Exhibot 10.3
 
SUBSCRIPTION AGREEMENT
WindTamer Corporation,
a New York corporation

WindTamer Corporation
6053 Ely Avenue
Livonia, New York 14487

Gentlemen:
 
This Subscription Agreement (the “Agreement”) is made by and between WindTamer
Corporation, a New York corporation (the “Company”), and the undersigned (the
“Subscriber”) in connection with the private placement in a single transaction
with the undersigned of shares of the Company’s Common Stock, par value $.0001
per share (“Common Stock”) at a price of $0.60 per share (the “Private
Placement”). The offer and sale of the shares of our Common Stock are being made
in reliance upon the provisions of Section 4(2) under the Securities Act of
1933, as amended (the “Securities Act”).

In consideration of any agreement by the Company to accept the Subscriber’s
subscription upon the terms and conditions set forth herein, the Subscriber
agrees and represents as follows:

1.           Subscription.

(a)           The Subscriber hereby irrevocably subscribes to purchase from the
Company at a purchase price of $0.60 per share that number of shares of our
Common Stock as shall have been subscribed for by the Subscriber as set forth on
the signature page of this Agreement.

(b)           Simultaneously with the execution of this Agreement, the
Subscriber is paying and delivering to the Company a check made payable to
“WindTamer Corporation” in the amount of the aggregate purchase price due for
the purchase of the Common Stock subscribed as set forth on the signature page
of this Agreement.  Subscriber further understands the payments made hereunder
may be used by the Company as working capital, and for other general corporate
purposes.

2.           Effectiveness.  Subscriber agrees that this Agreement shall not be
binding on the Company unless and until it is accepted by the Company.  Until
accepted, this Agreement constitutes an irrevocable offer to the
Company.  Subscriber also understands and agrees that the Company may refuse to
accept this Agreement for any reason and this Agreement shall not be accepted
until the funds paid by Subscriber herewith clear and are credited to the
account of the Company.
 
 

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

 
3.           Investment Representations.

Subscriber hereby makes the representations and warranties set forth below with
the express intention that they be relied upon by the Company in determining the
suitability of the Subscriber to purchase Common Stock:

(a)           SUBSCRIBER IS AWARE THAT THE COMMON STOCK IS A SPECULATIVE
INVESTMENT INVOLVING A HIGH DEGREE OF RISK AND THE POTENTIAL LOSS OF HIS/HER
ENTIRE INVESTMENT.
 
(b) Subscriber can bear the economic risk of this investment and can afford a
complete loss of this investment; and Subscriber (A) has sufficient liquid
assets to pay the full purchase price for the shares of our Common Stock; (B)
has adequate means of providing for Subscriber’s current needs and possible
personal contingencies, and has no present need for liquidity of Subscriber’s
investment in the shares of our Common Stock; (C) does not have a commitment to
investments which are not readily marketable or transferable which is
disproportionate to Subscriber’s net worth; and (D) Subscriber’s investment in
shares of our Common Stock will not cause such commitment to become excessive.
 
(c)           Subscriber has sought and received such accounting, legal and tax
advice as the Subscriber has considered necessary to make an informed investment
decision;
 
(d) Subscriber has had the opportunity to review publicly available materials
filed by the Company with the Securities and Exchange Commission (“SEC”)
pursuant to the Securities Exchange Act of 1934, as amended, including, but not
limited to, the Risk Factors related to the Company’s business and an investment
in its Common Stock. The Company has made available to Subscriber, a reasonable
time prior to the date hereof, the opportunity to ask questions of, and to
receive answers from, the Company and its representatives, concerning the terms
and conditions of the Private Placement and access to any information,
documents, financial statements, records and books (i) relative to the Company,
the business, the Private Placement and an investment in the Company, and (ii)
necessary to verify the accuracy of any information furnished to Subscriber.
Subscriber has been furnished, a reasonable time prior to the sale, a brief
description in writing of any material information concerning the offering that
has been provided by the Company to any accredited investor, but not previously
delivered to Subscriber, if any, and Subscriber has been furnished with a copy
of any such material as requested by him a reasonable time prior to the sale.
 
(e) Subscriber understands that the Common Stock has not been registered under
the Securities Act or pursuant to the provisions of the securities or other laws
of any applicable jurisdictions, in reliance upon certain exemptions contained
in the Securities Act and Regulation D promulgated thereunder and in the laws of
such jurisdictions. Subscriber is fully aware that Subscriber’s purchase of the
shares of our Common Stock is to be accepted by the Company in reliance upon
such exemptions based upon Subscriber’s representations, warranties and
agreements contained herein. The Subscriber further understands and agrees that
the Company will not honor any attempt by the Subscriber to sell, pledge,
transfer or otherwise dispose of any shares of Common Stock in the absence of an
effective registration statement for such shares of
 
2-

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

 
Common Stock, or an opinion of counsel satisfactory to the Company that an
exemption from any applicable registration requirements is available. The
Subscriber further understands that the Company is under no obligation to
register the shares of Common Stock or make an exemption from registration
available and that the Company has not represented that it will make any attempt
to so register the shares of Common Stock to make such an exemption thereto
available. Subscriber is fully aware of the restrictions on sale,
transferability, and assignment of the Company’s securities for an indefinite
period of time.

 
(f) Subscriber knows of no public solicitation or advertisement of any offer in
connection with the proposed issuance and sale of the securities hereunder.
Subscriber is not purchasing the Common Stock as a result of any advertisement,
article, notice or other communication regarding the Company or the Common Stock
published in any newspaper, magazine or similar media or broadcast over
television or radio or the Internet or presented at any seminar or through any
other general solicitation or general advertisement and acknowledges that the
Subscriber had a preexisting business or personal relationship with an officer
or director or service provider of the Company.
 
(g) Subscriber understands that there is presently no market for the Company’s
securities and no assurance that any such market will develop.

(h) Subscriber is an accredited investor as defined under the Securities Act and
the rules of the SEC promulgated thereunder. Subscriber has delivered herewith a
Representation of Accredited Investor (attached as Exhibit A hereto) and the
Subscriber represents that the information contained in such Representation is
true and accurate as of the date hereof. The Subscriber agrees to advise the
Company if any of the information contained in the Representation materially
changes prior to acceptance of this subscription.

(i) Subscriber’s execution and delivery of this Agreement has been duly
authorized by all necessary action. Subscriber agrees not to transfer or assign
this Agreement or any of Subscriber’s interest herein. Subscriber is acquiring
the shares of our Common Stock for Subscriber’s own account and not as a
fiduciary or nominee for any other person and for investment purposes only and
not with a view to or for the transfer, assignment, resale, or distribution
thereof, in whole or in part. Subscriber has no present plans to enter into any
such contract, undertaking, agreement, or arrangement. Subscriber understands
the meaning and legal consequences of the foregoing representations and
warranties. Subscriber is not an “underwriter” of any of the Company’s
securities, as that term is defined in Section 2(11) of the Securities Act, and
Subscriber will not take or cause to be taken any action that would cause
Subscriber to be deemed an “underwriter” of the securities.

(j) Subscriber has the full power and authority to execute, deliver and perform
this Agreement. This Agreement, when executed and delivered by Subscriber, will
constitute a valid and legally binding obligation of Subscriber, enforceable in
accordance with its terms.
 
(k) Subscriber acknowledges that, except as expressly set forth in this
Agreement, neither the Company, nor any other Person acting on the Company’s
behalf has made any other representations and warranties of any kind or nature
whatsoever to the Subscriber in
 
3-

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

 
connection with the sale of the Common Stock hereunder, including without
limitation, any representation or warranty regarding the Company, its business,
financial statements, results of operations, financial condition or future
prospects.
 
(l) Subscriber (a) is executing, delivering and performing this Agreement and is
proceeding with the transactions contemplated hereby on the basis that the
Company may be in possession of material, non-public information concerning the
Company (“Non-Public Company Information”) that is not or may not be known to
the Subscriber and that the Company has not disclosed to the Subscriber and that
such Non-Public Company Information may be material to an investor, such as
Subscriber, when making an investment decision, including the decision to enter
in this Agreement and purchase the Common Stock; (b) is consummating the
transactions contemplated hereby with full recognition and acknowledgment that
the Company may be privy to the Non-Public Company Information, and (c) is
voluntarily entering into this transaction without the benefit of the Non-Public
Company Information.
 
(m) The foregoing representations and warranties are true and correct as of the
date of Subscriber’s purchase of the shares of our Common Stock subscribed for
herein, and each such representation and warranty shall survive such purchase.
Subscriber agrees to notify the Company immediately as soon as any such
representation or warranty is no longer true and correct.
 
4. Legends. Each certificate representing the Common Stock which may be issued
by the Company shall bear the following legend:
 
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND SIMILAR STATE SECURITIES LAWS, AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED UNLESS AND UNTIL REGISTERED
UNDER SUCH ACT AND LAWS, OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF
COUNSEL OR OTHER EVIDENCE, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT
SUCH REGISTRATION IS NOT REQUIRED.

 
5. Indemnification. Subscriber hereby agrees to indemnify and hold harmless the
Company and its affiliated persons and entities (other than Subscriber) from any
and all damages, losses, costs, and expenses (including reasonable attorneys’
fees) which it may incur by reason of Subscriber’s failure to fulfill any of the
terms and conditions of this purchase or by reason of any misrepresentation or
breach of any of the warranties contained herein. In this regard, Subscriber
agrees to hold the Company and its controlling persons harmless from all
expenses, liabilities, and damages deriving from an assignment or disposition of
any shares of our Common Stock subscribed for and/or purchased hereby in a
manner which violates the Securities Act, or of any applicable state securities
law or which may be suffered by the indemnified person by reason of any
misrepresentation or breach of any warranty or agreement by Subscriber set forth
herein.
 
6. Securities Laws. Subscriber understands that this Private Placement has not
been reviewed by the U.S. Securities and Exchange Commission or the securities
commissioner or
 
 
4-

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

 
Attorney General of any state due to the exempted nature of this Private
Placement. Subscriber understands that any Private Placement literature used in
conjunction with this Private Placement has not been reviewed by the U.S.
Securities and Exchange Commission or the Attorney General or securities
commissioner of any state and therefore has not been approved by the U.S.
Securities and Exchange Commission or any state securities commissioner.
 
7. Notices. All notices and other communications required or permitted hereunder
shall be in writing, shall be effective when given, and shall in any event be
deemed to be given upon receipt by the other party or, if earlier, (a) five (5)
days after deposit with the United States Postal Service or other applicable
postal service, if delivered by first class mail, postage prepaid, (b) upon
delivery, if delivered by hand, (c) one (1) business day after the business day
of deposit with Federal Express or similar overnight courier, freight prepaid or
(d) one (1) business day after the business day of facsimile transmission, if
delivered by facsimile transmission with copy by first class mail, postage
prepaid, and shall be addressed to the parties at the following addresses and/or
facsimile numbers (or at such other address or number for a party as shall be
specified by like notice):
 
(a) If to the Company, to the address first set forth in the beginning of this
Agreement;
 
(b) If to Subscriber, to the address set forth on the signature page of this
Agreement for Subscriber.
 
8. Governing Law. This Agreement shall be governed in all respects, including,
without limitation, validity, interpretation and effect, by the internal laws of
the State of New York as applied to contracts entered into and entirely
performed within such state.
 
9. Severability. If any provision of this Agreement, or the application thereof,
will for any reason and to any extent be invalid or unenforceable, the remainder
of this Agreement and application of such provision to other persons or
circumstances will be interpreted so as reasonably to effect the intent of the
parties hereto. The parties further agree to replace such void or unenforceable
provision of this Agreement with a valid and enforceable provision that will
achieve, to the extent possible, the economic, business and other purposes of
the void or unenforceable provision.
 
10. Entire Agreement. This Agreement, and the exhibits attached hereto,
constitute the entire agreement between the parties hereto with respect to the
subject matter hereof, are intended to be limited to the expressly provided
provisions hereof, and supersede any prior agreements, representations or
understandings, both written and oral, between the parties hereto with respect
to the subject matter hereof, including, but not limited to, any prior
Subscription Agreement which may have been executed in favor of the Company by
the Subscriber.
 
11. Binding Effect. This Agreement is binding upon and will inure to the benefit
of the parties hereto and their respective successors and permitted assigns.

 
5-

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

 
 
12. Amendment. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
 
13. Counterparts. This Agreement may be executed in one or more counterparts,
all of which shall be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other party.
 
 

 
REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK
 
 
 
 
 
 
 
 

 
6-

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

 
SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT

The undersigned hereby subscribes for the number of shares of Common Stock as
indicated below.

 
Number of shares of Common Stock subscribed:
 
125,000_ shares X $0.60 per share = $75,000.00 payment.

 

IN WITNESS WHEREOF, the undersigned has executed this Subscription Agreement
this 14th day of November, 2009.
 
Signature:
/s/ William A. Schmitz
Name (Print):
William A. Schmitz 
Address:
     
SSN or EIN:
           
Title of Authorized Signatory if Subscriber is a corporation, partnership or
other entity

 

Subscription for 125,000 shares of Common Stock accepted this 14th day of
November, 2009.
 
WindTamer Corporation
   
By:
/s/  Gerald E. Brock
Name:
Gerald E. Brock
Title:
Chief Executive Officer

 
 
 
7-

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

 
EXHIBIT A

REPRESENTATION OF ACCREDITED INVESTOR

 
In connection with the proposed offering by WindTamer Corporation, a New York
corporation (the “Company”), of shares of the common stock, par value $.0001 per
share, of the Company (the “Common Stock”) in a transaction intended to qualify
as a private placement of securities exempt from registration under the
Securities Act of 1933, as amended (the “Act”), pursuant to Section 4(2) thereof
and Regulation D promulgated thereunder, I, the undersigned, furnish the
following representations and information:

 
1. I am an Accredited Investor (as that term is defined in Attachment 1 hereto),
as evidenced by my satisfying at least one of the following standards (initial
the one that applies):

 
__X__
(a)
I am an individual and had Income in excess of $200,000 in 2007 and 2008 or
joint Income with my spouse in excess of $300,000 in 2007 and 2008 and
reasonably expect to have Income in excess of this level in 2009. For purposes
of this Representation, “Income” shall mean salary and bonus income, taxable
income (gross receipts less cost of goods or services and expenses) in the case
of sale of proprietorships, distributable income from trusts and partnerships,
interest and dividend income (excluding unrealized gains) and vested
contributions made on behalf of an individual; or

 
_____
(b)
I am an individual and my net worth (i.e., excess of total assets over total
liabilities), either individually or together with my spouse, is at least
$1,000,000; or

 
_____
(c)
I am a corporation or partnership, not formed for the purpose of acquiring the
shares, with total assets in excess of $5,000,000; or

 
_____
(d)
I am an entity in which all of the equity owners meet the standards set forth in
any of the immediately preceding subparagraphs. (If this standard is initialed,
then each such equity owner must complete and return a copy of this
Representation); or

 
_____
(e)
Other (specify by reference to Attachment 1):

 

 
IN WITNESS WHEREOF, I have executed this Representation of Investor this 14th
day of November, 2009, and declare that it is truthful and correct.
 
 
/s/ William A. Schmitz
   
Signature of Prospective Purchaser
 
Signature of Prospective Co-Purchaser
     
William A. Schmitz
   
PRINT Purchaser Name
 
PRINT Co-Purchaser Name

 
 
 
 
 
 
A-1

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

ATTACHMENT 1 - Definition of Accredited Investor

Accredited investor.  Accredited investor shall mean any person who comes within
any of the following categories, or who the issuer reasonably believes comes
within any of the following categories, at the time of the sale of the
securities to that person:
 
(1) Any bank as defined in section 3(a)(2) of the Securities Act, or any savings
and loan association or other institution as defined in section 3(a)(5)(A) of
the Securities Act whether acting in its individual or fiduciary capacity; any
broker or dealer registered pursuant to section 15 of the Securities Exchange
Act of 1934; any insurance company as defined in section 2(13) of the Securities
Act; any investment company registered under the Investment Company Act of 1940
or a business development company as defined in section 2(a)(48) of that Act;
any Small Business Investment Company licensed by the U.S. Small Business
Administration under section 301(c) or (d) of the Small Business Investment Act
of 1958; any 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; any employee benefit plan within the meaning of the
Employee Retirement Income Security Act of 1974 if 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 adviser, or if the employee benefit plan has total assets in excess
of $ 5,000,000 or, if a self-directed plan, with investment decisions made
solely by persons that are accredited investors;
 
(2) Any private business development company as defined in section 202(a)(22) of
the Investment Advisers Act of 1940;
 
(3) Any organization described in section 501(c)(3) of the Internal Revenue
Code, corporation, Massachusetts or similar business trust, or partnership, not
formed for the specific purpose of acquiring the securities offered, with total
assets in excess of $ 5,000,000;
 
(4) Any director, executive officer, or general partner of the issuer of the
securities being offered or sold, or any director, executive officer, or general
partner of a general partner of that issuer;
 
(5) Any natural person whose individual net worth or joint net worth with that
person’s spouse, at the time of his purchase exceeds $1,000,000;
 
(6) Any natural person who 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;
 
(7) Any trust, with total assets in excess of $ 5,000,000, not formed for the
specific purpose of acquiring the securities offered, whose purchase is directed
by a sophisticated person as described in 17 C.F.R. § 230.506(b)(2)(ii); and
 
(8) Any entity in which all of the equity owners are accredited investors.

A-2