REGULATION S SUBSCRIPTION AGREEMENT AND INVESTMENT REPRESENTATION
To:
Watchtower
Ventures, Inc.
REGULATION
S SUBSCRIPTION AGREEMENT AND INVESTMENT REPRESENTATION
SECTION
1
1.1
Subscription.
(a)
The
undersigned, intending to be legally bound, hereby irrevocably subscribes
for and agrees to purchase _____________ shares
(the “Shares”) of the common
stock (the “Common Stock”) of _____________,
a
Nevada corporation (the “Company”)
in a transaction exempt from the registration requirements of the Securities
Act
of 1933, as amended (the “Securities Act”). The undersigned understands that the
Shares are being sold in connection with an offering by the Company of a
minimum
of 50,000 shares of Common Stock and a maximum of up to 3,500,000 shares
at
$0.01 per share (the “Offering”).
The
undersigned understands that the Shares are being offered, sold, and issued
in a
transaction exempt from the registration requirements of the Securities Act.
1.2
Purchase
of Shares.
The
undersigned understands and acknowledges that the purchase price to be
remitted
to the Company in exchange for the Shares shall be $______________.
The
undersigned
further understands and acknowledges that this subscription is irrevocable.
1.3
Acceptance
or Rejection of Subscription.
Payment
has been made simultaneous herewith by either (i) wire transfer as set forth
below or (ii) by check payable to Watchtower Ventures, Inc., in full payment
of
the shares of common stock subscribed for (the “Subscription Payment”).
The
undersigned agrees that subject to the conditions set forth herein, the Company
will accept subscriptions and payments therefor as they are received. The
undersigned further understands that the Company will notify the undersigned
as
to whether its subscription has been accepted in whole or in part as reasonably
promptly as possible. If the Company accepts all or a portion of the
undersigned's subscription, the undersigned agrees that this Agreement shall
become effective with respect to the Company and the undersigned, and the
Company will promptly deliver to the undersigned an executed copy of this
Agreement and a share certificate representing the Shares. The undersigned
acknowledges that the Corporation may terminate this offering at any time.
In
the
event the sale of the Shares subscribed for by the undersigned is not
consummated by the Company for any reason (in which event this Agreement
shall
be deemed to be rejected), this Agreement and any other agreement entered
into
between the undersigned and the Company relating to this subscription shall
thereafter have no force or effect and the Company shall promptly return
or
cause to be returned to the undersigned the purchase price remitted to the
Company by the undersigned, without interest thereon or deduction therefrom,
in
exchange for the Shares.
SECTION
2
2.1
Closing.
The
closing (the “Closing”) of the purchase and sale of the
Shares,
shall occur simultaneously with the acceptance by the Company of the
undersigned's subscription, as evidenced by the Company's execution of this
Subscription Agreement. The Closing shall not take place until at least an
aggregate minimum of 50,000 shares of common stock are subscribed for in
this
offering. You have the right to revoke your subscription by written notice
to
the Company if the Closing has not occurred on or before thirty days after
the
date that the undersigned has delivered an executed signature page to this
Agreement and the payment thereof, unless you are in material breach of the
Agreement; in such event, this subscription shall thereafter have no force
or
effect and the Company shall promptly return or cause to be returned to you
the
purchase price remitted to the Company by you, without interest thereon or
deduction therefrom.
SECTION
3
3.1
Investor
Representations and Warranties.
The
undersigned hereby acknowledges,
represents and warrants to, and agrees with, the Company and its affiliates
as
follows:
(a)
Investment
Purposes.
The
undersigned is acquiring the Shares for his own account
as principal, not as a nominee or agent, for investment purposes only, and
not
with a view to, or for, resale, distribution or fractionalization thereof
in
whole or in part in any transactions that would be in violation of the
Securities Act or any state securities or “blue-sky” laws. No other person has a
direct or indirect beneficial interest in, and the undersigned does not have
any
contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participations to such person or to any third person, with
respect to, the Shares or any part of the Shares for which the undersigned
is
subscribing that would be in violation of the Securities Act or any state
securities or “blue-sky” laws.
(b)
Authoritv.
The undersigned has full power and authority to enter into this Agreement,
the execution and delivery of this Agreement has been duly authorized, if
applicable, and this Agreement constitutes a valid and legally binding
obligation of the undersigned.
(c)
No
General Solicitation.
The
undersigned is not subscribing for the Shares
as
a result of or subsequent to any advertisement, article, notice or other
communication published in any newspaper, magazine or similar media or broadcast
over television or radio; or presented at any seminar or similar gathering;
or
any solicitation of a subscription by a person, other than Company personnel,
previously not known to the undersigned.
(d)
No
Obligation to Register Shares.
The
undersigned understands that the Company
is under no obligation to register the Shares under the Securities Act, or
to
assist the undersigned in complying with the Securities Act or the securities
laws of any state of the United States or of any foreign jurisdiction other
than
as expressly provided herein.
(e)
Investment
Experience.
The
undersigned, or the undersigned's
professional
advisors, has such knowledge and experience in finance, securities, taxation,
investments and other business matters as to evaluate investments of the
kind
described in this Agreement. By reason of the business and financial experience
of the undersigned or his professional advisors (who are not affiliated with
or
compensated in any way by the Company or any of its affiliates or selling
agents), the undersigned or his advisors can protect his own interests in
connection with the transactions described in this Agreement. The undersigned
is
able to afford the loss of his entire investment in the Shares.
(f)
Exemption
from Registration.
The
undersigned acknowledges his understanding
that the offering and sale of the Shares is intended to be exempt from
registration under the Securities Act. In furtherance thereof, in addition
to
the other representations and warranties of the undersigned made herein,
the
undersigned further represents and warrants to and agrees with the Company
and
its affiliates as follows:
(l)
The
undersigned has the financial ability to bear the economic risk of
his
investment, has adequate means for providing for his current needs and personal
contingencies and has no need for liquidity with respect to his investment
in
the Company; and
(2)
The
undersigned has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of the
prospective investment in the Shares. The undersigned also represents it
has not
been organized for the purpose of acquiring the Shares; and
(3)
The
undersigned has been provided an opportunity for a reasonable period
of
time prior to the date hereof to obtain additional information concerning
the
offering of the Shares, the Company and all other information to the extent
the
Company possesses such information or can acquire it without unreasonable
effort
or expense.
(g)
Economic
Considerations.
The
undersigned is not relying on the Company,
or its affiliates or agents with respect to economic considerations involved
in
this investment. The undersigned has relied solely on its own advisors. The
undersigned is
not
acting in concert with any of the other shareholders of the Company in
connection with its decision to purchase the Shares and will not act in concert
with any other person affiliated with the Company or any other shareholder
of
the Company in determining when or under what circumstances to sell or otherwise
dispose of all or any portion of the Shares.
(h)
No
Other Company Representations.
No
representations or warranties have
been
made to the undersigned by the Company, or any officer, employee, agent,
affiliate or subsidiary of the Company, other than the representations of
the
Company contained herein, and in subscribing for Shares the undersigned is
not
relying upon any representations other than those contained herein.
(i)
Compliance
with Laws.
Any
resale of the Shares during the ‘distribution compliance
period’ as defined in Rule 902(f) to Regulation S shall only be made in
compliance with exemptions from registration afforded by Regulation S. Further,
any such sale of the Shares in any jurisdiction outside of the United States
will be made in compliance with the securities laws of such jurisdiction.
The
undersigned will not offer to sell or sell the Shares in any jurisdiction
unless
the Investor obtains all required consents, if any.
(j)
Regulation
S Exemption.
The
undersigned understands that the Shares are being
offered and sold to him in reliance on an exemption from the registration
requirements of United States federal and state securities laws under Regulation
S promulgated under the Securities Act and that the Company is relying upon
the
truth and accuracy of the representations, warranties, agreements,
acknowledgments and understandings of the Investor set forth herein in order
to
determine the applicability of such exemptions and the suitability of the
Investor to acquire the Shares. In this regard, the undersigned represents,
warrants and agrees that:
(1)
The
undersigned is not a U.S. Person (as defined below) and is not an affiliate
(as defined in Rule 501(b) under the Securities Act) of the Company and is
not
acquiring the Shares for the account or benefit of a U.S. Person. A U.S.
Person
means anyone of the following:
(A)
any
natural person resident in the United States of America;
(B)
any
partnership or corporation organized or incorporated under
the
laws of the United States of America;
(C)
any
estate of which any executor or administrator is a U.S. person;
(D)
any
trust
of which any trustee is a U.S. person;
(E)
United States of America; any
agency or branch of a foreign entity located in the
(F)
any
non-discretionary account or similar account (other
than
an
estate or trust) held by a dealer or other fiduciary for the benefit or account
of a U.S. person;
(G)
any
discretionary account or similar account (other than an estate
or
trust) held by a dealer or other fiduciary organized, incorporated or (if
an
individual) resident in the United States of America; and
(H)
any
partnership or corporation if:
(i)
organized or incorporated under the laws of any foreign jurisdiction;
and
(ii)
formed
by
a U.S. person principally for the purpose
of
investing in securities not registered under the Securities Act, unless it
is
organized or incorporated, and owned, by accredited investors (as defined
in
Rule 50l(a) under the Securities Act) who are not natural persons, estates
or
trusts.
(2)
At
the
time of the origination of contact concerning this Agreement and
the
date of the execution and delivery of this Agreement, the undersigned was
outside of the United States.
(3)
The
undersigned will not, during the period commencing on the date
of
issuance of the Shares and ending on the first anniversary of such date,
or such
shorter period as may be permitted by Regulation S or other applicable
securities law (the “Restricted Period”), offer, sell, pledge or otherwise
transfer the Shares in the United States, or to a U.S. Person for the account
or
for the benefit of a U.S. Person, or otherwise in a manner that is not in
compliance with Regulation S.
(4)
The
undersigned will, after expiration of the Restricted Period, offer,
sell, pledge or otherwise transfer the Shares only pursuant to registration
under the Securities Act or an available exemption therefrom and, in accordance
with all applicable state and foreign securities laws.
(5)
The
undersigned was not in the United States, engaged in, and prior
to
the expiration of the Restricted Period will not engage in, any short selling
of
or any hedging transaction with respect to the Shares, including without
limitation, any put, call or other option transaction, option writing or
equity
swap.
(6)
Neither
the undersigned nor or any person acting on his behalf has engaged,
nor will engage, in any directed selling efforts to a U.S. Person with respect
to the Shares and the Investor and any person acting on his behalf have complied
and will comply with the “offering restrictions” requirements of Regulation S
under the Securities Act.
(7)
The
transactions contemplated by this Agreement have not been
pre-arranged
with a buyer located in the United States or with a U.S. Person, and are
not
part of a plan or scheme to evade the registration requirements of the
Securities Act.
(8)
Neither
the undersigned nor any person acting on his behalf has undertaken
or carried out any activity for the purpose of, or that could reasonably
be
expected to have the effect of, conditioning the market in the United States,
its territories or possessions, for any of the Shares. The undersigned agrees
not to cause any advertisement of the Shares to be published in any newspaper
or
periodical or posted in any public place and not to issue any circular relating
to the Shares, except such advertisements that include the statements required
by Regulation S under the Securities Act, and only offshore and not in the
U.S.
or its territories, and only in compliance with any local applicable securities
laws.
(9)
Each
certificate representing the Shares shall be endorsed with the following
legends, in addition to any other legend required to be placed thereon by
applicable federal or state securities laws:
(A)
“THE
SECURITIES ARE BEING OFFERED TO INVESTORS
WHO ARE NOT U.S. PERSONS (AS DEFINED IN REGULATION S UNDER THE SECURITIES
ACT OF
1933, AS AMENDED (“THE SECURITIES ACT”)) AND WITHOUT REGISTRATION WITH THE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT
IN
RELIANCE UPON REGULATION S PROMULGATED UNDER THE SECURITIES ACT.”
(B)
“TRANSFER
OF THESE SECURITIES IS PROHIBITED, EXCEPT
IN
ACCORDANCE WITH THE PROVISIONS OF REGULATION S, PURSUANT TO REGISTRATION
UNDER
THE SECURITIES ACT, OR PURSUANT TO AVAILABLE EXEMPTION FROM REGISTRATION.
HEDGING TRANSACTIONS MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE
SECURITIES ACT.”
(10)
The
undersigned consents to the Company making a notation on its records or giving
instructions to any transfer agent of the Company in order to implement the
restrictions on transfer of the Shares set forth in this Section 2.
(k)
Potential
Loss of Investment; Risk Factors.
The
undersigned understands that
an
investment in the Shares is a speculative investment which involves a high
degree of risk and the potential loss of his entire investment. The undersigned
has considered the uncertainties and difficulties frequently encountered
by
companies, such as the Company, in their early stages of development. The
undersigned understands and acknowledges that as a result thereof, he may
lose
his entire investment in the Company.
(1)
Investment
Commitment.
The
undersigned's overall commitment to investments
which are not readily marketable is not disproportionate to the undersigned's
net
worth, and an investment in the Shares will not cause such overall commitment
to
become excessive.
(m)
Receipt
of Information.
The
undersigned has received all documents, records,
books and other information pertaining to the undersigned’s investment in the
Company that has been requested by the undersigned.
(n)
No
Reliance.
Other
than as set forth herein, the undersigned is not relying upon
any
other information, representation or warranty by the Company or any officer,
director, stockholder, agent or representative of the Company in determining
to
invest in the Shares. The undersigned has consulted, to the extent deemed
appropriate by the undersigned, with the undersigned's own advisers as to
the
financial, tax, legal and related matters concerning an investment in the
Shares
and on that basis believes that his or its investment in the Shares is suitable
and appropriate for the undersigned.
(0)
No
Governmental Review.
The
undersigned is aware that no federal or state
agency has (i) made any finding or determination as to the fairness of this
investment, (ii) made any recommendation or endorsement of the Shares or
the
Company, or (iii) guaranteed or insured any investment in the Shares or any
investment made by the Company.
(p)
Price
of Shares.
The
undersigned understands that the price of the Shares offered
hereby was determined by the Company without reference to the assets or book
value of the Company. The undersigned further understands that there is a
substantial risk of further dilution of his or its investment in the Company.
SECTION
4
4.1
Company’s
Representations and Warranties.
The
Company represents and
warrants to the undersigned as follows:
(a)
Organization
of the Company.
The
Company is a corporation duly organized
and validly existing and in good standing under the laws of the State of
Nevada.
(b)
Authority.
(a) The
Company has the requisite corporate power and authority
to enter into and perform its obligations under this Agreement and to issue
the
Shares; (b) the execution and delivery of this Agreement by the Company and
the
consummation by it of the transactions contemplated hereby and thereby have
been
duly authorized by all necessary corporate action and no further consent
or
authorization of the Company or its Board of Directors or stockholders is
required; and (c) this Agreement has been duly executed and delivered by
the
Company and constitutes a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
or similar laws relating to, or affecting generally the enforcement of,
creditors’ rights and remedies or by other equitable principles of general
application.
(c)
Exemption
from Registration; Valid Issuances.
The sale
and issuance of the
Shares, in accordance with the terms and on the bases of the representations
and
warranties of the undersigned set forth herein, may and shall be properly
issued
by the Company to the undersigned pursuant to any applicable federal or state
law. When issued and paid for as herein provided, the Shares shall be duly
and
validly issued, fully paid, and nonassessable. Neither the sales of the Shares
pursuant to, nor the Company's performance of its obligations under, this
Agreement shall (i) result in the creation or imposition of any liens, charges,
claims or other encumbrances upon the Shares or any of the assets of the
Company. The Shares shall not subject the undersigned to personal liability
by
reason of the ownership thereof.
(d)
No
General Solicitation or Advertising in Regard to this
Transaction.
Neither
the Company nor any of its affiliates nor any person acting on its or their
behalf (a) has conducted or will conduct any general solicitation (as that
term
is used in Rule 502( c) of Regulation D) or general advertising with respect
to
any of the Shares, or (b) made any offers or sales of any security or solicited
any offers to buy any security under any circumstances that would require
registration of the Common Stock under the Securities Act.
SECTION
5
5.1
Indemnity.
The
undersigned agrees to indemnify and hold harmless the Company,
its officers and directors, employees and its affiliates and their respective
successors and assigns and each other person, if any, who controls any thereof,
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 or breach or failure by the undersigned to comply
with any covenant or agreement made by the undersigned herein or in any other
document furnished by the undersigned to any of the foregoing in connection
with
this transaction.
5.2
Modification.
Neither
this Agreement nor any provisions hereof shall be modified,
discharged or terminated except by an instrument in writing signed by the
party
against whom any waiver, change, discharge or termination is sought.
5.3
Notices.
Any
notice, demand or other communication which any party hereto
may be required, or may elect, to give to anyone interested hereunder shall
be
sufficiently given if (a) deposited, postage prepaid, in a United States
mail
letter box, registered or certified mail, return receipt requested, addressed
to
such address as may be given herein, (b) delivered personally at such address,
(c) upon the expiration of twenty four (24) hours after transmission, if
sent by
facsimile if a confirmation of transmission is produced
by the sending machine (and a copy of each facsimile promptly shall be sent
by
ordinary mail), (d) upon the expiration of twenty four (24) hours after
transmission, if sent by email if a confirmation of transmission is produced
by
the sending computer (and a copy of each email transmission promptly shall
be
sent by ordinary mail) or (e) on the third business day, if sent by overnight
recognized courier, in each case to the parties at their respective addresses
set forth below their signatures to this Agreement (or at such other address
for
a party as shall be specified by like notice; provided that the notices of
a
change of address shall be effective only upon receipt thereof).
5.4
Counterparts.
This
Agreement may be executed through the use of separate
signature pages or in any number of counterparts and by facsimile, and each
of
such counterparts shall, for all purposes, constitute one agreement binding
on
all parties, notwithstanding that all parties are not signatories to the
same
counterpart. Signatures may be facsimiles.
5.5
Binding
Effect.
Except
as otherwise provided herein, this Agreement shall be
binding upon and inure to the benefit of the parties and their heirs, executors,
administrators, successors, legal representatives and assigns. If the
undersigned is more than one person, the obligation of the undersigned shall
be
joint and several and the agreements, representations, warranties and
acknowledgments herein contained shall be deemed to be made by and be binding
upon each such person and his heirs, executors, administrators and successors.
5.6
Entire
Agreement.
This
Agreement and the documents referenced herein contain
the entire agreement of the parties and there are no representations, covenants
or other agreements except as stated or referred to herein and therein.
5.7
Assignabilitv.
This
Agreement is not transferable or assignable by the undersigned.
5.8
Applicable
Law; Arbitration; Jurisdiction.
This
Agreement shall be governed
by and construed in accordance with the laws of the State of New York, without
giving effect to conflicts of law principles. Any dispute between or, action
or
proceeding against any of the parties hereto under, arising out of or in
any
manner relating to, this Agreement and the transactions contemplated herein
shall be submitted to and adjudicated by binding arbitration under the rules
of
the American Arbitration Association (“AAA”). Such arbitration shall be in New
York, New York. Such arbitration shall be in New York, New York., If there
is
any litigation regarding the arbitration or, for any reason notwithstanding
the
foregoing two sentences, otherwise, then , without prejudice to their rights
under the forgoing two sentences, the parties hereto irrevocably consent
to the
jurisdiction of the courts of the State of New York and of any federal court
located in such State in connection with any action or proceeding arising
out of
or relating to this Agreement, any document or instrument delivered pursuant
to,
in connection with or simultaneously with this Agreement, or a breach of
this
Agreement or any such document or instrument. In any such action or proceeding,
each party hereto waives personal service of any summons, complaint or other
process and agrees
that service thereof may be made in accordance with Section 5.3. Within 30
days
after such service, or such other time as may be mutually agreed upon in
writing
by the attorneys for the parties to such action or proceeding, the party
so
served shall appear or answer such summons, complaint or other process.
EACH
PARTY HERETO WAIVES TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING ARISING
OUT
OF THIS AGREEMENT OR ANY BREACH OR ALLEGED BREACH HEREOF.
5.9
Pronouns.
The use
herein of the masculine pronouns “him” or “his” or similar
terms shall be deemed to include the feminine and neuter genders as well
and the
use herein of the singular pronoun shall be deemed to include the plural
as
well.
5.10
Further
Assurances.
Upon
request from time to time, the undersigned shall execute and deliver all
documents and do all other acts that may be necessary or desirable, in the
reasonable opinion of the Company or its counsel, to effect the subscription
for
the Shares in accordance herewith.
[Remainder
of Page Intentionally Omitted; Signature Pages to Follow]
SIGNATURE
PAGE
IN
WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the day and year this
subscription has been accepted by the Company as set forth below.
|
Number of Shares
Subscribed For: _______________
|
Print Name of Subscriber
___________________________________________
|
|
| By: _________________________________________ | ||
|
(Signature
of
Subscriber or
Authorized Signatory)
|
||
| Address: ____________________________________ | ||
| Telephone: __________________________________ | ||
| Fax: ________________________________________ | ||
__________________________________
Social
Security Number or other
Taxpayer
Identification Number
