same personally
or by courier, or by Federal Express or comparable overnight
courier. Any notice mailed shall be deemed to have been given three
(3) United States Post Office delivery days following the date of mailing or,
otherwise, on the date of actual delivery to the receiving
party. Either party may change the address for the service of notice
upon it by written notice given to the other in the manner herein provided for
the giving of notice.
(b) Amendments. No
change, modification or termination of any of the terms, provisions, or
conditions of this Subscription Agreement shall be effective unless made in
writing and signed or initialed by all parties hereto, their successors and
assigns.
(c) Governing
Law. This Subscription Agreement shall be construed and
enforced under and in accordance with the laws of the State of
Florida. Any litigation arising from a dispute hereunder shall be
litigated solely in the Circuit Court of the State of Florida in Hillsborough
County, Florida, or in the Federal District Court for the Middle District of
Florida, Tampa Division, and the parties hereto submit to the jurisdiction of
such courts and agree that such courts shall be the sole situs of venue for the
resolution of any such dispute through litigation.
(d) Severability. If
any paragraph, subparagraph or other provision of this Subscription Agreement,
or the application of such paragraph, subparagraph or provision, is held
invalid, then the remainder of the Subscription Agreement, and the application
of such paragraph, subparagraph or provision to person or circumstances other
than those with respect to which it is held invalid, shall not be affected
thereby.
(e) Binding Effect on Successors
and Assigns. This Subscription Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors, personal representatives, heirs and assigns.
(f) Continuance of
Agreement. The rights, responsibilities, duties,
representations and warranties of the parties hereto, and the covenants and
agreements herein contained, shall survive any closing and the execution hereof,
and shall continue to bind the parties hereto, and shall continue in full force
and effect until each and every obligation of the parties hereto pursuant to
this Subscription Agreement and any document or agreement incorporated herein by
reference shall have been fully performed.
(g) Assignment. This
Subscription Agreement is not transferable or assignable by
Subscriber.
(h) Effective
Date. This Subscription Agreement shall be effective as to
Subscriber as of the date of execution by Subscriber or, if the date of
execution is not inserted by Subscriber, then upon receipt of such Subscription
Agreement by the Company, which shall then be authorized to insert the date of
receipt. This Subscription Agreement shall be effective as to the
Company as the date of its acceptance of the subscription, such acceptance being
indicated by execution of this Subscription Agreement by the President of the
Company or other duly authorized representative of the Company.
[Remainder
of Page Intentionally Left Blank; Signatures on Following Page.]
6
IN WITNESS WHEREOF, the
undersigned has executed this Subscription Agreement this ___ day of _________,
2010.
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If
Individual Subscriber(s)
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Number
of Shares:_______
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(Signature)
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(Signature)
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Print
Name(s)
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Print
Name(s)
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If
Corporate or Other Non-Individual Subscriber
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Subscriber:
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[please
print]
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By:
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Name:
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Title:
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SUBSCRIPTION
AGREEMENT ACCEPTED
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AS
OF ______________, __, 2010.
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Xxxx
Xxxxx,
President
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7
INVESTOR
INFORMATION
If
Investor is an Individual:
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Social
Security Number:
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Residence
Address (street address):
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E-mail
Address:
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Business
Address:
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Telephone
Number(s):
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Residence:
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Business:
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Send mail to:
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Business
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(check
one)
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Residence
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If
Investor is a Company or
Other
Artificial Entity:
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Business
Address (street address):
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State
of Organization:
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Contact Person:
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Email
Address:
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Telephone
Number:
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Business:
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Type
of Entity:
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No. of Beneficial Owners:
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¨
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corporation
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¨
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general
partnership
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¨
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limited
partnership
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¨
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business
trust
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¨
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personal
trust
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¨
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other
form of entity (please specify)
_____________________________________.
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8
