SHARE SUBSCRIPTION AGREEMENT
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TO: ORNALI GROUP INC.
ADDRESS: ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, #▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
1. Share Subscription. The undersigned ("Subscriber") hereby agrees to
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purchase __________________________ (_______________) shares of common stock,
par value $$0.0001, of Ornali Group Inc., a Washington corporation ("Company.
2. Issuer Representations and Warranties. Issuer hereby represents and
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warrants to Subscriber as follows:
2.1 Organization, Good Standing and Qualification. The Issuer is
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a corporation duly organized, validly existing and in good standing under the
laws of the State of Washington.
2.2 Valid Issuance of Common Stock. The Common Stock, when
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issued and delivered in accordance with the terms hereof for the consideration
expressed herein, will be validly issued and outstanding, fully paid and
nonassessable.
2.3 No Market Conditioning. The Issuer undertook no activity for
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the purpose of, or that could reasonably be expected to have the effect of,
conditioning the market in the United States for the Common Stock. The Issuer
did not place any advertisements in any publication referring to the offering of
the Common Stock for sale.
3. Subscriber Representations and Warranties. Subscriber hereby
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represents and warrants to Issuer as follows:
3.1 Authority of Subscriber. The Subscriber, if a corporation,
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partnership, trust, or any other entity than a natural person, represents that
the subscription of the Common Stock referred to in this Agreement does not
contravene its charter or other organizational documents or the laws of the
country, state or province of its incorporation, formation or organization or of
any other relevant jurisdiction. The Subscriber also represents that it has the
necessary authorizations to that effect.
3.2 Investment Experience. The Subscriber has such knowledge and
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experience in financial and business matters that it is capable of evaluating
the merits and risks of the prospective investment in the Common Stock, which
are substantial and has in fact evaluated such merits and risks in making its
investment decision to purchase the Common Stock. The Subscriber, by virtue of
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its business and financial expertise, has the capacity to protect its own
interest in connection with this transaction, or has consulted with tax,
financial, legal or business advisors as to the appropriateness of an investment
in the Common Stock. The Subscriber has not been organized for the purpose of
investing in the Common Stock, although such investment is consistent with its
purposes.
3.3 Accredited Investor - The Subscriber is (check applicable box):
(a) [ ] a bank as defined in Section 3(a)(2) of the Securities Act
of 1933, as amended (the "Act"), or a savings and loan
association or other institution as defined in Section
3(a)(5)(A) of the Act acting in either an individual or
fiduciary capacity.
(b) [ ] an insurance company as defined in Section 2(13) of the
Act.
(c) [ ] an investment company registered under the Investment
Issuer Act of 1940 or a business development company as
defined in Section 2(a)(48) of that act.
(d) [ ] a Small Business Investment Issuer licensed by the U.S.
Small Business Administration under Section 301(c) or (d)
of the Small Business Investment Act of 1958.
(e) [ ] 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.
(f) [ ] an employee benefit plan within the meaning of Title 1 of
the Employee Retirement Income Security Act of 1974, and
the investment decision is made by a plan fiduciary, as
defined in Section 3(21) of such Act, which is either a
bank, savings and loan association, insurance company or
registered investment advisor, or an employee benefit plan
having total assets in excess of $5,000,000 or, if a
self-directed plan, with investment decisions made solely
by persons who are Accredited Investors.
(g) [ ] a private business development company as defined in
Section 202(a(22) of the investment Advisors Act of 1940.
(h) [ ] an organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, a corporation,
Massachusetts or similar business trust, or a partnership
not formed for the specific purpose of acquiring the
Common Stock, with total assets in excess of $5,000,000.
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(i) [ ] any trust with total assets in excess of $5,000,000 not
formed for the specific purpose of acquiring the Common
Stock, whose purchase is directed by a sophisticated
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.
(j) [ ] a broker or dealer registered pursuant to Section 15 of
the Securities Exchange Act of 1934, as amended.
(k) [ ] an individual (See Section 3.4(a) below)
(l) [ ] none of the above (See Section 3.4(b) below)
3.4(a) Individual Subscriber. If the Subscriber is an individual, then
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the Subscriber (check an applicable box):
[ ] is a director, executive officer or general partner of
the issuer of the Common Stock being offered or sold or a
director, executive officer or general partner of a general
partner of that issuer.
[ ] has an individual net worth, or joint net worth with
that person's spouse, at the time of his purchase exceeding
$1,000,000.
[ ] 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.
[ ] none of the above.
_____________ (Initial)
3.4(b) If the Subscriber checked the box for "none of the above", then
the Subscriber is an entity each equity owner of which is an individual who
could check one of the first three boxes in section 3.4(a) above.
_____________ (Initial)
3.5 No Distributor, Dealer or Underwriter. Subscriber is not a
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distributor or dealer of the Common Stock. Subscriber is not taking the Common
Stock with the intent to make a distribution of the Common Stock, as such terms
are defined in the Act and the '34 Act. In any event, if Subscriber is deemed
to be the distributor of the Common Stock offered hereby, Subscriber will act in
accordance with applicable law.
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3.6 Investment Intent. The Subscriber is acquiring the Common
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Stock for its own account and for investment purposes and not for sale or with a
view to distribution of all or any part of such Common Stock and has no present
plans to enter into any contract, undertaking, agreement or arrangement for such
resale or distribution.
3.7 No Immediate Need for Liquidity. The Subscriber understands
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that the Common Stock is a "restricted security" within the meaning of the Act,
and certificates representing the Common Stock are legended with certain
restrictions on the resale of the Common Stock and the Common Stock may not be
resold without a valid exemption from registration under the Act, or until a
registration statement is filed with respect thereto under the Act. There can be
no assurance that upon registration of the Common Stock pursuant to the Act,
that a market for the Common Stock will exist on an exchange or market or
quotation system. Accordingly, the Subscriber is aware that there are legal and
practical limits on the Subscriber's ability to sell or dispose of the Common
Stock, and, therefore that the Subscriber must bear the economic risk of the
investment for an indefinite period of time. The Subscriber has adequate means
of providing for the Subscriber's current needs and possible personal
contingencies and has need for only limited liquidity of this investment. The
Subscriber's commitment to illiquid investments is reasonable in relation to the
Subscriber's net worth. The Subscriber is capable of bearing the high degree of
economic risks and burdens of this investment, including but not limited to the
possibility of complete loss of all its investment capital and the lack of a
liquid market, such that it may not be able to liquidate readily the investment
whenever desired or at the then current asking price.
3.8 Exempt Subscription. The Subscriber understands that the
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Common Stock is being offered and sold in reliance on specific exemptions from
the registration requirements of U.S. federal and state law and that the
representations, warranties, agreements, acknowledgments and understandings set
forth herein are being relied upon by the Issuer in determining the
applicability of such exemptions and the suitability of the Subscriber to
acquire such Common Stock.
3.9 Authority of Signatory. The Subscriber has full power and
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authority to execute and deliver this Agreement and each other document included
herein as an exhibit to this Agreement for which signature is required, and the
person executing this Agreement on behalf of the subscribing individual,
partnership, trust, estate, corporation or other entity executing this Agreement
is a duly authorized signatory. If the signatory of this Agreement on behalf of
the Subscriber is not the Subscriber or an authorized officer or partner of the
Subscriber, the signatory represents and warrants to the Issuer that the
signatory is a professional fiduciary of the Subscriber, acting solely in its
capacity as holder of such account, as a fiduciary, executor or trustee.
3.10. Private Transaction. At no time was the Subscriber
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presented with or solicited by any leaflet, public promotional meeting,
circular, newspaper or magazine article, radio or television advertisement or
any other form of general advertising.
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3.11 Reliance on Own Advisors. The Subscriber has relied
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completely on the advice of, or has consulted with, his own personal tax,
investment, legal or other advisors and has not relied on the Issuer or any of
its affiliates, officers, directors, attorneys, accountants or any affiliates of
any thereof and each other person, if any, who controls any thereof, within the
meaning of Section 15 of the Act, except to the extent such advisors shall be
deemed to be as such.
4. Subscriber' Covenants and Acknowledgments. Subscribers make the
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following covenants and acknowledgments
4.1 Covenants of Subscriber. Subscriber shall not make any sale,
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transfer or other disposition of the Common Stock in violation of the Act or the
'34 Act, or any other applicable securities laws, or the rules and regulations
of the U.S. Securities and Exchange commission or of any securities authority of
any jurisdiction in which the sale, transfer or disposition of all or any
portion of the Common Stock unless and until (i) there is then in effect a
Registration Statement under the Act covering such proposed sale, transfer or
disposition and such disposition is made in accordance with such Registration
Statement; or (ii) the sale, transfer or disposition is made pursuant to a valid
exemption from the registration and prospectus delivery requirements of
applicable securities laws.
4.2 Acknowledgments of Subscriber. Subscriber acknowledges and
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understands as follows:
4.2.1 Risks of Investment. The Subscriber recognizes that
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investment in the Issuer involves certain risks, including the potential loss of
the Subscriber's investment herein, and the Subscriber has taken full cognizance
of and understands all of the risk factors related to the purchase of the Common
Stock.
4.2.2 No Government Approval. No federal or state agency
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has passed upon the Common Stock or made any finding or determination as to the
fairness of this transaction.
4.2.3 Price. The Price of the Common Stock was determined by
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the Issuer and bears no relationship to the Issuer's assets, book value or
results of operation.
4.2.4 No Registration. The Common Stock and any component
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thereof has not been registered under the Act or any securities laws of any
other jurisdiction by reason of exemptions from the registration requirements of
the Act and such laws, and may not be sold, pledged, assigned or otherwise
disposed of in the absence of an effective registration statement for the Common
Stock and any component thereof under the Act or unless an exemption from such
registration is available.
4.2.5 No Assurances of Registration. There can be no absolute
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assurance that any registration statement will be filed with respect to the
Common Stock or the Common Stock underlying the Common Stock, or if filed, that
such registration statement will become effective. Therefore, unless an
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exemption from the registration requirements under applicable law is available,
the Subscriber may be required to bear the economic risk of the Subscriber's
investment for an indefinite period of time.
4.2.6 Legends. The certificates representing the Common
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Stock shall bear the following legend:
THIS SECURITY HAS NOT BEEN REGISTERED WITH THE U.S.
SECURITIES AND EXCHANGE COMMISSION UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR ANY
OTHER SECURITIES AUTHORITIES. IT IS BEING OFFERED
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
REGULATIONS PROMULGATED UNDER THE ACT. IT MAY NOT BE
SOLD OR TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT OR AN EXEMPTION TO THE
REGISTRATION REQUIREMENTS OF THOSE SECURITIES LAWS.
The Issuer may in its sole discretion place a "Blue Sky" legend on the
certificates in accordance with U.S. State securities laws or as required by
applicable securities laws.
5. Regulation S. Issuer and Subscriber agree that Issuer, through its
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transfer agent, shall refuse to register any transfer or attempted transfer of
the Common Stock not made in accordance with the provisions of Regulation S of
the Securities Act of 1933 (the "Act"), pursuant to registration under the Act,
or pursuant to an available exemption from registration. The Subscriber agrees
to resell the Common Stock only in accordance with the provisions of Regulation
S of the Act, pursuant to registration under the Act, or pursuant to an
available exemption from registration; and agrees not to engage in hedging
transactions with regard to the Common Stock unless in compliance with the Act.
6. Notices. Any notice required or permitted to be given under this
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Subscription shall be deemed to have been given when sent by registered or
certified mail, postage prepaid, addressed to the person to receive notice at
the last address available in the records of the Company.
7. Heirs and Successors Bound. Subscriber may not cancel, terminate or
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revoke this Subscription. Subscriber executes this Subscription on behalf of
Subscriber, Subscriber's spouse and the marital community composed of them.
This Subscription shall bind and inure to the benefit of Subscriber's heirs,
personal representatives and successors.
8. Assignments. Subscriber may not assign or delegate any right or
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duty under this Subscription without the written consent of the Company.
9. Applicable Law And Jurisdiction.
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9.1 This Agreement shall be governed by and construed in
accordance with the laws of the State of Washington, without regard to conflicts
of law principles.
9.2 In the event of any dispute, controversy, claim or difference
that should arise between the parties out of or relating to or in connection
with this Agreement or the breach thereof, the parties shall endeavor to settle
such conflicts amicably among themselves. Should they fail to do so, the matter
in dispute shall be settled by arbitration pursuant to the provisions of R.C.W.
7.04. Procedurally, the arbitration will be conducted in conformity with
Washington Mandatory Arbitration Rules 5.1 - 5.4. The parties shall select a
single arbitrator within ten (10) days of the receipt of demand for arbitration.
If the parties fail to appoint an arbitrator within the ten (10) day period, any
party may make immediate application to the King County Superior Court for the
appointment of an arbitrator. The arbitration hearing shall take place in
Seattle, Washington, and shall commence within sixty (60) days of the
appointment of an arbitrator. Any party which is determined in such arbitration
to be the prevailing party shall be entitled to have its attorneys' fees and
costs paid by the non-prevailing party.
IN WITNESS WHEREOF, the undersigned Subscriber has executed this Share
Subscrip-tion Agreement the _______ day of ______________, 2001.
SUBSCRIBER:
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____________________________________
____________________________________
Spouse
____________________________________
____________________________________
Address
ACCEPTANCE
The foregoing subscription agreement and the consideration reflected
therein are hereby accepted.
DATED the _____ day of _________________, 2001.
________________________________________
President
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