Exhibit 10.1

 

SUBSCRIPTION AGREEMENT

 

Healthcare Integrated Technologies Inc.

1462 Rudder Lane

Knoxville, Tn 37919

 

Ladies and Gentlemen:

 

Subject to the terms and conditions of this Subscription Agreement (the
“Agreement”), undersigned subscriber (hereinafter, the “Purchaser”) hereby
irrevocably subscribes for and agrees to purchase the number of shares of common
stock, par value $0.001 per share (the “Shares”), of Healthcare Integrated
Technologies Inc., a Nevada corporation (the “Company”), on the signature page
hereof at a purchase price of $.10 per Share (the “Purchase Price”).

 

1. Subscription. Contemporaneously with the execution of this Agreement by the
Purchaser, the Purchaser tenders a check or wire transfer in the amount of the
Purchase Price to the Company.

 

2. Acceptance of Subscription. The Purchaser acknowledges that the Company has
the right (in its sole discretion) to accept or reject this subscription, in
whole or in part, for any reason, and that this subscription shall be deemed to
be accepted by the Company only when it is signed on its behalf. The Agreement
either will be accepted or rejected, in whole or in part, as promptly as
practical after receipt. Upon rejection of this Agreement for any reason, all
items received with this Agreement shall be returned to the Purchaser without
deduction for any fee, commission or expense and without accrued interest with
respect to any money received, and this Agreement shall be deemed to be null and
void and of no further force or effect.

 

3. Representations, Warranties and Covenants of the Purchaser. The Purchaser
hereby represents, warrants to, and covenants with the Company as follows:

 

(a) The Shares offered hereby are not registered under the Securities Act of
1933, as amended (the “Securities Act”), or any state securities laws. The
Purchaser understands that the offering and sale of the Shares contemplated
hereby is intended to be exempt from registration under the Securities Act, by
virtue of Section 4(a)(2) thereof, based, in part, upon the representations,
warranties and agreements of the Purchaser contained in this Agreement.

 

(b) The Purchaser has not been provided any offering materials in connection
with the sale of the Shares other than this Agreement. All documents, records,
and books pertaining to the investment in the Shares been made available for
inspection by the Purchaser and the Purchaser’s attorney, accountant, purchaser
representative and/or tax advisor, if any (collectively, the “Advisors”), if
any. The Purchaser and its Advisors, if any, have had a reasonable opportunity
to ask questions of and receive answers from a person or persons acting on
behalf of the Company concerning the offering of the Shares and the business,
financial condition, and results of operations of the Company, and all such
questions have been answered by representatives of the Company to the full
satisfaction of the Purchaser and its Advisors, if any. In evaluating the
suitability of an investment in the Company, the Purchaser has not relied upon
any representation or other information (oral or written) other than as stated
herein or as contained in documents so furnished to the Purchaser or its
Advisors, if any, by the Company

 

(c) Neither the Securities and Exchange Commission (the “SEC”) nor any state
securities commission or other regulatory body has approved the Shares, or
passed upon or endorsed the merits of this offering or confirmed the accuracy or
determined the adequacy of this Agreement. Any representation to the contrary is
a criminal offense. This Agreement has not been reviewed by any federal, state
or other regulatory authority. The Shares are subject to restrictions on
transferability and resale and may not be transferred or resold except as
permitted under the Securities Act, and the applicable state securities laws,
pursuant to registration or exemption therefrom.

 

1

 

 

(d) The Purchaser is unaware of, is in no way relying on, and did not become
aware of the offering of the Shares directly or indirectly through or as a
result of, any form of general solicitation or general advertising including,
without limitation, any press release, article, notice, advertisement or other
communication published in any newspaper, magazine or similar media or broadcast
over television, radio or the internet (including without limitation, internet
“blogs,” bulletin boards, discussion groups or social networking sites) in
connection with the offering and sale of the Shares and is not subscribing for
the Shares and did not become aware of the offering of the Shares through or as
a result of any seminar or meeting to which the Purchaser was invited by, or any
solicitation of a subscription by, a person not previously known to the
Purchaser in connection with investments in securities generally.

 

(e) The Purchaser is not aware of any person and has been advised that no
person, will receive from the Company any compensation as a broker, finder,
adviser or in any other capacity in connection with the purchase of the Shares.

 

(f) The Purchaser, either alone or together with its Advisors, if any, has such
knowledge and experience in financial, tax, and business matters, and, in
particular, investments in securities, so as to enable him to utilize the
information made available to him in connection with the offering of the Shares,
to evaluate the merits and risks of an investment in the Shares and the Company
and to make an informed investment decision with respect thereto.

 

(g) The Purchaser acknowledges that (i) the Company is not “current” in its
reporting obligations with the SEC, and (ii) that the Shares will not be
available for resale under the provisions of Rule 144 of the Securities Act
after the requisite holding period set forth in such rule until such time, if
ever, that the Company files all delinquent reports and other information with
the SEC and is considered “current” in its filing obligations. As a result, the
Purchaser may be required to hold the Shares indefinitely.

 

(h) The Purchaser is not relying on the Company or any of its employees or
agents with respect to the legal, tax, economic and related considerations of an
investment in the Shares, and the Purchaser has relied on the advice of, or has
consulted with, only its own Advisors, if any.

 

(i) The Purchaser represents that the Shares are being purchased for the
Purchaser’s own account, for investment purposes only and not with a view for
distribution or resale to others. The Purchaser agrees that the Purchaser will
not sell or otherwise transfer the Shares unless the Shares are registered under
the Securities Act or unless in the opinion of counsel satisfactory to the
Company an exemption from such registration is available. The Purchaser
understands that the Shares have not been registered under the Securities Act by
reason of a claimed exemption under the provisions of the Securities Act which
depends, in part, upon the Purchaser’s investment intention. In this connection,
the Purchaser understands that it is the position of the SEC that the statutory
basis for such exemption would not be present if the Purchaser’s representation
merely meant that the Purchaser’s present intention was to hold such Shares for
a short period, such as the capital gains period of tax statutes, for a deferred
sale or for any other fixed period. The Purchaser realizes that the SEC might
regard a purchase with an intent inconsistent with the Purchaser’s
representation to the Company, and a sale or disposition thereof, as a deferred
sale to which the exemption is not available.

 

(j) The purchase of the Shares represents a high risk capital investment and the
Purchaser is able to afford an investment in a speculative venture having the
risks and objectives of the Company. The Purchaser must bear the substantial
economic risks of the investment in the Shares indefinitely because the Shares
may be sold, hypothecated or otherwise disposed of unless subsequently
registered under the Securities Act and applicable state securities laws or an
exemption from such registration is available. A legend will be placed on the
certificate representing the Shares to the effect that the Shares have not been
registered under the Securities Act or applicable state securities laws and
appropriate notations thereof will be made in the Company’s books. Stop transfer
instructions will be placed with the transfer agent of the Shares.

 

(k) The Purchaser meets the requirements of at least one of the suitability
standards for an “accredited investor” as that term is defined in Regulation D
under the Securities Act. The Purchaser satisfies any special suitability or
other applicable requirements of his state of residence and/or the state in
which the transaction by which the Shares are purchased occurs.

 

(l) The Purchaser represents that the Purchaser has reached the age of 21 and
has full power and authority to execute and deliver this Agreement and all other
related agreements or certificates and to carry out the provisions hereof and
thereof and the execution and delivery of this Agreement will not violate or be
in conflict with any order, judgment, injunction, agreement or controlling
document to which the Purchaser is a party or by which he is bound.

 

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(m) Any information which the Purchaser has heretofore furnished or is
furnishing herewith to the Company is complete and accurate and may be relied
upon by the Company in determining the availability of an exemption from
registration under Federal and state securities laws in connection with the
offering and sale of the Shares. The Purchaser further represents and warrants
that it will notify and supply corrective information to the Company immediately
upon the occurrence of any change therein occurring prior to the Company’s
issuance of the certificates representing the Shares.

 

(n) The Purchaser has significant prior investment experience, including
investments in non-registered securities. The Purchaser has a sufficient net
worth to sustain a loss of its entire investment in the Company in the event
such a loss should occur. The Purchaser’s overall commitment to investments
which are not readily marketable is not excessive in view of the Purchaser’s net
worth and financial circumstances and the purchase of the Shares will not cause
such commitment to become excessive. The investment is a suitable one for the
Purchaser.

 

(o) Within five (5) days after receipt of a request from the Company, the
Purchaser will provide such information and deliver such documents as may
reasonably be necessary to comply with any and all laws and ordinances to which
the Company is subject.

 

(p) The Purchaser understands and agrees that all the certificate representing
the Shares will contain the following restrictive legend:

 

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (“SECURITIES ACT”), OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED OR DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO HEALTHCARE INTEGRATED
TECHNOLOGIES INC. THAT AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
AND ANY APPLICABLE STATE SECURITIES LAWS IS AVAILABLE.

 

(q) The Purchaser should check the Office of Foreign Assets Control (“OFAC”)
website at <http://www.treas.gov/ofac> before making the following
representations. The Purchaser represents that the amounts invested by him in
the Company in this offering were not and are not directly or indirectly derived
from activities that contravene federal, state or international laws and
regulations, including anti-money laundering laws and regulations. Federal
regulations and Executive Orders administered by OFAC prohibit, among other
things, the engagement in transactions with, and the provision of services to,
certain foreign countries, territories, entities and individuals. The lists of
OFAC prohibited countries, territories, persons and entities can be found on the
OFAC website at <http://www.treas.gov/ofac>. In addition, the programs
administered by OFAC (the “OFAC Programs”) prohibit dealing with individuals1 or
entities in certain countries regardless of whether such individuals or entities
appear on the OFAC lists.

 

(r) The Purchaser is not an individual named on an OFAC list, or a person
prohibited under the OFAC Programs. Please be advised that the Company may not
accept any amounts from a prospective investor if such prospective investor
cannot make the representations set forth in the preceding paragraph. The
Purchaser agrees to promptly notify the Company should the Purchaser become
aware of any change in the information set forth in these representations. The
Purchaser understands and acknowledges that, by law, the Company may be
obligated to “freeze the account” of the Purchaser, either by prohibiting
additional subscriptions from the Purchaser, declining any redemption requests
and/or segregating the assets in the account in compliance with governmental
regulations. The Purchaser further acknowledges that the Company may, by written
notice to the Purchaser, suspend the redemption rights, if any, of the Purchaser
if the Company reasonably deems it necessary to do so to comply with anti-money
laundering regulations applicable to the Company or any of the Company’s other
service providers. These individuals include specially designated nationals,
specially designated narcotics traffickers and other parties subject to OFAC
sanctions and embargo programs.

 

 

 

1 These individuals include specially designated nationals, specially designated
narcotics traffickers and other parties subject to OFAC sanctions and embargo
programs.

 

3

 

 

(s) The Purchaser is not senior foreign political figure2, or any immediate
family3 member or close associate4 of a senior foreign political figure, as such
terms are defined in the footnotes below.

 

(t) The Purchaser is not subject to any “Bad Actor” disqualifications described
in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualifying
Event”), except for a Disqualifying Event covered by Rule 506(d)(2) or (d)(3).

 

(u) The Purchaser acknowledges and agrees that the Common Stock is publicly
QUOTED on the otcpINK TIER OF THE OTC MARKETS and that by accepting the Offering
Documents the purchaser agrees with the company to maintain in strict confidence
all non-public information, including, but not limited to, the existence of the
offering and any other non-public information regarding the company obtained
from the company. The company has caused these materials to be delivered to the
purchaser in reliance upon such agreement AND UPON RULE 100(b)(2)(II) OF
REGULATION FD AS PROMULGATED BY THE SEC.

 

The foregoing representations and warranties are true and accurate as of the
date hereof, shall be true and accurate as of the date of delivery of this
Agreement and accompanying documents to the Company and shall survive such
delivery. If, in any respect, those representations and warranties shall not be
true and accurate prior to delivery of the payment pursuant to paragraph 1, the
undersigned shall immediately give written notice to the Company specifying
which representations and warranties are not true and accurate and the reason
therefor. In addition, the Purchaser agrees to notify the Company immediately in
writing if the Purchaser ceases to be an “accredited investor” within the
meaning of Rule 501(a) of Regulation D under the Securities Act. Until the
Purchaser provides a notice described in the preceding two sentences, the
Company may rely on the representations, warranties, covenants and agreements
contained herein in connection with any matter related to the Company. Without
limiting the generality of the preceding sentence, the Company may assume that
all such representations and warranties are correct in all respects as of the
date hereof and may rely on such representations and warranties in determining
whether (i) the Purchaser is suitable as a purchaser of the Shares, (ii) the
Shares may be sold to the Purchaser without first registering the Shares under
the Securities Act or any other applicable securities laws, and (iii) the
conditions to the acceptance of subscriptions for Shares have been satisfied.

 

4. Representations, Warranties and Covenants of the Company. The Company hereby
represents, warrants to and covenants with the Purchaser as follows:

 

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

 

(b) The Company has all power and authority to enter into and perform its
obligations under this Agreement and to issue, sell and deliver the Shares. The
execution and delivery of each of the Agreement and the issuance, sale and
delivery of the Shares has been duly authorized by all necessary corporate
action. This Agreement has been duly executed and when delivered will constitute
upon due execution and delivery, will constitute, valid and binding obligations
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 other similar laws now or hereafter in effect
relating to or affecting creditors’ rights generally, including the effect of
statutory and other laws regarding fraudulent conveyances and preferential
transfers, and except that no representation is made herein regarding the
enforceability of the Company’s obligations to provide indemnification and
contribution remedies under the securities laws and subject to the limitations
imposed by general equitable principles (regardless of whether such
enforceability is considered in a proceeding at law or in equity).

 

 

 

2 A “senior foreign political figure” is defined as a senior official in the
executive, legislative, administrative, military or judicial branches of a
foreign government (whether elected or not), a senior official of a major
foreign political party, or a senior executive of a foreign government owned
corporation. In addition, a “senior foreign political figure” includes any
corporation, business or other entity that has been formed by, or for the
benefit of, a senior foreign political figure.

 

3 “Immediate family” of a senior foreign political figure typically includes the
figure’s parents, siblings, spouse, children and in-laws.

 

4 A “close associate” of a senior foreign political figure is a person who is
widely and publicly known to maintain an unusually close relationship with the
senior foreign political figure, and includes a person who is in a position to
conduct substantial domestic and international financial transactions on behalf
of the senior foreign political figure.

 

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(c) The Shares will be duly and validly issued, fully paid and non-assessable,
and free from all taxes or liens with respect to the issue thereof and shall not
be subject to preemptive rights, rights of first refusal and/or other similar
rights of stockholders of the Company and/or any other person.

 

5. Indemnification. The Purchaser acknowledges that the Purchaser understands
the meaning and legal consequences of the representations, warranties and
covenants in Section 3 hereof and that the Company has relied upon such
representations, warranties and covenants, and the Purchaser hereby agrees to
indemnify and hold harmless the Company and its officers, directors, controlling
persons, agents and employees, from and against any and all losses, damages or
liabilities due to or arising out of a breach of any representation, warranty or
covenant made by the Purchaser herein. Notwithstanding the foregoing, however,
no representation, warranty, covenant, acknowledgment or agreement made herein
by the Purchaser shall in any manner be deemed to constitute a waiver of any
rights granted to the Purchaser under Federal or state securities laws. All
representations, warranties and covenants contained in this Agreement and the
indemnification contained in this Section 5 shall survive the acceptance of this
subscription.

 

6. Irrevocability; Binding Effect. The Purchaser hereby acknowledges and agrees
that the subscription hereunder is irrevocable by the Purchaser, except as
required by applicable law, and that this Agreement shall survive the death or
disability of the Purchaser and shall be binding upon and inure to the benefit
of the parties and their heirs, executors, administrators, successors, legal
representatives, and permitted assigns. If the Purchaser is more than one
person, the obligations of the Purchaser hereunder shall be joint and several
and the agreements, representations, warranties, and acknowledgments herein
shall be deemed to be made by and be binding upon each such person and such
person’s heirs, executors, administrators, successors, legal representatives,
and permitted assigns.

 

7. Modification. Neither this Agreement nor any provision hereof shall be
waived, modified, changed, discharged or terminated except by an instrument in
writing signed by the party against whom any waiver, modification, change,
discharge or termination is sought.

 

8. Notices. All notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been duly made when delivered,
or mailed by registered or certified mail, return receipt requested:

 

(a) If to the Purchaser, to the address set forth on the signature page of this
Agreement, or at such other address as the Purchaser may hereafter have advised
the Company by written notification.

 

(b) If to the Company, to the address set forth on the first page of this
Agreement, or at such other address as the Company may hereafter have advised
the Purchaser by written notification.

 

9. Survival of Representations and Warranties. Each party hereto covenants and
agrees that the representations and warranties of such party contained in this
Agreement shall survive the Closing.

 

10. Entire Agreement. This Agreement contains the entire agreement of the
parties with respect to the matters set forth herein and supersede all prior
oral or written agreements and understandings, if any, relating to the subject
matter hereof.

 

11. Assignability. This Agreement is not transferable or assignable by the
undersigned or any successor thereto.

 

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12. Governing Law; Venue; Waiver Of Jury Trial, Etc. This Agreement shall be
governed by and construed solely and exclusively under and pursuant to the laws
of the State of Nevada as applied to agreements among Nevada residents entered
into and to be performed entirely within Nevada. Each of the parties hereto
expressly and irrevocably (1) agree that any legal suit, action or proceeding
arising out of or relating to this Agreement will be instituted exclusively in
the United States District Court for the Eastern District of Tennessee, (2)
waive any objection they may have now or hereafter to the venue of any such
suit, action or proceeding, and (3) consent to the in personam jurisdiction of
the United States District Court for the Eastern District of Tennessee in any
such suit, action or proceeding. Each of the parties hereto further agrees to
accept and acknowledge service of any and all process which may be served in any
such suit, action or proceeding in the United States District Court for the
Eastern District of Tennessee and agree that service of process upon it mailed
by certified mail to its address will be deemed in every respect effective
service of process upon it, in any such suit, action or proceeding. THE PARTIES
HERETO AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DOCUMENT OR
AGREEMENT CONTEMPLATED HEREBY. THE PARTY PREVAILING THEREIN SHALL BE ENTITLED TO
PAYMENT FROM THE OTHER PARTY HERETO OF ALL OF ITS REASONABLE COUNSEL FEES AND
DISBURSEMENTS.

 

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

 

14. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, and all of which shall
constitute one and the same document. In the event that any signature (including
a financing signature page) is delivered by facsimile transmission or by e-mail
delivery of a “.pdf” format data file, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile or “pdf” signature
page were an original thereof.

 

15. Use of Pronouns and Defined Terms. All pronouns and any variations thereof
used herein shall be deemed to refer to the masculine, feminine, neuter,
singular or plural as the identity of the person or persons referred to may
require. All terms not otherwise defined herein shall have the same meaning as
in the Offering Documents.

 

16. Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof but shall be interpreted as if it were written so as
to be enforceable to the maximum extent permitted by applicable law, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the parties hereby waive any provision of law which
renders any provision hereof prohibited or unenforceable in any respect.

 

[SIGNATURE PAGE TO FOLLOW]

 

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IN WITNESS WHEREOF, the undersigned has executed this Agreement on the date his
signature has been subscribed and sworn to below.

 

No. of Shares: ______________________________   Purchase Price: $
_________________________________       (No. of Shares x $.10 per Share)        
The Shares are to be issued in   (check one box):   Print Name of Purchaser    
    [  ] individual name         Print Name of Joint Purchaser (if applicable)
[  ] joint tenants with rights of survivorship           [  ] tenants in
entirety   Signature of Purchaser         [  ] corporation (an officer must
sign)         Signature of Joint Purchaser [  ] partnership (all general
partners must sign)             [  ] Trust             [  ] limited liability
company         Print Name of Trust, Corporation, Partnership, LLC or other
Institutional Purchaser

 

email address:                 fax number:             By:         
Subscriber(s) address:         Title:               Taxpayer ID No.:     Name of
natural person with voting and dispositive control over the Shares being
subscribed for

 

Accepted as of this _____________ day of__________________________________, 2020

 

HEALTHCARE INTEGRATED TECHNOLOGIES INC.

 

By:           Scott M. Boruff, Chief Executive Officer  

 

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Annex 1

 

“Bad Actor” Disqualification

Rules 506(d)(1) and (2) of the Securities Act of 1933

 

(d) “Bad Actor” disqualification. (1) No exemption under this section shall be
available for a sale of securities if the issuer; any predecessor of the issuer;
any affiliated issuer; any director, executive officer, other officer
participating in the Offering, general partner or managing member of the issuer;
any beneficial owner of 20% or more of the issuer’s outstanding voting equity
securities, calculated on the basis of voting power; any promoter connected with
the issuer in any capacity at the time of such sale; any investment manager of
an issuer that is a pooled investment fund; any person that has been or will be
paid (directly or indirectly) remuneration for solicitation of purchasers in
connection with such sale of securities; any general partner or managing member
of any such investment manager or solicitor; or any director, executive officer
or other officer participating in the Offering of any such investment manager or
solicitor or general partner or managing member of such investment manager or
solicitor:

 

(i) Has been convicted, within ten years before such sale (or five years, in the
case of issuers, their predecessors and affiliated issuers), of any felony or
misdemeanor:

 

  (A) In connection with the purchase or sale of any security;         (B)
Involving the making of any false filing with the Commission; or         (C)
Arising out of the conduct of the business of an underwriter, broker, dealer,
municipal securities dealer, investment adviser or paid solicitor of purchasers
of securities;

 

(ii) Is subject to any order, judgment or decree of any court of competent
jurisdiction, entered within five years before such sale, that, at the time of
such sale, restrains or enjoins such person from engaging or continuing to
engage in any conduct or practice:

 

  (A) In connection with the purchase or sale of any security;         (B)
Involving the making of any false filing with the Commission; or         (C)
Arising out of the conduct of the business of an underwriter, broker, dealer,
municipal securities dealer, investment adviser or paid solicitor of purchasers
of securities;

 

(iii) Is subject to a final order of a state securities commission (or an agency
or officer of a state performing like functions); a state authority that
supervises or examines banks, savings associations, or credit unions; a state
insurance commission (or an agency or officer of a state performing like
functions); an appropriate federal banking agency; the U.S. Commodity Futures
Trading Commission; or the National Credit Union Administration that:

 

  (A) At the time of such sale, bars the person from:

 

  (1) Association with an entity regulated by such commission, authority,
agency, or officer;         (2) Engaging in the business of securities,
insurance or banking; or         (3) Engaging in savings association or credit
union activities; or

 

  (B) Constitutes a final order based on a violation of any law or regulation
that prohibits fraudulent, manipulative, or deceptive conduct entered within ten
years before such sale;

 

(iv) Is subject to an order of the Commission entered pursuant to section 15(b)
or 15B(c) of the Securities Exchange Act of 1934 (15 U.S.C. 78 o (b) or 78 o
-4(c)) or section 203(e) or (f) of the Investment Advisers Act of 1940 (15
U.S.C. 80b-3(e) or (f)) that, at the time of such sale:

 

 

 

 

  (A) Suspends or revokes such person’s registration as a broker, dealer,
municipal securities dealer or investment adviser;         (B) Places
limitations on the activities, functions or operations of such person; or      
  (C) Bars such person from being associated with any entity or from
participating in the Offering of any penny stock;

 

(v) Is subject to any order of the Commission entered within five years before
such sale that, at the time of such sale, orders the person to cease and desist
from committing or causing a violation or future violation of:

 

  (A) Any scienter-based anti-fraud provision of the federal securities laws,
including without limitation section 17(a)(1) of the Securities Act of 1933 (15
U.S.C. 77q(a)(1)), section 10(b) of the Securities Exchange Act of 1934 (15
U.S.C. 78j(b)) and 17 CFR 240.10b-5, section 15(c)(1) of the Securities Exchange
Act of 1934 (15 U.S.C. 78 o (c)(1)) and section 206(1) of the Investment
Advisers Act of 1940 (15 U.S.C. 80b-6(1)), or any other rule or regulation
thereunder; or         (B) Section 5 of the Securities Act of 1933 (15 U.S.C.
77e).

 

(vi) Is suspended or expelled from membership in, or suspended or barred from
association with a member of, a registered national securities exchange or a
registered national or affiliated securities association for any act or omission
to act constituting conduct inconsistent with just and equitable principles of
trade;

 

(vii) Has filed (as a registrant or issuer), or was or was named as an
underwriter in, any registration statement or Regulation A offering statement
filed with the Commission that, within five years before such sale, was the
subject of a refusal order, stop order, or order suspending the Regulation A
exemption, or is, at the time of such sale, the subject of an investigation or
proceeding to determine whether a stop order or suspension order should be
issued; or

 

(viii) Is subject to a United States Postal Service false representation order
entered within five years before such sale, or is, at the time of such sale,
subject to a temporary restraining order or preliminary injunction with respect
to conduct alleged by the United States Postal Service to constitute a scheme or
device for obtaining money or property through the mail by means of false
representations.

 

(2) Paragraph (d)(1) of this section shall not apply:

 

(i) With respect to any conviction, order, judgment, decree, suspension,
expulsion or bar that occurred or was issued before September 23, 2013;

 

(ii) Upon a showing of good cause and without prejudice to any other action by
the Commission, if the Commission determines that it is not necessary under the
circumstances that an exemption be denied;

 

(iii) If, before the relevant sale, the court or regulatory authority that
entered the relevant order, judgment or decree advises in writing (whether
contained in the relevant judgment, order or decree or separately to the
Commission or its staff) that disqualification under paragraph (d)(1) of this
section should not arise as a consequence of such order, judgment or decree; or

 

(iv) If the issuer establishes that it did not know and, in the exercise of
reasonable care, could not have known that a disqualification existed under
paragraph (d)(1) of this section.

 

(3) For purposes of paragraph (d)(1) of this section, events relating to any
affiliated issuer that occurred before the affiliation arose will be not
considered disqualifying if the affiliated entity is not:

 

(i) In control of the issuer; or

 

(ii) Under common control with the issuer by a third party that was in control
of the affiliated entity at the time of such events.