2. SALE AND PURCHASE OF NOTES AND STOCK
The Company will sell the Notes to the purchasers listed on Exhibit A, each of whom agrees to purchase
the principal amount of the Notes set opposite their names, subject to the terms and conditions hereof
and in reliance upon the representations and warranties of the Company contained herein, at the
purchase price of [%] of the principal amount.
3. REPRESENTATIONS AND WARRANTIES BY THE COMPANY
a. Company is a corporation duly organized and existing in good standing under the laws of the
State of [STATE/PROVINCE] has the corporate power to own its own property and to carry
on in the business as it is now being conducted.
b. Company has on its corporate records the names of the following individuals who each own
[NUMBER] shares of common stock which constitute all the issue and outstanding capital
stock of the Company as of this date.
c. The Company has furnished to the Note Holders an Offering Circular which is attached
hereto as Exhibit B. The financial statements contained therein are true and correct and have
been prepared in accordance with generally accepted accounting principles consistently
followed throughout the period indicated.
d. There is no action or proceeding pending or, to the knowledge of the Company, threatened
against the Company before any court or administrative agency, the determination of which
might result in any material adverse change in the business of the Company.
e. The Company has title to the respective properties and assets including the properties and
assets reflected on the financial statement for the year ending [DATE] and which assets and
properties are subject to no liens, mortgages, encumbrances or charges except a security
interest to [SPECIFY].
f.
The Company is not a party to any contract or agreement or subject to any restriction which
materially and adversely affects its business, property or assets, or financial condition, and
neither the execution nor delivery of this Agreement, nor the confirmation of the transactions
contemplated herein, nor the fulfillment of the terms hereof, nor the compliance with the
terms and provisions hereof and of the Notes, will conflict with or result in the breach of the
terms, conditions or provisions or constitute a default, under the Articles of Incorporation or
Code of Regulations of the Company or of any Agreement or instrument to which the
Company is now a party.
g. The Company has not declared, set aside, paid or made any dividend or other distributions
with respect to its capital stock and has not made or caused to be made directly or indirectly,
any payment or other distribution of any nature whatsoever to any of the holders of its capital
stock except for regular salary payments for services rendered and the reimbursement of
business expenses.
h. All of the equipment and automobiles of the Company are in good condition and repair.
i.
There are no outstanding options or rights to purchase shares of the Company and no
outstanding securities with the right of conversion into shares of the Company.