STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT ("Agreement") is entered into as of this
21st day of October, 1996 between American Film Technologies, Inc., 000 Xxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Company"), and X. Xxxxxx
Xxxx, x/x Xxxxxxxxx, Xxxxxxxx & Co., Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000.
W I T N E S S E T H:
--------------------
WHEREAS, the Company is in need of additional capital to continue to
finance its operations and to continue its business; and
WHEREAS, Purchaser is willing to acquire from the Company Five Hundred
Thousand Shares (500,000) shares of $.002 par value per share common stock of
the Company (the "Common Stock") (the "Purchased Shares") for an aggregate
purchase price of Seventy Five Thousand Dollars ($75,000) (the "Purchase
Price");
WHEREAS, the Company is willing to sell to the Purchaser the Shares for
the Purchase Price and such other terms and conditions as set forth herein; and
NOW, THEREFORE, in consideration of the foregoing, the mutual promises
contained herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company and Purchaser agree as
follows:
1. Purchase and Sale of the Shares. On or before 6:00 Los Angeles time
on October 18, 1996, upon satisfaction of the conditions set forth in Section 2
below, the Company shall sell to Purchaser and Purchaser shall purchase from the
Company the Shares for the Purchase Price (the "Sale").
2. Conditions Precedent, Delivery of the Shares.
(a) The obligations of the Company hereunder shall be subject to
and conditioned upon the satisfaction of all of the following conditions:
(i) The execution of this Agreement by the parties hereto;
(ii) The completion, execution and delivery by the Purchaser to
the Company of the Purchaser's Questionnaire, attached hereto
as Exhibit "A";
(iii) The delivery by the Purchaser to the Company of the
Purchase Price;
(iv) All of the representations and warranties of the Purchaser
contained herein remain true and correct; and
(v) The Execution of the Registration Undertaking, as attached
hereto as Exhibit A-1.
(b) Upon satisfaction of all of the conditions precedent set forth
in Section 2(a) above, the Company shall cause to be delivered to the Purchaser
at the address set forth in Section 7(b) below a stock certificate representing
the Shares. Said stock certificate shall contain a restrictive legend
substantially similar to that set forth in Section 7 below (the "Certificate").
3. Representations of the Company. The Company represents and warrants
that:
(a) the representations and warranties of the Company in this
Agreement shall have been true and correct in all material respects on the date
of this Agreement, and they shall be true and correct in all material respects
as of the Closing with the same force and effect as though made at the Closing.
(b) upon issuance, the Shares will be (i) validly issued, fully
paid and nonassessable; and (ii) free of any liens or encumbrances;
(c) the Sale has been duly authorized and approved;
(d) the Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has all
requisite corporate power and authority to conduct its business as it is
presently being conducted. The Company is duly qualified to do business as a
foreign corporation in the State of California and is qualified to do business
as a foreign corporation in all other jurisdictions where the failure to qualify
would result in a material adverse effect on the Company's business and
operations taken as a whole;
(e) the Company has all necessary corporate power and authority and
has taken all corporate action necessary to enter into this Agreement, to
consummate the transactions contemplated hereby and to perform the its
obligations hereunder. This Agreement, and all related agreements, has been duly
authorized, executed and delivered by the Company and is a legal, valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms. No authorization, approval, consent, order, registration,
license or permit of any court or governmental agency or body is required for
the execution of this Agreement and the consummation of the transactions
contemplated hereby, including the valid authorization, issuance, sale,
delivery, of the Shares under the Agreement;
2
(f) the execution, delivery and performance of this Agreement by
the Company, the consummation of the Company of the transactions contemplated
herein and the compliance of the Company with the terms of this Agreement, do
not, and will not, with or without the giving of notice or the lapse of time, or
both, (i) result in any violation of the Articles of Incorporation or By-Laws of
the Company, (ii) result in a breach or conflict with any of the terms or
provisions of any agreement or instrument to which the Company is a party, or
constitute a default under or result in the modification or termination of, any
agreement to which the Company is a party, except where such breach or conflict
would not have a material adverse effect on the business, operations or
finanacial condition of the Company taken as a whole, (iii) result in any
violation of any existing applicable law, rule, regulation, judgment, or decree
of any governmental agency or court, domestic or foreign, having jurisdiction
over the Company or any of its properties in business, except where the effect
of such violation would not have a material effect on the business, operations
or financial condition of the Company taken as a whole;
(g) the Company has 100,000,000 shares of capital stock as follows:
(i) 10,000,000 shares of preferred stock of which no shares are
outstanding and 10,000,000 preferred shares of are subject to outstanding
options; and
(ii) 90,000,000 shares of Common Stock of which 70,900,644 are
issued and outstanding and 16,278,00 of which are subject to outstanding options
and possible stock grants.
(h) the financial statements included in the Company's 10-K Report
for the year ended June 30, 1996 (the "Financial Statements"), were, except as
otherwise noted therein, prepared in accordance with generally accepted
accounting principles consistently applied and to the best of the Company's
knowledge are true and correct and fairly present the financial condition of the
Company as of such date and results of its operations for the fiscal year ending
on June 30, 1996;
3
(i) except as set forth in Schedule 3(i), and except for (x)
expenses and obligations incurred in the ordinary course of the Company's
business as presently conducted, (y) in connection with professional fees, or
(z) with respect to pre-existing contracts or agreements, since the date of the
Financial Statements there has not been (i) any change in the business, results
of operations, assets, or financial condition or prospects or in the manner of
conducting the business of the Company which individually or in the aggregate
has had or may have a material adverse effect on the business, results of
operations, assets, financial condition or prospects of the Company and (ii) any
damage, destruction or loss, whether covered by insurance or not, which has had
or will have a material adverse effect on the business, results of operations,
assets, financial condition or prospects of the Company.
(j) except as set forth in the Financial Statements, the Company
does not have any outstanding loan obligations.
(k) to the best of the Company's knowlege there are no claims,
actions, suits, litigation, proceedings, governmental investigations or
arbitration proceedings pending or threatened in writing, against the Company
involving the business or properties of the Company which if determined
adversely to the Company, would have a material adverse effect on the business,
operations or financial condition of the Company taken as a whole.
(l) except as set forth in Schedule 3(l) to this Agreement, there
are no existing subsidiaries of the Company.
(m) except as set forth in Schedule 3(m) to this Agreement and
contained in the SEC Reports (hereinafter defined), attached as Exhibit B, the
Company is not a party to any material agreements. For the purposes hereof the
SEC Reports are defined as:
i. The Company's Form 10-K Report for its fiscal year ended
June 30, 1995;
ii. The Company's Form 10-Q Reports for the fiscal quarters
ended September 30, 1995, December 31, 1995 and March 31, 1996;
and
iii. The Company's Form 10-K Report for the fiscal year ended
June 30, 1996.
4
(n) the Company currently has in effect directors' and officers'
liability insurance and such other liability and property insurance as the
Company deems appropriate.
(o) the Company has filed, caused to be filed or obtained
extensions to file all federal, state and local income tax returns which are
required to be filed by it, and has paid, or caused to be paid, or to the best
of the Company's knowledge has (i) made adequate provision on its books in
accordance with generally accepted accounting principles amounts sufficient for
the payment of, all taxes as shown on said returns or on any assessment received
by them, to the extent that the taxes have become due, and (ii) made all
estimated tax payments required to be made by it to avoid the imposition of
penalties, interest and other additions to tax;
(p) except as set forth in or scheduled as Exhibits to the SEC
Reports there are no existing labor and employment agreements;
(q) to the best of the Company's knowledge, the Company is not in
violation of any applicable law, rule regulation, judgment, order, or decree of
any governmental agency or court, domestic or foreign, having jurisdiction over
the Company or its properties or businesses where such violation would have a
material adverse effect on the Company's operations, business or financial
condition taken as a whole.
(r) to the best of the Company's knowledge, there is currently no
litigation pending or threatened in writing, seeking to enjoin or otherwise
prohibit the transactions contemplated hereby.
For the purposes hereof "To the best of the Company's knowledge" means the
actual current knowledge of Xxxxxx Xxxxxxx or Xxxx Xxxx without any duty to
investigate.
Except as expressly set forth above, the Company makes no representations or
warranties of any kind or nature to the Purchaser.
4. Representations of Purchaser.
Purchaser represents and warrants in favor of the Company that:
(a) it is acquiring the Shares for its own account, for investment
purposes only, and not with a view to or for the resale, distribution or
assignment thereof, in whole or in part;
(b) it understands that the offer and sale of the Shares is
intended to be exempt from registration under the Securities Act of 1933, as
amended (the "Act"), and under the laws of any other jurisdiction; that the
Company does not intend and is under no obligation to so register the Shares;
that the Shares may not therefore be sold, assigned, pledged or otherwise
transferred unless subsequently registered under the Act or pursuant to an
exemption therefrom; and that legends to the foregoing effect will be placed on
the Certificate evidencing the Shares;
5
(c) Purchaser has the financial ability to bear the economic risk
of its investment in the Company, including its possible loss, has adequate
means of providing for his current needs and personal contingencies and has no
need for liquidity with respect to its investment in the Company;
(d) Purchaser has the knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of an
investment in the Shares and has obtained, in its judgment, sufficient
information from the Company to evaluate the merits and risks of an investment
in the Shares;
(e) Purchaser is an "accredited investor" as such term is defined
in Rule 501(a) of Regulation D, promulgated under the Securities Act of 1933, as
amended;
(f) Purchaser has been given the opportunity to ask questions of
and receive answers from the representatives of the Company concerning the
Company, the Shares, the terms and conditions of the Sale and other matters
pertaining to this investment, and has been given the opportunity to obtain such
additional information as Purchaser deemed necessary to verify the accuracy of
the information provided in order for it to evaluate the merits and risks of an
investment in the Company and has not been furnished any offering literature or
prospectus except the SEC Reports;
(g) Purchaser is not acquiring the Shares as a result of or
subsequent to:
i. any advertisement, article, notice or other communication
published in any newspaper, magazine or similar media or
broadcast over television or radio; or
ii. any seminar or meeting whose attendees, including the
Purchaser, had been invited as result of, subsequent to or
pursuant to any of the foregoing.
(h) Any information which the Purchaser has heretofore furnished to
the Company with respect to its financial position and business experience,
including without limitation its Purchaser Questionnaire, attached hereto as
Exhibit "A", is complete and correct as of the date of this Agreement and if
there should be any material change in such information at any time prior to or
after acceptance of the Sale, the Purchaser will immediately furnish such
revised or corrected information to the Company.
6
(i) Purchaser and/or Purchaser's investment advisors, if any, have
carefully read and reviewed this Agreement, Exhibit A hereto and the SEC
Documents and understand the risks of, and other considerations relating to, a
purchase of Sale, including, but not limited to, the risks set forth under "Risk
Factors" in the Company's draft 1996 Form 10-K Report, attached as Exhibit C. In
connection therewith, Purchaser is aware of the fact that the Company has
recently emerged from a Chapter 11 Bankruptcy proceeding, has not engaged in
ongoing business operations in over thirty (30) months and will need additional
financing in order to remain in business and significant additional financing
thereafter to implement its business plan.
5. Indemnification.
The Purchaser understands the meanings and legal consequences of the
representations and warranties contained in this Agreement and agrees to
indemnify and hold harmless the Company and its officers and directors from and
against any loss, damage, liability, claim and expense whatsoever, including but
not limited to any and all legal expenses, due to or arising out of a breach of
any representation or warranty of the Purchaser, whether contained in this
Agreement or the Purchaser's Questionnaire, or any failure by the undersigned
to fulfill any covenants or agreements set forth herein or therein or arising
out of the sale or distribution by the Purchaser of any Shares in violation of
the Act or any applicable state Securities laws. Notwithstanding any of the
representations, warranties, acknowledgments or agreements made herein by the
Purchaser, the Purchaser does not thereby or in any other manner waive any
rights granted to the Purchaser under Federal or state securities laws.
Notwithstanding the foregoing, the Company agrees that in no event shall the
liability of the Purchaser pursuant to Section 6 exceed $75,000.
6. Legends
Purchaser agrees that all Certificates representing the Shares shall
have endorsed thereon a legend in substantially the following form:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER UNITED
STATES FEDERAL OR STATE SECURITIES LAWS, INCLUDING BUT NOT LIMITED TO THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") NOR APPROVED BY ANY FEDERAL
OR STATE REGULATORY AGENCY, INCLUDING BUT NOT LIMITED TO THE SECURITIES
AND EXCHANGE COMMISSION, AND MAY NOT BE OFFERED FOR SALE, SOLD OR
OTHERWISE TRANSFERRED OR ASSIGNED FOR VALUE, DIRECTLY OR INDIRECTLY, NOR
MAY THE SECURITIES BE TRANSFERRED ON THE BOOKS OF THE CORPORATION, WITHOUT
REGISTRATION OF SUCH SECURITIES UNDER ALL APPLICABLE UNITED STATES FEDERAL
OR STATE SECURITIES LAWS, INCLUDING BUT NOT LIMITED TO THE ACT, OR
COMPLIANCE WITH AN APPLICABLE EXEMPTION THEREFROM, SUCH COMPLIANCE, AT THE
DISCRETION OF THE CORPORATION, TO BE EVIDENCED BY AN OPINION OF
SHAREHOLDER'S COUNSEL, IN FORM ACCEPTABLE TO THE CORPORATION, THAT NO
VIOLATION OF SUCH REGISTRATION OR QUALIFICATION PROVISIONS WOULD RESULT
FROM ANY PROPOSED TRANSFER OR ASSIGNMENT."
7
7. MISCELLANEOUS.
(a) Finders Fees. Xxxxxxx and Purchaser each acknowledges that he
or it has not, directly or indirectly, dealt with anyone acting as a broker,
finder or in a similar capacity, or has incurred any obligation for any
brokerage, finders' or similar fee or commission in connection with this
Agreement or any of the transactions contemplated hereby.
(b) Notices. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed to have been given
(i) upon delivery, if personally delivered, sent by commercial over night
courier (e.g. Federal Express or DHL), or telefaxed with confirmation copy sent
the same day by first class U.S. mail (postage prepaid); or (ii) upon the
expiration of the fifth (5th) business day after deposit, if mailed by
first-class, registered or certified U.S. mail, postage prepaid. All notices
shall be addressed to each party at the following address:
If to the Company:
Xxxxxx X. Xxxxxxx
Chief Executive Officer
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax No. (000) 000-0000
With a copy to:
Xxxxx X. Xxxxxx, Esq.
Jeffer, Mangels, Xxxxxx & Xxxxxxx LLP
2121 Avenue of the Stars
00xx Xxxxx
Xxx Xxxxxxx, XX. 00000
Fax No. (000) 000-0000
8
If to Purchaser:
X. Xxxxxx Xxxx
x/x Xxxxxxxxx, Xxxxxxxx & Co., Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax No. (000) 000-0000
or to such other address as the addressee shall have furnished to the other
parties hereto in the manner prescribed by this section.
(c) Entire Agreement. This Agreement, together with any related
documents referred to in this Agreement, constitutes the entire agreement among
the parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings between them or any of them as to such subject
matter. No amendment, change or modification of this Agreement be valid unless
in writing and signed by all of the parties hereto.
(d) Waiver. No reliance upon or waiver of one or more provisions of
this Agreement shall constitute a waiver of any other provisions hereof.
(e) Severability. In case any one or more of the provisions
contained in this Agreement shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement and such invalid, illegal
and unenforceable provision shall be reformed and construed so that it will be
valid, legal and enforceable to the maximum extent permitted by law.
(f) Counterparts. 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 instrument.
(g) Section Headings. The headings contained in this Agreement are
for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement. Should there be any conflict between any such
heading and the section at the head of which it appears, the section and not
such heading shall control.
9
(h) Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New York. The
parties hereby consent to the exclusive jurisdiction of the state or federal
courts located in the State of New York for the resolution of any disputes
arising out of this Agreement.
(i) Successors and Assigns. All of the terms and provisions
contained herein shall inure to the benefit of and shall be binding upon the
parties hereto and their respective heirs, legal or personal representatives,
successors and assigns; provided however, except by operation of law, neither
party can assign their obligations under the Agreement, without consent of the
other.
(j) Further Assurances. Each of the parties hereto shall execute
and deliver any and all additional papers, documents, and other assurances, and
shall do any and all acts and things reasonably necessary in connection with the
performance of their obligations hereunder and to carry out the intent of the
parties hereto.
(k) Attorney's Fees. If any legal action or any other proceeding is
brought for the enforcement of this Agreement, or because of an alleged dispute,
breach, default or misrepresentation in connection with any of the provisions of
this Agreement, the successful or prevailing party or parties shall be entitled
to recover reasonable attorneys' fees and other costs incurred in that action or
proceeding, in addition to any other relief to which it or they may be entitled.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day and year first set forth above.
AMERICAN FILM TECHNOLOGIES, INC.
By: _______________________________
Xxxxxx X. Xxxxxxx
Chief Executive Officer
-----------------------------------
X. Xxxxxx Xxxx
10
PURCHASER QUESTIONNAIRE
You are being requested to answer questions in connection with the
proposed offer and sale, pursuant to an exemption from the registration
provisions of the Securities Act of 1933, as amended (the "Act") and in
particular, Rule 505 of Regulation D, of shares of the Common Stock, $.002 par
value per share (the "Shares') of American Film Technologies, Inc,, a Delaware
corporation (the "Company"). The availability of the exemption depends, in part,
on a determination that each purchaser is an "accredited investor" as defined in
Rule 501(a) of Regulation D.
The information supplied will be used in determining whether the sale
of the Shares meets such criteria. The information will be kept confidential and
will not be disclosed except to the Company, its counsel, and if required, to
governmental and regulatory authorities.
Please PRINT your response to each question; and, where the answer to
any question if "None" or "Not Applicable" please so state.
I, (we), __________________________________, understand the Shares are
being issued WITHOUT registration under the Act in reliance upon the private
offering exemption contained in Rule 505 of Regulation D promulgated under
Section 4(2) of the Securities Act, and that such reliance is based in part on
the information herein supplied. For the foregoing reasons, and to induce the
Company to issue and deliver the Shares to me, I represent and warrant that the
information stated herein is true, accurate and complete to the best of my
knowledge and belief, and I agree to notify and supply corrective information
promptly if, prior to the consummation of my purchase of the Shares, any of such
information becomes inaccurate and incomplete.
INDIVIDUAL AND JOINT PURCHASERS SHOULD COMPLETE SECTION A
CORPORATIONS, BUSINESS TRUSTS AND PARTNERSHIPS SHOULD COMPLETE SECTION B
11
A. INDIVIDUAL AND JOINT PURCHASERS
1. Personal
a. Full Name: _____________________________
b. Social Security No.: _____________________________
c. Residence Address: _____________________________
-----------------------------
d. Occupation: _____________________________
e. Employer: _____________________________
f. Business Address: _____________________________
-----------------------------
g. Telephone: Business: _____________ Home: _________
h. Position or Title: _____________________________
i. Are You (Check One): Married:
______ Single _______
j. Do You File Joint
Tax Returns(Chock One): Yes
__________ No ___________
2. Bank References
a. Bank: _____________________________
b. Bank Address: _____________________________
-----------------------------
c. Bank Telephone No.: _____________________________
d. Name of Bank
Representative: _____________________________
3. Income, Net Worth and Financial Standing
a. Did your annual income during each of 1994 and 1995 exceed $200,000,
or, did your joint income together with your spouse exceed $300,000 during each
of 1994 and 1995, and do you reasonably expert your annual income during 1996 to
exceed $200,000, or your joint income together with your spouse to exceed
$300,000?
Yes _____________ No _______________
12
b. Does your individual not worth, or your joint not worth together
with your spouse, exceed $1,000,000?
Yes _______ No _________ Not Applicable __________
x. Xxxxx income for the most recently
ended tax year: $____________
d. Anticipated gross income for
the year 1996: $____________
e. Do you anticipate that your income over the next five
years will:
Increase _______ Decrease _______ Remain Same ________
f. Is your net worth, excluding home, furnishings and automobiles
(Check One):
Over $200,000 ___ Over $300,000 ___ Over $400,000 ___
Over $________ (State Amount)
g. What percentage of your net worth are liquid assets (cash or assets
readily convertible to cash) (Check One:)
over 15% _____ over 25% _____ over 35% _____ over 50% ____
h. Do you have any debts or other obligations, or are there any
reasonably foreseeable circumstances likely in the future to require you to
dispose of the Shares?
Yes ________ No ________ (If yes, please describe
briefly below)
---------------------------------------------------------
----------------------------------------------------------
4. Investment Experience
Describe briefly your prior investment experience in both marketable
and unmarketable securities. If none, please so state.
---------------------------------------------------------
---------------------------------------------------------
13
5. Education
Describe your educational background (schools attended and degrees
obtained):
---------------------------------------------------------
---------------------------------------------------------
6. What is your profession, if any? _______________________
7. Investment Advice
a. In connection with your proposed purchase of Shares, will you or did you
seek advice from any lawyer, accountant, investment advisor or other person or
persons?
Yes _________ No ___________
If Yes, please set forth the name, profession or occupation
and business address of each such advisor or prospective advisor and, if more
than one, explain briefly the division of responsibilities between them:
---------------------------------------------------------
---------------------------------------------------------
b. Do you or any of your advisors, or any of your or their respective
affiliates, now have or contemplate having, or have they had, during the past
two years, any relationship with the Company and/or any of its officers,
directors, or their affiliates; or, any of your advisors or affiliates the
beneficial owner of 10% or more of any class of equity securities or 10% or more
of the equity interest in the Company or affiliates of the Company;
Yes ____________ No _____________
If Yes, please describe such relationship and/or ownership.
---------------------------------------------------------
B. CORPORATE PURCHASERS, BUSINESS TRUST OR PARTNERSHIP PURCHASERS
1. Name of Corporation, Business Trust or Partnership:
---------------------------------------------------------------
2. Name and Title of Executive Officer Executing Questionnaire:
---------------------------------------------------------------
14
3. Business Address: ________________________________________
----------------------------------------
4. Telephone Number: ________________________________________
5. Representations and Warranties
The undersigned represents and warrants as follows:
a. The corporation, business trust or partnership, as the case
may be, has been duly incorporated if a corporation, formed if a business trust
or partnership, and is validly existing as a corporation, business trust or
partnership, in good standing under the laws of the jurisdiction of its
incorporation or formation, with full power and authority to enter into the
transactions contemplated by the offering documents.
b. (i) The officers or partners of the undersigned who, on
behalf of the undersigned, have considered the purchase of the Shares and the
advisors, if any, of the corporation, business trust or partnership, as the case
may be, in connection with such consideration are named below and such officers
and advisors or partners were duly authorized to act for the corporation,
business trust or the partnership in reviewing such investment;
(ii) The names and positions of the officers or partners of
the undersigned who, on its behalf, have reviewed the purchase of the Shares are
as follows:
---------------------------------------------------------
(iii) In evaluating the merits and risks of the purchase of
the Shares, the corporation, business trust or the partnership, as the case may
be, intends to rely upon, or has relied upon, the advice of, or will consult
with, or has consulted with, the following persons:
---------------------------------------------------------
c. The officers of the corporation, business trust or the
partners of the partnership who, on its behalf, have considered the purchase of
the Shares, and the advisors, if any, of the corporation or the corporation,
business trust or partnership in connection with such consideration, together
have such knowledge and experience in financial and business matters that such
officer(s), partner(s) and such advisor(s), if any, together are capable of
evaluating the merits and risks of purchase of the Shares and of making an
informed investment decision;
d. Together with any corporation or group of corporations with
which it files a consolidated federal income tax return, the undersigned (i)
expects to have adequate taxable income to realize the economic and potential
tax benefits from ownership of the Shares, and (ii) has reserves and/or net
worth adequate to permit it to satisfy any tax or other liabilities arising from
its personal liability with respect to the investment and operation thereof;
15
e. The total assets of the corporation, business trust or
partnership are in excess of $_______________.
f. The net worth of the corporation. business trust or the
partnership is in excess of $_____________.
g. The corporation, business trust or the partnership has had,
during each of the past two tax years, gross income from all sources of
$_____________ and $_______________, respectively.
h. The undersigned expects the corporation, business trust or
the partnership to have during the current and next tax year, gross income from
all sources of at least $____________; and
i. The undersigned knows of no pending or threatened
litigation the outcome of which could adversely affect the answer to any
question hereunder.
j. Indicate the following if a partnership purchaser:
(i) The date the partnership was formed:
(ii) The names of each partner in the partnership. Please have
each individual partner execute a separate questionnaire or forward to the
Company a letter indicating whether or not each partner is sophisticated and has
a sufficient net worth or salary level to be deemed an "accredited investor"
under Rule __________ promulgated under the Securities Act.
---------------------------------------------------------
---------------------------------------------------------
The undersigned warrants and represents that the foregoing statements
are true and accurate to the best of the information and belief of the
undersigned and the undersigned will promptly notify the Company of any changes
in the foregoing answers.
FOR INDIVIDUALS
Purchaser
Dated:__________, 1996 ______________________________________
Signature
______________________________________
Signature (If Joint)
16
FOR CORPORATIONS
Dated:____________, 1996 ______________________________________
Name of Company
______________________________________
Executive Officer
______________________________________
Signature of Officer
FOR BUSINESS TRUSTS
Dated:___________, 1996 _______________________________________
Name of Business Trust
_______________________________________
Name of Trustee Executing
Questionnaire
_______________________________________
Signature of Trustee
FOR PARTNERSHIPS
Dated:___________, 1996 _______________________________________
Name of Partnership
_______________________________________
Name of Partner Executing
Questionnaire
_______________________________________
Signature of Partner
17
FOR PENNSYLVANIA RESIDENTS:
The undersigned hereby agrees not to sell any of the securities
acquired hereunder for a period of 12 months from the date he acquires such
securities.
By:
____________________________________
Signature
_______________________________________
Printed Name
_______________________________________
Date
_______________________________________
Street
_______________________________________
City, State Zip
_______________________________________
Social Security Number of Federal
ID No.
_______________________________________
Telephone No. of Subscriber
AGREED AND ACCEPTED BY:
AMERICAN FILM TECHNOLOGIES, INC.
By:___________________________________
Xxxxxx X. Xxxxxxx
Chief Executive Officer
Date:_________________________________
18
