1
ECONOSHARE, INC.
A NEVADA CORPORATION
PRIVATE PLACEMENT MEMORANDUM
SUBSCRIPTION DOCUMENTS
&
REGISTRATION RIGHTS AGREEMENT
Series A Units
Each Series A Unit of EconoShare Inc. consists of one (1) share of Common
Stock, one ( 1 ) Series A Warrant exercisable @ $0.50 per Share, one ( 1 )
Series B Warrant exercisable @ $1.00 per Share, one (1) Series C Warrant
exercisable @ $1.25 per Share, one (1) Series D Warrant exercisable at $
1.50. Each Warrant is exercisable into one share of Common Stock.
SUBSCRIPTION AGREEMENT
----------------------
EconoShare, Inc.
1510 51 St.
placeCityBrooklyn, StateN.Y.
Tel: 718-435-5291
Gentlemen:
The undersigned hereby subscribes for, and purchases herewith the number of
Series A Units and underlying common shares $.0001 par value (Units" ") and
common stock purchase warrants (the "Warrants") (collectively the Shares and
Warrants are referred to as "Securities") of EconoShare, Inc., a Nevada
corporation (the "Corporation"), set forth below, and as full consideration for
the issuance of the Securities by the Corporation, the undersigned agrees to pay
in cash the Cash Consideration set forth below. Each Series A Unit of
EconoShare Inc. consists of one (1) share of Common Stock, one ( 1 ) Series A
Warrant exercisable @ $0.50 per Share, one ( 1 ) Series B Warrant exercisable @
$1.00 per Share, one (1) Series C Warrant exercisable @ $1.25 per Share,
one (1) Series D Warrant exercisable at $ 1.50. Each Warrant is exercisable
into one share of Common Stock.
In consideration of your acceptance of this offer and your authorization for the
issuance of a certificate in my name representing the Securities, the
undersigned hereby represents, warrants and acknowledges to each of you and the
Corporation that (a) the Securities are being acquired for the account of the
undersigned, for purposes of investment and not with a view to the distribution
thereof, as those terms are used in the Securities Act of 1933, as amended (the
"Act"), and the rules and regulations promulgated thereunder, (b) the
undersigned has sufficient knowledge and experience in financial and business
matters so as to be capable of evaluating the merits and risks of purchasing the
Securities, (c) the undersigned has received a copy of the Corporation's Private
Placement Memorandum dated September 15, 2005 and exhibits thereto, (d) the
undersigned has received copies of such documents and such other information as
the undersigned has deemed necessary in order to make an informed investment
decision with respect to the purchase of the Securities, and (e) the undersigned
understands, and has the financial capability of assuming, the economic risk of
an investment in the Securities for an indefinite period of time. (f) The
undersigned's overall commitment to investments which are not readily marketable
is reasonable in relation to the undersigned's net worth. (g) The undersigned
hereby agrees to provide such information and to execute and deliver such
documents as may reasonably be necessary to comply with any and all laws and
ordinances to which the Company is subject, including without limitation, such
additional information as the Company or the Placement Agent may deem
appropriate with regard to the undersigned's suitability.
The undersigned further acknowledges to each of you that the undersigned has
been advised that he will not be able to dispose of the Securities, or any
interest therein, without first complying with the relevant provisions of the
Act and any applicable state securities laws. The undersigned further
understands that the provisions of Rule 144 promulgated under the Act,
permitting routine sales of securities of certain issuers subject to the terms
and conditions thereof, are not currently, and will not be available, to the
undersigned with respect to the Securities. The undersigned acknowledges that
the Corporation is not under any obligation to register the Securities or to
furnish any information or take any other action, to assist the undersigned in
complying with the terms and conditions of any exemption which might be
available under the Act or any state securities laws with respect to sales of
the Securities by the undersigned in the future.
Accordingly, the undersigned agrees to hold the Securities subject to all
applicable provisions of the Act, applicable state securities laws, the Articles
of Incorporation and the By-laws of the Corporation, and any agreement
restricting the disposition or encumbrance of the Securities to which the
undersigned is a party. The undersigned shall give the Corporation prompt
written notice of any proposed disposition of the Securities and shall not
proceed with any such proposed disposition unless a registration under the Act
is in effect with respect to the Securities and all state securities laws have
been complied with or unless the Corporation shall have received an opinion of
counsel, of standing satisfactory to the Corporation, to the effect that such
registration is not required, and the undersigned authorizes the Corporation to
place a suitable legend to this effect on the stock certificate to be issued
representing the Securities.
If the undersigned has not received the Private Placement Memorandum prior to
the delivery of this Subscription Agreement, then the undersigned may revoke
this subscription at any time up until three days after receipt of the Private
Placement Memorandum.
The representations, agreements and acknowledgments set forth above are being
given by the undersigned with the understanding that they will be relied upon by
the Corporation and its Board of Directors in order to claim the availability of
the exemption from the registration provisions of the Act contained in Section
4(2) thereof.
DATED as of ________________________
Very truly yours,
____________________________________
Signature
____________________________________
Print Name
____________________________________
Address
____________________________________
Address
____________________________________
Telephone Number
____________________________________
Social Security Number
Number of Series A Units Subscribed______ Cash Consideration
$________________
Total Consideration: $___________________
FOR ACCREDITED INVESTORS
____ (1) A natural person who has individual income of more than $200,000
in each of the most recent two years or joint income with that persons's spouse
in excess of $300,000 in each of the most recent two years and who reasonably
expects to reach that same income level for the current year. For this purpose,
"individual income" means adjusted gross income, as reported by a federal income
tax purposes, less any income attributable to a spouse or to property owned by a
spouse, (A) increased by the individual's share (and not a spouse's share) of:
(1) the amount of any tax exempt interest income received, (2) amounts
contributed to an IRA or Keogh retirement plan (3) alimony paid, and (4) the
excluded portion of any long-term capital gains, and (B) adjusted, plus or
minus, for any non-cash loss or gain, respectively, reported for federal income;
____ (2) A natural person whose individual net worth, or joint net worth
with that person's spouse, is in excess of $1,000,000. For this purpose, "net
worth" means the excess of total assets at fair market value, including home and
personal property, over total liabilities, provided, however, for the purpose of
determining a person's net worth, the principal residence owned by an individual
shall be valued at cost, including the cost of improvements, net of current
encumbrances upon the property or valued on the basis of a written appraisal
used by an institutional lender making a loan secured by the property. For the
purposes of this provisions, "institutional lender" means a bank, savings and
loan company, industrial loan company, credit union, personal property broker or
a company whose principal business is as a lender upon loans secured by real
property and which has such loans receivable in the amount of $2,000,000 or
more. Any person relying on the appraised value of a principal residence must
deliver to the Company, at or prior to the date of execution hereof, a copy of
such appraisal;
____ (3) A trust, with total assets in excess of $5,000,000, which is not
formed for the purpose of acquiring the Units and whose purchase is directed by
a person who has such knowledge and experience in financial business matters
that such person is capable of evaluating the risks and merits of an investment
in the Units;
____ (4) A bank as defined in Section 3(a)(2) of the Securities Act or a
savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary
capacity; 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
Securities 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
the Investment Company Act of 1940; 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; a plan established and maintained by a
state, its political subdivisions, or an 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 an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act of 1974, if
the investment decision is made by a plan fiduciary, as defined in Section 3(21)
of the Employee Retirement Income Security Act of 1974, which is either a bank,
savings and loan association, insurance company, or registered investment
adviser, or if the employee benefit plan has total assets in excess of
$5,000,000 or, if the employee benefit plan is a self-directed plan and the
investment decision is made solely by persons who are accredited investors;
____ (5) A private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940;
____ (6) An organization described in Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended, a corporation, Massachusetts or similar
business trust, or partnership, not formed for the specific purpose of acquiring
the Units with total assets in excess of $5,000,000;
____ (7) A director or executive officer of the Company;
or
____ (8) An entity in which all of the equity owners meet the requirements
of at least one of the above subparagraphs for accredited investors.
(d) FOR QUALIFIED INSTITUTIONAL BUYERS
____ (1) An insurance company as defined in Section 2(13) of the Securities
Act, acting for its own account or the accounts of other qualified institutional
buyers which, in the aggregate, owns or invests on a discretionary basis at
least $100 million in securities of issuers that are not affiliated with it;
____ (2) An investment company registered under the Investment Company Act
of 1940 (the "Investment Company Act") or any business development company as
defined in Section 2(a)(48) of that Act, acting for its own account or the
accounts of other qualified institutional buyers which, in the aggregate, owns
or invests on a discretionary basis at least $100 million in securities of
issuers that are not affiliated with it;
____ (3) 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, acting for its own account or the accounts of other
qualified institutional buyers which, in the aggregate, owns or invests on a
discretionary basis at least $100 million in securities of issuers that are not
affiliated with it;
____ (4) 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, aggregate, owns or invests on a
discretionary basis at least $100 million in securities of issuers that are not
affiliated with it;
____ (5) An employee benefit plan within the meaning of Title I of the
Employee Retirement Income Security Act of 1974, acting for its own account or
the accounts of other qualified institutional buyers which, in the aggregate,
owns or invests on a discretionary basis at least $100 million in securities of
issuers that are not affiliated with it;
____ (6) A business development company as defined in Section 202(a)(22) of
the Investment Adviser Act of 1940, acting for its own account or the accounts
of other qualified institutional buyers which, in the aggregate, owns or invests
on a discretionary basis at least $100 million in securities of issuers that are
not affiliated with it;
____ (7) An organization described in Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended, a corporation (other than a bank as defined in
Section 3(a)(2) of the Securities Act or a savings and loan association or other
institution referenced in Section 3(a)(5)(A) of the Securities Act or a foreign
bank or savings and loan association or equivalent institution, partnership, or
Massachusetts or similar business trust, acting for its own account or the
accounts of other qualified institutional buyers which, in the aggregate, owns
or invests on a discretionary basis at least $100 million in securities of
issuers that are not affiliated with it;
____ (8) An investment adviser registered under the Investment Advisers Act
of 1940, acting for its own account or the accounts of other qualified
institutional buyers which, in the aggregate, owns or invests on a discretionary
basis at least $100 million in securities of issuers that are not affiliated
with it;
____ (9) A dealer registered pursuant to Section 15 of the Exchange Act or
1934, acting for its own account or the accounts of other qualified
institutional buyers, which, in the aggregate, owns and invests on a
discretionary basis at least $10 million of securities of issuers that are not
affiliated with the dealer, provided that securities constituting the whole or a
part of an unsold allotment to or subscription by a dealer as a participant in a
public offering shall not be deemed to be owned by such dealer;
____ (10) A dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934 acting in a riskless principal transaction on behalf of a
qualified institutional buyer;
____ (11) An investment company registered under the Investment Company
Act, acting for its own account or for the accounts of other qualified
institutional, that is part of a family of investment companies which own, in
the aggregate, at least $100 million in securities of issuers, other than
issuers that are affiliated with the investment company or are part of such
family of investment companies. "Family of investment companies" means any two
or more investment companies registered under the Investment Company Act (except
for a unit investment trust whose assets consist solely of Units of one or more
registered investment companies) that have the same investment adviser (or, in
the case of unit investment trusts, the same depositor), provided that for
purposes of this paragraph (11);
(A) Each series of a series company (as defined in Rule 18f-2 under the
Investment Company Act) shall be deemed to be a separate investment company; and
(B) Investment companies shall be deemed to have the same adviser (or
depositor) if their adviser (or depositors) are majority-owned subsidiaries of
the same parent, or if one investment company's adviser (or depositor) is a
majority-owned subsidiary of the other investment company's adviser (or
depositor).
____ (12) An entity, all of the equity owners of which are qualified
institutional buyers, acting for its own account or the accounts of other
qualified institutional buyers; and
____ (13) A bank as defined in section 3(a)(2) of the Securities Act,
savings and loan association or other institution as referenced in Section
3(a)(5)(A) of the Securities Act, or foreign bank or savings and loan
association or equivalent institution, acting for its own account or the
accounts of other qualified institutional buyers, which, in the aggregate, owns
and invests on a discretionary basis at least $100 million in securities of
issuers that are not affiliated with it and that has an audited net worth of at
least $25 million as demonstrated in its latest annual financial statements, as
of a date not more than 16 months preceding the date of execution hereof, in the
case of a U.S. bank or savings and loan association, and not more than 18 months
preceding the date of execution hereof, in the case of a foreign bank or savings
and loan association or equivalent institution.
(e) The undersigned's overall commitment to investments which are not
readily marketable is reasonable in relation to the undersigned's net worth.
(f) The undersigned hereby agrees to provide such information and to execute
and deliver such documents as may reasonably be necessary to comply with any and
all laws and ordinances to which the Company is subject, including without
limitation, such additional information as the Company or the Placement Agent
may deem appropriate with regard to the undersigned's suitability.
____ (14) NASD Affiliation.
------------------
Are you affiliated or associated with an NASD member firm (please check one):
Yes______ No______
If Yes, please described:
_________________________________________________________
_________________________________________________________
_________________________________________________________
* If undersigned is a Registered Representative with an NASD member firm, have
the following acknowledgement signed by the appropriate party:
The undersigned NASD member firm acknowledges receipt of the notice required by
Article 3, Sections 28(a) and (b) of the Rules of Fair Practice.
_____________________________________
Name of NASD Member Firm
By:__________________________________
Authorized Officer
Date:________________________________
The undersigned is informed of the significance to you of the foregoing
representations and answers contained in the undersigned representations
contained in this Paragraph 5 and such answers have been provided under the
assumption that the Corporation will rely on them.
(g) The undersigned acknowledges:
(1) That the undersigned is aware that investment in the Units involves a
number of very significant risks, and has carefully read and considered the
matters set forth under the caption "Risk Factors" in the Memorandum;
(2) In making an investment decision the undersigned has relied on the
undersigned's own examination of the Company and the terms of the Offering,
including the merits and risks involved. These Units have not been recommended
by any federal or state securities commission or regulatory authority.
Furthermore, the foregoing authorities have not confirmed the accuracy or
determined the adequacy of the Memorandum or this document. Any representation
to the contrary is a criminal offense.
(3) The undersigned, if executing this Subscription Agreement in a
representative or fiduciary capacity, 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
(4) The representations, warranties, and agreements of the undersigned
contained herein and in any other writing delivered in connection with the
transactions contemplated hereby shall be true and correct in all respects on
and as of the date of the sale of the Units as if made on and of such date and
shall survive the execution and delivery of this Subscription Agreement and the
purchase of the Units.
6. INDEMNIFICATION. The undersigned agrees to indemnify and hold harmless
----------------
the Company, the Placement Agent, the Selected Dealers and their respective
officers, directors, agents, and affiliates against any and all loss, liability,
claim, damage, and expense whatsoever (including, but not limited to, any and
all expenses reasonably incurred in investigating, preparing, or defending
against any litigation commenced or threatened or any claim whatsoever) arising
out of or based upon any false representation or warranty or breach or failure
by the undersigned to comply with any covenant or agreement made by the
undersigned herein or in any other document furnished by the undersigned to any
of the foregoing in connection with this transaction.
7. IRREVOCABILITY; BINDING EFFECT. The undersigned hereby acknowledges and
--------------------------------
agrees that the subscription hereunder is irrevocable by the undersigned, that,
except as required by law, the undersigned is not entitled to cancel, terminate,
revoke this Subscription Agreement or any agreements of the undersigned
hereunder, and shall be binding upon and inure to the benefit of the parties and
their heirs, executors, administrators, successors, legal representatives, and
permitted assigns. If the undersigned is more than one person, the obligations
of the undersigned hereunder shall be joint and several and the agreements,
representations, warranties, and acknowledgments herein contained shall be
deemed to be made by and be binding upon each such person and his/her heirs,
executors, administrators, successors, legal representatives, and permitted
assigns.
8. MODIFICATION. Neither this Subscription Agreement nor any provisions
-------------
hereof shall be waived, modified, discharged, or terminated except by an
instrument in writing signed by the party against whom any such waiver,
modification, discharge, or termination is sought.
9. NOTICES. Any notice or other communication required or permitted to be
--------
given hereunder shall be in writing and shall be personally delivered or deemed
delivered the third business day after being mailed by first class mail, to the
party to receive same (a) if to the Company, to EconoShare, Inc., 1510 51st
Street, Brooklyn, New York 11219, or (b) if to the undersigned, at the address
set forth on the signature page hereof (or, in either case, to such other
address as the party shall have furnished in writing in accordance with the
provisions of this Section 9). Any notice or other communication given by
certified mail shall be deemed given at the time of receipt thereof.
10. ASSIGNABILITY. This Subscription Agreement and the rights and
--------------
obligations hereunder are not transferable or assignable by the undersigned.
11. APPLICABLE LAW. Notwithstanding the place where this Subscription
----------------
Agreement may be executed by any of the parties hereto, the parties expressly
agree that all of the terms and provisions hereof except by operation of law and
laws of decent shall be construed in accordance with the laws of the State of
New York without regard to principles of conflicts of law and any dispute
brought hereunder shall be brought in a Federal or State court located in either
the Southern or Eastern Districts of New York.
12. Upon the execution and delivery of this Agreement by the Subscriber,
this Agreement shall become a binding obligation of the Subscriber with respect
to the purchase of Units as herein provided; subject, however, to the right
hereby reserved to the Corporation to enter into the same agreements with other
subscribers and to add and/or delete other persons as subscribers.
13. It is agreed that a waiver by either party of a breach of any provision
of this Agreement shall not operate, or be construed, as a waiver of any
subsequent breach by that same party.
14. The parties agree to execute and deliver all such further documents,
agreements and instruments and take such other and further action as may be
necessary or appropriate to carry out the purpose and intent of this Agreement.
15. STATE SECURITIES LAWS. Subscribers who reside in placeStateCALIFORNIA,
------------------------
placeStatePENNSYLVANIA or placeStateMASSACHUSETTS also agree and represent as
follows:
(a) THE UNDERSIGNED, IF A CALIFORNIA RESIDENT, REPRESENTS THAT: (1) THE
UNDERSIGNED OR THE UNDERSIGNED'S PROFESSIONAL ADVISER CAN PROTECT THE
UNDERSIGNED'S INTEREST IN CONNECTION WITH THIS TRANSACTION; (2) THE UNDERSIGNED
IS ABLE TO BEAR THE ECONOMIC RISK OF THIS INVESTMENT OR (3) THIS INVESTMENT DOES
NOT EXCEED 10% OF SUCH PERSON'S NET WORTH OR JOINT NET WORTH WITH SUCH PERSON'S
SPOUSE.
(b) THE UNDERSIGNED, IF A PENNSYLVANIA RESIDENT, REPRESENTS THAT THE
UNDERSIGNED WILL NOT SELL ANY Units FOR A PERIOD OF TWELVE (12) MONTHS FROM THE
DATE OF PURCHASE IF THIS SUBSCRIPTION IS NOT TIMELY WITHDRAWN PURSUANT TO THE
RIGHT OF RECISION GRANTED UNDER THE PENNSYLVANIA SECURITIES ACT, UNLESS SUCH
SECURITIES ARE SUBSEQUENTLY REGISTERED UNDER FEDERAL SECURITIES LAWS OR ARE SOLD
IN ACCORDANCE WITH PENNSYLVANIA SECURITIES LAWS. ANY OFFEREE WHO IS A RESIDENT
OF PENNSYLVANIA HAS THE RIGHT TO WITHDRAW THIS SUBSCRIPTION, WITHOUT INCURRING
ANY LIABILITY TO THE COMPANY, THE SELLING AGENT OR ANY OTHER PERSON AND TO
CANCEL THE PURCHASE OF Units, WITHIN TWO (2) BUSINESS DAYS FROM THE DATE OF
RECEIPT BY THE COMPANY OF A WRITTEN BINDING CONTRACT OF PURCHASE OR, IN THE CASE
OF A TRANSACTION IN WITH THERE IS NO WRITTEN BINDING CONTRACT OF PURCHASE,
WITHIN TWO (2) BUSINESS DAYS AFTER THE INITIAL PAYMENT FOR THE Units BEING
OFFERED.
SIGNATURE OF placeStatePENNSYLVANIA RESIDENT:________________________________
(c) THE UNDERSIGNED, IF A MASSACHUSETTS RESIDENT, REPRESENTS THAT THE
UNDERSIGNED'S INVESTMENT IN THE Units DOES NOT EXCEED 25% OF SUCH PERSON'S NET
WORTH OR, IF MARRIED, THE COMBINED NET WORTH OF SUCH PERSON'S SPOUSE AND THE
UNDERSIGNED, EXCLUDING PRINCIPAL RESIDENCE AND HOME FURNISHINGS.
Nature of Subscriber. The undersigned is (check one):
_____ (a) One or more individuals
_____ (b) A corporation
_____ (c) A partnership
_____ (d) A trust
_____ (e) Another entity or organization,
namely (please specify): _________________________
Other Certifications. By signing the Signature Page, the undersigned certifies
as follows:
(a) that the undersigned and its grantor (if a trust) or its general
partners (if a partnership) have not filed or been involved in bankruptcy
proceedings;
if the undersigned is an individual investor, that one of the following is true
and correct (check one):
Spouse if Purchaser Co-Owner
--------- --------
____ ____ (1) I am a United States citizen or resident of the United
States for United States federal income tax purposes.
____ ____ (2) I am neither a placecountry-regionUnited States citizen
nor a resident of the placecountry-regionUnited States for federal income tax
purposes.
(c) if the undersigned is a trust, that the trust has not been established
in connection with either (1) an employee benefit plan (as defined in Section
3(3) of ERISA), whether or not subject to the provisions of Title I of ERISA, or
(2) a plan described in Section 4975(e)(i) of the Internal Revenue Code and that
one of the following is true and correct (check one):
____ (1) the Trust is an estate or trust whose income from sources outside
the United States is includable in its gross income for United States federal
income tax purposes regardless of its connection with a trade or business
carried on the United States.
____ (2) the Trust is an estate or trust whose income from sources outside
the United States is not includable in its gross income for United States
federal income tax purposes regardless of its connection with a trade or
business carried on in the United States.
(d) if the undersigned is a partnership, that the assets of the partnership
do not constitute "plan assets" within the meaning of ERISA and regulation S
2510.3-101 promulgated thereunder and that one of the following is true and
correct (check one):
_____ (1) the Partnership is a partnership formed in or under the laws
of the United States or any political subdivision thereof.
_____ (2) the Partnership is a partnership not formed in or under the
laws of the United States or any political subdivision thereof.
(e) if the undersigned is a corporation, that the assets of the Corporation
do not constitute "plan assets" within the meaning of ERISA and regulation
S2510.3-101 promulgated thereunder and that one of the following is true and
correct (check one):
____ (1) the Corporation is a corporation organized in or under the
laws of the United States or any political subdivision thereof.
____ (2) the Corporation is a corporation which is neither created nor
organized in or under the United States or any political subdivision thereof but
which has made an election under either Section 897(i) or 897(k) of the United
States Internal Revenue Code of 1986, as amended, to be treated as a domestic
corporation for certain purposes of United States federal income taxation (A
copy of the Internal Revenue Service acknowledgment of the undersigned's
election must be attached to this Subscription Agreement if this provision is
applicable).
____ (3) neither (1) nor (2) above is true.
SUBSCRIPTION AGREEMENT SIGNATURE PAGE FOR INDIVIDUAL INVESTORS
IN WITNESS WHEREOF, the undersigned has executed this Agreement this _______ day
of
Number of Units being subscribed for: ________________________________________
Print Name
________________________________________
Signature of Investor
________________________________________
Social Security Number
________________________________________
Residence Address
________________________________________
If the purchaser has indicated that the Units will be held as JOINT TENANTS, as
TENANTS IN COMMON, or as COMMUNITY PROPERTY, please complete the following:
_________________________________________
Print Name of Spouse or Other Purchaser
_________________________________________
Signature of Spouse or Other Purchaser
_________________________________________
Social Security Number
ACCEPTED AND AGREED:
EconoShare, Inc.
By: _______________________________
Hyman Schwartz,
President & Chief Financial Officer
Dated: ____________, 2005
IF YOU ARE PURCHASING UNITS WITH YOUR SPOUSE, YOU MUST BOTH SIGN THE SIGNATURE
PAGE. IF YOU ARE PURCHASING UNITS WITH ANOTHER PERSON NOT YOUR SPOUSE, YOU MUST
EACH FILL OUT ALL AREAS OF THIS AGREEMENT APPLICABLE TO AN INDIVIDUAL PURCHASER.
- ----
SUBSCRIPTION AGREEMENT SIGNATURE PAGE FOR PARTNERSHIPS,
CORPORATIONS, TRUSTS, OR OTHER ENTITIES
IN WITNESS WHEREOF, the undersigned has executed this Agreement this ___ day of
_______, 2005
Number of Units being subscribed for:___________________
_________________________________________
Print Name of Partnership, Corporation,
Trust or other Entity
_________________________________________
(Signature of Authorized Signatory)
Name:_____________________________________
Title:____________________________________
Address:___________________________________
_________________________________________
__________________________________________
Taxpayer Identification Number:__________________
Date of Formation:___________________________
Address of Chief Executive Office of Subscriber:
__________________________________________
_________________________________________
_________________________________________
ACCEPTED AND AGREED:
EconoShare, Inc.
By: _______________________________
Hyman Schwartz
President & Chief Financial Officer
Dated: ______________2005
PROSPECTIVE PURCHASER QUESTIONNAIRE
For Confidential Private Offering
EconoShare, Inc.
1510 51 St.
Brooklyn, NY 11219
The information contained herein in being furnished to you in order for you to
determine whether a sale of a Unit (the "Units") in EconoShare, Inc. (the
"Company") may be made to the undersigned, pursuant to Section 4 (2) of the
Securities Act of 1933 (the "Act") and Regulation D promulgated thereunder. The
undersigned understands that (i) you will rely upon the information contained
herein for purposes of such determination, (ii) the securities will not be
registered under the Act in reliance upon the exemption from registration
provided by Section 4 (2) of the Act and Rule 506 of Regulation D, promulgated
thereunder and (iii) this questionnaire is not an offer to sell securities to
the undersigned.
The undersigned further represents to you that (i) the information contained
herein is complete and accurate and may be relied upon by you, and (ii) the
undersigned will notify you immediately of any material change in any of such
information occurring prior to the purchase of such securities, if any purchase
is made, by the undersigned.
THE UNDERSIGNED UNDERSTANDS AND AGREES THAT, ALTHOUGH THIS QUESTIONNAIRE WILL BE
KEPT STRICTLY CONFIDENTIAL, THE ISSUER OF ANY SECURITIES PURCHASED BY THE
UNDERSIGNED MAY PRESENT THIS QUESTIONNAIRE TO SUCH PARTIES AS IT DEEMS ADVISABLE
IF CALLED UPON TO ESTABLISH THE AVAILABILITY UNDER ANY FEDERAL OR STATE
SECURITIES LAWS OF AN EXEMPTION FROM REGISTRATION OF THE PRIVATE PLACEMENT.
THIS LETTER IS NOT AN OFFER TO SELL SECURITIES BUT MERELY A REQUEST FOR
INFORMATION PURSUANT TO REGULATION D OF THE SECURITIES AND EXCHANGE COMMISSION.
Please complete, sign, date and return one copy of this questionnaire to the
Company at
EconoShare, Inc.
1510 51 St.
Brooklyn, NY 11219
PLEASE TYPE OR PRINT
1. Name: ________________________________________________________
Date of Birth: _________________________
Social Security Number:_________________
Citizenship: _______________ Marital Status: _____________
Number of Dependents: ______
Where Registered to Vote: ____________________________________
State of Issuance of Driver's License: _______________________
Home Address:_________________________________________________
Home Telephone Number:________________________________________
2. Firm Name: ___________________________________________________
Nature of Business: __________________________________________
Position: ____________________________________________________
Nature of Duties: ____________________________________________
Business Address: ____________________________________________
Business Telephone Number: ___________________________________
3. Your employment, positions or occupations during the past 5 years (and
the inclusive dates of each) are as follows (Note: What is sought is a
sufficient description to enable the Issuer to determine the extent of
vocationally related experience in financial and business matters):
Employment, Position Nature of
or Occupation Duties From To
- -------------- ------ ---- --
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
4. 4. Your general, business or professional education, and the
degrees received, are as follows:
School Degree Year Received
- ------ ------ --------------
______________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
5. Was your income (from all sources) for each of the latest two complete
calendar years more than (check one):
___ $40,000; ___ $60,000; ___ $80,000;
___ $100,000; ___ $200,000; ___ $500,000.
(a) What percentage of your income as shown above was derived from sources other
than salary? _______________
(b) Approximately what percentage of your income as shown above remained after
payment of Federal, state and local taxes, and after payment of all ordinary and
necessary business and/or living expenses? ________________
6. Was your income with that of your spouse for each of the latest two
complete calendar years more than (check one):
___ $40,000; ___ $60,000; ___ $80,000;
___ $100,000; ___ $300,000; ___ $500,000.
(a) What percentage of your combined income as shown above is derived from
sources other than salary? __________
(b) Approximately what percentage of your combined income as shown above
remained after payment of Federal, state and local taxes, and after payment of
all ordinary and necessary business and/or living expenses?
______________________
7. Is your income from all sources for the current calendar year reasonably
expected to be more than (check one):
___ $40,000; ___ $60,000; ___ $80,000;
___ $100,000; ___ $200,000; ___ $500,000?
(a) What percentage of your income as shown above will be derived for sources
other than salary? ___________________
(b) Approximately what percentage of your income as shown above will remain
after payment of Federal, state, and local taxes, and after payment of all
ordinary and necessary business and/or living expenses?
__________________________
8. Is your income with that of your spouse from all sources for the current
calendar year reasonably expected to be more than (check one):
___ $40,000; ___ $60,000; ___ $80,000;
___ $100,000; ___ $300,000; ___ $500,000.
9. The undersigned has a net worth, or a joint net worth together with his
or her spouse, in excess: (In calculating net worth, you may include equity in
personal property and real estate, including your principal residence, cash,
short-term investments, stock and securities. Equity in personal property and
real estate should be based on the fair market value of such property minus debt
secured by such property.)
___ $40,000; ___ $60,000; ___ $80,000;
___ $100,000; ___ $300,000; ___ $500,000.
(a) What percentage of your net worth as shown above is invested in tax
"shelter" investments and investments in marketable securities (stocks, bonds,
debentures, or notes)? __________________
(b) What percentage of you net worth as shown above constitutes home,
furnishings and automobiles? ________________
(c) What percentage of your net worth as shown above
constitutes liquid assets (cash or assets readily convertible
to cash)? ____________________
10. Indicate any other investments or contingent liabilities which you
reasonably anticipate could cause you to require cash in excess of the amount of
cash readily available to you (please specify):
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
11. Investment experience:
(a) Please indicate the frequency of your investment in marketable securities:
( ) often; ( ) occasionally; ( ) seldom; ( ) never.
(b) Please indicate the frequency of your investment in high technology
companies:
( ) often; ( ) occasionally; ( ) seldom; ( ) never.
(c) Please indicate the frequency of your investment in options:
( ) often; ( ) occasionally; ( ) seldom; ( ) never.
(d) Please indicate the frequency of your investment in securities purchased on
margin:
( ) often; ( ) occasionally; ( ) seldom; ( ) never.
(I) Please indicate the frequency of your investment in unmarketable securities:
( ) often; ( ) occasionally; ( ) seldom; ( ) never.
12. Please indicate in the space provided below any additional information
which you think may be helpful in enabling the Issuer to determine that your
knowledge and experience in financial and business matters is sufficient to
enable you to evaluate the merits and risks of this investment.
______________________________________________________________
______________________________________________________________
______________________________________________________________
13. Indicate whether you are acting for your own account:
Yes__ No __
(a) If not acting for your own account complete the following:
(i) Capacity in which you are acting (Trustee or otherwise):
__________________________
(ii) Name, address and telephone number of persons you
represent: ______________________________________________
_________________________________________________________
_________________________________________________________
(iii) Evidence of authority (please attach).
NOTE: ANY INDIVIDUALS REPRESENTED BY YOU MUST ALSO BE QUALIFIED AS "PURCHASERS"
PURSUANT TO RULE 506 AND THE ACT.
To the best of my information and belief, the above information supplied by the
undersigned is true and correct in all respects.
IN WITNESS WHEREOF, I have executed this questionnaire this ___ day of
_________ 2005.
_______________________________________
(Signature of Prospective Purchaser)
- ------
REGISTRATION RIGHTS AGREEMENT
-------------------------------
This Registration Rights Agreement (the "Agreement") is made and entered into as
of September 15, 2005 by and among EconoShare, Inc., a Nevada corporation (the
"Company"), and the persons and entities who purchase Units in the Company's
private placement described in a Private Placement Memorandum dated September
15, 2005, (collectively, the "Investors").
WITNESSETH:
-----------
WHEREAS, the Company will issue Units consisting of Common Stock ("Common
Stock") and common stock purchase warrants ("Warrants"); and
WHEREAS, with respect to the Common Stock and common stock to be acquired by the
Investors upon exercise of the Warrants, the Company has agreed to grant to the
Investors the rights contained herein.
NOW, THEREFORE, in consideration of the foregoing recital and the mutual
promises hereinafter set forth, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following capitalized terms
-----------
shall have the following respective meanings:
Closing Date. The term "Closing Date" shall mean the final date of the offering
- ------------
period of the Units, as described in the Private Placement Memorandum, which may
be extended by the Company.
Exchange Act. The term "Exchange Act" means the United States Securities
- -------------
Exchange Act of 1934, as amended.
- ------
Holder. The term "Holder" means any person owning of record Registrable
- ------
Securities or any assignee of record of such Registrable Securities to whom
- ------
rights under this Agreement have been duly assigned in accordance with this
- ----
Agreement.
- ----
Person. The term "Person" shall mean an individual, partnership, corporation,
- ------
trust or unincorporated organization, or a government or agency or political
subdivision thereof.
Registrable Securities. The term "Registrable Securities" means all the Common
- -----------------------
Stock and common stock issuable upon exercise of the Warrants; excluding in all
---------
cases, however, any of such securities sold by a Person in a transaction in
which rights under this Agreement are not assigned in accordance with this
Agreement.
Registration. The terms "register," "registered" and "registration" refer to a
- ------------
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of
effectiveness of such registration statement.
Registration Statement. The term "Registration Statement" shall mean a
- -----------------------
registration statement filed by the Company with the Commission under the
- --------
Securities Act providing for the offer and sale of Registrable Securities.
- ------
SEC. The term "SEC" or "Commission" means the U.S. Securities and Exchange
- ---
Commission.
- ---
Securities Act. The term "Securities Act" means the United States Securities
- ---------------
Act of 1933, as amended.
- --
2. Grant of Registration Rights. The Company hereby grants the following
-------------------------------
registration rights to holders of the Securities offered in the accompanying
Private Placement Memorandum.
(a) On one occasion, for a period commencing 270 days after the Closing
Date, but not later than three years after the Closing Date, the Company, upon a
written request therefor from any record holder or holders of more than 50% of
the aggregate of the "Registrable Securities", shall prepare and file with the
SEC a registration statement under the Act covering the Registrable Securities
which are the subject of such request, unless such Registrable Securities are
the subject of an effective registration statement or are otherwise salable
pursuant to an exemption from registration. In addition, upon the receipt of
such request, the Company shall promptly give written notice to all other record
holders of the Registrable Securities that such registration statement is to be
filed and shall include in such registration statement Registrable Securities
for which it has received written requests within 10 days after the Company
gives such written notice. Such other requesting record holders shall be deemed
to have exercised their demand registration right under this Section 2(a). As a
condition precedent to the inclusion of Registrable Securities, the holder
thereof shall provide the Company with such information as the Company
reasonably requests. The obligation of the Company under this Section 2(a)
shall be limited to one registration statement.
(b) If the Company at any time proposes to register any of its securities
under the Act for sale to the public, whether for its own account or for the
account of other security holders or both, except with respect to registration
statements on Forms S-4, S-8 or another form not available for registering the
Registrable Securities for sale to the public, provided the Registrable
Securities are not otherwise registered for resale by the Subscriber or Holder
pursuant to an effective registration statement, each such time it will give at
least 30 days' prior written notice to the record holder of the Registrable
Securities of its intention so to do. Upon the written request of the holder,
received by the Company within 30 days after the giving of any such notice by
the Company, to register any of the Registrable Securities, the Company will
cause such Registrable Securities as to which registration shall have been so
requested to be included with the securities to be covered by the registration
statement proposed to be filed by the Company, all to the extent required to
permit the sale or other disposition of the Registrable Securities so registered
by the holder of such Registrable Securities (the "Seller"). In the event that
any registration pursuant to this Section 2(b) or 2(d) shall be, in whole or in
part, an underwritten public offering of common stock of the Company, the number
of shares of Registrable Securities to be included in such an underwriting may
be reduced by the managing underwriter if and to the extent that the Company and
the underwriter shall reasonably be of the opinion that such inclusion would
adversely affect the marketing of the securities to be sold by the Company
therein; provided, however, that the Company shall notify the Seller in writing
of any such reduction. Notwithstanding the forgoing provisions, the Company may
withdraw any registration statement referred to in this Section 2(b) without
thereby incurring any liability to the Seller.
(c) If, at the time any written request for registration is received by the
Company pursuant to Section 2(a), the Company has determined to proceed with the
actual preparation and filing of a registration statement under the 1933 Act in
connection with the proposed offer and sale for cash of any of its securities
for the Company's own account, such written request shall be deemed to have been
given pursuant to Section 2(b) rather than Section 2(a), and the rights of the
holders of Registrable Securities covered by such written request shall be
governed by Section 2(b).
(d) The Company shall file with the Commission within 120 days of the final
Closing Date (the "Filing Date"), and use its reasonable commercial efforts to
cause to be declared effective a Registration Statement within 270 days of the
Closing Date (the "Effective Date"). The Company will register one share of
Common Stock in the afore described registration statement for each share of
Common Stock contained in the Units and one share of Common Stock for each
common share issuable upon exercise of the Warrants. The Registrable Securities
shall be reserved and set aside exclusively for the benefit of the Subscriber
and not issued, employed or reserved for anyone other than the Subscriber. the
Company may delay the Filing Date and Effective Date during the pendency of
negotiations with an underwriter for an initial public offering by the Company
of its securities. Any such delay may not be longer than thirty (30) days in
connection with the Filing Date and sixty (60) days in connection with the
Effective Date.
3. Registration Procedures. If and whenever the Company is required by the
------------------------
provisions hereof to effect the registration of any shares of Registrable
Securities under the Act, the Company will, as expeditiously as possible:
(a) prepare and file with the Commission a registration statement with
respect to such securities and use its best efforts to cause such registration
statement to become and remain effective for the period of the distribution
contemplated thereby (determined as herein provided), and promptly provide to
the holders of Registrable Securities copies of all filings upon request of such
holder.
(b) prepare and file with the Commission such amendments and supplements to
such registration statement and the prospectus used in connection therewith as
may be necessary to keep such registration statement effective until the latest
of: (i) six months after the exercise period of the Warrants; or (ii) one year
after the Closing Date, and comply with the provisions of the Act with respect
to the disposition of all of the Registrable Securities covered by such
registration statement in accordance with the Seller's intended method of
disposition set forth in such registration statement for such period;
(c) furnish to the Seller, and to each underwriter if any, such number of
copies of the registration statement and the prospectus included therein
(including each preliminary prospectus) as such persons reasonably may request
in order to facilitate the public sale or their disposition of the securities
covered by such registration statement;
(d) use its best efforts to register or qualify the Seller's Registrable
Securities covered by such registration statement under the securities or "blue
sky" laws of such jurisdictions as the Seller and in the case of an underwritten
public offering, the managing underwriter shall reasonably request, provided,
however, that the Company shall not for any such purpose be required to qualify
generally to transact business as a foreign corporation in any jurisdiction
where it is not so qualified or to consent to general service of process in any
such jurisdiction;
(e) list the Registrable Securities covered by such registration statement
with any securities exchange on which the Common Stock of the Company is then
listed;
(f) immediately notify the Seller and each underwriter under such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act, of the happening of any event of which
the Company has knowledge as a result of which the prospectus contained in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing;
(g) make available for inspection by the Seller, any underwriter
participating in any distribution pursuant to such registration statement, and
any attorney, accountant or other agent retained by the Seller or underwriter,
all publicly available, non-confidential financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors and employees to supply all publicly available,
non-confidential information reasonably requested by the seller, underwriter,
attorney, accountant or agent in connection with such registration statement.
4. Provision of Documents.
------------------------
(a) At the request of the Seller, provided a demand for registration has been
made pursuant to Section 2(a) or a request for registration has been made
pursuant to Section 2(b), the Registrable Securities will be included in a
registration statement filed pursuant to this Agreement. In the event of an
underwritten public offering in which the Registrable Securities are so
included, the lockup, if any, requested by the managing underwriter may not
exceed nine months after the effective date thereof.
(b) In connection with each registration hereunder, the Seller will furnish to
the Company in writing such information and representation letters with respect
to itself and the proposed distribution by it as reasonably shall be necessary
in order to assure compliance with federal and applicable state securities laws.
In connection with each registration pursuant to Section 2(a) or 2(b) covering
an underwritten public offering, the Company and the Seller agree to enter into
a written agreement with the managing underwriter in such form and containing
such provisions as are customary in the securities business for such an
arrangement between such underwriter and companies of the Company's size and
investment stature.
5. Expenses. All expenses incurred by the Company in complying with this
--------
Agreement, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel and independent public
accountants for the Company, fees and expenses (including reasonable counsel
fees) incurred in connection with complying with state securities or "blue sky"
laws, fees of the National Association of Securities Dealers, Inc., transfer
taxes, fees of transfer agents and registrars, fee of one counsel, if any, to
represent all the Sellers, and costs of insurance are called "Registration
Expenses". All underwriting discounts and selling commissions applicable to the
sale of Registrable Securities, including any fees and disbursements of any
special counsel to the Seller, are called "Selling Expenses". The Seller shall
pay the fees of its own additional counsel, if any.
The Company will pay all Registration Expenses in connection with the
Registration Statement. All Selling Expenses in connection with each
Registration Statement shall be borne by the Seller and may be apportioned among
the Sellers in proportion to the number of shares sold by the Seller relative to
the number of shares sold under such Registration Statement or as all Sellers
thereunder may agree.
6. Indemnification and Contribution.
----------------------------------
(a) In the event of a registration of any Registrable Securities under the Act
pursuant to this Agreement, the Company will indemnify and hold harmless the
Seller, each officer of the Seller, each director of the Seller, each
underwriter of such Registrable Securities thereunder and each other person, if
any, who controls such Seller or underwriter within the meaning of the 1933 Act,
against any losses, claims, damages or liabilities, joint or several, to which
the Seller, or such underwriter or controlling person may become subject under
the Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in any registration
statement under which such Registrable Securities was registered under the Act
pursuant to this Agreement, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Seller, each such underwriter and each such
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case if and to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission so made in conformity with information
furnished by any such Seller, the underwriter or any such controlling person in
writing specifically for use in such registration statement or prospectus.
(b) In the event of a registration of any of the Registrable Securities under
the Act pursuant to this Agreement, the Seller will indemnify and hold harmless
the Company, and each person, if any, who controls the Company within the
meaning of the Act, each officer of the Company who signs the registration
statement, each director of the Company, each underwriter and each person who
controls any underwriter within the meaning of the Act, against all losses,
claims, damages or liabilities, joint or several, to which the Company or such
officer, director, underwriter or controlling person may become subject under
the Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in the registration
statement under which such Registrable Securities were registered under the Act
pursuant to this Agreement, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company and each such officer, director,
underwriter and controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action, provided, however, that the Seller will be
liable hereunder in any such case if and only to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with information pertaining to such Seller, as such, furnished
in writing to the Company by such Seller specifically for use in such
registration statement or prospectus, and provided, further, however, that the
liability of the Seller hereunder shall be limited to the proportion of any such
loss, claim, damage, liability or expense which is equal to the proportion that
the public offering price of the Registrable Securities sold by the Seller under
such registration statement bears to the total public offering price of all
securities sold thereunder, but not in any event to exceed the gross proceeds
received by the Seller from the sale of Registrable Securities covered by such
registration statement.
(c) Promptly after receipt by an indemnified party hereunder of notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party hereunder, notify the
indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
such indemnified party other than under this Section 7(c) and shall only relieve
it from any liability which it may have to such indemnified party under this
Section 7(c) if and to the extent the indemnifying party is prejudiced by such
omission. In case any such action shall be brought against any indemnified party
and it shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in and, to the extent it
shall wish, to assume and undertake the defense thereof with counsel
satisfactory to such indemnified party, and, after notice from the indemnifying
party to such indemnified party of its election so to assume and undertake the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under this Section 7(c) for any legal expenses subsequently incurred by
such indemnified party in connection with the defense thereof other than
reasonable costs of investigation and of liaison with counsel so selected,
provided, however, that, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be reasonable defenses available to it
which are different from or additional to those available to the indemnifying
party or if the interests of the indemnified party reasonably may be deemed to
conflict with the interests of the indemnifying party, the indemnified parties
shall have the right to select one separate counsel and to assume such legal
defenses and otherwise to participate in the defense of such action, with the
reasonable expenses and fees of such separate counsel and other expenses related
to such participation to be reimbursed by the indemnifying party as incurred.
(d) In order to provide for just and equitable contribution in the event of
joint liability under the Act in any case in which either (i) the Seller, or any
controlling person of the Seller, makes a claim for indemnification pursuant to
this Section 7 but it is judicially determined (by the entry of a final judgment
or decree by a court of competent jurisdiction and the expiration of time to
appeal or the denial of the last right of appeal) that such indemnification may
not be enforced in such case notwithstanding the fact that this Section 7
provides for indemnification in such case, or (ii) contribution under the Act
may be required on the part of the Seller or controlling person of the Seller in
circumstances for which indemnification is provided under this Section 7; then,
and in each such case, the Company and the Seller will contribute to the
aggregate losses, claims, damages or liabilities to which they may be subject
(after contribution from others) in such proportion so that the Seller is
responsible only for the portion represented by the percentage that the public
offering price of its securities offered by the registration statement bears to
the public offering price of all securities offered by such registration
statement, provided, however, that, in any such case, (A) the Seller will not be
required to contribute any amount in excess of the public offering price of all
such securities offered by it pursuant to such registration statement; and (B)
no person or entity guilty of fraudulent misrepresentation (within the meaning
of Section 10(f) of the Act) will be entitled to contribution from any person or
entity who was not guilty of such fraudulent misrepresentation.
7. Assignment and Amendment. Notwithstanding anything herein to the
--------------------------
contrary:
(a) Registration Rights. The registration rights of a Holder under this
--------------------
Agreement may be assigned to a party who acquires Registrable Securities from a
Holder (or a Holder's permitted assigns) only if: (i) such Holder agrees in
writing with the transferee or assignee to assign such rights, and the Company
is given written notice by the assigning party before, at or after the time of
such assignment stating the name and address of the assignee and identifying the
securities of the Company as to which the rights in question are being assigned;
and (ii) the transferee or assignee agrees in writing with the Company to be
bounded by all of the terms and conditions of this Agreement, including, without
limitation, the provisions of this Section.
(b) Amendment of Rights. Any provision of this Agreement may be amended and
-------------------
the observance thereof may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written
consent of the Company and Investors (and/or any of their permitted successors
or assigns) holding shares representing and/or exercisable into a majority of
all the Registration Securities. Any amendment or waiver effected in accordance
with this subsection 8(b) shall be binding upon each Investor, each Holder, each
permitted successor or assignee of such Investor or Holder and the Company.
8. Miscellaneous.
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(a) Notices. All notices or other communications given or made hereunder
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shall be in writing and shall be personally delivered or deemed delivered the
first business day after being telecopied (provided that a copy is delivered by
first class mail) or on the third business day after being mailed by first class
mail, to the party to receive the same at its address set forth below or to such
other address as either party shall hereafter give to the other by notice duly
made under this Section: (i) if to the Company, to EconoShare, Inc. 1510 51 St.
Brooklyn NY 11219.
and (ii) if to the Subscriber, to the name, address and telecopier number set
forth on the signature page hereto.
(b) Entire Agreement; Assignment. This Agreement and the documents referred
----------------------------
to herein represent the entire agreement between the parties hereto with respect
to the subject matter hereof and may be amended only by a writing executed by
the parties pursuant to Section 8 hereof. No right or obligation of either
party shall be assigned by that party without prior notice to and the written
consent of the other party except as described in Section 8 hereof.
(c) Execution. This Agreement may be executed by facsimile transmission,
---------
and in counterparts, each of which will be deemed an original.
(d) Law Governing this Agreement. This Agreement shall be governed by and
------------------------------
construed in accordance with the laws of the State of placeStateNevada without
regard to principles of conflicts of laws. Any action brought by either party
against the other concerning the transactions contemplated by this Agreement
shall be brought exclusively in the state courts of placeStateNevada or in the
federal courts located in the state of placeStateNevada. The parties and the
Company agree to submit to the jurisdiction of such courts and waive trial by
jury. The prevailing party shall be entitled to recover from the other party
its reasonable attorney's fees and costs. In the event that any provision of
this Agreement or any other agreement delivered in connection herewith is
invalid or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of
law. Any such provision which may prove invalid or unenforceable under any law
shall not affect the validity or enforceability of any other provision of any
agreement.
(e) Adjustments for Stock Splits, etc. Wherever in this Agreement there is
-----------------------------------
a reference to a specific number of shares of Common Stock of the Company of any
class or series, then, upon the occurrence of any subdivision, combination or
stock dividend of such class or series of stock, the specific number of shares
so referenced in this Agreement shall automatically be proportionally adjusted
to reflect the effect on the outstanding shares of such class or series of stock
by such subdivision, combination or stock dividend.
[THIS SPACE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto
as of the date first written above.
ECONOSHARE, INC.
By:________________________________
Hyman Schwartz
President and Chief Financial Officer
INVESTOR:
___________________________________
Signature
___________________________________
Print Name
___________________________________
Address
___________________________________
Address
___________________________________
Telecopier Number (must be provided)