REGULATION D SUBSCRIPTION AGREEMENT AND INVESTMENT REPRESENTATION
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
REGULATION
D SUBSCRIPTION AGREEMENT
AND
INVESTMENT REPRESENTATION
SECTION
1
1.1 Subscription.
(a) The
undersigned, intending to be legally bound, hereby irrevocably subscribes for
and agrees to purchase __________ shares (the “Shares”) of the common stock (the
“Common Stock”) of Entertainment Art, Inc., a Nevada corporation (the
"Company"). The undersigned understands that the Shares are being
sold in connection with an offering by the Company of up to 1,000,000 shares at
$0.10 per share (the “Offering”).
The undersigned understands that the
Shares are being offered, sold, and issued in a transaction exempt from the
registration requirements of the Securities Act of 1933, as amended (the
“Securities Act”).
1.2 Purchase of
Shares.
The undersigned understands and
acknowledges that the purchase price to be remitted to the Company in exchange
for the Shares shall be _______________________ dollars
($___________________). The undersigned further understands and
acknowledges that this subscription is irrevocable and that since there is no
minimum amount of proceeds which must be raised by the Company in this Offering,
upon acceptance of this Agreement the Company shall be able to utilize the
investor’s funds as it desires.
1.3 Acceptance or Rejection of
Subscription.
Payment has been made simultaneous
herewith by either (i) wire transfer as set forth below or (ii) by check payable
to Entertainment Art, Inc., in full payment of the shares of common stock
subscribed for (the “Subscription Payment”). The wire transfer
instructions are as follows:
Bank of
America, NA
Routing Number:
▇▇▇▇▇▇▇▇▇
Account
Number: 483006506484
If the
undersigned has paid by check, the undersigned has sent a check by overnight
mail to:
▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
The
undersigned agrees that subject to the conditions set forth herein, the Company
will accept subscriptions and payments therefor as they are received. The
undersigned further understands that the Company will notify the undersigned as
to whether its subscription has been accepted in whole or in part as reasonably
promptly as possible. If the Company accepts all or a portion of the
undersigned’s subscription, the undersigned agrees that this Agreement shall
become effective with respect to the Company and the undersigned, and the
Company will promptly deliver to the undersigned an executed copy of this
Agreement and a share certificate representing the Shares. The undersigned
acknowledges that the Company may terminate this offering at any
time.
In the event the sale of the Shares
subscribed for by the undersigned is not consummated by the Company for any
reason (in which event this Agreement shall be deemed to be rejected), this
Agreement and any other agreement entered into between the undersigned and the
Company relating to this subscription shall thereafter have no force or effect
and the Company shall promptly return or cause to be returned to the undersigned
the purchase price remitted to the Company by the undersigned, without interest
thereon or deduction therefrom, in exchange for the Shares.
SECTION
2
2.1 Closing. The
closing (the "Closing") of the purchase and sale of the Shares, shall occur
simultaneously with the acceptance by the Company of the undersigned's
subscription, as evidenced by the Company's execution of this Subscription
Agreement. You have the right to revoke your subscription by written
notice to the Company if the Closing has not occurred on or before thirty days
after the date that the undersigned has delivered an executed signature page to
this Agreement and the payment thereof, unless you are in material breach of the
Agreement; in such event, this subscription shall thereafter have no force or
effect and the Company shall promptly return or cause to be returned to you the
purchase price remitted to the Company by you, without interest thereon or
deduction therefrom.
SECTION
3
3.1 Investor Representations and
Warranties. The undersigned hereby acknowledges,
represents and warrants to, and agrees with, the Company and its affiliates as
follows:
(a) Investment
Purposes. The undersigned is acquiring the Shares for his own
account as principal, not as a nominee or agent, for investment purposes only,
and not with a view to, or for, resale, distribution or fractionalization
thereof in whole or in part in any transactions that would be in violation of
the Securities Act or any state securities or "blue-sky" laws. No other person
has a direct or indirect beneficial interest in, and the undersigned does not
have any contract, undertaking, agreement or arrangement with any person to
sell, transfer or grant participations to such person or to any third person,
with respect to, the Shares or any part of the Shares for which the undersigned
is subscribing that would be in violation of the Securities Act or any state
securities or "blue-sky" laws.
(b) Authority. The
undersigned has full power and authority to enter into this Agreement, the
execution and delivery of this Agreement has been duly authorized, if
applicable, and this Agreement constitutes a valid and legally binding
obligation of the undersigned.
(c) No General
Solicitation. The undersigned is not subscribing for the
Shares as a result of or subsequent to any advertisement, article, notice or
other communication published in any newspaper, magazine or similar media or
broadcast over television or radio; or presented at any seminar or similar
gathering; or any solicitation of a subscription by a person, other than Company
personnel, previously not known to the undersigned.
(d) No Obligation to Register
Shares. The undersigned understands that the Company is under
no obligation to register the Shares under the Securities Act, or to assist the
undersigned in complying with the Securities Act or the securities laws of any
state of the United States or of any foreign jurisdiction other than as
expressly provided herein.
(e) Investment
Experience. The undersigned, or the undersigned’s professional
advisors, has such knowledge and experience in finance, securities, taxation,
investments and other business matters as to evaluate investments of the kind
described in this Agreement. By reason of the business and financial experience
of the undersigned or his professional advisors (who are not affiliated with or
compensated in any way by the Company or any of its affiliates or selling
agents), the undersigned or his advisors can protect his own interests in
connection with the transactions described in this Agreement. The undersigned is
able to afford the loss of his entire investment in the Shares.
(f) Exemption from
Registration. The undersigned acknowledges his understanding
that the offering and sale of the Shares is intended to be exempt from
registration under the
Securities
Act. In furtherance thereof, in addition to the other representations
and warranties of the undersigned made herein, the undersigned further
represents and warrants to and agrees with the Company and its affiliates as
follows:
(1) The
undersigned has the financial ability to bear the economic risk of his
investment, has adequate means for providing for his current needs and personal
contingencies and has no need for liquidity with respect to his investment in
the Company; and
(2) The
undersigned has such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of the prospective
investment in the Shares. The undersigned also represents it has not
been organized for the purpose of acquiring the Shares; and
(3) The
undersigned has been provided an opportunity for a reasonable period of time
prior to the date hereof to obtain additional information concerning the
offering of the Shares, the Company and all other information to the extent the
Company possesses such information or can acquire it without unreasonable effort
or expense.
(4) The
undersigned understands that the Shares are not being registered under the
Securities Act, or the securities laws of any state in reliance upon exemptions
therefrom for private offerings. The undersigned understands that the
Shares must be held indefinitely unless the sale thereof is subsequently
registered under the Securities Act and applicable state securities laws or
exemptions from such registration are available. All certificates
evidencing the undersigned Shares will bear a legend stating that the Shares
have not been registered under the Securities Act or state securities laws and
they may not be resold unless they are registered under the Securities Act and
applicable state securities laws or exempt therefrom.
(g) Economic
Considerations. The undersigned is not relying on the Company,
or its affiliates or agents with respect to economic considerations involved in
this investment. The undersigned has relied solely on its own
advisors.
(h) No Other Company
Representations. No representations or warranties have been
made to the undersigned by the Company, or any officer, employee, agent,
affiliate or subsidiary of the Company, other than the representations of the
Company contained herein, and in subscribing for Shares the undersigned is not
relying upon any representations other than those contained herein.
(i) Accredited
Investor. The undersigned is an “Accredited Investor” as that
term is defined in Rule 501(a) of Regulation D promulgated under the Securities
Act, and as specifically indicated in Exhibit A to this Agreement.
(j) State
Residency. The
undersigned’s principal residence (if subscriber is an individual) or
principal business address, as applicable, is in the State indicated on the
signature page hereof, and the undersigned has no present intention to move such
residence or principal business address, as applicable, from such
State.
(k) Legend. Each
certificate representing the Shares shall be endorsed with the following legend,
in addition to any other legend required to be placed thereon by applicable
federal or state securities laws:
“THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY
NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR WITHOUT AN
EXEMPTION THEREFROM OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF
1933.”
The
undersigned consents to the Company making a notation on its records or giving
instructions to any transfer agent of the Company in order to implement the
restrictions on transfer of the Shares set forth in this Section
(l) Potential Loss of
Investment; Risk Factors. The undersigned understands that an
investment in the Shares is a speculative investment which involves a high
degree of risk and the potential loss of his entire investment. The
undersigned has considered the uncertainties and difficulties frequently
encountered by companies, such as the Company, in their early stages of
development. The undersigned understands and acknowledges that as a
result thereof, he may lose his entire investment in the Company.
(m) Investment
Commitment. The undersigned's overall commitment to
investments which are not readily marketable is not disproportionate to the
undersigned's net worth, and an investment in the Shares will not cause such
overall commitment to become excessive.
(n) Receipt of
Information. The undersigned has received all documents,
records, books and other information pertaining to the undersigned’s investment
in the Company that has been requested by the undersigned.
(o) No
Reliance. Other than as set forth herein, the undersigned is
not relying upon any other information, representation or warranty by the
Company or any officer, director, stockholder, agent or representative of the
Company in determining to invest in the Shares. The undersigned has
consulted, to the extent deemed appropriate by the undersigned, with the
undersigned’s own advisers as to the financial, tax, legal and related matters
concerning an investment in the Shares and on that basis believes that his or
its investment in the Shares is suitable and appropriate for the
undersigned.
(p) No Governmental
Review. The undersigned is aware that no federal or state
agency has (i) made any finding or determination as to the fairness of this
investment, (ii) made any recommendation or endorsement of the Shares or the
Company, or (iii) guaranteed or insured any investment in the Shares or any
investment made by the Company.
(q) Price of
Shares. The undersigned understands that the price of
the Shares offered hereby was determined by the Company without reference to the
assets or book value of the Company. The undersigned further
understands that there is a substantial risk of further dilution of his or its
investment in the Company.
SECTION
4
4.1 Company’s Representations
and Warranties. The Company represents and warrants to the
undersigned as follows:
(a)
Organization of the
Company. The Company is a corporation duly organized and
validly existing and in good standing under the laws of the State of
Nevada.
(b) Authority. (a) The
Company has the requisite corporate power and authority to enter into and
perform its obligations under this Agreement and to issue the Shares; (b) the
execution and delivery of this Agreement by the Company and the consummation by
it of the transactions contemplated hereby and thereby have been duly authorized
by all necessary corporate action and no further consent or authorization of the
Company or its Board of Directors or stockholders is required; and (c) this
Agreement has been duly executed and delivered by the Company and constitutes a
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, except as
such enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws relating to, or affecting generally the
enforcement of, creditors' rights and remedies or by other equitable principles
of general application.
(c) Exemption from Registration;
Valid Issuances. The sale and issuance of the Shares, in
accordance with the terms and on the bases of the representations and warranties
of the undersigned set forth herein, may and shall be properly issued by the
Company to the undersigned pursuant to any applicable federal or state law. When
issued and paid for as herein provided, the Shares shall be duly and validly
issued, fully paid, and nonassessable. Neither the sales of the Shares pursuant
to, nor the Company's performance of its obligations under, this Agreement shall
result in the creation or imposition of any liens, charges, claims or other
encumbrances upon the Shares or any of the assets of the Company. The Shares
shall not subject the undersigned to personal liability by reason of the
ownership thereof.
(d) No General Solicitation or
Advertising in Regard to this Transaction. Neither the Company
nor any of its affiliates nor any person acting on its or their behalf (a) has
conducted or will conduct any general solicitation (as that term is used in Rule
502(c) of Regulation D) or general advertising with respect to any of the
Shares, or (b) made any offers or sales of any security or solicited any offers
to buy any security under any circumstances that would require registration of
the Common Stock under the Securities Act.
(e) Description of the
Corporation’s Capital Stock. The Company is authorized to
issue 100,000,000 shares of common stock, $0.001 par value per share, of the
Company and 10,000,000 shares of Preferred Stock, $0.001 par
value per share. The Company has issued 10,000,000 shares of common
stock to its officers and directors.
SECTION
5
5.1 Indemnity. The
undersigned agrees to indemnify and hold harmless the Company, its officers and
directors, employees and its affiliates and their respective successors and
assigns and each other person, if any, who controls any thereof, against any
loss, liability, claim, damage and expense whatsoever (including, but not
limited to, any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any litigation commenced or
threatened or any claim whatsoever) arising out of or based upon any false
representation or warranty or breach or failure by the undersigned to comply
with any covenant or agreement made by the undersigned herein or in any other
document furnished by the undersigned to any of the foregoing in connection with
this transaction.
5.2 Modification. Neither
this Agreement nor any provisions hereof shall be modified, discharged or
terminated except by an instrument in writing signed by the party against whom
any waiver, change, discharge or termination is sought.
5.3 Notices. Any
notice, demand or other communication which any party hereto may be required, or
may elect, to give to anyone interested hereunder shall be sufficiently given if
(a) deposited, postage prepaid, in a United States mail letter box, registered
or certified mail, return receipt requested, addressed to such address as may be
given herein, (b) delivered personally at such address, (c) upon the expiration
of twenty four (24) hours after transmission, if sent by facsimile if a
confirmation of transmission is produced by the sending machine (and a copy of
each facsimile promptly shall be sent by ordinary mail), (d) upon the expiration
of twenty four (24) hours after transmission, if sent by email if a confirmation
of transmission is produced by the sending computer (and a copy of each email
transmission promptly shall be sent by ordinary mail) or (e) on the third
business day, if sent by overnight recognized courier, in each case to the
parties at their respective addresses set forth below their signatures to this
Agreement (or at such other address for a party as shall be specified by like
notice; provided that the notices of a change of address shall be effective only
upon receipt thereof).
5.4 Counterparts. This
Agreement may be executed through the use of separate signature pages or in any
number of counterparts and by facsimile, and each of such counterparts shall,
for all purposes, constitute one agreement binding on all parties,
notwithstanding that all parties are not signatories to the same counterpart.
Signatures may be facsimiles.
5.5 Binding
Effect. Except as otherwise provided herein, this Agreement
shall be binding upon and inure to the benefit of the parties and their heirs,
executors, administrators, successors, legal representatives and
assigns. If the undersigned is more than one person, the obligation
of the undersigned shall be joint and several and the agreements,
representations, warranties and acknowledgments herein contained shall be deemed
to be made by and be binding upon each such person and his heirs, executors,
administrators and successors.
5.6 Entire
Agreement. This Agreement and the documents referenced herein
contain the entire agreement of the parties and there are no representations,
covenants or other agreements except as stated or referred to herein and
therein.
5.7 Assignability. This
Agreement is not transferable or assignable by the undersigned.
5.8 Applicable Law; Arbitration;
Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to conflicts of law principles. Any dispute between or, action or
proceeding against any of the parties hereto under, arising out of or in any
manner relating to, this Agreement and the transactions contemplated herein
shall be submitted to and adjudicated by binding arbitration under the rules of
the American Arbitration Association (“AAA”). Such arbitration shall
be in New York, New York. If there is any litigation regarding the arbitration
or otherwise relating to this section 5.8, the parties hereto irrevocably
consent to the jurisdiction of the courts of the State of New York and of any
federal court located in such State in connection with any action or proceeding
arising out of or relating to this Agreement, any document or instrument
delivered pursuant to, in connection with or simultaneously with this Agreement,
or a breach of this Agreement or any such document or instrument. In
any such action or proceeding, each party hereto waives personal service of any
summons, complaint or other process and agrees that service thereof may be made
in accordance with Section 5.3. Within 30 days after such service, or
such other time as may be mutually agreed upon in writing by the attorneys for
the parties to such action or proceeding, the party so served shall appear or
answer such summons, complaint or other process.EACH PARTY HERETO WAIVES TRIAL BY
JURY IN ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF THIS AGREEMENT OR ANY
BREACH OR ALLEGED BREACH HEREOF.
5.9 Pronouns. The
use herein of the masculine pronouns "him" or "his" or similar terms shall be
deemed to include the feminine and neuter genders as well and the use herein of
the singular pronoun shall be deemed to include the plural as well.
5.10 Further
Assurances. Upon request from time to time, the undersigned
shall execute and deliver all documents and do all other acts that may be
necessary or desirable, in the reasonable opinion of the Company or its counsel,
to effect the subscription for the Shares in accordance herewith.
SIGNATURE
PAGE
IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the day and year this
subscription has been accepted by the Company as set forth below.
Number of
Shares
|
Subscribed
For:
|
Print
Name of Subscriber
|
|
_______________
|
|
|
By:
|
|
|
(Signature
of Subscriber or
|
|
|
Authorized
Signatory)
|
|
| Address: | ||
| Telephone: | ||
| Fax: | ||
______________________________
Social
Security Number or other
Taxpayer
Identification
Number
If the
Shares will be held as joint tenants, tenants in common, or community property,
please complete the following:
| Print name of spouse or other co-subscriber |
| Signature of spouse or other co-subscriber |
| Print manner in which Shares will be held |
______________________________
Social
Security Number or other
Taxpayer
Identification Number
If the
Shares have been purchased through a broker or other intermediary, please
identify such entity:
ACCEPTANCE
OF SUBSCRIPTION
_____________________________
Name of
Subscriber
ACCEPTED
BY:
By:____________________________
Name:
Title:
| Date: | , 2007 |
| Accepted for | Number of Shares |
EXHIBIT
A
ACCREDITED INVESTOR
STATUS
The
undersigned subscriber represents that it is an Accredited Investor on the basis
that it is (check one):
_____(i) A
bank as defined in Section 3(a)(2) of the Act, or a savings and loan association
or other institution as defined in Section 3(a)(5)(A) of the Act, whether acting
in its individual or fiduciary capacity; a broker or dealer registered pursuant
to Section 15 of the Securities Exchange Act of 1934; an insurance company as
defined in Section 2(13) of the Act; an investment company registered under the
Investment Company Act of 1940 (the “Investment Company Act”) or a business
development company as defined in Section 2(a)(48) of the Investment Company
Act; a Small Business Investment Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business Investment Act
of 1958; a plan established and maintained by a state, its political
subdivisions or any agency or instrumentality of a state or its political
subdivisions for the benefit of its employees, if such plan has total assets in
excess of $5,000,000; an employee benefit plan within the meaning of the
Employee Retirement Income Security Act of 1974 (“ERISA”), if the investment
decision is made by a plan fiduciary, as defined in Section 3(21) of ERISA,
which is either a bank, savings and loan association, insurance company, or
registered investment advisor, or if the employee benefit plan has total assets
in excess of $5,000,000 or, if a self-directed plan, with investment decisions
made solely by persons that are accredited investors.
_____(ii) A
private business development company as defined in Section 202(a)(22) of the
Investment Advisers Act of 1940.
_____(iii) An
organization described in Section 501(c)(3) of the Internal Revenue Code,
corporation, Massachusetts or similar business trust, or partnership, not formed
for the specific purpose of acquiring the securities offered, with total assets
in excess of $5,000,000.
_____(iv) A
director or executive officer of the Company.
_____(v) A
natural person whose individual net worth, or joint net worth with that person’s
spouse, at the time of his or her purchase exceeds $1,000,000.
_____(vi) A
natural person who had an individual income in excess of $200,000 in each of the
two most recent years or joint income with that person’s spouse in excess of
$300,000 in each of those years and has a reasonable expectation of reaching the
same income level in the current year.
_____(vii) A
trust, with total assets in excess of $5,000,000, not formed for the specific
purpose of acquiring the securities offered, whose purchase is directed by a
sophisticated person as described in Rule 506(b)(2)(ii) (i.e., a person who has
such knowledge and experience in financial and business matters that he is
capable of evaluating the merits and risks of the prospective
investment).
_____(viii) An
entity in which all of the equity owners are accredited
investors. (If this alternative is checked, the Subscriber must
identify each equity owner and provide statements signed by each demonstrating
how each is qualified as an accredited investor. Further, the
Subscriber represents that it has made such investigation as is reasonably
necessary in order to verify the accuracy of this
alternative.)