Exhibit 10(ae)
BIG XXXXX BRANDS, INC.
SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT made as of this __ day of __, 1999 between Big Xxxxx
Brands, Inc., a Delaware corporation (the "Company") and the undersigned (the
"Subscriber").
WHEREAS, the Company desires to issue 1,100,000 Units ("Units" ) for
$1.00 per Unit on the terms and conditions hereinafter set forth and the
Subscriber desires to acquire the Units in a private placement, each Unit
consisting of 1 share of Common Stock, $.01 par value per share (the "Common
Stock") and 2 warrants to purchase shares of Common Stock of the Company. The
Class A Warrant will have an exercise price of $1.50 per share and the Class B
Warrants will have an exercise price of $1.75 per share (the "Warrants");
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants hereinafter set forth, the parties hereto do hereby agree as follows:
I. SUBSCRIPTION FOR UNITS AND REPRESENTATIONS BY SUBSCRIBER
1.1 Subject to the terms and conditions hereinafter set forth, the Subscriber
hereby subscribes for and agrees to purchase from the Company ___ Units for a
price equal to $1.00 per Unit and the Company agrees to sell such Units to the
Subscriber for said purchase price. The purchase price is payable by certified
or bank check or wire transfer payable to the Company, contemporaneously with
the execution and delivery of this Subscription Agreement.
1.2 The Subscriber recognizes that the purchase of Units involves a high degree
of risk in that (i) the Company has had substantial losses in recent periods and
requires substantial funds in addition to the proceeds of this private
placement; (ii) an investment in the Company is highly speculative and only
investors who can afford the loss of their entire investment should consider
investing in the Company; (iii) the Subscriber may not be able to liquidate this
investment; (iv) transferability of the Units is extremely limited; and (v) in
the event of a disposition, a Subscriber could sustain the loss of the
Subscriber's entire investment.
1.3 The Subscriber represents that the Subscriber is an "accredited investor" as
such term in defined in Rule 501 of Regulation D promulgated under the United
States Securities Act of 1933, as amended (the "Act") qualifying as such on the
basis set forth in the executed Investor Questionnaire provided by the
Subscriber to the Company concurrently herewith and that the Subscriber is able
to bear the economic risk of an investment in the Units.
1.4 The Subscriber acknowledges that the Subscriber has prior investment
experience, including investment in non-listed and non-registered securities and
to evaluate the merits and risks of such an investment on the Subscriber's
behalf, and that the Subscriber recognizes the highly speculative nature of this
investment. The Subscriber or the Subscriber's purchaser representative has such
knowledge and experience in finance, securities, investments and other business
matters so as to be able to protect the interests of the Subscriber in
connection with this transaction, and the Subscriber's investment in the Company
hereunder is not material when compared to the Subscriber's total financial
capacity. The Subscriber understands the various risks of an investment in the
Company
as proposed herein and can afford to bear such risks, including, without
limitation, the risks of losing the entire investment.
1.5 The Subscriber represents that the Subscriber has been furnished by the
Company during the course of this transaction with all information regarding the
Company which the Subscriber had requested or desired to know; that all
documents which could be reasonably provided have been made available for the
Subscriber's inspection and review; and that such information and documents
have, in the Subscriber's opinion, afforded the Subscriber with all of the same
information that would be provided the Subscriber in a registration statement
filed under the Act; that the Subscriber has been afforded the opportunity to
ask questions of and receive answers from duly authorized officers or other
representatives of the Company concerning the terms and conditions of the
offering, and any additional information which the Subscriber had requested.
1.6 The Subscriber hereby acknowledges that this offering of Units has not been
reviewed by the United States Securities and Exchange Commission ("SEC") because
of the Company's representations that this is intended to be a nonpublic
offering pursuant to Sections 4(2) or 3(b) of the Act. The Subscriber represents
that the Units are being purchased for his own account, for investment and not
for distribution or resale to others. The Subscriber agrees that he will not
sell or otherwise transfer such securities unless they are registered under the
Act or unless an exemption from such registration is available.
1.7 The Subscriber understands that the Units have not been registered under Act
by reason of a claimed exemption under the provisions of the Act which depends,
in part, upon his investment intention and other representations and warranties
set forth herein. In this connection, the Subscriber understands that it is the
position of the SEC that the statutory basis for such exemption would not be
present if his representation merely meant that his present intention was to
hold such securities for a short period, such as the capital gains period of tax
statutes, for a deferred sale, for a market rise, assuming that a market
develops, or for any other fixed period. The Subscriber realizes that, in the
view of the SEC, a purchase now with an intent to resell would represent a
purchase with an intent inconsistent with his representation to the Company, and
the SEC might regard such a sale or disposition as a deferred sale to which such
exemptions are not available.
1.8 The Subscriber understands that there is no public market for the Units. The
Subscriber understands that even if a public market develops for the Common
Stock, Rule 144 (the "Rule") promulgated under the Act requires, among other
conditions, a one year holding period prior to the resale (in limited amounts)
of securities acquired in a non-public offering without having to satisfy the
registration requirements under the Act. The Subscriber understands and hereby
acknowledges that the Company is under no obligation to register the securities
comprising the Units under the Act, except as provided in Paragraph 4 hereof.
The Subscriber consents that the Company may, if it desires, permit the transfer
of the securities comprising the Units out of his name only when his request for
transfer is accompanied by an opinion of counsel reasonably satisfactory to the
Company that neither the sale nor the proposed transfer results in a violation
of the Act or any applicable state "blue sky" laws (collectively "Securities
Laws"). The Subscriber agrees to hold the Company and its directors, officers
and controlling persons and their respective heirs, representatives, successors
and assigns harmless and to indemnify them against all liabilities, costs and
expenses incurred by them as a result of any misrepresentation made by him
contained herein or any sale or distribution by the undersigned Subscriber in
violation of any Securities Laws.
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1.9 The Subscriber consents to the placement of a legend on any certificate or
other document evidencing the Units stating that they have not been registered
under the Act and setting forth or referring to the restrictions on
transferability and sale thereof and a lockup that the Securities may not be
sold without the prior written consent of X.X. Xxxxxxxx Investments for a period
of one year.
1.10 The Subscriber hereby represents that the address of Subscriber furnished
by him at the end of this Subscription Agreement is the undersigned's principal
residence if he is an individual or its principal business address if it is a
corporation or other entity.
1.11 The Subscriber hereby represents that no representations or warranties have
been made to the Subscriber by the Company or any agent, employee or affiliate
of the Company and in entering into this transaction, the Subscriber is not
relying on any information, other than that contained in this Agreement and the
results of independent investigation by the Subscriber.
In furtherance of the foregoing and not by way of limitation, it never has been
represented, guaranteed or warranted by any broker, the Company, X.X. Xxxxxxxx
Investments, Inc., Fin-Atlantic Securities, any of their officers, directors,
stockholders, partners, employees or agents, or any other persons, whether
expressly or by implication, that: (i) the Company or the Subscriber will
realize any given percentage of profits and/or amount or type of consideration,
profit or loss as a result of the Company's activities or the Subscriber's
investment in the Company; or (ii) the past performance or experience of the
management of the Company, or of any other person, will in any way indicate the
predictable results of the ownership of the securities or of the Company's
activities.
1.12 If a natural person, the Subscriber is a bona fide resident of the State
contained in the address set forth on the signature page of this Agreement as
the undersigned's home address; at least 21 years of age; and legally competent
to execute this Subscription Agreement. If an entity, the undersigned is duly
authorized to execute this Agreement and this Agreement constitutes the legal,
valid and binding obligation of the undersigned enforceable against the
undersigned in accordance with its terms.
1.13 The undersigned will acquire the Securities for the undersigned's own
account (or for the joint account of the undersigned and the undersigned's
spouse either in joint tenancy, tenancy by the entirety or tenancy in common)
for investment and not with a view to the sale or distribution thereof or the
granting of any participation therein, and has no present intention of
distributing or selling to others any of such interest or granting any
participation therein.
1.14 No oral or written representations have been made other than as stated in
this Agreement, and no oral or written information furnished to the Subscriber
or the Subscriber's advisor(s) in connection with this offering were in any way
inconsistent with the information stated herein.
1.15 The Subscriber 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, or any solicitation of a subscription by a
person other than a representative of X.X. Xxxxxxxx Investments, Inc.,
Fin-Atlantic Securities or the Company with which the undersigned had a
pre-existing relationship in connection with investments in securities
generally.
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1.16 The Subscriber is not relying on the Company with respect to the tax and
other economic considerations of an investment.
1.17 The Subscriber has received and carefully read copies of the Company's
Annual Report on Form 10-KSB for the period ended December 31, 1997 and the
Quarterly Report on Form 10-QSB for the period ended September 30, 1998. The
Subscriber has had the opportunity to ask questions about the contents of such
reports and is satisfied as to the responses of the Company.
1.18 Without limiting any of the Subscriber's other representations and
warranties hereunder, the Subscriber acknowledges that the undersigned has
reviewed and is aware of the risk factors described in the Company's annual
report on Form 10-KSB for the fiscal year ended December 31, 1997 and the
Company's other periodic reports filed with the SEC from time to time.
1.19 The Subscriber acknowledges that the representations, warranties and
agreements made by the Subscriber herein shall survive the execution and
delivery of this Agreement and the purchase of the Units.
1.20 The Subscriber has consulted his own financial, legal and tax advisors with
respect to the economic, legal and tax consequences of an investment in the
Units and has not relied on the Company, its officers, directors or professional
advisors for advice as to such consequences.
II. REPRESENTATIONS BY THE COMPANY
The Company represents and warrants to the Subscriber that prior to the
consummation of this offering and at the Closing Date:
(a) The Company is a corporation duly organized and existing under the laws of
the State of Delaware and has the corporate power to conduct the business which
it conducts and proposes to conduct. Upon the payment of past due franchise
taxes upon the closing of this offering, the Company will be in good standing in
the State of Delaware
(b) The execution, delivery and performance of this Subscription Agreement by
the Company will have been duly approved by the Board of Directors of the
Company and all other actions required to authorize and effect the offer and
sale of the Units will have been duly taken and approved.
(c) The Common Stock and Warrants comprising the Units have been duly and
validly authorized and when issued and paid for in accordance with the terms
hereof, the Common Stock will be fully paid and nonassessable and the Warrants
will be valid and binding obligations of the Company enforceable in accordance
with their respective terms.
(d) Except as disclosed in its public filings, the Company knows of no pending
or threatened legal or governmental proceedings to which the Company is a party
which could materially adversely affect the business, property, financial
condition or operations of the Company.
III. TERMS OF SUBSCRIPTION
3.1 The subscription period will begin as of January 19, 1999 and will terminate
at 11:59 PM Eastern time on January 29, 1999, unless extended by the Company for
an additional 10 days (the
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"Termination Date"). All Units will be offered on a "best efforts-all or none"
basis.
3.2 Placement of the Units will be made by X.X. Xxxxxxxx Investments, Inc, which
will receive a placement fee of 10% of the purchase price of the Units placed
and a nonaccountable expense allowance of 1% of the purchase price. Xxxxxxxx may
give a portion of such fees to another broker-dealer that participates in the
Offering.
IV. REGISTRATION RIGHTS
4.1 As soon as practicable but not later than 15 days following completion of
the 1998 audit, the Company shall file with the SEC a registration statement on
Form SB-2 or other applicable form (the "Registration Statement"), and to cause
the Registration Statement to be declared effective. The Registration Statement
shall cover the resale of the Common Stock, the Warrants and the shares of
Common Stock issuable upon exercise of the Warrants (the "Securities").
4.2 In connection with the filing of the Registration Statement, the Company
shall
(a) Prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statement and the
prospectus used in connection with the Registration Statement and take such
other reasonable action as may be necessary to keep the Registration Statement
effective until the earlier of the (A) public sale of the Securities or (B) the
Securities becoming capable of full and complete public sale without
registration under the Securities Act and to comply with the provisions of the
Securities Act and the Exchange Act, and the rules and regulations thereunder,
provided that the Registration Statement shall be kept effective so long as any
Warrants are outstanding;
4.3 Notify the Subscriber, after becoming aware thereof, (a) when the
Registration Statement or the prospectus included therein or any prospectus
amendment or supplement or post-effective amendment has been filed and, with
respect to the Registration Statement or any post-effective amendment, when the
same has become effective or (b) of any request by the SEC for amendment of or
supplement to the Registration Statement or related prospectus or for additional
information;
4.4 Furnish promptly to the Subscriber such reasonable number of copies of a
prospectus, and all amendments and supplements thereto, in conformity with the
requirements of the Securities Act, and such other documents as the Subscriber
may reasonably request in order to facilitate their disposition of any
Securities;
4.5 Use its best efforts to register and qualify the Securities under the
securities or Blue Sky laws of such states as shall be reasonably requested by
the Subscriber, and prepare and file in those states such amendments (including
post-effective amendments) and supplements and to take such other actions as may
be necessary to maintain such registration and qualification in effect at all
times during the period the Company is required to maintain the Registration
Statement effective, and to take all
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other actions necessary or advisable to enable the disposition of the Securities
in such states, provided that the Company shall not be required in connection
therewith or as a condition thereto to subject itself to taxation, to qualify to
do business or to file a general consent to service of process in any such
states; and
4.6 Notify the Subscriber, at any time when a prospectus relating to the
Securities is required to be delivered under the Securities Act, of the
happening of any event as a result of which the prospectus included in the
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The Company shall promptly amend or
supplement the Registration Statement to correct any such untrue statement or
omission, and provide the Subscriber with an amended or supplemented prospectus
with respect to the Securities that corrects such untrue statement or omission.
4.7 It shall be a condition precedent to the obligations of the Company to the
Subscriber to take any action pursuant to this Section that the Subscriber shall
furnish to the Company such information regarding the Subscriber, the
Securities, and other shares of the Company's Common Stock held by the
Subscriber and the intended method of disposition of such securities as shall be
reasonably required to effect the registration of the Securities and shall
execute such documents in connection with such registration as the Company may
reasonably request.
4.8 All expenses incurred by the Company in complying with this section,
including, without limitation, registration and filing fees, fees and expenses
of complying with state securities and Blue Sky laws, printing expenses, and
fees and disbursements of the Company's counsel and accountants, shall be paid
by the Company. All selling commissions applicable to the disposition of the
Securities shall not be borne by the Company but shall be borne by the
Subscriber.
4.9. (a) Whenever pursuant to Section 4 a Registration Statement relating to the
Securities is filed under the Act, amended or supplemented, the Company will
indemnify and hold harmless each holder of the securities covered by such
registration statement, amendment, or supplement (such holder being hereinafter
called the "Distributing Holder"), and each person, if any, who controls (within
the meaning of the Act) the Distributing Holder, and each underwriter (within
the meaning of the Act) of such securities and each person, if any, who controls
(within the meaning of the Act) any such underwriter, against any losses,
claims, damages, or liabilities, joint or several, to which the Distributing
Holder, any such controlling person or any such underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any such registration statement or any preliminary prospectus or final
prospectus constituting a part thereof or any amendment or supplement thereto,
or arise out of or are based upon the omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading; and will reimburse the Distributing Holder and each such controlling
person and underwriter for any legal or other expenses reasonably incurred by
the
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Distributing Holder or such controlling person or underwriter in connection with
investigating or defending any such loss, claim, damage, liability, or action;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage, or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in said registration statement, said preliminary prospectus, said
final prospectus, or said amendment or supplement in reliance upon and in
conformity with written information furnished by such Distributing Holder or any
other Distributing Holder, for use in the preparation thereof.
(b) The Distributing Holder will indemnify and hold harmless the Company, each
of its directors, each of its officers who have signed said registration
statement and such amendments and supplements thereto, each person, if any, who
controls the Company (within the meaning of the Act) against any losses, claims,
damages, or liabilities, joint and several, to which the Company or any such
director, officer, or controlling person may become subject, under the Act or
otherwise, insofar as such losses, claims, damages, or liabilities arise out of
or are based upon any untrue or alleged untrue statement of any material fact
contained in said registration statement, said preliminary prospectus, said
final prospectus, or said amendment or supplement, or arise out of or are based
upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in said registration statement, said preliminary prospectus, said final
prospectus, or said amendment or supplement in reliance upon and in conformity
with written information furnished by such Distributing Holder for use in the
preparation thereof; and will reimburse the Company or any such director,
officer, or controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability, or action.
(c) Promptly after receipt by an indemnified party under this paragraph 4.9 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party, give the
indemnifying party notice of the commencement thereof; but the omission so to
notify the indemnifying party will not relieve it from any liability which it
may have to any indemnified party otherwise than under this paragraph 4.9.
In case any such action is brought against any indemnified party, and it
notifies an indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate in, and, to the extent that it may wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party,
and after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this paragraph 4.2 for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof.
V. MISCELLANEOUS
5.1 Any notice or other communication given hereunder shall be deemed sufficient
if in writing and sent by registered or certified mail, return receipt
requested, addressed to the Company, at 0000 X. Xxxxxx Xxxx, Xxxxx 000, Xxxx
Xxxxx, Xxxxxxx 00000, Attention: President and to the Subscriber at his address
indicated on the last page of this Subscription Agreement. Notices shall be
deemed to have been given on the date of mailing, except notices of change of
address, which shall be deemed
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to have been given when received.
5.2 This Subscription Agreement shall not be changed, modified or amended except
by a writing signed by the parties to be charged, and this Subscription
Agreement may not be discharged except by performance in accordance with its
terms or by a writing signed by the party to be charged.
5.3 This Subscription Agreement shall be binding upon and inure to the benefit
of the parties hereto and to their respective heirs, legal representatives,
successors and assigns. This Subscription Agreement sets forth the entire
agreement and understanding between the parties as to the subject matter thereof
and merges and supersedes all prior discussions, agreements and understandings
of any and every nature among them.
5.4 Notwithstanding the place where this Subscription Agreement may be executed
by any of the parties hereto, the parties expressly agree that all the terms and
provisions hereof shall be construed in accordance with and governed by the laws
of the State of Florida.
5.5 This Subscription Agreement may be executed in counterparts. Upon the
execution and delivery of this Subscription Agreement by the Subscriber, this
Subscription Agreement shall become a binding obligation of the Subscriber with
respect to the purchase of Units as herein provided; subject, however, to the
right hereby reserved to the Company to enter into the same agreements with
other subscribers and to add and/or to delete other persons as subscribers.
5.6 The holding of any provision of this Subscription Agreement to be invalid or
unenforceable by a court of competent jurisdiction shall not affect any other
provision of this Subscription Agreement, which shall remain in full force and
effect.
5.7 It is agreed that a waiver by either party of a breach of any provision of
this Subscription Agreement shall not operate, or be construed, as a waiver of
any subsequent breach by that same party.
5.8 The parties agree to execute and deliver all such further documents,
agreements and instruments and take such other and further action as may be
necessary or appropriate to carry out the purposes and intent of this
Subscription Agreement.
V. BLUE SKY LEGENDS
Connecticut
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The undersigned acknowledges that the Securities have not been registered under
the Connecticut Uniform Securities Act, as amended (the "Act") and are subject
to restrictions on transferability and sale of securities as set forth herein.
The undersigned hereby agrees that such Securities will not be transferred or
sold without registration under the Act or exemption therefrom.
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IN WITNESS WHEREOF, the parties have executed this Subscription Agreement as of
the day and year first written above.
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Signature of Subscriber(s)
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Name of Subscriber(s)
[please print]
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Address of Subscriber(s)
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Social Security or Taxpayer
Identification Number of
Subscriber(s)
Subscription Accepted:
BIG XXXXX BRANDS, INC.
By: ______________________________
Name:
Title:
Date: ____________________
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BIG XXXXX BRANDS, INC.
INVESTOR QUESTIONNAIRE
Purpose of this Questionnaire
-----------------------------
The Units are being offered without registration under the Securities Act of
1933, as amended (the "1933 Act"), or the securities laws of any state, in
reliance on the exemptions contained in Rule 506 of Regulation D promulgated
under the Securities Act of 1933, as amended. The Company may be required to
determine that an individual, or an individual together with a "purchaser
representative" or each individual equity owner of an investing entity meets
certain suitability requirements before selling the Units to such individual or
entity. You understand that the Company will rely on the following information
for purposes of such determination, and that the Units will not be registered
under the 1933 Act in reliance on an exemption from registration provided under
Section 4(2) under the 1933 Act. THE COMPANY MAY, AT ITS ELECTION, NOT SELL
UNITS TO A SUBSCRIBER WHO HAS NOT THOROUGHLY FILLED OUT A QUESTIONNAIRE. IN THE
CASE OF AN INVESTOR THAT IS A PARTNERSHIP, TRUST, OR CORPORATION, EACH EQUITY
OWNER MUST COMPLETE A QUESTIONNAIRE. This Questionnaire does not constitute an
offer to sell or a solicitation of an offer to buy the Units or any other
security.
Instructions
------------
One (1) copy of this Questionnaire should be completed, signed, dated, and
delivered to Xxxxx Xxxxxxxx, X.X. Xxxxxxxx Investments, Inc., 0000 X. Xxxxxxx
Xxxxxxx, Xxxx Xxxxx, Xxxxxxx 00000 . Please contact Xxxxxxx Xxxxxx-- telephone
(305) 373-9423-- if you have any questions with respect to the Questionnaire.
Please Answer All Questions
---------------------------
If the appropriate answer is "None" or "Not Applicable," so state. Please print
or type your answers to all questions. Attach additional sheets if necessary to
complete your answers to any item.
Your answers will be kept strictly confidential at all times; however, the
Company may present this Questionnaire to such parties as it deems appropriate,
including its counsel, in order to assure itself that the offer and sale of the
Units will not result in a violation of the registration provisions of the 1933
Act or a violation of the securities laws of any state and if called on to
establish that the proposed offer and sale of the security is exempt from
registration under the 1933 Act or meets the requirements of applicable state
securities laws.
(1) Please provide the following personal information:
Name: ____________________ Age: ____________________
Residence Address
(including zip code): ________________________
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Telephone Numbers: Residence:________________________
Business: ________________________
(2) Please describe your present or most recent business or occupation and
indicate such information as the nature of your employment, the
principal business of your employer, the principal activities under your
management or supervision, and the scope (e.g., dollar volume, industry
rank, etc.) of such activities.
(3) Please provide the following information concerning your financial
experience.
3.1 Indicate by check xxxx which of the following categories best
describes the extent of your prior experience in the areas of
investment listed below:
========================================================
Substantial Limited No
Experience Experience Experience
=================================--------------------------------------------------------
Marketable Securities
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Equity Securities for which
no market exists
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Limited Partnerships
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Initial Public Offerings
=========================================================================================
3.2 Indicate by check xxxx whether or not you maintain any of the
following types of accounts over which you, rather than a third
party, exercise investment discretion, and the length of time you
have maintained each type of account.
Securities (cash) _______ _______ Number of years ______
Yes No
Securities (margin) _______ _______ Number of years ______
Yes No
(4) Please answer the following questions concerning your financial condition:
4.1 Does your net worth1 (or joint net worth with your spouse, if
greater) exceed $1,000,000?
---------------------------------
1 For purposes hereof, net worth shall be deemed to include all
of your assets, liquid or illiquid (including such items as home, furnishings,
automobile, and restricted securities) minus any liabilities (including such
items as home mortgages and other debts and liabilities).
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Yes _____ No _____
4.2 Did you have an individual income2 in excess of $200,000 or joint
income together with your spouse in excess of $300,000 in each of
1998 and 1997 and do you reasonably expect to reach the same
income level in the current year?
Yes _____ No _____
(5) Check, if appropriate:
(6) By signing this Questionnaire, I hereby confirm the following statements:
a. I am aware that the offering of the Units will involve securities
for which no market currently exists, thereby requiring any
investment to be maintained for an indefinite period of time, and
I have no need to liquidate the investment.
b. I acknowledge that any delivery to me of any documentation
relating to the Units prior to the determination by the Company
of my suitability as an investor shall not constitute an offer of
the Units until such determination of suitability shall be made,
and I agree that I shall promptly return all such documentation
to the Company upon request.
c. I hereby represent and warrant that I have such knowledge and
experience in financial and business matters that I am capable of
evaluating the merits and risks of any prospective investment in
the Company.
d. Neither I nor any of my associates or affiliates: (i) are a
member or a person associated with a member firm of the NASD,
(ii) own any stock or other securities of any NASD member, or
(iii) made subordinated loans to any NASD member.
e. My answers to the foregoing questions are true and complete to
the best of my information and belief, and I will promptly notify
the Company of any changes in the information I have provided.
f. I also understand and agree that, although the Company will use
its best efforts to keep
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2 For purposes hereof, the term "income" is not limited to
"adjusted gross income" as that term is defined for Federal Income Tax purposes,
but rather includes certain items of income which are deducted in computing
"adjusted gross income." For investors who are salaried employees, the gross
salary of such investor, minus any significant expenses personally incurred by
such investor in connection with earning the salary, plus any income from any
other source including unearned income, is a fair measure of "income" for
purposes hereof. For investors who are self-employed, "income" is generally
construed to mean total revenues received during the calendar year minus
significant expenses incurred in connection with earning such revenues.
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the information provided in answers to this Questionnaire
strictly confidential, the Company may present this Questionnaire
and the information provided in answers to it to such parties as
it may deem advisable if called upon to establish the
availability under any federal or state securities laws of an
exemption from registration of the private placement or if the
contents thereof are relevant to any issue in any action, suit,
or proceeding to which the Company is a party or by which it or
they are or may be bound.
g. I realize that this Questionnaire does not constitute an offer by
the Company to sell the Units but is merely a request for
information.
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Printed Name
-------------------------------------
Signature
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Social Security Number or
Employee Identification Number
Date and Place Executed:
Date:
---------------------------
Place:
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