Washington, D.C. Location
Washington, DC 20015
Princeton, NJ Location
Princeton, NJ 08540
THIS AGREEMENT is made this [Date] by and between [Patent Research Co.], a [Type of Organization] with offices at [Address] (“Patent Research Co.”), and [Name of Fund], a [Type of Organization] with offices at [Address] (the “Investment Subscriber”).
WHEREAS, the Patent Research Co. is seeking an infusion of capital and is desirous of potential investors; and
WHEREAS, the Investment Subscriber is desirous of investing in the Patent Research Co. in exchange for the purchase of membership interests;
NOW, THEREFORE, in consideration of the promises and agreements set forth herein, the parties, each intending to be legally bound hereby, do promise and agree as follows:
1. MEMBERSHIP INTERESTS
A. The undersigned Investment Subscriber hereby subscribes for and agrees to purchase a membership interest in Patent Research Co., a Connecticut limited liability Patent Research Co. (the “Patent Research Co. Membership Interest”) The Membership Interest being offered are more fully described in the Offering Memorandum (the “Memorandum”) dated [Date], which is incorporated herein by reference.
B. The Investment Subscriber hereby encloses a check representing irrevocable payment of $[amount] (the “Purchase Payment”) made payable to [law firm], Escrow Acct. The undersigned hereby, concurrently with this Subscription Agreement, executes and delivers a signature page to the Patent Research Co. Operating Agreement (“Patent Research Co. Signature Page”) attached hereto. Investment Subscriber acknowledges and agrees that, notwithstanding execution and delivery of the Signature Page, he will not become a member of the Patent Research Co. (and will have no rights with respect thereto) except in accordance with Paragraph E(2) below. Investment Subscriber hereby confirms that he has reviewed a copy of the Patent Research Co. Operating Agreement which is contained in Appendix A to the Memorandum and by execution and delivery of the Signature Page agrees to their terms and conditions.
C. The Investment Subscriber acknowledges that (i) the Membership Interest has not been registered under the Securities Act of 1933, as amended (the “1933 Act”), or the securities laws of any state or other jurisdiction that, absent an exemption, would require registration; (ii) the Membership Interest is being offered for sale in reliance upon exemptions from registration contained in the 1933 Act and applicable state laws; (iii) the Patent Research Co. is being registered as an investment Patent Research Co. under the U.S. Investment Patent Research Co. Act of 1940 (the “Patent Research Co. Act”) in reliance upon the Patent Research Co. being excluded from the definition of an investment Patent Research Co.; and (iv) the Patent Research Co.’s reliance upon such exemptions is based in part upon the Investment Subscriber’s representations, warranties and agreements contained in this Subscription Agreement.
2. REPRESENTATIONS AND WARRANTIES
A. In order to induce the Patent Research Co. to accept this Subscription Agreement, the Investment Subscriber represents and warrants to, and covenants and agrees with, the Patent Research Co. as follows.
1. The Investment Subscriber understands and agrees that: (a) substantially all net proceeds will be used to purchase securities offered by Patent Research Co.; and (b) this Subscription Agreement, the Operating Agreements of the Patent Research Co., the Memorandum, and all other documents or agreements relating to an investment by the Investment Subscriber in the Membership Interest (collectively, the “Subject Documents”), unless properly revoked before closing of a sale of the Membership Interest to the Investment Subscriber, will be irrevocable and will survive the Investment Subscriber’s death, disability or insolvency, except that the Investment Subscriber will have no obligations in the event that this Subscription Agreement is rejected in its entirety by the Manager. The Investment Subscriber acknowledges that in the event of conflicts between the Memorandum and the Patent Research Co. Operating Agreements, any other information distributed prior to the date of the closing of the sale of the Membership Interests (the “Closing Date”), the provisions of the Operating Agreements of the Patent Research Co. and this Subscription Agreement shall control.
2. The Investment Subscriber understands and agrees that (a) this Subscription Agreement, the Signature Pages, and the Purchase Payment tendered in accordance herewith, may be accepted or rejected in whole or in part in the sole and absolute discretion of the Patent Research Co.; the unaccepted remainder of the Purchase Payment to be refunded to the Investment Subscriber in the event that the Manager does not accept the entire Purchase Payment and if the Manager accepts this Subscription Agreement in whole or part and the Investment Subscriber tenders the Purchase Payment to the Patent Research Co. in accordance with paragraph C above, then the Investment Subscriber will become a Member of the Patent Research Co. in the manner described below and such Member’s executed Signature Pages will become a part of the Patent Research Co. ‘s Operating Agreement.
3. The Investment Subscriber has read carefully each of the Subject Documents and, to the extent believed necessary, has discussed with its counsel the representations, warranties and agreements which the Investment Subscriber makes by signing them, and the applicable limitations upon the Investment Subscriber’s resale of the Patent Research Co. Membership Interest. The Investment Subscriber understands that no federal or state agency has made any finding or determination regarding the fairness of the offering of the Membership Interest, or any recommendation or endorsement of the offering of the Membership Interest.
4. The Investment Subscriber is purchasing the Membership Interest for the Investment Subscriber’s own account, with the intention of holding the Membership Interest for investment, with no present intention of dividing or allowing others to participate in this investment or of reselling or otherwise participating, directly or indirectly, in a distribution of the Membership Interest; and will not make any sale, transfer or other disposition of the Membership Interest without the prior written consent of the Manager in accordance with the Operating Agreement of the Patent Research Co. . No person or entity other than the Investment Subscriber has any direct or indirect beneficial interest in the Membership Interest subscribed for hereunder by the Investment Subscriber.
5. The Investment Subscriber’s overall commitment to investments which are not readily marketable is not disproportionate to the Investment Subscriber’s net worth, and the Investment Subscriber’s investment in the Membership Interest will not cause such overall commitment to become excessive.
6. The Investment Subscriber, if an individual, has adequate means of providing for his current needs and personal and family contingencies and has no need for liquidity in his investment in the Membership Interest.
7. The Investment Subscriber is an “accredited investor” as that term is defined in Section 501(a) under Regulation D promulgated by the Securities and Exchange Commission under the 1933 Act and a “qualified purchaser” as that term is defined under Section 2(a)(51) of the Patent Research Co. Act. The Investment Subscriber is financially able to bear the economic risk of this investment, including the ability to afford holding the Membership Interest for an indefinite period or to afford a complete loss of this investment.
8. The Investment Subscriber, together with any purchaser representatives of the Investment Subscriber, has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Patent Research Co. Membership Interest and of making an informed investment decision with respect thereto. The Investment Subscriber acknowledges that the Memorandum may not contain all information that is essential to making an investment decision with respect to the Patent Research Co. Membership Interest, and that it must rely on its own examination of the Patent Research Co. and the terms and conditions of the offering, regardless of the information contained in the Memorandum, prior to making any investment decision with respect to the Patent Research Co. Membership Interest.
9. The Investment Subscriber is not subscribing for the Patent Research Co. Membership Interest as a result of or subsequent to any advertisement, article, notice or other communication published in any newspaper, magazine, or similar media or broadcast over television or radio, any seminar or meeting, or any solicitation of a subscription by a person or entity not previously known to the Investment Subscriber in connection with investment in securities generally.
10. The Investment Subscriber represents that in making this subscription to purchase the Patent Research Co. Membership Interest no oral representations or warranties have been made to Investment Subscriber. The Investment Subscriber acknowledges that it has been advised that no person or entity is authorized to give any information, or to make any statement regarding the Patent Research Co. or the offering, and that any such information or statement must not be relied upon as having been authorized by the Patent Research Co. or the Manager, their members, officers, affiliates or professional advisors.
11. The Investment Subscriber has not engaged any broker or other person or entity that is entitled to a commission, fee or other remuneration as a result of the execution, delivery or performance of any of the Subject Documents.
12. The Investment Subscriber has full power and authority to execute and deliver each of the Subject Documents requiring such execution and delivery, and such Subject Documents have been duly executed and delivered by or on behalf of the Investment Subscriber and constitute legal, valid and binding obligations of the Investment Subscriber enforceable in accordance with their respective terms, except to the extent such enforceability may be limited by the laws of bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally or by general principles of equity.
13. Neither the execution, delivery nor performance by the Investment Subscriber of the Subject Documents requiring such execution, delivery and performance violates or conflicts with, creates (with or without the giving of notice or the lapse of time, or both) a default under or a lien or encumbrance upon any of the Investment Subscriber’s assets or properties pursuant to or requires the consent, approval or order of any government or governmental agency or other person or entity under (a) any note, indenture, lease, license or other material agreement to which the Investment Subscriber is a party or by which it or any of its assets or properties is bound or (b) any statute, law, rule, regulation or court decree binding upon or applicable to the Investment Subscriber or its assets or properties. If the Investment Subscriber is not a natural person, the execution and delivery by the Investment Subscriber of the Subject Documents have been duly authorized by all necessary corporate or other action on behalf of the Investment Subscriber and such investment will not constitute a breach or violation of, or default under, the charter or by-laws or equivalent governing documents of the Investment Subscriber.
14. The Investment Subscriber has received and read the Subject Documents and understands all of the terms of this offering and the risks associated with this investment, including without limitation the risks identified under the heading “Risk Factors” in the Memorandum and in the Appendices.
15. The Investment Subscriber has no knowledge that the statements contained in the Memorandum are not true and correct in all material respects. The Investment Subscriber has consulted its own financial, legal and tax advisors with respect to the economic, legal and tax consequences of an investment in the Membership Interest and has not relied on the Memorandum, the Patent Research Co., or the Patent Research Co.’s members, officers, affiliates or professional advisors for advice as to such consequences.
16. The Investment Subscriber has been given the opportunity to ask questions of, and receive answers from, the Patent Research Co. concerning the terms and conditions of the offering and to obtain additional information necessary to verify the accuracy of the information contained in the Subject Documents or such other information as the Investment Subscriber desired in order to evaluate the investment, and the Investment Subscriber availed itself of such opportunity to the extent considered appropriate in order to evaluate the merits or risks of the proposed investment, and all of its questions and requests for documents and information have been answered to its complete satisfaction.
17. The Investment Subscriber has accurately completed the Qualified Purchaser Questionnaire provided herewith and has executed such Qualified Purchaser Questionnaire and any applicable exhibits thereto. In addition, if the Investment Subscriber has used a financial advisor to assist it in evaluating an investment in the Patent Research Co. Membership Interest such financial advisor has executed and delivered to the Patent Research Co. a dated and completed Purchaser Representative Questionnaire.
18. The Investment Subscriber understands that: (a) the Patent Research Co. Membership Interest will not be registered under the 1933 Act, or any state or other securities laws; (b) the Patent Research Co. is not and will not be registered under the Patent Research Co. Act; (c) registration under such laws or any other securities laws is not contemplated by the Patent Research Co.; (d) there is no public market for the Membership Interest and that such a market is not likely to develop in the future; (e) the Investment Subscriber may have to hold the Patent Research Co. Membership Interest indefinitely and it may not be possible for the Investment Subscriber to liquidate its investment in the Patent Research Co.; and (f) the Investment Subscriber should not purchase the Patent Research Co. Membership Interest unless it can afford a complete loss of its investment and bear the burden of such loss for an indefinite period of time.
19. The Investment Subscriber, if an individual, is at least 21 years of age and has full legal capacity to enter into and perform his obligations under the Subject Documents. The Investment Subscriber, if signing this Subscription Agreement on behalf of an entity, has been duly authorized by such entity to do so.
20. If the Investment Subscriber is, or is acting on behalf of, an employee benefit plan (the “Plan”) which is subject to ERISA: (a) the Plan, and any fiduciaries responsible for the Plan’s investments, are aware of and understand the Patent Research Co.’s investment objectives, policies and strategies, and the decision to invest the Plan’s assets in the Patent Research Co. was made with appropriate consideration of relevant investment factors with regard to the Plan including the diversification requirements of Section 404(a)(1)(c)(3) of ERISA; (b) the fiduciary or other person signing this Subscription Agreement on behalf of the Investment Subscriber has not received or relied on any advice of the Patent Research Co. with respect to an investment in the Patent Research Co.; (c) this subscription and the investment contemplated hereby are authorized and executed in accordance with all requirements applicable to the Plan under its governing instruments; and (d) the Investment Subscriber acknowledges its understanding that neither of the Patent Research Co. nor their Manager will be a “fiduciary” (within the meaning of Section 3(21) of ERISA) with respect of any assets of the Plan by reason of the Investment Subscriber’s investment in the Patent Research Co. .
21. If the Investment Subscriber is, or is acting on behalf of, a Plan which is not subject to ERISA: (a) the Investment Subscriber is duly authorized, qualified and permitted by the laws and regulations of each jurisdiction to which it is subject, and the Plan, to purchase the Patent Research Co. Membership Interest; (b) any information which the Investment Subscriber has previously provided with respect to its financial position and business experience is true and correct as of the Closing and does not omit any statement necessary to make the statements therein not misleading; (c) the Investment Subscriber has been informed of and understands the investment objectives and policies of, and the investment strategies that may be pursued by, the Patent Research Co. and has given appropriate consideration to the facts and circumstances relevant to the investment by such Investment Subscriber in the Patent Research Co. including, to the extent such Investment Subscriber is responsible for such determination, whether such investment is reasonably designed, as part of such Investment Subscriber’s portfolio of investment, to further the purposes of the Plan; (d) the Investment Subscriber’s investment in the Patent Research Co. complies with all applicable prudence and diversification requirements and procedures with respect to investments contained in the Plan; and (e) the Investment Subscriber’s investment in the Patent Research Co. will not conflict with, or result in a violation of, and is permitted by the provisions of the Plan or any other statute, rule, regulation, order or governing law applicable to such Investment Subscriber.
22. The foregoing representations and warranties are true and accurate as of the date hereof and will be true and accurate as of the date of delivery of this Subscription Agreement to the Patent Research Co. and will survive such delivery. If at any time prior to issuance of the Patent Research Co. Membership Interest to the Investment Subscriber, any representation and warranty of the Investment Subscriber is no longer true, the Investment Subscriber promptly will give written notice to the Patent Research Co. specifying which representations and warranties are not true and the reason therefor, whereupon the Investment Subscriber’s subscription may be rejected or, if previously accepted, such acceptance may be rescinded.
23. The Investment Subscriber acknowledges that it understands the meaning and legal consequences of the representations, warranties, acknowledgment and agreements contained in this Subscription Agreement and in the Qualified Purchaser Questionnaire, and hereby agrees to indemnify and hold harmless the Patent Research Co., their members, officers, managers, affiliates, agents and representatives, from and against any and all loss, damage, expense, claim, liability, action, suit or proceeding (including the reasonable fees and expenses of legal counsel) (collectively, “Loss”) as incurred arising out of or in any manner whatsoever connected with a breach of any representation or warranty of the Investment Subscriber, or the Investment Subscriber’s failure to perform any obligation or agreement, contained in this Subscription Agreement, in the Qualified Purchaser Questionnaire or in any other Subject Document. The Investment Subscriber acknowledges that such damage could be substantial since: (a) the Membership Interest is being offered without registration under the 1933 Act in reliance upon the exemption pursuant to Section 4(2) of the 1933 Act thereof and Regulation D thereunder for transactions by an issuer not involving a public offering and, in various states, pursuant to exemptions from registration; (b) the Patent Research Co. is not being registered as an investment Patent Research Co. under the Patent Research Co. Act in reliance upon the Patent Research Co. being excluded from the definition of an investment Patent Research Co. by reason of Section 3(c)(7) of the Patent Research Co. Act; (c) the availability of such exemptions is, in part, dependent upon the truthfulness and accuracy of the representations made by the Investment Subscriber herein and in its Qualified Purchaser Questionnaire; and (d) the Patent Research Co. will rely on such representations in accepting the Investment Subscriber’s Subscription Agreement. The Investment Subscriber further agrees that in the event it brings any action against the Patent Research Co. or any other person or entity in connection with its purchase of the Patent Research Co. Membership Interest it will indemnify the Patent Research Co. and/or any such person or entity for any and all Loss incurred by them (or any of them) in connection with defending such action in the event the Investment Subscriber does not prevail in such action.
The Investment Subscriber acknowledges and agrees that all information, written and oral, concerning the Patent Research Co. furnished from time to time to the Investment Subscriber, including the Subject Documents, is provided on a confidential basis. The Investment Subscriber further acknowledges and agrees that it will not disclose such information, other than where such disclosure is required by law or where such information is already available to the public other than as a result of disclosure by the Investment Subscriber, to anyone other than the Investment Subscriber’s officers, directors, employees, legal counsel, accountants, or authorized agents or advisors, who will agree in writing to be bound by the provisions of this Section.
4. EXECUTION IN COUNTERPARTS
This Subscription Agreement may be executed in two or more counterparts, each of which shall constitute an original and all of which, taken together, will constitute the same agreement.
5. NOTICE AND PAYMENT
A. Any notice required to be given under this Agreement shall be in writing and delivered personally to the other designated party at the above stated address or mailed by certified, registered or Express mail, return receipt requested or by Federal Express.
B. Either party may change the address to which notice or payment is to be sent by written notice to the other under any provision of this paragraph.
This Agreement shall be governed in accordance with the laws of the State of [State]. All disputes under this Agreement shall be resolved by litigation in the courts of the State of [State] including the federal courts therein and the Parties all consent to the jurisdiction of such courts, agree to accept service of process by mail, and hereby waive any jurisdictional or venue defenses otherwise available to it.
7. AGREEMENT BINDING ON SUCCESSORS
The provisions of the Agreement shall be binding upon and shall inure to the benefit of the Parties hereto, their heirs, administrators, successors and assigns.
Neither party may assign this Agreement or the rights and obligations thereunder to any third party without the prior express written approval of the other party which shall not be unreasonably withheld.
No waiver by either party of any default shall be deemed as a waiver of prior or subsequent default of the same of other provisions of this Agreement.
If any term, clause or provision hereof is held invalid or unenforceable by a court of competent jurisdiction, such invalidity shall not affect the validity or operation of any other term, clause or provision and such invalid term, clause or provision shall be deemed to be severed from the Agreement.
This Agreement constitutes the entire understanding of the Parties, and revokes and supersedes all prior agreements between the Parties and is intended as a final expression of their Agreement. It shall not be modified or amended except in writing signed by the Parties hereto and specifically referring to this Agreement. This Agreement shall take precedence over any other documents which may conflict with this Agreement.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have each caused to be affixed hereto its or his/her hand and seal the day indicated.
[Name of Investment Subscriber] [Name of Patent Research Co.]
ALL INVESTMENT SUBSCRIBERS MUST COMPLETE THIS PAGE
IN WITNESS WHEREOF, the Investment Subscriber has executed this Subscription Agreement on this _____ day of _______________, 2000.
Membership Interest for a purchase price of $____________.
Manner in which title is to be held (Please Check One):
1. / / Individual Plan
2. / / Joint Tenants with Right of Survivorship
3. / / Community Property Under the Uniform Gift to Minors Act of the State of ________________
4. / / Tenants in Common
5. / / Corporation/Partnership
6. / / IRA
7. / / Trust/Estate/Pension or Profit Sharing Date Opened: __________
8. / / As a Custodian for _____________
9. / / Married with Separate Property
10. / / Keogh
EXECUTION BY INVESTMENT SUBSCRIBER WHO IS A NATURAL PERSON
Exact Name in Which Title is to be Held
(If Joint Tenant or Tenants in Common, both persons must
sign and this page must contain all information for both persons).
Name (Please Print)
Residence: Number and Street
City State Zip Code
Social Security Number
ACCEPTED this ____ day of _____________, 2000, on behalf of the Patent Research Co.
(Corporation, Partnership, Limited Liability Patent Research Co., Trust, Etc.)
Name of Entity (Please Print)
Type of Entity (Partnership, Corporation, Limited Liability Patent Research Co., Trust Estate, Other)
Address of Principal Office of Entity
The Investment Subscriber represents and warrants that (i) he or she is the ______________ (Insert Title) of the above entity, (ii) he or she has full power and authority to execute this Subscription Agreement and the other Subject Documents on behalf of the above entity and (iii) investment in the Patent Research Co. by the above entity is not prohibited by the governing documents of the entity.
(If Entity is a Corporation)
Taxpayer Identification Number
ACCEPTED this ____ day of ___________, 2000, on behalf of the Patent Research Co.