EX-10.16
EXECUTION COPY
SUBSCRIPTION NO.:
____________________________
OFFEREE:
____________________________
[SHEERVISION LOGO]
---------------
SUBSCRIPTION PACKAGE
---------------
UP TO 24 UNITS, EACH UNIT CONSISTING OF
$50,000
PRINCIPAL AMOUNT OF 12% SENIOR SECURED CONVERTIBLE NOTES DUE
2006
AND
1,200 COMMON STOCK PURCHASE WARRANTS
OFFERING PRICE PER UNIT: $50,000
MINIMUM SUBSCRIPTION: ONE UNIT
---------------
[NORTHEAST SECURITIES, INC. LOGO]
August 24, 2005
<PAGE>
SUBSCRIPTION INSTRUCTIONS
(PLEASE READ CAREFULLY)
NO PERSON WILL BE ACCEPTED AS A PURCHASER PRIOR TO THE CLOSING OF
THE
OFFERING. THE COMPANY AND THE PLACEMENT AGENT EACH RESERVES THE
RIGHT TO REJECT
ANY SUBSCRIPTION, IN WHOLE OR IN PART, OR TO ALLOT TO ANY
PROSPECTIVE PURCHASER
FEWER THAN THE NUMBER OF UNITS SUBSCRIBED FOR BY SUCH PURCHASER.
ANY
REPRESENTATION TO THE CONTRARY IS UNAUTHORIZED AND MUST NOT BE
RELIED UPON.
SheerVision, Inc., a California corporation (the "COMPANY"), is
hereby
offering (the "OFFERING") units (the "UNITS") each comprised of
$50,000
Principal Amount of 12% Senior Secured Convertible Notes (the
"NOTES") due 2006
and common stock purchase warrants (the "WARRANTS") exercisable for
an aggregate
of 1,200 shares of common stock, no par value (the "COMMON STOCK"),
of the
Company. The purchase price per Unit (the "PURCHASE PRICE") shall
be US$50,000
per Unit. The exercise price of the Warrant shall be $2.70 per
share of Common
Stock. Each subscription must be for a minimum of one Unit unless
the Company
and Northeast Securities Corporation, as placement agent (the
"PLACEMENT
AGENT"), in their sole discretion, permit subscriptions for a
lesser amount.
I. This
Subscription Booklet contains all of the materials necessary
for
you to purchase the Shares. This material is arranged in the
following
order:
o
Confidential Private Placement Memorandum
o
Subscription Agreement
o A.
Subscription Package for an INDIVIDUAL investor
o B.
Subscription Package for a TRUST investor
o C.
Subscription Package for a PARTNERSHIP investor
o D.
Subscription Package for a CORPORATE investor
o E.
Subscription Package for a RETIREMENT PLAN investor
Each Subscription Package contains:
(1) a
Questionnaire designed to enable you to demonstrate that you
meet the minimum legal requirements under Federal and state
securities laws to
purchase the Units; and
(2) a
Signature Page for the Questionnaire and the Subscription
Agreement containing representations relating to your
subscription.
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<PAGE>
II. After
reading the Subscription Agreement, please turn to the
appropriate Subscription Package (A, B, C, D, or E) and fill in
all
applicable information. You must complete and sign ALL of the
documents
in the appropriate section. This includes: (a) the Questionnaire,
and
(b) the Signature Page for the Questionnaire and the
Subscription
Agreement. Once you have completed the appropriate portions of
the
Subscription Booklet, please return the entire Subscription Booklet
and
any additional required documents (as described in the
Questionnaire)
to the Placement Agent at the address set forth below in Section
IV.
III.
The Purchase Price may be made by check or by wire transfer as
provided
below:
Bank Name:
U.S. Bank
Bank Address:
15910 Ventura Blvd., Encino, CA 91436
Bank Representative: Lucy
ABA Number:
1222-35821
Account Name:
SheerVision, Inc.
Account Number
1 643 0112 0527
Reference:
SheerVision, Inc. Private Placement
Checks should be made payable to SheerVision, Inc. and
forwarded
together with the completed subscription documents to the Placement
Agent.
If you are a foreign person or foreign entity, you may be subject
to a
withholding tax on dividends paid by the Company. In order to
eliminate or
reduce such withholding tax, you may submit a properly executed
Internal Revenue
Service Form 4224 (Exemption from Withholding of Tax on Income
Effectively
Connected with the Conduct of a Trade or Business in the United
States) or
Internal Revenue Service Form 1001 (Ownership Exemption or Reduced
Rate
Certificate), claiming exemption from withholding or eligibility
for treaty
benefits in the form of a lower rate of withholding tax on interest
or
dividends.
IV. Send all
completed documents together with the requisite payment to the
Placement Agent at the following address:
Northeast Securities, Inc.
100 Wall Street, 8th Floor
New York, New York 10005
Attention: David Tsiang
V. Questions regarding completion of subscription documents should
be directed
to David Tsiang at the above address, telephone: (212)
607-5406.
iii
<PAGE>
PLEASE PRINT IN INK OR TYPE ALL INFORMATION
FAILURE TO COMPLY WITH THE ABOVE INSTRUCTIONS WILL CONSTITUTE
AN
INVALID SUBSCRIPTION, WHICH, IF NOT CORRECTED, WILL RESULT IN THE
REJECTION OF
YOUR SUBSCRIPTION REQUEST. EVEN IF CORRECTED, THE DELAY MAY RESULT
IN (1) THE
ACCEPTANCE OF PURCHASERS WHOSE SUBSCRIPTION BOOKLETS WERE INITIALLY
RECEIVED BY
THE PLACEMENT AGENT AFTER YOURS OR (2) THE OFFERING BEING CLOSED
WITHOUT YOUR
SUBSCRIPTION REQUEST BEING CONSIDERED BY THE COMPANY.
iv
<PAGE>
DEFINITIVE
SUBSCRIPTION AGREEMENT
----------------------------------------
SHEERVISION, INC.
----------------------------------------
To:
SheerVision, Inc.
This Subscription Agreement is made between SheerVision, Inc.,
a
California corporation (the "COMPANY"), and the undersigned
prospective
purchaser who is subscribing hereby for Units (each a "UNIT"), each
Unit
comprised of $50,000 Principal Amount of 12% Senior Secured
Convertible Notes
(the "NOTES") due 2006 and common stock purchase warrants (the
"WARRANTS")
exercisable for an aggregate of 1,200 shares of common stock, no
par value (the
"COMMON STOCK"), of the Company. The purchase price per Unit (the
"PURCHASE
PRICE") shall be $50,000. The exercise price of the Warrant shall
be $2.70 per
share. This subscription is submitted to you in accordance with,
and subject to,
the terms and conditions described in this Subscription Agreement
and the
Confidential Private Placement Memorandum, dated August 24, 2005
(the
"MEMORANDUM"), and, together with this Subscription Agreement (the
"DISCLOSURE
MATERIALS"), provided to the undersigned.
In consideration of the Company's agreement to sell Units, or, in
the
discretion of the Company and Northeast Securities Corporation, as
placement
agent (the "PLACEMENT AGENT"), fractions thereof, to the
undersigned upon the
terms and conditions summarized in the Memorandum, the undersigned
agrees and
represents as follows:
A.
SUBSCRIPTION.
(1) The
undersigned hereby irrevocably subscribes for, and agrees
to purchase, the number of Units indicated on the signature page
hereto at a
purchase price per Unit equal to the Purchase Price. Upon execution
and delivery
hereof, the undersigned shall deliver to the Placement Agent in
accordance with
the terms hereof either a check or evidence that a wire transfer
has been made
to in accordance with this Subscription Agreement and the
instructions hereto,
in the full amount of the purchase price of the Units for which the
undersigned
is subscribing or a check in such amount (the "PAYMENT"). In the
event that the
undersigned shall elect to deliver the Payment in the form of a
check, such
check should have a notation thereon that such check relates to the
SheerVision,
Inc. private placement.
(2) The
Payment (or, in the case of rejection of a portion of the
undersigned's subscription, the part of the Payment relating to
such rejected
portion) will be returned promptly, without interest, if the
undersigned's
subscription is rejected in whole or in part. The
<PAGE>
Company and the Placement Agent will hold an initial closing of the
Offering
(the "INITIAL CLOSING") at such time as the Company and the
Placement Agent may
together determine with no requirement that a minimum number of
Units be sold
thereat, and from time to time thereafter (each an "ADDITIONAL
CLOSING"). The
Company and the Placement Agent expect to hold Additional Closings
from time to
time after the Initial Closing on the basis described herein. Upon
receipt by
the Company of the Payment for Units to be purchased hereunder by
subscribers
whose subscriptions are accepted (each, a "PURCHASER") at the
Initial Closing or
any Additional Closing (each a "CLOSING"), the subscriber for the
Units so
purchased will be registered on the note and warrant registers of
the Company as
the record owner of the securities underlying the Units so
purchased and the
Company shall deliver to the Purchaser: (i) evidence that a Form
UCC-1 financing
statement shall have been filed in the appropriate UCC filing
office for a
debtor that is a registered organization in the State of California
such that
the Security Interest shall constitute a perfected security
interest in the
Collateral (as defined in the Notes), prior to all other Liens and
rights of
others therein, (ii) an executed Note in the form included in the
Disclosure
Materials, (iii) an executed Warrant in the form included in the
Disclosure
Materials, and (iv) an executed Registration Rights Agreement in
the form
included in the Disclosure Materials.
(3) The
undersigned hereby agrees to be bound upon the (i)
execution and delivery to the Placement Agent of the signature page
to the
undersigned's completed questionnaire submitted by the undersigned
(the
"QUESTIONNAIRE") and this Subscription Agreement and (ii)
acceptance on the
Closing by the Company of the undersigned's subscription (the
"SUBSCRIPTION").
(4) The
undersigned agrees that the Company and the Placement
Agent, may, in their sole and absolute discretion, reduce the
undersigned's
subscription to any number of Units that in the aggregate does not
exceed the
number of Units hereby subscribed for without any prior notice to,
or further
consent by, the undersigned. The undersigned hereby irrevocably
constitutes and
appoints the Placement Agent, and each officer of the Placement
Agent, with full
power of substitution, the true and lawful agent and
attorney-in-fact of the
undersigned, with full power and authority in the undersigned's
name, place, and
stead, (A) to amend this Subscription Agreement and the
Questionnaire, including
in each case the undersigned's signature page thereto, to effect
any of the
foregoing provisions of this Paragraph A(4), and (B) execute and
deliver on
behalf of the undersigned, the following agreements, substantially
in the
respective forms attached as Annexes to the Disclosure Materials:
Intercreditor
Agreement; and Registration Rights Agreement.
B.
REGISTRATION RIGHTS
At the Closing relating to this Subscription, the Company shall
deliver
to the undersigned an executed Registration Rights Agreement
substantially in
the form included in the Disclosure Materials.
C.
REPRESENTATIONS AND WARRANTIES.
The undersigned hereby represents and warrants to, and agrees with,
the
Company and the Placement Agent, as follows:
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<PAGE>
(1) The
undersigned has read the Memorandum and fully understands
the Memorandum and the terms of the Offering (as defined in the
instructions
attached hereto). With respect to individual or partnership tax and
other
economic considerations involved in this investment, the
undersigned is not
relying on the Company or the Placement Agent. The undersigned has
carefully
considered and has, to the extent the undersigned believes such
discussion
necessary, discussed with the undersigned's professional legal,
tax, accounting,
and financial advisors the suitability of an investment in the
Units for the
undersigned's particular tax and financial situation and has
determined that the
Units being subscribed for by the undersigned are a suitable
investment for the
undersigned.
(2) The
undersigned acknowledges that all documents, records, and
books pertaining to this investment which the undersigned has
requested
(including, without limitation, the Disclosure Materials) have been
made
available for inspection by the undersigned, the undersigned's
attorney,
accountant, or adviser(s).
(3) The
undersigned and/or the undersigned's adviser(s) has/have
had a reasonable opportunity to ask questions of, and receive
answers from, a
person or persons acting on behalf of the Company concerning the
Offering and
all such questions have been answered to the full satisfaction of
the
undersigned.
(4) The
undersigned is not subscribing for Units as a result of,
or subsequent to, any advertisement, article, notice, or other
communication
published in any newspaper, magazine, or similar media or broadcast
over
television or radio or presented at any seminar or meeting.
(5) The
undersigned: (i) has a pre-existing business relationship
with the Company, the Placement Agent, or one of its respective
officers,
directors, or controlling persons; AND (ii) by reason of the
undersigned's
business or financial experience or the business or financial
experience of the
undersigned's professional advisors who are unaffiliated with, and
who are not
compensated by, the Company, the Placement Agent, or any of its
respective
affiliates, directly or indirectly, can be reasonably assumed to
have the
capacity to protect the undersigned's interests in connection with
the
investment in the Units.
(6) If the
undersigned is a natural person, the undersigned has
reached the age of majority in the state in which the undersigned
resides, has
adequate means of providing for the undersigned's current financial
needs and
contingencies, is able to bear the substantial economic risks of an
investment
in the Units for an indefinite period of time, has no need for
liquidity in such
investment, and, at the present time, could afford a complete loss
of such
investment.
(7) The
undersigned or the undersigned's purchaser representative,
as the case may be, has such knowledge and experience in financial,
tax, and
business matters so as to enable the undersigned to utilize the
information made
available to the undersigned in connection with the Offering to
evaluate the
merits and risks of an investment in the Units and to make an
informed
investment decision with respect thereto.
(8) The
undersigned will not sell or otherwise transfer the Units
without registration under the Securities Act of 1933, as amended
(the
"SECURITIES ACT"), or applicable state securities laws or an
exemption
therefrom. The Units have not been registered under the
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<PAGE>
Securities Act or under the securities laws of any states. The
undersigned
represents that the undersigned is purchasing the Units for the
undersigned's
own account, for investment, and not with a view to resale or
distribution,
except in compliance with the Securities Act. The undersigned has
not offered or
sold any portion of the Units being acquired nor does the
undersigned have any
present intention of dividing such Units with others or of
selling,
distributing, or otherwise disposing of any portion of such Units
either
currently or after the passage of a fixed or determinable period of
time or upon
the occurrence or non-occurrence of any predetermined event or
circumstance in
violation of the Securities Act. Except as otherwise provided in
the Disclosure
Materials, the Company has no obligation to register the Units.
(9) The
undersigned recognizes that investment in the Units
involves substantial risks, including loss of the entire amount of
such
investment. Further, the undersigned has carefully read and
considered the
matters set forth in the Disclosure Materials, and has taken full
cognizance of,
and understands all of, the risks related to the purchase of the
Units.
(10)
The undersigned acknowledges that the certificates
representing the Units shall be stamped or otherwise imprinted with
a legend
substantially in the following form and that the Company may issue
stop transfer
instructions to the transfer agent of such securities:
"THE SECURITIES
REPRESENTED
HEREBY
[AND
ISSUABLE
UPON
THE
CONVERSION/EXERCISE
HEREOF] HAVE NOT
BEEN REGISTERED UNDER UNITED
STATES FEDERAL OR
STATE SECURITIES
LAWS AND MAY NOT BE
OFFERED FOR
SALE, SOLD, OR OTHERWISE DISPOSED OF OR ASSIGNED FOR VALUE,
DIRECTLY OR
INDIRECTLY, NOR MAY
THE SECURITIES BE
TRANSFERRED ON THE BOOKS OF THE
CORPORATION,
WITHOUT
REGISTRATION OF
SUCH SECURITIES UNDER ALL
APPLICABLE
UNITED STATES
FEDERAL AND STATE SECURITIES LAWS OR
COMPLIANCE WITH AN APPLICABLE EXEMPTION THEREFROM, SUCH COMPLIANCE, AT
THE OPTION
OF THE CORPORATION, TO BE EVIDENCED BY AN OPINION OF
STOCKHOLDER'S
COUNSEL, IN
FORM AND SUBSTANCE ACCEPTABLE TO THE
CORPORATION, THAT NO
VIOLATION OF SUCH
REGISTRATION
PROVISIONS WOULD
RESULT FROM ANY PROPOSED TRANSFER OR ASSIGNMENT."
(11)
The undersigned acknowledges and agrees that it shall not be
entitled to seek any remedies with respect to the Offering from any
party other
than the Company and the Placement Agent.
(12)
If this Subscription Agreement is executed and delivered on
behalf of a partnership, corporation, trust, or estate: (i) such
partnership,
corporation, trust, or estate has the full legal right and power
and all
authority and approval required (a) to execute and deliver, or
authorize the
execution and delivery of, this Subscription Agreement and all
other instruments
executed and delivered by, or on behalf of, such partnership,
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<PAGE>
corporation, trust, or estate in connection with the purchase of
its Units, (b)
to delegate authority pursuant to a power of attorney, and (c) to
purchase and
hold such Units; (ii) the signature of the party signing on behalf
of such
partnership, corporation, trust, or estate is binding upon such
partnership,
corporation, trust, or estate; and (iii) such partnership,
corporation, or trust
has not been formed for the specific purpose of acquiring such
Units, unless
each beneficial owner of such entity is qualified as an "ACCREDITED
INVESTOR"
within the meaning of Rule 501(a) of Regulation D promulgated under
the
Securities Act ("REGULATION D") and has submitted information
substantiating
such individual qualification.
(13)
If the undersigned is a retirement plan or is investing on
behalf of a retirement plan, the undersigned acknowledges that
investment in the
Units poses additional risks, including the inability to use losses
generated by
an investment in the Units to offset taxable income.
(14)
The undersigned is an accredited investor, as defined in Rule
501(a) of Regulation D and under state securities of "blue sky"
laws, as
indicated in the applicable Questionnaire attached hereto and
hereby made a part
hereof.
(15)
The undersigned shall indemnify and hold harmless the Company,
the Placement Agent, and each respective officer, director,
employee, agent,
representative or control person thereof, who is or may be a party
to, or is or
may be threatened to be made a party to, any threatened, pending,
or completed
action, suit, or proceeding, whether civil, criminal,
administrative, or
investigative, by reason of, or arising from, any actual or
alleged
misrepresentation or misstatement of facts or omission to represent
or state
facts made or alleged to have been made by the undersigned, or
omitted or
alleged to have been omitted by the undersigned, concerning the
undersigned or
the undersigned's authority to invest or financial position in
connection with
the Offering, including, without limitation, any such
misrepresentation,
misstatement, or omission contained in the Questionnaire or any
other document
submitted by the undersigned, against losses, liabilities, and
expenses
(including reasonable attorneys' fees, judgments, fines, and
amounts paid in
settlement) actually and reasonably incurred by the Company, the
Placement
Agent, and each respective officer, director, employee, agent,
representative or
control person thereof, in connection with such action, suit, or
proceeding.
The Company represents and warrants to, and agrees with the
undersigned, as follows:
(1) The
Company represents and warrants that it is duly organized
and validly exists as a corporation in good standing under the laws
of the State
of California.
(2) The
Company represents and warrants that all necessary
corporate action has been duly and validly taken by the Company to
authorize the
execution, delivery and performance of this Subscription Agreement,
the Notes,
the Warrants and the Registration Rights Agreement (together, the
"TRANSACTION
DOCUMENTS"). If accepted by and countersigned on behalf of the
Company, this
Subscription Agreement has been duly and validly authorized,
executed and
delivered by the Company and constitutes the legal, valid and
binding obligation
of the Company enforceable against the Company in accordance with
its terms,
except (i) as the enforceability thereof may be limited by
bankruptcy,
insolvency (including, without limitation, all laws relating to
fraudulent
transfers), reorganization, moratorium or similar laws affecting
enforcement of
creditors' rights generally, (ii) as enforcement thereof is subject
to general
principles of equity (regardless of whether enforcement is
considered in a
proceeding in equity or at law), and (iii) as enforceability of
any
indemnification provision may be limited under the federal and
state securities
laws.
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<PAGE>
(3) The
execution and delivery by the Company of the Transaction
Documents, the performance of the obligations of the Company
pursuant to each of
the Transaction documents and the issuance of the Notes and
Warrants will not,
as of the date the Offering is consummated, (i) conflict with or
result in a
breach or violation of any of the terms or provisions of, or
constitute a
default under, any indenture, mortgage, deed of trust, loan
agreement, note,
lease, license, franchise agreement, permit, certificate, contract
or other
agreement or instrument to which the Company is a party or by which
the Company
is bound or to which any of the property or assets of the Company
is subject,
(ii) result in any violation of the provisions of the charter, by
laws or
formation documents of the Company or any statute or any order,
rule or
regulation of any court or governmental agency or body having
jurisdiction over
the Company or any of their properties or assets, (iii) result in
the imposition
or creation of (or the obligation to create or impose) any Lien
under any
agreement or instrument to which the Company is a party or by which
any of the
Company or its properties or assets is bound or (iv) result in the
suspension,
termination or revocation of any permit, license, consent,
exemption, franchise,
authorization or other approval (each, an "AUTHORIZATION") the
Company or any
other impairment of the rights of the holder of any such
Authorization.
(4) The
Company has good and marketable title to all Collateral
free and clear of all liens, charges, claims, encumbrances,
pledges, security
interests, defects or other restrictions or equities of any kind
whatsoever,
except such as are described in the Memorandum. The Company owns or
possesses
adequate rights to use all patents, patent applications,
trademarks, service
marks, trade names, trademark registrations, service mark
registrations,
copyrights and licenses necessary for the conduct of its business
and has no
reason to believe that the conduct of its business will conflict
with, and has
not received any notice of any claim of conflict with, any such
rights of
others, in each case except as could not reasonably be expected to
have a
Material Adverse Effect, as defined in the Notes. The Company has
taken
reasonable security measures to protect the secrecy,
confidentiality and value
of its intellectual property and other proprietary information in
all respects.
The inventories of the Company do not consist of, in any material
amount, items
that are obsolete, damaged or slow-moving. The Company's
inventories are in good
and merchantable condition in all material respects, are suitable
and usable for
the purposes for which they are intended and are in a condition
such that they
can be sold in the ordinary course of business consistent with past
practice.
All equipment which the Company owns or in which it has an interest
is in good
repair and operating condition, ordinary wear and tear
excepted.
D.
UNDERSTANDINGS.
The undersigned understands, acknowledges, and agrees with the
Company
and the Placement Agent as follows:
(1) This
Subscription may be rejected, in whole or in part, by the
Company and the Placement Agent, in its sole and absolute
discretion, at any
time before the relevant Closing, notwithstanding prior receipt by
the
undersigned of notice of acceptance of the undersigned's
Subscription.
(2) Except as
set forth in paragraph D(1) above, the undersigned
hereby
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<PAGE>
acknowledges and agrees that the subscription hereunder is
irrevocable by the
undersigned, that, except as may be provided under applicable laws,
the
undersigned is not entitled to cancel, terminate, or revoke this
Subscription
Agreement or any agreements of the undersigned hereunder and that
this
Subscription Agreement and such other agreements shall survive the
death or
disability of the undersigned 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.
(3) No federal
or state agency has made any finding or
determination as to the accuracy or adequacy of the Disclosure
Materials or as
to the fairness of the terms of this Offering for investment nor
any
recommendation or endorsement of the Units.
(4) The
Offering is intended to be exempt from registration under
the Securities Act by virtue of Section 4(2) of the Securities Act
and the
provisions of Regulation D thereunder, which is in part dependent
upon the
truth, completeness, and accuracy of the statements made by the
undersigned
herein and in the Questionnaire.
(5)
It is
understood that in order not to jeopardize the
Offering's exempt status under Section 4(2) of the Securities Act
and Regulation
D, any transferee will, at a minimum, be required to fulfill the
investor
suitability requirements thereunder.
(6) The
Placement Agent will receive compensation in connection
with the Offering, but is not guaranteeing or assuming
responsibility for the
operation or possible liability of the Company, including, without
limitation,
compliance by the Company with the agreements entered into in
connection with
the Offering, and will not supervise or participate in the
operation or
management of the Company.
(7) The
undersigned acknowledges that the information contained in
the Disclosure Materials is confidential and non-public and agrees
that all such
information shall be kept in confidence by the undersigned and
neither used by
the undersigned for the undersigned's personal benefit (other than
in connection
with this Subscription) nor disclosed to any third party for any
reason;
provided, however, that this obligation shall not apply to any such
information
that (i) is part of the public knowledge or literature and readily
accessible at
the date hereof, (ii) becomes part of the public knowledge or
literature and
readily accessible by publication (except as a result of a breach
of this
provision), or (iii) is received from third parties (except third
parties who
disclose such information in violation of any confidentiality
agreements or
obligations, including, without limitation, any Subscription
Agreement entered
into with the Company and/or the Placement Agent).
(8) 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 Closing as if made on and as
of such date
and shall survive the execution and delivery of this Subscription
Agreement and
the purchase of the Units.
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<PAGE>
(9) Insofar as
indemnification for liabilities under the
Securities Act may be permitted to directors, officers, or
controlling persons
of the Company, the Company has been informed that, in the opinion
of the
Securities and Exchange Commission, such indemnification is against
public
policy as expressed in the Securities Act and is therefore
unenforceable to such
extent.
(10)
IN MAKING AN INVESTMENT DECISION, PURCHASERS MUST RELY ON
THEIR OWN EXAMINATION OF THE COMPANY AND THE TERMS OF THE OFFERING,
INCLUDING
THE MERITS AND RISKS INVOLVED. THE SECURITIES 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 DISCLOSURE MATERIALS OR THIS DOCUMENT. ANY REPRESENTATION TO
THE CONTRARY
IS A CRIMINAL OFFENSE.
(11)
THE UNITS MAY NOT BE TRANSFERRED, RESOLD, OR OTHERWISE
DISPOSED OF, EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND
APPLICABLE STATE
SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
PURCHASERS
SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL
RISKS OF THIS
INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
(12)
SECURITIES LEGENDS:
NASAA UNIFORM LEGEND:
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR
OWN
EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING
THE MERITS
AND RISKS INVOLVED. THESE SECURITIES 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 THIS
DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THESE
SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT
BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES
ACT OF 1933,
AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
REGISTRATION
OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE
REQUIRED TO
BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE
PERIOD OF TIME.
FOR RESIDENTS OF ALABAMA, IDAHO, INDIANA, MISSISSIPPI, NORTH
CAROLINA, OREGON,
SOUTH CAROLINA, SOUTH DAKOTA, OR TENNESSEE:
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR
OWN
EXAMINATION OF THE COMPANY AND THE TERMS OF THIS OFFERING,
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<PAGE>
INCLUDING THE MERITS AND RISKS INVOLVED. THE SECURITIES OFFERED
HEREBY 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 THIS DOCUMENT. ANY
REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE SECURITIES OFFERED HEREBY ARE SUBJECT TO SIGNIFICANT
RESTRICTIONS
ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD
EXCEPT AS
PERMITTED, AMONG OTHER THINGS, UNDER THE SECURITIES ACT AND
APPLICABLE STATE
SECURITIES LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
INVESTORS
SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL
RISKS OF THIS
INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
FOR RESIDENTS OF ARKANSAS:
THE SECURITIES OFFERED HEREBY ARE OFFERED PURSUANT TO A CLAIM
OF
EXEMPTION UNDER SECTION 23-42-504(A)(14) OF THE ARKANSAS SECURITIES
ACT AND
SECTION 4(2) OF THE SECURITIES ACT. A REGISTRATION STATEMENT
RELATING TO THE
SECURITIES OFFERED HEREBY HAS NOT BEEN FILED WITH THE ARKANSAS
SECURITIES
DEPARTMENT OR WITH THE SECURITIES AND EXCHANGE COMMISSION. NEITHER
THE
DEPARTMENT NOR THE SECURITIES AND EXCHANGE COMMISSION HAS PASSED
UPON THE VALUE
OF THE SECURITIES OFFERED HEREBY, MADE ANY RECOMMENDATIONS AS TO
THEIR PURCHASE,
APPROVED OR DISAPPROVED THE OFFERING, OR PASSED UPON THE ADEQUACY
OR ACCURACY OF
THIS AGREEMENT OR THE DISCLOSURE MATERIALS. ANY REPRESENTATION TO
THE CONTRARY
IS UNLAWFUL.
FOR RESIDENTS OF CALIFORNIA:
THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA DOES
NOT
RECOMMEND OR ENDORSE THE PURCHASE OF THESE SECURITIES. IT IS
UNLAWFUL TO
CONSUMMATE A SALE OR TRANSFER OF THE SECURITIES OR ANY INTEREST
THEREIN OR TO
RECEIVE ANY CONSIDERATION THEREFOR WITHOUT THE PRIOR CONSENT OF THE
COMMISSIONER
OF CORPORATIONS OF THE STATE OF CALIFORNIA EXCEPT AS PERMITTED IN
THE
COMMISSIONER'S RULES.
THE SALE OF THE SECURITIES OFFERED HEREBY HAS NOT BEEN QUALIFIED
WITH
THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA, AND
THE ISSUANCE OF
SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION
THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE
OF SECURITIES
IS EXEMPT FROM QUALIFICATION BY SECTIONS 25100, 25102, OR 25105 OF
THE
CALIFORNIA CORPORATIONS CODE.
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<PAGE>
FOR RESIDENTS OF CONNECTICUT:
THE SECURITIES OFFERED HEREBY ARE OFFERED PURSUANT TO A CLAIM
OF
EXEMPTION AND HAVE NOT BEEN REGISTERED UNDER SECTION 36-485 OF THE
CONNECTICUT
UNIFORM SECURITIES ACT. THE SECURITIES OFFERED HEREBY CANNOT,
THEREFORE, BE
RESOLD OR TRANSFERRED UNLESS THEY ARE REGISTERED UNDER THAT ACT OR
UNLESS AN
EXEMPTION FROM REGISTRATION IS AVAILABLE.
FOR RESIDENTS OF FLORIDA:
PURSUANT TO SECTION 517.061(11)(A)(5) OF THE FLORIDA SECURITIES
ACT,
FLORIDA INVESTORS HAVE A RIGHT TO RESCIND THEIR SUBSCRIPTION
AGREEMENTS WITHIN
THREE BUSINESS DAYS AFTER THE DELIVERY OF ANY CONSIDERATION FOR THE
SECURITIES.
YOUR WITHDRAWAL WILL BE WITHOUT ANY FURTHER LIABILITY TO YOU. TO
ACCOMPLISH SUCH
WITHDRAWAL, YOU NEED ONLY TELEPHONE OR SEND A TELEGRAM (WITHIN SUCH
TIME PERIOD)
TO SHEERVISION, INC., 4040 PALOS VERDES DRIVE NORTH, SUITE 105,
ROLLING HILLS
ESTATES, CALIFORNIA 90274, ATTENTION: PRESIDENT. SHOULD YOU MAKE
THIS REQUEST
ORALLY, YOU MUST ALSO SEND A TELEGRAM CONFIRMING YOUR REQUEST.
THE FLORIDA DEPARTMENT OF BANKING AND FINANCE HAS NOT REVIEWED
THE
OFFERING OR THESE DISCLOSURE MATERIALS AND THE SECURITIES HAVE NOT
BEEN
REGISTERED UNDER THE FLORIDA SECURITIES ACT. UNLESS THESE
SECURITIES ARE
REGISTERED, THEY MAY NOT BE SOLD OR TRANSFERRED IN FLORIDA, EXCEPT
IN A
TRANSACTION THAT IS EXEMPT UNDER SAID ACT.
FOR RESIDENTS OF ILLINOIS:
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECRETARY
OF STATE OF THE STATE OF ILLINOIS OR THE STATE OF ILLINOIS, NOR HAS
THE
SECRETARY OF STATE OF THE STATE OF ILLINOIS PASSED UPON THE
ACCURACY OR ADEQUACY
OF THIS OFFERING DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL
OFFENSE.
FOR RESIDENTS OF MAINE:
THESE SECURITIES ARE BEING SOLD PURSUANT TO AN EXEMPTION FROM
REGISTRATION WITH THE BANK SUPERINTENDENT OF THE STATE OF MAINE
UNDER SECTION
10502(2)(R) OF TITLE 32 OF THE MAINE REVISED STATUTES. THESE
SECURITIES MAY BE
DEEMED RESTRICTED AND AS SUCH THE HOLDER MAY NOT BE ABLE TO RESELL
THE
SECURITIES UNLESS PURSUANT TO REGISTRATION UNDER STATE OR FEDERAL
SECURITIES
LAWS OR UNLESS AN EXEMPTION UNDER SUCH LAWS EXISTS.
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<PAGE>
FOR RESIDENTS OF MASSACHUSETTS:
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE
SECURITIES LAWS OF MASSACHUSETTS AND MAY NOT BE TRANSFERRED OR SOLD
EXCEPT IN
TRANSACTIONS WHICH ARE EXEMPT UNDER THE MASSACHUSETTS SECURITIES
LAWS OR
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT.
FOR RESIDENTS OF MISSOURI:
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE
MISSOURI UNIFORM SECURITIES ACT AND MAY ONLY BE DISPOSED OF THROUGH
A REGISTERED
BROKER-DEALER. IT IS A FELONY TO SELL SECURITIES IN VIOLATION OF
THE MISSOURI
SECURITIES ACT.
FOR RESIDENTS OF NEW HAMPSHIRE:
NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION
FOR A
LICENSE HAS BEEN FILED WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT
THAT A
SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE
STATE OF NEW
HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE THAT ANY
DOCUMENT
FILED UNDER RSA 421-B IS TRUE, COMPLETE, AND NOT MISLEADING.
NEITHER ANY SUCH
FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A
SECURITY OR
A TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED IN ANY
WAY UPON THE
MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO,
ANY PERSON,
SECURITY, OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE
MADE, TO ANY
PROSPECTIVE PURCHASER, CUSTOMER, OR CLIENT ANY REPRESENTATION
INCONSISTENT WITH
THE PROVISIONS OF THIS PARAGRAPH.
FOR NEW JERSEY RESIDENTS:
THE ATTORNEY GENERAL OF THE STATE OF NEW JERSEY HAS NOT PASSED UPON
OR
ENDORSED THE MERITS OF THIS OFFERING. THE FILING OF THIS OFFERING
WITH THE
BUREAU OF SECURITIES DOES NOT CONSTITUTE APPROVAL OF THE ISSUE OR
THE SALE
THEREOF BY THE BUREAU OF SECURITIES OR THE DEPARTMENT OF LAW AND
PUBLIC SAFETY
OF THE STATE OF NEW JERSEY. ANY REPRESENTATION TO THE CONTRARY IS
UNLAWFUL.
FOR NEW YORK RESIDENTS:
NEITHER THIS AGREEMENT NOR THE DISCLOSURE MATERIALS HAS BEEN
REVIEWED
BY THE ATTORNEY GENERAL OF THE STATE OF NEW YORK PRIOR TO ITS
ISSUANCE AND USE.
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED UPON
OR ENDORSED
THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS
UNLAWFUL.
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<PAGE>
NEITHER THIS AGREEMENT NOR THE DISCLOSURE MATERIALS CONTAINS AN
UNTRUE
STATEMENT OF A MATERIAL FACT OR OMITS TO STATE A MATERIAL FACT
NECESSARY TO MAKE
THE STATEMENTS MADE, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY
WERE MADE,
NOT MISLEADING. THIS AGREEMENT AND THE DISCLOSURE MATERIALS CONTAIN
A FAIR
SUMMARY OF THE MATERIAL TERMS AND DOCUMENTS PURPORTED TO BE
SUMMARIZED HEREIN.
FOR RESIDENTS OF PENNSYLVANIA:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
PENNSYLVANIA
SECURITIES ACT. THE SECURITIES PURCHASED HEREBY CANNOT BE SOLD OR
OTHERWISE
TRANSFERRED, EXCEPT PURSUANT TO A REGISTRATION UNDER THE
PENNSYLVANIA SECURITIES
ACT OR UNDER THE SECURITIES ACT. THE SECURITIES REGULATORY
AUTHORITY OF THE
COMMONWEALTH OF PENNSYLVANIA HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES
NOR PASSED UPON THE MERITS OF THIS OFFERING OR THE ACCURACY OR
ADEQUACY OF THESE
DISCLOSURE MATERIALS, AND ANY REPRESENTATION TO THE CONTRARY IS
UNLAWFUL.
SALES OF THESE SECURITIES TO RESIDENTS OF THE COMMONWEALTH OF
PENNSYLVANIA ARE SUBJECT TO THE FOLLOWING CONDITIONS:
(1) EACH
PENNSYLVANIA RESIDENT WHO SUBSCRIBES FOR THESE
SECURITIES MUST AGREE IN WRITING NOT TO SELL OR TRANSFER THESE
SECURITIES FOR A PERIOD OF 12 MONTHS FROM THE DATE OF THE CLOSING
OF
THE SALE
OF THE SECURITIES OFFERED HEREBY IF SUCH SALE OR TRANSFER
WOULD VIOLATE SECTION 203(D) OF THE PENNSYLVANIA SECURITIES ACT OR
THE
REGULATIONS THEREUNDER; AND
(2) EACH
PENNSYLVANIA RESIDENT WHO SUBSCRIBES FOR
SECURITIES HAS THE RIGHT, PURSUANT TO SECTION 207(M) OF THE
PENNSYLVANIA SECURITIES ACT OF 1972, TO WITHDRAW HIS SUBSCRIPTION,
AND
RECEIVE A FULL REFUND OF ALL MONIES PAID, WITHIN TWO BUSINESS
DAYS
AFTER THE DATE OF RECEIPT BY THE ISSUER OF THE INVESTOR'S
EXECUTED
SUBSCRIPTION AGREEMENT. WITHDRAWAL WILL BE WITHOUT ANY FURTHER
LIABILITY TO ANY PERSON. TO ACCOMPLISH THIS WITHDRAWAL, A
SUBSCRIBER
NEED ONLY SEND A LETTER OR TELEGRAM INDICATING HIS INTENTION TO
WITHDRAW TO: SHEERVISION, INC., 4040 PALOS VERDES DRIVE NORTH,
SUITE
105, ROLLING HILLS ESTATES, CALIFORNIA 90274, ATTENTION:
PRESIDENT.
SUCH LETTER OR TELEGRAM SHOULD BE SENT AND POSTMARKED PRIOR TO THE
END
OF THE
AFOREMENTIONED SECOND BUSINESS DAY. IT IS PRUDENT TO SEND SUCH
LETTER BY CERTIFIED MAIL, RETU
