Exhibit No. 3
Shallbetter Industries, Inc.
Form 10-SB
CONFIDENTIAL
CONFIDENTIAL
INVESTMENT LETTER AND SUBSCRIPTION AGREEMENT
1,000,000 Shares of Common Stock
$10,000 Total Purchase Price
Shallbetter Industries, Inc.
11900 Wayzata Blvd.
Suite 100
Minneapolis, Minnesota 55305
Gentlemen:
The undersigned desires to purchase 1,000,000 common shares ("the
Shares") from Shallbetter Industries, Inc. ("the Company") for a
cash price of $0.01 per share, and hereby subscribes for the
number of common shares set forth above, upon the terms and
conditions set forth below:
I herewith tender to the Company the enclosed promissory note
payable to the order of Shallbetter Industries, Inc. in the
amount of the purchase price for the shares subscribed for above.
I acknowledge that this subscription is contingent upon
acceptance in whole or in part by the Company.
I hereby represent and certify as follows:
1.) I understand an investment in the Shares involves a high
degree of risk and is highly speculative.
2.) I have been fully informed to my complete satisfaction
concerning the organizational aspects, business, current
operations, finances, and all other matters that I consider
significant for the purpose of making an investment decision with
respect to the Company. I have had the opportunity of discussing
the Company and its affairs with members of management, of
reviewing such documents and records as I consider appropriate,
and have received all information that I have requested with
respect to the Company. I am aware of the Company's current
limited cash position, and I am aware that the Company is an
early developmental stage company. I am fully aware of all of
the risks involved in purchasing shares of the Company's common
stock.
3.) I understand that, the Company has generated no sales to date
and that there is no assurance that the Company will be
profitable in the future. I have been afforded access to such
information concerning the Company as has been requested and such
materials were sufficient to enable me to arrive at a reasoned
investment decision with respect to an investment in the Shares.
4.) I understand that there is currently no market for the
Company's common stock and that there can be no assurance that an
active market will ever exist. I realize that I must bear the
economic risk of an investment in the Shares for an indefinite
period of time because the common shares have not been registered
under the Securities Act
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of 1933, as amended (the "Act"), and have not been registered or
qualified under the applicable securities laws of any state in
the United States, and are being issued in reliance upon the
truth and accuracy of the representations made herein with
respect to my investment intent and suitability as an investor.
I understand that they many not be sold or transferred without
registration under the Act, or qualification or registration
under the applicable state securities laws, unless there is an
exemption from such registration or qualification then available,
and I consent to having a legend printed on the Shares to that
effect. I will received "restricted" shares of the Company which
can only be resold in compliance with federal and state
securities law. I understand that under Rule 144 such shares
would have a two-year minimum holding period requirement.
5.) I am purchasing the Shares for my personal account and for
investment and without the intention of reselling or
redistributing the same; I have made no agreement with others
regarding any of the Shares and my financial condition is such
that it is not likely that it will be necessary to dispose of any
of the Shares in the foreseeable future. I am aware that in the
view of the Securities and Exchange Commission and state agencies
that administer state securities laws, a purchase of the Shares
with an intent to resell by reason of any foreseeable specific
contingency or anticipated change in market values, or any change
in the condition of the Company or its business, or in connection
with a contemplated liquidation or settlement of any loan
obtained for the acquisition of the Shares and for which the
Shares were pledged as security, would represent an intent
inconsistent with the representations set forth above. I further
represent and agree that if, contrary to the foregoing
intentions, I should later desire to dispose of or transfer any
of the Shares in any manner, I shall not do so without first
obtaining (a) an opinion of counsel satisfactory to the Company
that such proposed disposition or transfer lawfully may be made
without the registration of the Shares for such purpose pursuant
to the Act and applicable state securities laws or (b) such
registrations (it being expressly understood that the Company
shall not have any obligations to register such securities for
such purpose).
6.) I am aware that you may sell the Shares to me only if I
qualify according to the express standards stated herein. I
represent and warrant that I either:
(i) meet one or more of the following standards of an
"Accredited Investor," as such term is defined in Rule
501(a) of Regulation D (initial all applicable provisions):
(a) Any director, executive officer or
general partner of the issuer, or any
director, executive officer or general
partner of a general partner of the issuer.
Rule 501(a)(4).
(b) Any natural person whose individual net
worth or joint net worth with that person's
spouse at the time of purchase exceeds
$1,000,000. Rule 501(a)(5)
(c) Any natural person who had an individual
income in excess of $200,000 in each of the
two most recent years or joint income with
that person's spouse in excess of $300,000 in
each of those years, and who has a reasonable
expectation of reaching the same income level
in the current year. Rule 501(a)(6).
or
(ii) I have such knowledge and experience in financial and
business matters as to be able to evaluate the risks and merits
of an investment in the Shares.
7.) I understand that other persons may be offered share
subscriptions at various prices at the discretion of the Board of
Directors of the Company.
8.) I represent and warrant that all of the foregoing information
is correct and complete as of the date set forth at the end
hereof, and if there should be any adverse change in such
information prior to this subscription being accepted, I will
immediately provide the Company with such information. I agree to
provide such additional information as the Company may request
concerning my qualifications.
9.) I wish to have the Shares issued in the following type of
ownership (check one):
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Individual Ownership Joint Tenants with Right of Survivor-
ship (both parties must sign)
Trust or Estate (describe ____ Other (describe on separate page)
and enclose authority)
Dated: , 1999 Dated: , 1999
Signature Signature
Name Printed or Typed Name Printed or Typed
Residence Address: Mailing Address:
Tax Identification or Telephone Number
Social Security Number: (Business and Home)
[Business]
[Home]
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ACCEPTANCE OF SUBSCRIPTION
This Subscription Agreement is accepted as of , 1999.
Shallbetter Industries, Inc.
By:
Its: _________________________________
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