EXHIBIT (d)(3)
XXXXXXXX INSURANCE COMPANY, LTD.
REPURCHASE AND SUBSCRIPTION AGREEMENT
This Repurchase and Subscription Agreement (this "Agreement") is made
as of __________ __, 2001, by and among Xxxxxxxx Insurance Company, Ltd., a
Cayman Islands corporation (the "Company"), and __________ (the "Shareholder").
Unless otherwise defined, capitalized terms used herein have the meanings
ascribed to such terms in the Company's Proxy Statement, filed with the
Securities and Exchange Commission as of __________ __, 2000.
WHEREAS, the Shareholder desires to sell and the Company desires to
purchase from Shareholder, __________ shares of the Company's common shares,
$1.67 par value (the "Common Shares"), upon the terms and subject to the
conditions set forth herein; and
WHEREAS, the Company desires to sell and Shareholder desires to
purchase from the Company __________ shares of the Company's Series C Preferred
Shares, $___ par value (the "Series C Preferred Shares"), upon the terms and
subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein the parties hereto agree as follows:
1. SALE.
(a) Subject to the terms and conditions hereof, Shareholder
hereby irrevocably agrees to sell Common Shares to the Company.
(b) Subject to the terms and conditions hereof, the
Shareholder irrevocably subscribes for and agrees to purchase _________ Series C
Preferred Shares.
2. PURCHASE PRICE.
(a) The purchase price to be paid by the Company to the
Shareholder for each Common Share shall be $10.00 in cash on the Closing Date
(defined herein) for an aggregate consideration of
$____________.
(b) The purchase price to be paid by the Shareholder to the
Company for each Series C Preferred Share shall be $10.00 in cash on the Closing
Date for an aggregate consideration of
$____________.
3. DELIVERY OF CERTIFICATES. On the Closing Date, the
Shareholder shall surrender certificates representing Common Shares, duly
endorsed for transfer or with separate stock powers in substantially the
forms attached hereto as EXHIBIT A, and shall deliver a completed purchaser
questionnaire, attached hereto as EXHIBIT B. Upon the foregoing deliveries,
the Company shall issue to and register in the name of the Shareholder one or
more certificates representing the Series C Preferred Shares subscribed for
hereunder.
4. CLOSING. Subject to the provisions of this Agreement, the
closing of the transactions contemplated by this Agreement shall take place
at such time and place as is mutually agreed upon by the Company and
Shareholder. The date and time of the closing are referred to herein as the
"Closing Date."
5. CONDITIONS TO CLOSING.
(a) THE OBLIGATIONS OF THE COMPANY HEREUNDER ARE SUBJECT TO
SATISFACTION, AT OR PRIOR TO THE CLOSING DATE, OF EACH OF THE FOLLOWING
CONDITIONS: (i) SHAREHOLDER SHALL HAVE DELIVERED TO THE COMPANY THE STOCK
CERTIFICATES REPRESENTING COMMON SHARES, AN EXECUTED STOCK POWER FOR EACH
CERTIFICATE DELIVERED, A PURCHASER QUESTIONNAIRE AND PAYMENT OF THE PURCHASE
PRICE HEREUNDER; (ii) EACH OF THE REPRESENTATIONS AND WARRANTIES SET FORTH IN
SECTION 6 HEREOF SHALL BE TRUE, ACCURATE AND CORRECT IN ALL RESPECTS AT THE
CLOSING DATE WITH THE SAME EFFECT AS THOUGH MADE AT AND AS OF SUCH TIME; AND
(iii) SHAREHOLDER SHALL HAVE PERFORMED AND COMPLIED IN ALL RESPECTS WITH ALL
AGREEMENTS AND CONDITIONS CONTAINED HEREIN, INCLUDING WITHOUT LIMITATION
SECTIONS 7 AND 8, REQUIRED TO BE PERFORMED OR COMPLIED BY HIM PRIOR TO OR ON THE
CLOSING DATE. This Agreement shall not be deemed accepted by the Company until
signed by a duly authorized officer of the Company. Once executed by Shareholder
and the Company, this Agreement shall become effective as between the Company
and Shareholder.
(b) This Agreement is being made in connection with the
Recapitalization Plan being proposed in the Company's Proxy Statement, which if
approved and consummated would effect a going private transaction. As a
condition precedent to the effectiveness of this Agreement, the Recapitalization
Plan must be approved at a Special Meeting. In the event that shareholders
disapprove the Recapitalization Plan at either the Special Meeting, this
Agreement will have no effect.
6. ACKNOWLEDGMENTS, REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER.
Shareholder acknowledges that he has had an opportunity to ask questions and
receive answers concerning the terms and conditions of the offering of the
Series C Preferred Shares and to obtain any additional information that the
Company possesses, or could acquire without unreasonable effort or expense,
necessary to verify the accuracy of such information and all such questions and
requests for information have been answered to the full satisfaction of
Shareholder. Shareholder represents and warrants that:
(a) (i) if Shareholder is a natural person, Shareholder (y)
has a personal net worth or joint net worth with his spouse of greater than
$1,000,000, or (z) has individual income (not joint income with his spouse) in
excess of $200,000 in each of the two most recent years or joint income with his
spouse in excess of $300,000 in each of those years and has a reasonable
expectation of reaching the same income level in the current year; or (ii) if
Shareholder is not a natural person, Shareholder and the person signing on its
behalf represent and warrant that either (y) all owners of equity interests in
Shareholder meet the qualifications stated in the preceding sentence, or (z)
Shareholder otherwise qualifies as an "accredited investor" as that term is
defined in Rule 501 promulgated under the Securities Act of 1933, as amended
(the "Act");
(b) Shareholder acknowledges and confirms that Shareholder (i)
has knowledge and experience in financial or business matters and understands
the speculative nature of, merits and the risks involved in, an investment in
the Company and is able to bear the economic risks of an investment in the
Company; (ii) is fully informed as to the business conducted by the Company;
(iii) has adequate means of providing for Shareholder's current needs and
possible contingencies and has no need now, and anticipates no need in the
foreseeable future, to sell the Series C Preferred Shares for which Shareholder
hereby purchases; (iv) understands that the Series C Preferred Shares have not
been registered under the Act or any other applicable state or federal statutes
and are being offered under an exemption from registration thereunder; (v) is
acquiring the Series C Preferred Shares solely for Shareholder's own account,
for investment purposes only, and not with a view to, or in connection with, any
resale, distribution, subdivision, fractionalization or other direct or indirect
distribution thereof; (vi) has no agreement or other arrangement,
2
formal or informal, with any person to sell, transfer or pledge any part of the
Series C Preferred Shares purchased for hereby or which would guarantee to
Shareholder any profit or against any loss with respect to such Series C
Preferred Shares, and he has no plans to enter into any such agreement or
arrangement; and (vii) he understands that he must bear the economic risk of his
investment for an indefinite period of time because the Series C Preferred
Shares or any part thereof cannot be sold or otherwise transferred unless they
are subsequently registered under the Act (which the Company is not obligated
and does not plan to do) or an exemption from such registration is available.
(c) Shareholder, either individually or together with his
purchaser representative, has such knowledge and experience in financial and
business matters that he is capable of evaluating the merits and risks of an
investment in the Series C Preferred Shares and of making an informed investment
decision.
(d) If Shareholder is a natural person, he is at least 21
years of age and a bona fide resident and domiciliary (not a temporary or
transient resident) of the state or country set forth on the signature page
hereof, and has no current intention of becoming a resident of any other state
or jurisdiction.
(e) There have been no representations, guaranties or
warranties made to Shareholder by the Company, or its agents or employees, or by
any other person, expressly or by implication, with respect to (i) the
percentage of profit and/or amount of or type of consideration, profit or loss
(including tax benefits) to be realized, if any, as a result of investment in
the Series C Preferred Shares or (ii) the possibility that the past performance
or experience on the part of any officer or director of the Company, or of any
other person, might in any way indicate the predictable results of operations of
the Company, or of ownership of the Series C Preferred Shares.
(f) Shareholder understands that no federal or state agency
has passed on or made any recommendation or endorsement of the Series C
Preferred Shares or the Recapitalization Plan.
(g) Shareholder is acquiring the Series C Preferred Shares for
investment and not with a view for resale or distribution.
(h) Shareholder can bear the economic risk of losing his
entire investment.
(i) Shareholder's overall commitment to investments that are
not readily marketable is not disproportionate to his net worth, and his
investment in the Series C Preferred Shares will not cause such overall
commitment to become excessive.
(j) Shareholder has adequate means of providing for his
current needs and personal contingencies and has no need for liquidity in his
investment in the Series C Preferred Shares.
(k) Shareholder acknowledges that the Series C Preferred
Shares were not offered to Shareholder by means of a general solicitation,
publicly disseminated advertisements or sales literature.
(l) If Shareholder is not a natural person, Shareholder is an
entity duly organized, validly existing and in good standing under the laws of
the state of its organization. Shareholder has all necessary power and authority
to execute and deliver this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by the Shareholder and, assuming the due and valid authorization,
execution and delivery of this Agreement by the Company, constitutes a valid and
biding obligation of the Shareholder enforceable against the Shareholder in
3
accordance with its terms, except as enforceability may be limited by
bankruptcy, moratorium, reorganization, receivership or similar laws affecting
the rights of creditors generally. None of the execution and delivery of this
Agreement by Shareholder, the consummation by Shareholder of the transaction
contemplated hereby or compliance by Shareholder with any of the provisions
hereof will (1) violate its organization documents, (2) conflict with or violate
any statute, ordinance, rule, regulation, order, judgment, decree, permit or
license applicable to Shareholder or any of its subsidiaries, or by which any of
them or any of their respective properties or assets may be bound or affected,
(3) conflict with or violate any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit or other instrument or obligation to which
Shareholder or any of its subsidiaries is a party or by which Shareholder or any
of its subsidiaries or any of their respective properties may be bound or
affected.
(m) Shareholder represents and warrants to the Company that he
has completed and delivered to the Company a purchaser questionnaire, and that
the answers contained in the purchaser questionnaire and the representations and
warranties contained in this Agreement are true, correct and complete in all
respects.
(7) COVENANTS OF SHAREHOLDER. Shareholder covenants and agrees with the
Company as follows:
(a) STANDSTILL AGREEMENT. Shareholder agrees that for a period
of 18 months from the Closing Date Shareholder will not engage in any
transaction that results in a change of control of, or solicit any third party
to engage in any transaction that results in a change of control of, the
Company, any subsidiaries or divisions thereof or any successors thereto. As
used herein, "change of control" means: (i) the acquisition, by any entity (or
group of affiliated entities) of more than 25% of the equity interests of the
Company or Shareholder, whichever is smaller and whether voting or non-voting,
(ii) the dissolution or liquidation of the Company, (iii) consummation of any
merger or consolidation of the Company, or (iv) any sale or other disposition of
all or substantially all of the Company's assets.
(b) RESTRICTIONS ON TRANSFER. The Series C Preferred Shares
may not be offered for sale, sold or transferred except pursuant to (i) an
effective registration under the Act or in a transaction which is otherwise in
compliance with the Act; (ii) an effective registration under any applicable
state securities statutes or in a transaction otherwise in compliance with any
applicable state securities statute, and (iii) evidence of compliance with the
applicable securities laws of other jurisdictions. Shareholder shall furnish to
the Company and the Company shall be entitled to rely upon an opinion of
competent securities counsel acceptable to the Company with respect to
compliance with the above laws.
(c) LEGEND. A legend indicating that the Series C Preferred
Shares have not been registered under such securities laws and referring to the
restriction on transferability and sale of the Series C Preferred Shares set
forth herein shall be placed on the certificate delivered to Shareholder, and
the Company, or any transfer agent thereof, shall required compliance therewith,
either through the issuance of stop transfer instructions or through the making
of notations in the appropriate records of the Company.
8. OTHER MATTERS.
(a) This Agreement and the transactions contemplated by the
Recapitalization Plan may be terminated by the Company at any time prior to the
Closing Date, whether such action occurs before or after shareholder approval is
obtained, for any reason whatsoever, including without limitation (i) if the
Board shall have withdrawn, modified, amended or qualified its approval or
recommendation of the Recapitalization Plan in connection with a Superior
Acquisition Proposal (defined herein), (ii) in order to
4
explore, negotiate or enter into a binding written agreement with respect to a
Superior Acquisition Proposal or (iii) if the Board determines that such action
is in the best interests of the Company or its shareholders. The Company agrees
to notify Shareholder if it receives any inquiries, proposals, discussions or
negotiations or the making or implementation of any proposal or offer with
respect to a Superior Acquisition Proposal. Notwithstanding anything to the
contrary in this Agreement, the Board may take any actions required or necessary
with respect to any Superior Acquisition Proposal in order to comply with its
duties to shareholders imposed by applicable law or the Exchange Act.
"Superior Acquisition Proposal" shall mean a bona fide proposal made by
a third party to acquire, directly or indirectly, the Company pursuant to a
tender or exchange offer, merger, share exchange, consolidation or sale of all
or substantially all of the assets of the Company or otherwise on terms which a
majority of the Board and/or committee thereof determines or recommends that in
good faith, taking into account the advice of financial advisors, are superior,
from a financial point of view, to the Company's shareholders to those provided
for under the Recapitalization Plan.
(b) Shareholder recognizes that the purchase of the Series C
Preferred Shares is based upon representations and warranties contained herein,
and Shareholder agrees to indemnify the Company and its officers, directors and
shareholders and to hold each of them harmless against any liability, costs or
expenses (including reasonable attorneys' fees and costs) arising by reason of
or in connection with any misrepresentation or any breach of such warranties by
Shareholder, or arising as a result of the sale or distribution of any of the
Series C Preferred Shares by Shareholder in violation of the Act, or other
applicable law. The covenants, warranties and representations contained herein
shall be for the benefit of the Company and its officers, directors and
shareholders and each of them shall be entitled to all of the rights that such
covenants, warranties and representations shall confer. Shareholder agrees that
money damages may not be a sufficient remedy for any breach of this Agreement,
and that in addition to all other remedies the Company shall be entitled to
specific performance and injunctive or other equitable relief as a remedy for
any such breach.
(c) Shareholder agrees that, except as provided herein, this
Agreement or any agreement made hereunder or pursuant hereto may not be
cancelled, terminated or revoked by him except upon the written consent of the
Company.
(d) Shareholder agrees that this Agreement and the foregoing
acknowledgments, representations and covenants are true and accurate as of the
date of this Agreement, shall be true and accurate as of the date of delivery of
the Series C Preferred Shares by the Company, and shall survive such delivery
and any investigation made by any party relying on the same or any acceptance or
rejection of this Agreement.
(e) Shareholder agrees to execute any and all further
documents necessary or advisable, in the sole discretion of the Company, in
connection with his becoming a holder of the Series C Preferred Shares or any
portion thereof.
(f) The parties acknowledge and agree that this Agreement and
the obligations and undertakings of the parties hereunder will be performable in
Cayman Islands. This Agreement shall be governed by, and construed and enforced
in accordance with, the laws of Cayman Islands. If any action is brought to
enforce or interpret this Agreement, venue for such action shall be in Cayman
Islands.
5
(g) This Agreement constitutes the entire agreement among the
parties hereto with respect to the subject matter hereof, and may be amended
only by a writing executed by the party to be bound thereby.
IN WITNESS WHEREOF, the Company and Shareholder has hereby executed
this Agreement as of the date set forth below.
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Printed Name of Shareholder Shareholder's Street Address
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Signature of Shareholder City
------------------------------------- ---------------------------------
Title (if applicable) State Zip Code
---------------------------------
Date: Shareholder's Social Security or
-------------------- Tax ID Number
XXXXXXXX INSURANCE COMPANY, LTD.
By:
--------------------------------
Name:
-------------------------------
Title:
------------------------------
6
EXHIBIT A
STOCK POWER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto Xxxxxxxx Insurance Company, Ltd., a Cayman Islands corporation,
__________________________ (________) Common Shares, $1.67 par value, of
Xxxxxxxx Insurance Company Ltd., a Cayman Islands corporation (the "Company"),
standing in the name(s) of the undersigned on the books of the Company and
represented by Certificate No. __________ herewith, and does hereby irrevocably
constitute and appoint W. Xxxxx XxXxxx, as the undersigned's attorney to
transfer the said stock on the books of the Company, each with full power of
substitution in the premises.
Dated: , 2001
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Name (print):
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Name (print):
IMPORTANT - READ CAREFULLY
The signature(s) to this Stock Power must correspond with the name(s) as written
on the face of the certificate without any change whatever. All holders must
sign.
THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION, BANKS,
STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS, AND CREDIT UNIONS WITH MEMBERSHIP
IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO SEC RULE
17AD-15.
A-1
EXHIBIT B
PURCHASER QUESTIONNAIRE
(ALL INFORMATION WILL BE TREATED CONFIDENTIALLY)
The information elicited by this purchaser questionnaire (the
"Questionnaire") is to enable Xxxxxxxx Insurance Company Ltd., a Cayman Islands
corporation (the "Company"), to determine whether you or the prospective
investor on whose behalf you are providing this information, as the case may be,
meets the suitability requirements for purchasers under Regulation D promulgated
under the Securities Act of 1933, as amended (the "Act"), and similar
requirements of other applicable securities laws. The Company will rely upon the
information contained herein for the purpose of such determination and for the
purpose of selling shares described in the Repurchase and Subscription Agreement
(the "Shares"). The request to complete this Questionnaire does not constitute
an offer of the Shares.
Upon signing this Questionnaire, you (a) understand that you will have
an opportunity, prior to purchasing the Shares, to review all pertinent facts
concerning an investment in the Company and to ask questions of and receive
answers from the Company concerning the terms and conditions of the purchase,
and to obtain any additional information, to the extent that the Company
possesses such information or can acquire it without unreasonable effort or
expense, necessary to verify the accuracy of the information contained in the
disclosure documents, (b) understand that no purchase will be consummated prior
to the receipt by the Company of the information required by this Questionnaire
and the other purchase documents, and satisfaction of such further conditions as
may be agreed upon between the Company and the undersigned in connection with
the sale of the Shares, and (c) agree that the Company may present this
Questionnaire (and your answers contained herein) to such parties as it deems
appropriate to establish the availability of an exemption from registration of
the Shares under the applicable federal and state securities laws and for other
corporation purposes.
INSTRUCTIONS:
Answer all questions fully; if the answer to any question is "None" or
"Not Applicable," please so state.
If you are an individual and are furnishing this information on behalf
of yourself or another person that is a natural person (i.e., an individual),
please complete Sections 1 and 4 only.
If you are furnishing this information on behalf of a prospective
investor that is a corporation or partnership, please complete Sections 2 and 4
only.
If you are furnishing this information on behalf of a prospective
investor that is a trust, please complete Sections 3 and 4 only. All questions
should be answered with regard to the person investing in the Shares. For
example, if a corporation is purchasing, all answers should relate to that
corporation (and not the officer completing this Questionnaire).
B-1
If you use the services of a Purchaser Representative (as defined in
Rule 501 of Regulation D promulgated under the Act) in connection with an
investment in the Shares, (a) you must acknowledge, in writing, before any
purchase of Shares, that the Purchaser Representative is your Purchaser
Representative in connection with evaluating the merits and risks of a
prospective investment in the Company, (b) the Purchaser Representative must
disclose to you, in writing, before the acknowledgment referred to above, any
material relationship between the Purchaser Representative or its affiliates and
the Company or its affiliates that now exists or is mutually understood to be
contemplated or that has existed at any time during the previous two years and
any compensation received or to be received as a result of such relationship,
including any compensation received or to be received in connection with the
offering of the Shares, and (c) you must furnish true and complete copies of the
foregoing documents to the Company promptly upon their execution.
If you are signing in a capacity other than your individual capacity,
please attach evidence of your authority to sign in such capacity.
B-2
1. NATURAL PERSON (INDIVIDUALS)
If the prospective investor is a natural person, please complete this
Section 1.
A. Name:
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Date of birth: Citizenship:
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Social Security No.:
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Residence address:
----------------------------------------
Residence telephone number: ( )
------------------------
Business address:
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Business telephone number: ( )
-------------------------
Marital status:
--------------------------------------------
Spouse's full name:
----------------------------------------
Spouse's employment:
---------------------------------------
Spouse's business address:
---------------------------------
Spouse's business telephone number ( )
-----------------
Communications should be sent to (check one):
Business address: / / or Home address: / /
Do you maintain a house or apartment, pay state income taxes,
hold a driver's license or are you registered to vote, in any
state other than the state listed as your residence above in
this part A?
Yes No
----- ------
If "Yes," please state where and indicate whether such other
state is the state of your principal residence. If it is not,
please indicate why it is not.
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B-3
B. Occupation:
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Position and duties:
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Any prior occupations or duties during the past five years
(including name of employer, position held and length of
service):
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C. Do you have a net worth, or joint net worth with your
spouse, in excess of $1,000,000?
Yes No
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D. Do you have an individual income in excess of $200,000 in each
of the two most recent years, or joint income with your spouse
in excess of $300,000 in each of those years, and have a
reasonable expectation of exceeding such income level in the
current year?
Yes No
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E. Are you a director or executive officer of Xxxxxxxx Insurance
Company, Ltd.? "Executive Officer" means the president, any
vice president of a principal business unit, division or
function (such as sales, administration or finance), any other
officer who performs a policymaking function, or any other
person who performs similar policymaking functions for the
Company.
Yes No
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2. CORPORATIONS, PARTNERSHIPS, AND LIMITED LIABILITY COMPANIES
If the prospective investor is a corporation, partnership, or limited
liability company, please complete this Section 2.
A. Name of entity:
---------------------------------------------
Form of organization (i.e., corporation or partnership):
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Date of formation:
------------------------------------------
State or country in which organized:
------------------------
X-0
Xxxxxxx xx xxxxxx (xxxxxxxxx xxxxxx, xxxx, xxxxx, country
and zip code):
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Telephone number of organization: ( )
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Type of business:
------------------------------------------
IRS Employer Identification Number:
-------------------------
B. Number of shareholders, partners, or members:
---------------
Names of shareholders, partners, or members and percentage of
beneficial ownership for each:
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C. Is the investor a corporation, a partnership, a limited
liability company, a tax-exempt organization described in
section 501(c)(3) of the Internal Revenue Code, or a
Massachusetts or similar business trust, not formed for the
specific purpose of acquiring the Shares, with total assets in
excess of $5,000,000?
Yes No
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D. Is the investor a bank as defined in section 3(a)(2) of the
Act, a savings and loan association or other institution as
defined in section 3(a)(5)(A) of the Act; a broker or dealer
registered pursuant to section 15 of the Securities Exchange
Act of 1934, as amended; an insurance company as defined in
section 2(13) of the Act; or an investment company registered
under the Investment Company Act of 1940, as amended?
Yes No
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E. Is the investor a business development company as defined in
section 2(a)(48) of the Investment Company Act of 1940, as
amended; a private business development company as defined in
section 202(a)(22) of the Investment Advisers Act of 1940, as
amended; or 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?
Yes No
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B-5
F. ANSWER THIS QUESTION ONLY IF THE ANSWERS TO EACH OF QUESTIONS
C, D AND E OF THIS SECTION 2 ARE "NO." IF ANY OF SUCH
QUESTIONS WERE ANSWERED "YES," PLEASE SKIP THIS QUESTION AND
PROCEED TO SECTION 4.
Is the investor an entity in which all of its equity owners
are persons or entities that can answer "Yes" to at least one
of the following questions: Section 1--Question C, Question D
or Question E, Section 2--Question C, Question D or Question
E, Section 3--Question C, Question D, Question E or Question
F?
Yes No
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If the answer to this question is "Yes" and if the answers to
each of questions C, D and E of this Section 2 are "No", then
EACH beneficial owner of equity securities or equity interests
in the entity must complete a Questionnaire.
3. TRUSTS
If the investment will be in the name of a trust, please complete this
Section 3.
A. Name of trust:
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Trustee of trust:
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B. Address of trust (including street, city, state, country and zip
code):
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-----------------------------------------------------------------
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Telephone number: ( )
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IRS Employer Identification Number:
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Number of beneficiaries:
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Names of beneficiaries and percentage of beneficial interest
(excluding contingency interests) for each:
----------------------
-----------------------------------------------------------------
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B-6
C. Is the trust a trust with total assets in excess of
$5,000,000, not formed for the specific purpose of acquiring
the Shares, whose purchase is directed by a person who has
such knowledge and experience in financial and business
matters that he is capable of evaluating the merits and risks
of an investment in the Shares?
Yes No
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D. Is the trustee of the trust that is making the investment
decision to purchase the Shares a bank as defined in section
3(a)(2) of the Act, or any savings and loan association or
other institution as defined in section 3(a)(5)(A) of the Act?
Yes No
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E. Is the trust an employee benefit plan within the meaning of
the Employee Retirement Income Security Act of 1974, as
amended?
Yes No
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F. Is the trust an employee benefit plan within the meaning of
the Employee Retirement Income Security Act of 1974, as
amended, (a) whose investment decision to purchase the Shares
is made by a plan fiduciary, as defined in section 3(21) of
the Act, which is either a bank, savings and loan association,
insurance company or registered investment adviser, (b) which
has total assets in excess of $5,000,000, or (c) which is a
self-directed plan whose investment decisions are made solely
by persons that are accredited investors as defined in Rule
501(a) promulgated under the Act?
Yes No
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G. Is the trust a plan established and maintained by a state, its
political subdivisions, or any agency or instrumentality of a
state or its political subdivisions, for the benefit of its
employees, with total assets in excess of $5,000,000?
Yes No
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H. If the answers to questions C, D, E, F, and G of this Section
3 are "No", please answer the following questions (and if the
answer to any of questions C, D, E, F, and G is "Yes", please
skip this question and proceed to Section 4):
(a) Is the trust a revocable grantor trust that may be
amended or revoked at any time by the grantors?
Yes No
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B-7
(b) If the answer to subsection (a) is "yes", who are the
grantors?
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If the answer to subsection (a) is "Yes" (and if the answers
to questions C, D, E, F, and G are "No"), Section 1 of this
Questionnaire should be completed by each grantor with
information about himself.
4. INVESTMENT EXPERIENCE (TO BE COMPLETED BY ALL INVESTORS)
A. Does the investor have such knowledge of business, finance,
securities and investments generally, and such experience
(based on actual participation) in investments in particular,
that he or it is capable of evaluating the risks and merits of
the investment, and believes he or it can afford the complete
loss of his or its investment in the Shares?
Yes No
--------- ---------
If "Yes" please set forth, in detail, information showing the
knowledge and experience of the investor (in the case of an
individual) or the investor's decision makers (in the case of
an entity) in evaluating the merits and risks of a privately
offered investment in a corporation or partnership (e.g.,
education, business and professional experience, prior
investments and investment experience, and other relevant
information).
Education (including institutions attended, degree received
and date hereof):
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Business and Professional Experience:
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Privately Offered Investments:
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Other:
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B-8
If "No," an attorney, accountant, investment advisor or other
consultant, acting as the investor's Purchaser Representative,
may have to review this investment. Please give the following
information regarding the Purchaser Representative that the
investor has designated to review this investment:
Name: Telephone (____)
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Firm: Address:
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B. Is the investor able to bear the economic risk of an
investment in the Shares for an indefinite period of time?
Yes No
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C. Does the amount of the investor's investment in the Company
exceed ten percent (10%) of his or its net worth?
Yes No
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D. Please check below the types of investments the investor has made in
the past five years:
Oil and Gas Limited
Stocks Partnerships
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Equipment Leasing
Bonds Partnerships
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Certificates Real Estate Limited
of Deposit Partnerships
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Non-marketable Cattle or
Securities Ranching
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Other experience:
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B-9
THE UNDERSIGNED UNDERSTANDS THAT THE COMPANY AND ITS AFFILIATES AND
ADVISORS WILL BE RELYING ON THE ACCURACY AND COMPLETENESS OF THE RESPONSES TO
THE FOREGOING QUESTIONS. THE COMPANY WILL KEEP SUCH RESPONSES IN CONFIDENCE,
EXCEPT THAT THIS QUESTIONNAIRE (AND THE ANSWERS CONTAINED HEREIN) MAY BE
FURNISHED TO SUCH PARTIES AS THE COMPANY DEEMS DESIRABLE TO ESTABLISH COMPLIANCE
WITH FEDERAL AND STATE SECURITIES LAWS. THE ABOVE INFORMATION IS ACCURATE AND
COMPLETE IN ALL RESPECTS, AND THE UNDERSIGNED WILL NOTIFY THE COMPANY PROMPTLY
OF ANY CHANGES THAT OCCUR PRIOR TO THE PURCHASE OF THE SHARES
Name of Investor:
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Signature:
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Printed Name:
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Title (if applicable):
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Date:
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B-10
