OFFLINE CONSULTING, INC. REGULATION S SUBSCRIPTION AGREEMENT AND INVESTMENT REPRESENTATION
OFFLINE
CONSULTING, INC.
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 Offline Consulting, Inc., a Delaware corporation (the
"Company") in a transaction exempt from the registration requirements of the
Securities Act of 1933, as amended (the “Securities Act”). The undersigned
understands that the Shares are being sold in connection with an offering by
the
Company of an aggregate of up to 2,500,000 shares of Common Stock for total
proceeds of up to $250,000.
1.2 Purchase
of Shares.
The
undersigned understands and acknowledges that the purchase price to be remitted
to the Company in exchange for the Shares shall be ____________ dollars
($______) or $0.10 per Share. The Company shall deliver the Shares to the
undersigned promptly after the acceptance of this Subscription Agreement by
the
Company.
1.3 Acceptance
or Rejection.
(a) The
undersigned understands and agrees that the Company reserves the right to reject
this subscription for the Shares if, in its reasonable judgment, it deems such
action in the best interest of the Company, at any time prior to the Closing,
notwithstanding prior receipt by the undersigned of notice of acceptance of
the
undersigned's subscription.
(b) The
undersigned understands and agrees that its subscription for the Shares is
irrevocable.
(c) 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 Subscription
Agreement shall be deemed to be rejected), this Subscription 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.
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 and no
other person has a direct or indirect beneficial interest in such Shares or
any
portion thereof. Further, 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
for which the undersigned is subscribing or any part of the Shares.
(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 meeting, or any solicitation of a subscription
by
person previously not known to the undersigned in connection with investment
securities generally.
(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.
(e) Investment
Experience.
The
undersigned is (i) experienced in making investments of the kind described
in
this Agreement, (ii) able, by reason of the business and financial experience
of
its officers (if an entity) and professional advisors (who are not affiliated
with or compensated in any way by the Company or any of its affiliates or
selling agents), to protect its own interests in connection with the
transactions described in this Agreement, and (iii) able to afford the entire
loss of its 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 realizes that the basis for the exemption may not be present if,
notwithstanding such representations, the undersigned has in mind merely
acquiring the Shares for a fixed or determinable period in the future, or for
a
market rise, or for sale if the market does not rise. The undersigned does
not
have any such intention;
(2) 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
(3) 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
(4) The
undersigned has been provided an opportunity for a reasonable period of time
prior to the date hereof to obtain additional information concerning the
offering of the Shares, the Company and all other information to the extent
the
Company possesses such information or can acquire it without unreasonable effort
or expense.
(g) Economic
Considerations.
The
undersigned is not relying on the Company, or its affiliates or agents with
respect to economic considerations involved in this investment. The undersigned
has relied solely on its own advisors.
(h) No
Other Company Representations.
No
representations or warranties have been made to the undersigned by the Company,
or any officer, employee, agent, affiliate or subsidiary of the Company, other
than the representations of the Company contained herein, and in subscribing
for
Shares the undersigned is not relying upon any representations other than those
contained herein.
(i)
Compliance
with Laws.
Any
resale of the Shares during the ‘distribution compliance period’ as defined in
Rule 902(f) to Regulation S shall only be made in compliance with exemptions
from registration afforded by Regulation S. Further, any such sale of the Shares
in any jurisdiction outside of the United States will be made in compliance
with
the securities laws of such jurisdiction. The Investor will not offer to sell
or
sell the Shares in any jurisdiction unless the Investor obtains all required
consents, if any.
(j) Regulation
S Exemption.
The
undersigned understands that the Shares are being offered and sold to him in
reliance on an exemption from the registration requirements of United States
federal and state securities laws under Regulation S promulgated under the
Securities Act and that the Company is relying upon the truth and accuracy
of
the representations, warranties, agreements, acknowledgments and understandings
of the Investor set forth herein in order to determine the applicability of
such
exemptions and the suitability of the Investor to acquire the Shares. In this
regard, the undersigned represents, warrants and agrees that:
(1)
The
undersigned is not a U.S. Person (as defined below) and is not an affiliate
(as
defined in Rule 501(b) under the Securities Act) of the Company and is not
acquiring the Shares for the account or benefit of a U.S. Person. A U.S. Person
means any one of the following:
(A)
any
natural person resident in the United States of America;
(B)
any
partnership or corporation organized or incorporated under the laws of the
United States of America;
(C) any
estate of which any executor or administrator is a U.S. person;
(D) any
trust
of which any trustee is a U.S. person;
(E) any
agency or branch of a foreign entity located in the United States of
America;
(F) any
non-discretionary account or similar account (other than an estate or trust)
held by a dealer or other fiduciary for the benefit or account of a U.S.
person;
(G) any
discretionary account or similar account (other than an estate or trust) held
by
a dealer or other fiduciary organized, incorporated or (if an individual)
resident in the United States of America; and
(H) any
partnership or corporation if:
(i)
organized or incorporated under the laws of any foreign jurisdiction;
and
(ii)
formed
by
a U.S. person principally for the purpose of investing in securities not
registered under the Securities Act, unless it is organized or incorporated,
and
owned, by accredited investors (as
defined in Rule 501(a) under the Securities Act) who are not natural persons,
estates or trusts.
(2)
At
the
time of the origination of contact concerning this Agreement and the date of
the
execution and delivery of this Agreement, the undersigned was outside of the
United States.
(3) The
undersigned will not, during the period commencing on the date of issuance
of
the Shares and ending on the first anniversary of such date, or such shorter
period as may be permitted by Regulation S or other applicable securities law
(the “Restricted Period”), offer, sell, pledge or otherwise transfer the Shares
in the United States, or to a U.S. Person for the account or for the benefit
of
a U.S. Person, or otherwise in a manner that is not in compliance with
Regulation S.
(4) The
undersigned will, after expiration of the Restricted Period, offer, sell, pledge
or otherwise transfer the Shares only pursuant to registration under the
Securities Act or an available exemption therefrom and, in accordance with
all
applicable state and foreign securities laws.
(5) The
undersigned was not in the United States, engaged in, and prior to the
expiration of the Restricted Period will not engage in, any short selling of
or
any hedging transaction with respect to the Shares, including without
limitation, any put, call or other option transaction, option writing or equity
swap.
(6) Neither
the undersigned nor or any person acting on his behalf has engaged, nor will
engage, in any directed selling efforts to a U.S. Person with respect to the
Shares and the Investor and any person acting on his behalf have complied and
will comply with the “offering restrictions” requirements of Regulation S under
the Securities Act.
(7) The
transactions contemplated by this Agreement have not been pre-arranged with
a
buyer located in the United States or with a U.S. Person, and are not part
of a
plan or scheme to evade the registration requirements of the Securities
Act.
(8) Neither
the undersigned nor any person acting on his behalf has undertaken or carried
out any activity for the purpose of, or that could reasonably be expected to
have the effect of, conditioning the market in the United States, its
territories or possessions, for any of the Shares. The undersigned agrees not
to
cause any advertisement of the Shares to be published in any newspaper or
periodical or posted in any public place and not to issue any circular relating
to the Shares, except such advertisements that include the statements required
by Regulation S under the Securities Act, and only offshore and not in the
U.S.
or its territories, and only in compliance with any local applicable securities
laws.
(9) Each
certificate representing the Shares shall be endorsed with the following
legends, in addition to any other legend required to be placed thereon by
applicable federal or state securities laws:
(A) “THE
SECURITIES ARE BEING OFFERED TO INVESTORS WHO ARE NOT U.S. PERSONS (AS DEFINED
IN REGULATION S UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“THE SECURITIES
ACT”)) AND WITHOUT REGISTRATION WITH THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION UNDER THE SECURITIES ACT IN RELIANCE UPON REGULATION S PROMULGATED
UNDER THE SECURITIES ACT.”
(B) “TRANSFER
OF THESE SECURITIES IS PROHIBITED, EXCEPT IN ACCORDANCE WITH THE PROVISIONS
OF
REGULATION S, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT
TO
AVAILABLE EXEMPTION FROM REGISTRATION. HEDGING TRANSACTIONS MAY NOT BE CONDUCTED
UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.”
(10)
The
undersigned consents to the Company making a notation on its records or giving
instructions to any transfer agent of the Company in order to implement the
restrictions on transfer of the Shares set forth in this Section 2.
(k) Accredited
Investor.
The
undersigned is an “accredited investor” as that term is defined in Rule 501 of
the General Rules and Regulations under the Securities Act by reason of Rule
501(a)(3).
(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 understands that the following factors, among others, could cause
the loss of any or all of his investment.
(1)
The
Company is a development stage company with no operating history for the
undersigned to evaluate its business. The Company was incorporated in the State
of Delaware in April 2006, and as a result is only in the very early stages
of
development. Because the Company has no operating history, it is difficult
to
evaluate its business and future prospects. The undersigned has also considered
the uncertainties and difficulties frequently encountered by companies, such
as
the Company, in their early stages of development. The Company’s revenue and
income potential is unproven and its business model is still emerging. If its
business model does not prove to be profitable, the undersigned may lose all
of
his investment.
(2)
The
Company currently does not have enough working capital to satisfy its capital
needs. The Company is dependent upon its management team to fund its ongoing
operations, and cannot be certain that future financing will be available to
it
on acceptable terms when it needs it. The Company can give no assurances that
it
will be able to sell any portion of this offering or that management will
continue to fund its ongoing operations. This, along with the possibility of
other factors and circumstances the Company cannot predict, may require it
to
seek additional financing faster than anticipated. If the Company is unable
to
obtain financing to meet its needs, the undersigned may lose of his investment.
(3)
The
Company’s officers and directors will only devote a limited amount of time to
the Company. Their divided interests may hinder the Company's ability to
generate revenue. This could result in missed business opportunities and
worse-than-expected operating results. The undersigned may lose his entire
investment.
(4)
Management
has never operated in the industry in which it intends to operate. This lack
of
experience may result in the Company’s needing to employ outside experts that
have such experience. The additional cost could result in a net operating loss
and, ultimately, could result in the Company's failure. Management's
inexperience may limit the Company’s ability to generate revenues. The Company
may never achieve successful operations, and the undersigned may lose his entire
investment.
(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) Investor
Questionnaire.
The
undersigned represents and warrants to the Company that all information that
the
undersigned has provided to the Company, including, without limitation, the
information in the Investor Questionnaire attached hereto or previously provided
to the Company (the “Investor Questionnaire”), is correct and complete as of the
date hereof.
(p) 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.
(q) 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.
(r) Price
of Shares.
The
undersigned understands that the price of the Shares offered hereby bear no
relation to the assets, book value or net worth of the Company and were
determined arbitrarily by the Company. The undersigned further understands
that
there is a substantial risk of further dilution on 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 Delaware.
(b) Authority.
(i) The
Company has the requisite corporate power and authority to enter into and
perform its obligations under this Agreement and to issue the Shares; (ii)
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 (iii) this
Agreement has been duly executed and delivered by the Company and constitutes
a
valid and binding obligation of the Company enforceable against the Company
in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, or similar laws relating to, or affecting
generally the enforcement of, creditors' rights and remedies or by other
equitable principles of general application.
(c) Exemption
from Registration; Valid Issuances.
The
sale and issuance of the Shares, in accordance with the terms and on the bases
of the representations and warranties of the undersigned set forth herein,
may
and shall be properly issued by the Company to the undersigned pursuant to
any
applicable federal or state law. When issued and paid for as herein provided,
the Shares shall be duly and validly issued, fully paid, and nonassessable.
Neither the sales of the Shares pursuant to, nor the Company's performance
of
its obligations under, this Agreement shall (i) result in the creation or
imposition of any liens, charges, claims or other encumbrances upon the Shares
or any of the assets of the Company, or (ii) entitle the other holders of the
Common Stock of the Company to preemptive or other rights to subscribe to or
acquire the Common Stock or other securities 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 (i) 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 (ii) made any offers or sales of any security or solicited
any offers to buy any security under any circumstances that would require
registration of the Common Stock under the Securities Act.
SECTION
5.
5.1 Indemnity.
The
undersigned agrees to indemnify and hold harmless the Company, its officers
and
directors, employees and its affiliates and their respective successors and
assigns and each other person, if any, who controls any thereof, against any
loss, liability, claim, damage and expense whatsoever (including, but not
limited to, any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any litigation commenced or
threatened or any claim whatsoever) arising out of or based upon any false
representation or warranty or breach or failure by the undersigned to comply
with any covenant or agreement made by the undersigned herein or in any other
document furnished by the undersigned to any of the foregoing in connection
with
this transaction.
5.2 Modification.
Neither
this Agreement nor any provisions hereof shall be modified, discharged or
terminated except by an instrument in writing signed by the party against whom
any waiver, change, discharge or termination is sought.
5.3 Notices.
Any
notice, demand or other communication which any party hereto may be required,
or
may elect, to give to anyone interested hereunder shall be sufficiently given
if
(a) deposited, postage prepaid, in a United States mail letter box, registered
or certified mail, return receipt requested, addressed to such address as may
be
given herein, or (b) delivered personally at such address.
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.
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.
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, take all rightful oaths 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.
IN
WITNESS WHEREOF, the undersigned has executed this Agreement on the
day of
________________, 2006.
Amount
of
Investment:
$_____________________
INDIVIDUAL
INVESTOR:
______________________
Name:
PARTNERSHIP,
CORPORATION, TRUST,
CUSTODIAL
ACCOUNT, OTHER INVESTOR
______________________________
(Name
of
Entity)
| By: | ||||
| Name: |
|
|||
| Title: | ||||
| Address: |
Taxpayer
Identification Number:_____________
ACCEPTANCE
OF SUBSCRIPTION
(to
be
filed out only
by the
Company)
The
Company hereby accepts the above application for subscription for Shares on
behalf of the Company.
Dated:
_________ ___, 2006
| OFFLINE CONSULTING, INC. | ||
| |
|
|
| By: | ||
| Name: |
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ |
|
| Title: |
Chief Executive Officer, Chief
Financial
Officer, and Secretary
|
|
OFFLINE
CONSULTING, INC.
INVESTOR
QUESTIONNAIRE
| A. | General Information | ||
|
1.
|
Print
Full Name of Investor:
|
Individual:
|
|
|
____________________________________________________________
|
|||
|
First,
Middle, Last
|
|||
|
Partnership,
Corporation, Trust,
Custodial
Account, Other:
|
|||
|
____________________________________________________
|
|||
|
____________________________________________________________
|
|||
|
Name
of Entity
|
|||
|
2.
|
Address
for Notices:
|
____________________________________________________________
|
|
|
____________________________________________________________
|
|||
|
____________________________________________________________
|
|||
| ____________________________________________________________ | |||
| ____________________________________________________________ | |||
|
3.
|
Name
of Primary Contact Person:
|
____________________________________________________________
|
|
| Title: | ____________________________________________________________ | ||
|
4.
|
Telephone
Number:
|
____________________________________________________________
|
|
|
5.
|
E-Mail
Address:
|
____________________________________________________________
|
|
| ____________________________________________________________ | |||
|
6.
|
Facsimile
Number:
|
____________________________________________________________
|
|
|
7.
|
Permanent
Address:
|
____________________________________________________________
|
|
|
(if
different from Address for Notices above)
|
____________________________________________________________ |
| 8. | Authorized Signatory: | ____________________________________________________________ | |
| Title: | ____________________________________________________________ | ||
| Telephone Number: | ____________________________________________________________ | ||
| Facsimile Number: | ____________________________________________________________ |
B. Accredited
Investor Status
The
Investor represents and warrants that the Investor is an “accredited investor”
within the meaning of Rule 501 of Regulation D under the Securities Act of
1933,
as amended (the “Securities Act”), and has checked the box or boxes below which
are next to the categories under which the Investor qualifies as an accredited
investor:
|
FOR
INDIVIDUALS:
|
|
o
|
A
natural person with individual net worth (or joint net worth with
spouse)
in excess of $1 million. For purposes of this item, “net worth” means the
excess of total assets at fair market value, including home, home
furnishings and automobiles (and including property owned by a spouse),
over total liabilities.
|
|
|
o
|
A
natural person with individual income (without including any income
of the
Investor’s spouse) in excess of $200,000, or joint income with spouse of
$300,000, in each of the two most recent years and who reasonably
expects
to reach the same income level in the current
year.
|
|
|
FOR
ENTITIES:
|
|||
|
o
|
A
bank as defined in Section 3(a)(2) of the Securities Act or any savings
and loan association or other institution as defined in Section 3(a)(5)(A)
of the Securities Act, whether acting in its individual or fiduciary
capacity.
|
||
|
o
|
An
insurance company as defined in Section 2(13) of the Securities
Act.
|
||
|
o
|
A
broker-dealer registered pursuant to Section 15 of the Securities
Exchange
Act of 1934.
|
||
|
o
|
An
investment company registered under the Investment Company Act of
1940, as
amended (the “Investment Company Act”). If an Investor has checked this
box, please contact ▇▇▇▇▇ ▇▇▇▇▇, Esq. at (▇▇▇) ▇▇▇-▇▇▇▇ for additional
information that will be required.
|
||
|
o
|
A
business development company as defined in Section 2(a)(48) of the
Investment Company Act.
|
|
|
o
|
A
small business investment company licensed by the Small Business
Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958.
|
|
|
o
|
A
private business development company as defined in Section 202(a)(22)
of
the Investment Advisers Act of 1940. If an Investor has checked this
box,
please contact ▇▇▇▇▇ ▇▇▇▇▇, Esq. at (▇▇▇) ▇▇▇-▇▇▇▇ for additional
information that will be required.
|
|
|
o
|
An
organization described in Section 501(c)(3) of the Internal Revenue
Code,
a corporation, Massachusetts or similar business trust, or partnership,
not formed for the specific purpose of acquiring the Shares, with
total
assets in excess of $5 million.
|
|
|
o
|
A
trust with total assets in excess of $5 million not formed for the
specific purpose of acquiring the Shares, whose purchase is directed
by a
person with such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of an
investment in the Company and the purchase of the
Shares.
|
|
|
o
|
An
employee benefit plan within the meaning of ERISA if the decision
to
invest in the Shares 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 adviser, or if the employee
benefit plan has total assets in excess of $5 million or, if a
self-directed plan, with investment decisions made solely by persons
that
are accredited investors.
|
|
|
o
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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 the plan has total assets in
excess
of $5 million.
|
|
|
o
|
An
entity, including a grantor trust, in which all of the equity owners
are
accredited investors as determined under any of the foregoing paragraphs
(for this purpose, a beneficiary of a trust is not an equity owner,
but
the grantor of a grantor trust is an equity
owner).
|
C.
Supplemental
Data for Entities
1. If
the
Investor is not a natural person, furnish the following supplemental data
(natural persons may skip this Section C of the Investor
Questionnaire):
Legal
form of entity (trust, corporation, partnership, etc.):
_________________________
Jurisdiction
of organization: ________________________________________________
2.
Was
the
Investor organized for the specific purpose of acquiring the
Shares?
|
o
Yes
|
o
No
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If
the
answer to the above question is “Yes,” please contact ▇▇▇▇▇ ▇▇▇▇▇, Esq. at (▇▇▇)
▇▇▇-▇▇▇▇ for additional information that will be required.
3.
Are
shareholders, partners or other holders of equity or beneficial interest in
the
Investor able to decide individually whether to participate, or the extent
of
their participation, in the Investor’s investment in the Company (i.e., can
shareholders, partners or other holders of equity or beneficial interest in
the
Investor determine whether their capital will form part of the capital invested
by the Investor in the Company)?
|
o
Yes
|
o
No
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If
the
answer to the above question is “Yes,” please contact ▇▇▇▇▇ ▇▇▇▇▇, Esq. at (▇▇▇)
▇▇▇-▇▇▇▇ for additional information that will be required.
4(a).
Please
indicate whether or not the Investor is, or is acting on behalf of, (i) an
employee benefit plan within the meaning of Section 3(3) of ERISA, whether
or not such plan is subject to ERISA,
or (ii)
an entity which is deemed to hold the assets of any such employee benefit plan
pursuant to 29 C.F.R. § 2510.3-101. For example, a plan which is maintained by a
foreign corporation, governmental entity or church, a ▇▇▇▇▇ plan covering no
common-law employees and an individual retirement account are employee benefit
plans within the meaning of Section 3(3) of ERISA but generally are not subject
to ERISA (collectively, “Non-ERISA
Plans”).
In
general, a foreign or US entity which is not an operating company and which
is
not publicly traded or registered as an investment company under the Investment
Company Act of 1940, as amended, and in which 25% or more of the value of any
class of equity interest is held by employee pension or welfare plans (including
an entity which is deemed to hold the assets of any such plan), would be deemed
to hold the assets of one or more employee benefit plans pursuant to 29 C.F.R.
§
2510.3-101. However, if only Non-ERISA Plans were invested in such an entity,
the entity generally would not be subject to ERISA. For purposes of determining
whether this 25% threshold has been met or exceeded, the value of any equity
interest held by a person (other than such a plan or entity) who has
discretionary authority or control with respect to the assets of the entity,
or
any person who provides investment advice for a fee (direct or indirect) with
respect to such assets, or any affiliate of such a person, is
disregarded.
|
o
Yes
|
o
No
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4(b).
If
the
Investor is, or is acting on behalf of, such an employee benefit plan, or is
an
entity deemed to hold the assets of any such plan or plans, please indicate
whether or not the Investor is subject to ERISA.
|
o
Yes
|
o
No
|
4(c.) If
the
Investor answered “Yes” to question 4.(b) and the Investor is investing the
assets of an insurance company general account, please indicate what percentage
of the Investor’s assets the purchase of the Shares is subject to ERISA.
___________%.
5.
Does
the
amount of the Investor’s subscription for the Shares in the Company exceed 40%
of the total assets (on a consolidated basis with its subsidiaries) of the
Investor?
|
o
Yes
|
o
No
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If
the
question above was answered “Yes,” please contact ▇▇▇▇▇ ▇▇▇▇▇, Esq. at (▇▇▇)
▇▇▇-▇▇▇▇ for additional information that will be required.
6(a). Is
the
Investor a private investment company which is not registered under the
Investment Company Act, in reliance on Section 3(c)(1) or Section 3(c)(7)
thereof?
|
o
Yes
|
o
No
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6(b).
If
the
question above was answered “Yes,” was the Investor formed prior to April 30,
1996?
|
o
Yes
|
o
No
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If
the
questions set forth in (a) and (b) above were both answered “Yes,” please
contact ▇▇▇▇▇ ▇▇▇▇▇, Esq. at (▇▇▇) ▇▇▇-▇▇▇▇ for additional information that
will
be required.
7(a).
Is
the
Investor a grantor trust, a partnership or an S-Corporation for US federal
income tax purposes?
|
o
Yes
|
o
No
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7(b).
If
the
question above was answered “Yes,” please indicate whether or not:
(i)
more
than 50 percent of the value of the ownership interest of any beneficial owner
in the Investor is (or may at any time during the term of the Company be)
attributable to the Investor’s (direct or indirect) interest in the Company;
or
|
o
Yes
|
o
No
|
(ii)
it
is a principal purpose of the Investor’s participation in the Company to permit
the Partnership to satisfy the 100 partner limitation contained in US Treasury
Regulation Section 1.7704-1(h)(3).
|
o
Yes
|
o
No
|
If
either
question above was answered “Yes,” please contact ▇▇▇▇▇ ▇▇▇▇▇, Esq. at (▇▇▇)
▇▇▇-▇▇▇▇ for additional information that will be required.
8. If
the
Investor’s tax year ends on a date other than December 31, please indicate such
date below:
|
_____________________________________________________
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|
|
(Date)
|
D. Related
Parties
1. To
the
best of the Investor’s knowledge, does the Investor control, or is the Investor
controlled by or under common control with, any other investor in the
Company?
|
o
Yes
|
o
No
|
If
the
answer above was answered “Yes”, please identify such related investor(s)
below.
Name(s)
of related investor(s):
______________________________________________
2. Will
any
other person or persons have a beneficial interest in the Shares to be acquired
hereunder (other than as a shareholder, partner, or other beneficial owner
of
equity interest in the Investor)?
|
o
Yes
|
o
No
|
If
either
question above was answered “Yes”, please contact ▇▇▇▇▇ ▇▇▇▇▇, Esq. at (▇▇▇)
▇▇▇-▇▇▇▇ for additional information that will be required.
The
Investor understands that the foregoing information will be relied upon by
the
Company for the purpose of determining the eligibility of the Investor to
purchase the Shares. The Investor agrees to notify the Company immediately
if
any representation or warranty contained in this Subscription Agreement,
including this Investor Questionnaire, becomes untrue at any time. The Investor
agrees to provide, if requested, any additional information that may reasonably
be required to substantiate the Investor’s status as an accredited investor or
to otherwise determine the eligibility of the Investor to purchase the Shares.
The Investor agrees to indemnify and hold harmless the Company and each officer,
director, shareholder, agent and representative of the Company and their
respective affiliates and successors and assigns from and against any loss,
damage or liability due to or arising out of a breach of any representation,
warranty or agreement of the Investor contained herein.
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INDIVIDUAL:
|
|
|
_________________________________________________________
|
|
|
(Signature)
|
|
|
_________________________________________________________
|
|
|
(Print
Name)
|
|
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PARTNERSHIP,
CORPORATION, TRUST, CUSTODIAL ACCOUNT, OTHER:
|
|
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_________________________________________________________
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|
|
(Name
of Entity)
|
|
|
By:
______________________________________________________
|
|
|
(Signature)
|
|
|
______________________________________________________
|
|
|
(Print
Name and Title)
|
Annex
1
DEFINITION
OF “INVESTMENTS”
The
term
“investments” means:
(1) Securities,
other than securities of an issuer that controls, is controlled by, or is under
common control with, the Investor that owns such securities, unless the issuer
of such securities is:
(i) An
investment company or a company that would be an investment company but for
the
exclusions or exemptions provided by the Investment Company Act, or a commodity
pool; or
(ii) a
Public
Company (as defined below);
(iii) A
company
with shareholders’ equity of not less than $50 million (determined in accordance
with generally accepted accounting principles) as reflected on the company’s
most recent financial statements, provided that such financial statements
present the information as of a date within 16 months preceding the date on
which the Investor acquires Shares;
(2) Real
estate held for investment purposes;
(3) Commodity
Shares (as defined below) held for investment purposes;
(4) Physical
Commodities (as defined below) held for investment purposes;
(5) To
the
extent not securities, Financial Contracts (as defined below) entered into
for
investment purposes;
(6) In
the
case of an Investor that is a company that would be an investment company but
for the exclusions provided by Section 3(c)(1) or 3(c)(7) of the Investment
Company Act, or a commodity pool, any amounts payable to such Investor pursuant
to a firm agreement or similar binding commitment pursuant to which a person
has
agreed to acquire an interest in, or make capital contributions to, the Investor
upon the demand of the Investor; and
(7) Cash
and
cash equivalents held for investment purposes.
Real
Estate that is used by the owner or a Related Person (as defined below) of
the
owner for personal purposes, or as a place of business, or in connection with
the conduct of the trade or business of such owner or a Related Person of the
owner, will NOT be considered Real Estate held for investment purposes, provided
that real estate owned by an Investor who is engaged primarily in the business
of investing, trading or developing real estate in connection with such business
may be deemed to be held for investment purposes. However, residential real
estate will not be deemed to be used for personal purposes if deductions with
respect to such real estate are not disallowed by section 280A of the Internal
Revenue Code of 1986, as amended.
A
Commodity Interest or Physical Commodity owned, or a Financial Contract entered
into, by the Investor who is engaged primarily in the business of investing,
reinvesting, or trading in Commodity Shares, Physical Commodities or Financial
Contracts in connection with such business may be deemed to be held for
investment purposes.
“Commodity
Shares” means commodity futures contracts, options on commodity futures
contracts, and options on physical commodities traded on or subject to the
rules
of:
(i) Any
contract market designated for trading such transactions under the Commodity
Exchange Act and the rules thereunder; or
(ii) Any
board
of trade or exchange outside the United States, as contemplated in Part 30
of
the rules under the Commodity Exchange Act.
“Public
Company” means a company that:
(i) files
reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934,
as amended; or
(ii) has
a
class of securities that are listed on a Designated Offshore Securities Market,
as defined by Regulation S of the Securities Act.
“Financial
Contract” means any arrangement that:
(i) takes
the
form of an individually negotiated contract, agreement, or option to buy, sell,
lend, swap, or repurchase, or other similar individually negotiated transaction
commonly entered into by participants in the financial markets;
(ii) is
in
respect of securities, commodities, currencies, interest or other rates, other
measures of value, or any other financial or economic interest similar in
purpose or function to any of the foregoing; and
(iii) is
entered into in response to a request from a counter party for a quotation,
or
is otherwise entered into and structured to accommodate the objectives of the
counterparty to such arrangement.
“Physical
Commodities” means any physical commodity with respect to which a Commodity
Interest is traded on a market specified in the definition of Commodity Shares
above.
“Related
Person” means a person who is related to the Investor as a sibling, spouse or
former spouse, or is a direct lineal descendant or ancestor by birth or adoption
of the Investor, or is a spouse of such descendant or ancestor, provided that,
in the case of a Family Company, a Related Person includes any owner of the
Family Company and any person who is a Related Person of such an owner. “Family
Company” means a company that is owned directly or indirectly by or for two or
more natural persons who are related as siblings or spouse (including former
spouses), or direct lineal descendants by birth or adoption, spouses of such
persons, the estates of such persons, or foundations, charitable organizations
or trusts established for the benefit of such persons.
For
purposes of determining the amount of investments owned by a company, there
may
be included investments owned by majority-owned subsidiaries of the company
and
investments owned by a company (“Parent Company”) of which the company is a
majority-owned subsidiary, or by a majority-owned subsidiary of the company
and
other majority-owned subsidiaries of the Parent Company.
In
determining whether a natural person is a qualified purchaser, there may be
included in the amount of such person’s investments any investment held jointly
with such person’s spouse, or investments in which such person shares with such
person’s spouse a community property or similar shared ownership interest. In
determining whether spouses who are making a joint investment in the Partnership
are qualified purchasers, there may be included in the amount of each spouse’s
investments any investments owned by the other spouse (whether or not such
investments are held jointly). There shall be deducted from the amount of any
such investments any amounts specified by paragraph 2(a) of Annex 2 incurred
by
such spouse.
In
determining whether a natural person is a qualified purchaser, there may be
included in the amount of such person’s investments any investments held in an
individual retirement account or similar account the investments of which are
directed by and held for the benefit of such person.
Annex
2
VALUATIONS
OF INVESTMENTS
The
general rule for determining the value of investments in order to ascertain
whether a person is a qualified purchaser is that the value of the aggregate
amount of investments owned and invested on a discretionary basis by such person
shall be their fair market value on the most recent practicable date or their
cost. This general rule is subject to the following provisos:
(1) In
the
case of Commodity Shares, the amount of investments shall be the value of the
initial margin or option premium deposited in connection with such Commodity
Shares; and
(2) In
each
case, there shall be deducted from the amount of investments owned by such
person the following amounts:
(i) The
amount of any outstanding indebtedness incurred to acquire the investments
owned
by such person.
(ii) A
Family
Company, in addition to the amounts specified in paragraph (a) above, shall
have
deducted from the value of such Family Company’s investments any outstanding
indebtedness incurred by an owner of the Family Company to acquire such
investments.