To: ELDERWATCH,
      INC.

    


    ELDERWATCH,
      INC.

    REGULATION
      S SUBSCRIPTION AGREEMENT AND INVESTMENT 

    REPRESENTATION

    


    SECTION
      1

    


    1.1 Subscription.
      

    


    (a)
       The
      undersigned, intending to be legally bound, hereby irrevocably subscribes for
      and agrees to purchase ____________ Units (hereafter defined) to be issued
      by
      Elderwatch, Inc., a Florida corporation (the "Company") in an offshore
      transaction negotiated outside the U.S. and to be consummated and closed outside
      the U.S. The Company is directly offering for sale 2,500,000 Units for an
      aggregate gross proceeds of $250,000. A “Unit” shall consist of the following:


    


    
      	 	
              (1)
                

            	
              one
                share of Common Stock (a “Purchased
                Share”);

            


    

    


    
      	 	
              (2)
                

            	
              one
                Class A Warrant, as further described in the Class A Warrant Agreement
                attached hereto as Exhibit A, entitling the undersigned to purchase
                one
                share of Common Stock at an exercise price of $0.20 per share, expiring
                on
                December 31, 2007 (a “Class A Warrant”); and


            


    

    


    
      	 	
              (3)
                

            	
              one
                Class B Warrant, as further described in the Class B Warrant Agreement
                attached hereto as Exhibit B, entitling the undersigned to purchase
                one
                share of Common Stock at an exercise price of $0.30 per share, expiring
                on
                June 30, 2009 (a “Class B Warrant, and together with the Class A Warrant,
                the “Warrants”). 

            


    

    


    The
      Warrants are redeemable by the Company at any time at a redemption price of
      $0.05 per Warrant.

    


    (b)
       For
      purposes of this Subscription Agreement: 

    


    
      	 	
              (1)
                

            	
              “Common
                Stock” means the common stock of the Company, par value $0.001 per share.
                

            


    

    


    
      	 	
              (2)
                

            	
              “Securities”
                means the Purchased Shares, the Warrants and the Warrant Shares.
                

            


    

    


    
      	 	
              (3)
                

            	
              “Warrant
                Shares” means the shares of Common Stock issuable upon due exercise of the
                Warrants.

            


    

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    1.2 Purchase
      of Units.

    


    The
      undersigned understands and acknowledges that the purchase price to be remitted
      to the Company in exchange for the Units shall be ____________ dollars ($______)
      or $0.10 per Unit. Simultaneous with the execution and delivery of this
      Agreement, including the Investor Questionnaire annexed hereto, the undersigned
      shall deliver to the Company the aforementioned purchase price by wire transfer
      of immediately available funds. Wire instructions are attached hereto as
      Appendix A.
      

    


    1.3 Acceptance
      or Rejection.

    


    (a) The
      undersigned understands and agrees that the Company reserves the right to reject
      this subscription for the Units if, in its reasonable judgment, it deems such
      action in the best interest of the Company, at any time prior to the Closing,
      notwithstanding prior receipt by the undersigned of notice of acceptance of
      the
      undersigned's subscription.

    


    (b) The
      undersigned understands and agrees that its subscription for the Units is
      irrevocable.

    


    (c) In
      the
      event the sale of the Units subscribed for by the undersigned is not consummated
      by the Company for any reason (in which event this Subscription Agreement shall
      be deemed to be rejected), this Subscription Agreement and any other agreement
      entered into between the undersigned and the Company relating to this
      subscription shall thereafter have no force or effect and the Company shall
      promptly return or cause to be returned to the undersigned the purchase price
      remitted to the Company by the undersigned, without interest thereon or
      deduction therefrom, in exchange for the Units.

    


    SECTION
      2

    


    2.1 Closing

    


    The
      closing (the "Closing") of the purchase and sale of the Units, shall occur
      simultaneously with the acceptance by the Company of the undersigned's
      subscription, as evidenced by the Company's execution of this Subscription
      Agreement.

    


    SECTION
      3

    


    3.1 Investor
      Representations and Warranties.
      

    


    The
      undersigned hereby acknowledges, represents and warrants to, and agrees with,
      the Company and its affiliates as follows:

    


    (a) The
      undersigned is acquiring the Securities for his own account as principal, not
      as
      a nominee or agent, for investment purposes only, and not with a view to, or
      for, resale, distribution or fractionalization thereof in whole or in part
      and
      no other person has a direct or indirect beneficial interest in such Securities
      or any portion thereof. Further, the undersigned does not have any contract,
      undertaking, agreement or arrangement with any person to sell, transfer or
      grant
      participations to such person or to any third person, with respect to the
      Securities for which the undersigned is subscribing or any part of the
      Securities.

    


    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    (b) The
      undersigned has full power and authority to enter into this Agreement, the
      execution and delivery of this Agreement has been duly authorized, if
      applicable, and this Agreement constitutes a valid and legally binding
      obligation of the undersigned.

    


    (c) The
      undersigned is not subscribing for the Securities as a result of or subsequent
      to any advertisement, article, notice or other communication published in any
      newspaper, magazine or similar media or broadcast over television or radio,
      or
      presented at any seminar or meeting, or any solicitation of a subscription
      by
      person previously not known to the undersigned in connection with investment
      securities generally.

    


    (d) The
      undersigned understands that the Company is under no obligation to register
      the
      Securities under the Securities Act of 1933, as amended (the “Securities Act”),
      or to assist the undersigned in complying with the Securities Act or the
      securities laws of any state of the United States or of any foreign
      jurisdiction.

    


    (e) The
      undersigned is (i) experienced in making investments of the kind described
      in
      this Agreement and the related documents, (ii) able, by reason of the business
      and financial experience of its officers (if an entity) and professional
      advisors (who are not affiliated with or compensated in any way by the Company
      or any of its affiliates or selling agents), to protect its own interests in
      connection with the transactions described in this Agreement, and the related
      documents, and (iii) able to afford the entire loss of its investment in the
      Securities. The undersigned further understands that the Company currently
      has
      no business or operations and although it is contemplating entering the field
      of
      clean energy technologies, the Company currently has no agreements or
      arrangements with any persons in connection therewith.

    


    (f) The
      undersigned acknowledges his understanding that the offering and sale of the
      Purchased Shares, Warrants and the issuance of the Warrant Shares upon due
      exercise of the Warrants is intended to be exempt from registration under the
      Securities Act. In furtherance thereof, in addition to the other representations
      and warranties of the undersigned made herein, the undersigned further
      represents and warrants to and agrees with the Company and its affiliates as
      follows:

    


    
      	 	
              (i)

            	
              The
                undersigned realizes that the basis for the exemption may not be
                present
                if, notwithstanding such representations, the undersigned has in
                mind
                merely acquiring the Securities for a fixed or determinable period
                in the
                future, or for a market rise, or for sale if the market does not
                rise. The
                undersigned does not have any such
                intention;

            


    

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (ii)

            	
              The
                undersigned has the financial ability to bear the economic risk of
                his
                investment, has adequate means for providing for his current needs
                and
                personal contingencies and has no need for liquidity with respect
                to his
                investment in the Company; 

            


    

    


    
      	 	
              (iii)

            	
              The
                undersigned has such knowledge and experience in financial and business
                matters as to be capable of evaluating the merits and risks of the
                prospective investment in the Securities. The undersigned also represents
                it has not been organized for the purpose of acquiring the Securities;
                

            


    

    


    
      	 	
              (iv)

            	
              The
                undersigned has been provided an opportunity for a reasonable period
                of
                time prior to the date hereof to obtain additional information concerning
                the offering of the Securities, the Company and all other information
                to
                the extent the Company possesses such information or can acquire
                it
                without unreasonable effort or expense;
                and

            


    

    


    
      	 	
              (v)

            	
              The
                undersigned has carefully reviewed all of the Company’s filings under the
                Securities Exchange Act of 1934, as amended (the “Exchange
                Act”).

            


    

    


    (g) The
      undersigned is not relying on the Company, or its affiliates or agents with
      respect to economic considerations involved in this investment. The undersigned
      has relied solely on its own advisors.

    


    (h) No
      representations or warranties have been made to the undersigned by the Company,
      or any officer, employee, agent, affiliate or subsidiary of the Company, other
      than the representations of the Company contained herein, and in subscribing
      for
      Units the undersigned is not relying upon any representations other than those
      contained herein. 

    


    (i)  Any
      resale of the Securities during the ‘distribution compliance period’ as defined
      in Rule 902(f) to Regulation S shall only be made in compliance with exemptions
      from registration afforded by Regulation S. Further, any such sale of the
      Securities in any jurisdiction outside of the United States will be made in
      compliance with the securities laws of such jurisdiction. The Investor will
      not
      offer to sell or sell the Securities in any jurisdiction unless the Investor
      obtains all required consents, if any.

    


    (j) The
      undersigned understands that the Securities are being offered and sold in
      reliance on an exemption from the registration requirements of United States
      federal and state securities laws under Regulation S promulgated under the
      Securities Act and that the Company is relying upon the truth and accuracy
      of
      the representations, warranties, agreements, acknowledgments and understandings
      of the Investor set forth herein in order to determine the applicability of
      such
      exemptions and the suitability of the Investor to acquire the Securities. In
      this regard, the undersigned represents, warrants and agrees that:

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    


     

    
      	1.  	
              The
                undersigned is an U.S. Person (as defined below) and is not an affiliate
                (as defined in Rule 501(b) under the Securities Act) of the Company
                and is
                not acquiring the Securities for the account or benefit of a U.S.
                Person.
                A U.S. Person means any one of the
                following:

            


    

     

    
      	·  	
              any
                natural person resident in the United States of
                America;

            


    

     

    
      	·  	
              any
                partnership or corporation organized or incorporated under the laws
                of the
                United States of America;

            


    

     

    
      	·  	
              any
                estate of which any executor or administrator is a U.S.
                person;

            


    

     

    
      	·  	
              any
                trust of which any trustee is a U.S.
                person;

            


    

     

    
      	·  	
              any
                agency or branch of a foreign entity located in the United States
                of
                America;

            


    

     

    
      	·  	
              any
                non-discretionary account or similar account (other than an estate
                or
                trust) held by a dealer or other fiduciary for the benefit or account
                of a
                U.S. person;

            


    

     

    
      	·  	
              any
                discretionary account or similar account (other than an estate or
                trust)
                held by a dealer or other fiduciary organized, incorporated or (if
                an
                individual) resident in the United States of America;
                and

            


    

     

    
      	·  	
              any
                partnership or corporation if:

            


    

     

    (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 Securities Act, unless it is organized or incorporated,
      and owned, by accredited investors (as
      defined in Rule 501(a) under the Securities Act) who are not natural persons,
      estates or trusts.

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    
      	2.  	
              At
                the time of the origination of contact concerning this Agreement
                and the
                date of the execution and delivery of this Agreement, the undersigned
                was
                outside of the United States.

            


    

     

    
      	3.  	
              The
                undersigned will not, during the period commencing on the date of
                issuance
                of the Purchased Shares or Warrants and ending on the first anniversary
                of
                such date, or such shorter period as may be permitted by Regulation
                S or
                other applicable securities law (the “Restricted Period”), offer, sell,
                pledge or otherwise transfer the Purchased Shares or the Warrants
                in the
                United States, or to a U.S. Person for the account or for the benefit
                of a
                U.S. Person, or otherwise in a manner that is not in compliance with
                Regulation S. 

            


    

     

    
      	4.  	
              The
                undersigned will, after expiration of the Restricted Period, offer,
                sell,
                pledge or otherwise transfer the Purchased Shares or Warrants only
                pursuant to registration under the Securities Act or an available
                exemption therefrom and, in accordance with all applicable state
                and
                foreign securities laws.

            


    

     

    
      	5.  	
              The
                undersigned was not in the United States, engaged in, and prior to
                the
                expiration of the Restricted Period will not engage in, any short
                selling
                of or any hedging transaction with respect to the Securities, including
                without limitation, any put, call or other option transaction, option
                writing or equity swap.

            


    

     

    
      	6.  	
              Neither
                the undersigned nor or any person acting on his behalf has engaged,
                nor
                will engage, in any directed selling efforts to a U.S. Person with
                respect
                to the Securities and the Investor and any person acting on his behalf
                have complied and will comply with the “offering restrictions”
                requirements of Regulation S under the Securities
                Act.

            


    

     

    
      	7.  	
              The
                transactions contemplated by this Agreement have not been pre-arranged
                with a buyer located in the United States or with a U.S. Person,
                and are
                not part of a plan or scheme to evade the registration requirements
                of the
                Securities Act.

            


    

     

    
      	8.  	
              Neither
                the undersigned nor any person acting on his behalf has undertaken
                or
                carried out any activity for the purpose of, or that could reasonably
                be
                expected to have the effect of, conditioning the market in the United
                States, its territories or possessions, for any of the Securities.
                The
                undersigned agrees not to cause any advertisement of the Securities
                to be
                published in any newspaper or periodical or posted in any public
                place and
                not to issue any circular relating to the Securities, except such
                advertisements that include the statements required by Regulation
                S under
                the Securities Act, and only offshore and not in the U.S. or its
                territories, and only in compliance with any local applicable securities
                laws.

            


    

     

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

    
      	9.  	
              Each
                certificate representing the Securities shall be endorsed with the
                following legends, in addition to any other legend required to be
                placed
                thereon by applicable federal or state securities
                laws:

            


    

     

    (A) “THE
      SECURITIESARE BEING OFFERED TO INVESTORS WHO ARE NOT U.S. PERSONS (AS DEFINED
      IN
      REGULATION S UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“THE SECURITIES
      ACT”)) AND WITHOUT REGISTRATION WITH THE UNITED STATES SECURITIES AND EXCHANGE
      COMMISSION UNDER THE SECURITIES ACT IN RELIANCE UPON REGULATION S PROMULGATED
      UNDER THE SECURITIES ACT.”

     

    (B) “TRANSFER
      OF THESE SECURITIES IS PROHIBITED, EXCEPT IN ACCORDANCE WITH THE PROVISIONS
      OF
      REGULATION S, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT
      TO
      AVAILABLE EXEMPTION FROM REGISTRATION. HEDGING TRANSACTIONS MAY NOT BE CONDUCTED
      UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.”

    


    
      	10.  	
              The
                undersigned consents to the Company making a notation on its records
                or
                giving instructions to any transfer agent of the Company in order
                to
                implement the restrictions on transfer of the Securities set forth
                in this
                Section 2.

            


    

    


    (k) The
      undersigned is an “accredited investor” as that term is defined in Rule 501 of
      the General Rules and Regulations under the Securities Act by reason of Rule
      501(a)(3).


    


    (l) The
      undersigned understands that an investment in the Securities is a speculative
      investment which involves a high degree of risk and the potential loss of his
      entire investment.

    


    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    (m) The
      undersigned's overall commitment to investments which are not readily marketable
      is not disproportionate to the undersigned's net worth, and an investment in
      the
      Securities will not cause such overall commitment to become
      excessive.

    


    (n) The
      undersigned has received all documents, records, books and other information
      pertaining to the undersigned’s investment in the Company that has been
      requested by the undersigned. The undersigned has reviewed all reports and
      other
      documents filed by the Company with the Securities and Exchange Commission
      (the
“SEC Documents”).

    


    (o) The
      undersigned represents and warrants to the Company that all information that
      the
      undersigned has provided to the Company, including, without limitation, the
      information in the Investor Questionnaire attached hereto or previously provided
      to the Company (the “Investor Questionnaire”), is correct and complete as of the
      date hereof.

    


    (p) Other
      than as set forth herein, the undersigned is not relying upon any other
      information, representation or warranty by the Company or any officer, director,
      stockholder, agent or representative of the Company in determining to invest
      in
      the Securities. The undersigned has consulted, to the extent deemed appropriate
      by the undersigned, with the undersigned’s own advisers as to the financial,
      tax, legal and related matters concerning an investment in the Securities and
      on
      that basis believes that his or its investment in the Securities is suitable
      and
      appropriate for the undersigned.

    


    (q) The
      undersigned is aware that no federal or state agency has (i) made any finding
      or
      determination as to the fairness of this investment, (ii) made any
      recommendation or endorsement of the Securities or the Company, or (iii)
      guaranteed or insured any investment in the Securities or any investment made
      by
      the Company.

    


    (p) The
      undersigned understands that the price of the Securities offered hereby bear
      no
      relation to the assets, book value or net worth of the Company and were
      determined arbitrarily by the Company. The undersigned further understands
      that
      there is a substantial risk of further dilution on his or its investment in
      the
      Company.

    


    (r) The
      undersigned understands that the Company is undergoing a process to
      re-incorporate its state of incorporation from Florida to Nevada, change its
      name and increase its authorized share capital (the “Reincorporation”).
      Accordingly, the undersigned agrees and acknowledges that it will not receive
      stock certificates evidencing the Purchased Shares until the Reincorporation
      has
      been duly authorized and approved by the shareholders of the Company. The
      undersigned further agrees and acknowledges that it has reviewed the Company’s
      proxy statement on Schedule 14A filed with the SEC on or about July 27, 2006
      with respect to the Reincorporation (the “Proxy Statement”). The undersigned
      further agrees and acknowledges that it is the undersigned’s responsibility to
      review the Proxy Statement and the other SEC Documents, that the undersigned
      fully understands the Proxy Statement and the other SEC Documents, that the
      undersigned has had the opportunity to ask the Company any questions the
      undersigned may have had regarding the Proxy Statement and the other SEC
      Documents, and that the Company has provided to the undersigned all documents
      and other information requested by the undersigned from the Company in
      connection with the undersigned’s review of the Proxy Statements and the other
      SEC Documents.

    


    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    SECTION
      4

    


    The
      Company represents and warrants to the undersigned as follows:

    


    4.1  Organization
      of the Company.
      The
      Company is a corporation duly organized and validly existing and in good
      standing under the laws of the State of Florida, and has all requisite power
      and
      authority to own, lease and operate its properties and to carry on its business
      as now being conducted. 

    


    4.2 Authority.
      (a) The
      Company has the requisite corporate power and authority to enter into and
      perform its obligations under this Agreement and to issue the Securities; (b)
      the execution and delivery of this Agreement by the Company and the consummation
      by it of the transactions contemplated hereby and thereby have been duly
      authorized by all necessary corporate action and no further consent or
      authorization of the Company or its Board of Directors is required; and (c)
      this
      Agreement has been duly executed and delivered by the Company and constitutes
      a
      valid and binding obligation of the Company enforceable against the Company
      in
      accordance with its terms, except as such enforceability may be limited by
      applicable bankruptcy, insolvency, or similar laws relating to, or affecting
      generally the enforcement of, creditors' rights and remedies or by other
      equitable principles of general application.

    


    4.3 Capitalization.
      As of
      the date hereof, the authorized capital stock of the Company consists of
      50,000,000 shares of Common Stock, of which as of the date hereof 7,837,500
      shares are issued and outstanding, and 10,000,000 shares of preferred stock,
      none of which are issued. All the outstanding shares have been, or upon issuance
      will be, validly issued and are fully paid and nonassessable. 

    


    4.4 SEC
      Documents.
      To the
      best of Company's knowledge, the Company has not provided to the undersigned
      any
      information that, according to applicable law, rule or regulation, should have
      been disclosed publicly prior to the date hereof by the Company, but which
      has
      not been so disclosed. As of their respective dates, the SEC Documents complied
      in all material respects with the requirements of the Securities Act or the
      Exchange Act, as the case may be, and other federal, state and local laws,
      rules
      and regulations applicable to such SEC Documents, and none of the SEC Documents
      contained any untrue statement of a material fact or omitted to state a material
      fact required to be stated therein or necessary in order to make the statements
      therein, in light of the circumstances under which they were made, not
      misleading. The financial statements of the Company included in the SEC
      Documents comply as to form and substance in all material respects with
      applicable accounting requirements and the published rules and regulations
      of
      the Securities and Exchange Commission (the “SEC”) or other applicable rules and
      regulations with respect thereto. Such financial statements have been prepared
      in accordance with generally accepted accounting principles applied on a
      consistent basis during the periods involved (except (a) as may be otherwise
      indicated in such financial statements or the notes thereto or (b) in the case
      of unaudited interim statements, to the extent they may not include footnotes
      or
      may be condensed or summary statements) and fairly present in all material
      respects the financial position of the Company as of the dates thereof and
      the
      results of operations and cash flows for the periods then ended (subject, in
      the
      case of unaudited statements, to normal year-end audit
      adjustments).

    


    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    4.5 Exemption
      from Registration; Valid Issuances.
      The
      sale and issuance of the Securities, in accordance with the terms and on the
      bases of the representations and warranties of the undersigned set forth herein,
      may and shall be properly issued by the Company to the undersigned pursuant
      to
      Section 4(2), Regulation S and/or any applicable U.S state law. When issued
      and
      paid for as herein provided, the Securities shall be duly and validly issued,
      fully paid, and nonassessable. Neither the sales of the Securities pursuant
      to,
      nor the Company's performance of its obligations under, this Agreement shall
      (a)
      result in the creation or imposition of any liens, charges, claims or other
      encumbrances upon the Securities or any of the assets of the Company, or (b)
      entitle the other holders of the Common Stock of the Company to preemptive
      or
      other rights to subscribe to or acquire the Common Stock or other securities
      of
      the Company. The Securities shall not subject the undersigned to personal
      liability by reason of the ownership thereof. 

    


    4.6 No
      General Solicitation or Advertising in Regard to this
      Transaction.
      Neither
      the Company nor any of its affiliates nor any person acting on its or their
      behalf (a) has conducted or will conduct any general solicitation (as that
      term
      is used in Rule 502(c) of Regulation D) or general advertising with respect
      to
      any of the Securities, or (b) made any offers or sales of any security or
      solicited any offers to buy any security under any circumstances that would
      require registration of the Common Stock under the Securities Act.

    


    4.7 No
      Conflicts. The
      execution, delivery and performance of this Agreement by the Company and the
      consummation by the Company of the transactions contemplated hereby, including
      without limitation the issuance of the Securities, do not and will not (a)
      result in a violation of the Certificate or By-Laws of the Company or (b)
      conflict with, or constitute a material default (or an event that with notice
      or
      lapse of time or both would become a material default) under, or give to others
      any rights of termination, amendment, acceleration or cancellation of, any
      material agreement, indenture, instrument or any "lock-up" or similar provision
      of any underwriting or similar agreement to which the Company is a party, or
      (c)
      result in a violation of any federal, state, local or foreign law, rule,
      regulation, order, judgment or decree (including federal and state securities
      laws and regulations)applicable to the Company or by which any property or
      asset
      of the Company is bound or affected (except for such conflicts, defaults,
      terminations, amendments, accelerations, cancellations and violations as would
      not, individually or in the aggregate, have a material adverse effect on the
      business, operations, properties, prospects or condition (financial or
      otherwise) of the Company) nor is the Company otherwise in violation of,
      conflict with or in default under any of the foregoing. The Company is not
      required under U.S. federal, state or local law, rule or regulation to obtain
      any consent, authorization or order of, or make any filing or registration
      with,
      any court or governmental agency in order for it to execute, deliver or perform
      any of its obligations under this Agreement or issue and sell the Common Stock
      in accordance with the terms hereof (other than any SEC, NASD or state
      securities filings that may be required to be made by the Company subsequent
      to
      the Closing); provided that, for purposes of the representation made in this
      sentence, the Company is assuming and relying upon the accuracy of the relevant
      representations and agreements of the undersigned herein.

    


    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    4.8 No
      Undisclosed Liabilities.
      The
      Company has no liabilities or obligations that are material, individually or
      in
      the aggregate, and that are not disclosed in the SEC Documents or otherwise
      publicly announced, other than those incurred in the ordinary course of the
      Company's businesses and which, individually or in the aggregate, do not or
      would not have a material adverse effect on the Company.

     

    4.9 No
      Undisclosed Events or Circumstances.
      No
      event or circumstance has occurred or exists with respect to the Company or
      its
      businesses, properties, prospects, operations or financial condition, that,
      under applicable law, rule or regulation, requires public disclosure or
      announcement prior to the date hereof by the Company but which has not been
      so
      publicly announced or disclosed in the SEC Documents.

    


    4.10 No
      Integrated Offering.
      Neither
      the Company, nor any of its affiliates, nor any person acting on its or their
      behalf has, directly or indirectly, made any offers or sales of any security
      or
      solicited any offers to buy any security, other than pursuant to this
      Agreement.

    


    4.11 No
      Misleading or Untrue Communication.
      The
      Company, any person representing the Company, and, to the knowledge of the
      Company, any other person selling or offering to sell the Securities, if any,
      in
      connection with the transactions contemplated by this Agreement, have not made,
      at any time, any written or oral communication in connection with the offer
      or
      sale of the same which contained any untrue statement of a material fact or
      omitted to state any material fact necessary in order to make the statements,
      in
      the light of the circumstances under which they were made, not
      misleading.

    


    SECTION
      5

    


    5.1  Indemnity.
      The
      undersigned agrees to indemnify and hold harmless the Company, its officers
      and
      directors, employees and its affiliates and their respective successors and
      assigns and each other person, if any, who controls any thereof, against any
      loss, liability, claim, damage and expense whatsoever (including, but not
      limited to, any and all expenses whatsoever reasonably incurred in
      investigating, preparing or defending against any litigation commenced or
      threatened or any claim whatsoever) arising out of or based upon any false
      representation or warranty or breach or failure by the undersigned to comply
      with any covenant or agreement made by the undersigned herein or in any other
      document furnished by the undersigned to any of the foregoing in connection
      with
      this transaction.

    


    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

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

    


    5.3 Notices.
      Any
      notice, demand or other communication which any party hereto may be required,
      or
      may elect, to give to anyone interested hereunder shall be sufficiently given
      if
      (a) deposited, postage prepaid, in a United States mail letter box, registered
      or certified mail, return receipt requested, addressed to such address as may
      be
      given herein, or (b) delivered personally at such address.

    


    5.4 Counterparts.
      This
      Agreement may be executed through the use of separate signature pages or in
      any
      number of counterparts and by facsimile, and each of such counterparts shall,
      for all purposes, constitute one agreement binding on all parties,
      notwithstanding that all parties are not signatories to the same counterpart.
      Signatures may be facsimiles.

    


    5.5 Binding
      Effect.
      Except
      as otherwise provided herein, this Agreement shall be binding upon and inure
      to
      the benefit of the parties and their heirs, executors, administrators,
      successors, legal representatives and assigns. If the undersigned is more than
      one person, the obligation of the undersigned shall be joint and several and
      the
      agreements, representations, warranties and acknowledgments herein contained
      shall be deemed to be made by and be binding upon each such person and his
      heirs, executors, administrators and successors.

    


    5.6 Entire
      Agreement.
      This
      Agreement and the documents referenced herein contain the entire agreement
      of
      the parties and there are no representations, covenants or other agreements
      except as stated or referred to herein and therein.

    


    5.7 Assignability.
      This
      Agreement is not transferable or assignable by the undersigned.

    


    5.8 Applicable
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York, without giving effect to conflicts of law
      principles.

    


    5.9 Pronouns.
      The use
      herein of the masculine pronouns "him" or "his" or similar terms shall be deemed
      to include the feminine and neuter genders as well and the use herein of the
      singular pronoun shall be deemed to include the plural as well.

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    


    IN
      WITNESS WHEREOF, the undersigned has executed this Agreement on
      the ____
      of July,
      2006.

    


    Amount
      of
      Investment:

    


    $_____________________

    


    INDIVIDUAL
      INVESTOR:

    


    


    ______________________

    Name:

    


    


    PARTNERSHIP,
      CORPORATION, TRUST,

    CUSTODIAL
      ACCOUNT, OTHER INVESTOR

    


    ___________________________

    (Print
      Name of Entity)

    


    


    By: __________________

    Name:

    Title:

    Address:

    Taxpayer
      Identification Number:_____________

     

    
 

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    ACCEPTANCE
      OF SUBSCRIPTION

    


    (to
      be
      filed out only
      by the
      Company)

    


    The
      Company hereby accepts the above application for subscription for Units on
      behalf of the Company.

    


    


    


    ELDERWATCH,
      INC.   Dated:
      ______ ___, 2006

    


    


    By:______________________________

    Name:
      

    Title:

    


    


    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    


    Appendix
      A

     

    Wiring
      Instructions

     

    For
      Payment of Purchase Price

     

    The
      following are the wire instructions for the account into which the payment
      of
      the purchase price for the Units subscribed for should be wired.

    


    


     

    
 

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

     

    ELDERWATCH,
      INC.


    


    INVESTOR
      QUESTIONNAIRE

    
 

    
      	
              A.

            	
              General
                

              Information

            	 
	 	 	 
	
              1.

            	
              Print
                Full Name of Investor:

            	
              Individual:

            
	 	 	
              ____________________________________

            
	 	 	
              First,
                Middle, Last

            
	 	 	 
	 	 	
              Partnership,
                Corporation, Trust, Custodial Account, Other:

            
	 	 	 
	 	 	
              ____________________________________

            
	 	 	
              Name
                of Entity

            
	 	 	 
	
              2.

            	
              Address
                for Notices:

            	
              ____________________________________

            
	 	 	
              ____________________________________

            
	 	 	
              ____________________________________

            
	 	 	 
	
              3.

            	
              Name
                of Primary Contact Person:

              Title:

            	
              ____________________________________

            
	 	 	 
	
              4.

            	
              Telephone
                Number:

            	
              ____________________________________

            
	 	 	 
	
              5.

            	
              E-Mail
                Address: 

            	
              ____________________________________

            
	 	 	 
	
              6.

            	
              Facsimile
                Number:

              Permanent
                Address:

            	
              ____________________________________

            
	
               

              7.

            	
               

              Permanent
                Address:

              (if
                different from Address for Notices above)

            	
               

              ____________________________________

            


    

     

    
 

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

    


    
      	
              8.

            	
              Authorized
                Signatory:

              Title:

            	
              ____________________________________

              ____________________________________

            
	 	
              Telephone
                Number:

            	
              ____________________________________

            
	 	
              Facsimile
                Number:

            	
              ____________________________________

            
	
              9.

               

            	
              U.S.
                Investors Only:

               

              U.S.
                Taxpayer Identification or Social

              Security
                Number:

            	
               

               

               

              ____________________________________

            


    

    


    


    B. Accredited
      Investor Status

    


    The
      Investor represents and warrants that the Investor is an “accredited investor”
within the meaning of Rule 501 of Regulation D under the Securities Act of
      1933,
      as amended (the “Securities Act”), and has checked the box or boxes below which
      are next to the categories under which the Investor qualifies as an accredited
      investor:

     

    


    


    
      	
              FOR
                INDIVIDUALS:

            
	 
	
              o

            	
              A
                natural person with individual net worth (or joint net worth with
                spouse)
                in excess of $1 million. For purposes of this item, “net worth” means the
                excess of total assets at fair market value, including home, home
                furnishings and automobiles (and including property owned by a spouse),
                over total liabilities.

            
	 	 
	
              o

            	
              A
                natural person with individual income (without including any income
                of the
                Investor’s spouse) in excess of $200,000, or joint income with spouse of
                $300,000, in each of the two most recent years and who reasonably
                expects
                to reach the same income level in the current year.

            
	 	 	 
	
              FOR
                ENTITIES:

            
	 	 
	
              o

            	
              A
                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.

            
	 	 
	
              o

            	
              An
                insurance company as defined in Section 2(13) of the Securities
                Act.

            
	 	 
	
              o

            	
              A
                broker-dealer registered pursuant to Section 15 of the Securities
                Exchange
                Act of 1934.

            
	 	 
	
              o

            	
              An
                investment company registered under the Investment Company Act of
                1940, as
                amended (the “Investment Company Act”). If an Investor has checked this
                box, please contact _______ for additional information that will
                be
                required.

            
	 	 
	
              o

            	
              A
                business development company as defined in Section 2(a)(48) of the
                Investment Company Act.

            
	 	 
	
              o

            	
              A
                small business investment company licensed by the Small Business
                Administration under Section 301(c) or (d) of the Small Business
                Investment Act of 1958.

            


    

     

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

     

    
      	 	 
	
              o

            	
              A
                private business development company as defined in Section 202(a)(22)
                of
                the Investment Advisers Act of 1940. If an Investor has checked this
                box,
                please contact ______ for additional information that will be
                required.

            
	 	 
	
              o

            	
              An
                organization described in Section 501(c)(3) of the Internal Revenue
                Code,
                a corporation, Massachusetts or similar business trust, or partnership,
                not formed for the specific purpose of acquiring the Units, with
                total
                assets in excess of $5 million.

            
	 	 
	
              o

            	
              A
                trust with total assets in excess of $5 million not formed for the
                specific purpose of acquiring the Units, whose purchase is directed
                by a
                person with such knowledge and experience in financial and business
                matters as to be capable of evaluating the merits and risks of an
                investment in the Company and the purchase of the
                Units.

            
	 	 
	
              o

            	
              An
                employee benefit plan within the meaning of ERISA if the decision
                to
                invest in the Units is made by a plan fiduciary, as defined in Section
                3(21) of ERISA, 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 million or, if a
                self-directed plan, with investment decisions made solely by persons
                that
                are accredited investors.

            
	 	 
	
              o

            	
              A
                plan established and maintained by a state, its political subdivisions,
                or
                any agency or instrumentality of a state or its political subdivisions,
                for the benefit of its employees, if the plan has total assets in
                excess
                of $5 million.

            
	 	 
	
              o

            	
              An
                entity, including a grantor trust, in which all of the equity owners
                are
                accredited investors as determined under any of the foregoing paragraphs
                (for this purpose, a beneficiary of a trust is not an equity owner,
                but
                the grantor of a grantor trust is an equity
                owner).

            


    

    


     

    C.  Supplemental
      Data for Entities

    


    1. If
      the
      Investor is not a natural person, furnish the following supplemental data
      (natural persons may skip this Section C of the Investor
      Questionnaire):

    


    Legal
      form of entity (trust, corporation, partnership, etc.):
      _________________________ 

     

    Jurisdiction
      of organization: ________________________________________________

    


    2.
       Was
      the
      Investor organized for the specific purpose of acquiring the Units?

    


    
      	
              o
                Yes

            	
              o
                No

            


    

    


    If
      the
      answer to the above question is “Yes,” please contact _______, ________, at
      _______ or ________ for additional information that will be
      required.

    


    3.
       Are
      shareholders, partners or other holders of equity or beneficial interest in
      the
      Investor able to decide individually whether to participate, or the extent
      of
      their participation, in the Investor’s investment in the Company (i.e., can
      shareholders, partners or other holders of equity or beneficial interest in
      the
      Investor determine whether their capital will form part of the capital invested
      by the Investor in the Company)?

    


    
      	
              o
                Yes

            	
              o
                No

            


    

    


    


    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

    If
      the
      answer to the above question is “Yes,” please contact David Lubin &
Associates, PLLC (david@dlubinassociates.com
      or
      516-284-1740) for additional information that will be required.

    


    4(a).
       Please
      indicate whether or not the Investor is, or is acting on behalf of, (i) an
      employee benefit plan within the meaning of Section 3(3) of ERISA, whether
      or not such plan is subject to ERISA,
      or (ii)
      an entity which is deemed to hold the assets of any such employee benefit plan
      pursuant to 29 C.F.R. § 2510.3-101. For example, a plan which is maintained by a
      foreign corporation, governmental entity or church, a Keogh plan covering no
      common-law employees and an individual retirement account are employee benefit
      plans within the meaning of Section 3(3) of ERISA but generally are not subject
      to ERISA (collectively, “Non-ERISA
      Plans”).
      In
      general, a foreign or US entity which is not an operating company and which
      is
      not publicly traded or registered as an investment company under the Investment
      Company Act of 1940, as amended, and in which 25% or more of the value of any
      class of equity interest is held by employee pension or welfare plans (including
      an entity which is deemed to hold the assets of any such plan), would be deemed
      to hold the assets of one or more employee benefit plans pursuant to 29 C.F.R.
§
2510.3-101. However, if only Non-ERISA Plans were invested in such an entity,
      the entity generally would not be subject to ERISA. For purposes of determining
      whether this 25% threshold has been met or exceeded, the value of any equity
      interest held by a person (other than such a plan or entity) who has
      discretionary authority or control with respect to the assets of the entity,
      or
      any person who provides investment advice for a fee (direct or indirect) with
      respect to such assets, or any affiliate of such a person, is
      disregarded.

    


    
      	
              o
                Yes

            	
              o
                No

            


    

     

    4(b).
       If
      the
      Investor is, or is acting on behalf of, such an employee benefit plan, or is
      an
      entity deemed to hold the assets of any such plan or plans, please indicate
      whether or not the Investor is subject to ERISA.

    


    
      	
              o
                Yes

            	
              o
                No

            


    

    


    4(c.) If
      the
      Investor answered “Yes” to question 4.(b) and the Investor is investing the
      assets of an insurance company general account, please indicate what percentage
      of the Investor’s assets the purchase of the Units is subject to ERISA.
      ___________%.

    


    5.
       Does
      the
      amount of the Investor’s subscription for the Units in the Company exceed 40% of
      the total assets (on a consolidated basis with its subsidiaries) of the
      Investor?

    


    
      	
              o
                Yes

            	
              o
                No

            


    

    


    If
      the
      question above was answered “Yes,” please contact David Lubin & Associates
      for additional information that will be required.

    


    6(a). Is
      the
      Investor a private investment company which is not registered under the
      Investment Company Act, in reliance on Section 3(c)(1) or Section 3(c)(7)
      thereof?

    


    
      	
              o
                Yes

            	
              o
                No

            


    

    


    6(b).
       If
      the
      question above was answered “Yes,” was the Investor formed prior to April 30,
      1996?

    


    
      	
              o
                Yes

            	
              o
                No

            


    

    


    If
      the
      questions set forth in (a) and (b) above were both answered “Yes,” please
      contact David Lubin & Associates for additional information that will be
      required.

    


    7(a).
       Is
      the
      Investor a grantor trust, a partnership or an S-Corporation for US federal
      income tax purposes?

    


    
      	
              o
                Yes

            	
              o
                No

            


    

     

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

    7(b).
       If
      the
      question above was answered “Yes,” please indicate whether or not:

    


    (i)
      more
      than 50 percent of the value of the ownership interest of any beneficial owner
      in the Investor is (or may at any time during the term of the Company be)
      attributable to the Investor’s (direct or indirect) interest in the Company;
      or

     

    
      	
              o
                Yes

            	
              o
                No

            


    

    


    (ii)
      it
      is a principal purpose of the Investor’s participation in the Company to permit
      the Partnership to satisfy the 100 partner limitation contained in US Treasury
      Regulation Section 1.7704-1(h)(3).

    


    
      	
              o
                Yes

            	
              o
                No

            


    

    


    If
      either
      question above was answered “Yes,” please contact David Lubin & Associates
      for additional information that will be required.

    


    8. If
      the
      Investor’s tax year ends on a date other than December 31, please indicate such
      date below:

    
      	 	 
	 	
              (Date)

            


    

     

    D.  Related
      Parties

    


    1. 
      To
      the
      best of the Investor’s knowledge, does the Investor control, or is the Investor
      controlled by or under common control with, any other investor in the
      Company?

    


    
      	
              o
                Yes

            	
              o
                No

            


    

    


    If
      the
      answer above was answered “Yes”, please identify such related investor(s)
      below.

    


    Name(s)
      of related investor(s): _______________________________

    


    2.
      Will
      any
      other person or persons have a beneficial interest in the Units to be acquired
      hereunder (other than as a shareholder, partner, or other beneficial owner
      of
      equity interest in the Investor)?

    


    
      	
              o
                Yes

            	
              o
                No

            


    

    


    If
      either
      question above was answered “Yes”, please contact David Lubin & Associates
      for additional information that will be required.


    


    The
      Investor understands that the foregoing information will be relied upon by
      the
      Company for the purpose of determining the eligibility of the Investor to
      purchase the Units. The Investor agrees to notify the Company immediately if
      any
      representation or warranty contained in this Subscription Agreement, including
      this Investor Questionnaire, becomes untrue at any time. The Investor agrees
      to
      provide, if requested, any additional information that may reasonably be
      required to substantiate the Investor’s status as an accredited investor or to
      otherwise determine the eligibility of the Investor to purchase the Units.
      The
      Investor agrees to indemnify and hold harmless the Company and each officer,
      director, shareholder, agent and representative of the Company and their
      respective affiliates and successors and assigns from and against any loss,
      damage or liability due to or arising out of a breach of any representation,
      warranty or agreement of the Investor contained herein.

    
 

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

    


    
      	 	
              INDIVIDUAL:

            
	 	 
	 	
              ____________________________________

            
	 	
              (Signature)

            
	 	 
	 	
              ____________________________________

            
	 	
              (Print
                Name)

            
	 	 
	 	
              PARTNERSHIP,
                CORPORATION, TRUST, CUSTODIAL ACCOUNT, OTHER:

            
	 	 
	 	
              ___________________________________

            
	 	
              (Name
                of Entity)

            
	 	 
	 	
              By:
                ________________________________

            
	 	
              (Signature)

            
	 	 
	 	
              ________________________________

            
	 	
              (Print
                Name and Title)

            


    

    


    

      
        
          
          

        

        
          -21-

          
            

          

        

        
          
          

        

      

Annex
      1

     

    DEFINITION
      OF “INVESTMENTS”

    


    The
      term
“investments” means: 

    


    
      	1)  	
              Securities,
                other than securities of an issuer that controls, is controlled by,
                or is
                under common control with, the Investor that owns such securities,
                unless
                the issuer of such securities is:

            


    

    


    
      	(i)  	
              An
                investment company or a company that would be an investment company
                but
                for the exclusions or exemptions provided by the Investment Company
                Act,
                or a commodity pool; or

            


    

    


    
      	(ii)  	
              a
                Public Company (as defined below);

            


    

    


    
      	(iii)  	
              A
                company with shareholders’ equity of not less than $50 million (determined
                in accordance with generally accepted accounting principles) as reflected
                on the company’s most recent financial statements, provided that such
                financial statements present the information as of a date within
                16 months
                preceding the date on which the Investor acquires
                Units;

            


    

    


    
      	2)  	
              Real
                estate held for investment
                purposes;

            


    

    


    
      	3)  	
              Commodity
                Shares (as defined below) held for investment
                purposes;

            


    

    


    
      	4)  	
              Physical
                Commodities (as defined below) held for investment
                purposes;

            


    

    


    
      	5)  	
              To
                the extent not securities, Financial Contracts (as defined below)
                entered
                into for investment purposes;

            


    

    


    
      	6)  	
              In
                the case of an Investor that is a company that would be an investment
                company but for the exclusions provided by Section 3(c)(1) or 3(c)(7)
                of
                the Investment Company Act, or a commodity pool, any amounts payable
                to
                such Investor pursuant to a firm agreement or similar binding commitment
                pursuant to which a person has agreed to acquire an interest in,
                or make
                capital contributions to, the Investor upon the demand of the Investor;
                and

            


    

    


    
      	7)  	
              Cash
                and cash equivalents held for investment
                purposes.

            


    

     

    Real
      Estate that is used by the owner or a Related Person (as defined below) of
      the
      owner for personal purposes, or as a place of business, or in connection with
      the conduct of the trade or business of such owner or a Related Person of the
      owner, will NOT be considered Real Estate held for investment purposes, provided
      that real estate owned by an Investor who is engaged primarily in the business
      of investing, trading or developing real estate in connection with such business
      may be deemed to be held for investment purposes. However, residential real
      estate will not be deemed to be used for personal purposes if deductions with
      respect to such real estate are not disallowed by section 280A of the Internal
      Revenue Code of 1986, as amended. 

    


    A
      Commodity Interest or Physical Commodity owned, or a Financial Contract entered
      into, by the Investor who is engaged primarily in the business of investing,
      reinvesting, or trading in Commodity Shares, Physical Commodities or Financial
      Contracts in connection with such business may be deemed to be held for
      investment purposes.

    


    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

    “Commodity
      Shares” means commodity futures contracts, options on commodity futures
      contracts, and options on physical commodities traded on or subject to the
      rules
      of:

    


    
      	(i)  	
              Any
                contract market designated for trading such transactions under the
                Commodity Exchange Act and the rules thereunder;
                or

            


    

    


    
      	(ii)  	
              Any
                board of trade or exchange outside the United States, as contemplated
                in
                Part 30 of the rules under the Commodity Exchange
                Act.

            


    

    


    “Public
      Company” means a company that:

    


    
      	(i)  	
              files
                reports pursuant to Section 13 or 15(d) of the Securities Exchange
                Act of
                1934, as amended; or

            


    

    


    
      	(ii)  	
              has
                a class of securities that are listed on a Designated Offshore Securities
                Market, as defined by Regulation S of the Securities
                Act.

            


    

    


    “Financial
      Contract” means any arrangement that:

    


    
      	(i)  	
              takes
                the form of an individually negotiated contract, agreement, or option
                to
                buy, sell, lend, swap, or repurchase, or other similar individually
                negotiated transaction commonly entered into by participants in the
                financial markets;

            


    

    


    
      	(ii)  	
              is
                in respect of securities, commodities, currencies, interest or other
                rates, other measures of value, or any other financial or economic
                interest similar in purpose or function to any of the foregoing;
                and

            


    

    


    
      	(iii)  	
              is
                entered into in response to a request from a counter party for a
                quotation, or is otherwise entered into and structured to accommodate
                the
                objectives of the counterparty to such
                arrangement.

            


    

    


    “Physical
      Commodities” means any physical commodity with respect to which a Commodity
      Interest is traded on a market specified in the definition of Commodity Shares
      above.

    


    “Related
      Person” means a person who is related to the Investor as a sibling, spouse or
      former spouse, or is a direct lineal descendant or ancestor by birth or adoption
      of the Investor, or is a spouse of such descendant or ancestor, provided that,
      in the case of a Family Company, a Related Person includes any owner of the
      Family Company and any person who is a Related Person of such an owner. “Family
      Company” means a company that is owned directly or indirectly by or for two or
      more natural persons who are related as siblings or spouse (including former
      spouses), or direct lineal descendants by birth or adoption, spouses of such
      persons, the estates of such persons, or foundations, charitable organizations
      or trusts established for the benefit of such persons.

    


    For
      purposes of determining the amount of investments owned by a company, there
      may
      be included investments owned by majority-owned subsidiaries of the company
      and
      investments owned by a company (“Parent Company”) of which the company is a
      majority-owned subsidiary, or by a majority-owned subsidiary of the company
      and
      other majority-owned subsidiaries of the Parent Company. 

    


    In
      determining whether a natural person is a qualified purchaser, there may be
      included in the amount of such person’s investments any investment held jointly
      with such person’s spouse, or investments in which such person shares with such
      person’s spouse a community property or similar shared ownership interest. In
      determining whether spouses who are making a joint investment in the Partnership
      are qualified purchasers, there may be included in the amount of each spouse’s
      investments any investments owned by the other spouse (whether or not such
      investments are held jointly). There shall be deducted from the amount of any
      such investments any amounts specified by paragraph 2(a) of Annex 2 incurred
      by
      such spouse. 

    


    In
      determining whether a natural person is a qualified purchaser, there may be
      included in the amount of such person’s investments any investments held in an
      individual retirement account or similar account the investments of which are
      directed by and held for the benefit of such person.


    
      
        
        

      

      
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    Annex
      2

     

    VALUATIONS
      OF INVESTMENTS


    


    The
      general rule for determining the value of investments in order to ascertain
      whether a person is a qualified purchaser is that the value of the aggregate
      amount of investments owned and invested on a discretionary basis by such person
      shall be their fair market value on the most recent practicable date or their
      cost. This general rule is subject to the following provisos:

     

    


    
      	1)  	
              In
                the case of Commodity Shares, the amount of investments shall be
                the value
                of the initial margin or option premium deposited in connection with
                such
                Commodity Shares; and

            


    

    


    
      	2)  	
              In
                each case, there shall be deducted from the amount of investments
                owned by
                such person the following amounts:

            


    

    


    
      	(i)  	
              The
                amount of any outstanding indebtedness incurred to acquire the investments
                owned by such person.

            


    

    


    
      	(ii)  	
              A
                Family Company, in addition to the amounts specified in paragraph
                (a)
                above, shall have deducted from the value of such Family Company’s
                investments any outstanding indebtedness incurred by an owner of
                the
                Family Company to acquire such
                investments.

            


    

    


     

    
      
        
        

      

      
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