EXHIBIT 10.1
ACKNOWLEDGMENT AND RELEASE
PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT ACCEPTED
ISSUER: CHERRY TREE CAPITAL CORP. (K.N.A. XXXXXXXXXXXX.XXX, INC.)
PURCHASER:
LEGAL COUNSEL: VENTURE LAW CORPORATION
I, the subscriber, release the Issuer, and its Legal Counsel from any
claims that I have or may have arising from the above Subscription Agreement,
legally terminated as of the signing of this mutual release, and acknowledge the
return of my subscription funds in full and consent to the cancellation of all
shares issued in connection with this matter.
DATED at ____________________ , this ____ day of ____________, 1999.
Witness:
------------------------------- --------------------------------------
Signed by:
-----------------------------
Print Name
Address:
-------------------------------
------------------------------- Address:
I, the Issuer, release the Subscriber, and my Legal Counsel from any
claims that I have or may have arising out of the above Subscription Agreement,
legally terminated as of the signing of this mutual release, and agree to return
the subscription funds in the amount of US $_______ to the Subscriber in full.
I, the Issuer, acknowledge and agree all shares issued in connection with the
Subscription Agreement will be cancelled.
DATED at ________________, ______________ this ______ day of
____________, ______.
XXXXXXXXXXXX.XXX, INC.
Witness:
------------------------------------------
Authorized Signatory
Address:
Address:
RNL REALTY ASSOCIATES, INC.
0000 XX 000xx Xxxxxx, Xxxxx 000
Xxxxx, XX 00000
INVESTOR QUESTIONNAIRE
----------------------
THE FOLLOWING INVESTOR QUESTIONNAIRE IS ESSENTIAL TO INSURE THAT THIS PRIVATE
OFFERING IS CONDUCTED IN FULL COMPLIANCE WITH RULE 504 OF REGULATION D
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE QUESTIONNAIRE WILL
REMAIN ON FILE IN ABSOLUTE CONFIDENCE IN THE OFFICE OF THE COMPANY. YOUR
COOPERATION IN THE FULL COMPLETION OF THE INVESTOR QUESTIONNAIRE IS GREATLY
APPRECIATED.
Please answer each question fully and attach additional information, if
necessary. If the answer to any question is "None" or "Not Applicable," please
state so. Please sign and date the Questionnaire on the final page.
Gentlemen,
I understand that each "Share" being subscribed for consists of one share in the
common stock of RNL REALTY ASSOCIATES, INC. (the "Company") with a part value of
$0.001 per share (the "Shares") for $0.001 per Share.
I further understand that the Shares herein offered to me will not be registered
under the SECURITIES ACT OF 1933, as amended and applicable state securities law
(the "State Act"). I also understand that in order to insure that the offer and
sale of the Shares (the "Offering") are exempt from registration under the
SECURITIES ACT OF 1933 and the State Acts, the Company is required to have
reasonable grounds to believe, and must actually believe, after making
reasonable inquiries and prior to making any sale, that all purchasers are able
to evaluate the merits and risks of an vestment in the Shares.
In order to induce you to permit the undersigned to purchase the Shares, I
hereby warrant and represent to you as follows:
1. Subscriber's Name:
Home Address:
Home Phone:
Social Security No., or
Employers Identification No:
Date of Birth:
2. Occupation/Business
Present Employer
Business Address:
Business Phone:
3. ACCREDITED INVESTOR STATUS:
Check one of the following representations (a) through (d), if applicable. If
not applicable, proceed to question 4.
___ (a) My individual net worth, or joint net worth with my spouse,
exceeds $1,000,000.
___ (b) My individual income was in excess of $200,000 in each of the
two most recent years, or my joint income with my spouse was
excess of $300,000 in each of the two most recent years, and I
reasonably expect to reach the same income level in the
current year.
___ (c) I am a director or executive officer of the Company.
___ (d) My net worth or joint net worth is at least: (Check one):
IF AN INDIVIDUAL
with my spouse is at least:
___ $500,000 to $1 million
___ $1 million to $5 million
___ over $5 million
IF A CORPORATION
___ over $5 million
___ all equity owners are accredited investors under statement
3(d) above
IF A TRUST
___ trust assets over $5 million
___ trustee is (i) a bank, or savings and loan association or
other institution, as defined in Sections 3(a)(2) or
3(a)(5)(A) of the SECURITIES ACT OF 1933, (ii) acting in its
fiduciary capacity as trustee, and (iii) subscribing on behalf
of a trust for the purchase of the Units
___ all grantors are accredited investors under statement 3(d)
above.
4. NON-ACCREDITED INVESTOR STATUS:
My net worth, excluding home, furnishings, automobiles, and other assets which
are not readably marketable is in excess of: (Check one)
___ $65,000
___ $100,000
___ $200,000
___ $300,000
___ over $300,000
The current market value of my liquid assets is $
-------------------------------
5. Have you previously participated in other private placements?
Yes No
2
6. State the types of investments in which you have previously participated:
Types of Investments: Amount of Investment:
--------------------------- ---------------------------------
--------------------------- ---------------------------------
--------------------------- ---------------------------------
--------------------------- ---------------------------------
7. State your investment objectives by checking the following where applicable
____ Income
_X__ Appreciation
____ Other:___________________________
8. GENERAL WARRANTIES:
(a) SEC Rule 504 of Regulation D requires that each purchaser who
is not an Accredited Investor have sufficient knowledge and
experience in financial and business matters to be capable of
evaluating the merits and risks of an investment in the
Company.
I represent and warrant that I have such knowledge and experience in
financial and business matters, and that I am capable of evaluating the
merits and risks of an investment decision.
(b) I agree and warrant I am familiar with the business and
financial condition, properties, operations and prospects of
the Company. I have obtained copies of all information I deem
necessary or appropriate to evaluate the merits and risks of
an investment in the Units and underlying Shares. I further
acknowledge that I have had the opportunity to ask questions
of, and to receive answers from representatives of the Company
concerning the terms and conditions of the offering.
(c) I represent and warrant to the Company that information
contained in this Investor Questionnaire is true, complete and
correct.
Date:
---------------------------
Per: Authorized Signatory
3
GENERAL SUBSCRIPTION AGREEMENT AND QUESTIONNAIRE
------------------------------------------------
RNL REALTY ASSOCIATES, INC.
GENERAL SUBSCRIPTION AGREEMENT
RNL Realty Associates, Inc.
(the "Company")
0000 XX 000xx Xxxxxx, Xxxxx 000
Xxxxx, XX 00000
Gentlemen:
The undersigned hereby tenders this Subscription Agreement to you and
applies for the purchase of _______ shares of the Company for $0.001 each for an
aggregate purchase price of $______. The securities being offered are shares in
the common stock of the Company with a par value of $0.001 per share (the
"Shares"). All sums are in U.S. currency.
The undersigned hereby acknowledges:
(a) the undersigned is familiar with the business and financial
condition, properties, operations and prospects of the Company
and the undersigned has obtained copies of all information the
undersigned deems necessary or appropriate to evaluate the
merits and risks of an investment in the Shares. The
undersigned further acknowledges that the undersigned has had
the opportunity to ask questions of, and to receive answers
from representatives of the Company concerning the terms and
conditions of the offering;
(b) that upon the execution hereof by the undersigned, payment by
the undersigned of the full price of the Shares subscribed for
hereby shall be due and payable and shall accompany the return
of this Subscription Agreement by the undersigned and shall be
payable in U.S. funds;
(c) that in the event this Subscription Agreement is rejected by
the Company, the initial payment by the undersigned shall be
returned to the undersigned with the notice of such rejection;
(d) that any cash payment for the Shares (in a form payable to the
Company) will be deposited directly into the Company's bank
account and will be immediately available for use by the
Company. In the event that this subscription has not been
accepted by the earliest of (1) the date the Company may, in
its sole discretion, determine; (2) the date on which all the
Shares are sold; or (3) March 5, 1999 (the "Closing Date"),
the payment made by the undersigned and documents provided
will be promptly returned by the Company to the undersigned
without further obligation;
(e) the undersigned understands and acknowledges that an
investment in the Company is not liquid, not easily
transferable or disposed of, and that he has no need for
liquidity of this investment. The Shares issued under Rule 504
to Ontario residents will bear a restrictive legend; and
(f) that each subscriber is personally liable for the total amount
of the subscription price.
In consideration of the sale of the Shares and intending to be legally bound,
the undersigned hereby represents and warrants as follows:
1. The undersigned has substantial knowledge, skill and experience in
business, financial and investment matters and is capable of evaluating
the merits and risks of an investment in the Shares. To the extent that
the undersigned has deemed it appropriate to do so, the undersigned has
retained, at his or her own expense, and relied on, appropriate
professional advice regarding the investment, tax and legal merits and
consequences of purchasing the Shares.
2. The principal residence of each of the undersigned, if an individual,
is in the State, Province or Country shown in this Subscription
Agreement; if the undersigned is a corporation, trust or other entity
(except a partnership), it was incorporated or organized and is
existing under the laws of the State, Province or Country shown in this
Subscription Agreement; if the undersigned is a partnership, the
principle residence of all of its general partners are in the States
shown in this Subscription Agreement; and if the undersigned is a
corporation, trust, partnership or other entity; it was not organized
for the specific purpose of acquiring the Shares.
3. The Shares for which the undersigned hereby subscribes will be acquired
solely for the account of the undersigned (or if the undersigned is a
trust, solely for the beneficiaries thereof), for investment and is not
being purchased for subdivision or fractionalization thereof; and the
undersigned has no contract, undertaking, agreement or arrangement with
any person to sell, transfer or pledge to such person, or to anyone
else, the Shares which the undersigned hereby subscribes to purchase or
any part thereof, and the undersigned has no present plans to enter
into any such contract, undertaking, agreement or arrangement.
4. The Company has made all documents pertaining to this investment
available to the undersigned.
5. The undersigned is investing in his own name or in the capacity
indicated herein; and was not solicited by any form of general
solicitation or general advertising.
6. The undersigned, if an individual, is at least 21 years of age and a
bona fide resident of the State, Province or Country indicated herein
and has no present intention of becoming a resident of any other state
or jurisdiction.
The undersigned is one of the following: (Please check one)
FOR INDIVIDUAL INVESTORS ONLY
-----------------------------
_____ (a) a natural person who has an individual net worth, or
joint forth with that person's spouse of more than
$1,000,000; or
_____ (b) a natural person who had an individual income in
excess of $200,000 (a joint income in excess of
$300,000 with his spouse) in each of the two most
recent years and who reasonably expects to reach the
same income level in the current year; or
_____ (c) a director or executive officer of the Company;
_____ (d) a person with an annual income of at least $65,000
per year with sufficient knowledge and experience in
financial and business matters to valuate the risks
of the investment.
(e) none of the above.
2
FOR CORPORATE INVESTORS ONLY
_____ (f) the undersigned hereby certifies that it is an
accredited investor because it has total assets in
excess of $5,000,000 and was not formed for the
specific purpose of investing in the Company;
_____ (g) the undersigned hereby certifies that it is a
accredited investor because all of its equity owners
are accredited investor under statement 6(a), (b),
(c), or (d) above.
_____ (h) none of the above.
FOR TRUSTS
----------
_____ (i) the undersigned hereby certifies that it is an
accredited investor because it is a trust which has
total assets in excess of $5,000,000 and was not
formed for the specific purpose of investing in the
Company and that the purchase is directed by a person
with such knowledge and experience in financial and
business matters that he is capable of evaluating the
risks and merits of an investment in the Company;
_____ (j) the undersigned hereby certifies that it is an
accredited investor because it is (i) a bank, or
savings and loan association or other institution, as
defined in Sections 3(a)(2) or 3(a)(5)(A) of the
SECURITIES ACT OF 1935, (ii) acting in its fiduciary
capacity as trustee, and (iii) subscribing on behalf
of a trust of the purchase of the Shares.
_____ (k) the undersigned hereby certifies that it is an
accredited investor because it is a revocable trust
which may be amended or revoked at any time by the
grantors thereof and all of the grantors are
accredited investors under either statement 6(a),
(b), (c), or (d) above.
_____ (l) none of the above.
7. If the undersigned warrants eligibility for participation in accordance
with Paragraph 6(d) above, undersigned hereby represents and warrants
that he has an individual net worth (or joint net worth with his
spouse) at the time of Subscription of at least $65,000 (exclusive of
home, home furnishings and personal automobiles) for the Shares
subscribed for.
8. The undersigned acknowledges an understanding of the restrictions on
transferability of the Shares purchased herein.
The undersigned acknowledges and is aware of the following:
9. This subscription may be accepted or rejected, in whole or in part by
the Company in its sole and absolute discretion.
10. The Shares are a speculative investment which involves a high degree of
risk of loss by the undersigned of the entire investment of the
undersigned and there is no assurance of any income from such
investment.
11. No federal or state agency has made any finding or determination as the
fairness of the offering, or any recommendation or endorsement of the
Shares.
3
12. There are substantial restrictions on the transferability of the
Shares. There will be no public market for the Shares, and accordingly,
the undersigned will need to bear the economic risk of his investment
for an indefinite period of time and will not be readily able to
liquidate this investment in case of any emergency. Further, the Shares
issued under Rule 504 of Regulation D of the SECURITIES ACT OF 1933
issued to Ontario residents will also bear a restrictive legend
concerning resale restrictions imposed by the Ontario securities
legislation.
13. The undersigned agrees not to transfer or assign this subscription or
any interest therein and agrees that if this subscription is accepted
by the Company, the assignment and transferability of the Shares
purchased by the undersigned will be governed by all applicable state,
provincial and federal laws.
14. In connection with this subscription, the undersigned is relying on the
following representations and warranties of the Company:
(a) the Company has been duly incorporated and organized, is
validly subsisting under the laws of its jurisdiction of
incorporation, is current and up to date with all material
filings required to be made under the laws of that
jurisdiction and has all requisite corporate power and
authority to own its property and assets and to carry on its
business as now conducted or proposed to be conducted;
(b) the authorized capital of the Issuer consists of 50,000,000
shares of common stock with a par value of $0.001 per share,
of which 1,000,000 shares have been validly issued and are
outstanding as of the date hereof;
(c) no person has any agreement or option, or any right or
privilege (whether pre-emptive or contractual) capable of
becoming an agreement (including convertible securities or
warrants), to acquire any unissued shares or other securities
of the Company;
(d) the Company has not entered into any contracts, commitments or
engagements or incurred any liabilities that could be regarded
as presently material to a proposed investor in this offer of
shares other than contracts, commitments or engagements
entered into or liabilities incurred in the ordinary course of
business of the Company and except in connection with the
offering of the subject shares;
(e) to the knowledge of the Company, there are no actions, suits,
proceedings or inquiries pending or threatened against or
affecting the Company, at law or in equity, before or by any
federal, state, provincial, municipal or other governmental
department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which may in any way
materially and adversely affect the Company taken as a whole
or which may question the validity of the issue and sale of
the shares;
(f) neither the acceptance or execution of this subscription
agreement nor the consummation of the transactions provided
for or contemplated herein results ore will result in the
breach of nor conflict with any of the terms, conditions or
provisions of, or will constitute a default under, the
articles, by-laws or resolutions of the Company or any
indenture, agreement or instrument to which the Company is a
party or is bound;
(g) the balance sheet of the Company as at June 10, 1995 and the
statements of income, retained earnings and changes in cash
for the years then ended, together with the report of the
auditors of the Company thereon, have been prepared in
accordance with the accounting practices described in the
notes thereto, on a basis consistent with previous years and
present fairly the assets, liabilities and the financial
condition of the Company as at such dates and the sales,
income and results of operations of the Company during the
periods covered thereby;
4
(h) the unaudited financial statements of the Company as at
December 31, 1997 have been prepared in accordance with the
same accounting practices described in section (k) above
applied on a basis consistent with previous years and present
fairly the sales, income and results of operations of the
Company during the periods covered thereby;
(i) the proceeds to the Company from the sale of the shares will
be used as general working capital;
(j) as far as the current Board of Directors are aware there has
been no material change (actual, anticipated, contemplated or
threatened, financial or otherwise) except as publicly
disclosed prior to February 28, 1999, in the business,
affairs, operations, capital, assets or liabilities
(contingent or otherwise) of the Company since June 10, 1998;
and
(k) the shares of the common stock of the Company are quoted on
the Over the Counter Bulletin Board operated by the National
Association of Securities Dealers in the United States.
The undersigned recognizes that the offer and sale of the Shares to the
undersigned is based on the representations and warranties of the undersigned
contained in Paragraphs 1 through 8 above and hereby agrees to indemnify the
Company and the officers and directors of the Company, and to hold each of such
entities and persons harmless against all liabilities, costs or expenses
(including reasonable attorney's fees) arising by reason of or in connection
with any misrepresentations or any breach of such warranties by the undersigned,
or arising as a result of the sale or distribution of the Shares by the
undersigned in violation of the SECURITIES EXCHANGE ACT OF 1934, as amended, the
SECURITIES ACT OF 1933, as amended, or any other applicable federal or state
statute.
Upon acceptance by the Company of the subscription agreement by the undersigned,
the undersigned agrees to become an investor in the Company. The undersigned
acknowledges and agrees that the undersigned is not entitled to cancel,
terminate or revoke this subscription agreement or any agreements of the
undersigned herein, and that such subscription or agreements shall survive (a)
changes in transactions, documents, and instruments described in any materials
provided by the Company which the aggregate are not material, and (b) the death
or disability of the undersigned; provided, however, that if the Company shall
not have accepted this subscription by the Closing Date, either by personally
delivering to the undersigned an executed copy hereof reflecting such acceptance
or by depositing in the United States Mail, postage prepaid, a written notice of
acceptance addressed to the undersigned hereunder, and the power of attorney
granted hereby shall be automatically canceled, terminated and revoked.
The undersigned acknowledges that he/she is a person who has knowledge and
experience in financial and business matters such that the undersigned is
capable of evaluating the merits and risk of an investment in the Company and
making an informed decision.
RNL REALTY ASSOCIATES, INC. Date: 3/1/99
--------------------------
---------------------------------------------------------
Per: Authorized Signatory
5
RNL REALTY ASSOCIATES, INC.
REGISTRATION INSTRUCTIONS
Please register the Shares acquired by the undersigned as follows:
---------------------------------------------------------
Printed Name
---------------------------------------------------------
Address
-----------------------------------------------------------
City State/Province Zip Code/Postal Code
N/A
---------------------------------------------------------
Social Security Number/Employer Identification Number
Number of Shares:
-------------------------
Date Acquired: 3-1-99
-------------------------
3/1/99
-------------------------------- -----------------------------------
Signature Date
--------------------------------
Printed Name
