NONE OF THE SECURITIES TO WHICH THIS AGREEMENT (AS DEFINED HEREIN) RELATES HAVE
BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"1933 ACT"), OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE
MAY BE OFFERED OR SOLD IN THE UNITED STATES OR, DIRECTLY OR INDIRECTLY, TO U.S.
PERSONS (AS DEFINED HEREIN) EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN
EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.
SETTLEMENT AND STOCK OPTION AGREEMENT
-------------------------------------
THIS made ____ day of January, 2000,
BETWEEN:
XXXXXXXXXXXXX.XXX, INC., of Suite 1000, 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, XX,
XXX, 00000
(the "Company")
OF THE FIRST PART
AND:
XXXX XXXXXX, businessman of
0000 Xxxxxxxx Xxxxx, Xxxxxxx, XX 00000
-------------------------------------------------
("Xxxxxx")
OF THE SECOND PART
WHEREAS pursuant to a Settlement Agreement and Release, dated October 1, 1996,
Xxxxxx has agreed to release (the "Release") the Company and its subsidiaries
from all claims and issues that he had, now has or which he may have against the
Company and/or its subsidiaries in consideration for the Company granting to
Xxxxxx an option to purchase an aggregate of 100,000 common shares in the
capital of the Company (the "Option") at the exercise price of CDN$1.28 per
common share on the terms and conditions as set forth in this Settlement and
Stock Option Agreement (the "Agreement').
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the premises
and of the covenants and agreements set out herein, the parties hereto covenant
and agree as follows:
1. In this Agreement, the following terms shall have the following meanings:
(a) "Expiry Date" means January 31, 2001;
(b) "Notice of Exercise" means a notice in writing addressed to the Company
at its address first recited, which notice shall specify therein the number of
Optioned Shares in respect of which the Option is being exercised;
(c) "Option" means the irrevocable right and option to purchase, from time
to time, all, or any part of the Optioned Shares granted to Xxxxxx by the
Company pursuant to paragraph 2 hereof;
(d) "Optioned Shares" means the Shares of the Company, issuable on exercise
of the Option;
(e) "Securities" means the Option and/or the Optioned Shares, as applicable;
and
(f) "Shares" means the common shares in the capital stock of the Company.
2. In consideration of the Release provided by Xxxxxx, the Company agrees to
grant to Xxxxxx, subject to the terms and conditions set forth in this
Agreement, the Option to purchase a total of One Hundred Thousand (100,000)
Optioned Shares at the price of CDN$1.28 per Optioned Share.
3. The Option shall, at 5:00 p.m., Vancouver time, on the Expiry Date,
forthwith expire and terminate and be of no further force or effect whatsoever.
4. In the event of the death of Xxxxxx on or prior to the Expiry Date, the
Option, or such part thereof as remains unexercised, may be exercised by the
personal representative of Xxxxxx at any time prior to 5:00 p.m., Vancouver
time, on the first (1st) anniversary of the date of death of Xxxxxx or prior to
5:00 p.m., Vancouver time, on the Expiry Date, whichever is the earlier.
5. Xxxxxx hereby agrees that, upon delivery to him of the Option by the
Company, any and all claims that Xxxxxx has had, now has or may have in the
future as against the Company, its subsidiaries and their respective directors,
officers and/or agents will be fully satisfied and extinguished and Xxxxxx will
remise, release and forever discharge the Company, its subsidiaries and any of
their respective directors, officers and employees from any and all manner of
actions, causes of action, suits, debts, sums of money, due accounts, dues,
bonds, covenants, contracts, claims, demands, damages, costs, expenses and any
and all legal obligations of any and every kind and nature whatsoever, at law or
in equity or under any statute, whether known or unknown, suspected or
unsuspected and which Xxxxxx had or may now have or which he hereafter may have
for or by reason of any matter, cause or thing and, in particular, but without
limitation, for or by reason of any matter, cause or thing which has been or may
be sustained in consequence of Xxxxxx'x relationship with the Company and its
subsidiaries as a director, officer, consultant, agent, employee or shareholder.
6. Xxxxxx acknowledges that in making this Agreement he has been advised and
has had an opportunity to obtain independent legal advice, he has exercised his
own independent judgment and he has not been influenced to any extent whatsoever
by any representations, statements or conduct of any description whatever on the
part of any other parties to this Agreement.
7. Subject to the provisions hereof, the Option shall be exercisable in
whole or in part (at any time and from time to time as aforesaid) by Xxxxxx or
his personal representative giving a Notice of Exercise together with payment
(by cash or certified cheque made payable to the Company) in full of the
purchase price for the number of Optioned Shares specified in the Notice of
Exercise.
8. Upon the exercise of all or any part of the Option, the Company shall
forthwith cause the registrar and transfer agent of the Company to deliver to
Xxxxxx or his personal representative within ten (10) days following receipt by
the Company of the Notice of Exercise a certificate in the name of Xxxxxx or his
personal representative representing, in aggregate, the number of Optioned
Shares specified in the Notice of Exercise and in respect of which the Company
has received payment.
9. Nothing herein contained shall obligate Xxxxxx to purchase any Optioned
Shares except those Optioned Shares in respect of which Xxxxxx shall have
exercised his Option in the manner hereinbefore provided.
10. In the event of any subdivision, redivision or change of the Shares of
the Company at any time prior to the Expiry Date into a greater number of
Shares, the Company shall deliver at the time of any exercise thereafter of the
option such additional number of Shares as would have resulted from such
subdivision, redivision or change if such exercise of the Option had been made
prior to the date of such subdivision, redivision or change.
11. In the event of any consolidation or change of the Shares of the Company
at any time prior to the Expiry Date into a lesser number of Shares, the number
of Shares deliverable by the Company on any exercise thereafter of the Option
shall be reduced to such number of Shares as would have resulted from such
consolidation or change if such exercise of the Option had been made prior to
the date of such consolidation or change.
12. Xxxxxx shall have no rights whatsoever as a shareholder in respect of
any of the Optioned Shares (including any right to receive dividends or other
distribution therefrom or thereon) except in respect of which the Option has
been properly exercised in accordance with paragraph 7 hereof.
13. Xxxxxx must complete, sign and return to the Company the following
documents:
(a) two (2) executed copies of this Agreement; and
(b) a Prospective Investor Suitability Questionnaire in the form attached as
Appendix 1 (the "Questionnaire").
14. Xxxxxx shall complete, sign and return to the Company as soon as
possible, on request by the Company, any documents, questionnaires, notices and
undertakings as may be required by regulatory authorities, stock exchanges and
applicable law.
15. Xxxxxx acknowledges and agrees that:
(a) none of the Securities have been registered under the 1933 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 to U.S.
Persons, as that term is defined in Regulation S under the 1933 Act ("Regulation
S"), except pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the 1933 Act;
(b) the Company has not undertaken, and will have no obligation, to register
any of the Securities under the 1933 Act;
(c) Xxxxxx has carefully read this Agreement, the Company's Form 20-F for
the fiscal period ending February 28, 1999, the Company's Form 10-Q for the
fiscal period ending August 30, 1999, and the Company's Form 10-Q for the fiscal
period ending November 30, 1999 (collectively the "Company Information");
(d) the decision to execute this Agreement and acquire the Securities agreed
to be purchased hereunder has not been based upon any oral or written
representation as to fact or otherwise made by or on behalf of the Company and
such decision is based entirely upon a review of the Company Information and any
other public information which has been filed by the Company with the Securities
and Exchange Commission in compliance, or intended compliance, with applicable
securities legislation;
(e) Xxxxxx and Xxxxxx'x advisor(s) have had a reasonable opportunity to ask
questions of and receive answers from the Company in connection with the
acquisition of the Securities hereunder, and to obtain additional information,
to the extent possessed or obtainable without unreasonable effort or expense,
necessary to verify the accuracy of the information contained in the Company
Information;
(f) the books and records of the Company were available upon reasonable
notice for inspection, subject to certain confidentiality restrictions, by
Xxxxxx during reasonable business hours at its principal place of business and
that all documents, records and books in connection with the sale of the
Securities hereunder have been made available for inspection by Xxxxxx, Xxxxxx'x
attorney and/or advisor(s);
(g) all information which Xxxxxx has provided to the Company in the
Questionnaire concerning itself, its investor status, financial position, and
knowledge and experience of financial and business matters is correct and
complete as of the date the Questionnaire is signed, and if there should be any
change in such information, Xxxxxx will immediately provide the Company with
such information;
(h) the Company is entitled to rely on the representations and warranties
and the statements and answers of Xxxxxx contained in this Agreement and in the
Questionnaire, and Xxxxxx will hold harmless the Company from any loss or damage
it may suffer as a result of Xxxxxx'x failure to correctly complete this
Agreement or the Questionnaire;
(i) it will indemnify and hold harmless the Company and, where applicable,
its respective directors, officers, employees, agents, advisors and shareholders
from and against any and all loss, liability, claim, damage and expense
whatsoever (including, but not limited to, any and all fees, costs and expenses
whatsoever reasonably incurred in investigating, preparing or defending against
any claim, lawsuit, administrative proceeding or investigation whether commenced
or threatened) arising out of or based upon any representation or warranty of
Xxxxxx contained herein or in any document furnished by Xxxxxx to the Company in
connection herewith being untrue in any material respect or any breach or
failure by Xxxxxx to comply with any covenant or agreement made by Xxxxxx to the
Company in connection therewith;
(j) the issuance of the Securities to Xxxxxx will not be completed if it
would be unlawful or if, in the discretion of the Company acting reasonably, it
is not in the best interests of the Company;
(k) it has been advised to consult its own legal, tax and other advisors
with respect to the merits and risks of an investment in the Securities and with
respect to applicable resale restrictions and it is solely responsible (and the
Company is not in any way responsible) for compliance with applicable resale
restrictions;
(l) none of the Securities are not listed on any stock exchange or automated
dealer quotation system and no representation has been made to Xxxxxx that any
of the Securities will become listed on any stock exchange or automated dealer
quotation system, except that currently certain market makers make market in
shares of the Company on the National Association of Securities Dealers Inc.'s
Over-the-Counter Bulletin Board;
(m) it is acquiring the Securities as principal for its own account, for
investment purposes only, and not with a view to, or for, resale, distribution
or fractionalization thereof, in whole or in part, and no other person has a
direct or indirect beneficial interest in such Securities;
(n) no documents in connection with the sale of the Securities hereunder,
have been reviewed by the Securities and Exchange Commission or any state
securities administrators; and
(o) there is no government or other insurance covering any of the
Securities.
16. Xxxxxx hereby represents and warrants to and covenants with the Company
(which representations, warranties and covenants shall survive the execution of
this Agreement) that:
(a) Xxxxxx is a U.S. Person;
(b) Xxxxxx has the legal capacity and competence to enter into and execute
this Agreement and to take all actions required pursuant hereto;
(c) Xxxxxx:
(i) has adequate net worth and means of providing for its current financial
needs and possible personal contingencies,
(ii) has no need for liquidity in this investment, and
(iii) is able to bear the economic risks of an investment in the Securities
for an indefinite period of time;
(d) Xxxxxx is aware that an investment in the Company is speculative and
involves certain risks, including the possible loss of the investment and Xxxxxx
has carefully read and considered the matters set forth under the heading "Risk
Factors" appearing in the Company's Form 20-F;
(e) Xxxxxx has made an independent examination and investigation of an
investment in the Securities and the Company and has depended on the advice of
its legal and financial advisors and agrees that the Company will not be
responsible in anyway whatsoever for Xxxxxx'x decision to invest in the
Securities and the Company;
(f) all information contained in the Questionnaire is complete and accurate
and may be relied upon by the Company and Xxxxxx will notify the Company
immediately of any material change in any such information occurring prior to
the closing of the purchase of the Securities;
(g) Xxxxxx has duly executed and delivered this Agreement and it constitutes
a valid and binding agreement of Xxxxxx enforceable against Xxxxxx;
(h) it understands and agrees that none of the Securities have been
registered under the 1933 Act or any U.S. State Securities Laws, and unless so
registered, none may be offered or sold in the United States or, directly or
indirectly to U.S. Persons (as defined herein) except pursuant to an available
exemption from, or in a transaction not subject to the registration requirements
of the 1933 Act and in each case only in accordance with applicable state
securities laws;
(i) it is purchasing the Securities for its own account for investment
purposes only and not for the account of any other person and not for
distribution, assignment or resale to others, and no other person has a direct
or indirect beneficial interest is such Securities, and Xxxxxx has not
subdivided his interest in the Securities with any other person;
(j) it is able to fend for itself in connection with this Agreement and has
the ability to bear the economic risks of its prospective investment and can
afford the complete loss of such investment;
(k) it understands and agrees that the Company and others will rely upon the
truth and accuracy of the acknowledgements, representations and agreements
contained in sections 15 and 16 hereof and agrees that if any of such
acknowledgements, representations and agreements are no longer accurate or have
been breached, it shall promptly notify the Company;
(l) Xxxxxx is not acquiring the Securities as a result of any form of
general solicitation or general advertising including advertisements, articles,
notices or other communications published in any newspaper, magazine or similar
media or broadcast over radio, or television, or any seminar or meeting whose
attendees have been invited by general solicitation or general advertising; and
(m) no person has made to Xxxxxx any written or oral representations:
(i) that any person will resell or repurchase any of the Securities;
(ii) that any person will refund the purchase price of any of the
Securities;
(iii) as to the future price or value of any of the Securities; or
(iv) that any of the Securities 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 Securities of the Company on any stock exchange
or automated dealer quotation system.
17. In this Agreement, the term "U.S. Person" shall have the meaning
ascribed thereto in Regulation S and for the purpose of this Agreement includes
any person in the United States.
18. Xxxxxx has acknowledged that the decision to acquire the Securities was
solely made on the basis of publicly available information. Xxxxxx hereby
waives, to the fullest extent permitted by law, any rights of withdrawal,
rescission or compensation for damages to which Xxxxxx might be entitled in
connection with the distribution of any of the Securities.
19. Xxxxxx acknowledges that the representations and warranties contained
herein are made by it with the intention that they may be relied upon by the
Company and its legal counsel in determining Xxxxxx'x eligibility to acquire the
Securities under applicable securities legislation, or (if applicable) the
eligibility of others on whose behalf it is contracting hereunder to acquire the
Securities under applicable securities legislation. Xxxxxx further agrees that
by accepting delivery of the certificates representing the Securities, it will
be representing and warranting that the representations and warranties contained
herein are true and correct as at such delivery date with the same force and
effect as if they had been made by Xxxxxx at such date and that they will
survive the acquisition by Xxxxxx of the Securities and will continue in full
force and effect notwithstanding any subsequent disposition by Xxxxxx of such
Securities.
20. Xxxxxx acknowledges that any resale of the Securities will be subject to
resale restrictions contained in the securities legislation applicable to Xxxxxx
or proposed transferee as set forth in paragraph 16 of this Agreement. The
Securities may not be offered or sold in the United States unless registered in
accordance with federal securities laws and all applicable state securities laws
or exemptions from such registration requirements are available.
21. Xxxxxx hereby acknowledges that that upon the issuance thereof, and
until such time as the same is no longer required under the applicable
securities laws and regulations, the certificates representing any of the
Securities will bear a legend in substantially the following form:
"NONE OF THE SECURITIES HAVE BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR ANY U.S. STATE
SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD IN THE
UNITED STATES OR, DIRECTLY OR INDIRECTLY, TO U.S. PERSONS (AS DEFINED HEREIN)
EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS."
22. Xxxxxx hereby acknowledges and agrees to the Company making a notation
on its records or giving instructions to the registrar and transfer agent of the
Company in order to implement the restrictions on transfer set forth and
described in this Agreement.
23. Xxxxxx acknowledges and agrees that all costs and expenses incurred by
Xxxxxx (including any fees and disbursements of any special counsel retained by
Xxxxxx) relating to this Agreement shall be borne by Xxxxxx.
24. This Agreement, including without limitation the representations,
warranties and covenants contained herein, shall survive and continue in full
force and effect and be binding upon the parties hereto notwithstanding the
completion of the acquisition of the Securities by Xxxxxx pursuant hereto.
25. Except as expressly provided in this Agreement and in the agreements,
instruments and other documents contemplated or provided for herein, this
Agreement contains the entire agreement between the parties with respect to the
sale of the Securities and there are no other terms, conditions, representations
or warranties, whether expressed, implied, oral or written, by statute or common
law, by the Company or by anyone else.
26. This Agreement may be executed in any number of counterparts, each of
which, when so executed and delivered, shall constitute an original and all of
which together shall constitute one instrument.
27. Time shall be of the essence of this Agreement.
28. This Agreement shall enure to the benefit of and be binding upon the
Company, its successors and assigns, and Xxxxxx and his personal representative
to the extent provided in paragraph 4 hereof.
29. Subject to paragraph 4, this Agreement shall not be transferable or
assignable by Xxxxxx or his personal representative and the Option may be
exercised only by Xxxxxx or his personal representative.
30. Wherever the plural or masculine are used throughout this Agreement, the
same shall be construed as meaning singular or feminine or neuter or the body
politic or corporate where the context of the parties thereto require.
31. This Agreement is governed by the laws of the State of Illinois and the
federal laws of the United States applicable herein. Xxxxxx, in its personal
and attorns to the jurisdiction of the State of Illinois
IN WITNESS WHEREOF the parties have executed this agreement as of the day and
year first above written.
XXXXXXXXXXXXXX.XXX, INC
Per: /s/ Xxxxxxx Mol
-----------------
Authorized Signatory
)
SIGNED, SEALED and DELIVERED by )
XXXX XXXXXX in the presence of:. )
)
/s/ Xxxx Xxxxxxxxxxx . . . . . . . . . . . . . . . . . . . . . . )
---------------------------------------------------------------- ) /s/ Xxxx Xxxxxx
) ---------------
Signature. . . . . . . . . . . . . . . . . . . . . . . . . . . . ) XXXX XXXXXX
Xxxx X. Xxxxxxxxxxx. . . . . . . . . . . . . . . . . . . . . . . )
---------------------------------------------------------------- )
Print Name . . . . . . . . . . . . . . . . . . . . . . . . . . . )
0000 Xxxxxx Xxxxxx XX. . . . . . . . . . . . . . . . . . . . . . )
---------------------------------------------------------------- )
Address. . . . . . . . . . . . . . . . . . . . . . . . . . . . . )
Xxxxxxxxxx, XX 00000 )
---------------------------------------------------------------- )
Corporate Development. . . . . . . . . . . . . . . . . . . . . . )
---------------------------------------------------------------- )
Occupation . . . . . . . . . . . . . . . . . . . . . . . . . . . )
APPENDIX 1
PROSPECTIVE INVESTOR SUITABILITY QUESTIONNAIRE
----------------------------------------------
All capitalized terms herein, unless otherwise defined, have the meanings
ascribed thereto in the Agreement.
This Questionnaire is for use by Xxxxxx (the "Subscriber") who is a US person
(as that term is defined Regulation S of the United States Securities Act of
1933 (the "1933 Act")) and has indicated an interest in acquiring the Securities
of XxxxxxxXxxxxxx.xxx, Inc. (the "Company"). The purpose of this Questionnaire
is to assure the Company that the Subscriber will meet the standards imposed by
the 1933 Act and the appropriate exemptions of applicable state securities laws.
The Company will rely on the information contained in this Questionnaire for the
purposes of such determination. The Securities will not be registered under the
1933 Act in reliance upon the exemption from registration afforded by Section
3(b) and/or Section 4(2) of the 1933 Act and Regulation D promulgated
thereunder. This Questionnaire is not an offer of Securities or any other
securities of the Company in any state other than those specifically authorized
by the Company.
All information contained in this Questionnaire will be treated as confidential.
However, by signing and returning this Questionnaire, the Subscriber agrees
that, if necessary, this Questionnaire may be presented to such parties as the
Company deems appropriate to establish the availability, under the 1933 Act or
applicable state securities law, of exemption from registration in connection
with the sale of the Securities hereunder.
Please attach additional pages if necessary to answer any question fully.
REPRESENTATIONS OF SUBSCRIBERS
--------------------------------
The Subscriber covenants, represents and warrants to the Company that it has
such knowledge and experience in financial and business matters that it is
capable of evaluating the relative merits and risks of an investment in the
Securities and Company and is not utilizing a Purchaser Representative in
connection with evaluating such merits and risks. The Subscriber is providing
evidence of its knowledge and experience in these matters through the
information requested below in this Questionnaire.
FOR INDIVIDUAL INVESTORS
--------------------------
1. Name: Xxxx Xxxxxx
2. Residential Address & Telephone Number 0000 Xxxxxxxx Xxxxx, Xxxxxxx, XX
00000-0000 (000) 000-0000
3. Length of Residence in State of Residence: 12 years
4. U.S. Citizen: X Yes _____ No
5. Social Security Number: ###-##-####
6. Business Address & Telephone Number: 00000 Xxxxx Xxxxx Xxxxxx #000,
Xxxxxxxxx, XX 00000
7. Preferred Mailing Address: X Residence _____ Business
8. Other:
9. Date of Birth: 6-3-57
10. Employer and Position: President/CEO
11. Name of Business: Sonic Telecom Ltd.
12. Business or Professional Education and Degrees:
School Degree Year Received
------ ------ --------------
University of Colorado - B.S. 1978
13. Prior Employment (last 5 years):
Employer Nature of Duties Dates of Employment
-------- ------------------ -------------------
Sonic Telecom Ltd. CEO December 16, 1996
Sprint International VP 1993-1996
MCI VP 1983-1993
FOR INVESTORS THAN ARE CORPORATIONS, PARTNERSHIPS, TRUSTS OR OTHER ENTITIES
--------------------------------------------------------------------------------
14. Name:
15. Address of Principal Office:
16. Telephone:
17. Date and State of Incorporation or Organization:
18. Taxpayer Identification Number:
19. Nature of Business:
20. Individual Authorized to Execute this Questionnaire (indicate name and
office):
FOR ALL INVESTORS
-------------------
21. Relationship to the Company, if any:
22. Is the Subscriber an officer of director of a publicly-held company?
____ Yes X No
If yes, specify company:
23. Does the Subscriber beneficially own 10% or more of the voting
securities of a publicly-held company?
____ Yes X No
If yes, specify company:
24. Within the last 5 years, has the Subscriber personally invested in
investments sold by means of private placements in reliance on exemptions from
registration under the 1933 Act and State securities laws?
X Yes _____ No
25. Prior investments by Subscriber which were purchased in reliance on
exemptions from registration under the 1933 Act and State securities laws
(initial the highest number applicable):
Amount (Cumulative)
Real Estate: Up to $50,000 to Over
None: X $50,000 _____ $250,000 _____ $250,000 _____
Securities: Up to $50,000 to Over
None: _____ $50,000 _____ $250,000 _____$250,000 X
Other: Up to $50,000 to Over
None: _____ $50,000 _____ $250,000 _____ $250,000 _____
26. Does the Subscriber consider itself to be an experienced and
sophisticated investor?
X Yes _____ No
If so, please provide evidence of investment sophistication and/or experience:
27. Does the Subscriber, or any person authorized to execute this
Questionnaire, consider itself to have such knowledge of the Company and its
business and such experience in financial and business matters to enable it to
evaluate the merits and risks of an investment in the Securities of the Company,
should the Subscriber be given an opportunity to so invest?
X Yes _____ No
28. Listed below are the categories of "Accredited Investors", as defined by
Regulation D promulgated under the 1933 Act. Please initial in the space
provide those categories, if any, of an "Accredited Investor" which the
Subscriber satisfies:
Category 1 An organization described in Section 501(c)(3) of the
United States Internal Revenue Code, a corporation, a Massachusetts or similar
business trust or partnership, not formed for the specific purpose of acquiring
the Securities, with total assets in excess of US $5,000,000;
X Category 2 A natural person whose individual net worth, or joint net
worth with that person's spouse, on the date of purchase exceeds US $1,000,000;
Category 3 A natural person who had an individual income in excess of
US $200,000 in each of the two most recent years or joint income with that
person's spouse in excess of US $300,000 in each of those years and has a
reasonable expectation of reaching the same income level in the current year;
Category 4 A "bank" as defined under Section (3)(a)(2) of the 1933
Act or savings and loan association or other institution as defined in Section
3(a)(5)(A) of the 1933 Act acting in its individual or fiduciary capacity; a
broker dealer registered pursuant to Section 15 of the Securities Exchange Act
of 0000 (Xxxxxx Xxxxxx); an insurance company as defined in Section 2(13) of the
1933 Act; an investment company registered under the Investment Company Act of
1940 (United States) or a business development company as defined in Section
2(a)(48) of such Act; 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 0000 (Xxxxxx Xxxxxx); a plan with total assets in excess of
$5,000,000 established and maintained by a state, a political subdivision
thereof, or an agency or instrumentality of a state or a political subdivision
thereof, for the benefit of its employees; an employee benefit plan within the
meaning of the Employee Retirement Income Security Act of 1974 (United States)
whose investment decisions are 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,
whose investment decisions are made solely by persons that are accredited
investors;
Category 5 A private business development company as defined in
Section 202(a)(22) of the Investment Advisers Act of 0000 (Xxxxxx Xxxxxx);
Category 6 A director or executive officer of the Company;
Category 7 A trust with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the Securities, whose purchase is
directed by a sophisticated person as described in Rule 506(b)(2)(ii) under the
1933 Act;
Category 8 An entity in which all of the equity owners satisfy the
requirements of one or more of the foregoing categories;
Note that prospective Subscribers claiming to satisfy one of the above
categories of Accredited Investor may be required to supply the Company with a
balance sheet, prior years' federal income tax returns or other appropriate
documentation to verify and substantiate the Subscriber's status as an
Accredited Investor.
29. If the Subscriber is an entity which initialled Category 8 in reliance
upon the Accredited Investor categories above, state the name, address, total
personal income from all sources for the previous calendar year, and the net
worth (exclusive of home, home furnishings and personal automobiles) for each
equity owner of the said entity:
30. If the Subscriber is a trust, corporation, partnership or other entity
which was recently formed for the specific purpose of acquiring the Securities,
set forth the number of equity owners of such entity who are and who are not
Accredited Investors in the space provided below.
31. If the Subscriber is an individual, please indicate the Subscriber's and
his/her spouse's combined gross income during the preceding two years (initial
the highest number applicable):
1998 1997
---- ----
_____ Less than $75,000 _____ Less than $75,000
_____ $75,001 to $100,000 _____ $75,001 to $100,000
_____ $100,001 to $200,000 _____ $100,001 to$200,000
_____ $200,001 to $300,000 _____ $200,001 to $300,000
X $Over $300,000 _____ $Over $300,000
32. If the Subscriber is an individual, please indicate the Subscriber's and
his/her spouse's combined estimated net worth (exclusive of home, home
furnishings and personal automobiles) (initial the highest number applicable):
_____ Less than $100,000 _____ $300,0001 to$500,000
_____ $100,001 to $200,000 _____ $500,001 to $1,000,000
_____ $200,001 to $300,000 _____ Over $1,000,000
33. _____ $200,001 to $300,000 X Over $1,000,000
Regardless of the amount of the proposed investment:
(a) Will the Subscriber's proposed investment exceed 10% of its individual
net worth, or the Subscriber's joint net worth with its spouse as determined in
subparagraph 33 above?
_____ Yes X No
(b) Will the Subscriber be able to bear the economic risk of its investment
in this transaction?
X Yes _____ No
34. If the Subscriber does not qualify as an Accredited Investor, please
provide answers to the following questions (Accredited Investors may omit
answers to this paragraph).
(a) State total assets of the Subscriber, including cash, stocks and bonds,
automobiles, real estate, and any other assets:
$3,000,000
(b) State total liabilities of the Subscriber including real estate
indebtedness, accounts payable, taxes payable and any other liabilities:
$240,000
(c) State annual income of the Subscriber including salary, securities
income, rental income and any other income:
$300K
(d) State annual expenses of the Subscriber, excluding ordinary living
expenses, including real estate payments, rent, property taxes and other
expenses:
$70K
Does the Subscriber expect the amount of its assets, liabilities, income and
expenses, as stated above, to be subject to significant change in the future:
____ Yes X No
If yes, explain:
The Subscriber hereby certifies that the information contained in this
Questionnaire is complete and accurate and the Subscriber will notify the
Company promptly of any change in any such information. If this Questionnaire
is being completed on behalf of a corporation, partnership, trust or estate, the
person executing on behalf of the Subscriber represents that it has the
authority to execute and deliver this Questionnaire on behalf of such entity.
IN WITNESS WHEREOF, the undersigned has executed this Questionnaire as of the
2nd day of February, 2000.
If a Corporation, Partnership or Other Entity: If an Individual:
/s/ Xxxx Xxxxxx
----------------------------
Print of Type Name of Entity . . . . . . . . . Signature
Xxxx Xxxxxx
----------------------------
Signature of Authorized Signatory. . . . . . . Print or Type Name
###-##-####
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Type of Entity . . . . . . . . . . . . . . . . Social Security/Tax I.D. No.
