No._________ Name of Offeree __________________
CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM
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EASTERN SERVICES HOLDINGS, INC.
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400,000 Shares
Common Stock
Offering Price: $.10 Per Share
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Eastern Services Holdings, Inc., also known as "Eastern Services", "we" or "us,"
is offering for sale to persons who qualify as "accredited investors" (as
hereinafter defined) and to a limited number of sophisticated investors, a
maximum of 400,000 Shares of Common Stock, $0.001 par value per share
("Shares"). Subscriptions are payable by wire transfer or by check subject to
collection. The offering price is $.10 per common share. The common shares will
be offered through our officers and directors. The minimum investment is $500,
however, we may, in our sole discretion, accept subscriptions for lesser
amounts.
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THE SECURITIES OFFERED HEREBY ARE SPECULATIVE, INVOLVE A HIGH DEGREE OF RISK AND
SHOULD NOT BE PURCHASED BY ANYONE WHO CANNOT AFFORD THE LOSS OF THEIR ENTIRE
INVESTMENT. PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY THE INFORMATION SET
FORTH UNDER "RISK FACTORS" BEFORE PURCHASING SUCH SECURITIES.
THIS MEMORANDUM CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS MAY DIFFER SIGNIFICANTLY FROM THE
RESULTS DISCUSSED IN SUCH FORWARD-LOOKING STATEMENTS. FACTORS THAT MIGHT CAUSE
DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED IN "RISK FACTORS."
Price to Investors Commission Proceeds to Company(1)
------------------------------ ---------------------------- --------------------------- ----------------------------
Per Share $.10 $0 $.10
------------------------------ ---------------------------- --------------------------- ----------------------------
Maximum Offering - 400,000 $40,000 $0 $40,000
Shares
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(1) Before deducting non-commission expenses payable by the Company in
connection with this Offering, including, but not limited to blue sky
filing fees, legal fees, accounting fees and other related expenses of
the offering estimated to be approximately $10,000.
(2) This Offering will expire on the earlier to occur of (i) December 31,
2004; or (ii) the sale of all of the Shares; unless extended by the
Company for up to an additional 60 day period, in its sole discretion
(the "Termination Date"). The Shares offered hereby may be purchased by
the Company's officers, directors, employees and/or affiliates.
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November 11, 2004
The recipient of this document, prior to its delivery, has agreed, and
recipient's acceptance constitutes recipient's further agreement, that recipient
will hold the enclosed information and the transactions described in this
document in confidence and will not release or reproduce this document or
discuss the information contained in this document or use this document for any
purpose other than evaluating a potential investment in the Shares of the
Company, without the prior express written permission of the Company.
The shares of Common Stock (the "Securities") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") or the securities laws
of any state and are offered and sold in reliance upon exemptions from the
registration requirements of the Securities Act and such state securities laws.
The Shares have not been approved or disapproved by the Securities and Exchange
Commission (the "Commission"), any state securities commission or other
regulatory authority, nor have any of the foregoing authorities passed upon or
endorsed the merits of this Offering or the accuracy or adequacy of the
information set forth in this Memorandum. Any representation to the contrary is
unlawful. The Shares may not be sold or transferred without compliance with the
registration or qualification provisions of applicable federal and state
securities laws or an opinion of counsel, satisfactory to the Company, that an
exemption from such registration or qualification requirements is available.
The minimum subscription is $500, although the Company reserves the right to
accept subscriptions for less than $500. The subscription price is payable upon
submission to the Company of a fully completed and executed Subscription
Agreement and Confidential Prospective Purchaser Questionnaire. The offering
period for the Offering will terminate upon the earlier to occur of (i) December
31, 2004; or (ii) the sale of all of the Shares; unless extended by the Company
for up to an additional 60 day period, in its sole discretion without notice to
any subscriber.
TO THE PROSPECTIVE PURCHASERS
THIS MEMORANDUM SHOULD NOT BE CONSIDERED LEGAL OR INVESTMENT ADVICE AND EACH
INVESTOR SHOULD CONSULT WITH HIS OWN COUNSEL, ACCOUNTANT OR OTHER INVESTMENT
ADVISOR WITH RESPECT TO THE CONSEQUENCES OF AN INVESTMENT IN THE COMPANY.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN
CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS MEMORANDUM.
INFORMATION OR REPRESENTATIONS NOT CONTAINED HEREIN MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY EITHER THE COMPANY OR ANY REPRESENTATIVE OR AGENT OF
THE COMPANY.
THIS MEMORANDUM HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF PROSPECTIVE
INVESTORS INTERESTED IN THE POSSIBLE PURCHASE OF THE SECURITIES AND CONSTITUTES
AN OFFER ONLY TO AN OFFEREE TO WHOM THE COMPANY HAS DELIVERED THIS MEMORANDUM,
AND ONLY TO SUCH OFFEREE. ANY REPRODUCTION OR DISTRIBUTION OF THIS MEMORANDUM,
IN WHOLE OR IN PART, OR THE DISCLOSURE OF ANY OF ITS CONTENTS, IS PROHIBITED
WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY. EACH OFFEREE, BY ACCEPTING
DELIVERY OF THIS MEMORANDUM, AGREES TO RETURN IT AND ALL RELATED EXHIBITS AND
OTHER DOCUMENTS TO THE COMPANY IF THE OFFEREE DOES NOT INTEND TO SUBSCRIBE FOR
THE SECURITIES, THE OFFEREE'S SUBSCRIPTION IS NOT ACCEPTED, OR THE OFFERING IS
TERMINATED.
THE SECURITIES ARE NOT TRANSFERABLE WITHOUT THE SATISFACTION OF CERTAIN
CONDITIONS, INCLUDING REGISTRATION OR THE AVAILABILITY OF AN EXEMPTION UNDER THE
SECURITIES ACT AND STATE SECURITIES LAWS. PROSPECTIVE INVESTORS SHOULD ASSUME
THAT THEY WILL HAVE TO BEAR THE ECONOMIC RISK OF AN INVESTMENT IN THE SECURITIES
FOR AN INDEFINITE PERIOD OF TIME. NO ONE SHOULD INVEST IN THE SECURITIES WHO
CANNOT AFFORD TO LOSE HIS ENTIRE INVESTMENT.
EACH PROSPECTIVE INVESTOR AND HIS ADVISOR MAY, DURING NORMAL BUSINESS HOURS, ASK
QUESTIONS OF THE COMPANY WITH RESPECT TO TERMS AND CONDITIONS OF THE OFFERING
AND REQUEST ADDITIONAL INFORMATION RELATING TO THIS MEMORANDUM. THE COMPANY WILL
SEEK TO PROVIDE ANSWERS AND SUCH INFORMATION TO THE EXTENT POSSESSED BY THE
COMPANY OR OBTAINABLE WITHOUT UNREASONABLE EFFORT OR EXPENSE. OFFEREES MAY BE
REQUIRED TO EXECUTE NON-DISCLOSURE AGREEMENTS AS A PREREQUISITE TO REVIEWING
DOCUMENTS DETERMINED BY THE COMPANY TO CONTAIN PROPRIETARY, CONFIDENTIAL OR
OTHERWISE SENSITIVE INFORMATION.
THE STATEMENTS CONTAINED HEREIN ARE BASED ON INFORMATION PROVIDED BY THE COMPANY
AND BELIEVED TO BE RELIABLE. NEITHER THE DELIVERY OF THIS MEMORANDUM NOR ANY
SALES MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE MATTERS DISCUSSED HEREIN SINCE THE DATE HEREOF.
HOWEVER, IN THE EVENT OF ANY MATERIAL CHANGES DURING THE OFFERING PERIOD, THIS
MEMORANDUM WILL BE AMENDED OR SUPPLEMENTED ACCORDINGLY. THIS MEMORANDUM CONTAINS
A SUMMARY OF CERTAIN PROVISIONS OF DOCUMENTS RELATING TO THE COMPANY, AS WELL AS
SUMMARIES OF VARIOUS PROVISIONS OF RELEVANT STATUTES AND REGULATIONS. SUCH
SUMMARIES DO NOT PURPORT TO BE COMPLETE AND ARE QUALIFIED IN THEIR ENTIRETY BY
REFERENCE TO THE TEXTS OF THE ORIGINAL DOCUMENTS, STATUTES AND REGULATIONS.
THESE SECURITIES ARE BEING OFFERED HEREBY IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT, WHICH EXEMPTION DEPENDS UPON THE
EXISTENCE OF CERTAIN FACTS, INCLUDING BUT NOT LIMITED TO THE REQUIREMENTS THAT
THE SECURITIES ARE NOT BEING OFFERED THROUGH GENERAL ADVERTISING OR GENERAL
SOLICITATION, ADVERTISEMENTS OR COMMUNICATIONS IN NEWSPAPERS, MAGAZINES OR OTHER
MEDIA, OR BROADCASTS ON RADIO OR TELEVISION, AND THAT THIS MEMORANDUM SHALL BE
TREATED AS CONFIDENTIAL BY THE PERSONS TO WHOM IT IS DELIVERED. ANY DISTRIBUTION
OF THIS MEMORANDUM OR ANY PART HEREOF OR DIVULGENCE OF ANY OF ITS CONTENTS SHALL
BE UNAUTHORIZED.
THIS MEMORANDUM CONSTITUTES AN OFFER ONLY IF A NAME APPEARS ON THE APPROPRIATE
SPACE ON THE FRONT COVER. THE COMPANY HAS THE RIGHT TO REJECT SUBSCRIPTIONS IN
WHOLE OR IN PART.
THIS MEMORANDUM DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY STATE OR
OTHER JURISDICTION IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
OTHER SOLICITATION.
NASAA UNIFORM LEGEND
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF
THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS
INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE
SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING
AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS
DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THESE
SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT
BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT, AND THE
APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE
FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
TABLE OF CONTENTS
HEADING PAGE
Summary..................................................................1
Risk Factors ............................................................4
Use of Proceeds.........................................................11
Dividends...............................................................11
Business................................................................12
Management..............................................................21
Principal Stockholders..................................................25
Limitations on Personal Liability of Directors and Officers. . ....... 26
Plan of Distribution ...................................................29
Description of Capital Stock............................................30
Investor Qualifications.................................................31
Subscription Procedures.................................................33
Further Information.....................................................33
SUMMARY
This Memorandum contains forward-looking statements that involve risks and
uncertainties. The Company's actual results may differ significantly from the
results discussed in such forward-looking statements. Factors that might cause
differences include, but are not limited to, those discussed in "Risk Factors."
The Company
Eastern Services Holdings, Inc. ("Sastern Services" or the "Company") was
incorporated as a Delaware Corporation on November 5, 2004. It was incorporated
as a holding vehicle that would own and control distribution companies. On
November 9, 2004, the Company completed a Stock Purchase Agreement and Share
Exchange in which it purchased all of the outstanding common shares in Eastern
Services Group, Inc. ("ESG) so that ESG became a wholly owned subsidiary of
Grant. _________ was the sole owner of ESG and received 1,000,000 shares of our
common stock in exchange for all of the shares of ESG.
Through its wholly owned subsidiary, ESG, the Company's goal is to become the
leading independent tax analysis service for casino operations within its target
geographic market by executing the strategies and tactics to continually xxxxxx
its strong reputation and sustain client loyalty.
The Company presently maintains its principal offices at 000 Xxxxxxxx Xxxx.,
Xxxxx 000, Xxxxx Xxxxxx XX 00000.
THE OFFERING
Securities Offered........................ The Company, is offering a maximum of 400,000 shares of Common Stock, $0.001 par
value per share (the "Shares").
Purchase Price............................ $.10 per Share.
Fractional Units......................... The Company may, in its sole discretion allow sales of fractional Shares.
Offering Period......................... The offering period will terminate on December 31, 2004 (if all Shares are not
sold by such time) unless extended for an additional sixty (60) days in the
discretion of the Company.
Investor Suitability....................... This Offering will only be made to persons who qualify as "accredited investors," as
that term is defined under the Securities Act and a limited number of sophisticated
investors who meet certain suitability standards described in this document.
Use of Proceeds......................... The net proceeds from the Offering will be used by the Company for technology,
business development and general corporate purposes.
Restriction on Resale................. None of the Shares offered will be registered under the Securities Act and
the certificates representing the Shares will contain a legend restricting the
distribution, resale, transfer, pledge, hypothecation or other disposition of
such Shares unless and until such Shares are registered under the Securities Act
or an opinion of counsel reasonably satisfactory to the Company is received that
registration is not required under the Securities Act. Absent registration, the
Shares may only be sold pursuant to Rule 144 of the Securities Act of 1933, as
amended, or any other available exemption.
In addition, each investor will be required to agree in his or her Subscription
Agreement that, he or she will not sell or otherwise dispose of any of the
Shares acquired by him or her for the period commencing from issuance and ending
(i) one year from the date of issuance. The certificates for the Shares will
bear legends to such effect.
Available Documents.................. Any documents or information concerning the Company which a prospective
purchaser reasonably requests to inspect or have disclosed to him or her will be
made available or disclosed, subject in appropriate circumstances to receipt by
the Company of reasonable assurances that such documents or information will be
maintained in confidence.
Subscription Documents............. The purchase of the Shares shall be made pursuant to the Confidential
Prospective Purchaser Questionnaire (attached hereto as Exhibit B) and the
Subscription Agreement (attached hereto as Exhibit C), which will contain, among
other things, customary representations and warranties by the Company, certain
covenants of the Company and investment representations by the purchasers. See
"Subscription Procedures."
Expenses................................... All prospective purchasers of the Shares will be responsible for their own costs,
fees and expenses, including the costs, fees and expenses of their legal counsel
and other advisors.
RISK FACTORS
The Shares offered are highly speculative in nature, involve a high degree of
risk and should be purchased only by persons who can afford to lose their entire
investment. Accordingly, prospective investors should carefully consider, along
with other matters referred to in this document, the following risk factors in
evaluating the Company and its business before purchasing any Shares. This
Memorandum contains forward-looking statements which involve risks and
uncertainties. The Company's actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including those set forth in the following risk factors and elsewhere in this
Memorandum.
Need for Additional Financing
The Company will not be able to execute its business plan without obtaining
additional financing in the near future in addition to the financing
contemplated by this offering. If additional financing is not available or
obtainable, investors may lose a substantial portion or all of their investment.
Other than this offering, completion of which cannot be assured, the Company has
no immediate means for obtaining additional financing. There can be no assurance
that such additional financing, when necessary, will be available to the Company
on acceptable terms, or at all.
Limited Operating History, Risks of a New Business Venture
The Company was incorporated on November 5, 2004 and to date has been involved
primarily in organizational and development activities and has had no revenue.
Potential investors should be aware of the difficulties normally encountered by
a new enterprise and the high rate of failure of such enterprises. The
likelihood of success must be considered in light of the problems, expenses,
difficulties complications and delays encountered in connection with the
development of a business in the areas in which the Company intends to operate
and in connection with the formation and commencement of operations of a new
business in general. There is limited history upon which to base any assumption
as to the likelihood that the Company will prove successful, and there can be no
assurance that the Company will generate significant operating revenues or ever
achieve profitable operations. See "Use of Proceeds" and "Business".
No Dividends
Payment of dividends on the Common Stock is within the discretion of the Board
of Directors and will depend upon the Company's future earnings, its capital
requirements, financial condition and other relevant factors. The Company has no
plan to declare any dividends in the foreseeable future.
Offering Price
The Company arbitrarily determined the offering price of the Shares. Among the
factors considered in determining this price were the current immediate needs of
the Company, its uncertain prospects, the backgrounds of the directors and the
current condition of the financial markets. There is, however, no relationship
whatsoever between the issue price and the Company's assets, earnings, book
value or any other objective criteria of value.
There is no market for the Company's common stock.
There is no market for the Company's common stock and there is no assurance that
a market will develop. Purchasers of the Shares must be prepared to hold their
shares and be able to bear the economic risks of their investment for an
indefinite period of time. The Shares have not been registered under the Act or
the securities laws of any state. The Company is under no obligation to register
the Shares. There can be no assurance that a market or purchasers for the Shares
will be available.
Forward Looking Assessments Prepared by the Current Management of the Company
The ability of the Company to accomplish its objectives, and whether or not the
Company will be financially successful is dependent upon numerous factors, each
of which could have a material effect on the results obtained. Some of these
factors are in the discretion and control of management and others are beyond
management's control. The assumptions and hypothesis used in preparing any
forward-looking assessments of profitability contained herein are considered
reasonable by management. There can be no assurance, however, that any
projections or assessments contained herein or otherwise made by management will
be realized or achieved at any level. Prospective investors should have this
Disclosure Statement reviewed by their personal investment advisors, legal
counsel and/or accountants to properly evaluate the risks and contingencies of
this offering.
Best Efforts Offering
There can be no assurance that this Offering will be completely sold. If less
than the maximum proceeds are available to the Company, the Company's
development and prospects could be adversely affected. There is no minimum
number of Shares to be sold in this Offering. Therefore, the proceeds received
from this Offering, even though insufficient, may be immediately used by the
Company according to its business needs.
Availability of Exemptions from Registrations.
The Shares that we are offering have not been registered under the Securities
Act or the securities laws of the jurisdictions in which they are proposed to be
offered and sold in reliance upon certain claimed exemptions. The claimed
exemption from United States federal registration is complex, and it is often
difficult to determine whether a purchaser has fully complied with its terms. In
addition, exemption from registration under U.S. state securities laws
frequently depends upon the availability of exemptions from federal
registration. If for any reason we are subject to civil liability, and/or the
legal expense of defending an action or proceeding challenging the availability
to us of such exemptions, our business could be materially and adversely
affected.
The Price of the Shares after this Offering May Be Lower than the Price You Pay.
Prior to this Offering there has been, and following this Offering there will
be, no public market for the Common Stock. An active trading market in the
Common Stock will not develop as a result of this Offering. If you purchase
Shares in this Offering, you will pay a price that was not established in a
competitive market. The price for the Shares in this Offering is not necessarily
related to our assets, book value, historic results of operations or other
established criteria of value, and may not be indicative of the fair value of
the Shares. The price of the Shares that will prevail in any market that may
develop after this Offering may be higher or lower than the price you pay.
We Will Have Broad Discretion Is Using the Proceeds from this Offering.
Although we have identified generally in this Memorandum how we expect to use
the proceeds from this Offering, we will have broad discretion in determining
the specific uses of the proceeds. You will not have the opportunity to evaluate
the economic, financial or other information on which we base our decisions on
how to use the proceeds.
Limited State Qualifications of Shares Being Offered.
The Shares offered are intended to be qualified or exempt for sale only in a
limited number of states. Purchasers of the Shares may move to jurisdictions in
which the Shares are not so qualified or exempt. No assurances can be given that
the Company will be able to effect any required qualification or that any
exemption will be available permitting a purchaser to sell his Shares, and, as a
result, such Shares may be required to be held indefinitely.
USE OF PROCEEDS
The proceeds to the Company from the sale of the Shares will be approximately
$40,000 US if the maximum number of Shares is sold. Such proceeds will be
utilized for the following purposes:
DESCRIPTION AMOUNT
=========== ========
Expenses related to the Company's Offering $ 10,000
Working Capital and General Corporate Purposes $ 30,000
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TOTAL $ 40,000
========
The actual use of the proceeds of this Offering may differ substantially from
this estimate. Actual expenditures will be made according to decisions of the
Company's board of directors made in the best interests of advancing the
business of the Company. The actual expenditures will also vary from the
estimated use of proceeds if less than all of the Shares are sold.
The Company anticipates that the net proceeds from the Offering will be
sufficient to meet its financial requirements for only a short period of time.
The Company, therefore, will require substantial additional capital to fund its
contemplated business plan in the near future.
The Company anticipates that expenses associated with the Offering will be
nominal.
DIVIDENDS
To date, the Company has paid no dividends on any shares of its Common Stock and
has no present intention of paying any dividends on its Common Stock in the
foreseeable future. The payment by the Company of dividends on the Common Stock
in the future, if any, rests solely within the discretion of the Company's board
of directors and will depend upon, among other things, the Company's earnings,
capital requirements and financial condition, as well as other factors deemed
relevant by the Company's board of directors. Although dividends are not limited
currently by any agreements, it is anticipated that future agreements, if any,
with institutional lenders or others may limit the Company's ability to pay
dividends on its Common Stock.
BUSINESS
Our subsidiary, Eastern Services Group, Inc., was established in the State of
Nevada in February 1998. The Company provides state and local tax consultation
and analysis to casinos in the Las Vegas metropolitan area. The Company does not
provide filing services.
The core services suite provided by the Company is traditional tax analysis,
preparation, and business consulting services to clients operating casinos in
the Las Vegas, Nevada metropolitan area. The Company concentrates on analysis of
sales and use taxes, real property taxes, personal property tax, as well as
creating welfare benefit trusts.
At competitive prices, the Company works with clients to minimize tax exposure
and ensure that each filing adheres to all areas of local and state laws. With
the highest degree of integrity, the Company conducts preliminary interviews
with clients to ensure a comprehensive analysis and assessment of tax liability
with respect to the specific jurisdiction is provided.
Through in-depth evaluation and assessment, the Company makes significant
recommendations to clients to ensure local and state levied taxes are accurate,
accounting and tax filing procedures afford viable tax savings, and records and
accounts are correctly maintained to prevent unnecessary audits.
The target customers for the Company are hotel casino properties in the gaming
industry throughout Nevada. The Company currently works with more than 20 casino
properties in Las Vegas. Key client relationships include Mandalay Bay Group
(owner of Mandalay Bay, Luxor, Excalibur, and Circus Circus casinos); Coast
Casinos (owner of Barbary Coast, Gold Coast, The Orleans, and Suncoast casinos);
Stations Casinos, and Xxxx Gaming Corporation.
Management has honed a successful and profitable business model through past
experiences in this market and an in-depth understanding of the processes
associated with professional tax assessment and analysis service businesses at
the state and local level for casino operations. The Company utilizes
well-qualified appraisal and accounting professionals with an intimate knowledge
of the jurisdiction to minimize error and maximize tax savings for the client;
and therefore, revenues for the Company.
The Company has developed an effective pricing model. Approximately 95% of the
majority of contracts is contingent upon the tax savings incurred as a result of
services rendered by the Company. Typically, the Company receives 50% of the tax
savings resulting directly from the assessment and analysis provided. The
remaining 5% of the total contract is a flat or hourly fee to address
provisional administrative functions associated with the project.
This model translates directly into a more competitively priced but higher
quality, comprehensive service that develops new market opportunities in the
targeted geographic region. Additionally, with an initially narrow geographic
focus, the Company can build a specific niche market and develop a stronger
reputation through specialization in the industry.
Employees
As of November 12, 2004, the Company has ________ employees. Please advise.
Subsidiaries
The Company has one wholly owned subsidiary, Easter Services Group, Inc.,
a ______ company.
Patents and Trademarks
The Company does not own, either legally or beneficially, any patent or
trademark.
Legal Proceedings
There are no legal actions pending against the Company or of which the property
of the Company is subject nor to the knowledge of the Company are any such
proceedings contemplated.
MANAGEMENT
Directors and Executive Officers
The following table sets forth certain information with respect to the directors
and executive officers of the Company:
Xxxxx Xxxxxx 35 President and Chief Executive Officer
Secretary/ Treasurer/Director
Xx. Xxxxxx brings over 10 years of experience in managing multinational
Companies in diverse work environments including manufacturing, retail, and
advertising. She has assisted in creating marketing strategies to increase sales
and improve margins. Xx. Xxxxxx has a Bachelor of Arts degree in International
Business and Trade from the University of Dallas.
Director Compensation
Directors of the Company who are not salaried officers will receive no fee for
attending each Board meeting or meeting of a committee of the Board. All
directors will be reimbursed for their reasonable out-of-pocket expenses
incurred in connection with attending Board and committee meetings.
Employment Agreements
The Company has no employment agreements at this time.
Option Plan
We currently do not have a stock option plan in place. We intend to adopt a
stock option plan for the issuance of options to our employees, directors,
officers and consultants. We contemplate that approximately 1,000,000 shares of
Common Stock will be reserved to issuance pursuant to options granted under a
stock option plan. Options will be granted under the plan on such terms, such as
exercise price, term and vesting conditions, as will be determined by the
Company's Board of Directors in their discretion. Options will likely be issued
in certain cases with exercise prices that are below the current fair market
value for our Common Stock.
Certain Relationships and Related Transactions
Except as disclosed below, none of the following persons has any direct or
indirect material interest in any transaction to which the Company is a party
since the incorporation of the Company or in any proposed transaction to which
the Company is proposed to be a party:
(A) Any director or officer of the Company;
(B) Any proposed nominee for election as a director of the Company;
(C) Any person who beneficially owns, directly or indirectly, shares
carrying more than 10% of the voting rights attached to the Company's
Common Stock; or
(D) Any relative or spouse of any of the foregoing persons, or any
relative of such spouse, who has the same house as such person or who
is a director or officer of any parent or subsidiary of the Company.
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information concerning stock ownership of
all persons known by the Company to own beneficially five percent or more of the
outstanding Common Stock, each Director and certain executive officers and all
officers and directors as a group, and as adjusted to reflect the sale of the
maximum Shares offered hereby.
Stockholder Number of Shares Percentage
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Common Stock Xxxxxxx Xxxxxxxx 1,000,000 83.33%
Common Stock Xxxxx Xxxxxx 200,000 16.67%
Common Stock All Officers and Directors
as a Group (1 persons) 200,000 16.67%
LIMITATIONS ON PERSONAL LIABILITY OF DIRECTORS AND OFFICERS
Under Delaware law, a director is not personally liable for monetary damages to
a company or any other person for any statement, vote, decision, or failure to
act, regarding corporate management or policy, by a director, unless the
director breached or failed to perform his duties as a director and the
director's breach of, or failure to perform, those duties constitutes or result
in: (1) a violation of the criminal law, unless the director had reasonable
cause to believe his conduct was lawful or had no reasonable cause to believe
his conduct was unlawful; (2) a transaction from which the director derived an
improper personal benefit, either directly or indirectly; (3) a circumstance
under which the director is liable for an unlawful corporate distribution; (4) a
proceeding by or in the right of us to procure a judgment in its favor or by or
in the right of a shareholder, for conscious disregard for the best interest of
the company, or willful misconduct; or (5) a proceeding by or in the right of
someone other than us or a shareholder, for recklessness or an act or omission
which was committed in bad faith or with malicious purpose or in a manner
exhibiting wanton and willful disregard of human rights, safety, or property.
PLAN OF DISTRIBUTION
We are offering the Shares at a price of $.10 per share. The Shares are being
offered to accredited and a limited number of sophisticated investors on a "best
efforts" basis by our officers and directors. A maximum of 400,000 Shares will
be sold in this Offering. The Offering will be open until December 31, 2004, but
we may extend this period in our discretion for up to an additional 60 days
without notice to any subscriber. The minimum investment is $500, although the
Company may, in its discretion, accept subscriptions for lesser amounts.
The Company reserves the right to reject any subscription from a subscriber that
the Company believes, in its sole discretion, does not meet the suitability
standards for this Offering. In such an event, any funds received from such
subscriber will be promptly returned without interest or deductions.
A Confidential Prospective Purchaser Questionnaire (annexed hereto as Exhibit B)
and a Subscription Agreement (annexed hereto as Exhibit C) must be completed and
executed by each investor and delivered to the Company along with funds in the
amount of the purchase price of the Shares being purchased.
The Company may, in its sole discretion, reject any potential investor's
Subscription Agreement in whole or in part. However, Subscription Agreements
from any potential investor may only be accepted if such investor meets the
minimum suitability standards for an investment in the Offering. The Company is
not under any obligation to accept a potential investor's Subscription Agreement
and it has the discretion to accept Subscription Agreements to subscribe for any
amount up to and including the amount of the entire offering. Executive
officers, controlling persons and affiliates of the Company may purchase Shares
in the Offering.
DESCRIPTION OF CAPITAL STOCK
The Company is authorized to issue 100,000,000 shares of Common Stock, par value
$.001 per share and 10,000,000 shares of preferred stock, par value $.001 per
share.
Common Stock
As of November 12, 2004, there were 1,200,000 shares of Common Stock
outstanding. The holders of Common Stock are entitled to one vote for each share
held of record on all matters submitted to a vote of stockholders, including the
election of directors. The holders of Common Stock are entitled to any dividends
that may be declared by the Board of Directors out of funds legally available
therefore, subject to the prior rights of holders of Common Stock and the
Company's contractual restrictions, if any, against the payment of dividends on
Common Stock. In the event of liquidation or dissolution of the Company, holders
of Common Stock are entitled to share ratably in all assets remaining after
payment of liabilities. All of the outstanding shares of Common Stock are fully
paid and non-assessable.
The holders of shares of common stock do not have cumulative voting rights. This
means that the holders of more than fifty (50%) percent of the shares voting for
the election of Directors can elect all of the Directors, and the remaining
holders will not be able to elect any Directors. The holders of shares of common
stock have no preemptive rights or other rights to subscribe for additional
shares. There are no conversion rights, redemption rights or sinking fund
provisions with respect to shares of common stock. All shares of common stock
offered by the Company hereby will be, when issued and when the price therefore
is paid, validly issued, fully paid and non-assessable.
Preferred Stock
The Certificate of Incorporation authorizes the Company to issue 10,000,000
shares of preferred stock, $.001 par value.
Dividends
None.
INVESTOR QUALIFICATIONS
Prospective investors should consider carefully each of the risks associated
with this Offering, particularly those described in "Risk Factors." In view of
these risks, including the lack of an available trading market for the
Securities, and the consequent long-term nature of any investment in the
Company, this Offering is available only to investors who have substantial net
worth and no need for liquidity in their investments. The shares will be offered
for sale only to a limited number of sophisticated investors, who, in
conjunction with such sale, will represent in the Subscription Agreement that,
among other things, the share(s) purchased are being acquired by each investor
for his own account, for investment purposes and not with a view to resell or
distribute those shares.
The Company, in reliance upon the criteria set forth in Rule 501(a) promulgated
under the Securities Act, has established investor suitability standards for
investors in the Securities. Shares will be sold only to an accredited investor
who:
(a) represents that such investor is acquiring the Securities for
such investor's own account, for investment only not with a
view to the resale or distribution thereof;
(b) acknowledges that the right to transfer the Securities will be
restricted by the Securities Act, applicable state securities
laws and certain contractual restrictions, and that the
investor's ability to do so will be restricted by the absence
of a market for the Securities; and
(c) represents that such investor qualifies as one or more of the
following:
(1) Any natural person whose individual net worth, or
joint net worth with that person's spouse, at the
time of his purchase exceeds $1,000,000;
(2) Any natural person who had an individual income in
excess of $200,000 in each of the two most recent
years, or (except for residents of the State of New
Jersey) joint income with that person's spouse in
excess of $300,000 in each of those years, and has a
reasonable expectation of reaching the same income
level in the current year;
(3) Any bank as defined in Section 3(a)(2) of the
Securities Act of 1933, as amended (the "Act"), or
any savings and loan association or other institution
as defined in Section 3(a)(5)(A) of the Act whether
acting in its individual or fiduciary capacity; any
broker or dealer registered pursuant to Section 15 of
the Securities Exchange Act of 1934, as amended; any
insurance company as defined in Section 2(13) of the
Act; any investment company registered under the
Investment Company Act of 1940 (the "Investment
Company Act") or a business development company as
defined in Section 2(a)(48) of the Investment Company
Act; any 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; any plan established and
maintained by a state, its political subdivisions, or
any agency or instrumentality of a state or its
political subdivisions for the benefit of its
employees, if such plan has total assets in excess of
$5,000,000; any employee benefit plan within the
meaning of the Employee Retirement Income Security
Act of 1974 ("ERISA"), if the investment decision is
made by a plan fiduciary, as defined in Section 3(21)
of ERISA, 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;
(4) Any private business development company as defined
in Section 202(a)(22) of the Investment Advisers Act
of 1940;
(5) Any 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;
(6) Any director, or executive officer of the Company;
(7) Any 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
person who has such knowledge and experience in
financial and business matters that he is capable of
evaluating the merits and risks of the prospective
investment, or the Company reasonably believes
immediately prior to making any sale that such
purchaser comes within this description; or
(8) Any entity in which all of the equity owners are
accredited investors.
If such person is not an Accredited Investor, that such person must be a
sophisticated investor who:
(a) represents that such investor is acquiring the Securities
for such investor's own account, for investment only not with
a view to the resale or distribution thereof;
(b) acknowledges that the right to transfer the Securities
will be restricted by the Securities Act, applicable state
securities laws and certain contractual restrictions, and that
the investor's ability to do so will be restricted by the
absence of a market for the Securities; and
(c) represents that such investor qualifies as one or more of
the following:
(1) has an investment of $200,000 or more in shares;
(2) has personal income before taxes for his or her last
fiscal year or latest 12-month period of at least $300,000;
(3). is capable of bearing the economic risk of his or her
investment and has a net worth (exclusive of home, home
furnishings, personal automobiles and the amount to be
invested in these shares) of at least five (5) times the total
purchase price of the shares subscribed for by the investor.
Investors will be required to make certain representations and to satisfy
certain other standards and conditions, which are set forth in a Confidential
Prospective Purchaser Questionnaire and Subscription Agreement (annexed hereto
as Exhibits B and C, respectively) that must be executed by all investors in
this Offering.
The suitability standards referred to above are minimum requirements; the
satisfaction of such standards does not mean that investment in the Company is a
suitable investment for an investor. In addition, the Company may revoke the
offer made herein and refuse to sell any Shares to a prospective investor for
any other reason whatsoever, even if such investor returns a Confidential
Prospective Purchaser Questionnaire and Subscription Agreement containing
appropriate representations.
SUBSCRIPTION PROCEDURES
In order to subscribe for the Shares, each prospective investor will be required
to deliver the subscription price, made payable to "Eastern Services Holdings,
Inc." in United States dollars, by check or wire transfer in accordance with
instructions from the Company. In addition, the prospective investor must
complete, execute and deliver the following to the Company:
(1) A signature page that will evidence such prospective
investor's execution of a Subscription Agreement. This
document includes certain representations by such investor
relating to such investor's subscription; and
(2) A completed and executed Confidential Prospective Purchaser
Questionnaire.
A prospective investor remitting the purchase price by wire transfer should
first contact the Company to receive proper wire instructions to make necessary
arrangements for such wire.
Subscription Agreements are not binding on the Company until accepted by the
Company. The Company reserves the right to reject, in whole or in part, in its
sole discretion, any lesser number of Shares than the number for which a
prospective investor has subscribed. If the Company rejects all or a portion of
any subscription, the Company will mail the subscriber a check for all, or the
appropriate portion of, the amount submitted with such subscriber's
subscription, without interest thereon or deduction therefrom.
FURTHER INFORMATION
The statements contained in this Memorandum constitute only a brief summary of
certain provisions of the documents referred to herein and the transactions
contemplated hereby and thereby. The statements contained herein do not purport
to be a complete description of every term and condition of such documents and
are qualified in their entirety by reference to such documents. As with any
summary, some details and exceptions have been omitted. If any of the statements
herein are in conflict with any of the terms of any of such documents, the terms
of such documents will govern. Reference is made to the actual documents for a
complete understanding of what they contain. Copies of all documents in
connection with the transaction described in this Memorandum are either enclosed
herewith or are available for inspection at the offices of the Company. Each
prospective investor and his advisor are invited and encouraged to ask questions
of the Company with respect to the terms and conditions of the Offering and the
business of the Company and request additional information necessary to verify
information in this Memorandum. The Company will seek to provide answers and
such information to the extent possessed or obtainable without unreasonable
effort or expense. Offerees may be required to execute non-disclosure agreements
as a prerequisite to reviewing documents determined by the Company to contain
proprietary, confidential or otherwise sensitive information. To obtain such
information or to make arrangements to ask such questions of the Company,
prospective investors should contact the Company.
SUBSCRIPTION AGREEMENT
To: Eastern Services Holdings Inc.
Attention: Xxxxx Xxxxxx, President
000 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxx Xxxxxx XX 00000.
Gentlemen:
1. Subscription.
The undersigned (the "Purchaser"), intending to be legally bound,
hereby irrevocably agrees to purchase from Eastern Services Holdings
Inc., a Delaware Corporation (the "Company"), the number of shares of
common stock, par value $.001 per share ("Common Stock"), set forth on
the Signature Page at the end of this subscription Agreement (the
"Agreement") at a purchase price of $.10 per share, upon the terms and
conditions hereinafter set forth. This subscription is submitted to the
Company accordance with and subject to the terms and conditions
described in this Agreement and in the Confidential Private Placement
Memorandum dated as of November 12, 2004.
The undersigned is delivering (i) the subscription payment made payable
to Eastern Services Holdings Inc. (ii) two executed copies of the
Signature page at the end of this Agreement, and (iii) one executed
copy of Purchaser Questionnaire for Individuals (if appropriate),
attached hereto as Exhibit II, to:
EASTERN SERVICES HOLDINGS INC.
Attention : Xxxxx Xxxxxx
000 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxx Xxxxxx XX 00000
The undersigned understands that the Common Stock is being issued
pursuant to the exemption from the registration requirements of the
United States Securities Act of 1933, as amended (the "Securities
Act"), provided by Section 4(2) of such Securities Act. As such, the
Common Stock is only xxxx offered and sold to investors who qualify as
"accredited investors," and a limited number of "sophisticated
investors" and the Company is relying on the representations made b the
undersigned in this Agreement that the undersigned qualifies as such an
accredited or sophisticated investor. The shares of Common Stock are
"restricted securities" for purposes of the United States securities
laws and cannot be transferred except as permitted under these laws.
2. Acceptance of Subscription.
The Offering will be open until December 31, 2004, but the Company may
extend this period in our discretion for up to an additional 60 days. All
subscription funds will be deposited in a segregated account set up by the
Company until the earlier of time at which the closing for such subscription is
held, the rejection of the subscription or the termination of this Offering. No
interest will be paid to any potential investors on funds deposited in the
escrow account. Accordingly, the Purchaser may lose the use of such Purchaser's
funds for the entire duration of the offering period.
Subject to applicable state securities laws, the Purchaser may not
revoke any subscription that such Purchaser delivers to the Company. However,
the undersigned understands and agrees that the Company, in its sole discretion,
may (i) reject the subscription of any Purchaser, whether or not qualified, in
whole or in, part, and (ii) may withdraw the Offering at any time prior to the
termination of the Offering. The Company shall have no obligation to accept
subscriptions in the order received. This subscription shall become binding only
ff accepted by the Company.
3. Memorandum.
The Purchaser hereby acknowledges receipt of a copy of the Confidential
Private Placement Memorandum dated November 12, 2004 (as, the "Memorandum").
4. Representations and Warranties.
4.1. The Company represents and warrants to, and agrees with
the undersigned as follows, in each case as of the date hereof
and in all material respects as of the date of any closing,
except for any changes resulting solely from the Offering:
(a) The Company is duly organized, validly existing
and in good standing under the laws of the
jurisdiction of its incorporation with full power and
authority to own, lease, license and use its
properties and assets and to carry out the business
in which it is engaged as described in the
Memorandum. The Company is duly qualified to transact
the business in which it is engaged as described in
the Memorandum and is in good standing as a foreign
corporation in every jurisdiction in which its
ownership, leasing, licensing or use of property or
assets or the conduct of its business makes such
qualification necessary, except where the failure to
be so qualified would not have a material adverse
effect on the Company.
(b) At the date of the initial closing, the
authorized capital stock of the Company will consist
of 500,000,000 shares of common stock, par value
$.001 per share. At such date, without taking into
account the initial closing, there will be
outstanding no more than 10,000,000 shares of Common
Stock, excluding shares issued in connection with the
Offering, shares issued upon exercise or conversion
of options, warrants or other rights outstanding as
of the date of the initial closing, in accordance
with their terms as of such date, which terms have
been described properly in the Memorandum.
Each outstanding share of Common Stock is validly
authorized, validly issued, fully paid and
nonassessable, without any personal liability
attaching to the ownership thereof and has not been
issued and is not or will not be owned or held in
violation of any preemptive rights of stockholders.
There is no commitment, plan or arrangement to issue,
and no outstanding option, warrant or other right
calling for the issuance of, any share of capital
stock of the Company or any security or other
instrument which by its terms is convertible into,
exercisable for or exchangeable for capital stock of
the Company, except, as may be described in the
Memorandum. There is outstanding no security or other
instrument which by its terms is convertible into or
exchangeable for capital stock. of the Company,
except as may be described in the Memorandum
(c)There is no litigation, arbitration, claim,
governmental or other proceeding (formal or
informal), or investigation pending or, to the best
knowledge of the officers of the Company, threatened
with respect to the Company, or any of its
subsidiaries, operations, businesses, properties or
assets except as may be described in the Memorandum
or such as individually or in the aggregate do not
now have and could not reasonably be expected have a
material adverse effect upon the operations,
business, properties or assets of the Company.
(d) The Company is not in violation of, or in default
with respect to, any law, rule, regulation, order,
judgment or decree except as may be described in the
Memorandum or such as in the aggregate do not now
have and will not in the future have a material
adverse effect upon the operations, business,
properties or assets of the Company; nor is the
Company required to take any action in order to avoid
any such violation or default.
(e) The Company has all requisite power and authority
(i) to execute, deliver and perform its obligations
under this Agreement, and (ii) to issue and sell the
shares of Common Stock in the Offering.
(f) No consent, authorization, approval, order,
license, certificate or permit of or from, or
declaration or filing with, any United States
federal, state, local, or other applicable
governmental authority, or any court or any other
tribunal, is required by the Company for the
execution, delivery or performance by the Company of
this Agreement or the issuance and sale of the shares
of Common Stock, except such filings and consents as
may be required and have been or at the initial
closing will have been made or obtained under the
laws of the United States federal and state
securities laws.
(g) The execution, delivery and performance of this
Agreement and the issuance of the shares of Common
Stock will not violate or result in a breach of, or
entitle any party (with or without the giving of
notice or the passage of time or both) to terminate
or call a default under any agreement or violate or
result in a breach of any term of the Company's
Articles of Incorporation or Bylaws of, or violate
any law, rule, regulation, order, judgment or decree
binding upon, the Company, or to which any of its
operations, businesses, properties or assets are
subject, the breach, termination or violation of
which, or default under which, would have a material
adverse effect on the operations, business,
properties or assets of the Company.
(h) The shares of Common Stock issuable in this
Offering are validly authorized and, if and when
issued in accordance with the terms and conditions
set forth in the Memorandum and in this Agreement,
will be validly issued, fully paid and nonassessabIe
without any personal liability attaching to the
ownership thereof, and will not be issued in
violation of any preemptive or other rights of
stockholders.
(i) The Memorandum and this Agreement do not contain
any untrue statement of a material fact or omit to
state any material fact required to be stated therein
or necessary to make the statements therein not
misleading. Without limiting the generality of the
foregoing, there has been no material adverse change
in the financial condition, results of operations,
business, properties, assets, liabilities or, to the
knowledge of the Company, future prospects of the
Company from the latest information set forth in the
Memorandum.
4.2. The undersigned hereby represents and warrants to, and
agrees with, the Company as follows:
(a) The undersigned is an "Accredited Investor" as
that term is defined in Rule 501 (a) of Regulation D
promulgated under the Securities Act, and as
specifically indicated in Exhibit I attached to this
Agreement. "
(b) The undersigned is a "Sophisticated Investor" as
that term is defined in Rule 506(b)(2)(ii) of
Regulation D promulgated under the Securities Act.
(c) For California and Massachusetts individuals: If
the subscriber is a California resident, such
subscriber's investment in the Company will not
exceed 10% of such subscriber's net worth (or joint
net worth with his spouse). If the subscriber is a
Massachusetts resident, such subscriber's investment
in the Company will not exceed 25% of such
subscriber's joint net worth with such subscriber's
spouse (exclusive of principal residence and its
furnishings).
(d) If a natural person, the undersigned is: a bona
fide resident of the state or non-United States
jurisdiction contained in the address set forth on
the Signature Page of this Agreement as the
undersigned's home address; at least 21 years of age;
and legally competent to execute this Agreement. If
an entity, the undersigned has its principal offices
or principal place of business in the state or
non-United States jurisdiction contained in the
address set forth on the Signature Page of this
Agreement, the individual signing on behalf of the
undersigned is duly authorized to execute this
Agreement and this Agreement constitutes the legal,
valid and binding obligation of the undersigned
enforceable against the undersigned in accordance
with its terms.
(e) The undersigned has received, read carefully and
is familiar with this Agreement and the Memorandum.
(f) The undersigned is familiar with the Company's
business, plans and financial condition, the terms of
the Offering and any other matters relating to the
Offering, the undersigned has received all materials
which have been requested by the undersigned, has had
a reasonable opportunity to ask questions of the
Company and its representatives, and the Company has
answered all inquiries that the undersigned or the
undersigned's representatives have put to it. The
undersigned has had access to all additional
information necessary to verify the accuracy of the
information set forth in this Agreement and the
Memorandum and any other materials furnished
herewith, and has taken all the steps necessary to
evaluate the merits and risks of an investment as
proposed hereunder.
(g) The undersigned (or the undersigned's purchaser
representative) has such knowledge and experience in
finance, securities, taxation, investments and other
business matters so as to be able to protect the
interests of the undersigned in connection with this
transaction, and the undersigned's investment in the
Company hereunder is not material when compared to
the undersigned's total financial capacity.
(h) The undersigned understands the various risks of
an investment in the Company as proposed herein and
can afford to bear such risks, including, without
limitation, the risks of losing the entire
investment.
(i) The undersigned acknowledges that no market for
the Common Stock presently exists and none may
develop in the future and that the undersigned may
find it impossible to liquidate the investment at a
time when it may be desirable to do so, or at any
other time.
(j) The undersigned has been advised by the Company
that none of the Common Stock has been registered
under the Securities Act, that the Common Stock will
be issued on the basis of the statutory exemption
provided by Section 4(2) of the Securities Act or
Regulation D promulgated thereunder, or both,
relating to transactions by an issuer not involving
any public offering and under similar exemptions
under certain state securities laws; that this
transaction has not been reviewed by, passed on or
submitted to any federal or state agency or
self-regulatory organization where an exemption is
being relied upon; and that the Company's reliance
thereon is based in part upon the representations
made by the undersigned in this Agreement.
(k) The undersigned acknowledges that the undersigned
has been informed by the Company of or is otherwise
familiar with, the nature of the limitations imposed
by the Securities Act and the rules and regulations
thereunder on the transfer of the Common Stock. In
particular, the undersigned agrees that no sale,
assignment or transfer of any of the Common Stock
shall be valid or effective, and the Company shall
not be required to give any effect to such a sale,
assignment or transfer, unless (i) the sale,
assignment or transfer of such Common Stock is
registered under the Securities Act, it being
understood that the Common Stock are not currently
registered for sale and that the Company has no
obligation or intention to so register the Common
Stock, except as contemplated by the terms of this
Agreement or (ii) such Common Stock is sold, assigned
or transferred in accordance with all the
requirements and limitations of Rule 144 under the
Securities Act (it being understood that Rule 144 is
not available at the present time for the sale of the
Common Stock), or (iii) such sale, assignment or
transfer is otherwise exempt from registration under
the Securities Act, including Regulation S
promulgated thereunder. The undersigned further
understands that an opinion of counsel and other
documents may be required to transfer the Common
Stock.
(l) The undersigned acknowledges that the Common
Stock shall be subject to a stop transfer order and
the certificate or certificates evidencing any Common
Stock shall bear the following or a substantially
similar legend or such other legend as may appear on
the forms of Common Stock and such other legends as
may be required by state blue sky laws:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933 (THE "ACT") OR. APPLICABLE
STATE SECURITIES LAWS, AND SUCH SECURITIES MAY NOT BE
SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH SALE OR TRANSFER IS
EXEMPT FROM SUCH REGISTRATION REQUIREMENTS OF THE ACT
AND APPLICABLE STATE SECURITIES LAWS.
(m) The undersigned will acquire the Common Stock for
the undersigned's own account (or for the joint
account of the undersigned and the undersigned's
spouse either in joint tenancy, tenancy by 'he
entirety or tenancy in common) for investment and not
with a view to the sale or distribution thereof or
the granting of any participation therein, and has no
present intention of distributing or selling to
others any of such interest or granting any
participation therein.
(n) No representation, guarantee or warranty has been
made to the undersigned by any broker, the Company,
any of the officers, directors, stockholders,
partners, employees or agents of either of them, or
any other persons, whether expressly or by
implication, that:
(I) the Company or the undersigned will
realize any given percentage of profits
and/or amount or type of consideration,
profit or loss as a result of the Company's
activities or the undersigned's investment
in the Company; or (II) the past performance
or experience of the management of the
Company, or of any other person, will in any
way indicate the predictable results of the
ownership of the Common Stock or of the
Company's activities.
(o) No oral or written representations have been made
other than as stated in the Memorandum, and no oral
or written information furnished to the undersigned
or the undersigned's advisor(s) in connection with
the Offering were in any way inconsistent with the
information stated in the Memorandum.
(p) The undersigned is not subscribing for the Common
Stock as a result of or subsequent to any
advertisement, article, notice or other communication
published in any newspaper, magazine or similar media
or broadcast over television or radio, or presented
at any seminar or meeting, or any solicitation of a
subscription by a person other than a representative
of the Company with which the undersigned had a
pre-existing relationship in connection with
investments in securities generally.
(q) The undersigned is not relying on the Company
with respect to the tax and other economic
considerations of an investment.
(r) The undersigned understands that the net;
proceeds from all subscriptions paid and accepted
pursuant to the Offering (after deduction for
commissions, discounts and expenses of the Offering)
will be used in all material respects for the
purposes set forth in the Memorandum.
(s) Without limiting any of the undersigned's other
representations and warranties hereunder, the
undersigned acknowledges that the undersigned has
reviewed and is aware of the risk factors described
in the Memorandum.
(t) The undersigned acknowledges that the
representations, warranties and agreements made by
the undersigned herein shall survive the execution
and delivery of this Agreement and the purchase of
the Common Stock.
(u) The undersigned has consulted his own financial,
legal and tax advisors with respect to the economic,
legal and tax consequences of an investment in the
Common Stock and has not relied on the Memorandum or
the Company, its officers, directors or professional
advisors for advice as to such consequences.
5. Indemnification.
The Purchaser understands the meaning and legal consequences of the
representations and warranties contained in Section 4.2, and agrees to indemnify
and hold harmless the Company and each member, officer, employee, agent or
representative thereof against any and all loss, damage or liability due to or
arising out of a breach of any representation or warranty, or breach or failure
to comply with any covenant, of the Purchaser, whether contained in the
Memorandum or this Subscription Agreement. 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.
6. Provisions of Certain State Laws.
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING INCLUDING THE
MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED
BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY.
FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY
OR DETERMINED TIE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE
SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE
FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE NEW YORK UNIFORM
SECURITIES ACT AND, THEREFORE, CANNOT BE RESOLD UNLESS THEY ARE
REGISTERED UNDER THE ACT OR UNLESS AN EXEMPTION FROM REGISTRATION IS
AVAILABLE.
7. Additional Information.
The Purchaser hereby acknowledges and agrees that the Company may make
or cause to be made such further inquiry and obtain such additional information
as they may deem appropriate, with regard to the suitability of the undersigned.
1. Irrevocability; Binding Effect.
The Purchaser hereby acknowledges and agrees that the Subscription
hereunder is irrevocable, that the Purchaser is not entitled to cancel,
terminate or revoke this Subscription. Agreement or any agreements of the
undersigned thereunder and that this Subscription Agreement and such other
agreements shall survive the death or disability of the Purchaser and shall be
binding upon and inure to the benefit of the parties and their heirs, executors,
administrators, successors, legal representatives and assigns. If the Purchaser
is more than one person, the obligations of the Purchaser hereunder shall be
joint and several and the agreements, representations, warranties and
acknowledgments herein contained shall be deemed to be made by and be binding
upon each such person and his heirs, executors a legal representatives and
assigns.
9. Modification.
Neither this Subscription Agreement nor any provisions hereof shall be
waived, modified, discharged or terminated except by an instrument in writing
signed by the party against whom any such waiver, modification, discharge or
termination is sought.
10. Notices.
Any notice, demand or other communication which any party hereto may be
required, or may elect, to give to any other arty hereunder shall be
sufficiently given if (a) deposited, postage prepaid, in a United States mail
box, stamped registered or certified mail, return receipt requested, addressed
to such address ass may be listed on the books of the Company, or (b) delivered
personally at such address.
11. Counterparts.
This Subscription Agreement may be executed through the use of separate
signature pages or in any number of counterparts, and each such counterpart
shall, for all purposes, constitute one agreement binding on all parties,
notwithstanding that all parties are not signatories to the same counterpart.
12. Entire Agreement.
This Subscription Agreement contains the entire agreement of the
parties with respect to the subject matter hereof and there are no
representations, covenants or other agreements except as stated or referred to
herein.
13. Severability.
Each provision of this Subscription Agreement is intended to be
severable from every other provision, and the invalidity or illegality of any
Portion hereof shall not affect the validity or legality of the remainder
hereof.
14. Assignability.
This Subscription Agreement is not transferable or assignable by the
Purchaser.
15. Applicable Law.
This Subscription Agreement shall be governed by and construed in
accordance with the laws of the State of California as applied to residents of
that State executing contracts wholly to be performed in that State.
16. Choice of Jurisdiction.
The parties agree that any action or proceeding arising, directly,
indirectly or otherwise, in connection with, out of or from this Subscription
Agreement, any breach hereof or any transaction covered hereby shall be resolved
within the County, City and State of California. Accordingly, the parties
consent and submit to the jurisdiction of the United States federal and state
courts located within the County, City and State of California.
IN WITNESS THEREOF, the undersigned exercises and agrees to be bound by
this Subscription Agreement by executing the Signature Page attached hereto on
the date therein indicated.
SUBSCRIPTION AGREEMENT
SIGNATURE PAGE
By executing this Signature Page, the undersigned hereby executes,
adopts and agrees to all terms, conditions and representations of this
Subscription Agreement and acknowledges all requirements are met by the
purchaser to purchase shares of Common Stock in the Company.
Number of Shares Subscribed at $.10 per Share: ____________________________
Aggregate Purchase Price: $ _______________________________________________
Type of ownership: ____________ Individual
____________ Joint Tenants
____________ Tenants by the Entirety
____________ Tenants in Common
____________ Subscribing as Corporation or Partnership
____________ Other
IN WITNESS WHEREOF, the undersigned Xxxxxxxxx has executed this Signature
Page this __________ day of __________________________ , 2004.
----------------------------- --------------------------
Exact Name in which Shares are to Exact Name in which Shares are to
be Registered be Registered
----------------------------- ---------------------------
Signature Signature
----------------------------- ---------------------------
Print Name Print Name
-------------------------- ---------------------------
Tax Identification Number: Tax Identification Number
============================= ===========================
----------------------------- ---------------------------
Mailing Address Mailing Address
----------------------------- ---------------------------
Residence Phone Number Residence Phone Number
----------------------------- ---------------------------
Work Phone Number Work Phone Number
----------------------------- ---------------------------
E-Mail Address E-Mail Address
ACCEPTANCE OF SUBSCRIPTION
EASTERN SERVICES HOLDINGS INC. xxxxxx accepts the subscription of
________________shares of common stock, par value $.001 per share, as of the
____________day of _________________, 2004.
EASTERN SERVICES HOLDINGS INC.
By: ___________________________________________________________________
Name: ___________________________________________________________________
Title: ___________________________________________________________________
Exhibit I to Subscription Agreement
DEFINITION OF "ACCREDITED INVESTOR"
WITHIN THE MEANING OF REGULATION D
An accredited investor means any person who comes within any of the
following categories, or who the Company reasonably believes comes within any of
the following categories, at the time of the sale of the Shares to that person:
(i) any 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; any broker dealer registered pursuant to Section 15 of the Exchange
Act; any insurance company as defined in Section 2(13) of the Securities Act;
any 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; any
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; any plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, if such plan has total assets in
excess of $5,000,000; any employee benefit plan within the meaning 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;
(ii) any private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940;
(iii) any 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;
(iv) any of the directors or executive officers of the Company;
(v) any natural person whose individual net worth, or joint net worth
with that person's spouse, at the time of investment in the Common Stock,
exceeds $1,000,000;
(vi) any natural person who had an individual income in excess of
$200,000 in each of the two most recent years or joint income with that person's
spouse in excess of $300,000 in each of those years and has a reasonable
expectation of reaching that same income level in the current year;
(vii) any trust with total assets in excess of $5,000,000, not formed
for the specific purpose of acquiring the Common Stock, whose purchase is
directed by a sophisticated person as described in Rule 506(b)(2)(ii) of
Regulation D; or
(viii) any entity in which all of the equity owners are accredited
investors.
Exhibit II to Subscription Agreement
PURCHASER QUESTIONNAIRE FOR INDIVIDUALS
Purpose of this Questionnaire.
Shares of Stock in EASTERN SERVICES HOLDINGS INC., a Delaware
Corporation (the "Company'), are being offered without registration under the
Securities Act of 1933, as amended (the "Securities Act"), or the securities
laws of certain states, in reliance on the private offering exemption contained
in Section 4(2) of the Securities Act and on Regulation D of the Securities and
Exchange Commission thereunder ("Regulation D"), and in reliance on similar
exemptions under certain applicable state laws. The purpose of this Purchaser
Questionnaire is to assure the Company that the proposed purchaser meets the
standards imposed for the application of such exemptions including, but not
limited to, whether the proposed purchaser qualifies as an "accredited investor"
as defined in Rule 501 under the Act or a "sophisticated investor" as defined in
Rule 506 under the Act, your answers will at all times be kept strictly
confidential. However, by signing this purchaser Questionnaire you agree that
the Company may present this Purchaser Questionnaire to such parties as the
Company may deem appropriate if called upon under the law to establish the
availability of any exemption from registration of the private placement or if
the contents hereof are relevant to any issue in any action, suit or proceeding
to which the Company is a party or by which it may be bound. The undersigned
realizes that this Purchaser Questionnaire does not constitute an offer by the
Company to sell Shares but is a request for information.
THE COMPANY WILL NOT OFFER OR SELL SHARES TO ANY INDIVIDUAL WHO HAS NOT
FILLED OUT, AS THOROUGHLY AS POSSIBLE, A PROSPECTIVE PURCHASER QUESTIONNAIRE.
Instructions:
One (1) copy of this Questionnaire should be completed, signed, dated and
delivered to:
EASTERN SERVICES HOLDINGS INC.
Attn: Xxxxx Xxxxxx
000 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxx Xxxxxx XX 00000
Please contact Xxxxx Xxxxxx at (000) 000-0000 if you have any questions with
respect to the Questionnaire.
PLEASE ANSWER ALL QUESTIONS. If the appropriate answer is "None" or "Not
Applicable," so state. Please print or type your answers to all questions.
Attach additional sheets if necessary to complete your answers to any item.
I. General Information:
--------------------
Name: ________________________________
Date of Birth: ______________________________
Residence Address: ____________________________________________________________
Business Address: _____________________________________________________________
Home Telephone No.: __________________________________________________________
Business Telephone No: ______________________________________________________
E-mail Address: _______________________________________________________________
Preferred Mailing Address: ________ Business or _________ Home (check one)
Social Security Number: ____________________________________________________
Marital Status: ____________________________________________________________
II. Financial Condition:
1. Did your individual annual income during each of 2002 and 2003 exceed
$200,000 and do you reasonably expect your individual annual income during 2004
to exceed $200,000?
Yes _______ No _______
2. Did your joint (with spouse) annual income during each of 2002 and 2003
exceed $300,000 and do you reasonably expect your individual annual income
during 2004 to exceed $300,000?
Yes _______ No _______
3. Does your individual or joint net worth exceed $1,000,000?
Yes _______ No _______
By signing this Questionnaire I hereby confirm the following statements:
(a) I am aware that the offering of Common Stock will involve
securities that are not transferable and for which no market exists, thereby
requiring my investment to be maintained for an indefinite period of time.
(b) I acknowledge that any delivery to me of the Memorandum relating to
the shares of Common Stock prior to the determination by the Company of my
suitability as an investor, shall not constitute an offer of such shares until
such determination of suitability shall be made, and I agree that I shall
promptly return the Memorandum to the Company upon request.
(c) My answers to the foregoing questions are, and were on any date (if
any) that I previously subscribed for shares in the Company, true and complete
to the best of my information and belief and were true on any date that I
previously as of, and I will promptly notify the Company of any changes in the
information I have provided.
Executed:
Date:________________ _______________________________________________
(Printed Name)
Place: ____________________________________
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(Signature)
------------------------------------------
(Printed Name of Joint Subscriber)
