EXHIBIT 3(XIII)
IMPORTANT: PLEASE READ CAREFULLY BEFORE SIGNING; SIGNIFICANT
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REPRESENTATIONS ARE CALLED FOR HEREIN.
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ENVIRO-CLEAN OF AMERICA, INC.
SUBSCRIPTION AGREEMENT
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CONFIDENTIAL
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Enviro-Clean of America, Inc.
0000 Xxxxxxx
Xxx Xxxxxxx, Xxxxx 00000
Phone (000) 000-0000
1. SUBSCRIPTION. Capitalized and defined terms used in this Subscription
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Agreement shall have the meanings given such terms in the Confidential Private
Placement Memorandum (the "Memorandum") dated October 26,1999 of Enviro-Clean of
America, Inc. (the "Company"). Those persons who execute a Subscription
Agreement and whose subscriptions are accepted will be contributing cash to the
Company and will be issued the number of Units, each Unit containing 100 Shares
of Series B Cumulative Convertible Preferred Stock (the "Series B Stock") and
1,000 Common Stock Purchase Warrants (the "Warrants") (collectively, the
"Units") as set forth on the signature page hereof. The undersigned hereby
agrees to subscribe for the Units in the amount set forth on the Signature Page
hereof.
I acknowledge that I have received and reviewed to my satisfaction the
Memorandum and all exhibits and supplements thereto.
I acknowledge that I am not acting on the basis of any promotional sales
materials, or other information other than the Memorandum or other documents or
information furnished by the Company upon request by me or my advisors. I
further acknowledge that all matters relating to the Memorandum have been
explained to me to my satisfaction and that I understand the speculative nature
and risks involved in the proposed investment.
I agree to be bound by all of the terms and provisions of the offering of
the Units as described in the Memorandum, and the exhibits thereto, and
acknowledge that the Company will be relying on the information and
representations with respect to me set forth herein in determining whether an
investment in the Units is suitable for me and whether I otherwise qualify to
acquire the Units. I represent and warrant that such information is true and
correct as of the date of this Subscription Agreement.
THERE CAN BE NO ASSURANCE THAT THE COMPANY WILL BE PROFITABLE.
2. AMOUNT. The amount of the undersigned's subscription is set forth
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below, and the undersigned has enclosed all Subscription Documents and, if
applicable, a check in the amount of $10,000 for each Unit subscribed for.
3. PROCEDURE FOR ACCEPTANCE. The undersigned understands that if this
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application is accepted, the Company will return to the undersigned a copy of
the signature page of this Subscription Agreement with the acceptance form
filled out below.
4. TERMS AND CONDITIONS. The undersigned hereby agrees to be bound by
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all of the terms and conditions contained in the Memorandum.
5. REPRESENTATIONS AND WARRANTIES. The undersigned hereby warrants and
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represents to the Company that the following statements are true (if a statement
is not true, please strike any untrue portion and initial):
(a) The undersigned is an "accredited investor" within the meaning of
Regulation D promulgated by the Securities and Exchange Commission pursuant
to the Securities Act of 1933 (the "Securities Act") insofar as the
undersigned:
(1) is a natural person whose individual net worth, or joint net
worth with his or her spouse, exceeds $1,000,000;
(2) is a natural person who had an individual income (not
including his or her spouse's income) in excess of $200,000
in each of the two most recent years, or joint income with
his or her spouse in excess of $300,000 in each of those
years, and who reasonably expects reaching the same income
level in the current year;
(3) is a trust with total assets in excess of $5,000,000 not
formed for the specific purpose of acquiring the Units, whose
purchase is directed by a person who has such knowledge and
experience in financial and business matters that he is
capable of evaluating the merits and risks of an investment
in the Units;
(4) is a bank as defined in section 3(a)(2) of the Securities Act
or other institution as defined in section 3(a)(5)(A) of the
Securities Act, whether acting in its individual or fiduciary
capacity; broker or dealer registered pursuant to section 15
of the Securities Exchange Act of 1934; an insurance company
as defined in section 2(13) of the Securities Act; an
investment company registered under the Investment Company
Act of 1940 or a business development company as defined in
section 2(a)(48) of that Act; a Small Business Investment
Company licensed by the U.S. Small Business Administration
under section 301(c) or (d) of the Small Business Investment
Act of 1958; a plan established and maintained by a state,
its political subdivisions, or any agency or instrumentality
of a state or its political subdivisions for the benefit of
its employees, if such plan has total assets in
excess of $5,000,000; employee benefit plan within the
meaning of the Employee Retirement Income Security Act of
1974 ("ERISA"), if the investment decision is made by a plan
fiduciary, as defined in section 3(21) of ERISA, which is
either a bank, savings and loan association, insurance
company, or registered investment adviser, or if the employee
benefit plan has total assets in excess of $5,000,000; or, if
a self-directed plan, with investment decisions made solely
by persons that are accredited investors;
(5) is a private business development company as defined in
section 202(a)(22) of the Investment Advisers Act of 1940;
(6) is a non-profit organization described in Section 501(c)(3)
of the Internal Revenue Code, corporation, Massachusetts or
similar business trust, or Company, not formed for the
specific purpose of acquiring the securities offered, with
total assets in excess of $5,000,000;
(7) is a director or executive officer of the Company; or
(8) is an entity in which all of the equity owners are accredited
investors under subparagraphs (1) through (7) above.
(b) If applicable: The undersigned acknowledges that (i) the person
identified in the Purchaser Representative Letter, is his "Purchaser
Representative," as defined in Rule 501 of Regulation D promulgated under
the Securities Act, as amended, (ii) he has relied upon the advice of such
Purchaser Representative as to the merits of an investment in the Company
and the suitability of that investment for the undersigned, and (iii) such
Purchaser Representative has heretofore confirmed to the undersigned in
writing (a true and correct copy of which is furnished to you herewith)
during the course of this transaction any past, present or future material
relationship, actual or contemplated, between the Purchaser Representative
and his or its affiliates and the Company and its affiliates, or any
compensation received or to be received as a result thereof.
(c) The undersigned has such knowledge and experience in financial and
business matters that he is capable of evaluating the merits and risks of
an investment in the Company or (if applicable) the undersigned and his
Purchaser Representative together have such knowledge and experience in
financial and business matters that they are capable of evaluating the
merits and risks of the prospective investment.
(d) The undersigned has received and read and is familiar with the
Memorandum, including the documents and exhibits annexed thereto and any
amendments thereof, and understands that the form of any such document or
exhibit may be modified prior to its execution, and he confirms that, if
requested, all
documents, records and books pertaining to his proposed investment have
been made available to him and (if applicable) his Purchaser
Representative.
(e) The undersigned and, if applicable, his Purchaser Representative
have had, if requested, an opportunity to ask questions of and receive
satisfactory answers from the officers of the Company concerning the
Company and its business and the terms and conditions of an investment in
the Company, and all such questions have been answered to the full
satisfaction of the undersigned.
(f) The securities for which the undersigned hereby subscribes will be
acquired for his own account for investment and not with a view to, or for
resale in connection with, any distribution of the securities within the
meaning of the Securities Act and he does not now have any reason to
anticipate any change in his circumstances or other particular occasion or
event which would cause him to sell or transfer his securities.
(g) The undersigned represents that it has been called to his
attention by those individuals with whom he has dealt in connection with
his investment in the Company, that the Company was only recently organized
and that his investment in the Company involves a high degree of risk which
may result in the loss of the entire amount of his investment.
(h) The undersigned is presently a bona fide resident of the state set
forth on the signature page hereof as his "Address" and the address and
Social Security number or federal tax identification number set forth
herein are his true and correct residence and Social Security number or
federal tax identification number. The undersigned has no present
intention of becoming a resident of any other state or jurisdiction. If
the undersigned is a corporation, partnership, trust or other form of
business, it represents and warrants that its principal place of business
is within such state.
(i) The undersigned represents that he has made other investments and,
by reason of his business and financial experience and of the business and
financial experience of those persons he has retained to advise him with
respect to his investment in the Company, has acquired the capacity to
protect his own interest in investments of this nature. In reaching the
conclusion that he desires to acquire the Units, the undersigned has
carefully evaluated his financial resources and investment position, and
the risks associated with this investment and acknowledges that he is able
to bear the economic risks of this investment. The undersigned represents
and warrants that the investment being made does not exceed twenty percent
(20%) of the undersigned's net worth.
(j) The undersigned understands that no Commissioner of Securities of
any state has made any finding or determination relating to the fairness
for investment in the Units, that no Commissioner of Securities of any
state has endorsed the Units, and that the undersigned recognizes that he
must bear the economic risk of an investment in the Units for an indefinite
period of time because neither the Units, nor the
components of the Units, nor the securities into which the Series B Stock
and the Warrants are exercisable, have been registered under any securities
laws and therefore cannot be sold without registration under applicable
securities laws or an exemption from such registration is available.
(k) The undersigned, if a corporation, partnership, association, joint
stock company, trust or incorporated organization, represents and warrants
that such entity was not organized for the specific purpose of acquiring
the Units subscribed to herein and has other investment or business
activities or will make other investments or engage in other business
activities, unless the undersigned has indicated the contrary to the
Company and specified the number of beneficial owners thereof, and the
Company has consented in writing thereto, and the undersigned, if an
individual, represents and warrants that he is not acquiring the Units as
nominee, trustee, agent or representative for any other person, unless the
undersigned has indicated the contrary to the Company and specified the
number of beneficial owners thereof, and the Company has consented in
writing thereto.
(l) The information provided to the Company herein is true and correct
in all respects as of the date hereof. The undersigned agrees to notify
the Company immediately if any of the statements made herein shall become
untrue.
6. RETURN OF FUNDS UPON REJECTION. The Company shall have the right to
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accept or reject this subscription, in whole or in part, and this subscription
shall be deemed to be accepted by the Company only when a copy of the signature
page of this Subscription Agreement is executed by a duly authorized officer of
the Company. Subscriptions need not be accepted in the order received by the
Company. Should this subscription be rejected, in whole or in part, or should
the offering of the Units not be consummated for any reason, the Company shall
promptly return, without interest, that portion of the investment which is not
accepted, together with all subscription documents.
7. INDEMNIFICATION. The undersigned acknowledges that he understands the
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meaning and legal consequences of the representations and warranties in
Paragraph 5 hereof and that the Company has relied upon such representations and
warranties, and the undersigned hereby agrees to indemnify and hold harmless the
Company, and all officers, directors, employees agents and representatives
thereof, from and against any and all claims, demands, losses, damages, expenses
or liabilities (including attorneys' fees) due to or arising out of a breach of
any such representations or warranties. Notwithstanding the foregoing, however,
no representation, warranty, acknowledgment or agreement made herein by the
undersigned shall in any manner be deemed to constitute a waiver of any rights
granted to him under federal or state securities laws.
8. RESTRICTIONS ON TRANSFER. The undersigned acknowledges that he is
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aware that there are substantial restrictions on the transferability of the
Units, the Series B Stock, the Warrants, and the underlying Common Stock
available by conversion of the Series B Stock (the "Conversion Shares") or
exercise of the Warrants (the "Underlying Shares"). Since the Units will not
be, and since the undersigned has no right to require that said securities be,
registered under the Securities Act, the Units, the Series B Stock, the
Warrants,
the Conversion Shares, and the Underlying Shares may not become so registered.
The undersigned agrees that the Units, the Series B Stock, the Warrants, the
Conversion Shares, and the Underlying Shares may not be sold in the absence of
registration unless such sale is exempt from registration under such Act and any
applicable state securities laws. The undersigned also acknowledges that he
shall be responsible for compliance with all conditions on transfer imposed by
any Commissioner of Securities of any state and for any expenses incurred by the
Company for legal or accounting services in connection with reviewing such a
proposed transfer or issuing legal opinions in connection therewith.
I wish to subscribe for the securities shown on the following page. The
securities subscribed for hereby were offered and purchased in the state
indicated on the following page.
(THE FOLLOWING SIGNATURE PAGE SHOULD BE EXECUTED. MAIL OR DELIVER THE
ENTIRE EXECUTED SUBSCRIPTION AGREEMENT TO ENVIRO-CLEAN OF AMERICA, INC.,
X/X XXXXXXX X. XXXXX, XX 0000 XXXXXXX, XXX XXXXXXX, XXXXX 00000.)
SIGNATURE PAGE FOR SUBSCRIPTION AGREEMENT FOR
ENVIRO-CLEAN OF AMERICA, INC. CONFIDENTIAL
PRIVATE PLACEMENT MEMORANDUM (THE "MEMORANDUM")
The undersigned has subscribed and paid for __________ Units.
The undersigned represents that he has read the above Subscription
Agreement and the Memorandum.
IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement as of the ____ day of ___________, 199__.
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Signature
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SSN or Tax ID Number
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Name(s) typed or printed
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Address
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City, State and Zip Code
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SUBSCRIPTION ACCEPTED
ENVIRO-CLEAN OF AMERICA, INC.
By:
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Name:
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Title:
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Date:
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