SHARE EXCHANGE AGREEMENT
Exhibit
99.7
This
Agreement dated as of the 12th
day of
September 2007, by and among Lincoln International Corporation, a Delaware
corporation having its offices at 000 Xxxxxxxxx Xxxxxx, 00xx
Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (the “Issuer”), and Xxxxxxxx Xxxx-Xxx Xxxx (the
“Shareholder”).
WITNESSETH:
WHEREAS,
the Shareholder is the holder of all of the issued and outstanding capital
stock
(the “Acquisition Shares”) of Keep On Holding Limited, a British Virgin Island
corporation (“Keep On”), which is the sole stockholder of Suny Electronics
(Shenzhen) Company Limited, a corporation organized under the laws of the
Peoples’ Republic of China (“Suny”);
WHEREAS,
the Shareholder is acquiring a controlling interest in the Issuer;
WHEREAS,
the Issuer is willing to issue shares of its common stock, par value $0.0001
per
share (“Common Stock”), to the Shareholder and his designees listed on Schedule
I hereto (the “Designees”) in consideration for the Acquisition
Shares.
NOW,
THEREFORE, for the mutual consideration set out herein, the parties agree
as
follows:
1.
Exchange
of Shares.
(a)
Issuance
of Shares by Issuer.
On and
subject to the conditions set forth in this Agreement, the Issuer will issue
to
the Shareholder and the Designees, in exchange for all of the Acquisition
Shares, which represents all of the issued and outstanding capital stock
of Keep
On, which is the sole stockholder of Suny, an aggregate of 85,320,000 shares
of
Common Stock (the “Shares”). The Shares will be issued to the Shareholder and
the Designees in the amounts set forth after their respective names in Schedule
I to this Agreement.
(b)
Transfer
of Acquisition Shares by the Shareholder.
On and
subject to the conditions set forth in this Agreement, the Shareholder will
transfer to the Issuer all of the Acquisition Shares, free and clear of any
and
all liens, claims, encumbrances, preemptive rights, right of first refusal
and
adverse interests of any kind, in exchange for the Shares to be issued to
the
Shareholder and the Designees. The Shareholder holds the number of Acquisition
Shares set forth after his name in Schedule I to this Agreement.
(c)
Closing.
The
issuance of the Shares to the Shareholder and the Designees and the transfer
of
the Acquisition Shares to the Issuer will take place at a closing (the
“Closing”) to be held at the office of Sichenzia Xxxx Xxxxxxxx Xxxxxxx, LLP, 00
Xxxxxxxx, 00xx
Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000 as soon as possible after or contemporaneously with
the
satisfaction or waiver of all of the conditions to closing set forth in Section
4 of this Agreement.
2.
Representations
and Warranties of the Issuer.
The
Issuer hereby represents, warrants, covenants and agrees as
follows:
(a)
General.
(i)
The
Issuer is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. The Issuer has the corporate power
to
own its properties and to carry on its business as now being conducted and
is
duly qualified to do business and is in good standing in each jurisdiction
in
which the failure to be so qualified and in good standing would have a material
adverse effect on the Issuer. The Issuer is not in violation of any provisions
of its certificate of incorporation or its bylaws. No consent, approval or
agreement of any individual or entity is required to be obtained by the Issuer
in connection with the execution and performance by the Issuer of this Agreement
or the execution and performance by the Issuer of any agreements, instruments
or
other obligations entered into in connection with this Agreement. The Issuer
does not have any equity investment or other interest, direct or indirect,
in,
or any outstanding loans, advances or guarantees to or on behalf of, any
domestic or foreign corporation, limited liability company, association,
partnership, joint venture or other entity.
(ii)
The
Issuer provided to the Shareholder true, correct and complete copies of the
Issuer’s articles of incorporation, including all amendments thereto, and the
Issuer’s bylaws, including all amendments thereto, as such articles of
incorporation and bylaws are in effect on the date hereof.
(iii)
The
Issuer has full power and authority to carry out the transactions provided
for
in this Agreement, and this Agreement constitutes the legal, valid and binding
obligations of the Issuer, enforceable in accordance with its terms, except
as
enforceability may be limited by bankruptcy, insolvency and other laws of
general application affecting the enforcement of creditor’s rights and except
that any remedies in the nature of equitable relief are in the discretion
of the
court. All necessary action required to be taken by the Issuer for the
consummation of the transactions contemplated by this Agreement has been
taken.
(iv)
The
Shares, when issued pursuant to this Agreement, will be duly and validly
authorized and issued, fully paid and non-assessable. The issuance of the
Shares
to Shareholder and Designees is exempt from the registration requirements
of the
Securities Act of 1933, as amended (the “Securities Act”), pursuant to an
exemption provided by Regulation S promulgated by the Securities and Exchange
Commission (“SEC”) thereunder (“Regulation S”).
2
(v)
The
Issuer has authorized capital stock consisting of 500,000,000 shares of Issuer
Common Stock, and 50,000,000 shares of preferred stock, no par value (the
“Preferred Stock”), of which 2,610,000 shares of Common Stock (subject to
adjustment in the event of a reverse split of the Common Stock), and no shares
of Preferred Stock are presently issued and outstanding. The Issuer has not
created or authorized any other series of Preferred Stock and has no obligation
or understanding to do so, except as contemplated in that certain securities
purchase agreement to be executed in connection with a proposed reverse
acquisition transaction between the Issuer and the Investors named therein
(the
“Purchase Agreement”).
(vi)
The
Issuer is not party to any agreement or understanding pursuant to which any
securities of any class of capital stock are to be issued or created or
transferred. Except as contemplated in the Purchase Agreement, neither the
Issuer nor any officer, director or 5% stockholder of the Issuer has any
agreements, plans, understandings or proposals, whether formal or informal
or
whether oral or in writing, pursuant to which it or he granted or may have
issued or granted any individual or entity any Convertible Security or any
interest in the Issuer or the Issuer’s earnings or profits, however defined. As
used in this Agreement, the term “Convertible Securities” shall mean any
options, rights, warrants, convertible debt, equity securities or other
instrument or agreement upon the exercise or conversion of which or upon
the
exchange of which or pursuant to the terms of which additional shares of
any
class of capital stock of the Issuer may be issued.
(vii)
There is no private or governmental action, suit, proceeding, claim, arbitration
or investigation pending before any agency, court or tribunal, foreign or
domestic, or, to the Issuer’s Best Knowledge, threatened against the Issuer or
any of its properties or any of its officers or directors (in their capacities
as such). There is no judgment, decree or order against the Issuer that could
prevent, enjoin, alter or delay any of the transactions contemplated by this
Agreement. The term “Best Knowledge” of the Issuer shall mean and include (i)
actual knowledge and (ii) that knowledge which a prudent businessperson would
reasonably have obtained in the management of such Person’s business affairs
after making due inquiry and exercising the due diligence which a prudent
businessperson should have made or exercised, as applicable, with respect
thereto.
(viii)
There
are
no material claims, actions, suits, proceedings, inquiries, labor disputes
or
investigations (whether or not purportedly on behalf of the Issuer) pending
or,
to the Issuer’s Best Knowledge, threatened against the Issuer or any of its
assets, at law or in equity or by or before any governmental entity or in
arbitration or mediation. No bankruptcy, receivership or debtor relief
proceedings are pending or, to the best of the Issuer’s knowledge, threatened
against the Issuer.
(ix)
The
Issuer has complied with, is not in violation of, and has not received any
notices of violation with respect to, any federal, state, local or foreign
Law,
judgment, decree, injunction or order, applicable to it, the conduct of its
business, or the ownership or operation of its business. References in this
Agreement to “Laws” shall refer to any laws, rules or regulations of any
federal, state or local government or any governmental or quasi-governmental
agency, bureau, commission, instrumentality or judicial body (including,
without
limitation, any federal or state securities law, regulation, rule or
administrative order).
3
(x)
The
Issuer has properly filed all tax returns required to be filed and has paid
all
taxes shown thereon to be due. To the Best Knowledge of the Issuer, all tax
returns previously filed are true and correct in all material
respects.
(xi)
The
Issuer has no outstanding liabilities or obligations to any party except
as
reflected on the Issuer’s Form 10-QSB for the quarter ended April 30, 2007,
other than charges since such date similar to those incurred in past periods
and
consistent with past practice.
(xii)
The
Issuer’s Form 10-KSB for the year ended July 31, 2006, contains the audited
financial statements of the Issuer, certified by Sherb & Co., LLP,
(“Sherb”), the Issuer’s independent registered accounting firm, and the Issuer’s
Form 10-QSB for the quarter ended April 30, 2007 contains the unaudited
financial statements of the Issuer which have been reviewed by Sherb. The
balance sheets fairly present the financial position of the Issuer, as of
their
respective dates, and each of the consolidated statements of income,
stockholders’ equity and cash flows (including any related notes and schedules
thereto) fairly presents the results of operations, cash flows and changes
in
stockholders’ equity, as the case may be, of the Issuer for the periods to which
they relate, in each case in accordance with generally accepted accounting
principles (“GAAP”) consistently applied during the periods involved. Sherb is
independent as to the Issuer in accordance with the rules and regulations
of the
SEC. The books and records of the Issuer have been, and are being, maintained
in
all material respects in accordance with GAAP and any other applicable legal
and
accounting requirements and reflect only actual transaction. The Issuer has
not
received any letters of comments from the SEC relating to any filing made
by the
Issuer with the SEC which has not been addressed by an amended filing, and
each
amended filing fully responds to the questions raised by the staff of the
SEC.
The Issuer maintains disclosure controls and procedures that are effective
to
ensure that information required to be disclosed by the Issuer in its annual
and
quarterly reports filed with the SEC is accumulated and communicated to the
Issuer’s management, including its principal executive and financial officers as
appropriate, to allow timely decisions regarding required disclosure. There
were
no significant changes in the Issuer’s internal controls or other factors that
could significantly affect such controls subsequent to December 31, 2006.
The
Issuer has not received any advice from Sherb to the effect that there is
any
significant deficiency or material weakness in the Issuer’s controls or
recommending any corrective action on the part of the Issuer or any subsidiary
of the Issuer. The Issuer does not have any contingent liabilities.
(xiii)
The execution and delivery of this Agreement by the Issuer and the consummation
of the transactions contemplated by this Agreement will not result in any
material violation of the Issuer’s certificate of incorporation or by-laws, or
any applicable Law.
(b)
SEC
Documents.
The
Issuer’s Common Stock is registered pursuant to Section 12(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”). The Issuer is current
with its reporting obligations under the Exchange Act. The Common Stock is
listed on the OTC Bulletin Board of the National Association of Securities
Dealers, Inc. The Issuer has received no notice, either oral or written,
with
respect to the continued listing of the Common Stock on the OTC Bulletin
Board.
The Issuer has not provided to any investor any information that, according
to
applicable law, rule or regulation, should have been disclosed publicly prior
to
the date hereof by the Issuer, but which has not been so disclosed. As of
their
respective dates, the Issuer’s filings made pursuant to the Exchange Act (the
“Issuer SEC Documents”) complied in all material respects with the requirements
of the Exchange Act, and rules and regulations of the SEC promulgated thereunder
and the Issuer SEC Documents did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading.
4
3.
Representations
and Warranties of Shareholder.
The
Shareholder hereby represents, warrants, covenants and agrees as
follows:
(a)
The
Shareholder understands that the offer and sale of the Shares is being made
only
by means of this Agreement and understands that the Issuer has not authorized
the use of, and the Shareholder confirms that he or she is not relying upon,
any
other information, written or oral, other than material contained in this
Agreement. The
Shareholder is aware that the purchase of the Shares involves a high degree
of
risk and that the Shareholder may sustain, and has the financial ability
to
sustain, the loss of his entire investment, understands that no assurance
can be
given that the Issuer will be profitable in the future, that there is no
public
market for the Common Stock, and the Issuer can give no assurance that there
will ever be a public market for the Common Stock. Furthermore,
in subscribing for the Shares, the Shareholder acknowledges it is not relying
upon any projections or any statements of any kind relating to future revenue,
earnings, operations or cash flow in making an investment in the
Shares.
(b)
The
Shareholder is not acquiring the Shares as a result of, and will not itself
engage in, any "directed selling efforts" (as defined in Regulation S) in
the
United States in respect of the Shares which would include any activities
undertaken for the purpose of, or that could reasonably be expected to have
the
effect of, conditioning the market in the United States for the resale of
the
Shares; provided, however, that the Shareholder may sell or otherwise dispose
of
the Shares pursuant to registration thereof under the Securities Act and
any
applicable state and provincial securities laws or under an exemption from
such
registration requirements;
(c)
The
Shareholder acknowledges and agrees that none of the Shares have been registered
under the Securities Act, or under any state securities or "blue sky" laws
of
any state of the United States, and, unless so registered, may not be offered
or
sold in the United States or, directly or indirectly, to U.S. Persons, as
that
term is defined in Regulation S, except in accordance with the provisions
of
Regulation S, pursuant to an effective registration statement under the
Securities Act, or pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act and in each
case
in accordance with applicable state and provincial securities laws;
5
(d)
The
Shareholder acknowledges and agrees that the Issuer will refuse to register
any
transfer of the Shares not made in accordance with the provisions of Regulation
S, pursuant to an effective registration statement under the Securities Act
or
pursuant to an available exemption from the registration requirements of
the
Securities Act and in accordance with applicable state and provincial securities
laws;
(e)
The
Shareholder represents and warrants that no broker or finder was involved
directly or indirectly in connection with his or her purchase of the Shares
pursuant to this Agreement. The Shareholder shall indemnify the Issuer and
hold
it harmless from and against any manner of loss, liability, damage or expense,
including fees and expenses of counsel, resulting from a breach of the
Shareholder’s warranty contained in this Paragraph 3(e).
(f)
The
Shareholder understands that he or she has no registration rights with respect
to the Shares.
(g)
The
Shareholder is resident in the Peoples’ Republic of China;
(h)
The
Shareholder is acquiring the Shares for investment only and not with a view
to
resale or distribution and, in particular, it has no intention to distribute
either directly or indirectly any of the Shares in the United States or to
U.S.
Persons;
(i)
The
Shareholder is acquiring the Shares as principal for the Shareholder’s own
account (except for the circumstances outlined in paragraph 3(k)), for
investment purposes only, and not with a view to, or for, resale, distribution
or fractionalisation thereof, in whole or in part, and no other person has
a
direct or indirect beneficial interest in such Shares;
(j)
The
Shareholder is not an underwriter of, or dealer in, the common shares of
the
Issuer, nor is the Shareholder participating, pursuant to a contractual
agreement or otherwise, in the distribution of the Shares;
(k)
If
the Shareholder is acquiring the Shares as a fiduciary or agent for one or
more
investor accounts:
(i) the
Shareholder has sole investment discretion with respect to each such account
and
it has full power to make the foregoing acknowledgements, representations
and
agreements on behalf of such account, and
(ii) the
investor accounts for which the Shareholder acts as a fiduciary or agent
satisfy
the definition of an “Accredited Investor”, as the term is defined in Regulation
D promulgated by the SEC under the Securities Act;
(l)
The
Shareholder is not aware of any advertisement of any of the Shares;
and
(m)
No
person has made to the Shareholder any written or oral
representations:
(i) that
any
person will resell or repurchase any of the Shares;
(ii) that
any
person will refund the purchase price of any of the Shares;
6
(iii) as
to the
future price or value of any of the Shares; or
(iv) that
any
of the Shares will be listed and posted for trading on any stock exchange
or
automated dealer quotation system or that application has been made to list
and
post any of the Shares of the Issuer on any stock exchange or automated dealer
quotation system.
(n)
The
Shareholder represents to the Issuer that he is an accredited investor within
the meaning of Rule 501 under the Securities Act of 1933 and he understands
the
meaning of the term “accredited investor.” The requirements for an accredited
investor are as set forth in Exhibit B. The Shareholder further represents
that
he has such knowledge and experience in financial and business matters as
to
enable the Shareholder to understand the nature and extent of the risks involved
in purchasing the Shares. The Shareholder is fully aware that such investments
can and sometimes do result in the loss of the entire investment. The
Shareholder has engaged his or her own counsel and accountants to the extent
that the Shareholder deems it necessary.
4.
Conditions
to the Obligation of Shareholder and the Issuer.
The
obligations of Shareholder and the Issuer under this Agreement are subject
to:
(a)
the
completion of the sale of preferred stock and warrants to an investor pursuant
to an agreement between the Issuer and the investor contemporaneously with
the
exchange contemplated by this Agreement;
(b)
the
delivery by the Issuer of a legal opinion in a form reasonably satisfactory
to
the Shareholder that: (i) the Shares, when issued pursuant to this
Agreement, will be duly and validly authorized and issued, fully paid and
non-assessable and (ii) the issuance of the Shares to the Shareholder and
the
Designees is exempt from the registration requirements of the Securities
Act,
pursuant to an exemption provided by Regulation S; and
(c)
the
delivery by each Designee of a Regulation S letter in the form of Exhibit
A
hereto.
5.
Miscellaneous.
(a)
This
Agreement constitutes the entire agreement between the parties relating to
the
subject matter hereof, superseding any and all prior or contemporaneous oral
and
prior written agreements, understandings and letters of intent. This Agreement
may not be modified or amended nor may any right be waived except by a writing
which expressly refers to this Agreement, states that it is a modification,
amendment or waiver and is signed by all parties with respect to a modification
or amendment or the party granting the waiver with respect to a waiver. No
course of conduct or dealing and no trade custom or usage shall modify any
provisions of this Agreement.
7
(b)
This
Agreement shall be governed by and construed in accordance with the laws
of the
State of New York applicable to contracts made and to be performed entirely
within such State.
(c)
This
Agreement shall be binding upon and inure to the benefit of the parties hereto,
and their respective successors and permitted assigns.
(d)
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original but all of which together shall constitute one and the
same
document.
(e)
The
various representations, warranties, and covenants set forth in this Agreement
or in any other writing delivered in connection therewith shall survive the
issuance of the Shares.
[Remainder
of this page intentionally left blank.]
8
Please
confirm your agreement with the foregoing by signing this Agreement where
indicated.
Very truly yours, | ||
|
|
|
/s/ Xxxxxxxx Xxxx-Xxx Xxxx | ||
|
||
Xxxxxxxx
Xxxx-Xxx Xxxx
|
Accepted
this 12th
day of
September 2007
Lincoln
International Corporation
|
|||
/s/ Xxxxxx Xxxxx | |||
CEO
|
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|
9
Schedule
I
Holder
Name
|
Shares
to be issued
|
Acquisition
shares
|
||||||||
1
|
XXXX
Xxxx-xxx, Xxxxxxxx
|
36,246,180
|
10,925,000
|
|||||||
2
|
XXXX
Xxxx-Xxxxx
|
7,500,000
|
|
|||||||
3
|
XXXX
XXXX Lung-Ming
|
3,750,000
|
|
|
||||||
4
|
XXXX
Xxxx-Po
|
3,750,000
|
|
|||||||
5
|
XXXXX Xxx-Xxx
|
4,185,000
|
|
|||||||
6
|
Keen
Dragon Group Limited
|
4,125,000
|
||||||||
7
|
Goldwide
Hotdings Limited
|
4,125,000
|
||||||||
8
|
Joyrise
Holdings Limited
|
4,125,000
|
||||||||
9
|
XXXXX Xxxx
|
3,225,000
|
||||||||
10
|
XX
Xxx
|
3,000,000
|
|
|||||||
11
|
XXXX
Xxxx
|
2,437,500
|
||||||||
12
|
XXXXX
Xxx
|
3,750,000
|
||||||||
13
|
ZHANG
Hai Lan
|
2,153,820
|
|
|||||||
14
|
MA
Xian Min
|
1,087,500
|
||||||||
15
|
LV
Rui
|
750,000
|
||||||||
16
|
WANG
Xian Hua
|
750,000
|
||||||||
85,320,000
|
10
Exhibit
A
In
connection with the issuance to the undersigned of shares of common stock
of
Lincoln International Corporation (the “Issuer”) pursuant to the Share Exchange
Agreement (the “Agreement”), dated as of September 13, 2007, between Lincoln
International Corporation (the “Issuer”) and Xxxxxxxx Xxxx-Xxx Xxxx, the
undersigned hereby represents and warrants:
(a)
I am not acquiring the shares of common stock of the Issuer (the “Shares”) as a
result of, and will not itself engage in, any "directed selling efforts"
(as
defined in Regulation S (“Regulations S”) promulgated by the Securities and
Exchange Commission (“SEC”) under the Securities Act of 1933, as amended (the
“Securities Act”)) in the United States in respect of the Shares which would
include any activities undertaken for the purpose of, or that could reasonably
be expected to have the effect of, conditioning the market in the United
States
for the resale of the Shares; provided, however, that I may sell or otherwise
dispose of the Shares pursuant to registration thereof under the Securities
Act
and any applicable state and provincial securities laws or under an exemption
from such registration requirements;
(b)
I
acknowledge and agree that none of the Shares have been registered under
the
Securities Act, or under any state securities or "blue sky" laws of any state
of
the United States, and, unless so registered, may not be offered or sold
in the
United States or, directly or indirectly, to U.S. Persons, as that term is
defined in Regulation S, except in accordance with the provisions of Regulation
S, pursuant to an effective registration statement under the Securities Act,
or
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and in each case in accordance
with applicable state and provincial securities laws;
(c)
I
acknowledge and agree that the Issuer will refuse to register any transfer
of
the Shares not made in accordance with the provisions of Regulation S, pursuant
to an effective registration statement under the Securities Act or pursuant
to
an available exemption from the registration requirements of the Securities
Act
and in accordance with applicable state and provincial securities
laws;
(d)
No
broker or finder was involved directly or indirectly in connection with my
acquisition of the Shares pursuant to the Agreement. I shall indemnify the
Issuer and hold it harmless from and against any manner of loss, liability,
damage or expense, including fees and expenses of counsel, resulting from
a
breach of the my warranty contained in this Paragraph (d).
(e)
I
understand that I have no registration rights with respect to the
Shares.
(f)
I am
resident of the country set forth below;
11
(g) I am acquiring the Shares for investment only and not with a view to resale or distribution and, in particular, I have no intention to distribute either directly or indirectly any of the Shares in the United States or to U.S. Persons;
(h)
I am
acquiring the Shares as principal for my own account (except for the
circumstances outlined in paragraph (j)), for investment purposes only, and
not
with a view to, or for, resale, distribution or fractionalisation thereof,
in
whole or in part, and no other person has a direct or indirect beneficial
interest in such Shares;
(i)
I am
not an underwriter of, or dealer in, the common shares of the Issuer, nor
am I
participating, pursuant to a contractual agreement or otherwise, in the
distribution of the Shares;
(j)
If I
am acquiring the Shares as a fiduciary or agent for one or more investor
accounts:
(i) I
have
sole investment discretion with respect to each such account and it has full
power to make the foregoing acknowledgements, representations and agreements
on
behalf of such account, and
(ii) the
investor accounts for which I act as a fiduciary or agent satisfy the definition
of an “Accredited Investor”, as the term is defined in Regulation D promulgated
the SEC under the Securities Act;
(m)
I am
not aware of any advertisement of any of the Shares; and
(n)
No
person has made to me any written or oral representations:
(i) |
that
any person will resell or repurchase any of the
Shares;
|
(ii) |
that
any person will refund the purchase price of any of the
Shares;
|
(iii) |
as
to the future price or value of any of the Shares;
or
|
(iv) |
that
any of the Shares will be listed and posted for trading on any
stock
exchange or automated dealer quotation system or that application
has been
made to list and post any of the Shares of the Issuer on any stock
exchange or automated dealer quotation
system.
|
(o)
I am
an accredited investor within the meaning of Rule 501 under the Securities
Act
and I understand the meaning of the term “accredited investor.” I further
represent that I have such knowledge and experience in financial and business
matters as to enable me to understand the nature and extent of the risks
involved in acquiring the Shares. I am fully aware that such investments
can and
sometimes do result in the loss of the entire investment. I have engaged
my own
counsel and accountants to the extent that I deem it necessary.
[Name
of stockholder]
|
|||
[Address]
|
|||
[Signature]
|
|||
[Country
of Residence]
|
|||
[Title,
if applicable]
|
12
Exhibit
B
Accredited
investors
A
Shareholder who meets any one of the following tests is an accredited
investor:
(a)
The
Shareholder is an individual who has a net worth, or joint net worth with
the
Shareholder’s spouse, of at least $1,000,000.
(b)
The
Shareholder is an individual who had individual income of more than $200,000
(or
$300,000 jointly with the Shareholder’s spouse) for the past two years, and the
Shareholder has a reasonable expectation of having income of at least $200,000
(or $300,000 jointly with the Shareholder’s spouse) for the current
year.
(c)
The
Shareholder is an officer or director of the Issuer.
(d)
The
Shareholder is a bank as defined in section 3(a)(2) of the Securities Act
or any
savings and loan association or other institution as defined in section
3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary
capacity.
(e)
The
Shareholder is a broker or dealer registered pursuant to section 15 of the
Securities Exchange Act of 1934.
(f)
The
Shareholder is an insurance company as defined in section 2(13) of the
Securities
Act.
(g)
The
Shareholder is an investment company registered under the Investment Company
Act
of 1940 or a business development company as defined in section 2(a)(48)
of that
Act.
(h)
The
Shareholder is 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.
(i)
The
Shareholder is an employee benefit plan within the meaning of Title I of
the
Employee Retirement Income Security Act of 1974, if the investment decision
is
made by a plan fiduciary, as defined in section 3(21) of such Act, which
is
either a bank, savings and loan association, insurance company, or registered
investment adviser, or if the employee benefit plan has total assets in excess
of $5,000,000 or, if a self-directed plan, with investment decisions made
solely
by persons that are accredited investors.
(j)
The
Shareholder is a private business development company as defined in section
202(a)(22) of the Investment Advisers Act of 1940.
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(k)
The
Shareholder is an organization described in Section 501(c)(3) of the Internal
Revenue Code, corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the securities
offered, with total assets in excess of $5,000,000.
(l)
The
Shareholder is a trust, with total assets in excess of $5,000,000, not formed
for the specific purpose of acquiring the securities offered, whose purchase
is
directed by a sophisticated person as described in Rule 506(b)(2)(ii) of
the
Commission under the Securities Act.
(m)
The
Shareholder is an entity in which all of the equity owners are accredited
investors (i.e., all of the equity owners meet one of the tests for an
accredited investor).
If
an
individual Shareholder qualifies as an accredited investor, such individual
may
purchase the Shares in the name of his or her individual retirement account
(“XXX”).
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