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THIS PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT RELATES TO AN OFFERING OF
SECURITIES IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT U.S. PERSONS
PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "1933 ACT").
NONE OF THE SECURITIES TO WHICH THIS PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT
(THE "SUBSCRIPTION AGREEMENT") RELATES HAVE BEEN REGISTERED UNDER THE 1933 ACT,
OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE
OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO U.S.
PERSONS EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE
1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT,
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING
TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN ACCORDANCE
WITH THE 1933 ACT
CONFIDENTIAL
AMENDED PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT
(Subscribers Resident in British Columbia or Overseas)
TO: Netco Investments Inc. (the "Company")
Suite ▇▇▇-▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Purchase of Units
l. Subscription
1.1 On the basis of the representations and warranties and subject to the
terms and conditions set forth herein, the undersigned (the "Subscriber")
hereby irrevocably subscribes for and agrees to purchase (1,250 units at a
price per unit of USS1.00 (the "Units") (such subscription and agreement to
purchase being the "Subscription"), for an aggregate purchase price of
US$ 1,250 (the "Subscription Proceeds").
1.2 Each Unit will consist of one common share in the capital of the Company (a
"Share") and one non-transferable share purchase warrant (a "Warrant")
entitling the holder thereof to purchase one additional common share of the
Company (a "Warrant Share"), as presently constituted, for a period of
one year from the date of issue of the Warrant at a price of US$1.50 per
Warrant Share (the Shares, the Warrants, and the Warrant Shares herein are
collectively referred to as the "Securities").
1.3 On the basis of the representations and warranties and subject to the terms
and conditions set forth herein, the Company hereby irrevocably agrees to
sell the Units to the Subscriber.
1.4 Subject to the terms hereof, the Subscription will be effective upon its
acceptance by the Company. The Subscriber acknowledges that the offering of
Units contemplated hereby is part of a private placement offering Units
under Regulation S and a parallel private placement offering under
Regulation D, Rule 506 of the 1933 Act having an aggregate subscription
level of up to two million US dollars (US$2,000,000) (the "Offering"). The
Offering is not subject to any minimum aggregate subscription level.
2. Payment
2.1 The Subscription Proceeds must accompany this Subscription and shall be
paid by certified cheque or bank draft drawn on a Canadian chartered bank,
or a bank in the United States reasonably acceptable to
the Company, and made payable and delivered to the Company. Alternatively,
the Subscription Proceeds may be wired to the Company pursuant to wiring
instructions that will be provided to the Subscriber upon request.
2.2 The Subscriber acknowledges and agrees that this Subscription Agreement,
the Subscription Proceeds and any other documents delivered in connection
herewith will be held on behalf of the Company. In the event that this
Subscription Agreement is not accepted by the Company for whatever reason,
which the Company expressly reserves the right to do, within 90 days of the
delivery of an executed Subscription Agreement by the Subscriber, this
Subscription Agreement, the Subscription Proceeds (without interest
thereon) and any other documents delivered in connection herewith will be
returned to the Subscriber at the address of the Subscriber as set forth in
this Subscription agreement.
2.3 Where the Subscription Proceeds are paid to the Company, the Company is
entitled to treat such Subscription Proceeds as an interest free loan to
the Company until such time as the Subscription is accepted and the
certificates representing the Units have been issued to the Subscriber.
3. Documents Required from Subscriber
3.1 The subscriber must complete, sign and return to the Company.
(a) an executed copy of this Subscription Agreement; and
(b) if the Subscriber is an "Accredited Investor", as that term is defined
in National Instrument 45 106, an Accredited Investor Questionnaire in
the form attached as Exhibit A (the "Questionnaire").
3.2 The Subscriber shall complete, sign and return to the Company as soon as
possible, on request by the Company, any documents, questionnaires, notices
and undertakings as may be required by regulatory authorities, the OTC
Bulletin Board and applicable law.
4. Closing
4.1 Closing of the offering of the Securities (the "Closing") shall occur on or
before September 30, 2006, or on such other date as may be determined by
the Company (the "Closing Date").
4.2 The Company may, at its discretion, elect to close the Offering in one or
more closings, prior to raising the total amount of US$2 million, in which
event the Company may agree with one or more subscribers (including the
Subscriber hereunder) to complete delivery of the Units to such
subscriber(s) against payment therefor at any time on or prior to the
Closing Date.
5. Acknowledgements of Subscriber
5.1 The Subscriber acknowledges and agrees that:
(a) none of the Securities have been registered under the 1933 Act, or under
any state securities or "blue sky" laws of any state of the United States,
and, unless so registered, may not be offered or sold in the United States
or, directly or indirectly, to U.S. Persons, as that term is defined in
Regulation S under the 1933 Act ("Regulation S"), except in accordance with
the provisions of Regulation S, pursuant to an effective registration
statement under the 1933 Act, or pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the 1933 Act;
(b) the Subscriber acknowledges that the Company has not undertaken, and will
have no obligation, to register, of the Securities under the 1933 Act;
(c) by completing the Questionnaire, the Subscriber is representing and
warranting that the Subscriber is an "Accredited Investor", as the term is
defined in National Instrument 45-106 adopted by the British Columbia
Securities Commission;
(d) the decision to execute this Agreement and acquire the Securities hereunder
has not been based upon any oral or written representation as to fact or
otherwise made by or on behalf of the Company, and such decision is based
entirely upon a review of information which has been filed by the Company
with the United States Securities and Exchange Commission, the British
Columbia Securities Commission and in compliance, or intended compliance,
with applicable securities legislation (collectively, the "Public Record");
(e) if the Company has presented a business plan to the Subscriber, the
Subscriber acknowledges that the business plan may not be achieved or be
achievable;
(f) the Subscriber acknowledges having received and reviewed certain materials
concerning the Company;
(g) no securities commission or similar regulatory authority has reviewed or
passed on the merits of the Securities;
(h) there is no government or other insurance covering the Securities;
(i) then are risks associated with an investment in the Securities, as more
fully described in certain information forming part of the Public Record
and the risk factors as detailed in Exhibit B, and the Subscriber
acknowledges such risks by signing the Risk Acknowledgement attached as
Exhibit C;
(j) there are restrictions on the Subscriber's ability to resell the Securities
and it is the responsibility of the Subscriber to find out what those
restrictions are and to comply with them before selling the Securities
(k) the Company has advised the Subscriber that the Company is relying on an
exemption from the requirements to provide the Subscriber with a prospectus
and to sell the Securities through a person registered to sell securities
under the Securities Act (British Columbia) (the "B.C. Act") and as a
consequence of acquiring the Securities pursuant to this exemption, certain
protections, rights and remedies provided by the B.C. Act, including
statutory rights of rescission or damages, will not be available to the
Subscriber;
(l) the Subscriber has not acquired the Securities as a result of, and will not
itself engage in, any "directed selling efforts" (as defined in Regulation
S under the ▇▇▇▇ ▇▇▇) in the United States in respect of any of the
Securities which would include any activities undertaken for the purpose
of, or that could reasonably be expected to have the effect of,
conditioning the market in the United States for the resale of any of the
Units; provided, however, that the Subscriber may sell or otherwise dispose
of any of the Units pursuant to registration thereof under the 1933 Act and
any applicable state securities laws or under an exemption from such
registration requirements;
(m) the Subscriber and the Subscriber's advisor(s) have had a reasonable
opportunity to ask questions of and receive answers from the Company in
connection with the distribution of the Securities hereunder, and to obtain
additional information, to the extent possessed or obtainable without
unreasonable effort or expense, necessary to verify the accuracy of the
information about the Company;
(n) the books and records of the Company were available upon reasonable notice
for inspection, subject to certain confidentiality restrictions, by the
Subscriber during reasonable business hours at
its principal place of business, and all documents, records and books in
connection with the distribution of the Securities hereunder have been made
available for inspection by the Subscriber, the Subscriber's lawyer and/or
advisor(s);
(o) the Subscriber will indemnify and hold harmless the Company and, where
applicable, its directors, officers, employees, agents, advisors and
shareholders, from and against any and all loss, liability, claim, damage
and expense whatsoever (including, but not limited to, any and all fees,
costs and expenses whatsoever reasonably incurred in investigating,
preparing or defending against any claim, lawsuit, administrative
proceeding or investigation whether commenced or threatened) arising
out of or based upon any representation or warranty of the Subscriber
contained herein, the Questionnaire or in any document furnished by the
Subscriber to the Company in connection herewith being untrue in any
material respect or any breach or failure by the Subscriber to comply with
any covenant or agreement made by the Subscriber to the Company in
connection therewith;
(p) the Securities will become listed on the OTC Bulletin Board;
(q) in addition to resale restrictions imposed under U.S. securities laws,
there are additional restrictions on the Subscriber's ability to resell the
Units under the B.C. Act and National lnstrument 45-102 adopted by the
British Columbia Securities Commission;
(r) the Company will refuse to register any transfer of the Units not made in
accordance with the provisions of Regulation S, pursuant to an effective
registration statement under the 1933 Act or pursuant to an available
exemption from the registration requirements of the 1933 Act;
(s) the statutory and regulatory basis for the exemption claimed for the offer
Securities, although in technical compliance with Regulation S, would not
be available if the offering is part of a plan or scheme to evade the
registration provisions of the 1933 Act; and
(t) the Subscriber (or others for whom it is contracting hereunder) has been
advised to consult its own legal, tax and other advisors with respect to
the merits and risks of an investment in the Securities and with respect to
applicable resale restrictions and applicable tax considerations, and it
(or others for whom it is contracting under) is solely responsible (and the
Company is not in any way responsible) for compliance with:
(i) any applicable laws of the jurisdiction in which the Subscriber is
resident in connection with the distribution of the Securities
hereunder;
(ii) applicable resale restrictions; and
(iii) applicable tax legislation;
(u) this Subscription Agreement is not enforceable by the Subscriber unless it
has been accepted by the Company.
6. Representations, Warranties and Covenants of the Subscriber
6.1 The Subscriber hereby represents and warrants to and covenants with the
Company (which representations, warranties and covenants shall survive the
Closing) that:
(a) the Subscriber has the legal capacity and competence to enter into and
execute this Subscription Agreement and to take all actions required
pursuant hereto and, if the Subscriber is a corporation, it is duly
incorporated and validly subsisting under the laws of its jurisdiction of
incorporation and
all necessary approvals by its directors, shareholders and others have been
obtained to authorize execution and performance of this Subscription
Agreement on behalf of the Subscriber)
(b) the entering into of this Subscription Agreement and the transactions
contemplated hereby do not result in the violation of any of the terms and
provisions of any law applicable to, or the constating documents of, the
Subscriber or of any agreement, written or oral, to which the Subscriber
may be a party or by which the Subscriber is or may be bound;
(c) the Subscriber has duly executed and delivered this Subscription Agreement
and it constitutes a valid and binding agreement of the Subscriber
enforceable against the Subscriber;
(d) if the Subscriber is resident in British Columbia and is not an Accredited
Investor, the Subscriber is (check one or more of the following boxes):
(A) a director, officer, employee or control person of the Company [ ]
(B) a spouse, parent, grandparent, brother, sister or child of a director,
senior officer or control person of the Company [ ]
(C) a close, personal friend of a director, senior officer or control
person of the Company [ ]
(D) a close business associate of a director, senior officer or control
person of the Company [ ]
(e) if the Subscriber has checked one or more of boxes B, C or D in paragraph
6.1(d) above, the director(s), senior officer(s), or control person(s) of
the Company with whom the Subscriber has the relationship is
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
(Fill in the name of each director, senior officer and control person which
you have the above-mentioned relationship with).
(f) the Subscriber is not a U.S. Person;
(g) the Subscriber is not acquiring the Securities for the account or benefit
of, directly or indirectly, any U.S. Person;
(h) the Subscriber is resident in the jurisdiction set out under the heading
"Name and Address of Subscriber" on the signature page of this Subscription
Agreement;
(i) the sale of the Securities to the Subscriber as contemplated in this
Subscription Agreement complies with or is exempt from the applicable
securities legislation of the jurisdiction of residence of the Subscriber;
(j) the Subscriber is acquiring the Securities for investment only and not with
a view to resale or distribution and, in particular, it has no intention to
distribute either directly or indirectly any of the Securities in the
United States or to U. S. Persons;
(k) the Subscriber is outside the United States when receiving and executing
this Subscription Agreement and is acquiring the Securities as principal
for the Subscriber's own account (except for the circumstances outlined in
paragraph 6.1(n)), for investment purposes only, and not with a view to
or for, resale, distribution or fractionalisation thereof, in whole or in
part, and no other person as a direct or indirect beneficial interest in
such Securities;
(l) the Subscriber is not an underwriter of, or dealer in, the common shares of
the Company, nor is the Subscriber participating, pursuant to a contractual
agreement or otherwise, in the distribution of the Securities;
(m) the Subscriber (i) is able to fend for him/her/itself in the Subscription;
(ii) has such knowledge and experience in business matters as to be capable
of evaluating the merits and risks of its prospective investment in the
Securities; and (iii) has the ability to bear the economic risks of its
prospective investment and can afford the complete loss of such investment;
(n) if the Subscriber is acquiring the securities as a fiduciary or agent for
one or more investor accounts
(i) the Subscriber has sole investment discretion with respect to each
such account and it has full power to make the foregoing
acknowledgements, representations and agreements on behalf of such
account, and
(ii) the investor accounts for which the Subscriber acts as a fiduciary or
agent satisfy the definition of an "Accredited Investor", as the term
is defined National Instrument 45-106 adopted by the British Columbia
Securities Commission;
(o) the Subscriber acknowledges that the Subscriber has not acquired the
Securities as a result of, and will not itself engage in, any "directed
selling efforts" (as defined in Regulation S under the ▇▇▇▇ ▇▇▇) in the
United States in respect of any of the Securities which would include any
activities undertaken for the purpose of, or that could reasonably be
expected to have the effect of conditioning the market in the United States
for the resale of any of the Securities; provided, however, that the
Subscriber may sell or otherwise dispose of any of the Securities pursuant
to registration of any of the Securities pursuant to the 1933 Act and any
applicable state securities laws or under an exemption from such
registration requirements and as otherwise provided herein;
(p) the Subscriber is not aware of any advertisement of any of the Securities;
and
(q) no person has made to the Subscriber any written or oral representations:
(i) that any person will resell or repurchase any of the Securities;
(ii) that any person will refund the purchase price of any of the
Securities;
(iii) as to the future price or value of any of the Securities; or
(iv) that any of the Securities will be listed and posted for trading on
any stock exchange or automated dealer quotation system or that
application has been made to list and post any of the Securities of
the Company on any stock exchange or automated dealer quotation
system, except that currently certain market makers make market in the
common shares of the Company on the OTC Bulletin Board.
7. Acknowledgement and Waiver
The Subscriber has acknowledged that the decision to purchase the
Securities was solely made on the basis of publicly available information
contained in the Public Record. The Subscriber hereby waives, to the fullest
extent permitted by law, any rights of withdrawal, rescission or compensation
for damages to which the Subscriber might be entitled in connection with the
distribution of any of the Securities.
8. Resale Restrictions and Legends - All Securities
8.1 The Subscriber hereby acknowledges that upon the issuance thereof, and
until such time as the same is no longer required under the applicable
securities laws and regulations, the certificates representing any of the
Securities will bear a legend in substantially the following form:
THESE SECURITIES WERE ISSUED IN AN OFFSHORE TRANSACTION TO PERSONS WHO
ARE NOT U.S. PERSONS PURSUANT TO REGULATION S UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED THE "1933 ACT"). ACCORDINGLY, NONE OF
THE SECURITIES TO WHICH THIS CERTIFICATE RELATES HAVE BEEN REGISTERED
UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO
REGISTERED, NONE MAYBE OFFERED OR SOLD IN THE UNITED STATES OR, DIRECTLY
OR INDIRECTLY, TO U.S. PERSONS EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT OR PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO THE REGISTRATION REQUIREMENTS OF THE 1933 ACT
AND IN EACH CASE ONLY IN ACCORDANCES WITH APPLICABLE STATE SECURITIES
LAWS, IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT
BE CONDUCTED UNLESS IN ACCORDANCE WITH THE 1933 ACT.
UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THE
SECURITIES SHALL NOT TRADE THE SECURITIES UNTIL THE EXPIRATION OF 12
MONTHS AFTER ACCEPTANCE OF THIS SUBSCRIPTION BY THE COMPANY."
8.2 The Subscriber hereby acknowledges and agrees to the company making a
notation on its records or giving instructions to the registrar and
transfer agent of the Company in order to implement the restrictions on
transfer set forth and described in this Subscription Agreement.
9. Cost
The Subscriber acknowledges and agrees that all costs and expenses incurred by
the Subscriber (including any fees and disbursements of any special counsel
retained by the Subscriber) relating to the purchase of the Units shall be borne
by tine Subscriber.
10. Government Law
This Subscription Agreement is governed by, interpreted and
enforced in accordance with the laws of the Province of British Columbia and the
federal law of Canada applicable therein. The Subscriber, in its personal or
corporate capacity and, if applicable, on behalf of each beneficial purchaser
for whom it is acting, irrevocably attorns to the exclusive jurisdiction of the
courts of the Province of British Columbia.
11. Survival
This Subscription Agreement, including without limitation the
representations, warranties and covenants contained herein, shall survive and
continue in full force and effect and be binding upon the parties hereto
notwithstanding the completion of the purchase of the Securities by the
Subscriber pursuant hereto.
12. Assignment
This Subscription Agreement is not transferable or assignable.
13. Severability
The invalidity or unenforceability of any particular provision of this
Subscription Agreement shall not affect or limit nit the validity or
enforceability of the remaining provisions of this Subscription Agreement
14. Entire Agreement
Except as expressly provided in this Subscription Agreement
and in the agreements, instruments and other document contemplated or provided
for herein, this Subscription Agreement contains the entire agreement between
the parties with respect to the securities and supersedes all prior
agreements, understandings, negotiations and discussions. There are no other
terms, conditions, agreements, representations or warranties, whether expressed
or implied, oral or written, collateral, statutory or otherwise, between the
parties in connection with the subject matter of this Subscription Agreement.
15. Obtaining Regulatory Approval
Without limitation, this subscription and the transactions
contemplated by this Subscription Agreement are conditional upon and subject to
the Company having obtained such regulatory approval of this subscription and
the transactions contemplated by this Subscription Agreement as the Company
considers necessary.
16. Notices
All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given when delivered personally,
telecopied (which is confirmed) or dispatched (postage prepaid) to a nationally
recognized overnight courier service with overnight delivery instructions.
Notices to the Subscriber shall be directed to the address pursuant to clause 18
and notices to the Company shall be directed to NetCo Investments Inc., ▇▇▇▇▇
▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Facsimile
number, (▇▇▇) ▇▇▇▇▇▇▇.
17. Execution By Facsimile and Counterparts
The Company may rely on delivery by fax machine of an executed
copy of this subscription and acceptance by the Company of such faxed copy will
be equally effective to create a valid and binding agreement between the
Subscriber and the Company in accordance with the terms of the Subscription
Agreement. This Subscription Agreement including Exhibit A may be executed in
any number of counterparts (including counterparts by facsimile; and all such
counterparts taken together will be deemed to constitute one and the same
document.
18. Delivery Instructions
The invalidity or unenforceability of any particular provision of
this Subscription Agreement shall not affect or limit the validity or
enforceability of the remaining provisions of this Subscription Agreement.
18.1 The Susbscriber hereby directs the Company to deliver the Share Certificate
to: (name)
_Shih Kai Cheng_______________________________
(name)
_▇▇▇ ▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇ 1S5_______
(address)
_____(▇▇▇) ▇▇▇-▇▇▇▇___________________________
(telephone number)
18.2 The Subscriber hereby directs the Company to cause the Units to be
registered on the books of the Company as follows:
_Shih Kai Cheng_______________________________
(name to appear on certificate)
______________________________________________
(account reference, if applicable)
_▇▇▇ ▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇ 1S5_______
(address)
IN WITNESS WHEREOF the Subscriber has duly executed this Subscription Agreement
as of the date of acceptance by the Company.
_____/s/ Shih Kai Cheng___________________________________
Signature of Individual (if Subscriber is individual)
__________________________________________________________
Authorized signatory (if Subscriber is not an individual)
_Shih Kai Cheng___________________________________________
Name of Subscriber (please print)
__________________________________________________________
Name of authorized signatory (please print)
_▇▇▇ ▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇ 1S5____________________
Address of Purchaser
__(604)▇▇▇-▇▇▇▇_____▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇______________________
Telephone number and email address
___/s/________________________
Signature of witness
__Pui Woh Lo__________________
Name of witness (please print)
__206-388 Drake Street, Vancouver, BC___
Address of witness
ACCEPTANCE
The above-mentioned Subscription Agreement in respect of the Units is hereby
accepted by NetCo Investments Inc.
DATED at Vancouver, the 19th day of May, 2006
NetCo Investments Inc.
/s/_____________________
Authorized Signatory
EXHIBIT A
NATIONAL INSTRUMENT 45-106
ACCREDITED INVESTOR QUESTIONNAIRE
The purpose of this questionnaire is to assure NetCo Investments Inc., that the
undersigned (the "Subscriber") will meet certain requirements for the
registration and prospectus exemptions provided for under National Instrument
45-106 ("NI 45-106"), as adopted by the British Columbia Securities Commission
and the Alberta Securities Commission, in respect of the proposed private
placement of securities by the Company (the "Transaction"). The Company will
rely on the information contained in this Questionnaire for the purposes of
such determination.
The undersigned Subscriber covenants, represents and warrants to the Company
that:
l. the Subscriber has such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of the
Transaction and the Subscriber is able to bear the economic risk of loss
arising from such Transaction;
2. the Subscriber satisfies one or more of the categories of "accredited
investor" (as that term is defined in NI 45-106) indicated below (please
check the appropriate box):
[] a) a Canadian financial institution, or a Schedule III bank;
[] b) the Business Development Bank of Canada incorporated under the
Business ,Development Bank of Canada Act (Canada);
[] (c) a subsidiary of any person referred to in paragraphs (a) or (b),
if the person owns all of the voting securities of the subsidiary,
except the voting securities required by law to be owned by directors
of that subsidiary;
[] (d) a person registered under the securities legislation of a
jurisdiction of Canada as an adviser or dealer, other than a person
registered solely as a limited market dealer under cane or both of the
Securities Act (Ontario) or the Securities Act (Newfoundland and
Labrador),
[] (e) an individual registered or formerly registered under the
securities legislation of a jurisdiction of Canada as a representative
of a person referred to in paragraph (d)
[] (f) the Government of Canada or a jurisdiction of Canada, or any crown
corporation, agency or wholly owned entity of the Government of Canada
or a jurisdiction of Canada;
[] (g) a municipality, public board or commission in Canada and a
metropolitan community, school board, the Comite de gestion de la taxe
scolaire de l'ile de Montreal or an intermunicipal management board in
Quebec;
[] (h) a national, federal, state, provincial, territorial or municipal
government of or in any foreign Jurisdiction, or any agency of that
government;
[] (i) a pension fund that is regulated by either the Office of the
Superintendent of Financial Institutions (Canada) or a pension
commission or similar regulatory authority of a jurisdiction of
Canada;
[X] (j) an individual who, either alone or with a spouse, beneficially
owns, directly or indirectly, financial assets having an aggregate
realizable value that before taxes, but net of any related
liabilities, exceeds CDN$1,000,000;
[] (k) an individual whose net income before taxes exceeded CDN$200,000
in each of the two more recent calendar years or whose net income
before taxes combined with that of a spouse exceeded CDN$300,000 in
each of the 2 most recent calendar years and who, in either case,
reasonably expects to exceed that net income level in the current
calendar year;
[] (1) an individual who, either alone or with a spouse, has net assets
of at least CDN$5,000,000;
[] (m) a person, other than an individual or investment fund, that has
net assets of at least CDN$5,000,000 as shown on its most recently
prepared financial statements;
[] (n) an investment fund that distributes or has distributed its
securities only to
(i) a person that is or was an accredited investor at the time of the
distribution;
(ii) a person that acquires or acquired securities in the
circumstances referred to in sections 2.10 [Minimum amount
investment], and 2.19 [Additional investment in investment
funds]; or
(iii) a person described in paragraph (i) or (ii) that acquires or
acquired securities under section 2.18 [Investment fund
reinvestment];
[] (o) an investment fund that distributes or has distributed securities
under a prospectus in a jurisdiction of Canada for which the regulator
or, in Quebec, the securities regulatory authority, has issued a
receipt;
[] (p) a trust company or trust corporation registered or authorized to
carry on business larder the Trust and Loan Companies Act (Canada) or
under comparable legislation in a jurisdiction of Canada or a foreign
jurisdiction, acting on behalf of a fully managed account managed by
the trust company or trust corporation, as the case may be;
[] (q) a person acting on behalf of a fully managed account managed by
that person, if that person
(i) is registered or authorized to carry on business as an advisor or
the equivalent under the securities legislation of a jurisdiction
of Canada or a foreign jurisdiction; and
(ii) in Ontario, is purchasing a security that is not a security of
ate investment fund;
[] (r) a registered charity under the Income Tax Act (Canada) that, in
regard to the trade, has obtained advice from an eligibility adviser
or an adviser registered under the securities legislation of the
jurisdiction of the registered charity to give advice on the
securities being traded;
[] (s) an entity organized in a foreign jurisdiction that is analogous to
any of the entities referred to in paragraphs (a) to (d) or paragraph
(i) in form and function;
[] (t) a person in respect of which all of the owners of interests,
direct, indirect or beneficial, except the voting securities required
by law to be owned by directors, are persons that are accredited
investors,
[] (u) an investment fund that is advised by a person registered as an
advisor or a person that is exempt from registration as an adviser; or
[] (v) a person that is recognized or designated by the securities
regulatory authority or, except in Ontario or Quebec, the regulator as
(i) an accredited investor; or
(ii) an exempt purchaser in Alberta or British Columbia after this
instrument comes into force
The Subscriber acknowledges and agrees that the Subscriber may be required by
the Company to provide such additional documentation as may be reasonably
required by the Company and its legal counsel in determining the Subscriber's
eligibility to acquire the Units under relevant legislation.
IN WITNESS WHEREOF, the undersigned has executed this
Questionnaire as of the __19th__ day of _May__ 2006.
If a Corporation, Partnership or Other Entity: If an Individual:
_____________________________________________ ___/s/____________
Print or Type Name of Entry Signature
____________________________________________ __Shih Kai Cheng__
Signature of Authorized Signatory Print or Type Name
___________________________________________
Type of Entity
EXHIBIT B
RISK FACTORS
The Securities of Netco Investments Inc. (the "Company") involve a high degree
of risk and should be regarded as speculative. In addition to matters set
forth elsewhere, potential subscribers should carefully consider the risk
factors described bellow relating to the business of the Company and the
Offering.
Our securities are speculative.
The purchase of the Units is highly speculative. You should buy them only if
you are able to bear the risk of the entire loss of your investment and have no
need for immediate liquidity in your investment. An investment in the Units
should not constitute a major portion of your portfolio. You should consult your
own independent advisors as to the tax, business and legal considerations
regarding an investment in our securities.
The Company has a limited operating history and has incurred losses
since its Inception March 15, 2000, expects losses to continue for the
foreseeable future, and could fail before implementing its business plan.
The Company is in the extreme early stages of development and could fail before
implementing its business plan. It is a start up venture that will incur net
losses for the foreseeable future. In its Independent Auditor's Report, the
Company's accountants state that the Company's failure to generate revenues and
conduct operations since its inception raise substantial doubt about its ability
to continue as a going concern. The Company will incur additional expenses
before becoming profitable, if it ever becomes profitable. It is a relatively
young company that has no history of earnings or profit. There is no assurance
that it will operate profitably in the future or provide a return on investment
in the future. We have experienced losses in the majority of the fiscal periods
since inception. Our accumulated deficit was $112,114.00 as at December 31,
2005. There is no assurance that we will be able to achieve and maintain
profitable operations.
The potential imposition of a sales tax on the sale of goods and services over
the Internet may substantially impair the Company's opportunity to derive
financial benefit from the sales of its products.
There is currently no Federal Sales Tax on Internet transactions in the USA.
However, it is the Company's understanding that there are agencies working on
the Streamline Sales Tax Project to consider ways of taxing Internet sales,
especially mail-order sales. In the event a sales tax is imposed, this could
impact on the Company's sales and their ability t( generate profit from sales
over the Internet.
The Company will need additional financing which may not be available, or which
may dilute the ownership interests of investors.
The Company's ultimate success will depend on its ability to raise additional
capital. The Company is proposing to raise US$2 million at $1.00 per Unit by
way of private placement through a parallel Regulation S and Rule 506 of
Regulation T, under the Securities Act of 1933, as amended. If the Company fails
to raise funds, it will be unable to implement its business plan and the Company
will likely fail. The Company may raise additional funds through the issuance of
equity, equity-related or convertible debt securities. The issuance of
additional common stock will dilute existing stockholders. The Company may issue
securities with rights, preferences or privileges senior to those of the rights
of its common stock and its stockholders may experience additional dilution.
When additional capital is needed, there is no assurance that funds will be
available from any source or, if available, that they can be obtained on terms
acceptable to the Company.
Purchasers must rely on ▇▇. ▇▇▇▇▇▇▇'▇ abilities for all decisions as he will
control the majority of the stock after the offering. The Company has no
employment agreement with ▇▇. ▇▇▇▇▇▇▇ His leaving would hinder the Company's
ability to operate thereby decreasing the value of the business.
▇▇. ▇▇▇▇▇▇▇ is serving as the Company's sole officer and director and the
Company will be heavily dependent upon ▇▇. ▇▇▇▇▇▇▇'▇ entrepreneurial skills and
experience to implement its business plan. Moreover, the Company does not have
an employment agreement with ▇▇. ▇▇▇▇▇▇▇ and as a result, there is no assurance
that he will continue to manage its affairs in the future. Nor has the Company
obtained a key man life insurance policy on ▇▇. ▇▇▇▇▇▇▇. The Company could lose
:he services of ▇▇. ▇▇▇▇▇▇▇, or ▇▇. ▇▇▇▇▇▇▇ could decide to join a competitor or
otherwise compete directly or indirectly with the Company, which would have a
significant adverse effect on its business and could cause the price if its
stock to be worthless. The services of ▇▇. ▇▇▇▇▇▇▇ would be difficult to
replace.
The offering price by the Units in this offering was arbitrarily
determined and is not an indication of the true value of the stock.
The offering price of Units under this private placement has been arbitrarily
determined by the Company based upon what it believes purchasers of such
speculative issues would be willing to pay for the stock and bears no basis in
relation to assets, book value or any other established criteria of value. These
Units will be subject to restrictions overeating Regulation 144. The offering
price may not reflect the market price of our shares after the offering. No
assurance can be given that the Units will have a market value or that they can
be resold at this price if and when an active secondary market might exist. The
price bears no relationship to earnings, book value or other valuation criteria.
Ryerson A. V. V., will control the majority of the stock after the offering, and
could direct business decisions that may benefit itself to the detriment of
minority shareholders.
As the majority shareholder of the Company, Ryerson A.V.V. and ▇▇ ▇▇▇▇▇▇▇ will
have the ability to control the election of directors and officers of the
Company, and thus direct corporate decisions. Such decisions way include raising
additional capital acquiring assets or engaging in a business combination
transaction. While such corporate actions may implicitly increase the value of
the Company, resulting in an increase in the value of Ryerson's shareholdings,
minority shareholders may not personally recognize an increase in the value of
their stock. For example, the Company may decide to raise additional capital at
a higher value than the current offering. While the Company may be ale to
conduct an offering at a higher value, it may not support enough volume to
permit a shareholder to liquidate shares at a profit. Similarly, an asset
purchase or business combination transaction could result in any consideration
being paid either to the Company or a significant shareholder such as Ryerson
A.V.V., and minority shareholders would simply continue to own shares in the
resulting business. Any asset acquisition or business combination would also
likely include the issuance of a significant amount of the Company's common
stock, which would dilute the ownership interest of holders of existing shares
of the Company's common stock. Depending on the nature of the transaction, the
Company's stockholders may not have an opportunity to vote on whether to approve
it. The Company's management could enter into a transaction that an investor
would not want to invest in. In such a case, an investor could not only lose its
entire investment, but could lose its entire investment on a business decision
it did not get to evaluate at the time of investing in the Company.
Acquisition of Syntec Biofuel Inc's Assets
The Company entered into an acquisition agreement on April 7th 2006 to acquire
all the assets (*including patents relating to a catalyst to convert Syngas
into Ethanol) from Syntec Biofuel Inc subject to the Companies shareholder's
approval. Was cannot guarantee that the shareholders will approve the
acquisition.
Commercialization of the Syntec Catalyst.
The Company cannot guarantee that it will be successful in commercializing the
Syntec Catalyst which would substantially reduce time value of the shares
The SEC could subject the Company to an enforcement inquiry or a shareholders',
suit, which would cripple the Company and render shareholders' investments
worthless.
If the SEC may concludes that the Company never intended to implement the
vitamin distribution business plan they could institute an enforcement inquiry.
Such an action would effectively put the Company out of business due to its thin
capitalization. Investors would likely lose their entire investments.
No market may develop for the Company's common stock and Investors may be unable
to sell their shares.
There is no public market for the Company's common stock and no assurance can be
given that a market will develop or that any shareholder will be able to
liquidate their investment without considerable delay, if at all. The trading
market price of the Company's common stock may decline below the offering price.
If a market should develop, the price may be highly volatile. In addition, an
active public market for the Company's common stock may not develop or be
sustained. Owing to the low price of the securities, many brokerage firms may
not be willing to effect transactions in the securities. Even if a purchaser
finds a broker willing to effect a transaction in the Company's common stock the
combination of brokerage commissions, state transfer taxes, if any, and other
selling costs may exceed the selling price. Further, many lending institutions
will not permit the use of such securities as collateral for loans. Thus, a
purchaser may be unable to sell or otherwise realize the value invested in the
Company's stock.
Investors may face significant limitations on the resale of the Company's stock
due to federal ▇▇▇▇▇ stock regulations
The Securities and Exchange Commission has adopted a number of rules to regulate
"▇▇▇▇▇ stocks." Such rules include Rules 3a51-1, 15g- 1, 15g-2, 15g-3, 15g-4,
15g-5, 15g-6 and 15g-7 under the Securities and Exchange Act of 1934, as
amended. Because the Company's securities may constitute "▇▇▇▇▇ stock" within
the meaning of the rules, the rules would apply to the Company and its
securities. The rules may further affect the ability of owners of the Company's
shares to se11 their securities in any market that may develop for them. There
may be a limited market for ▇▇▇▇▇ stocks, Broker-dealers are required to make a
special suitability determination for purchasers who are not established
customers or accredited investors, and receive the purchaser's written agreement
to the transaction prior to the sale. The market among dealers may not be
active. Investors in ▇▇▇▇▇ stock often are unable to sell stock back to the
dealer that sold them the stock. The ▇▇▇▇ ups or commissions charged by the
broker-dealers may be greater than any profit the seller may make. Because of
large dealer spreads, investors may be unable to sell the stock immediately back
to the dealer at the same price the dealer sold the stock to the investor. In
some cases, the stock may fall quickly in value. Investors may be unable to reap
any profit from any sale of the stock, if they can sell it at all.
Exhibit C
Form 45-106F4
Risk Acknowledgement
o I acknowledge that this is a risky investment.
o I am investing at my own risk.
o No Securities regulatory authority has evaluated or endorsed the merits of
these securities or the disclosure in the offering memorandum.
o That person selling me these securities is not registered with a securities
regulatory authority and has no duty to tell me whether this investment is
suitable for me. [Instruction: Delete if sold by registrant]
o I will not be able to sell these securities for 4 months. [Instruction:
Delete if issuer is not reporting or if the purchaser is a Manitoba
resident]
o I could lose all the money I invest
I am investing __$1,200.00__ [total consideration] in total; this includes any
amount I am obliged to pay in future. __Netco Investments Inc.___ [name of the
issuer] will pay ___$ 0___ [amount of fee or commission] of this to ___N/A___
[name of person selling the securities] as a fee or commission.
I acknowledge that this is a risky investment and that I could lose all the
money I invest.
_______March 19, 2006_______ ___/s/ Shih Kai Cheng______
Date Signature of Purchaser
___Shih Kai Cheng__________
Print name of Purchaser
Sign 2 copies of this document. Keep one copy for your records.
You have 2 business days to cancel your purchase
To do so, send a notice to NETCO INVESTMENTS INC. stating that you want to
cancel your purchase. You must send the notice before midnight on the 2nd
business day after you sign the agreement to purchase the securities. You can
send the notice by fax or email or deliver it in person to NETCO INVESTMENTS
INC. at its business address. Keep a copy of the notice for your records.
Issuer Name and Address:
NETCO INVESTMENTS INC.
Suite 206 - ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Fax (▇▇▇) ▇▇▇-▇▇▇▇ Email:
You are buying Exempt Market Securities
They are called exempt market securities because two parts of securities law do
not apply to them. If an issuer wants to sell exempt market securities to you:
o the issuer does not have to give you a prospectus (a document that
describes the investment in detail and gives you some legal
protections), and
o the securities do not have to be sold by an investment dealer registered
with a securities regulatory authority.
There are restrictions on your ability to resell exempt market securities.
Exempt market securities are more risky than other securities
You will not receive advice [Instruction: Delete if sold by registrant]
You will not get professional advice about whether the investment is suitable
for you, But you can still seek that advice from a registered adviser or
investment dealer. In Alberta, Manitoba, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ and Saskatchewan to qualify as an eligible investor, you may be
required to obtain that advice. Contact the Investment Dealers Association of
Canada (website at ▇▇▇.▇▇▇.▇▇) for a list of registered investment dealers in
your area.
For more information or the exempt market, call your local securities regulatory
authority.
British Columbia Securities Commission
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇ Fax: ▇▇▇-▇▇▇-▇▇▇▇
Instruction: The purchaser must sign 2 copies of this form. The purchaser and
the issuer must each receive a signed copy.