Document:

EXHIBIT 4.5

IMPORTANT: PLEASE READ CAREFULLY BEFORE SIGNING. SIGNIFICANT REPRESENTATIONS ARE CALLED FOR HEREIN. AN INVESTMENT IN THESE SECURITIES INVOLVES A HIGH DEGREE OF RISK. NO PERSON SHOULD PURCHASE THE SECURITIES UNLESS SUCH PERSON CAN AFFORD THE TOTAL LOSS OF HIS/HER/ITS INVESTMENT. 

 

U.S. RESIDENT 

 

SUBSCRIPTION AGREEMENT 

 

ACCREDITED INVESTORS ONLY 

 

US Farms Inc.   

1635 Rosecrans Street, Suite D  

San Diego, CA  92106 

 

Gentlemen: 

 

PART I 

 

1. US Farms Inc., a Nevada corporation (the “Company”), has authorized the sale of up to 2,000,000 shares of the Company’s $0.001 par value common stock (the “Shares”) and warrants (the “Warrants”) of the Company’s common stock, $0.001 par value per share (collectively, the “Units”) at the purchase price of twenty-five cents ($0.25) per Units, for an aggregate offering price of $500,000. 

 

2. The undersigned hereby tenders this subscription for the purchase of the Shares in the principal amount of $____________ (minimum $10,000.00) with each Unit priced at $0.25 as per the SPA.  Checks shall be made payable to “US Farms Inc.” 

 

3. The undersigned acknowledges that the Shares are being offered in reliance upon the private offering exemptions contained in Sections 3(b) and 4(2) of the Securities Act of 1933, as amended (the “Act”), and Rule 506 of Regulation D promulgated thereunder. 

 

4. Payment in the principal amount subscribed for above is simultaneously being paid with the undersigned subscription. The undersigned understands that a subscription for the Shares may be rejected for any reason and that, in the event that this subscription is rejected, the funds delivered herewith will be promptly returned, without interest thereon or deduction therefrom. By execution below, the undersigned acknowledges that the Company is relying upon the accuracy and completeness of the representations contained herein in complying with its obligations under applicable securities laws. 

 

5. The undersigned acknowledges receipt from the Company of a Securities Purchase Agreement (“SPA”), a copy of which is attached hereto.  Terms not defined herein shall have the meaning ascribed to them in the SPA. 

 

6. The undersigned acknowledges that he understands the terms of the Offering, which shall be made substantially in accordance with the SPA, and summarized below: 

 

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Who May Invest 

Investment in the Shares is limited to “accredited investors” within the meaning of Rule 501(a) of Regulation D promulgated under the Securities Act. 

 

Offering Period  

Offering shall commence on Nov 28, 2006 (“Effective Date”) and end on March 15, 2007, unless extended by mutual consent of the Company and the Placement Agent. 

 

Aggregate Offering Price  

Up to $500,000 (This amount may be increased at the option of the Company and Placement Agent.) 

 

Securities Offered 

One Share of common stock and one warrant to purchase one additional share common stock (“Unit”).   

 

Offering Price 

 Each Unit shall be priced at $.25 on the day that the investment amount by check or wire is received by the Company (the “Purchase Date”). 

 

Warrants 

Each warrant will entitle the holder to purchase one share of common stock at an exercise price of $.50 (Fifty Cents). The warrants will generally be exercisable at any time for three years after the Effective Date of the Offering, unless earlier redeemed.  The warrants are redeemable by the Company, at a price of $0.10 per warrant 

 

·

upon 30 days’ prior written notice, 

·

   no earlier than 30 days from the effective date of this offering  and then 

·

only if the closing price (last trade price) equals or exceeds $1.00 per share of the common stock for the 10 consecutive trading days immediately preceding the date of notice of redemption (as quoted on the OTCBB or any other successor exchange, adjusted for splits, etc.).  If Company gives notice of its intention to redeem, a warrant holder will have the choice either to 

·

exercise their warrants before the date specified in the redemption  notice or 

·

to accept the redemption price. 

 

The warrants will be issued in unregistered form under a warrant agreement between Company and their Transfer Agent. The shares of common stock underlying the warrants, when issued upon exercise of a warrant, will be fully paid and nonassessable.  Company will pay any transfer tax incurred as a result of the issuance of common stock to the holder upon its exercise.  

Registration Rights  

The Holder of the Units shall be entitled to demand registration rights of those Units as outlined in Section II of the SPA. 

 

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Subscription 

Each prospective investor who desires to purchase the Shares should complete, date, and execute the Subscription Agreement, and the Signature Page to the Purchase Agreement (the “Execution 

Documents”), make a check, bank draft, or money order payable to 

“US Farms, Inc.” in the investment amount, and deliver the completed Execution Documents and check to the Company US Farms, Inc. 1635 Rosecrans Street, Suite D San Diego, CA 92106

 

A subscription for the Shares may be rejected by the Company for any reason and, in the event that a subscription is rejected, the funds delivered therewith will be promptly returned, without interest thereon or deduction therefrom. 

 

PART II 

 

The Units may sometimes hereinafter be referred to as the "Securities." 

 

1. The undersigned acknowledges, warrants and represents as follows: 

 

(a) None of the Shares or Warrant Shares are registered under the Act or any state securities laws.  Purchaser understands that the offering and sale of the Securities is intended to be exempt from registration under the Act, by virtue of Section 4(2) thereof and the provisions of Regulation D promulgated thereunder, based, in part, upon the representations, warranties and agreements of the Purchaser contained in this Subscription Agreement; 

 

(b)  That the undersigned is in a financial position to hold the Securities for an indefinite period of time and is able to bear the economic risk and withstand a complete loss of the undersigned's investment in the Securities.  The Purchaser’s overall commitment to investments which are not readily marketable 

is not excessive in view of its net worth and financial circumstances and the purchase of the Shares will not cause such commitment to become excessive.  The investment is a suitable one for the Purchaser; 

 

(c) That the undersigned has such knowledge and experience in financial and business matters that the undersigned is capable of evaluating the merits and risk of an investment in the Securities, has the capacity to protect the undersigned's own interests in connection with an investment in the Securities and has the net worth to undertake such risks; 

 

(d) That the undersigned has obtained, to the extent the undersigned deems necessary, the undersigned's own personal professional advice and made its determination with respect to the risks inherent in the investment in the Securities, and the suitability of an investment in the Securities in light of the undersigned's financial condition and investment needs; 

 

(e) That the undersigned believes that an investment in the Securities is suitable for the undersigned based upon his investment objectives and financial needs, and the undersigned has adequate means for providing for the undersigned's current financial needs and personal contingencies and has no need for liquidity of investment with respect to the Securities; 

  

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(f) That the undersigned recognizes that the Securities as an investment involves a high degree of risk, including, but not limited to, the risk of loss of 100% of the undersigned's investment in the Securities; 

 

(g) That the undersigned realizes that (i) the purchase of the Securities is a long-term investment; (ii) the purchaser of the Securities must bear the economic risk of investment for an indefinite period of time, in part because the Securities have not been registered under the Act, or under the securities laws of any state and, therefore, the Securities cannot be resold unless they are subsequently registered under said laws or exemptions from such registrations are available; (iii) there is presently no public market for the Securities and the undersigned may be unable to liquidate the undersigned's investment in the event of an emergency, or pledge the Securities as collateral for a loan; and (iv) the transferability of the Securities is restricted and requires conformity with the restrictions contained under federal and state securities laws, in paragraph 2 below and legends will be placed on the certificate(s) representing the Securities referring to the applicable restrictions on transferability; 

 

(h) That a legend may be placed on the Securities and any certificate representing the Securities substantially to the following effect: 

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF A CURRENT AND EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT WITH RESPECT TO SUCH SECURITIES, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. 

 

(i) The Purchaser has received the SPA, and all other documents requested by the Purchaser, has carefully reviewed them and understands the information contained therein, and the Purchaser, prior to the execution of this Subscription Agreement, has had access to the same kind of information which would be available in a registration statement filed by the Company under the Securities Act; 

(j) Neither the Securities and Exchange Commission nor any state securities commission has approved the Securities, or passed upon or endorsed the merits of the Offering or confirmed the accuracy or determined the adequacy of the SPA. The SPA has not been reviewed by any federal, state or other regulatory authority; 

(k) All documents, records and books pertaining to the investment in the Securities (including, without limitation, the SPA) have been made available for inspection by the Purchaser; 

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 (l) The Purchaser has had a reasonable opportunity to ask questions of and receive answers from a person or persons acting on behalf of the Company concerning the offering of the Securities and the business, financial condition, results of operations and prospects of the Company, and all such questions have been answered to the full satisfaction of the Purchaser; 

(m) In evaluating the suitability of an investment in the Company, the Purchaser has not relied upon any representation or other information (oral or written) other than as stated in the SPA; 

(n) The Purchaser is unaware of, is in no way relying on, and did not become aware of the offering of the Securities through or as a result of, any form of general solicitation or general advertising including, without limitation, any article, notice, advertisement or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, in connection with the offering and sale of the Securities and is not subscribing for Securities and did not become aware of the offering of the Securities through or as a result of any seminar or meeting to which the Purchaser was invited by, or any solicitation of a subscription by, a person not previously known to the Purchaser in connection with investments in Securities generally; 

(o) The Purchaser has taken no action which would give rise to any claim by any person other than the Placement Agent for brokerage commissions, finders’ fees or the like relating to this Subscription Agreement or the transactions contemplated hereby; 

(p) The Purchaser has such knowledge and experience in financial, tax, and business matters, and, in particular, investments in securities similar to the Securities, so as to enable the Purchaser to utilize the information made available to it in connection with the offering of the Securities to evaluate the merits and risks of an investment in the Securities and the Company and to make an informed investment decision with respect thereto; 

(q) The Purchaser is not relying on the Company or any of its employees or agents with respect to the legal, tax, economic and related considerations as to an investment in the Securities, and the Purchaser has relied on the advice of, or has consulted with, only his own advisors; 

(r) The Purchaser is acquiring the Securities solely for the Purchaser's own account for investment and not with a view to resale, assignment or distribution thereof, in whole or in part.  The Purchaser has no agreement or arrangement, formal or informal, with any person to sell or transfer all or any part of the Securities, and the Purchaser has no plans to enter into any such agreement or arrangement; 

(s) Stop transfer instructions will be placed with the transfer agent of the Securities.  Although the Company has the obligation to register for resale the Shares and Warrant Shares, there can be no assurance that such registration will be completed within the time frames required by the Company, or at all.  It is not anticipated that there will be any market for resale of the Shares or Warrant Shares, and such shares will not be freely transferable at any time in the foreseeable future; 

(t) The Purchaser has adequate means of providing for such Purchaser’s current financial needs and foreseeable contingencies and has no need for liquidity of the investment in the Securities for an indefinite period of time; 

(u) The Purchaser is aware that an investment in the Securities involves a number of very significant risks and has carefully read and considered the matters set forth in the SPA and in the Company Commission Filings; 

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(v) The Purchaser meets the requirements of at least one of the suitability standards for an “accredited investor” as set forth on the Accredited Investor Certification contained herein; 

 (w) The Purchaser: (i) if a natural person, represents that the Purchaser has reached the age of 21 and has full power and authority to execute and deliver this Subscription Agreement and all other related agreements or certificates and to carry out the provisions hereof and thereof; (ii) if a corporation, partnership, limited liability company or partnership, association, joint stock company, trust, unincorporated organization or other entity, (A) such entity was not formed for the specific purpose of acquiring the Securities, (B) such entity is duly organized, validly existing and in good standing under the laws of the state of its organization, (C) the consummation of the transactions contemplated hereby is authorized by, and will not result in a violation of state law or its charter or other organizational documents, (D) such entity has full power and authority to execute and deliver this Subscription Agreement and all other related agreements or certificates and to carry out the provisions hereof and thereof and to purchase and hold the Securities, (E) the execution and delivery of this Subscription Agreement has been duly authorized by all necessary action, and (F) this Subscription Agreement has been duly executed and delivered on behalf of such entity and is a legal, valid and binding obligation of such entity; and (iii) if executing this Subscription Agreement in a representative or fiduciary capacity, such representative has full power and authority to execute and deliver this Subscription Agreement in such capacity and on behalf of the subscribing individual, ward, partnership, trust, estate, corporation, limited liability company or limited liability partnership, or other entity for whom such representative is executing this Subscription Agreement, and such individual, ward, partnership, trust, estate, corporation, limited liability company or partnership, or other entity has full right and power to perform this Subscription Agreement and make an investment in the Company, and that this Subscription Agreement constitutes a legal, valid and binding obligation of such Purchaser. The execution and delivery of this Subscription Agreement will not violate or be in conflict with any order, judgment, injunction, agreement or controlling document to which the Purchaser is a party or by which it is bound; 

(x) The Purchaser had the opportunity to obtain any additional information, to the extent the Company had such information in its possession or could acquire it without unreasonable effort or expense, necessary to verify the accuracy of the information contained in the SPA and all documents received or reviewed in connection with the purchase of the Securities and the opportunity to have representatives of the Company provide it with such additional information regarding the terms and conditions of this particular investment and the financial condition, results of operations, business and prospects of the Company deemed relevant by the Purchaser and all such requested information, to the extent the Company had such information in its possession or could acquire it without unreasonable effort or expense, has been provided to Purchaser to its full satisfaction; 

(y) Any information which the undersigned has heretofore furnished or furnishes herewith to the Company is complete and accurate and may be relied upon by the Company and Placement Agent in determining the availability of an exemption from registration under Federal and state securities laws in connection with the offering of Securities as described in the SPA.  The Purchaser further represents and warrants that it will notify and supply corrective information to the Company and Placement Agent immediately upon the occurrence of any change therein occurring prior to the Company's issuance of the Securities; 

(z) Prior to execution of this Agreement, neither it nor any Person over which the Purchaser has control, have made any net short sales of, or granted any option for the purchase of or entered into an

hedging or similar transaction with the same economic effect as a net short sale, in the Common Stock.  

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Each Purchaser, severally and not jointly with the other Purchasers, understands and acknowledges that the Securities and Exchange Commission currently takes the position that coverage of short sales of shares of the Common Stock “against the box” with the Shares and Warrant Shares purchased hereunder prior to the effective date of the Registration Statement is a violation of Section 5 of the Securities Act, as set forth in Item 65, Section 5 under Section A, of the Manual of Publicly Available Telephone Interpretations, dated July 1997, compiled by the Office of Chief Counsel, Division of Corporate Finance.  Accordingly, each Purchaser hereby agrees not to use any of the Shares and Warrant Shares to cover any short sales prior to the Effective Date.  Additionally, each Purchaser, severally and not jointly with the other Purchasers, agrees to comply with Regulation M under the federal securities laws.  The Purchasers agree, severally and not jointly, that they will not enter into any Short Sales (as hereinafter defined) from the period commencing on the date hereof and ending on the date that all of the Shares and Warrant Shares held by such Purchaser have been disposed of.  For purposes hereof, a "Short Sale" shall mean a sale of Common Stock by such Purchaser that is marked as a short sale and that is made at a time when there is no equivalent offsetting long position in Common Stock held by such Purchaser;  

  

(aa) No oral or written representations have been made, or oral or written information furnished, to the Purchaser in connection with the offering of the Securities or as to the Company, which are in any way inconsistent with the information contained in the SPA; 

 

(bb) THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF CERTAIN STATES AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH LAWS.  THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933 AS AMENDED AND SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. ALTHOUGH THE COMPANY HAS AN OBLIGATION TO REGISTER FOR RESALE THE SHARES AND THE WARRANT SHARES, THERE CAN BE NO ASSURANCE THAT SUCH REGISTRATION WILL BE COMPLETED WITHIN THE TIME FRAMES REQUIRED, OR AT ALL.  THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED HEREIN OR IN THE SPA.  ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

(cc) (For ERISA plans only)    The fiduciary of the ERISA plan represents that such fiduciary has been informed of and understands the Company’s investment objectives, policies and strategies, and that the decision to invest “plan assets” (as such term is defined in ERISA) in the Company is consistent with the provisions of ERISA that require diversification of plan assets and impose other fiduciary responsibilities.  The Purchaser fiduciary or Plan (a) is responsible for the decision to invest in the Company; (b) is independent of the Company or any of its affiliates; (c) is qualified to make such investment decision; and (d) in making such decision, the Purchaser fiduciary or Plan has not relied primarily on any advice or recommendation of the Company or any of its affiliates. 

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

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(ee)  To the best of the Purchaser’s knowledge, none of: (1) the Purchaser; (2) any person controlling or controlled by the Purchaser; (3) if the Purchaser is a privately-held entity, any person having a beneficial interest in the Purchaser; or (4) any person for whom the Purchaser is acting as agent or nominee in connection with this investment is a country, territory, individual or entity named on an OFAC list, or a person or entity prohibited under the OFAC Programs.  Please be advised that the Company may not accept any amounts from a prospective investor if such prospective investor cannot make the representation set forth in the preceding paragraph.  The Purchaser agrees to promptly notify the Company should the Purchaser become aware of any change in the information set forth in these representations.  The Purchaser understands and acknowledges that, by law, the Company may be obligated to “freeze the account” of the Purchaser, either by prohibiting additional subscriptions from the Purchaser, declining any redemption requests and/or segregating the assets in the account in compliance with governmental regulations.  The Purchaser further acknowledges that the Company may, by written notice to the Purchaser, suspend the redemption rights, if any, of the Purchaser if the Company reasonably deems it necessary to do so to comply with anti-money laundering regulations applicable to the Company or any of the Company’s other service providers.  These individuals include specially designated nationals, specially designated narcotics traffickers and other parties subject to OFAC sanctions and embargo programs. 

(ff)  To the best of the Purchaser’s knowledge, none of: (1) the Purchaser; (2) any person controlling or controlled by the Purchaser; (3) if the Purchaser is a privately-held entity, any person having a beneficial interest in the Purchaser; or (4) any person for whom the Purchaser is acting as agent or nominee in connection with this investment is a senior foreign

political figure2, or any immediate family3 member or close associate4 of a senior foreign political figure, as such terms are defined in the footnotes below. 

(gg) If the Purchaser is affiliated with a non-U.S. banking institution (a “Foreign Bank”), or if the Purchaser receives deposits from, makes payments on behalf of, or handles other financial transactions related to a Foreign Bank, the Purchaser represents and warrants to the Company that: (1) the Foreign Bank has a fixed address, other than solely an electronic address, in a country in which the Foreign Bank is authorized to conduct banking activities; (2) the Foreign Bank maintains operating records related to its banking activities; (3) the Foreign Bank is subject to inspection by the banking authority that licensed the Foreign Bank to conduct banking activities; and (4) the Foreign Bank does not provide banking services to any other Foreign Bank that does not have a physical presence in any country and that is not a regulated affiliate. ______________________________________

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

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

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

 

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

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(hh) Purchaser agrees to indemnify and hold harmless the Company and Placement Agent, its Affiliates and their respective officers, directors, partners and members (collectively, the “Company Indemnitees”), from and against any and all damages, costs and claims, and agrees to reimburse the Company Indemnitees for reasonable all out-of-pocket expenses (including the reasonable fees and expenses of legal counsel), in each case promptly as incurred by the Company Indemnitees and to the extent arising out of or in connection with any material misrepresentation, omission of a material fact, or breach of any of the Purchaser’s representations or warranties contained in this Agreement, the Registration Statement, the annexes, schedules or exhibits hereto or thereto or any instrument, agreement or certificate entered into or delivered by the Purchaser pursuant to this Agreement. 

(ii) Purchaser acknowledges that, pursuant to the terms of the Offering, the price paid for the Securities may vary among Purchasers and that some Purchasers may pay less for their Securities than another Purchaser and no Purchaser shall have any right to receive a refund or otherwise rescind their purchase once the Closing on their funds has occurred. 

2. The undersigned has been advised that the Securities have not been registered under the Act or applicable state securities laws and that the Securities are being offered and sold pursuant to exemptions from such laws and that the Company's reliance upon such exemptions is 

predicated in part on the undersigned's representations as contained herein. The undersigned represents and warrants that the Securities are being purchased for the undersigned's own account and for investment purposes only, and without the intention of reselling or redistributing the Securities; the undersigned has made no agreement with others regarding any of the Securities.  The undersigned is aware that, in the view of the Securities and Exchange Commission, a purchase of such Securities with an intent to resell the Securities, would represent an intent inconsistent with the representations set forth above and could nullify the protections pursuant to which the Offering is taking place and subject both the Company and the undersigned to significant liability.  The undersigned further represents and agrees  that if, contrary to the foregoing intentions, the undersigned should later desire to dispose of or transfer any of the Securities in any manner, the undersigned shall not do so without first obtaining (i) the opinion of counsel to the Company that such proposed disposition or transfer may be lawfully made without the registration of such Securities pursuant to the Act, as then amended, and applicable state securities laws, or (ii) there is then a current and effective registration statement under the Act with respect to the Securities.

3. The undersigned represents and warrants that the undersigned is a bona fide resident of, is domiciled in and received the offer and made the decision to invest in the Securities in the state set forth on the signature page hereof, and the Securities are being purchased by the undersigned in the undersigned's name solely for the undersigned's own beneficial interest and not as nominee for, or on behalf of, or for the beneficial interest of, or with the intention to transfer to, any other person, trust or organization. 

 

4. The undersigned represents and warrants that the undersigned comes within at least one  category marked below, and that for any category marked the undersigned has truthfully set forth the factual basis or reason the undersigned comes within that category. ALL INFORMATION IN RESPONSE TO THIS PARAGRAPH WILL BE KEPT STRICTLY CONFIDENTIAL. The undersigned agrees to furnish any additional information which the Company deems necessary in order to verify the answers set forth below.  

  

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Category I    ______ The undersigned is an individual (not a partnership, corporation, etc.) whose individual net worth, or joint net worth with the undersigned's spouse, presently exceeds $1,000,000.  

 

Explanation. In calculation of net worth the undersigned may include equity in personal property and real estate, including the undersigned's principal residence, cash, short term investments, stocks and securities. Equity in personal property and real estate should be based on the fair market value of such property less debt secured by such property. 

 

Category II   ______ The undersigned is an individual (not a partnership, corporation, etc.) who had individual income in excess of $200,000, or joint income with the undersigned's spouse in excess of $300,000 in each of the two most recent years, and has a reasonable expectation of reaching the same income level in the current year. Category III The undersigned is a bank as defined in Section 3(a)(2) of the Act or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Act, whether acting in its individual or fiduciary capacity; a broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934; an insurance company as defined in Section 2(13) of the Act; an 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; 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; a plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions for the benefit of its employees, if such plan has total assets in excess of $5,000,000; an employee benefit plan within the meaning of the Employee

Retirement Income Security Act of 1974 if the investment decision is made by the plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company, or registered investment advisor, or 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. _____________________________________________________ _____________________________________________________ (describe entity and indicate amount of total assets) 

 

Category III ______ 

The undersigned is a private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940. _____________________________________________________ _____________________________________________________ (describe entity and indicate amount of total assets) 

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Category IV ______ 

The undersigned is an 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. _____________________________________________________ _____________________________________________________ (describe entity and indicate amount of total assets) 

 

Category V   ______  

The undersigned is a director or executive officer of the Company.  

 

Category VI   ______ 

The undersigned is a 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 Section 230.506(b)(2)(ii) of the Act. _____________________________________________________ _____________________________________________________ (describe entity and indicate amount of total assets) 

 

Category VII   ______  

The undersigned is an entity in which all of the equity owners are "Accredited Investors" as defined in Section 230.501(a) of the Act. _____________________________________________________ _____________________________________________________ (describe entity and indicate amount of total assets) 

 

Category VIII    ______ The undersigned does NOT come within any of the above categories. 

 

5. The undersigned is informed of the material significance to the Company of the foregoing representations, agreements and consents, and they are made with the express acknowledgment that the Company will rely on them in conducting the Offering.  The undersigned hereby undertakes to notify the Company immediately of any change in any information contained herein that may occur prior to the issuance of the Securities. 

 

6. The undersigned, if other than an individual, makes the following additional representations: 

 

(a) The undersigned was not organized for the specific purpose of acquiring the Securities; and 

 

(b) This Subscription Agreement has been duly authorized by all necessary action on the part of the undersigned, has been duly executed by an authorized representative of the undersigned, and is a legal, valid and binding obligation of the undersigned enforceable in accordance with its respective terms. 

 

7. The undersigned further represents and warrants that (place an X in one space below): 

 

(a) ______ The undersigned has such knowledge and experience in financial and business matters to as to be capable of evaluating the merits and risks of an investment in the Securities and protecting the undersigned's own interests in this transaction, and does not desire to utilize the services of any other person in connection with  evaluating such merits and risks. 

  

  

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(b) ______ The undersigned intends to use or has used the services of a purchaser representative acceptable to the Company ("Purchaser Representative") in connection with evaluating the merits and risks of an investment in the Securities. The undersigned hereby acknowledges the following named person(s) to be the undersigned's Purchaser Representative in connection with evaluating the merits and risks of an investment in the Securities: 

 

The advisor's name, address, and occupation are as follows: _____________________________________________________ _____________________________________________________ _____________________________________________________ 

 

8. Manner in Which Title is To Be Held. Place an "X" in one space below: 

 

(a)  ____ Individual Ownership   (b)  _____ Community Property 

(c)  _____ Partnership    (d) _____ Tenants in Common 

(e)  _____ Corporation    (f)  _____ Trust 

(g)  _____ Joint Tenant with Right of Survivorship (both parties must sign) 

(h)  _____ Other (Describe): _____________________________________________ 

 

9. My state of residence and the state I received the offer to invest and made the decision to invest in the Securities:___________________________________________________  

_______________________________________________________________ 

Please PRINT above the exact name(s) in which the Securities are to be held. 

 

The undersigned hereby represents he has read and understands this entire Subscription Agreement. 

 

SIGNATURE PAGES FOLLOW 

12

  

 

INDIVIDUAL 

 

Subscription. The undersigned hereby subscribes for the Company’s Units in the investment amount of $_________. 

 

Executed this __________day of _______________, 200__. 

 

 

Address to Which Correspondence Should be Directed: 

 

______________________________________

______________________________________   

Signature (Individual) 

Name Printed 

 

______________________________________ 

______________________________________  

Date of Birth 

Street Address 

 

______________________________________   ______________________________________

Social Security Number City, State and Zip Code 

 

______________________________________ 

(            ) _______________________________

Name(s) Typed or Printed 

Telephone Number 

  

(            ) _______________________________ 

  

Facsimile Number 

 

 

 

IF MORE THAN ONE RECORD HOLDER, ALL SHOULD SIGN: 

(attach additional pages if necessary) 

 

       Address to Which Correspondence Should be Directed: 

 

 

______________________________________

______________________________________   

Signature # 2 (Individual) (if applicable) 

Name Printed 

 

______________________________________

______________________________________   

Date of Birth 

Street Address 

 

______________________________________

______________________________________   

Social Security Number 

City, State and Zip Code 

 

______________________________________ 

(            )_______________________________ 

Name(s) Typed or Printed 

Telephone Number 

(            )_______________________________

  

Facsimile Number 

 

 

13

  

 

CORPORATION, PARTNERSHIP, TRUST, OR OTHER ENTITY

Subscription. The undersigned hereby subscribes for the Units of the Company in the principal amount of $_________________. 

 

Executed this         day of                         , 200__. 

 

 

______________________________________ 

Address to Which Correspondence Should  

Name of Entity 

be Directed 

 

______________________________________

______________________________________   

Type of Entity (i.e., corporation, 

Street Address 

  partnership, etc.) 

 

______________________________________

______________________________________   

State of Formation of Entity 

City, State and Zip Code 

 

By:____________________________________

______________________________________   

     *Signature 

Tax Identification or Social Security No. 

 

Its:____________________________________ 

(          )______________________________________ 

     Title 

Telephone Number 

 

______________________________________ 

(          )______________________________________ 

Name Typed or Printed 

Facsimile Number 

 

CERTIFICATE OF SIGNATORY

To be completed if Units are being subscribed for by an entity. 

 

 I,                                            , am the                                                of                                                                         (the "Entity"). 

 I certify that I am empowered and duly authorized by the Entity to execute and carry out the terms of the Subscription Agreement and to purchase and hold the Units, and certify that the Subscription Agreement have been duly and validly executed on behalf of the Entity and constitute legal and binding obligations of the Entity. 

 

 IN WITNESS WHEREOF, I have hereto set my hand this ____ day of ___________, 200__. 

 

 

___________________________________                                                     

Signature 

14

  

 

ACCEPTANCE

 

This Subscription Agreement of ________________________________________________________ for  

 

the purchase of Units is accepted as of _________________, 200__. 

 

 

  

US FARMS INC. 

  

(a Nevada corporation) 

 

 

  

By: _____________________________________       

   

  

Name: ____Yan K Skwara___________________

   

Title: ________President____________________      

 

       

 

15MEMS USA, INC

EXHIBIT
4.6

US FARMS, INC.

SECURITIES PURCHASE AGREEMENT

THIS SECURITIES PURCHASE AGREEMENT (as amended, modified, supplemented or restated in accordance with its terms from time to time, this “Agreement”) is between US Farms Inc., a Nevada corporation and its affiliates (the “Company”), and the individuals named on the signature page of this agreement attached hereto (individually, a “Purchaser” and together, the “Purchasers”). 

RECITALS

WHEREAS, the Company has authorized the offering and sale of up to 2,000,000 shares of the Company’s $0.001 par value common stock (the “Shares”) and warrants (the “Warrants”) of the Company’s common stock, $0.001 par value per share (collectively, the “Units”) at the purchase price of twenty-five cents ($0.25) per Units, for an aggregate offering amount of $500,000, which amount may be increased at the option of the Company and Placement Agent, and which Units shall be purchased in minimum investment amounts of $10,000 (the “Offering”); and

WHEREAS, the Company has engaged Westcap Securities, Inc. as the placement agent (the “Placement Agent”) to offer and sell the Units on behalf of the Company; and

WHEREAS, the Offering shall commence on November 28, 2006 (“Effective Date”) and end on Mar 15, 2007, unless extended or terminated by mutual consent of the Company and the Placement Agent; and

WHEREAS, the Company has the right to terminate the Offering early with a 15-day prior written notice to Placement Agent (“Early Termination Date”).  In the event a Closing has already occurred, this early termination will not relieve the Company of any other of its obligations contained in the Offering with respect to such closing; and

WHEREAS, the Units will be offered and sold only to “accredited investors” within the meaning of Rule 501(a) of Regulation D promulgated under the Securities Act pursuant to this Agreement and that certain subscription agreement executed by the Purchasers in connection with the Offering (the “Subscription Agreement”); and

WHEREAS, each Unit shall be priced at $.25 (the “Offering Price”) once the investment amount by check or wire is received by the Company (the “Purchase Date”). 

WHEREAS, Purchasers desire to purchase the Units on the terms and conditions set forth herein and in the Subscription Agreement; and

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WHEREAS, the Company desires to sell the Units to Purchasers on the terms and conditions set forth herein.

AGREEMENT

In consideration of the recitals and the mutual promises, covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE  I

AUTHORIZATION AND SALE OF THE UNITS

1.1 Authorization. The Company has, prior to the date of this Agreement, (i) authorized the issuance and sale of the Shares to the Purchasers and (ii) authorized issuance of and reserved for issuance shares upon warrant exercise.

1.2 Sale of the Units to the Purchasers. Subject in all respects to the satisfaction of the terms and conditions herein set forth, and in reliance upon the respective representations and warranties of the parties set forth herein, in the SPA and in any document delivered pursuant hereto or thereto, the Company agrees to sell to each Purchaser (and such Purchaser agrees by executing and delivering the Execution Documents and investment amount to purchase from the Company) the number of Units set forth in such Purchasers’ Subscription Agreement at the Offering Price.

1.3 Offering Price and Share Calculation. Each Unit shall be priced at the Offering Price. 

1.4 Delivery of the Units to the Purchasers. Upon the execution and delivery by the Purchasers of the Execution Documents and the investment amount, the Company will calculate the number of Units purchased by the Purchaser and deposit the funds in a segregated bank account designated by the Company.  The Units will be issued to the Purchaser when the subscription has been accepted by the Company and the Company receives notice that the funds have been cleared by the bank holding the funds.  This delivery in no way shall exceed 10 days from the Final Closing or Early Termination date whichever is first.

1.5  Early Termination.  Notwithstanding anything contained herein to the contrary, the Company has the right to terminate the Offering at any time upon 15 days’ written notice to Placement Agent (“Early Termination Date”).  In the event a Closing has already occurred, this early termination will not relieve the Company of its obligations to register the Shares and shares of Common Stock underlying the Warrant (the “Warrant Shares”) sold at such Closing.

1.6

Terms of Warrant.  (a) Each Warrant will entitle the holder to purchase one share of Common Stock at an exercise price of $.50. The Warrants will be exercisable at any time for three years after the Effective Date, unless earlier redeemed. The Warrants will be issued in unregistered form. 

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(b)

The Warrant Shares, when issued upon exercise of a Warrant, will 

be fully paid and non-assessable, and the Warrant Shares will be registered in the Registration Statement mentioned elsewhere in this agreement. Company will pay any transfer tax incurred as a result of the issuance of Common Stock to the holder upon its exercise. 

ARTICLE II

REGISTRATION RIGHTS

2.1 Registration of Shares by Company. The Company will file a registration 

statement covering the Shares and Warrant Shares (the “Registration Statement”).  The Company will file the Registration Statement within 60 days of the final date of Closing of the Offering (“Closing Date”), or, in the event a Closing has already occurred, the Early Termination Date, whichever comes first, and use its best efforts to have the Registration Statement declared effective 120 days of the Closing Date. If the Registration Statement is not filed on a timely basis as indicated above or is not declared effective by the SEC for any reason on a timely basis as indicated above, the Company will be required to pay Investors an amount equal to 1% of the principal amount of the amount subscribed for by Investors and received by the Company for every 30 day period (or portion thereof) after the relevant date, in each case until the Registration Statement is filed or declared effective, as the case may be (“Registration Penalty”).

2.2 Late Filing Penalty Clause. As with the Registration Penalty, the Company

shall also be required to pay investors an amount equal to 1% of the principal amount of the Amount subscribed for by Investors and received by the Company if the Company becomes deficient in their Securities Exchange Act of 1934 filings (taking into account permitted extensions) up until the point that the above mentioned Registration Statement becomes effective (“Late Filing Penalty”). This Late Filing Penalty shall be in addition to any other penalties mentioned.

               

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants (such representations and warranties do not lessen or obviate the representations and warranties of the Purchasers set forth in this Agreement or the Subscription Agreement) that:

3.1 Organization and Existence, Authority, Etc. The Company is a corporation duly organized and validly existing and in good standing under the laws of the State of 

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Nevada, and has all requisite corporate power and authority to carry on its business as now conducted and proposed to be conducted; the Company has all requisite corporate power and authority to enter into this Agreement, to issue the Units as contemplated herein and to carry out the provisions and conditions of this Agreement. This Agreement has been duly executed and delivered by, and constitutes the valid and binding obligations of, the Company, enforceable in accordance with their respective terms, subject to the effect of any applicable bankruptcy, moratorium, insolvency, reorganization or other similar law affecting the enforceability of creditors' rights generally and to the effect of general principles of equity which may limit the availability of remedies (whether in a proceeding at law or in equity). The Company is duly qualified and is authorized to do business and is in good standing as a foreign corporation in each jurisdiction in which the conduct of its business or ownership of its properties would so require, except where the failure to be so qualified would not have a material adverse effect on its business and financial condition, taken as a whole.  The Company will preserve, protect, and maintain, (a) its corporate existence, and (b) all rights, franchises, accreditations, privileges, and properties, the failure of which to preserve, protect, and maintain might have a material adverse effect on the business, affairs, assets, prospects, operations, employee relations, rights or condition, financial or otherwise, of the Company taken as a whole.

3.2 Litigation. Except as disclosed in the Company Commission Filings (as hereinafter defined) and the Private Placement Memorandum, to the knowledge of the Company, there is no action, suit or proceeding pending, or threatened, against the Company before any court, administrative agency or arbitrator which could reasonably be expected to result in any material adverse change in the business, properties, condition (financial or otherwise) of the Company, taken as a whole, or which challenges the validity of any action taken or to be taken pursuant to or in connection with this Agreement.

3.3 Charter Documents. Neither the execution nor the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, nor compliance with the terms and provisions hereof, will conflict with, or result in a breach of or creation of a lien under, the terms, conditions or provisions of, or constitute a default under, the charter or by-laws of the Company, as amended, copies of which are available to the Purchasers in the Company Commission Filings.

3.4 Authorized and Outstanding Capital Stock. The authorized capital stock of the

Company, as of September 30, 2006, consists of (i) 500,000,000 shares of Common Stock and 50,000,000 shares of preferred stock, par value $0.001. As of September 30, 2006, there are approximately 15,442,656 shares of Common Stock and 88,500 shares of Preferred Stock outstanding. All of such outstanding shares of Common Stock have been validly issued and are fully paid and non-assessable. The Company has authorized the issuance of the number of Shares and Warrant Shares deliverable to the Purchasers under this Offering at the Offering Amount up to $500,000. The Shares when issued as part of the Units in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable.

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3.5 Commission Filings and Financial Statements. True and complete copies of all reports, registration statements, definitive proxy statements and other documents (in each case together with all amendments and supplements thereto) filed by the Company with the Securities and Exchange Commission (such reports, registration statements, definitive proxy statements and other documents, together with any amendments and supplements thereto, are sometimes collectively referred to as the "Company Commission Filings") are available to the Purchasers at the Commission’s website www.sec.gov. The Company Commission Filings constitute all of the documents (other than preliminary materials) that the Company was required to file with the Commission. As of their respective dates, each of the Company Commission Filings complied in all material respects with the applicable requirements of the Securities Act and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as applicable, and the rules and regulations under each such act, and none of the Company Commission Filings contained as of such date any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. When filed with the Commission the financial statements included in the Company Commission Filings complied as to form in all material respects with the applicable rules and regulations of the Commission and were prepared in accordance with generally accepted accounting principles (as in effect from time to time) applied on a consistent basis (except as may be indicated therein or in the notes or schedules thereto), and such financial statements fairly present in accordance with generally accepted accounting principles in all material respects the financial position of the Company as at the dates thereof and the results of its operations and its cash flows for the periods then ended, subject, in the case of the unaudited interim financial statements, to normal, recurring year-end audit adjustments and the absence of footnotes.

3.6 Intellectual Property. The Company shall maintain in full force and affect its corporate existence, rights and franchises and all licenses and other rights to use Intellectual Property owned or possessed by it and reasonably deemed to be necessary to the conduct of its business.

3.7 Tax Returns and Payments. The Company has timely filed all tax returns (federal, state and local) required to be filed by it. All taxes shown to be due and payable on such returns, any assessments imposed, and to the Company's knowledge all other taxes due and payable by the Company as of the date hereof, have been paid, are being contested in good faith or will be paid prior to the time they become delinquent. The Company has not been advised (a) that any of its returns, federal, state or other, have been or are being audited as of the date hereof, or (b) of any deficiency in assessment or proposed judgment to its federal, state or other taxes. The Company has no knowledge of any liability of any tax to be imposed upon its properties or assets as of the date of this Agreement that is not adequately provided for.

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3.8 Title to Properties. The Company has good and marketable title to its properties and assets, and good title to its leasehold estates, in each case subject to no mortgage, pledge, lien, lease, encumbrance or charge, other than (a) those resulting from taxes which have not yet become delinquent, (b) minor liens and encumbrances which do not materially detract from the value of the property subject thereto or materially impair the operations of the Company, and (c) those that have otherwise arisen in the ordinary course of business. The Company is in compliance with all material terms of each lease to which it is a party or is otherwise bound.

3.9 Compliance with Other Instruments, Etc. The Company is not in violation of any term of its certificate or articles of incorporation or by-laws, and the Company is not in material violation of any material term of any material agreement or instrument to which it is a party or by which it is bound or any material term of any applicable law, ordinance, rule or regulation of any governmental authority or any material term of any applicable order, judgment or decree of any court, arbitrator or governmental authority, the consequences of which violation might have a materially adverse effect on the business, condition (financial or other), operations, assets or properties of the Company; the execution, delivery and performance of this Agreement and the Related Agreements will not result in any material violation of or be in material conflict with or constitute a material default under any such term; and there is no such term which materially adversely affects the business, condition (financial or other), operations, assets, or properties of the Company, taken as a whole.

3.10 Governmental Consent. No material consent, approval or authorization of, or declaration or filing with, any governmental authority on the part of the Company or any of its Subsidiaries is required for the valid execution and delivery of this Agreement and the Related Agreements or the valid offer, issue, sale and delivery of the Units pursuant to this Agreement or the Related Agreements, except where the failure to obtain such consent or make such filing would not have a material adverse effect on the business, operations or assets of the Company, and except for appropriate filings (i) with the Commission and (ii) with such state securities commissions in respect of "blue sky" laws as may be appropriate.

3.11 Use of Proceeds. The Company estimates they will use Offering proceeds of $500,000 as follows:

·

$79,000 for Inventory Requirements

·

$239,000 for Immediate CAPX Requirements

·

$75,000 for Asparagus (Growing / Harvesting)

·

$75,000 for Placement Agent Fees (Assuming full subscription)

·

$32,000 for General Working Capital.

3.12

Disclosure. To the best of the Company's knowledge, there is no fact (other than matters of a general economic or political nature which does not affect the Company uniquely) known to the Company which materially adversely affects the business, condition (financial or other), operations, assets or properties of the Company which has not been set forth either in the Company Commission Filings or in this Agreement or in the other documents, certificates and instruments delivered to the Purchasers by or on behalf of the Company specifically for use in connection with the transactions contemplated by this Agreement.

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS

Each Purchaser hereby severally and not jointly represents and warrants to the Company with respect to itself or himself as follows (such representations and warranties do not lessen or obviate the representations and warranties of the Company set forth in this Agreement):

4.1 Requisite Power and Authority. Purchaser has all necessary power and authority under all applicable governing documents and provisions of law to execute and deliver this Agreement and the Related Agreements and to carry out their provisions. All action on Purchaser's part required for the lawful execution and delivery of this Agreement and the Related Agreements have been or will be taken prior to the Closing Date. Upon their execution and delivery, this Agreement and the Related Agreements will be valid and binding obligations of Purchaser, enforceable in accordance with their terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors' rights, and (b) as limited by general principles of equity that restrict the availability of equitable remedies.

4.2 Investment Representations. Purchaser understands that the Units are being offered and sold pursuant to an exemption from registration contained in the Securities Act based in part upon Purchaser's representations contained in the Agreement.

4.3 Purchaser Bears Economic Risk. Purchaser has substantial experience in evaluating and investing in private placement transactions of securities in companies similar to the Company so that it is capable of evaluating the merits and risks of its investment in the Company and has the capacity to protect its own interests. Purchaser must bear the economic risk of this investment for an indefinite period of time.

4.4 Acquisition for Own Account. Purchaser is acquiring the Units for Purchaser's own account for investment only, and not with a view towards their distribution or resale.

4.5 Purchaser Can Protect Its Interest. Purchaser represents that by reason of his/her/its, or of its management's, business or financial experience, Purchaser has the capacity to protect its own interests in connection with the transactions contemplated in this Agreement, and the Related Agreements. Further, Purchaser is aware of no publication or any advertisement in connection with the transactions contemplated in the Agreement.  In evaluating the suitability of an investment in the Company, the Purchaser has not relied upon any representation or other information (oral or written) other than as stated in this Agreement.

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4.6 Self-Reliance. The Purchaser is not relying on the Company or any of its employees or agents or Placement Agent with respect to the legal, tax, economic and related considerations as to an investment in the Securities, and the Purchaser has relied on the advice of, or has consulted with, only his own advisors

4.7 Accredited Investor. Each Purchaser acknowledges that a purchase of the Units is only available to a Purchaser who is an "accredited investor." In connection therewith, each Purchaser represents and warrants to the Company and the Placement Agent that he/she or it, as the case may be, qualifies as an "accredited investor" within the meaning of Regulation D, since he/she or it meets one of the following standards for determination of "accredited investor" status of Regulation D set forth below:

(a) Any broker or dealer registered pursuant to Section 15 of the Exchange

Act;

(b) 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;

(c) 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;

(d) 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 Rule 506(b)(2)(ii) of Regulation D;

(e) Any organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, 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; or

(f) Any entity in which all of the equity owners are "accredited investors".

4.8 Available Information. Each Purchaser hereby represents that he/she/it (i) has access to and has carefully reviewed the Company Commission Filings, and (ii) has had the opportunity to ask questions and receive answers from the Company concerning the Company Commission Filings and the terms and conditions of the offering of the Units and to obtain any documents relating to the Company which are publicly available and any additional information or documents relating to the Company which the Company possesses or can acquire without unreasonable effort or expense.

4.9  Regulatory Compliance. Purchaser agrees that Purchaser will comply with all relevant rules and regulations of the Exchange Act, including the provisions of Regulation M promulgated thereunder.

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4.10 Legends. Purchaser understands the certificates representing the components of the Units shall bear the following legend (or one substantially similar) until the Shares and Warrant Shares are covered by an effective registration statement filed with the Commission:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE "ACT") OR, IF APPLICABLE, STATE SECURITIES LAWS AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF A CURRENT AND EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT WITH RESPECT TO SUCH SECURITIES, OR AN OPINION OF THE COMPANY'S COUNSEL TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT. ALTHOUGH THE COMPANY HAS AN OBLIGATION TO REGISTER FOR RESALE THE SHARES AND THE WARRANT SHARES, THERE CAN BE NO ASSURANCE THAT SUCH REGISTRATION WILL BE COMPLETED WITHIN THE TIME FRAMES REQUIRED, OR AT ALL.  THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.”

4.11 Confidentiality. The Purchaser agrees that he/she/it will not include in any public announcement, the name of the Company, unless expressly agreed to by the Company or unless and until such disclosure is required by law or applicable regulation, and then only to the extent of such requirement.

4.12 Non-Manipulative Practices. Under no circumstances is Placement Agent or Purchasers to engage in any type of short selling in an attempt to hedge their positions or manipulate the stock. 

4.13 Financial Position / Requisite Knowledge.

(a) That the undersigned is in a financial position to hold the Securities for an indefinite period of time and is able to bear the economic risk and withstand a complete loss of the undersigned's investment in the Securities. Additionally, the undersigned's proposed investment in the Securities does not exceed 20% of the undersigned's net worth exclusive of home, home furnishings and automobiles; 

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(b) That the undersigned, either alone or with the assistance of the undersigned's own professional advisor, has such knowledge and experience in financial and business matters that the undersigned is capable of evaluating the merits and risks of an investment in the Securities, has the capacity to protect the undersigned's own interests in connection with an investment in the Notes and has the net worth to undertake such risks;

(c) That the undersigned has obtained, to the extent the undersigned deems necessary, the undersigned's own personal professional advice with respect to the risks inherent in the investment in the Securities, and the suitability of an investment in the Securities in light of the undersigned's financial condition and investment needs

(d) That the undersigned believes that an investment in the Securities is suitable for the undersigned based upon their investment objectives and financial needs, and the undersigned has adequate means for providing for the their current financial needs and personal contingencies and has no need for liquidity of investment with respect to the Securities;

(e) That the undersigned recognizes that the Securities as an investment involves a high degree of risk, including, but not limited to, the risk of loss of 100% of the undersigned's investment in the Securities;

4.14 Purchaser Bears Economic Risk. Purchaser has substantial experience in evaluating and investing in private placement transactions of securities in companies similar to the Company so that it is capable of evaluating the merits and risks of its investment in the Company and has the capacity to protect its own interests. Purchaser must bear the economic risk of this investment until the Securities are registered pursuant to the Securities Act, or an exemption from registration is available. That the undersigned realizes that (i) the purchase of the Securities is a long-term investment; (ii) the purchaser of the Securities must bear the economic risk of investment for an indefinite period of time because the Securities have not been registered under the Act, or under the securities laws of any state and, therefore, the Securities cannot be resold unless they are subsequently registered under said laws or exemptions from such registrations are available; (iii) there is presently no public market for the Securities and the undersigned may be unable to liquidate the undersigned's investment in the event of an emergency, or pledge the Securities as collateral for a loan; and (iv) the transferability of the Securities is restricted and requires conformity with the restrictions contained in Section 3.3 and legends will be placed on the certificate(s) representing the Securities referring to the applicable restrictions on transferability; and

 

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

4.16 Use of Information. Any information which the undersigned has heretofore furnished or furnishes herewith to the Company is complete and accurate and may be relied upon by the Company in determining the availability of an exemption from registration under Federal and state securities laws in connection with the offering of Securities as described herein. The Purchaser further represents and warrants that it will notify and supply corrective information to the Company immediately upon the occurrence of any change therein occurring prior to the Company's issuance of the Securities

ARTICLE V

COVENANTS OF THE COMPANY

5.1 Insurance. The Company will maintain or cause to be maintained with financially sound and reputable insurers, insurance with respect to its assets and business against loss or damage covering risks of such types and in such amounts which are customary for similarly situated corporations of established reputation engaged in the same or similar businesses, in adequate amounts.

5.2 Payment of Taxes and Other Obligations. The Company will pay or cause to be paid all material taxes, assessments and other governmental charges levied upon any of its assets or in respect of its franchises, businesses, income or profits, all trade accounts payable in accordance with usual and customary business terms, and all claims for work, labor or materials, which if unpaid might become a Lien upon any asset of the Company before the same become delinquent, except that (unless and until foreclosure, restraint, sale or other similar proceedings shall have been commenced) no such charge need be paid if being contested in good faith and by appropriate measures promptly initiated and diligently conducted if (a) such reserve or other appropriate provision, if any, as shall be required by sound accounting practice consistent with GAAP shall have been made therefor, and (b) such contest does not have a material adverse effect on the financial condition of the Company or the ability of the Company to pay any Indebtedness and no assets are in imminent danger of forfeiture.

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5.3 Compliance With Laws. The Company will comply, and will cause each of its

Subsidiaries to comply, with all material laws (including, but not limited to, Environmental Laws), rules, regulations, judgments, orders and decrees of any governmental or regulatory authority applicable to its and their respective assets.

5.4 Corporate Existence; Property. The Company will preserve, protect and maintain (a) its corporate existence, and (b) all rights, franchises, accreditations, privileges, and properties, the failure of which to preserve, protect, and maintain might have a material adverse effect on the business, affairs, assets, prospects, operations, employee relations, rights or condition, financial or otherwise, of the Company taken as a whole.

5.5 Maintenance. The Company will maintain and keep its properties in good repair, working order and condition, subject to normal wear and tear, and from time to time make all necessary repairs, renewals and replacements so that its businesses may be properly and advantageously conducted at all times.

5.6 Other Obligations. The Company will comply with all obligations which it incurs pursuant to any contract or agreement, whether oral or written, express or implied, as such obligations become due to the extent to which the failure to so comply could be expected to have a material adverse effect upon the business, affairs, assets, prospects, operations, employee relations, rights or condition, financial or otherwise, of the Company, unless and to the extent that the same are being contested in good faith and by appropriate proceedings and adequate reserves (as determined in accordance with GAAP) have been established on its books with respect thereto.

5.7 No Restrictions. The Company will not enter into or become subject to any agreement or instrument, which by its terms would (under any circumstances) restrict the

Company’s right to perform the provisions of this Agreement or the Related Agreements.

5.8 Public Disclosures. The Company will not disclose the Purchaser’s name or identity as an investor in the Company in any press release or other public announcement or in any document or material filed with any governmental entity, without the prior written consent of the Purchaser and Placement Agent, unless such disclosure is required by applicable law or governmental or Commission regulations or by order of a court of competent jurisdiction.

5.9 No Violation. None of the execution and delivery of this Agreement and any Related Agreements, the consummation of the transactions provided for herein and therein or contemplated hereby and thereby, the fulfillment by the Company of the terms hereof or thereof, will (a) conflict with or result in a breach of any provision of the Articles of Incorporation or By-Laws of the Company, (b) result in a default or breach, give rise to any right of termination, cancellation or acceleration, or require any consent or approval, under any of the terms, conditions or provisions of any material stock, bond, mortgage, indenture, loan, factoring arrangement, license, agreement, lease or other instrument or obligation to which the Company is a party or by which it or any of its respective assets may be bound or (c) to the knowledge of the Company, violate any material law (including, but not limited to, any Environmental Law), judgment, order, writ, injunction, decree, statute, rule or regulation of any court, administrative agency, bureau, board, commission, office, authority, department or other governmental entity applicable to the Company or any of its assets.

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5.10 Use of Proceeds. The Company will use the proceeds from the sale of the Units as specified herein.

5.11 Fees and Expenses.

(a) The Company will bear all of its own expenses in connection with the preparation, execution and negotiation of this Agreement and the Related Agreements, and the transactions contemplated hereby and thereby.

(b) The Company is offering the Units through the Placement Agent, a member of the National Association of Securities Dealers, Inc. (NASD). The Placement Agent will receive a cash commission of 10%, plus a non-accountable expense allowance of 3%, plus 2% due diligence expense allowance of the gross proceeds received in the Offering. In addition, the Placement Agent will receive Common Stock equal to 10% of the number of Shares sold by it in this Offering for consulting services rendered to the Company.

(c) Placement Agent shall also be the warrant agent on transactions involving an exercise of the Warrants and will receive cash commission in the amount of 10% of the amount of said exercise.

(d) It is the Company’s obligation to file appropriate federal and state forms regarding this Offering. 

5.12 Non-Manipulative Practices. Company shall under no circumstances engage

in any activities that could be construed as price manipulation.

ARTICLE VI

DEFINITIONS

6.1 Definitions. In addition to the capitalized terms defined elsewhere in this

Agreement, the following capitalized terms shall have the following meanings when used in this Agreement:

(a) “Common Stock” means the shares of common stock, $.001 par value per share, of the Company.

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(b) “Environmental Laws” means all federal, state and local laws, ordinances and rules of common law relating to environmental, safety, or health matters, including those relating to fines, orders, injunctions, penalties, damages, contribution, cost recovery compensation, losses, or injuries resulting from the release or threatened release of Hazardous Substances and the generation, use, storage, transportation, or disposal of Hazardous Substances in any manner applicable to the Company or its assets, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. §§ 9601 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. §§ 1801 et seq the Resource Conservation and Recovery Act of 1976 (42 U.S.C. §§6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C. §§ 1251 et seq.), the Clean air  Act (42 U.S.C. §§ 7401 et seq.), the Toxic Substances Control Act of 1976 (15 U.S.C. §§ 2601 et seq.), the Safe Drinking Water Act (42 U.S.C. §§ 300f- §§ 300j-11 et seq, the Occupational Safety and Health Act of 1970 (29 U.S.C. §§ 651 et seq.), and the Emergency Planning and Community Right-to-Know Act (42 U.S.C. §§ 11001 et seq.), each as heretofore and hereafter amended or supplemented, and any analogous present or future federal, state, or local statutes, rules, and regulations promulgated thereunder or pursuant thereto, and any other present or future law, ordinance, rule, regulation, permit, order, or directive addressing environmental, safety or health issues, of or by the federal government, any state or political subdivision thereof, or any agency, court, or body of the federal government or any state or political subdivision thereof.

(c) “Execution Documents” means this Agreement and the Subscription Agreement.

(d) “GAAP” means United States generally accepted accounting principles, consistently applied.

 (e) “Indebtedness” of any Person means the principal of, premium, if any, and unpaid interest on (a) indebtedness for borrowed money, (b) indebtedness guaranteed, directly or indirectly, in any manner by such Person, or in effect guaranteed, directly or indirectly, in any manner by such Person through an agreement, contingent or otherwise, to supply funds to, or in any other manner invest in, the debtor, or to purchase indebtedness, or to purchase and pay for property if not delivered or pay for services if not performed, primarily for the purpose of enabling the debtor to make payment of the indebtedness or to assure the owners of the indebtedness against loss, (c) all indebtedness secured by any mortgage, lien, pledge, charge or other encumbrance upon property owned by such Person, even though such Person has not in any manner become liable for the payment of such indebtedness, (d) all indebtedness of such Person created or arising under any conditional sale, lease (intended primarily as a financing device) or other title retention or security agreement with respect to property acquired by such Person even though the rights and remedies of the seller, lessor or lender under such agreement or lease in the event of default may be limited to repossession or sale of such property, and (e) renewals, extensions and refunding of any such indebtedness.

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(f) “Lien” means any mortgage, deed of trust, lien, security interest, pledge, lease, conditional sale contract, claim, charge, easement, right of way, assessment, restriction and other encumbrance of every kind.

(g) “Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or a governmental entity or any department, agency or political subdivision thereof.

(h) “Placement Agent” means Westcap Securities, Inc., an NASD registered broker/dealer.

(i) “Related Agreement” means the Subscription Agreement.

(j) “Securities Act” means the Securities Act of 1933, as amended.

6.2 Rules of Construction. The following provisions shall be applied wherever appropriate herein:

(a) “herein,” ”hereby,” “hereunder,” ”hereof” and other equivalent words shall refer to this Agreement as an entirety and not solely to the particular portion of this Agreement in which any such word is used;

(b) all definitions set forth herein shall be deemed applicable whether the words defined are used herein in the singular or the plural;

(c) wherever used herein, any pronoun or pronouns shall be deemed to include both the singular and plural and to cover all genders;

(d) all accounting terms not specifically defined herein shall be construed in accordance with GAAP;

(e) neither this Agreement nor any other agreement, document or instrument referred to herein or executed and delivered in connection herewith shall be construed against either party as the principal draftsperson hereof or thereof;

(f) all references or citations in this Agreement to statutes or regulations or

statutory or regulatory provisions shall generally be considered citations to such statutes, regulations or provisions as in effect on the date hereof, except that when the context otherwise requires, such references shall be considered citations to such statutes, regulations or provisions as in effect from time to time, including any successor statutes, regulations or provisions directly or indirectly superseding such statutes, regulations or provisions;

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(g) any references herein to a particular Section, Article, Exhibit or Schedule means a Section or Article of, or an Exhibit or Schedule to, this Agreement unless another agreement is specified; and

(h) the Exhibits and Schedules attached hereto are incorporated herein by reference and shall be considered part of this Agreement.

ARTICLE VII

MISCELLANEOUS

7.1 Consent to Amendments; Waivers. The provisions of this Agreement may be amended, and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of a majority in interest of the Purchasers in the Offering, such consent not to be unreasonably withheld, delayed or conditioned.  No other course of dealing between the Company and any Purchaser or any delay in exercising any rights hereunder or under any of the Related Agreements shall operate as a waiver of any rights of any such Purchaser. If the Company pays any consideration to any Person for such consent to any amendment, modification or waiver hereunder or under any of the Related Agreements, the Company shall also pay each Purchaser granting its consent equivalent consideration computed on a pro rata basis. Any waiver, permit, consent or approval of any kind or character on the part of any party of any provisions or conditions of this Agreement or any Related Agreement must be made in writing and shall be effective only to the extent specifically set forth in such writing.

7.2 Representations and Warranties: Indemnification.

(a) All representations and warranties contained herein or in any Related Agreement or made in writing by any party in connection herewith or therewith will survive the execution and delivery of this Agreement and any investigation made at any time by or on behalf of the Purchasers.

(b) The Company will defend, indemnify and hold the Purchasers harmless from and against any and all actions, suits, losses, damages, liabilities, claims, obligations and expenses (including, but not limited to, legal fees and court costs) (“Losses”), whether or not resulting from judgments or arbitration awards, that shall be suffered or incurred by such Purchasers resulting from or arising out of any breach of any of the representations, warranties or covenants of the Company contained in this Agreement or in any Related Agreement or in any schedule, certificate, exhibit or other instrument furnished or to be furnished by the Company hereunder or thereunder.

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(c) Each Purchaser will, jointly and severally, defend, indemnify and hold the Company harmless from and against any and all losses, whether or not resulting from judgment or arbitration awards, that shall be suffered or incurred by the Company resulting from or arising out of any breach of any of the representations, warranties or covenants of the Purchasers contained in this Agreement or in any Related Agreement or in any schedule, certificate, exhibit or other instrument furnished or to be furnished by the Purchasers hereunder or thereunder.

7.3 Successors and Assigns. Except as otherwise expressly provided herein, all covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto will bind and inure to the benefit of the respective successors and assigns of the parties hereto, whether so expressed or not, provided, however, that neither party shall assign (by operation of law or otherwise) this Agreement or any part hereof or any obligation hereunder without the prior written consent of the Company or the Purchaser. In addition, and whether or not any express assignment has been made, the provisions of this Agreement which are for the benefit of the Purchasers are also for the benefit of, and enforceable by, any subsequent holders of all or any part of the Units. The Units may not be transferred unless such transfer is registered under the Securities Act or unless an exemption from such registration is available, which exemption shall be established either by an opinion of counsel delivered by the holder of the Units being transferred or by other customary means.

7.4 Descriptive Headings. The descriptive headings of this Agreement are inserted for convenience of reference only and do not constitute a part of and shall not be utilized in interpreting this Agreement.

7.5 Notices. Any notices required or permitted to be sent hereunder shall be delivered personally or mailed, by certified mail, return receipt requested, or delivered by overnight courier service to the following addresses, or such other address as any party hereto designates by written notice to the Company, and shall be deemed to have been given upon delivery, if delivered personally, five days after mailing, if mailed, or one business day after delivery to the courier, if delivered by overnight courier service.

If to the Company, to:

US Farms Inc.

1635 Rosecrans Street. Suite D

San Diego, Ca 92106

Attn: Yan Skwara – President / Chairman

If to the Purchasers, to the addresses specified on the signature page attached hereto.

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7.6 Governing Law. This Agreement and the rights and duties of the parties hereto shall be governed by the laws of the State of California (without regard to principles of conflicts of law).

7.7 Execution in Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, and such counterparts together shall constitute one instrument.

7.8 Consent to Jurisdiction. The Company and the Purchasers hereby irrevocably agree that any suit, action, proceeding or claim against it arising out of or in any way relating to this agreement or any of the related agreements, or any judgment entered by any court in respect thereof, may be brought or enforced in the state or federal courts located in Orange County, CA and hereby irrevocably waives, to the fullest extent permitted by law, any objection which they may now or hereafter have to the venue of any proceeding brought in Orange County, CA and further irrevocably waives any claims that any such proceeding has been brought in an inconvenient forum.

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SECURITIES PURCHASE AGREEMENT - SIGNATURE PAGE

The parties hereto have executed this Securities Purchase Agreement as of the date set

forth below.

COMPANY:

US FARMS INC.

By:_______________________________

Its:_______________________________

Date:_____________________________

PURCHASER/PURCHASERS:

Signature___________________________   Signature ___________________________

Print Name_________________________

Print Name __________________________

Soc. Sec. No________________________

Soc. Sec. No _________________________

Date: ______________________________   Date: ______________________________

Footnotes

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

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