SUBSCRIPTION AGREEMENT FOR Z TRIM HOLDINGS, INC.
Exhibit
4.1
Xxxxxxxxx,
XX 00000
Ladies
and Gentlemen:
1. Subscription.
(a) The
undersigned (the “Purchaser”), intending to be legally bound, hereby
irrevocably
agrees to purchase a unit or units (each, a “Unit” and collectively, the
“Units”) at a purchase
price of $10,000 per Unit, from Z Trim Holdings, Inc., an Illinois corporation
(the “Company”). Each
Unit consists of a senior secured 8% convertible note in the principal amount of
$10,000 convertible at the conversion price of $1.00 into 10,000 shares of
common stock, $.00005 par value per share (“Common Shares”), of Z Trim Holdings,
Inc., an Illinois corporation (the “Company”), and one five-year warrant,
one to purchase 15,000 Common Shares at $1.50 per share (the “$1.50 Warrants”). This
subscription is submitted to you in accordance with and subject to the terms and
conditions described in this Subscription Agreement, and the Confidential
Private Placement Memorandum of the Company dated as of March 11, 2009, as
amended or supplemented from time to time, including all documents incorporated
by reference therein and all attachments, schedules and exhibits thereto (the
“Memorandum”), relating to the offering (the “Offering”) by the Company of a
maximum of 500 Units ($5,000,000) (the “Maximum Amount”).
(b) The
terms of the Offering are more completely described in the Memorandum
and such terms are incorporated herein in their entirety. Certain capitalized
terms used, but
not otherwise defined herein, shall have the respective meanings provided in the
Memorandum.
2. Payment. The
Purchaser encloses herewith a check payable to, or will immediately
make a wire transfer payment to, Z Trim Holdings, Inc., in the full amount of
the purchase price of the Units being subscribed for (the “Subscription
Amount”). Together with the check for, or wire transfer of, the full
Subscription Amount, the Purchaser is delivering a completed and executed
Signature Page to this Subscription Agreement.
3. Deposit of
Funds. All payments made as provided in Section 2 hereof shall
be deposited
by the Company as soon as practicable in its corporate bank
account. If the Company rejects a Purchaser’s subscription, either in
whole or in part (which decision is in the sole discretion of the Company), the
rejected Subscription Amount or the rejected portion thereof will be returned
promptly to the Purchaser without interest accrued thereon or deduction
therefrom. The maximum Subscription Amount for a Purchaser in the Offering is 50
Units ($500,000), unless specifically approved by the Company’s Board of
Directors.
4. Acceptance of
Subscription. The Purchaser understands and agrees that the
Company
in its sole discretion reserves the right to accept or reject this or any other
subscription for the
Units, in whole or in part, notwithstanding prior receipt by the Purchaser of
notice of acceptance
of this or any other subscription. The Company shall have no
obligation hereunder until the
Company shall execute and deliver to the Purchaser an executed copy of this
Subscription
Agreement. If Purchaser’s subscription is rejected in whole, or the
Offering is terminated,
all funds received from the Purchaser will be returned without interest,
penalty, expense or deduction, and this Subscription Agreement shall thereafter
be of no further force or effect. If Purchaser’s subscription is
rejected in part, the funds for the rejected portion of such subscription will
be returned without interest, penalty, expense or deduction, and this
Subscription Agreement will continue in full force and effect to the extent such
subscription was accepted.
5. Representations and Warranties of the
Purchaser. The Purchaser hereby acknowledges,
represents, warrants, and agrees as follows:
(a) None
of the Units, the Notes, the Warrants or any of the shares of Common
Stock issuable upon conversion of the Notes or the exercise of the Warrants
offered pursuant to the Memorandum are registered under the Securities Act of
1933, as amended (the “Securities Act”), or any state securities
laws. The Purchaser understands that the offering and sale of the
Units is intended to be exempt from registration under the Securities Act, by
virtue of Section 4(2) thereof and the provisions of Regulation D promulgated
thereunder, based, in part, upon the representations, warranties and agreements
of the Purchaser contained in this Subscription Agreement;
(b) The Purchaser and the Purchaser’s attorney, accountant, purchaser
representative and/or tax advisor, if any (collectively, “Advisors”), have received the
Memorandum
and all other documents requested by the Purchaser or its Advisors, if any, have
carefully
reviewed them and understand the information contained therein, prior to the
execution of this
Subscription Agreement;
(c) Neither
the Securities and Exchange Commission (the “Commission”) nor any
state securities commission has approved the Units, the Notes, the Warrants or
any of the Common
Shares issuable upon conversion of the Notes or exercise of the Warrants, or
passed upon or endorsed the merits of the Offering or confirmed the accuracy or
determined the adequacy of the Memorandum. The Memorandum has not been reviewed
by any Federal, state or other regulatory authority;
(d) All
documents, records, and books pertaining to the investment in the Units
(including, without limitation, the Memorandum) have been made available for
inspection by the
Purchaser and its Advisors, if any;
(e) The
Purchaser has carefully read the memorandum including the section entitled Risk
Factors. The Purchaser and its Advisors, if
any, have had a reasonable
opportunity
to ask questions of and receive answers from a person or persons acting on
behalf of the
Company concerning the offering of the Units and the business, financial
condition, results of operations
and prospects of the Company, and all such questions have been answered by the
Company
to the full satisfaction of the Purchaser and its Advisors, if any, and the
Purchaser and its
Advisors have had access, through the XXXXX system, to true and complete copies
of the Company’s
most recent Annual Report on Form 10-KSB for the fiscal year ended December 31,
2007 (the
“10-KSB”) as amended, and all other reports filed by the Company pursuant to the
Securities
Exchange Act of 1934, as amended, since the filing of the 10-KSB and prior
to the date hereof
and have reviewed such filings;
(f) In
evaluating the suitability of an investment in the Company, the Purchaser
has not relied upon any representation or other information (oral or written)
other than as stated
in the Memorandum or as contained in documents so furnished to the Purchaser or
its Advisors,
if any, by the Company in writing;
(g) The
Purchaser is unaware of, is in no way relying on, and did not become
aware of
the offering of the Units through or as a result of, any form of general
solicitation or general
advertising including, without limitation, any article, notice, advertisement or
other communication
published in any newspaper, magazine or similar media or broadcast over
television,
radio or over the Internet, in connection with the offering and sale of the
Units and is not
subscribing for Units and did not become aware of the offering of the Units
through or as a result of
any seminar or meeting to which the Purchaser was invited by, or any
solicitation of a subscription
by, a person not previously known to the Purchaser in connection with
investments in
securities generally;
(h) The
Purchaser has taken no action which would give rise to any claim by any person
for brokerage commissions, finders’ fees or the like relating to this
Subscription Agreement or the transactions contemplated hereby (other than
commissions to be paid by the Company as described in the Memorandum
);
(i) The
Purchaser, either alone or together with its Advisor(s), if any, have such
knowledge and experience in financial, tax, and business matters, and, in
particular, investments in securities, so as to enable them to utilize the
information made available to them in connection with the offering of the Units
to evaluate the merits and risks of an investment in the Units and the Company
and to make an informed investment decision with respect thereto;
(j) The
Purchaser is not relying on the Company or any of its employees or agents with
respect to the legal, tax, economic and related considerations of an investment
in the Units, and the Purchaser has relied on the advice of, or has consulted
with, only its own Advisors;
(k) The
Purchaser is acquiring the Units solely for such Purchaser’s own account for
investment and not with a view to resale or distribution thereof, in whole or in
part. The Purchaser has no agreement or arrangement, formal or informal, with
any person to sell or transfer all or any of the Units, the Notes, Warrants or
Common Shares issuable upon conversion of the Notes or exercise of the Warrants,
and the Purchaser has no plans to enter into any such agreement or
arrangement;
(l) The
purchase of the Units represents high risk capital and the Purchaser is able to
afford an investment in a speculative venture having the risks and objectives of
the Company. The Purchaser must bear the substantial economic risks of the
investment in the Units indefinitely because none of the Units, the Notes, the
Warrants, or the Common Shares issuable upon conversion of the Notes or exercise
of the Warrants may be sold, hypothecated or otherwise disposed of unless
subsequently registered under the Securities Act and applicable state securities
laws or an exemption from such registration is available. Legends shall be
placed on the securities included in the Units to the effect that they have not
been registered under the Securities Act or applicable state securities laws and
appropriate notations thereof will be made in the Company’s stock books. Stop
transfer instructions will be placed with the transfer agent of the
securities constituting the Units. It is not anticipated that there will be any
market for resale of the Units, the Notes or the Warrants and
such securities will not be freely transferable at any time in the foreseeable
future. The Common Shares issuable upon conversion of the Notes
or upon exercise of the Warrants will not be transferable
until at least 6 months after conversion or payment in full upon
exercise and then only upon compliance with the conditions of Rule 144
promulgated under the Securities Act of 1933.
(m) The
Purchaser has adequate means of providing for such Purchaser’s current financial
needs and foreseeable contingencies and has no need for liquidity of the
investment in the Units, the Notes, Warrants or any of the Common Shares
issuable upon conversion of the Notes or upon exercise of
the Warrants for an indefinite period of time;
(n) The
Purchaser is aware that an investment in the Units involves a number of very
significant risks and has carefully read and considered the matters set forth in
the Memorandum and, in particular, the matters under the caption “Risk Factors”
therein, and, in particular, acknowledges that such risks may materially
adversely affect the Company’s results of operations and future
prospects;
(o) The
Purchaser is an “accredited investor” as that term is defined in Regulation D
under the Securities Act, and has truthfully and accurately completed the
Accredited Investor Certification contained herein;
(p) The
Purchaser: (i) if a natural person, represents that the Purchaser has reached
the age of 21 and has full power and authority to execute and deliver this
Subscription Agreement and all other related agreements or certificates and to
carry out the provisions hereof and thereof; (ii) if a corporation, partnership,
or limited liability company or partnership, or association, joint stock
company, trust, unincorporated organization or other entity, represents that
such entity was not formed for the specific purpose of acquiring the Units, such
entity is duly organized, validly existing and in good standing under the laws
of the state of its organization, the consummation of the transactions
contemplated hereby is authorized by, and will not result in a violation of
state law or its charter or other organizational documents, such entity has
full power and authority to execute and deliver this Subscription Agreement and
all other related agreements or certificates and to carry out the provisions
hereof and thereof and to purchase and hold the securities constituting the
Units, the execution and delivery of this Subscription Agreement has been duly
authorized by all necessary action, this Subscription Agreement has been duly
executed and delivered on behalf of such entity and is a legal, valid and
binding obligation of such entity; or (iii) if executing this Subscription
Agreement in a representative or fiduciary capacity, represents that it has full
power and authority to execute and deliver this Subscription Agreement in such
capacity and on behalf of the subscribing individual, xxxx, partnership, trust,
estate, corporation, or limited liability company or partnership, or other
entity for whom the Purchaser is executing this Subscription Agreement, and such
individual, partnership, xxxx, trust, estate, corporation, or limited liability
company or partnership, or other entity has full right and power to perform
pursuant to this Subscription Agreement and make an investment in the Company,
and represents that this Subscription Agreement constitutes a legal, valid and
binding obligation of such entity. The execution and delivery of this
Subscription Agreement will not violate or be in conflict with any order,
judgment, injunction, agreement or controlling document to which the Purchaser
is a party or by which it is bound;
(q) The
Purchaser and its Advisors, if any, have had the opportunity to obtain any
additional information, to the extent the Company had such information in their
possession or could acquire it without unreasonable effort or expense, necessary
to verify the accuracy of the information contained in the Memorandum and all
documents received or reviewed in connection with the purchase of the Units and
have had the opportunity to have representatives of the Company provide them
with such additional information regarding the terms and conditions of this
particular investment and the financial condition, results of operations,
business and prospects of the Company deemed relevant by the Purchaser or its
Advisors, if any, and all such requested information, to the extent the Company
had such information in its possession or could acquire it without unreasonable
effort or expense, has been provided by the Company in writing to the full
satisfaction of the Purchaser and its Advisors, if any;
(r) The
Purchaser represents to the Company that any information which the undersigned
has heretofore furnished or is furnishing herewith to the Company is complete
and accurate and may be relied upon by the Company in determining the
availability of an exemption from registration under Federal and state
securities laws in connection with the offering of securities as described in
the Memorandum. The Purchaser further represents and warrants that it will
notify and supply corrective information to the Company immediately upon
the occurrence of any change therein occurring prior to the Company’s issuance
of the securities contained in the Units;
(s) The
Purchaser has significant prior investment experience, including investment in
non-listed and non-registered securities. The Purchaser is knowledgeable about
investment considerations in public companies and, in particular, public
companies traded on the OTCBB. The Purchaser has a sufficient net worth to
sustain a loss of its entire investment in the Company in the event such a loss
should occur. The Purchaser’s overall commitment to investments which are not
readily marketable is not excessive in view of the Purchaser’s net worth and
financial circumstances and the purchase of the Units will not cause such
commitment to become excessive. This investment is a suitable one for the
Purchaser;
(t) The
Purchaser is satisfied that it has received adequate information with respect to
all matters which it or its Advisors, if any, consider material to its decision
to make this investment;
(u) The
Purchaser acknowledges that any estimates or forward-looking statements or
projections included in the Memorandum were prepared by the Company in good
faith, but that the attainment of any such projections, estimates or
forward-looking statements cannot be guaranteed by the Company and should not be
relied upon;
(v) No
oral or written representations have been made, or oral or written information
furnished, to the Purchaser or its Advisors, if any, in connection with the
offering of the Units which are in any way inconsistent with the information
contained in the Memorandum;
(w)
Within five days after receipt of a request from the Company, the Purchaser will
provide such information and deliver such documents as may reasonably be
necessary to comply with any and all laws and ordinances to which the Company is
subject;
(x) The
Purchaser’s substantive relationship with the Company predates the Company’s
contact with the Purchaser regarding an investment in the Units;
(y) THE
SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR
THE SECURITIES LAWS OF CERTAIN STATES AND ARE BEING OFFERED AND SOLD IN RELIANCE
ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH LAWS. THE
SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT
BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER SAID ACT AND SUCH LAWS
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE SECURITIES HAVE NOT BEEN
APPROVED OR DISAPPROVED BY THE COMMISSION, ANY STATE SECURITIES COMMISSION OR
ANY OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED
UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE
MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL;
(z) The
Purchaser acknowledges that none of the Units, the Notes, the Warrants or the
Common Shares issuable upon the conversion of the Notes or upon
exercise of the Warrants have been recommended by any Federal or state
securities commission or regulatory authority. In making an investment decision
investors must rely on their own examination of the Company and the terms of the
Offering, including the merits and risks involved. Furthermore, the foregoing
authorities have not confirmed the accuracy or determined the adequacy of this
Subscription Agreement. Any representation to the contrary is a criminal
offense. The Units, the Notes, the Warrants, and the Common Shares issuable by
the Company upon conversion of the Notes and upon the exercise of the
Warrants, are subject to restrictions on transferability and resale and may not
be transferred or resold except as permitted under the Securities Act, and the
applicable state securities laws, pursuant to registration or exemption
therefrom. Investors should be aware that they will be required to bear the
financial risks of this investment for an indefinite period of time;
and
(aa)
(For ERISA plans only)
The fiduciary of the ER1SA plan (the “Plan”) represents that such
fiduciary has been informed of and understands the Company’s investment
objectives, policies and strategies, and that the decision to invest “plan
assets” (as such term is defined in ERISA) in the Company is consistent with the
provisions of ERISA that require diversification of plan assets and impose other
fiduciary responsibilities. The Purchaser or Plan fiduciary (a) is responsible
for the decision to invest in the Company; (b) is independent of the Company and
any of its affiliates; (c) is qualified to make such investment decision; and
(d) in making such decision, the Purchaser or Plan fiduciary has not relied
on any advice or recommendation of the Company or any of its
affiliates.
6. Representations and Warranties of the
Company. The Company hereby acknowledges, represents,
warrants, and agrees as follows:
(a) The
Company is duly organized, validly existing and in good standing under the laws
of the State of Illinois. The Company is duly qualified to transact business and
is in good standing in each jurisdiction in which failure to do so would have a
material adverse effect on the assets, business, properties, operations,
financial condition or prospects of the Company; and
(b) The
execution and delivery of this Subscription Agreement, the Notes, the Warrants
and the Security Agreement and the performance by the Company of its
obligations hereunder and thereunder and the consummation by the Company of the
transactions contemplated hereby have been duly authorized by the Company and no
other proceedings on the part of the Company are necessary. The person(s)
executing this Subscription Agreement, the Notes, the Security Agreement and the
Warrants on behalf of the Company has all right, power and authority to execute
and deliver such agreements in the name and on behalf of the Company. This
Subscription Agreement, the Notes, the Security Agreement and the Warrants have
been duly executed and delivered by the Company and, assuming the due
authorization, execution and delivery hereof by the subscriber hereto, will
constitute the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as the same may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the rights of creditors generally and the
availability of equitable remedies.
7. Indemnification. The
Purchaser agrees to indemnify and hold harmless the Company,
its officers, directors, employees, agents, control persons and
affiliates from and against all losses, liabilities, claims, damages, costs,
fees and expenses whatsoever
(including, but not limited to, any and all expenses incurred in investigating,
preparing
or defending against any litigation commenced or threatened) based upon or
arising out of any actual or alleged false acknowledgment, representation or
warranty, or misrepresentation or omission to state a material fact, or breach
by the Purchaser of any covenant or agreement made by the Purchaser herein or in
any other document delivered in connection with this Subscription
Agreement.
8. Irrevocability; Binding Effect.
The Purchaser hereby acknowledges and agrees that the
subscription hereunder is irrevocable by the Purchaser, except as required by
applicable law, and
that this Subscription Agreement shall survive the death or disability of the
Purchaser and shall
be binding upon and inure to the benefit of the parties and their heirs,
executors, administrators,
successors, legal representatives, and permitted assigns. If the
Purchaser is more than one
person, the obligations of the Purchaser hereunder shall be joint and several
and the agreements,
representations, warranties, and acknowledgments herein shall be deemed to be
made by and be binding upon each such person and such person’s heirs, executors,
administrators, successors, legal representatives, and permitted
assigns.
9. Modification. This
Subscription Agreement shall not be modified or waived except by
an instrument in writing signed by the party against whom any such modification
or waiver is
sought.
10. Notices. Any notice or other
communication required or permitted to be given hereunder
shall be in writing and shall be mailed by certified mail, return receipt
requested, or delivered
against receipt to the party to whom it is to be given (a) if to the Company, at
the address
set forth above or (b) if to the Purchaser, at the address set forth on the
signature page hereof
(or, in either case, to such other address as the party shall have furnished in
writing in accordance
with the provisions of this Section 10). Any notice or other communication given
by certified
mail shall be deemed given at the time of certification thereof, except for a
notice changing
a party’s address which shall be deemed given at the time of receipt
thereof.
11. Assignability. This
Subscription Agreement and the rights, interests and obligations
hereunder are not transferable or assignable by the Purchaser and the transfer
or assignment
of the Units, the Notes, the Security Agreement, the Warrants and the shares of
Common Stock issuable by the Company upon or upon exercise of the Warrants shall
be made only in accordance with all applicable laws.
12. Applicable
Law. This Subscription Agreement shall be governed by and
construed
under the laws of the State of Illinois as applied to agreements among Illinois
residents entered
into and to be performed entirely within Illinois. Each of the parties hereto
(1) agree that any legal
suit, action or proceeding arising out of or relating to this Agreement shall be
instituted exclusively
in the 19th
Judicial Circuit Court of Lake County, Illinois, or in the United States
District
Court for the Northern District of Illinois, (2) waive any objection which the
Company may have
now or hereafter to the venue of any such
suit, action or proceeding, and (3)
irrevocably consent to the jurisdiction of the 19th
Judicial Circuit Court of Lake County, Illinois,
and the United States District Court for the Northern District of Illinois in
any such suit, action or
proceeding. Each of the parties hereto further agrees to accept and acknowledge
service of any
and all process which may be served in any such suit, action or proceeding in
the 19th
Judicial
Circuit Court of Lake County, Illinois, or in the United States District Court
for the Northern
District of Illinois and agrees that service of process upon it mailed by
certified mail to its
address shall be deemed in every respect effective service of process upon it,
in any such suit, action or
proceeding. THE PARTIES HERETO AGREE TO WAIVE THEIR RESPECTIVE
RIGHTS TO
A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS SUBSCRIPTION AGREEMENT OR ANY DOCUMENT OR
AGREEMENT
CONTEMPLATED HEREBY.
13. Blue Sky Qualification. The
purchase of Units under this Subscription
Agreement
is expressly conditioned upon the exemption from qualification of the offer and
sale of the
Units from applicable Federal and state securities laws. The Company
shall not be required
to qualify this transaction under the securities laws of any
jurisdiction and, should qualification
be necessary, the Company shall be released from any and all obligations to
maintain
its offer, and may rescind any sale contracted, in the
jurisdiction.
14. Use of
Pronouns. All pronouns and any variations thereof used herein
shall be deemed to
refer to the masculine, feminine, neuter, singular or plural as the identity of
the person or
persons referred to may require.
15. Confidentiality. The Purchaser
acknowledges and agrees that any information or data
the Purchaser has acquired from or about the Company, not otherwise properly in
the public
domain, was received in confidence. The Purchaser agrees not to divulge,
communicate or disclose,
except as may be required by law or for the performance of this Subscription
Agreement,
or use to the detriment of the Company or for the benefit of any other
person or persons,
or misuse in any way, any confidential information of the Company, including any
scientific,
technical, trade or business secrets of the Company and any scientific,
technical, trade or
business materials that are treated by the Company as confidential or
proprietary, including, but not
limited to, ideas, discoveries, inventions, developments and improvements
belonging to the
Company and confidential information obtained by or given to the Company about
or belonging
to third parties.
16. Miscellaneous.
(a) This
Subscription Agreement, together with the Warrants constitute the entire
agreement between the Purchaser and the Company with respect to the subject
matter hereof and supersede all prior oral or written agreements and
understandings, if any, relating to the subject matter hereof. The terms and
provisions of this Subscription Agreement may be waived, or consent for the
departure therefrom granted, only by a written document executed by the party
entitled to the benefits of such terms or provisions.
(b) Each
of the Purchaser’s and the Company’s representations and warranties
made in this Subscription Agreement shall survive the execution and delivery
hereof and
delivery of the Notes, the Warrants and the Common Shares issuable upon
conversion of, or payment
of interest on, the Notes and issuable upon the exercise of the
Warrants.
(c) Each
of the parties hereto shall pay its own fees and expenses (including
the fees
of any attorneys, accountants, appraisers or others engaged by such party) in
connection with this
Subscription Agreement and the transactions contemplated hereby whether or not
the transactions
contemplated hereby are consummated.
(d) This Subscription Agreement may be executed in one or more
counterparts
each of which shall be deemed an original, but all of which shall together
constitute one and
the same instrument.
(e) Each
provision of this Subscription Agreement shall be considered separable
and, if for any reason any provision or provisions hereof are determined to be
invalid or contrary to applicable law, such invalidity or illegality shall not
impair the operation of or affect the remaining portions of this Subscription
Agreement.
(f) Paragraph
titles are for descriptive purposes only and shall not control or alter the
meaning of this Subscription Agreement as set forth in the text.
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17.
Omnibus signature
page. This Subscription Agreement is intended to be read and
construed in conjunction with the Security Agreement pertaining to the
Notes. Accordingly, pursuant to the terms and conditions of
this Subscription Agreement and such related agreement it is herby agreed
that the execution by the Purchaser of this Subscription Agreement, in the
place set forth herein shall constitute agreement to be bound by the terms
and conditions hereof and the terms and conditions of the Security
Agreement, the Patent Security Agreement and the Trademark Security
Agreement with the same effect as if each of such separate, but related
agreements were separately signed.
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ANTI-MONEY
LAUNDERING REQUIREMENTS
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The
USA PATRIOT Act
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What
is money laundering?
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How
big is the problem and why is it important?
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The
USA PATRIOT Act is designed to detect, deter, and punish terrorists in the
United States and abroad. The Act imposes new anti-money
laundering requirements on brokerage firms and financial
institutions. Since April 24, 2002 all brokerage firms have
been required to have new, comprehensive anti-money laundering
programs.
To
help you understand theses efforts, we want to provide you with some
information about money laundering and our steps to implement the USA
PATRIOT Act.
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Money
laundering is the process of disguising illegally obtained money so that
the funds appear to come from legitimate sources or
activities. Money laundering occurs in connection with a wide
variety of crimes, including illegal arms sales, drug trafficking,
robbery, fraud, racketeering, and terrorism.
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The
use of the U.S. financial system by criminals to facilitate terrorism or
other crimes could well taint our financial markets. According
to the U.S. State Department, one recent estimate puts the amount of
worldwide money laundering activity at $1 trillion a
year.
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What
are we required to do to eliminate money laundering?
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Under
new rules required by the USA PATRIOT Act, our anti-money laundering
program must designate a special compliance officer, set up employee
training, conduct independent audits, and establish policies and
procedures to detect and report suspicious transaction and ensure
compliance with the new laws.
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As
part of our required program, we may ask you to provide various
identification documents or other information. Until you
provide the information or documents we need, we may not be able to effect
any transactions for you.
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SIGNATURE
PAGE TO
SUBSCRIPTION
AGREEMENT, SECURITY AGREEMENT, PATENT SECURITY AGREEMENT AND TRADEMARK SECURITY
AGREEMENT
Purchaser
hereby elects to purchase a total of ______ Units at a price of $________ per
Unit (NOTE: to be completed by the Purchaser).
Date
(NOTE: To be completed by the Purchaser): __________________, 2009
If the
Purchaser is an INDIVIDUAL, and if purchased as JOINT TENANTS, as TENANTS IN
COMMON, or as COMMUNITY PROPERTY:
____________________________ ______________________________
Print
Name(s) Social
Security Number(s)
___________________________ ______________________________
Signature(s) of
Purchaser(s) Signature
____________________________ ______________________________
Date Address
If the
Purchaser is a PARTNERSHIP, CORPORATION, LIMITED LIABILITY COMPANY or
TRUST:
____________________________ ______________________________
Name of
Partnership, Federal
Taxpayer
Corporation,
Limited Identification
Number
Liability Company or Trust
By:_________________________ ______________________________
Name: State
of Organization
Title:
____________________________ ______________________________
Date Address
By: __________________________
Authorized
Officer
