EXHIBIT 10.35
August __, 1996
Irata, Inc.
0000 Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Gentlemen:
The purpose of this letter is to supplement the investment
representations and warranties set forth in the SETTLEMENT AGREEMENT AND RELEASE
between Irata, Inc. (the "Company") and the undersigned creditor of the Company
(the "Creditor") so as to provide the investment representations requisite for
the Company to be able to issue to the Creditor the "Stock" required to be
issued by the Company under the Settlement Agreement and Release under
exemptions from the registration requirements under the Securities Act of 1933
(the "33 Act") and any applicable state securities laws (the "Blue Sky Acts").
To facilitate such issuance of stock, the Creditor understands as follows:
(a) That the shares of Common Stock have been offered and the terms
and arrangements relating to the transfer of Common Stock of the Company have
been arrived at through direct communication between the Company and the
Creditor and that the offer was not made pursuant to any general advertisement,
public solicitations, broadcast or other medium.
(b) That Creditor has been fully advised as to the business and
affairs and the proposed business and affairs of the Company and its operations
and its proposed operations and has had disclosed to her such information
regarding the Company and the controlling persons thereof as would have been
contained in a registration statement under the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder ("33 Act")
covering the shares of Class A Common Stock being acquired by Creditor.
(c) That the Creditor has such knowledge and experience in financial
and business matters that Creditor is capable of utilizing the information
referred to in the immediately preceding paragraph to evaluate the risks of
investment in the Class A Common Stock and of making an informed investment
decision in connection therewith and that Creditor has utilized the information
referred to in the immediately preceding paragraph in evaluating the risks of an
investment in the Class A Common Stock and that Creditor has made an informed
investment decision with respect to the Class A Common Stock.
(d) That the Class A Common Stock being acquired by Creditor in view
of the economic risks associated therewith and the size and nature of the
investment in the Class A Common Stock by Buyer is an appropriate and suitable
investment for Creditor and that Creditor's personal and financial condition is
such that she is capable of bearing the economic risks of an investment in the
Class A Common Stock.
(e) That Creditor is acquiring the Class A Common Stock for his, her
or its own account for investment and not with a view to or for sale in
connection with any distribution thereof except as provided or otherwise
permitted under (i) the 33 Act and (ii) under any applicable Blue Sky Act.
(f) That Creditor has been informed by the Company that the Class A
Stock being issued to Creditor has not been registered under the 33 Act or any
Blue Sky Act and that accordingly, the Class A Stock must be held indefinitely
unless it is subsequently registered under the 33 Act and unless sold in
compliance with all of the applicable Blue Sky Acts or any exemption from such
registration is available. However, Creditor has been informed by the Company
that the Company is obligated to seek registration of the Stock under the 33 Act
by no later than December 1997.
(g) That Creditor understands that Company has not registered the
Class A Common Stock under the 33 Act or any Blue Sky Act in reliance upon the
representations herein contained and that accordingly, Creditor will not at any
time or times directly or indirectly, offer, sell or otherwise dispose of or
solicit any offer to buy, purchase or otherwise acquire any Class A Common Stock
which Creditor receives unless one of the following conditions has been
fulfilled:
(i) a registration statement under the 33 Act is in effect as to the
Class A Common
Stock and the Class A Common Stock has been duly qualified under any
applicable Blue Sky Laws; or
(ii) there is presented to the Company an opinion of counsel
satisfactory to the Company in form and substance satisfactory to the
Company to the effect that the proposed transfer of the Class A Common
Stock is exempt from the registration provisions of the 33 Act and any
applicable Blue Sky Act.
(h) That to implement the foregoing, Creditor consents to the placing of a
legend in substantially the following form upon each certificate evidencing the
Class A Common Stock transferred to Creditor from Company:
"The securities evidenced hereby have not been registered under the
Securities Act of 1933. They may not be offered or sold and no transfer of
them will be made by the Company unless (i) they are registered under the
Securities Act of 1933; or (ii) there is presented to the Company an
opinion of counsel satisfactory to the Company in form and substance
satisfactory to the Company to the effect that such registration is not
necessary".
(i) Creditor shall indemnify Company and the Company against all liability,
cost or expenses arising out of or resulting from any misrepresentation or
breach of warranty or breach of any covenant contained herein or in the offer,
sale, distribution or other distribution or other disposition of any shares of
Class A Common Stock transferred by Company pursuant to this investment letter
or any solicitation of any offer to buy, purchase or otherwise acquire any Class
A Common Stock, in violation of the 33 Act or any Blue Sky Act.
You understand and agree that the foregoing information has been fully
disclosed by the Company and that your acceptance of stock is subject to the
foregoing provisions.
Very truly yours,
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(Creditor)
UNDERSTOOD AND AGREED TO BY:
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By:
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Name:
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Title:
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