Exhibit 10.1
THIS SUBSCRIPTION AGREEMENT RELATES TO AN OFFERING OF SECURITIES IN AN OFFSHORE
TRANSACTION TO PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED HEREIN) 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
(AS DEFINED HEREIN) 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.
REGULATION S 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 SIMPLE TECH INC., of ▇▇ - ▇ ▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇. ▇▇▇▇▇ ISRAEL, a Nevada corporation (the "Company") in a
transaction exempt from the registration requirements of the Securities Act of
1933, as amended (the "Securities Act"). The company was incorporated in the
State of Nevada on November 16th 2006. (inception) The undersigned understands
that the Shares are being sold in connection with an offering by the Company of
an aggregate of up to 1,500,000 shares of Common Stock for total proceeds of up
to $75,000.
1.2 PURCHASE OF SHARES.
The undersigned understands and acknowledges that the purchase price to be
remitted to the Company in exchange for the Shares shall be ________ US dollars
($_____) or $0.05 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.
1
(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
2
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
3
unless the Investor obtains all required consents, if any. Further, the
securities of the Company cannot be sold or transferred without the prior
consent of the board of directors, expressed by resolution of the board, at the
sole discretion of the directors.
(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,
4
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:
5
(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 Nevada in [see Section 1.1(a) for date of
inception], 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.
6
(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.
7
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 non-assessable. Neither the sales of the
Shares pursuant to, nor the Company's performance of its obligations under, this
Agreement shall (a) 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 (b) 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 (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.
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
8
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.
9
Purchaser Information:
Printed Name: _______________________________
Signature; _______________________________
Date: _______________________________
Address: _______________________________
the foregoing Subscription is hereby accepted in full on behalf of Simple Tech,
Inc, on
Date _______________________.
Simple Tech, Inc.
By:_________________________
Simple Tech, Inc., CEO
10