Exhibit 10.1

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SUBSCRIPTION AGREEMENT

 

This SUBSCRIPTION AGREEMENT (this “Subscription Agreement”) is made by and
between LiqTech International, Inc. a Nevada corporation (the “Company”), and
the undersigned (“Subscriber”) as of the date this Subscription Agreement is
accepted by the Company, as set forth on the Company’s signature page hereto.

 

WHEREAS, subject to the terms and conditions set forth in this Agreement, and
pursuant to Regulation S under the Securities Act of 1933, as amended (the
“Securities Act”), the Company desires to issue and sell to Subscriber, and
Subscriber desires to purchase from the Company, that number of shares of the
Company’s Series A Convertible Preferred Stock, $0.001 par value per share
(“Preferred Stock”) set forth on the signature page hereto, to persons who are
not U.S. persons under Regulation S in a private placement (the “Offering”); and

 

WHEREAS, Subscriber understands that the Offering is being made without
registration of the Preferred Stock under the Securities Act, or any securities
law of any state of the United States or of any other jurisdiction, and is being
made only non-U.S. persons.

 

NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants hereinafter set forth, the parties hereto do hereby agree as follows:

 

1.     Subscription for Shares

 

(a)     Subscription for Shares. Subject to the terms and conditions hereinafter
set forth, Subscriber hereby irrevocably subscribes for and agrees to purchase
from the Company such amounts of Preferred Stock as is set forth on the
signature page hereof (the “Shares”) at a price per Share and for an aggregate
purchase price as set forth on the signature page hereof (the “Purchase Price”),
and the Company agrees to sell such Shares to Subscriber for the Purchase Price,
subject to the Company’s right, in its sole discretion, to reject this
subscription, in whole or in part, at any time prior to the Closing (as defined
below). Subscriber acknowledges that Subscriber is not entitled to cancel,
terminate or revoke this Subscription Agreement. Subscriber further acknowledges
that the Shares will be subject to restrictions on transfer as set forth in this
Subscription Agreement.

 

2.     Terms of Subscription.

 

 (a)     Payment. Subscriber shall make payment for the Shares to an account
designated by the Company in an amount equal to the Purchase Price by wire
transfer of immediately available funds at or prior to the Closing.

 

 (b)     Acceptance of Subscription and Issuance of Shares. It is understood and
agreed that the Company shall have the sole right, at its complete discretion,
to accept or reject this subscription, in whole or in part, for any reason and
that the same shall be deemed to be accepted by the Company only when it is
signed by a duly authorized officer of the Company and delivered to the
undersigned at the Closing (as defined below). Notwithstanding anything in this
Subscription Agreement to the contrary, the Company shall have no obligation to
issue any of the Shares to any person who is a resident of a jurisdiction in
which the issuance of Shares to such person would constitute a violation of the
securities, “blue sky” or other similar laws.

 

 (c)     Closing. The Offering may be consummated at such place (or by
electronic transmission) as may be mutually agreed upon by the parties at a
closing (the “Closing”) to occur on a date as may be determined by the Company,
at a time as may be determined by the Company. Subsequent closings may occur at
the discretion of the Company.

 

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(d)     Closing Deliverables. At the Closing: Subscriber shall deliver the
Purchase Price and the Company shall deliver a share certificate representing
the Shares to Subscriber that bears an appropriate legend referring to the fact
that the Shares are subject to transfer restrictions as set forth in the
Securities Act.

 

3.     Representations and Warranties of Subscriber.

 

Subscriber represents and warrants to the Company that:

 

(a)     Reliance on Exemptions. Subscriber understands that the Shares are being
offered and sold in reliance upon specific exemptions from registration provided
in the Securities Act, and acknowledges that the Offering has not been reviewed
by the Securities and Exchange Commission or any state agency because it is
intended to be an offering exempt from the registration requirements of the
Securities Act pursuant to Regulation S under the Securities Act. Subscriber
understands that the Company is relying upon, and intends that the Company rely
upon, the truth and accuracy of, and Subscriber’s compliance with, the
representations, warranties, agreements, acknowledgments and understandings of
Subscriber set forth herein in order to determine the availability of such
exemptions and the eligibility of Subscriber to acquire the Shares. The Company
may only make offers to sell the Shares to persons outside the United States in
this Offering and, if applicable, at the time any buy order is originated, the
buyer is outside the United States. The undersigned has not received an offer to
purchase Shares inside the United States and will not originate a buy order
inside the United States.

 

(b)     Non-U.S. Person. Subscriber is not and is not acquiring the securities
for the account or benefit of:

 

(i)     a natural person resident in the United States;

 

(ii)     a partnership or corporation organized or incorporated under the laws
of the United States;

 

(iii)     an estate of which any executor or administrator is a U.S. person;

 

(iv)     a trust of which any trustee is a U.S. person;

 

(v)     an agency or branch of a foreign entity located in the United States;

 

(vi)     a non-discretionary account or similar account (other than an estate or
trust) held by a dealer or other fiduciary for the benefit or account any of the
foregoing; or

 

(vii)     a partnership or corporation (A) organized or incorporated under the
laws of any foreign jurisdiction, and (B) Formed by a U.S. person principally
for the purpose of investing in securities not registered under the Act, unless
it is organized or incorporated, and owned, by accredited investors (as defined
in Regulation D under the Securities Act) who are not natural persons, estates
or trusts.

 

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(c)     Investment Purpose. The Shares and any shares of the common stock of the
Company, par value $0.0001 (“Common Stock”) issuable upon conversion thereof
(“Conversion Shares”, and together with the Shares, the “Securities”) are being
purchased for Subscriber’s own account, for investment purposes only and not
with a view to sale or resale, distribution or fractionalization of the
Securities under applicable U.S. federal or state securities laws. The
undersigned is not acquiring the Securities for the account or benefit of any
U.S. person and was not organized for the specific purpose of acquiring such
Securities. The undersigned will not (i) resell or offer to resell the
Securities, or any portion thereof, or (ii) engage in hedging transactions, in
each case, except in accordance with the terms of this Agreement and in
accordance with Regulation S under the Securities Act, pursuant to registration
under the Securities Act or pursuant to an available exemption from registration
under the Securities Act and otherwise in compliance with all applicable
securities laws. Furthermore, prior to engaging in any hedging transaction or
any resale of the securities, or any portion thereof, by the undersigned, the
undersigned shall provide the Company with an opinion of counsel acceptable to
the Company in its sole discretion and in a form acceptable to the Company in
its sole discretion, that any such proposed sale or hedging transaction is in
compliance with the Securities Act or an exemption therefrom. Subscriber has no
contract, undertaking, agreement, or arrangement with any person to sell,
distribute, transfer, or pledge to such person or anyone else the Securities
which Subscriber hereby subscribes to purchase, or any interest therein, and
Subscriber has no present plans to enter into any such contract, undertaking,
agreement, or arrangement. Subscriber agrees that the Company and its affiliates
shall not be required to give effect to any purported transfer of such Shares
except upon compliance with the foregoing restrictions.

 

(d)     Risk of Investment. Subscriber recognizes that the purchase of the
Shares involves a high degree of risk in that: an investment in the Company is
highly speculative and only investors who can afford the loss of their entire
investment should consider investing in the Company and the Shares;
transferability of the Securities is limited; and the Company may require
substantial additional funds to operate its business and there can be no
assurance that the Offering will be completed.

 

(e)     Use of Proceeds. The Company has made long-term investments into the
marine scrubber industry. In November 2016 the International Maritime
Organization (IMO) voted to implement a new lower global cap on sulphur
emissions from international shipping. Following this, the Company has
experienced a strong interest from the marine industry, and in the third quarter
2017 we have seen a strong growth in the sales and delivery of our standardized
systems for the treatment of waste water from marine scrubbers. We are working
with some of the largest scrubber manufactures in the world, and their forecasts
for 2018 give us reason to believe that we will see continued growth from this
industry. Subscriber understands that the net proceeds of the Offering will be
used to establish the necessary working capital to manage the anticipated growth
in orders for our standardized systems for the treatment of waste water from
marine scrubbers.

 

(f)     Prior Investment Experience. Subscriber understands the business in
which the Company is engaged and has such knowledge and experience in business
and financial matters that Subscriber is capable of evaluating the merits and
risks of the investment in the Shares. Subscriber has prior investment
experience, and Subscriber recognizes the highly speculative nature of this
investment

 

(g)     Information and Non-Reliance. Subscriber acknowledges that Subscriber
has carefully reviewed this Subscription Agreement, which Subscriber
acknowledges has been provided to Subscriber. Subscriber has been given the
opportunity to ask questions of, and receive answers from, the Company
concerning the terms and conditions of this Offering and the Subscription
Agreement and to obtain such additional information, to the extent the Company
possesses such information or can acquire it without unreasonable effort or
expense, necessary to verify the accuracy of same as Subscriber reasonably
desires in order to evaluate the investment. Subscriber understands the
Subscription Agreement, and Subscriber has had the opportunity to discuss any
questions regarding the Subscription Agreement with Subscriber’s counsel or
other advisor. Notwithstanding the foregoing, the only information upon which
Subscriber has relied is that set forth in the Subscription Agreement and the
results of independent investigation by Subscriber. Subscriber has received no
representations or warranties from the Company, its employees, agents or
attorneys in making this investment decision other than as set forth in the
Subscription Agreement. Subscriber does not desire to receive any further
information.

 

(i)     Subscriber represents that it is not relying on (and will not at any
time rely on) any communication (written or oral) of the Company, as investment
advice or as a recommendation to purchase the Shares, it being understood that
information and explanations related to the terms and conditions of the Shares
and the Subscription Agreement shall not be considered investment advice or a
recommendation to purchase the Shares.

 

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(ii)     Subscriber confirms that the Company has not (i) given any guarantee or
representation as to the potential success, return, effect or benefit (either
legal, regulatory, tax, financial, accounting or otherwise) an of investment in
the Shares or (ii) made any representation to Subscriber regarding the legality
of an investment in the Shares under applicable legal investment or similar laws
or regulations. In deciding to purchase the Shares, Subscriber is not relying on
the advice or recommendations of the Company and Subscriber has made its own
independent decision that the investment in the Shares is suitable and
appropriate for Subscriber.

 

(h)     Tax Consequences. Subscriber acknowledges that the Offering may involve
tax consequences and that the contents of the Subscription Agreement do not
contain tax advice or information. Subscriber acknowledges that Subscriber must
retain Subscriber’s own professional advisors to evaluate the tax and other
consequences of an investment in the Shares. Subscriber intends to acquire the
Shares without regard to tax consequences.

 

(i)     Transfer or Resale. Subscriber understands that the Securities have not
been registered under the Securities Act or the securities laws of any state
and, as a result thereof, are subject to substantial restrictions on transfer.
Subscriber acknowledges that Subscriber may be precluded from selling or
otherwise disposing of the Securities for an indefinite period of time and that
in no circumstance may the Securities be transferred to any U.S. Person, as
defined by Rule 902(k) of Regulation S under the Securities Act for six (6)
months. Subscriber understands and hereby acknowledges that the Company is under
no obligation to register the Securities under the Securities Act. Subscriber
consents that the Company may, if it desires, permit the transfer of the
Securities out of Subscriber’s name only when Subscriber’s request for transfer
is accompanied by an opinion of counsel reasonably satisfactory to the Company
that neither the sale nor the proposed transfer results in a violation of the
Securities Act or any applicable state “blue sky” laws. Notwithstanding any of
the foregoing, Subscriber acknowledges that the Company may refuse to register
any transfer of the Securities if such transfer is not made in accordance with
the provisions of this Regulation S under the Securities Act.

 

(j)     Due Authorization; Enforcement. Subscriber has all requisite power and
authority (and in the case of an individual, capacity) to purchase and hold the
Shares, to execute, deliver and perform Subscriber’s obligations under this
Subscription Agreement and when executed and delivered by Subscriber, this
Subscription Agreement will constitute legal, valid and binding agreements of
Subscriber enforceable against Subscriber in accordance with their terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ and contracting
parties’ rights generally, and except as enforceability may be subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).

 

(k)     Address. The residence address of Subscriber furnished by Subscriber on
the signature page hereto is Subscriber’s principal residence if Subscriber is
an individual or its principal business address if it is a corporation,
partnership, trust or other entity.

 

(l)     Compliance with Laws. Subscriber will comply with all applicable laws
and regulations in effect in any jurisdiction in which Subscriber purchases or
sells the Securities and obtain any consent, approval or permission required for
such purchases or sales under the laws and regulations of any jurisdiction to
which Subscriber is subject or in which Subscriber makes such purchases or
sales, and the Company shall have no responsibility therefore.

 

(m)     Accuracy of Representations and Warranties. The information set forth
herein concerning Subscriber is true and correct. Subscriber understands that,
unless Subscriber notifies the Company in writing to the contrary at or before
the Closing, each of Subscriber’s representations and warranties contained in
this Subscription Agreement will be deemed to have been reaffirmed and confirmed
as of the Closing, taking into account all information received by Subscriber.

 

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(n)     Entity Representation. If Subscriber is a corporation, partnership,
trust or other entity, such entity further represents and warrants that it was
not formed for the purpose of investing in the Company.

 

4.     Representations and Warranties of the Company.

 

The Company represents and warrants to Subscriber that:

 

(a)     Organization. The Company is organized and validly existing in good
standing under the laws of the state of Nevada.

 

(b)     Due Authorization and Enforcement. The Company has all requisite power
and authority to execute, deliver and perform its obligations under this
Subscription Agreement, and when executed and delivered by the Company, this
Subscription Agreement will constitute legal, valid and binding agreements of
the Company enforceable against the Company in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ and contracting
parties’ rights generally, and except as enforceability may be subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).

 

(c)     Valid Issuance. The Shares have been duly authorized and, when issued
and paid for in accordance with the terms of this Subscription Agreement, will
be duly and validly issued, fully paid and nonassessable, subject to the terms
of the Company’s Certificate of Designations of the Relative Rights and
Preferences of the Series A Convertible Preferred Stock in the form attached as
Exhibit A hereto (the “Certificate of Designation”),and no preemptive rights
will exist with respect to any of the Shares or the issuance and sale thereof.
In the event that Conversion Shares are issued in accordance with the
Certificate of Designation, such Conversion Shares will be duly authorized by
all necessary corporate action and validly issued and outstanding, fully paid
and nonassessable, and the holders shall be entitled to all rights afforded to a
holder of Common Stock. The Company has and will continue to reserve a
sufficient amount of Common Stock for the issuance of the Conversion Shares.

 

(d)     Noncontravention. The execution and delivery of this Subscription
Agreement and the consummation of the transactions contemplated hereby will not
conflict with or constitute a violation of, or default under any material
agreement to which the Company is a party or by which it or any of its
properties are bound or the organizational documents of the Company.

 

5.     Conditions to Obligations of Subscriber and the Company.

 

The obligations of Subscriber to purchase and pay for the Shares specified on
the signature page hereof and of the Company to sell the Shares are subject to
the satisfaction at or prior to the Closing of the following conditions
precedent:

 

(a)     Representations and Warranties. The representations and warranties of
Subscriber contained in Section 3 hereof and of the Company contained in Section
4 hereof shall be true and correct as of the Closing in all respects with the
same effect as though such representations and warranties had been made as of
the Closing.

 

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6.     Legends.

 

The certificates representing the Shares sold pursuant to this Subscription
Agreement will be imprinted with legends in substantially the following form:

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) AND MAY NOT BE SOLD OR
TRANSFERRED EXCEPT IN ACCORDANCE WITH REGULATION S PROMULGATED UNDER THE ACT. IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN OPINION
OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT
REQUIRED. HEDGING TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED BY THIS
CERTIFICATE MAY NOT BE CONDUCTED EXCEPT IN COMPLIANCE WITH THE ACT.”

 

Certificates may also bear any other legend language that may be determined by
the Company and its counsel from time to time.

 

7.     United States Anti-Money Laundering Program. Subscriber understands that
the Company’s Board of Directors is required to comply with applicable
anti-money laundering provisions under the United States PATRIOT Act of 2001, as
amended (the “USA PATRIOT Act”). As a condition to acceptance of Subscriber’s
investment in the Company, Subscriber makes the representations and agreements
set forth on Annex A attached hereto, and agrees to provide to the Company true
and correct copies of the applicable documentation pursuant to the requirements
of Annex B, attached hereto. The Company reserves the right to request such
additional information as is necessary to verify the identity of Subscriber and
the underlying beneficial owner of Subscriber’s interest in the Company. In the
event of delay or failure by Subscriber to produce any information required for
verification purposes, the Company may refuse to accept a subscription or may
cause the withdrawal of Subscriber from the Company.

 

8.     Miscellaneous

 

(a)     Notice. Any notices, consents, waivers or other communications required
or permitted to be given under the terms of this Subscription Agreement must be
in writing and will be deemed to have been delivered: upon receipt, when
delivered personally; upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or one (1) business day after deposit with
an overnight courier service, in each case properly addressed to the party to
receive the same. The addresses and facsimile numbers for such communications
shall be:

 

  If to the Company:            

LiqTech International, Inc.

   

Industriparken 22C

   

DK2750 Ballerup, Denmark Phone: + 45 4498 6000

   

E-mail: sd@liqtech.com

   

Attention: Søren Degn, Chief Financial Officer

       

with a copy to:

K&L Gates LLP

   

200 South Biscayne Boulevard

   

Suite 3900

   

Miami, FL 33131

   
Facsimile:     (305) 359-3306
   

E-mail: clayton.parker@klgates.com

   

Attention:     Clayton E. Parker, Esq.

 

If to Subscriber, to its residence address (or mailing address, if different)
and facsimile number set forth at the end of this Subscription Agreement, or to
such other address and/or facsimile number and/or to the attention of such other
person as specified by written notice given to the Company five (5) calendar
days prior to the effectiveness of such change.

 

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(b)     Entire Agreement; Amendment. This Subscription Agreement, which includes
the exhibit and annexes referred to herein, supersedes all other prior oral or
written agreements between Subscriber, the Company, their affiliates and persons
acting on their behalf with respect to the matters discussed herein, and
constitutes the entire understanding of the parties with respect to the matters
covered herein. No provision of this Subscription Agreement may be amended or
waived other than by an instrument in writing signed by the Company and
Subscriber.

 

(c)   Severability. If any provision of this Subscription Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Subscription Agreement in that jurisdiction or the validity or
enforceability of any provision of this Subscription Agreement in any other
jurisdiction.

 

(d)    Governing Law. This Subscription Agreement shall be governed by and
construed in accordance with the laws of the state of Nevada, without giving
effect to any choice of law or conflict of law provision or rule.

 

(e)     Successors and Assigns. This Subscription Agreement shall be binding
upon and inure to the benefit of the parties and their respective successors and
assigns. Subscriber shall not assign its rights hereunder without the prior
written consent of the Company.

 

(f)     No Third Party Beneficiaries. This Subscription Agreement is intended
for the benefit of the parties hereto and their respective permitted successors
and assigns, and is not for the benefit of, nor may any provision hereof be
enforced by, any other person.

 

(g)     Notification of Changes. Subscriber hereby covenants and agrees to
notify the Company upon the occurrence of any event prior to the closing of the
purchase of the Shares pursuant to this Subscription Agreement which would cause
any representation, warranty or covenant of Subscriber contained in this
Subscription Agreement to be false or incorrect.

 

(h)     Further Assurances. Each party shall do and perform, or cause to be done
and performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Subscription Agreement and the consummation of the transactions
contemplated hereby.

 

(i)     Legal Representation. Subscriber acknowledges that: Subscriber has read
this Subscription Agreement and the exhibit and annexes referred to herein;
Subscriber understands that the Company has been represented in the preparation,
negotiation and execution of the Subscription Agreement; and Subscriber
understands the terms and conditions of the Subscription Agreement and is fully
aware of their legal and binding effect.

 

(j)     Expenses. Each party will bear its own costs and expenses (including
legal and accounting fees and expenses) incurred in connection with this
Subscription Agreement and the transactions contemplated hereby.

 

(k)     Counterparts. This Subscription Agreement may be executed in
counterparts, all of which shall be considered one and the same agreement. The
exchange of signature pages by facsimile transmission, by electronic mail in
“portable document format” (“.pdf”) form or by any other electronic means
intended to preserve the original graphic and pictorial appearance of a document
shall constitute effective execution and delivery of this Agreement as to the
parties.

 

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[SIGNATURE PAGES FOLLOW]

 

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SUBSCRIBER SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT

 

IN WITNESS WHEREOF, and intending to be legally bound hereby, Subscriber has
caused this Subscription Agreement to be duly executed and, by executing this
signature page, hereby executes, adopts and agrees to all terms, conditions, and
representations contained in the foregoing Subscription Agreement and hereby
subscribes for the Shares offered by the Company in the amount set forth below.

 

SUBSCRIBER:

 

 

     

Signature 

             

Print Name

             

Print Title/Entity Name (if subscriber is not a natural person)

             

Signature of joint investor, if applicable

             

Print name of joint investor, if applicable

       

Check one (if applicable)

 

[ ] Tenants in Common

         

[ ] JTWROS

         

[ ] Tenants by Entirety

   

Date: ____________ ____, 2017

 

Shares (number of shares of Preferred Stock subscribed for):                 
________

 

Purchase Price (number of Shares x $[_____]): $                                 
___

 

 

 

 

Residence Address:

 

Mailing Address, if different from Residence Address:

                           

 

 

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COMPANY SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT

 

– PLEASE DO NOT WRITE BELOW THIS LINE –

 

COMPANY USE ONLY

 

 

 

Accepted and Agreed:

 

        LIQTECH INTERNATIONAL, INC.  

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

 

Title:

 

 

 

          As of: ____________ ____, 2017  

 

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EXHIBIT A

 

CERTIFICATE OF DESIGNATIONS

 

Exhibit A

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Annex A

 

UNITED STATES ANTI-MONEY LAUNDERING

REPRESENTATIONS AND WARRANTIES

 

In connection with the acquisition of the Company’s Shares, Subscriber hereby
represents, warrants and covenants to the Company as follows:

 

1.

Subscriber has reviewed the website of the U.S. Treasury Department’s Office of
Foreign Assets Control (“OFAC”), and conducted such other investigation as
Subscriber deems necessary or prudent, prior to making these representations and
warranties. Subscriber acknowledges that U.S. federal regulations and executive
orders administered by OFAC prohibit, among other things, engaging in
transactions with, and the provision of services to, certain foreign countries,
territories, entities and individuals.

 

2.

All evidence of identity provided in connection with Subscriber’s acquisition of
Shares is genuine and all related information furnished is accurate.

 

3.

Subscriber understands and agrees that the investment of funds is prohibited by
or restricted with respect to any persons or entities: (i) acting, directly or
indirectly, on behalf of terrorists or terrorist organizations, including those
persons, entities and organizations that are included on any of the OFAC lists;
(ii) residing or having a place of business in a country or territory named on
such lists or which is designated as a Non-Cooperative Jurisdiction by the
Financial Action Task Force on Money Laundering (“FATF”), or whose subscription
funds are transferred from or through such a jurisdiction; (iii) (A) that are a
“Foreign Shell Bank” within the meaning of the USA PATRIOT Act or (B) that are a
foreign bank other than a “Regulated Affiliate” that is barred, pursuant to its
banking license, from conducting banking activities with the citizens of, or
with the local currency of, the country that issued the license or (C) whose
subscription funds are transferred from or through the entities listed in
foregoing clauses (A) and (B); or (iv) residing in, or organized under the laws
of, a jurisdiction designated by the Secretary of the Treasury under Sections
311 or 312 of the USA PATRIOT Act as warranting special measures due to money
laundering concerns. Such persons or entities in (i) through (iv) are
collectively referred to as “Restricted Persons.” Neither Subscriber, nor any
person or entity controlling, controlled by, or under common control with,
Subscriber, any investors in Subscriber (if Subscriber is a pooled investment
vehicle) or any person or entity for whom Subscriber is acting as agent,
representative, intermediary, nominee or similar capacity (each such investor in
Subscriber and each such person for whom Subscriber acts as agent,
representative, intermediary, nominee or in a similar capacity, an “Underlying
Beneficial Owner”) in connection with the acquisition of Shares is a Restricted
Person.

 

4.

No funds tendered for the acquisition of Shares are directly or indirectly
derived from activities that may contravene U.S. federal, state or non-U.S. laws
and regulations, including anti-money laundering laws, rules and regulations,
and no capital contribution in relation to Shares acquired by Subscriber or, if
applicable, any Underlying Beneficial Owner will be derived from any illegal or
illegitimate activities.

 

5.

To the extent Subscriber has any Underlying Beneficial Owners, Subscriber: (i)
has carried out thorough due diligence as to, and established the identities of,
the Underlying Beneficial Owners and any related persons to the extent required
by applicable law and regulations (“Related Persons”); (ii) holds the evidence
of such identities and will maintain all such evidence for at least five years
from the date of the completion of the liquidation of the Company; and (iii)
will make such information available to the Company upon the Company’s request.

 

6.

Subscriber acknowledges and understands that the Company, in its sole
discretion, may decline to accept any subscription for Shares by a person who is
a “Covered Person” within the meaning of the Guidance on Enhanced Scrutiny for
Transactions that May Involve the Proceeds of Foreign Official Corruption,
issued by the U.S. Department of the Treasury, et al., January, 2001.
Accordingly, Subscriber agrees to inform the Company, prior to its acquisition
of Shares, if Subscriber or any person controlling, controlled by, or under
common control with, Subscriber, or for whom Subscriber is acting as agent or
nominee in connection with the acquisition of Shares, is a Covered Person.

 

Annex A

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7.

Subscriber agrees to provide any information (including confidential information
about Subscriber and, if applicable, any Underlying Beneficial Owner or Related
Person) to any person deemed necessary by the Company, in its sole and absolute
discretion, to comply with its anti-money laundering responsibilities and
policies and any laws, rules and regulations applicable to an investment held or
proposed to be held by the Company.

 

8.

Subscriber authorizes and permits the Company, using its own reasonable business
judgment, to report information about Subscriber, or any person controlling,
controlled by, or under common control with Subscriber, to appropriate
authorities, and Subscriber agrees not to hold them liable for any loss or
injury that may occur as the result of providing such information.

 

9.

Subscriber agrees that, in the event of a material change with respect to the
information provided in connection with the purchase of the Shares, Subscriber
will provide the Company promptly with updated information affected by the
material change.

 

10.

Subscriber agrees that, notwithstanding any statement to the contrary in any
agreement into which it has entered that relates to the Company, or any
statement to the contrary in any private placement memorandum of the Company, if
the Company determines that Subscriber has appeared on a list of known or
suspected terrorists or terrorist organizations compiled by any U.S. or non-U.S.
governmental agency, or that any information provided by Subscriber in
connection with the acquisition of Shares is no longer true or accurate, the
Company, without limiting any other rights available under any agreement between
the Company and Subscriber, shall be authorized to take any action it deems
necessary or appropriate as a result thereof. The Company may be obligated to
“freeze the account” of Subscriber, either by prohibiting additional capital
contributions, restricting any distributions and/or declining any requests to
transfer Subscriber’s Shares. In addition, in any such event, Subscriber may
forfeit its Shares, may be forced to withdraw from the Company or may otherwise
be subject to the remedies required by law, and Subscriber shall have no claim
against the Company nor its officers, directors, employees, agents, control
persons, affiliates and professional advisors and such parties shall be held
harmless and indemnified by Subscriber in accordance with the indemnification
section of this Agreement for any form of damages as a result of any of the
actions described in this paragraph. The Company may also be required to report
such action and to disclose Subscriber’s identity or provide other information
with respect to Subscriber to OFAC or other governmental entities.

 

11.

Subscriber acknowledges and agrees that any distributions paid to it by the
Company will be paid to, and any contributions made by it to the Company will be
made from, an account in Subscriber’s name unless the Company, in its sole
discretion, agrees otherwise.

 

12.

Subscriber understands, acknowledges and agrees that the acceptance of this
Agreement, together with the appropriate remittance, will not breach any
applicable money laundering or related rules or regulations (including, without
limitation, any statutes, rules or regulations in effect under the laws of the
U.S.A. pertaining to prohibitions on money laundering or to transacting business
or dealing in property that may be blocked or may belong to Specially Designated
Nationals, as such term is used by OFAC).

 

Annex A

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Annex B

 

ANTI-MONEY LAUNDERING DOCUMENTATION

 

Subscriber has delivered, or is concurrently delivering herewith, the true,
correct and applicable documentation noted below that is applicable to
Subscriber:

 

 

(i)

Individuals (each of the following):

 

 

(A)

Certified (notarized) copy of passport or other valid government identification
document displaying the true name, signature, date of birth and photograph of
Subscriber (with certified English translation, if necessary); and

 

 

(B)

Copy of a recent bank statement or utility bill showing Subscriber’s current
home address.

 

 

(ii)

Corporate (each of the following):

 

 

(A)

Certificate of Incorporation (or equivalent) with evidence of any name changes;

 

 

(B)

Certificate of Good Standing;

 

 

(C)

Director resolution authorizing the investment, if applicable;

 

 

(D)

Current list or register of Directors;

 

 

(E)

Specimen signatures of persons authorized to bind Subscriber with regard to its
investments with name and office held printed underneath or Powers of Attorney
or Letters of Authority (if applicable);

 

 

(F)

Information on at least two Directors (see (i) above for individuals and (ii)
for all other entities);

 

 

(G)

Evidence of identity for authorized signatories and all beneficial owners of
Subscriber >25% OR comfort letter (see (i) above for individuals and (ii) for
all other entities); and

 

 

(H)

Signed copy of Subscriber’s latest available financial statements.

 

 

(iii)

Limited Partnership (or Limited Liability Company) (each of the following):

 

 

(A)

Certificate of Limited Partnership (or equivalent) (evidencing registered
address) with evidence of any name changes;

 

 

(B)

Certified copy of the limited partnership agreement (or equivalent);

 

 

(C)

Limited partnership mandate (or equivalent) for making the investment (if any);

 

 

(D)

Specimen signatures of persons authorized to bind Subscriber with regard to its
investments with name and office held printed underneath or Powers of Attorney
or Letters of Authority (if applicable);

 

 

(E)

Information on the individual(s) that control the general partner (or managing
member, if applicable) (see (i) above for individuals and (ii) for all other
entities);

 

 

(F)

Evidence of identity for authorized signatories and all beneficial owners of
Subscriber >25% OR comfort letter (see (i) above for individuals and (ii) for
all other entities); and

 

 

--------------------------------------------------------------------------------

 

 

 

(G)

Signed copy of Subscriber’s latest available financial statements.

 

 

(iv)

Trust (each of the following):

 

 

(A)

Certified copy of Trust Deed/Agreement (including trust name, nature of trust,
trustees, authorizations, date of trust and principal address);

 

 

(B)

Information about the trustee(s) and settlor(s) (or beneficial owner(s), if
different than the settlor(s)) (see (i) above for individuals and (ii) for all
other entities); and

 

 

(C)

Signed copy of Subscriber’s latest available financial statements.

 

 

(v)

Private Pension Plans or Not For Profit (including Foundations and Charities)
(each of the following):

 

 

(A)

Certified copy of the entity’s formation documents;

 

 

(B)

An explanation of the nature of the entity’s purpose and operations;

 

 

(C)

Evidence of identity for authorized signatories, anyone who gives instructions
on behalf of the entity and all beneficial owners of Subscriber >25% OR comfort
letter (see (i) above for individuals and (ii) for all other entities); and

 

 

(D)

Confirmation of not for profit designation from the applicable government
authority.

 

 

(vi)

Financial Institutions (additional requirements):

 

In addition to the applicable requirements above, banks, brokers and other
financial institutions must deliver a representation letter in the form
determined by the Company indicating that they have established and implemented
anti-money laundering procedures reasonably designed to achieve compliance with
the USA PATRIOT Act.

 

Subscriber acknowledges that the Company and its affiliates may require further
identification of Subscriber or source of funds before the subscription can be
processed, and the Company and its officers, directors, employees, agents,
control persons, affiliates and professional advisors shall be held harmless and
indemnified in accordance with the indemnification provisions of the Agreement
as a result of a failure to process the subscription if such information as has
been required by the Company has not been provided by Subscriber. Subscriber
agrees to provide any information deemed necessary by the Company in its sole
and absolute discretion to comply with its anti-money laundering policies and
obligations.