Document:

employmentagreement2.htm

  

  

  

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement is entered into as of the 1st day of November, 2010, between

 

Xnergy, Inc., a California corporation with its principal offices located in Carlsbad, California

 

(“Xnergy” or the “Company”), and Joey Catalano (“Employee”).

 

In consideration of the mutual covenants contained in this Agreement, the Company and

 

Employee agree as follows:

 

1. Employment.

 

During the term of this Agreement, as defined in Sections 2 and 4 of this Agreement, the

 

Company shall employ Employee, and Employee hereby accepts such employment by the

 

Company, in accordance with the terms and conditions set forth in this Employment Agreement.

 

(a) Position and Duties. Employee shall serve as Vice President and Chief Operating

 

Officer (COO) of the Company. Employee shall perform all duties, services and

 

responsibilities and have such authority and powers for and on behalf of, the Company as

 

are customary and appropriate for such positions and as are established from time to time

 

by, or in accordance with procedures established by, the Company’s Board of Directors.

 

Employee shall report to the Chief Executive Officer of the Company

 

(b) Performance. Employee shall perform the duties called for under this Agreement

 

to the best of his ability and shall devote all of his business time, energies, efforts and

 

skill to such duties during the term of his employment. Employee shall be based at, and

 

be expected to perform his duties at, the Company offices in San Diego and at other

 

geographic locations as required, and shall include reasonable travel incidental to the

 

performance of his duties under this Employment Agreement.

 

c) Additional Duties. The Company agrees that within eighteen (18) months of the date of

 

Closing of the acquisition of all of the issued and outstanding stock of the Company by

 

Healthcare of Today, Inc., ownership of the outstanding stock of Xnergy will be transferred to

 

Alternative Energy Partners, Inc. (“AEGY”) and Xnergy will become a wholly-owned subsidiary

 

of AEGY. The parties acknowledge that their intent is that, in addition to his duties hereunder to

 

the Company which shall continue, Employee shall be appointed to the Board of Directors of

 

AEGY and as its Vice President and COO, and shall be compensated as described in Addendum

 

A of this Agreement for serving in those positions, reporting to the Chief Executive Officer of

 

AEGY. The Board of Directors of the Company shall be made up of five members, one of

 

whom shall be Employee at all times during his employment by the Company under this

 

Agreement, one of whom shall be Jason Davis at all times during his employment by the

 

Company under a similar employment agreement with the Company, two of whom shall be

 

appointed at all times by Healthcare of Today, Inc. and the fifth of whom shall be nominated and

 

appointed by the other four members and shall serve as the Chairman of the Board of Directors.

 

2. Term.

 

Subject to Section 4 of this Agreement, the term of Employee’s employment under this

 

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Agreement shall begin on the date of the Closing of the acquisition of all of the issued and

 

outstanding stock of the Company by Healthcare of Today, Inc. (“Healthcare”), pursuant to the

 

Acquisition Agreement between the Company, its shareholders and Healthcare dated September

 

30, 2010, and shall continue for an initial term of twenty-four (24) months and shall be renewed

 

annually thereafter for successive 12 month terms, unless modified, amended or terminated by

 

the parties as provided herein.

 

3. Compensation, Expenses and Benefits.

 

As full compensation for Employee’s performance of his duties pursuant to this Agreement, the

 

Company shall pay Employee during the term of this Agreement, and Employee shall accept as

 

full payment for such performance, the following aggregate amounts and benefits:

 

(a) Salary. As salary for Employee’s services to be rendered under this Agreement, the

 

Company shall pay Employee an aggregate salary, payable monthly in arrears, based on the

 

following schedule:

 

$140,000 per year, payable every two weeks to coincide with Xnergy's current payroll

 

system and third party Direct Deposit for the preceding two weeks.

 

(b) Bonus. The Company may pay Employee a bonus, in such amount and at such time

 

as shall be determined by the Company’s Board of Directors or its Compensation Committee and

 

any bonus to which Employee may be entitled to under any Executive Officer Bonus Plan now

 

or hereafter in effect. The Board of Directors of the Company or the Compensation Committee

 

shall review Employee’s salary and bonus at least once a year to determine the amount, if any, of

 

Employee’s salary increase and discretionary bonus.

 

(c) Business Expenses. The Company shall pay or reimburse Employee for all

 

reasonable, ordinary and necessary travel expenses including airfare, car rental and lodging,

 

cellular phone, Internet access, entertainment, meals, and other out-of-pocket expenses incurred

 

by Employee in connection with the Company’ businesses, for which Employee submits

 

appropriate receipts and which are consistent with Company policy or have been authorized by

 

the Company’ Boards of Directors.

 

(d) Benefits. Employee shall be eligible to participate in all fringe benefits that he is

 

currently enjoying as an employee of the Company, including but without limitation the

 

following: major medical and dental insurance, life insurance, any 401(k) plan, retirement plans

 

and other employee benefit plans, applicable to other similar employees of the Company, when

 

and if adopted and made available during the term of this Agreement to employees with similar

 

periods of service, subject to any eligibility or other requirements for participating in such fringe

 

benefits and to the actual existence of the respective plans.

 

(e) Options and Stock Benefits. In addition to the compensation otherwise provided for

 

herein, Employee shall be entitled to receive the stock options and stock benefits described in

 

Addendum A.

 

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(f) Indemnification; Directors and Officers Insurance. The Company shall, to the fullest

 

extent authorized or permitted by applicable state law, defend, indemnify and hold Employee, his

 

heirs, executors, administrators and other legal representatives, harmless from and against any

 

and all claims, suits, debts, causes of action, proceedings or other actions, at law or in equity,

 

including costs and reasonable attorney fees which any person or entity may have had, now has

 

or may in the future have with respect to Employee’s service to the Company as an officer,

 

employee or agent thereof. This provision shall survive the termination of this agreement.

 

(g) Vacation. Employee is eligible for vacation in accordance with existing Company

 

policy which is that after five (5) years of service an employee receives fifteen (15) days of paid

 

vacation time each calendar year. Only one week of vacation may be accrued or carried over

 

from one calendar year to another, with a maximum of twenty (20) days of paid vacation being

 

allowed to be accrued at any one time over one calendar year.

 

4. Termination.

 

(a) Death. Employee’s employment under this Employment Agreement shall terminate

 

immediately upon Employee’s death.

 

(b) Disability. Employee’s employment under this Employment Agreement shall terminate at the

 

Company’s option, immediately upon notice to Employee given after Employee’s “total

 

disability”, but no earlier than the later of (i) the day after six (6) consecutive months during

 

which Employee suffers from a “total disability” and (ii) the day that Employee is eligible to

 

begin receiving disability benefits under the insurance policy or its equivalent provided in

 

Section 3 of this Agreement, assuming such condition continues, all, if permitted by such

 

insurance policy or its equivalent, as determined by a doctor chosen by the Company and a

 

doctor chosen by Employee, if necessary, a doctor mutually chosen by such doctors. Employee

 

shall continue to receive compensation pursuant to Section 3 during the period prior to the

 

termination of Employee’s employment pursuant to this Section 4 (b), less any disability benefits

 

Employee receives pursuant to the insurance policy or its equivalent provided by Section 3 with

 

respect to such period. There shall be no deduction for disability benefits received by Employee

 

if Employee pays the premiums on such disability insurance policy.

 

(c) With Cause - Employer. The Company shall have the right, upon written notice to

 

Employee, to terminate Employee’s employment under this Employment Agreement for “cause”.

 

Such termination shall be effective immediately upon Employee’s receipt of such written notice.

 

“Cause” means only the following: a) breach by Employee of any Confidentiality Agreement by

 

and between Employee and the Company, but only if such breach has a material adverse effect

 

on the Company, b) failure to perform his duties under this Employment Agreement, c) gross

 

neglect, gross abuse of office amounting to fraud or (d) any conviction of a felony provided that

 

failure to perform his duties under this Employment Agreement gross neglect, and gross abuse of

 

office amounting to breach of trust shall constitute “cause” only if Employee fails to correct or

 

fails to terminate such actions to the satisfaction of the Board of Directors of the Company, with

 

Employee not participating in any discussions or vote thereon within thirty (30) days after

 

written notice of such “cause” from the Company to the Employee.

 

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(d) Without Cause - Company. The Company shall have the right, upon written notice to the

 

Employee, to terminate Employee’s employment under this Employment Agreement without

 

“cause”. Such termination shall be effective thirty days after the receipt of such notice.

 

(e) Without Cause – Employee. The Employee shall have the right, upon written notice to the

 

Company, to terminate Employee’s employment under this employment Agreement without

 

“cause”.

 

5. Effects of Termination.

 

(a) If Employee’s employment under this Employment Agreement is terminated

 

pursuant to Sections 4 (a), 4(b), or 4 (c) or if Employee resigns pursuant to Section 4 (e), the

 

Company’s obligations under this Employment Agreement, including obligations under Section

 

3, shall end except for the Company’s obligations to: (i) reimburse Employee (or his estate) for

 

all out of pocket expenses incurred and unpaid pursuant to Section 3 of this Agreement and all

 

accrued and unpaid vacation leave and other benefits actually due pursuant to Section 3 through

 

the date of termination; and (ii) pay to Employee all salary and bonus compensation pursuant to

 

Section 3 through the effective date of termination.

 

(b) Notwithstanding anything to the contrary in this Employment Agreement or any

 

other agreement between the parties, if Employee’s employment is terminated pursuant to

 

Section 4 (d), in addition to providing the benefits described in Section 5 (a):

 

(i) The Company shall pay and/or provide to Employee all

 

compensation, expenses, rights and benefits provided under Section 3 hereof, as if

 

termination by the Company pursuant to Section 4 (d) had not occurred and which

 

shall continue for a period of the duration of the term of this AgreementEmployee

 

shall not be bound by the terms of Sections 6 and 7 of this Agreement after two

 

years from the termination date;

 

(ii) Employee shall be fully vested in all stock options provided to him

 

by the Company.

 

(iii) All payments due and not paid for the acquisition of Company

 

become due upon date of termination;

 

(c) In the event Employee terminates Employee’s employment pursuant to Section 4(e)

 

of this Agreement, employee shall forfeit any and all outstanding and unpaid

 

consideration then due to employee pursuant to any Merger Agreement or Acquisition

 

Agreement entered into by and between Employee and employer or any parent

 

company of employer.

 

6. Solicitation of Employees and Consultants.

 

(a) Provided that the Company is not in default under this Employment Agreement,

 

including but not limited to Section 3 of this Agreement, then upon termination of Employee’s

 

employment with the Company under this Agreement, with cause by the Company or without

 

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cause by the Employee, then Employee shall not, for a period of two (2) years following the date

 

of such termination:

 

(i) Solicit or attempt to hire any person who is then employed by the

 

Company or its subsidiaries or who, to Employee’s knowledge, was employed by

 

the Company or its subsidiaries at any time during the year before the termination

 

of Employee’s employment with the Company under this Agreement; or

 

(ii) Encourage any such person to terminate his employment

 

with the Company or its subsidiaries.

 

7. Covenant Not to Compete.

 

Provided that the Company is not in default under this Employment Agreement, including but

 

not limited to Section 3 of this Agreement, then upon termination of Employee’s employment

 

with the Company under this Agreement with cause by the Company or without cause by the

 

Employee, for a period of three (3) years following the date of such termination, Employee shall

 

not:

 

(a), within a one hundred (100) mile radius of any customer of Company whose

 

principal place of business is located in California, Nevada or Arizona at the time of

 

such termination, directly or indirectly, himself, or through or for an individual, person

 

or entity wherever located engage in the business of marketing, selling or distributing

 

any product or service which the Company was then marketing, selling or distributing

 

at the time of such termination; or

 

(b) contact, solicit or otherwise do business with any customer of Company at the time

 

of such termination; provided, that Employee may own, for investment purposes only,

 

up to 3% of the stock of any publicly traded business or fund engaged in the business of

 

marketing, selling or distributing any product or service which the Company was then

 

marketing, selling or distributing at the time of such termination, whose stock is either

 

listed on a national stock exchange or on The NASDAQ National Market (if Employee

 

is not otherwise affiliated with such business).

 

8. Return of Documents.

 

Upon termination of Employee's employment with the Company for any reason, all documents,

 

procedural manuals, guides, specifications, plans, drawings, designs and similar materials,

 

diaries, records, customer lists, notebooks, and similar repositories of or containing confidential

 

information, including all copies thereof, then in Employee’s possession or control, whether

 

prepared by Employee or others, shall be left with, or forthwith returned by Employee to, the

 

Company.

 

9. Company’ Remedies.

 

Employee acknowledges and agrees that the covenants and undertakings contained in Sections

 

1(b), 6, 7 and 8 of this Agreement relate to matters which are of a special, unique and

 

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extraordinary character and that a violation of any of the terms of such Sections will cause

 

irreparable injury to the Company, the amount of which will be difficult, if not impossible, to

 

estimate or determine and which cannot be adequately compensated. Therefore, Employee

 

agrees that the Company, in addition to any other available remedies under applicable law and

 

subject to Paragraph 17 of this Agreement, shall be entitled, as a matter of course, to an

 

injunction, restraining order or other equitable relief from any court of competent jurisdiction,

 

restraining any violation or threatened violation of any such terms by Employee and such other

 

persons as the court shall order, but only after Employee shall be given at least five (5) days

 

written notice of Company's request for such equitable relief and an opportunity to present his

 

position to the Court of competent jurisdiction located in San Diego County, California.

 

10. Employee’s Remedies.

 

Employee’s remedy against the Company for breach of this Agreement and/or wrongful

 

termination of his employment is the collection of any compensation due him as provided in

 

Sections 3 and 5 and such other remedies as are available to Employee under law or in equity,

 

subject to Paragraph 17 of this Agreement.

 

11. Assignment.

 

The Company shall not be required to make any payment under this Agreement to any assignee

 

or creditor of Employee, other than to Employee's legal representative or his estate on death or

 

disability. Employee’s obligations under this Agreement are personal and may not be assigned,

 

delegated or transferred in any manner and any attempt to do so shall be void. Employee, or his

 

legal representative, shall have no rights by way of anticipation or otherwise to assign or

 

otherwise dispose of any right of Employee under this Agreement. The Company may not assign

 

this Agreement without Employee’s consent. This Agreement shall be binding upon, and shall

 

inure to the benefit of, the Company, Employee and their permitted successors and assigns.

 

12. Company’ Obligations Unfunded.

 

Except for any benefits under any benefit plan of the Company that are required by law or by

 

express agreement to be funded, it is understood that the Company’ obligations under this

 

Agreement are not funded, and it is agreed that the Company shall not be required to set aside or

 

escrow any monies in advance of the due date of the payment of such monies to Employee.

 

13. Notices.

 

(a) To Employee. Any notice to be given under this Agreement by the Company to Employee

 

shall be deemed to be given if delivered to Employee in person or three business days after

 

mailed to him by certified or registered mail, postage prepaid, return receipt requested, to:

 

Joey Patalano

 

6759 Mineral Drive

 

San Diego, CA 92119

 

or at such other address as Employee shall have advised the Company in writing.

 

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(b) To the Company. Any notice to be given by Employee to the Company shall be deemed to be

 

given three business days after mailed by certified or registered mail, postage prepaid, return

 

receipt requested, to:

 

Xnergy, Inc.

 

2721 Loker Avenue West

 

Carlsbad, CA 92010

 

With a copy to:

 

Healthcare of Today, Inc.

 

1365 N. Courtenay Parkway, Suite A

 

Merritt Island, FL 32953

 

Attention: Robert Hipple, General Counsel

 

or at such other address as the Company shall have advised Employee in writing.

 

14. Amendments.

 

This Agreement shall not be amended, in whole or in part, except by an agreement in writing signed

 

by the Company and Employee.

 

15. Entire Agreement.

 

This Agreement constitutes the entire agreement between the parties with respect to the subject

 

matter of this Agreement and all prior agreements or understandings, oral or written, are merged in

 

this Agreement and are of no further force or effect. The parties acknowledge that they are not

 

relying on any representations, express or implied, oral or written, (relating to any aspect of

 

Employee's current or future employment or otherwise), except for those stated in this Agreement.

 

Employee further acknowledges that his sole rights and remedies with respect to any aspect of his

 

employment or termination of his employment are provided for in this Agreement.

 

16. Captions.

 

The captions of this Agreement are included for convenience only and shall not affect the

 

construction of any provision of this Agreement.

 

17. Arbitration .

 

The Parties agree that all questions or matters in dispute with respect to this Agreement shall be

 

submitted to arbitration on the following terms:

 

(a) It shall be a condition precedent to the right of any party to submit any matter to arbitration

 

pursuant to the provisions hereof, that any party intending to refer any matter to arbitration shall

 

have given not less than five business days’ prior written notice of its intention to do so to the

 

other party together with particulars of the matter in dispute. On the expiration of such five

 

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business days the party who gave such notice may proceed to refer the dispute to arbitration as

 

provided for below.

 

(b) The party desiring arbitration shall appoint one arbitrator, and shall notify the other party of

 

such appointment, and the other party shall, within five business days after receiving such notice,

 

appoint an arbitrator, and the two arbitrators so named, before proceeding to act, shall, within

 

five business days of the appointment of the last appointed arbitrator, unanimously agree on the

 

appointment of a third arbitrator, to act with them and be chairman of the arbitration herein

 

provided for (and if both Parties agree in writing to drop their respective arbitrators then the

 

"chairman" shall serve as the sole arbitrator). If the other party shall fail to appoint an arbitrator

 

within five business days after receiving actual notice of the appointment of the first arbitrator,

 

then the proceeding may continue with only one arbitrator so appointed, and if the two arbitrators

 

appointed by the parties shall be unable to agree on the appointment of the chairman, the

 

chairman shall be appointed in accordance with the rules for commercial arbitration of the

 

American Arbitration Association. Except as specifically otherwise provided in this section, the

 

arbitration herein provided for shall be conducted in accordance with the rules for commercial

 

arbitration of the American Arbitration Association and shall be conducted in either San Diego

 

or Orange Counties in the State of California. The chairman, or in the case where only one

 

arbitrator is appointed, the single arbitrator, shall fix a time and place for the purpose of hearing

 

the evidence and representations of the parties, and he shall preside over the arbitration and

 

determine all questions of procedure not provided for by the rules for commercial arbitration of

 

the American Arbitration Association, or this section.

 

After hearing any evidence and representations that the parties may submit, the single arbitrator,

 

or the arbitrators, as the case may be, shall make an award and reduce the same to writing, and

 

deliver one copy thereof to each of the parties.

 

(c) The Parties agree that the award of a majority of the arbitrators, or in the case of a single

 

arbitrator, of such arbitrator, shall be final and binding upon each of them, and there shall be no

 

appeal from such award. Any such award may be filed thereafter in any court of competent

 

jurisdiction in order to enforce the said award, and shall have the same force and effect as a

 

judgment in favor of the party in his favor the award was entered and against the other party to

 

the arbitration.

 

(d) Any award in the arbitration shall be limited to actual contractual damages, and there shall be

 

no award of consequential or punitive damages. Each party expressly waives and disclaims the

 

right to a jury trial relating to or arising out of this Agreement and expressly accepts the

 

arbitration procedure set forth herein as the sole means of resolving any disputes or

 

disagreements. The parties agree that the Arbitrator shall award the substantially prevailing

 

party his/its reasonable attorney's fees and costs incurred in the subject dispute, together with any

 

costs incurred (including any expert witness fees).

 

18. Severability.

 

All provisions, agreements, and covenants contained in this Agreement are severable, and in the

 

event any of them shall be held to be illegal, void or invalid by any competent court or under any

 

applicable law, such provision shall be changed to the extent reasonably necessary to make the

 

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provision, as so changed, legal, valid and binding. If any provision of this Agreement is held illegal,

 

void or invalid in its entirety, the remaining provisions of this Agreement shall not in any way be

 

affected or impaired, but shall remain binding in accordance with their terms.

 

19. No Waiver.

 

No waiver of any provision of this Agreement shall be valid unless in writing and signed by the

 

party against whom enforcement of the waiver is sought. The waiver by either party of any breach

 

of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent

 

breach.

 

20. Consultation with Counsel.

 

Employee acknowledges that he has been given the opportunity to consult with his personal legal

 

counsel concerning all aspects of this Agreement and the Company have urged Employee to so

 

consult with such counsel.

 

21. Conflicts.

 

Employee represents and warrants that his execution, delivery and performance of this Agreement

 

will not (i) constitute a breach or violation of any agreement or arrangement to which he is a

 

party or by which the is bound; (ii) constitute a violation of any order, judgment or decree to

 

which he is a party; or (iii) require the consent of any third party.

 

IN WITNESS WHEREOF, the Company and Employee have duly executed this Agreement as of

 

the date and year first above written.

 

Xnergy, Inc.

 

Company

 

By:

 

Its: _________________________________

 

Joey Catalano

 

Employee

 

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ADDENDUM A – PERFORMANCE-BASED COMPENSATION

 

A. AEGY STOCK OPTION GRANT. Subject to the terms and conditions listed herein, and

 

upon Healthcare transferring its ownership of the Company to AEGY and Employee becoming a

 

member of the Board of Directors and the President and COO of AEGY, AEGY shall issue stock

 

options to Employee annually for the calendar years 2011, 2012, 2013, 2014, and 2015, to

 

purchase common shares of AEGY stock (the “AEGY Stock Options”), up to an aggregate value

 

of $101,995 each calendar year, at an exercise price of US$0.001 per share under a stock option

 

plan to be adopted and approved by AEGY (the “Plan”).

 

AEGY’s Board of Directors, or an independent compensation committee appointed by its Board

 

of Directors, shall determine the performance result criteria upon which the Stock Options shall

 

be granted, vest, and become exercisable under the Plan. In the event the conditions set forth by

 

the Board of Directors, or an independent compensation committee appointed by the Board of

 

Directors, are met, the Company shall issue the AEGY Stock Options upon completion, in form

 

satisfactory to AEGY, of the conditions to the grant of the Options

 

B. CONDITIONAL STOCK GRANT. In the event the 2010 annual audited consolidated

 

earnings before income tax (“EBIT”) of Xnergy and ecoLegacy is not less than US $3.5 million,

 

based on generally accepted accounting principles consistently applied and in form required by

 

Regulation S-X issued under the Securities and Exchange Act of 1934, Healthcare of Today, Inc.

 

shall issue to Sellers $11,219 restricted, unregistered common shares of Healthcare of Today,

 

Inc. (“Healthcare”) stock (“Healthcare Performance Shares”), as valued in Section 2.1 of that

 

certain Acquisition Agreement executed by and between Xnergy and Healthcare on the 30th day

 

of September, 2010. In the event the conditions set forth herein are met, the Healthcare

 

Performance Shares shall be issued to Sellers either as free trading shares or subject to a piggy-

 

back registration requirement in the event HOTI is not then trading publicly, if the 2010 annual

 

audited consolidated earnings before income tax (EBIT) of the Company and ecoLegacy are

 

equal to or greater than $3.5 million, based on generally accepted accounting principles

 

consistently applied. The Performance Shares shall be issued, if earned, on completion of the

 

audit of the Company and ecoLegacy for the calendar year ended December 31, 2010, but no

 

later than April 30, 2011.

 

EBIT shall be exclusive of any parent or affiliate company prorata burden and/or SG&A fees

 

taxed against the company’s income and of any income, net revenues or other operations of any

 

subsequent acquisition of AEGY, Xnergy or ecoLegacy .

 

C. HEALTHCARE CONDITIONAL STOCK OPTION GRANT. Healthcare shall issue to

 

Employee options to purchase up to 407,980 common shares of Healthcare stock (the

 

“Healthcare Stock Options”) to be issued at Closing and at an exercise price of US$1.00 per

 

share and vesting and exercisable annually based on the annual consolidated EBIT of the

 

Company and ecoLegacy commencing for the calendar years 2011 through 2015, as follows:

 

Consolidated EBIT Options Vesting and

 

(no less than): Exercisable Each Year

 

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$ 3,500,000 50,998

 

$ 4,200,000 61,197

 

$ 5,040,000 81,596

 

$ 6,048,000 101,995

 

$ 7,260,000 122,394

 

$ 8,712,000 142,793

 

Annual Minimum Vesting. Stock Options equaling not less than 50,998 shares, valued at US

 

$1.00 shall vest and become exercisable for each of the calendar years 2011, 2012, 2013 and

 

2014, provided that annual consolidated EBIT of Xnergy and ecoLegacy, as defined in Section

 

1.4 of the Acquisition Agreement, is not less than US$3,500,000 in any year. Any and all Stock

 

Options not vested and exercised before December 31, 2017 shall expire.

 

EBIT shall be exclusive of any parent or affiliate company prorata burden and/or SG&A fees

 

taxed against the company’s income and of any income, net revenues or other operations of any

 

subsequent acquisition of AEGY, Xnergy or ecoLegacy

 

-11ex10-1.htm

Exhibit 10.1

Augme Technologies, Inc.

THE PRIVATE PLACEMENT OF

UP TO $2,000,000 OF

AUGME TECHNOLOGIES, INC.

CONSISTING

OF

COMMON STOCK

AND

WARRANTS TO PURCHASE SHARES OF COMMON STOCK

SUBSCRIPTION BOOKLET

No.____________________

Name _________________

 

 

  

  

  

SUBSCRIPTION INSTRUCTIONS

(Please Read Carefully)

 

THE COMPANY RESERVES THE RIGHT TO REJECT ANY SUBSCRIPTION, IN WHOLE OR IN PART, OR TO ALLOT TO ANY PROSPECTIVE PURCHASER FEWER THAN THE NUMBER OF UNITS SUBSCRIBED FOR BY SUCH PURCHASER. ANY REPRESENTATION TO THE CONTRARY IS UNAUTHORIZED AND MUST NOT BE RELIED UPON.

 

	
1.

	
This Subscription Booklet contains all of the materials necessary for you to purchase the Securities.  Each Subscription Booklet contains:

 

(1)          an appropriate Questionnaire (Corporation, Partnership or Individual) designed to enable you to demonstrate that you meet the minimum legal requirements under Federal and State securities laws to purchase the Securities; and

 

(2)          a Signature Page for the appropriate Questionnaire and the Subscription Agreement containing representations relating to your subscription.

 

	
2.

	
After reading the Subscription Agreement, please fill in all applicable information. You must complete and sign ALL of the documents.

 

This includes: (1) initialing and signing the applicable Questionnaire; and (2) signing the Signature Page.

 

	
3.

	
Payment for the Units must be made by (i) check payable to “Augme Technologies, Inc.,” forwarded together with the completed subscription documents to Augme Technologies, Inc. at the address set forth below or (ii) by wire transfer pursuant to the following wire instructions:

 

Bank:  Harris Bank        

Account Name: Augme Technologies, Inc.

ABA Routing No:  122105249

Account No.:   3100079784

	
4.

	
Send all completed documents, together with the requisite payment (if payment is made by check), to Augme Technologies, Inc. at the following address:

 

Augme Technologies, Inc.

43 W 24th Street, 11th Floor

New York, NY 10010

Attn: Paul R. Arena

Checks Payable to: Augme Technologies, Inc.

  

  

  

PLEASE PRINT IN INK OR TYPE ALL INFORMATION. FAILURE TO COMPLY WITH THE ABOVE INSTRUCTIONS WILL CONSTITUTE AN INVALID SUBSCRIPTION, WHICH, IF NOT CORRECTED, WILL RESULT IN THE REJECTION OF YOUR SUBSCRIPTION REQUEST. EVEN IF CORRECTED, THE DELAY MAY RESULT IN (1) THE ACCEPTANCE OF PURCHASERS WHOSE SUBSCRIPTION BOOKLETS WERE INITIALLY RECEIVED BY THE COMPANY AFTER YOURS OR (2) THE OFFERING BEING CLOSED WITHOUT YOUR SUBSCRIPTION REQUEST BEING CONSIDERED BY THE COMPANY.

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 SAID ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.  SUBSCRIBERS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. 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 MEMORANDUM.  ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

  

  

Augme Technologies, Inc.

 

SUBSCRIPTION AGREEMENT

Augme Technologies, Inc.

43 W 24th Street, 11th Floor

New York, NY 10010

Ladies and Gentlemen:

 

1.           Subscription and Description of Securities.  The undersigned (the “Subscriber”), subject to the terms and conditions described in this Subscription Agreement (this “Subscription Agreement”), hereby irrevocably subscribes for and agrees to purchase from Augme Technologies, Inc., a Delaware corporation (“Augme” or the “Company”), a number of Common Shares of the Company’s securities (the “Units” or “Securities”), indicated on the signature page hereof, at a price of $2.00 per share, and hereby tenders this Subscription Agreement, together with a check or wire transfer in the full amount of the purchase price of the Common Stock and Warrants being subscribed for hereby payable to the Company.

 

For $2,000,000, the investors shall receive 1,000,000 shares of Augme’s Common Stock, $.0001 par value per share (the “Common Stock”) and warrants to purchase up to 500,000 shares of Common Stock exercisable over a 3-year period, at an exercise price per share equal to (i) $2.50 from the date of issuance of the Warrant (the “Issue Date”) until the date which is thirty-six months thereafter.

The Subscriber agrees that this subscription shall be irrevocable and shall survive the death or disability of the Subscriber.  The Subscriber understands that if this subscription is not accepted, in whole or in part, or the offering is terminated pursuant to its terms or by the Company, all unaccepted funds will be returned by the Company to the Subscriber, without interest, penalty, expense or deduction.

 

IN MAKING AN INVESTMENT DECISION A SUBSCRIBER MUST RELY ON SUCH SUBSCRIBER’S OWN EXAMINATION OF THE COMPANY, INCLUDING, BUT NOT LIMITED TO, ITS RECENT ORGANIZATION, ABSENCE OF OPERATING HISTORY, PROPOSED BUSINESS, PROSPECTS, MANAGEMENT, LACK OF FINANCIAL RESOURCES AS WELL AS THE TERMS OF THE OFFERING.  THE SECURITIES ARE SPECULATIVE IN NATURE AND THE PURCHASE OF ANY OF THE SECURITIES INVOLVES A HIGH DEGREE OF RISK.  THE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY.  FURTHERMORE, NONE OF THE FOREGOING AUTHORITIES HAS CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF ANY INFORMATION FURNISHED BY THE COMPANY.  ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

 

2.           Acceptance of Subscription.  The Subscriber acknowledges and agrees that the Company has the right to accept or reject this subscription, in whole or in part, in its sole and absolute discretion, notwithstanding prior receipt by the undersigned of notice of acceptance of this subscription, and that this subscription shall be deemed to be accepted by the Company only when it is signed on its behalf by an authorized officer of the Company and a fully executed copy thereof is delivered to the Subscriber.  This Subscription Agreement either will be accepted or rejected, in whole or in part, as promptly as practicable after receipt.  Upon rejection of the subscription hereunder in whole for any reason, all items received with this Subscription Agreement shall be returned to the Subscriber without deduction for any fee, commission or expense, and without accrued interest with respect to any money received, and this Subscription Agreement shall be deemed to be null and void and of no further force or effect.  If the subscription hereunder is rejected in part for any reason, the funds for such rejected portion of this subscription will be returned by the Company to the Subscriber without deduction for any fee, commission or expense, and without accrued interest with respect to such returned funds, and this Subscription Agreement shall continue in force and effect to the extent the subscription hereunder was accepted.

  

  

  

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

 

3.1           Subscriber Information.

 

(a)           “Accredited Investor”.  The Subscriber has completed accurately the Subscriber Questionnaire attached hereto as Annex A and meets the requirements of at least one of the suitability standards for an “accredited investor” as defined therein.

 

(b)           Liquidity.  The Subscriber has adequate means of providing for the Subscriber’s current needs and personal contingencies and has no need, and has no reason to anticipate any need, for liquidity in this investment.

 

(c)           Financially Experienced.  The Subscriber has sufficient knowledge and experience in financial and business matters so as to enable the Subscriber to utilize the information made available to the Subscriber in connection with the offering of the Securities to evaluate the merits and risks of an investment in the Company, or the Subscriber has employed the services of an investment advisor, attorney or accountant to read any documents and this Subscription Agreement made available to the Subscriber by the Company in connection with the offering of the Securities (the “Offering Documents”) and any other documents furnished or made available by the Company to the Subscriber concerning the investment in the Company and to evaluate the merits and risks of such an investment on the Subscriber’s behalf.

 

(d)           Capacity. The Subscriber: (i) if a natural person, represents that the Subscriber is at least 21 years of age 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, association, joint stock company, trust, unincorporated organization or other entity, represents that such entity was not formed for the specific purpose of acquiring the Securities, such entity is validly existing under the laws of the state of its organization, 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, 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, this Subscription Agreement has been duly authorized by all necessary action, 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, represents that it 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, or other entity for whom the undersigned is executing this Subscription Agreement, and such individual, ward, partnership, trust, estate, corporation, or other entity has full right and power to perform pursuant to this Subscription Agreement and make an investment in the Company, and that this Subscription Agreement constitutes a legal, valid and binding obligation of such entity.

 

  

  

  

3.2           Nature of Investment.

 

(a)           Examination of Materials.  The Subscriber has examined the Offering Documents.

 

(b)           No SEC Registration.  The Subscriber has been advised that this offering has not been registered with, or reviewed by, the Securities and Exchange Commission (“SEC”) because this offering is intended to be a non-public offering pursuant to Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”) and Rule 506 of Regulation D promulgated thereunder.

 

(c)           Restrictions on Transfer.  The Subscriber understands and agrees that the sale, pledge, hypothecation or transfer (for the purposes of this Subscription Agreement, collectively, “transfer”) of the Securities is subject to the provisions of the Securities Act restricting transfers, unless they are registered under the Securities Act and applicable state securities laws or are exempt from the registration requirement thereof.  Legends shall be placed on the Securities to the effect that they have not been registered under the Securities Act or applicable state securities laws and appropriate notations thereof will be made in the Company’s stock books.

 

(d)           Investment Intention.  The Subscriber’s investment in the Securities is being purchased for the Subscriber’s own account, for investment purposes only and not with a view of distribution or resale to others.

 

(e)           No State Review.  The Subscriber understands that no securities administrator of any state has made any finding or determination relating to the fairness of this offering and that no securities administrator of any state has recommended or endorsed, or will recommend or endorse, this offering.

 

3.3           Reliance.

 

(a)           Limited to Facts and Terms.  The Company has made available to the Subscriber the opportunity to ask questions of, and receive answers from the Company with respect to the activities of the Company as described in the Offering Documents, and otherwise to obtain any additional information, to the extent that the Company possesses the information or could acquire it without unreasonable effort or expense, necessary to verify the accuracy of the information contained in the Offering Documents.  The Subscriber (or Subscriber’s representative, if any) is entering into this Subscription Agreement relying solely on the facts and terms set forth in the Offering Documents or as contained in documents or answers to questions so furnished to the Subscriber, and neither the Company nor its representatives has made any other representations or provided any other information of any kind or nature, whether written or verbal, to induce the Subscriber to enter into this Subscription Agreement or in connection with the Subscriber’s investment in the Securities.

 

  

  

  

(b)           Acknowledgment of Certain Risks. The Subscriber understands and has evaluated the merits and risks of an investment in the Company and the purchase of the Securities.  The Subscriber acknowledges that (i) the purchase of the Securities is a speculative investment and involves a high degree of risk; (ii) no federal or state agency has made any finding of determination as to the fairness of such investment or any recommendation or endorsement of it; (iii) there is not and will not be in the foreseeable future a market for the sale of the Securities by the Subscriber, (iv) the operations of the Company are dependent on the Company’s ability to secure additional financing, and there are no existing arrangements with respect to such financing.

 

(c)           Reliance On Own Advisors.  The Subscriber has relied solely upon the advice of his own tax and legal advisors with respect to the tax and other legal aspects of this investment.

 

3.4           No General Solicitation.  The Subscriber acknowledges that no general solicitation or general advertising (including communications published in any newspaper, magazine or other broadcast) has been received by the Subscriber and that no public solicitation or advertisement with respect to the offering of an investment interest in the Company has been made to the Subscriber.

 

3.5           Only For ERISA Plans.

 

(a)           Investment Objectives.  If the Subscriber is a fiduciary of an Employee Retirement Income Security Act of 1974 (“ERISA”) plan executing this Subscription Agreement, such Subscriber has been informed of and understands the Company’s objectives, policies and strategies, that the decision to invest “plan assets” (as that 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 foregoing representations and warranties are true and accurate as of the date hereof, shall be true and accurate as of the date of delivery of this Subscription Agreement and the other Offering Documents to the Company and shall survive that delivery.  If, in any respect, those representations and warranties shall not be true and accurate prior to delivery of the payment pursuant to Section 1 of this Subscription Agreement, the undersigned shall immediately give written notice to the Company specifying which representations and warranties are not true and accurate and the reason therefor.

 

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

 

(a)           The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, is duly qualified and in good standing under the laws of any foreign jurisdiction where the failure to be so qualified would have a material adverse effect on its ability to perform its obligations under the Offering Documents and it has full corporate power and authority to enter into this Agreement to carry out the provisions hereof and thereof.

  

  

  

(b)           The issuance, execution and delivery of this Agreement has been duly authorized by all necessary corporate action on the part of the Company and such Agreement constitutes the valid and legally binding obligations of the Company, enforceable against it in accordance with the terms hereof or thereof, except as such enforceability may be limited by bankruptcy, insolvency or other laws affecting generally the enforceability of creditors’ rights, by general principles of equity and by limitations on the availability of equitable remedies.

 

(c)           Neither the execution and delivery of this Agreement by the Company, nor compliance by the Company with the provisions hereof, violates any provision of its Certificate of Incorporation or By-Laws, as amended, or any law, statute, ordinance, regulation, order, judgment or decree of any court or governmental agency, or conflicts with or will result in any breach of the terms of or constitute a default under or result in the termination of or the creation of any lien pursuant to the terms of any agreement or instrument to which the Company is a party or by which it or any of its properties is bound.

 

(d)           No authorization, consent, approval, license or exemption of, and no registration, qualification, designation or filing with any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign is or was necessary to (a) the valid execution and delivery by the Company of this Agreement and all other instruments, documents and agreements contemplated hereby or (b) the consummation of the transactions contemplated hereby.

 

(e)           There are no claims, actions, disputes, suits, investigations or proceedings pending or, to the best knowledge of the Company, threatened against the Company or any of the properties or assets of the Company, by or before any court, administrative agency or other governmental authority or any arbitrator which could prevent performance or enforcement of the transactions contemplated hereby or have an adverse effect on the business, assets or condition of the Company.

 

(f)           The Company represents that each of the documents, instruments, agreements and other supplemental information provided to the Subscriber by the Company or its agents in connection with this subscription, did not and will not include any untrue statement of a material fact or did not and will not omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

 

5.           Indemnification.  (a) The Subscriber hereby agrees to indemnify and hold harmless the Company, its officers, directors, controlling persons, agents, advisors, representatives and employees, from and against any and all loss, damage, expense, claim, action, suit or proceeding (including reasonable attorneys’ fees and expenses) or liabilities due to or arising out of a breach of any representation, warranty, covenant or acknowledgements made by the Subscriber herein.

 

(b)           The Company hereby agrees to indemnify and hold harmless the Subscriber and, if applicable, its officers, directors, controlling persons, agents, advisors, representatives and employees, from and against any and all loss, damage, expense, claim, action, suit or proceeding (including reasonable attorneys’ fees and expenses) or liabilities due to or arising out of a breach of any representation, warranty, covenant or acknowledgements made by the Company herein.

 

All representations, warranties, covenants and acknowledgements contained in this Subscription Agreement and in the Subscriber Questionnaire and the indemnification contained in this paragraph 5 shall survive the acceptance of this subscription.

 

  

  

  

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

 

7.           Notices.  All notices, requests, consents and other communications hereunder shall be in writing and shall be deemed to have been duly made when delivered to, or if mailed by registered or certified mail, return receipt requested, five (5) days after mailing:

 

(a)           if to the Subscriber, the address set forth on the signature page of this Subscription Agreement; or

 

(b)           if to the Company, the address set forth on the first page of this Subscription Agreement; or

 

(c)           to such other address as the Subscriber or the Company may hereafter have advised the other.

 

8.           Successors and Assigns.  Except as otherwise specifically provided in this Subscription Agreement, this Subscription Agreement shall be binding upon and inure to the benefit of the parties and their transferees, including without limitation, their legal representatives, heirs, administrators, executors, successors and permitted assigns.

 

9.           Entire Agreement.  This Subscription Agreement contains the entire agreement of the parties with respect to the matters set forth herein and there are no representations, covenants or other agreements except as stated or referred to herein or as are embodied in the Offering Documents.

 

10.         Governing Law.  THIS SUBSCRIPTION AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE WITHOUT REFERENCE TO THE CONFLICT OR CHOICE OF LAWS PROVISIONS THEREOF.

 

11.          Construction.  Wherever from the context it appears appropriate, each term stated in either the singular or the plural shall include the singular and the plural, and pronouns stated in the masculine, feminine or the neuter gender shall include the masculine, the feminine and the neuter.  The term “include” and its forms shall be construed as if followed by the phrase “without limitation.”

 

12.          Captions.  Captions contained in this Subscription Agreement are inserted only as a matter of convenience and shall in no way define, limit or extend the scope or intent of this Subscription Agreement or any provision hereof or in any way affect the construction or interpretation hereof.

 

13.          Severability.  If any provision of this Subscription Agreement, or the application of such provision to any person, entity or circumstance, shall be held invalid, the remainder of this Subscription Agreement, or the application of such provision to persons, entities or circumstances other than those to which it is held invalid, shall not be affected thereby.

 

14.          Blue Sky Qualification.  The Subscriber’s right to purchase the Securities under this Subscription Agreement is expressly conditioned upon the exemption from qualification of the offer and sale of the Securities from applicable Federal and state securities laws.  The Company shall not be required to qualify this transaction under the securities laws of any jurisdiction and, should qualification be necessary, the Company shall be released from any and all obligations to maintain its offer, and may rescind any sale contracted, in the relevant jurisdiction.

 

  

  

  

15.           Counterparts.  This Subscription Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same instrument.

 

 

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IN WITNESS WHEREOF, the undersigned have executed this Subscription Agreement as of the ____ day of November, 2010.

 

No. of Shares Subscribed for: ________________________*

 

Total Subscription Paid: $________________________

	  	
______________________________

	  	
(Signature of Subscriber)

	  	
______________________________

	  	
(Name Typed or Printed)

	
Subscriber Representative

	
______________________________

	
(if any):

	
Title and Name of Entity

	  	
(if applicable)

	
_________________________

	
______________________________

	
(Name Typed or Printed)

	
(Signature of Co-Subscriber)

	  	
______________________________

	  	
(Name Typed or Printed)

	  	
______________________________

	  	
Title and Name of Entity

	  	
(if applicable)

	  	  
	
_________________

	  

 

 

  

  

  

Type of Ownership:

(Check all appropriate spaces)

 

	
____ Individual

	
____As Custodian for

	  
	
____ Joint tenants with

	  	  
	
rights of survivorship

	
______________________________

	  
	  	
under the Uniform Gifts to Minors Act of the

	  	
State of __________

	  
	
____Tenants in common

	  	  
	
____Tenants by the entirety

	
____Corporation

	  
	
____Keogh

	
____Company

	  
	
____Community Property

	
____Trust/Estate/Pension or Profit Sharing Plan Date Opened: ___________

	
____IRA

	  	  
	
____Others (specify) ____________________________________

	  
	  	  	  
	  	  	  
	
____________________________

	
_____________________________

	  
	
Residence or Entity

	
Mailing Address

	  
	
Address

	
(if different from proceeding)

	  
	  	  	  
	
___________________________

	
_____________________________

	  
	
City, State and Zip Code

	
City, State and Zip Code

	  
	
___________________________

	
________________

	
________________

	
Social Security or Federal

	
Telephone Number

	
Facsimile Number

	
Tax Identification Number

	  	  
	
of Subscriber

	  	  
	
________________________________

	  	  
	
Social Security Number for Joint Party

	  	  
	  	  	  

 

	  	
Agreed and Accepted as of the ____ day of ___________, 2010

 

	  	
Augme Technologies, Inc.

 

	  	
By ___________________________

	  	
Name:

	  	
Title:

 

  

  

  

  

Annex A

 

SUBSCRIBER QUESTIONNAIRE

 

THE FOLLOWING MUST BE COMPLETED BY ALL SUBSCRIBERS WHO ARE NATURAL PERSONS

 

ITEM 1.  ALL SUBSCRIBERS MUST INITIAL THE FOLLOWING:

 

	
___

	
I understand that the representations contained in this Subscriber Questionnaire qualifying or disqualifying me as an accredited investor as that term is defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the “Act”), are made for the purpose of inducing a sale of securities to me.  I understand and acknowledge that Augme Technologies, Inc. (the “Company”) will rely upon such representations.  I hereby represent that the statement or statements initialed below are true and correct in all respects, and I will notify the Company immediately of any material change in any of the information contained in such statement or statements.  I understand that any false representations may constitute a violation of law and that any company or person who suffers damage as a result of such false representations may have a claim against me for damages.

 

	
ITEM 2.

	
A SUBSCRIBER SHOULD INITIAL ANY OF THE FOLLOWING STATEMENTS THAT APPLY TO THEM:

 

	
___

	
A.

	
I certify that I am an accredited investor because I am a natural person and I have a net worth, or my spouse and I have a combined net worth, in excess of $1,000,000.  For purposes of this Subscriber Questionnaire, “net worth” means the excess of total assets at fair market value, including home and personal property, over total liabilities.

 

	
___

	
B.

	
I certify that I am an accredited investor because I had individual annual income in excess of $200,000 or joint annual income with my spouse in excess of $300,000, in each of the two most recent years and I reasonably expect to have an individual annual income in excess of $200,000, or joint annual income with my spouse in excess of $300,000, for the current year. For purposes of this Subscriber Questionnaire, “income” means adjusted gross income, as reported for Federal income tax purposes, increased by the following amounts:  (i) the amount of any tax exempt interest income received, (ii) the amount of losses claimed as a limited partner in a limited partnership and deducted in arriving at adjusted gross income, (iii) any deduction claim for depletion, (iv) deductible amounts contributed to an IRA or Keogh retirement plan and (v) alimony paid.

 

 

 

  

  

  

THE FOLLOWING MUST BE COMPLETED BY ALL SUBSCRIBERS WHICH ARE NOT NATURAL PERSONS

 

ITEM 1.  ALL SUBSCRIBERS MUST INITIAL THE FOLLOWING:

 

	
___

	
The undersigned understands that the representations contained in this Subscriber Questionnaire qualifying or disqualifying it as an accredited investor as that term is defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the “Act”), are made for the purpose of inducing a sale of securities to the undersigned.  The undersigned understands and acknowledges that the Company will rely upon such representations.  The undersigned hereby represents that the statement or statements initialed below are true and correct in all respect, and the undersigned will notify the Company immediately of any material change in any of the information contained in such statement or statements.  The undersigned understands that any false representations may constitute a violation of law and that any company or person who suffers damages as a result of such false representations may have a claim against it for damages.

 

	
ITEM 2.

	
A SUBSCRIBER SHOULD INITIAL ANY OF THE FOLLOWING STATEMENTS THAT APPLY TO IT:

 

	
___

	
(a)

	
The undersigned certifies that it is an accredited investor because it is either (i) a bank as defined in Section 3(a)(2) of the Act, or 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, (ii) a broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended, (iii) an insurance company as defined in Section 2(13) of the Act, (iv) an investment company registered under the Investment Company Act of 1940, as amended (the “Investment Company Act”), or a business development company registered under the Investment Company Act or a business development company as defined in Section 2(a)(48) of the Investment Company Act, (v) a 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, as amended, (v) 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, or (vii) an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 if investment decisions are made by a plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or an employee benefit plan that 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.

 

	
___

	
(b)

	
The undersigned certifies that it is an accredited investor because it is a private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940, as amended.

 

 

 

  

  

  

	
___

	
(c)

	
The undersigned certifies that it is an accredited investor because it is an organization described in Section 501(c)(3) of the Internal Revenue Code, a corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the Company’s securities, with total assets in excess of $5,000,000.

 

	
___

	
(d)

	
The undersigned certifies that it is an accredited investor because it is a trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Company’s securities, whose purchases of securities are directed by a person who has such knowledge and experience in financial and business matters that he or she is capable of evaluating the merits and risks of an investment in the Company.

 

	
___

	
(e)

	
The undersigned certifies that it is an accredited investor because it is an entity in which all of the equity owners are accredited investors described in paragraphs (a) - (d) above.  Each such equity owner must also properly complete and submit a Subscriber Questionnaire as if such equity owner was a shareholder.  Such additional Questionnaires are available upon request from the Company.

 

IN WITNESS WHEREOF, I have executed this Subscriber Questionnaire this ___ day of _____________, 2010, and declare that it is truthful and correct to the best of my knowledge.

 

	  	
By:__________________________

	  	
Name:

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