EXHIBIT 10.2
Subscription Agreement
SUBSCRIPTION AGREEMENT
Winmark, Inc.
000 X Xxxxxx, XX
Xxxxxxxxxx, X.X. 00000
Attn: Xxxx Xxxxxxxx
1. APPLICATION. The undersigned ("Investor"), intending to be legally
bound, hereby subscribes for ______________ Shares of the $.001 par value Common
Stock ("Securities") of Winmark, Inc, a Nevada corporation (the "Company") at a
purchase price of ten cents($0.10) per Share, equaling a total price of
_______________________________ Dollars ($____________).
The undersigned understands that his/her Subscription to purchase
Securities may be accepted or rejected in whole or in part by the Company in its
sole discretion. This Subscription is and shall be irrevocable, and none of the
purchase price paid shall be refundable, unless the Company rejects your
Subscription. Enclosed is the undersigned's check made payable to Manufacturers
and Traders Trust Company/Winmark, Inc. Escrow Account" and has been forwarded
to the escrow account in the self-addressed stamped envelope that has been
provided for convenience. The Investor may also elect to submit his subscription
funds to the escrow account VIA wire transfer as provided in this Agreement.
2. representations and warranties. The undersigned represents and warrants
as follows:
(a) The undersigned and/or advisors have had a reasonable opportunity to
ask questions and receive answers from the Company concerning the
Securities.
(b) The undersigned is able to bear the economic risks of an investment in
the Securities for an indefinite period and at the present time could
afford the loss of such investment.
(c) The undersigned understands that an investment in the Securities
involves certain risks and has the knowledge and experience in
financial and business matters generally such that the undersigned is
capable of evaluating the merits and risks of an investment in the
Securities.
(d) The undersigned understands and acknowledges that the Securities have
not been registered for sale under the Securities Act of 1933, as
amended (the "Act"), or under certain state securities laws in
reliance upon exemptions therefrom for non-public offerings, and that
the Securities may not be sold or transferred unless the sale or
transfer is subsequently registered or an exemption from such
registration is available, and there are no assurances that there will
be a public market available to sell or dispose of the Securities.
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EXHIBIT 10.2 - continued
(e) The Securities are being purchased solely for the undersigned's
account, for investment purposes only and not with a view to the
distribution of said Securities and not with a view to assignment or
resale thereof, and no other person will have a direct or indirect
beneficial interest in such Securities.
(f) The undersigned, if a corporation, partnership, trust or other entity
is authorized and otherwise duly qualified to purchase and hold the
Securities and to enter into this Subscription Agreement.
3. INDEMNIFICATION. The undersigned agrees to indemnify and hold harmless the
Company and its agents, representatives and employees from and against all
liability, damage, loss, cost, fee and expense (including reasonable
attorneys' fees) which they may incur by reason of the failure of the
undersigned to fulfill any of the terms or conditions of this Subscription
Agreement, or by reason of any inaccuracy or omission in the information
furnished by the undersigned herein or any breach of the representations
and warranties made by the undersigned herein, or in any document provided
by the undersigned to the Company.
4. MISCELLANEOUS.
(a) This Subscription Agreement shall survive the death or disability of
the undersigned and shall be binding upon the undersigned's heirs,
executors, administrators, successors and permitted assigns.
(b) This Subscription Agreement has been duly and validly authorized,
executed and delivered by the undersigned and constitutes the valid,
binding and enforceable agreement of the undersigned. If this
Subscription Agreement is being completed on behalf of a corporation,
partnership, or trust, it has been completed and executed by an
authorized corporate officer, general partner, or trustee.
(c) This Subscription Agreement referred to herein constitutes the entire
agreement between the parties hereto with respect to the subject
matter hereof and together supersede all prior discussions or
agreements relating to the purchase of these Securities.
(d) Within five (5) days after receipt of a written request from the
Company, the undersigned agrees to provide such information, to
execute and deliver such documents and to take, or forbear from
taking, such actions or provide such further assurances as reasonably
may be necessary to correct any errors in documentation or to comply
with any and all laws to which the Company is subject.
(e) The Company shall be notified immediately of any change in any of the
information contained above occurring prior to the undersigned's
purchase of the Securities or at any time thereafter for so long as
the undersigned is a holder of the Securities.
5. REPRESENTATIONS. The undersigned hereby additionally represents and
warrants that:
(i) The undersigned is purchasing for his/her/its own account and not on
behalf of any other person.
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EXHIBIT 10.2 - continued
(ii) The undersigned will not sell or assign the Securities except in
accordance with the provisions of the Securities Act of 1933, as amended,
or pursuant to the registration Requirements under the Act, or pursuant to
an available exemption under the Act such as Rule 144, which requires a
prior holding period of not less than one year from date of purchase.
(iii) The undersigned, in evaluating the merits and risks of this
investment, has determined that this investment is suitable for the
undersigned's participation, and the undersigned has received and reviewed
all pertinent documents requested by the undersigned.
(iv) Share certificates shall bear an appropriate restrictive legend that
restricts the further sale or assignment of the Securities except in
accordance with the foregoing provisions set forth above.
(v) The undersigned is aware that there is no public market for the
Company's Securities that the transfer of Securities is subject to certain
restrictions according to law and that, as a consequence, it may not be
possible for the undersigned to liquidate the Securities, which may have to
be held indefinitely, which makes this offering an illiquid investment.
(vi) The undersigned is able to bear the economic risk of the investment
and has such business or financial experience as to be capable of
evaluating the merits and risks of investing in the Company.
(vii) The undersigned is aware that an investment in the Company involves
certain material risks.
(viii) The undersigned, in evaluating the merits and risks of an investment
in the Securities, has been encouraged to seek the advice of his or her own
personal tax and legal counsel, and has not relied upon any representations
concerning this investment.
(ix) The undersigned has had the opportunity to personally ask questions of
and receive answers from duly qualified agents and representatives of the
Company and to verify the accuracy and completion of all material
information about the Company, its business, officers, directors and
founders, and the terms and conditions under which the Securities are being
acquired.
6. ACCREDITED INVESTOR CERTIFICATION. The undersigned further represents
and warrants as indicated below:
(Please xxxx one or more of the seven following statements)
[ ] 1. I am a natural person who had individual income of more than
$200,000 in each of the most recent two years, or joint income with my
spouse in excess of $300,000 in each of the most recent two years, and
reasonably expect to reach that same income level for the current
year. The term "income", for purposes of this Subscription Agreement,
shall be computed as follows: individual adjusted gross income, as
reported (or to be reported) on a federal income tax return, increased
by (1) any deduction of long-term capital gains under Section 1202 of
the current Internal Revenue Code (the "Code"), (2) any deduction for
depletion under Section 611 of the Code, (3) any exclusion for
interest under Section 103 of the Codes and (4) any losses of a
partnership as reported on Schedule E of Form 1040);
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EXHIBIT 10.2 - continued
[ ] 2. I am a natural person whose individual net worth (i.e., total
assets in excess of total liabilities), or joint net worth with my
spouse, will at the time of purchase of the Securities be in excess of
$1,000,000;
[ ] 3. The Investor is a trust, which trust has total assets in excess
of $5,000,000, which is not formed for the specific purpose of
acquiring the Securities being offered and whose purchase is directed
by a sophisticated person as described in Rule 506(b)(ii) of
Regulation D and who has such knowledge and experience in financial
and business matters that he is capable of evaluating the risks and
merits of an investment in the Securities;
[ ] 4. The Investor is an employee benefit plan within the meaning of
Title I of the Employee Retirement Income Security Act of 1974, and
either (a) the investment decision will be made by a plan fiduciary,
as defined in Section 3 (21) of such Act, which is either a bank,
insurance company, or a registered investment adviser; or (b) the
employee benefit plan has total assets in excess of $5,000,000; or (c)
the employee benefit plan is a self-directed plan, within the meaning
of Title I of such act, and the person directing the purchase is an
Accredited Investor. *
[ ] 5. The Investor otherwise satisfies the requirements of Section
501(a)(1), or satisfying the requirements of Section 501(a)(2) or (3)
of Regulation D promulgated under the Act, which includes but is not
limited to, a self-directed employee benefit plan where investment
decisions are made solely by persons who are "Accredited Investors" as
otherwise defined in Regulation D;
[ ] 6. I am a Director or Executive Officer of the Company; or
[ ] 7. The Investor is an entity (other than a trust) in which all of
the equity owners meet the requirements of at least one of the above
subparagraphs.
The undersigned has executed this Subscription Agreement this _______ day
of_________________________, 2004.
_________________________ x $ per share = $_________________ USD
(Shares being purchased) (Subscription Price)
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EXHIBIT 10.2 - continued
If the Investor is an individual, check whether purchased as [ ] JOINT
TENANTS, as [ ] TENANTS IN COMMON, as [ ] COMMUNITY PROPERTY, or as an [ ]
Individual.
Securities should be issued in the name(s) of:
--------------------------------------- ---------------------------------------
(Print or Type Owner's Name) (Print or Type Owner's Name)
--------------------------------------- ---------------------------------------
(Owner's Mailing Address) (Owner's Mailing Address)
--------------------------------------- ---------------------------------------
(City) (State) (Zip) (City) (State) (Zip)
--------------------------------------- ---------------------------------------
(Telephone) (Telephone)
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(Signature of Investor) (Signature of Investor)
If the Investor is a [ ] PARTNERSHIP, [ ] CORPORATION, [ ] LIMITED
LIABILITY COMPANY, or [ ] TRUST (check applicable):
--------------------------------------- ---------------------------------------
(Print Name of Entity as Owner) (Title)
--------------------------------------- ---------------------------------------
(Owner Mailing Address) (Print Name of Authorized Officer)
by:
--------------------------------------- ---------------------------------------
(City) (State) (Zip) (Signature)
Subscription Accepted And Agreed To
This Day of 2004
--------- -------------------------
WINMARK, INC.
By:
-----------------------------------------------
Xxxx Xxxxxxxx, its President
WIRING INSTRUCTIONS:
ABA #000000000
M&T Bank Buffalo NY
A/C 6239397070
f/f/c Trust account # 0000000
Account Name: Winmark, Inc
Attn: Xxxx Xxxxxxx
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