(ii) If Subscriber is an entity (e.g., a corporation,
partnership, limited liability company, trust), (1) Subscriber has
exercised due diligence to establish the identity of each person who
possesses the power, directly or indirectly, to direct or cause the
direction of Subscriber's management and policies; (2) if ownership
interests in Subscriber are not publicly traded on an exchange or an
organized over-the-counter market that is regulated by any foreign
government, or any governmental body or regulatory organization
empowered by a foreign government to administer or enforce its laws as
they relate to securities matters, Subscriber has exercised due
diligence to establish the identity of each person who holds, directly
or indirectly, a beneficial interest in Subscriber, and (3) if
Subscriber is a financial intermediary (e.g., a bank, brokerage firm,
depositary), Subscriber has exercised due diligence to establish the
identity of each of its account holders (each of the foregoing persons
listed in this paragraph being, an "Affiliated Person"). Subscriber
(a) maintains records of all documents it uses to verify the
identities of its Affiliated Persons, and (b) will maintain all such
records for a period of at least five (5) years after the first date
on which Subscriber's Interest has been redeemed.
(iii) Subscriber declares, represents and warrants, that
Subscriber, any person for which Subscriber is acting as agent, its
beneficial owner or controlling person, is not (1) a foreign shell
bank, or acting directly or indirectly on behalf of a "foreign shell
bank", as defined in the U.S.A. Patriot Act of 2001 and the
regulations promulgated thereunder, (2) a person listed in the Annex
to Executive Order No. 13224 (2001) issued by the President of the
United States (Executive Order Blocking Property and Prohibiting
Transactions with Persons Who Commit, or Support Terrorism), (3) named
on the List of Specially Designated Nationals and Blocked Persons
maintained by OFAC (the "SDN List"), (4) a person or entity that has
acted on behalf of any person or organization (a) residing or having a
place of business in a country or territory subject to embargo under
laws enforced by OFAC, or (b) identified as a terrorist, terrorist
organization, specially designated national or blocked person by OFAC,
any other department, agency, division, board, bureau or other
instrumentality of the United States Government, or any recognized
international organization, multilateral expert group or governmental
or industry publication, or (5) a person otherwise prohibited from
investing in the Partnership pursuant to applicable U.S. anti-money
laundering, anti-terrorist and asset control laws, regulations, rules
or orders.
(iv) Unless Subscriber has otherwise notified the Company,
Subscriber declares, represents and warrants that: (1) If Subscriber
is an individual, Subscriber is neither a foreign public official,
including a head of state or of government; a senior politician; a
senior governmental, judicial or military official; or a senior member
of a political party ("Foreign Public Official") nor an immediate
family member or close associate of a Foreign Public Official; or (2)
if Subscriber is not an individual then: (a) if Subscriber is not a
publicly-traded entity, no beneficial owner of Subscriber is a Foreign
Public Official or an immediate family member or close associate of a
Foreign Public Official; (b) if Subscriber is a publicly-traded
entity, no control person of Subscriber is a Foreign Public Official
or an immediate family member or close associate of a Foreign Public
Official; and (c) Subscriber is not acting as a nominee or agent
intending to hold Shares of the Company on behalf of a Foreign Public
Official or an immediate family member or close associate of a Foreign
Public Official. Each person as described in this paragraph (s)(iv) is
referred to herein as a "Prohibited Person".
4
(v) Subscriber declares, represents and warrants that Subscriber
is not a Prohibited Person, none of its Affiliated Persons is a
Prohibited Person, and Subscriber is not acquiring, and does not
intend to acquire, any Shares for the direct or indirect benefit of
any Prohibited Person. Subscriber acknowledges and agrees that if, at
any time, the Company determines that Subscriber is or may be a
Prohibited Person, or that any Prohibited Person holds or may hold a
direct or indirect Interest in Subscriber or any Shares held by
Subscriber, the Company may, in its sole discretion, prohibit
Subscriber from purchasing Shares in the Company.
(vi) Subscriber acknowledges that, any provision of this
subscription application and the Memorandum to the contrary
notwithstanding, pursuant to applicable laws or regulations relating
to the combating of terrorism and/or money laundering, the Company may
be required to release information regarding Subscriber to law
enforcement authorities and/or regulators.
2.02 INDEMNIFICATION. The Subscriber understands that the offer to
subscribe to the Shares was made in reliance upon Subscriber's representations
and warranties set forth in this ARTICLE II above. The Subscriber agrees to
provide, if requested, any additional information that may reasonably be
requested by the Company to determine the eligibility of the Subscriber to
purchase the Shares. The Subscriber hereby agrees to indemnify the Company, and
its respective affiliates and to defend and hold each of them harmless from and
against any loss, claim, damage, liability, cost or expense (including
reasonable attorneys' fees) due to or arising out of a breach of any
representation, warranty or agreement of the Subscriber contained in this
Subscription Agreement or in any other document provided by the Subscriber to
the Company in connection with the Subscriber's purchase of the Shares. The
Subscriber hereby agrees to indemnify the Company and its respective affiliates,
and to defend and hold each of them harmless against all losses, claims,
damages, liabilities, costs or expenses (including reasonable attorneys' fees)
arising as a result of the sale or distribution of the Shares or any part
thereof by the Subscriber in violation of the 1933 Act and/or other applicable
law or any misrepresentation or breach by the Subscriber with respect to the
matters set forth herein. In addition, the Subscriber agrees to indemnify the
Company and its affiliates and to defend and hold each of them harmless from and
against, any and all loss, claim, damage, liability, cost or expense (including
reasonable attorneys' fees) to which they may be put or which they may incur or
sustain by reason of or in connection with any misrepresentation made by the
Subscriber with respect to the matters about which representations and
warranties are required by the terms of this Subscription Agreement, or any
breach of any such warranties or any failure to fulfill any covenants or
agreements set forth herein or included in the Memorandum. Notwithstanding any
provisions of this Subscription Agreement, the Subscriber does not waive any
rights granted to it under applicable securities laws.
5
ARTICLE III
SUITABILITY REQUIREMENTS
3.01 GENERAL. The information contained herein is being furnished to the
Company in order for the Company to determine whether the Subscription may be
accepted pursuant to Section 4(2) of the Securities Act of 1933 and/or Rule 506
of Regulation D. The Subscriber understands that (i) the Company will rely upon
the following information, (ii) the Shares will not be registered under the 1933
Act in reliance upon the exemptions from registration provided by Section 4(2)
of the 1933 Act and/or Rule 506 of Regulation D, and (iii) NO SUBSCRIPTION FOR
SHARES WILL BE ACCEPTED UNLESS THE SUBSCRIBER IS AN ACCREDITED INVESTOR. In
accordance with the foregoing, the Subscriber makes the representations and
warranties to the Company as set forth below.
3.02 Individual Qualification as an Accredited Investor.
(a) In order to qualify as an Accredited Investor, the Subscriber must
satisfy at least one of the following tests:
(PLEASE CHECK APPLICABLE BOXES)
(i) The Subscriber is a natural person whose own net worth, or
joint net worth with the Subscriber's spouse, at the time of
purchase, exceeds $1 million;
Yes [_] No [_]
(ii) The Subscriber is a natural person who has had income in
excess of $200,000 in each of the two most recent years or
joint income with the Subscriber's spouse in excess of
$300,000 in each of those years and has a reasonable
expectation of reaching the same in the current year.
Yes [_] No [_]
(b) Additional representations for individual:
(i) The Subscriber has knowledge and experience in financial and
business matters so as to be capable of evaluating the
relative merits and risks of an investment in the Shares.
Yes [_] No [_]
(ii) The Subscriber is willing and able to bear the economic risk
of an investment in the Shares.
Yes [_] No [_]
6
(iii) The Subscriber is a resident of the State of ____________.
3.03 Entity Qualification as an Accredited Investor.
(a) In order to qualify as an Accredited Investor, the Subscriber must
meet one of the following tests:
(PLEASE CHECK BOX AT THE END OF EACH APPLICABLE SECTION)
1. A bank as defined in Section 3(a)(2) of the 1933 Act, or any
savings and loan association or other institution as defined in
Section 3(a)(5)(A) of the 1933 Act whether acting in its
individual or fiduciary capacity: [_]
2. A broker or dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934, as amended: [_]
3. An insurance company as defined in Section 2(13) of the 1933 Act.
[_]
4. An investment company registered under the ICA: [_]
5. A business development company as defined in Section 2(a)(48) of
the ICA: [_]
6. 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: [_]
7. A private business development company as defined in Section
202(a)(22) of the Advisers Act: [_]
8. An employee benefit plan within the meaning of Title I of the
Employee Retirement Income Security Act of 1974 ("ERISA"), (a)
whose investment decisions are made by a plan fiduciary, as
defined in Section 3(21) of ERISA, which is either a bank,
insurance company or registered investment advisor; or (b) having
total assets in excess of $5,000,000; or (c) if self-directed,
the investment decisions are made solely by persons that are
Accredited Investors: [_]
7
9. An organization described in Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended, corporation, Massachusetts or
similar business trust, or partnership, not formed for the
specific purpose of acquiring an Interest, having total assets in
excess of $5 million: [_]
10. A trust, with total assets in excess of $5 million not formed for
the specific purpose of acquiring an Interest, whose purchase is
directed by an investor as described in Rule 506(b)(2)(ii)
promulgated by the SEC under the 1933 Act. [_]
11. An individual retirement account in which the sole participant is
an Accredited Investor.
12. (a) An entity in which all of the equity owners are Accredited
Investors:
[_] (SECTION 3.02 OR SECTION 3.03 (AS APPLICABLE) MUST ALSO BE
COMPLETED, AND A SIGNATURE PAGE TO THIS AGREEMENT (PAGE 12)
MUST ALSO BE COMPLETED AND SIGNED, BY EACH EQUITY OWNER)
If you checked the box in this Section 11(a), please
indicate how many equity owners the Subscriber has:
______________________________________________.
(b) If the Subscriber is a partnership or a limited liability
company, please check whichever box is applicable:
[_] The Subscriber hereby represents that no individual partner
or group of partners, or individual member or group of
members, as the case may be, of the Subscriber had the right
to elect whether or not to participate in the investment of
the Subscriber in the Partnership or to determine the level
of participation of such partner, member or group therein.
[_] The Subscriber is not able to so represent.
8
3.04 FOR NON-UNITED STATES PERSONS.
If you are not a U.S. Person(2), please check here [_]
I am a citizen of ____________________________________ and a
resident of _________________________________________.
ARTICLE IV
MISCELLANEOUS
4.01 SIGNATURE PAGE TO PARTNERSHIP AGREEMENT. By signing the signature page
attached to this Subscription Agreement, the Subscriber agrees to be bound by
the terms and conditions thereof.
4.02 ADDRESSES AND NOTICES. The address of each party for all purposes
shall be the address set forth on the first page of this Subscription Agreement,
as to the Company, or on the signature page annexed hereto, as to the
Subscriber, or such other address of which the other party has received written
notice. Any notice, demand or request required or permitted to be given or made
hereunder shall be in writing and shall be deemed given or made when delivered
in person or when sent to such party at such address by registered or certified
mail, return receipt requested.
4.03 TITLES AND CAPTIONS. All Article and Section titles or captions in
this Subscription Agreement are for convenience only. They shall not be deemed
part of this Subscription Agreement and do not in any way define, limit, extend
or describe the scope or intent of any provisions hereof.
4.04 ASSIGNABILITY. This Subscription Agreement is not transferable or
assignable by the Subscriber.
4.05 PRONOUNS AND PLURALS. Whenever the context may require, any pronoun
used herein shall include the corresponding masculine, feminine or neuter forms.
The singular form of nouns, pronouns and verbs shall include the plural and vice
versa.
---------------------------
(2) The term "U.S. Person" means, with respect to individuals, any U.S. Citizen
(and certain former U.S. citizens) or "resident alien" within the meaning of
U.S. income tax laws as in effect from time to time. Currently, the term
"resident alien" is defined under U.S. income tax laws to generally include any
individual who (i) holds an Alien Registration Card (a "green card") issued by
the U.S. Immigration and Naturalization Service, or (ii) meets a "substantial
presence" test. The "substantial presence" test is generally met with respect to
any current calendar year if (i) the individual was present in the U.S. on at
least thirty-one (31) days during such year, and (ii) the sum of the number of
days on which such individual was present in the U.S. during the current year,
1/3 of the number of such days during the first preceding year, and 1/6 of the
number of such days during the second preceding year, equals or exceeds 183
days. With respect to persons other than individuals, the term "U.S. Person"
means (i) a corporation or partnership created or organized in the United States
or under the laws of the United States or any state or (ii) a trust or estate
which is subject to U.S. tax on its worldwide income from all sources.
9
4.06 FURTHER ACTION. The parties shall execute and deliver all documents,
provide all information and take or forbear from taking all such action as may
be necessary or appropriate to achieve the purposes of this Subscription
Agreement. Each party shall bear its own expenses in connection therewith.
4.07 APPLICABLE LAW. This Subscription Agreement shall be construed in
accordance with and governed by the laws of the State of New York without regard
to New York conflict of law rules.
4.08 PERMITTED TRANSACTIONS AND BINDING EFFECT. This Subscription Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, administrators, successors, legal representatives, personal
representatives, successors and permitted assigns. If the Subscriber is more
than one person, the obligation of the Subscriber 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 the
Subscriber's heirs, executors, administrators and successors.
4.09 INTEGRATION. This Subscription Agreement constitutes the entire
agreement among the parties pertaining to the subject matter hereof and
supersedes and replaces all contemporaneous and prior agreements and
understandings, whether written or oral, pertaining thereto. No covenant,
representation or condition not expressed in this Subscription Agreement shall
affect or be deemed to interpret, change or restrict the express provisions
hereof.
4.10 AMENDMENT. This Subscription Agreement may be modified or amended only
with the written approval of all parties.
4.11 CREDITORS. None of the provisions of this Subscription Agreement shall
be for the benefit of or enforceable by creditors of any party.
4.12 WAIVER. No failure by any party to insist upon the strict performance
of any covenant, agreement, term or condition of this Subscription Agreement or
to exercise any right or remedy available upon a breach thereof shall constitute
a waiver of any such breach or of such or any other covenant, agreement, term or
condition.
4.13 RIGHTS AND REMEDIES. The rights and remedies of each of the parties
hereunder shall be mutually exclusive, and the implementation of one or more of
the provisions of this Subscription Agreement shall not preclude the
implementation of any other provision.
4.14 COUNTERPARTS. This Subscription Agreement may be executed in
counterparts, all of which taken together shall constitute one agreement binding
on all the parties notwithstanding that all the parties are not the signatories
to the original or the same counterpart.
4.15 SIGNATURES. BY EXECUTING THIS SUBSCRIPTION AGREEMENT, SUBSCRIBER
CONFIRMS THAT IT HAS READ AND AGREED TO ALL THE REPRESENTATIONS AND TERMS
HEREOF.
10
NOTES:
(a) A corporation should affix its common seal (if any) and execute under the
hand of a duly authorized official who should state his representative capacity.
(b) The Subscription Agreement may be completed by a duly authorized agent on
behalf of the Subscriber(s). Such person represents and warrants that he is duly
authorized to sign this form and on behalf of the Subscriber(s).
(c) The Subscription Agreement includes the information contained under
"INSTRUCTIONS TO SUBSCRIBERS" and Subscription Agreement. If all of the
subscription documents are not fully completed to the satisfaction of the
Company the subscription may not be accepted.
--------
THE REMAINDER OF THIS PAGE HAS BEEN
INTENTIONALLY LEFT BANK
11
IN WITNESS WHEREOF, the Subscriber has executed this Agreement on this
______ day of __________, 2010.
NUMBER OF SHARES SUBSCRIBED FOR AT $0.125 PER SHARE __________________
TOTAL SUBSCRIPTION PRICE FOR SHARES $__________________
_____________________________________ __________________________________
Social Security or Employer Print Name of Subscriber
Identification Number
Signature for Individual Subscribers: Signature for Subscriber Other
than Individual:
_____________________________________ By:_______________________________
Signature of Subscriber Signature of Authorized Signatory
_____________________________________ __________________________________
Signature of Subscriber, if Joint Print Name and Title of Authorized
Ownership Signatory
Mailing Address of Subscriber: Principal Address of Subscriber:
_____________________________________ __________________________________
Street Street
_____________________________________ __________________________________
City State Zip Code City State Zip Code
__________________________________
Telephone Number of Subscriber
__________________________________
Facsimile Number of Subscriber
__________________________________
E-Mail Address of Subscriber
If Joint Ownership, check one:
[_] Joint Tenants with Right of Survivorship
[_] Tenants-in-Common
[_] Community Property
[_] Estate
If Other than Individual Subscribers, check one:
[_] General Partnership [_] Trust
[_] Limited Partnership [_] "Grantor" Trust
[_] Corporation [_] Limited Liability Company
[_] S Corporation [_] Other (specify):____________
FOREGOING SUBSCRIPTION ACCEPTED: As to ________________ Shares
As to $_______________ total subscription price
for Shares
INKSURE TECHNOLOGIES INC.
By:________________________________________
12
INKSURE TECHNOLOGIES INC.
FORM W-9
INKSURE TECHNOLOGIES INC.
JANUARY 25, 2010 PRIVATE PLACEMENT
CLOSING ON MARCH 11, 2010
SUBSCRIPTIONS ACCEPTED AND NUMBER OF
SHARES TO BE ISSUED TO EACH SUBSCRIBER
SUBSCRIPTIONS ACCEPTED AND
SOCIAL SECURITY NUMBER SUBSCRIPTION NUMBER OF
OR I.D. NUMBER AMOUNT SHARES
FOR U.S. SUBSCRIBERS ACCEPTED TO BE ISSUED
-------------------------- ---------- ----------
ICTS International, N.V.
Biesbosch 225, 1181 JC Amstelveen
The Netherlands $ 675,000 5,400,000
Newco Holdings Corp.
Centro Comercial Bal Harbour
Suite 43 A
Via Italia, Punta Paitilla
Ciudad De Panama 400,000 3,200,000
Peleg Investment Management LLC
551 Fifth Avenue - 24th Floor
New York, NY 10176
ID#: 20-3697516 400,000 3,200,000
Pierre L. Schoenheimer
551 Fifth Avenue - 24th Floor
New York, NY 10176
SS#: ###-##-#### 250,000 2,000,000
Credit Agricole (Suisse) SA
Administrative Center
Chemin de Beree 46-48
1010 Lausanne 10
Switzerland 200,000 1,600,000
John Sauder
Cheryl Sauder
111 Congress #3000
Austin, TX 78701
SS#:###-##-#### (John) 200,000 1,600,000
James E. Lineberger
725 Palm Trail #11
Delray Beach, FL 33483
SS#: ###-##-#### 150,000 1,200,000
13-B
SUBSCRIPTIONS ACCEPTED AND
SOCIAL SECURITY NUMBERS SUBSCRIPTION NUMBER OF
OR I.D. NUMBER AMOUNT SHARES
FOR U.S. SUBSCRIBERS ACCEPTED TO BE ISSUED
-------------------------- ---------- ----------
Jonathan Berger
14 East 75th Street, Apt. 10D
New York, NY 10021
SS#: ###-##-#### $ 143,750 1,150,000
Yusuf Taragano
G.O.S.B. Kemal Nehrozogln Street
Gebze/Kocaeli, Turkey 41480 100,000 800,000
Yaron Meerfeld
3 Yehezkel Street
Ramat Gan, Israel 52245 100,000 800,000
Israel Kariv
31 Atzmon Street
Ramat-Hasharon, Israel 47287 75,000 600,000
Leonard Lichter
40 Stonygate Oval
New Rochelle, NY 10804
SS#: ###-##-#### 75,000 600,000
Robert Lapin Revocable Trust
4 Sutton Drive
Boynton Beach, FL 33436
SS#: ###-##-#### 62,500 500,000
Lineberger & Co., LLC
1120 Boston Post Road
Darien, CT 06820
ID#: 06-1557367 50,000 400,000
Bruce Nakfoor
9119 Spinning Leaf Cove
Austin, TX 78735
SS#: ###-##-#### 50,000 400,000
Ronald A. Hirsch
668 N. Coast Hwy, #171
Laguna Beach, CA 92651
SS#: ###-##-#### 50,000 400,000
13-B
SUBSCRIPTIONS ACCEPTED AND
SOCIAL SECURITY NUMBERS SUBSCRIPTION NUMBER OF
OR I.D. NUMBER AMOUNT SHARES
FOR U.S. SUBSCRIBERS ACCEPTED TO BE ISSUED
-------------------------- ---------- ----------
Gary N. Moss
505 East 79th Street
New York, NY 10075
SS#: ###-##-#### $ 50,000 400,000
Haim Y. Kaplan
10 Shmuel Tamiz
Tel Aviv, Israel 69637 50,000 400,000
Alon Raich
Shalom Ash 7
Petach-Tikva, Israel 49410 25,000 200,000
Charles Salfeld
150 East 69th Street
New York, NY 10021
SS#: ###-##-#### 18,750 150,000
---------- ----------
Totals $3,125,000 25,000,000
========== ==========
13-B
