Exhibit 10.1
ESCROW AGREEMENT
THIS ESCROW AGREEMENT dated as of this 11th day of December, 2003
("Escrow Agreement") is by and among Sardy House, LLC, a Colorado limited
liability company ("Sardy House"), North and South Aspen, L.L.C., a Colorado
limited liability company which owns all 25 of the outstanding limited liability
company membership interests of Sardy House ("North South"), X. X. Xxxxxxx &
Company, a Colorado corporation ("Underwriter"), and Computershare Trust
Company, Inc., a Colorado corporation, as Escrow Agent ("Escrow Agent").
Collectively, Sardy House and North South are hereinafter referred to as the
"Issuer."
BACKGROUND
A. The Issuer is conducting a public offering through the
Underwriter of up to the total of 25 limited liability company membership
interests of Sardy House ("Membership Interests") held by North South, which
constitute all of the issued and outstanding Membership Interests.
B. The offering is being conducted on a "best efforts, all or
none" basis as to a minimum offering of seven (7) Membership Interests necessary
to allow for complete repayment of the bank debt of up to $4,350,000 on the
Sardy House property, the sale of which seven (7) Membership Interests must
result in total proceeds of a minimum of $4,665,000 before any commissions and
referral fees and excluding accrued interest on the bank debt to be repaid, and
on a "best efforts" basis as to the remaining 18 Membership Interests up to the
maximum offering of 25 Membership Interests. If a minimum of seven (7)
Membership Interests are not sold by May 31, 2004, subject to extension for up
to an additional 30 days, the offering will be terminated and all money received
shall be returned to investors with interest within five (5) business days.
Until the minimum offering is achieved, all funds received from investors shall
be deposited into an interest bearing escrow account, with interest to be
credited toward the final purchase price.
C. In connection with the offering, Sardy House has filed a
Registration Statement on Form SB-2 (Registration No. 333-105521) (together with
all amendments thereto, the "Registration Statement") with the Securities and
Exchange Commission (the "SEC").
D. Persons who purchase Membership Interests in the offering will
be required to do so pursuant to a Subscription Agreement, the form of which is
attached as Exhibit A to this Escrow Agreement (the "Subscription Agreement")
(such persons who purchase the Membership Interests pursuant to the Subscription
Agreement are hereinafter referred to as the "Subscribers").
E. In accordance with the Subscription Agreement, the Subscribers
will be required to submit full payment for their investment in the Membership
Interests at the time they return the executed Subscription Agreement to the
Issuer or Underwriter.
F. The offering price is $750,000 per Membership Interest. This
price may be changed at any time after December 19, 2003. If the offering price
is decreased it will be
decreased for all purchasers, and if the offering price is increased it will be
increased for all purchasers who have not as of that date executed Subscription
Agreements and submitted Subscription Funds (as defined below).
G. Issuer and Underwriter desire to establish an escrow account
with Escrow Agent for the deposit of funds received from Subscribers in order to
comply with Rule 10b-9 and Rule 15c2-4 of the rules promulgated by the SEC under
the Securities Exchange Act of 1934.
H. All payments for Subscriptions for Membership Interests
("Subscription Funds") and the executed Subscription Agreements received by
Issuer or Underwriter shall be promptly forwarded, by no later than noon of the
next business day after receipt, to Escrow Agent, and Escrow Agent has agreed to
accept, hold and disburse such Subscription Funds deposited with it in
accordance with the terms of this Escrow Agreement.
I. In order to establish the escrow of Subscription Funds and to
effect the consummation of the transactions contemplated by the Subscription
Agreements, the parties hereto have entered into this Escrow Agreement.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, for
themselves, their successors and assigns, hereby agree as follows:
1. Certain Definitions. The following terms shall have the
following meanings when used herein:
"Cash Investment" shall mean the number of Membership Interests
subscribed for by a Subscriber multiplied by the Purchase Price (as defined
below) per Membership Interest, as set forth in the Subscription Agreement
submitted by such Subscriber.
"Construction Loan Agreement" shall mean that certain Construction Loan
Agreement dated March 28, 2003 among Sardy House, North South and WestStar Bank,
as amended.
"Effective Date" shall mean the date on which the Registration
Statement is declared effective by the SEC.
"Entire Offering" shall mean the sale of all 25 Membership Interests
offered.
"Escrow Account" shall mean the interest bearing account entitled
"Computershare Trust Company, Inc., as Escrow Agent for Sardy House, LLC"
established by the Escrow Agent with a bank.
"Escrow Funds" shall mean the Subscription Funds deposited with Escrow
Agent pursuant to this Escrow Agreement, together with any interest and other
income thereon.
"Escrow Period" shall have the meaning set forth in Section 3 of this
Escrow Agreement.
2
"Maximum Offering Notice" shall mean a written notification, signed by
the Issuer, which shall specify that: (a) subscriptions for the Entire Offering
have been received and accepted; and (b) such subscriptions have not been
withdrawn, rejected or otherwise terminated.
"Membership Interests" shall have the meaning set forth in the Section
of this Escrow Agreement titled "Background."
"Minimum Offering" shall mean the sale of seven (7) Membership
Interests, which shall result in the receipt of total Subscription Funds of a
minimum of $4,665,000 before any commissions and referral fees, which total
represents the total minimum Subscription Funds necessary to upon release from
escrow enable North South to, as disclosed in the prospectus included in the
Registration Statement, (a) pay all commissions and referral fees in connection
with the sale of such Membership Interests and (b) completely repay the total
indebtedness of the Issuer to WestStar Bank of up to $4,350,000 pursuant to the
Construction Loan Agreement.
"Minimum Offering Notice" shall mean a written notification, signed by
the Issuer, which shall specify that: (a) subscriptions for the Minimum Offering
have been received and accepted; and (b) such subscriptions have not been
withdrawn, rejected or otherwise terminated.
"Purchase Price" shall mean the purchase price for each Membership
Interest as determined by the Issuer, which Purchase Price is initially $750,000
but may be changed by Issuer at any time after December 19, 2003. If the
Purchase Price is decreased it shall be decreased for all purchasers, and if the
Purchase Price is increased it shall be increased for all purchasers who have
not as of that date executed Subscription Agreements and submitted Subscription
Funds.
"Subscribers" shall have the meaning set forth in the Section of this
Escrow Agreement titled "Background."
"Subscription Accounting" shall mean an accounting of all subscriptions
for Membership Interests received and accepted by Issuer as of the date of such
accounting, indicating for each subscription the Subscriber's name, address and
taxpayer identification number, the number and total purchase price of
subscribed Membership Interests, any withdrawal of such subscription by the
Subscriber, any rejection of such subscription by the Issuers, or other
termination, for whatever reason, of such subscription.
"Subscription Funds" shall have the meaning set forth in the Section of
this Escrow Agreement titled "Background."
2. Appointment of and Acceptance by Escrow Agent and
Establishment of Escrow Account. Issuer hereby appoints Escrow Agent to serve as
escrow agent hereunder, and Escrow Agent hereby accepts such appointment in
accordance with the terms of this Escrow Agreement. In accepting such
appointment, Escrow Agent represents and warrants that it is a "bank," as that
term is defined in Section 3(a)(6) of the Securities Exchange Act of 1934.
The parties hereto shall establish the Escrow Account. The Issuer and
the Underwriter shall instruct Subscribers to make payments for Subscription
Funds either by wire transfer or
3
check payable to "Computershare Trust Company, Inc., as Escrow Agent for Sardy
House, LLC." Wire transfers shall be directed to the following account:
Bank: Xxxxxx Trust and Savings Bank
Chicago, IL
ABA #: 071 000 288
Account #: 0000000
Account Name: Computershare Trust Company, Inc.
Sardy House Subscription
8066 Escrow Agent
Any check received that is made payable to a party other than Escrow Agent shall
be returned to the person who submitted the check.
3. Deposits into Escrow Account and Escrow Period.
(a) Deposits into Escrow Account. After the Effective
Date, Issuer and Underwriter shall forward to Escrow Agent, by no later
than noon of the next business day after receipt, (i) the Subscription
Funds and Subscription Agreements received by Issuer or Underwriter for
deposit into the Escrow Account and (ii) the appropriate IRS Form W-9s
or Form W-8s (or Escrow Agent's substitute forms therefor) for each
Subscriber that are required to be executed and delivered by each
Subscriber pursuant to the terms of the Subscription Agreement. Escrow
Agent agrees to deposit into the Escrow Account, upon the receipt
thereof, any and all Subscription Funds, including all checks and other
instruments and monies payable to Escrow Agent as escrow agent
therefor. Escrow Agent is hereby authorized to forward each check or
other instrument for collection, and upon collection of the proceeds of
each check or other instrument deposit the collected proceeds into the
Escrow Account.
ALL FUNDS SO DEPOSITED SHALL REMAIN THE PROPERTY OF THE
SUBSCRIBERS ACCORDING TO THEIR RESPECTIVE INTERESTS AND
SHALL NOT BE SUBJECT TO ANY LIEN OR CHARGE BY ESCROW
AGENT OR BY JUDGMENT OR CREDITORS' CLAIMS AGAINST
ISSUER UNTIL RELEASED TO ISSUER IN ACCORDANCE WITH
SECTION 5(a) HEREOF.
No party shall accept any funds from Subscribers prior to the
Effective Date. Upon receipt of any Subscription Funds which are not
equal to the proper Cash Investment for such subscription or if a
notice of insufficient funds has been received by Escrow Agent for a
check for such Subscription Funds, Escrow Agent's sole obligation shall
be to notify Issuer of such fact and to return such Subscription Funds
to Issuer. If Issuer rejects any subscription for which the Escrow
Agent has already deposited Subscription Funds into the Escrow Account,
the Escrow Agent shall promptly issue a check payable to the Subscriber
in the amount of the Subscriber's subscription check plus
4
interest earned on such funds, after the Escrow Agent has
cleared such funds, and deliver such check to Issuer. Issuer
shall promptly deliver such check to the Subscriber.
(b) Escrow Period for Minimum Offering. The escrow period
(the "Escrow Period") with respect to the Minimum Offering
shall begin at the later of the time that the Escrow Account
is established or the Effective Date and shall terminate upon
the earlier of the following to occur:
(i) The date upon which the Escrow Agent
confirms that it has received the Minimum
Offering Notice, and the Subscription Funds
with respect to such Minimum Offering Notice
have been deposited into the Escrow Account;
or
(ii) 5:00 p.m. (Denver, Colorado time) on May 31,
2004, unless extended from time to time in
writing by the Issuer and Underwriter for an
additional number of days as described in
the prospectus included in the Registration
Statement, but not to be extended for more
than an additional 30 days (as extended, the
"Expiration Date"), if Subscription Funds
with respect to the Minimum Offering have
not been deposited into the Escrow Account
by the Expiration Date; or
(iii) The date upon which Escrow Agent receives
written notice from Issuer of a
determination to terminate the offering
prior to completion of the Minimum Offering.
(c) Escrow Period for Subscription Funds Received After
Completion of Minimum Offering. The Escrow Period with respect
to any Subscription Funds received and deposited into the
Escrow Account after the Minimum Offering has been completed
shall be as set forth in the provisions for such Subscription
Funds in Section 5(a)(ii) of this Escrow Agreement.
4. Investment of Escrow Funds. Prior to the disbursement of
Escrow Funds pursuant to Section 5 of this Escrow Agreement, the Escrow Funds
shall be invested only as directed in writing by Issuer. The Issuer may only
direct investments in the following:
(a) short-term securities issued or guaranteed by the
United States of America Government or of any agency
thereof and backed by the full faith and credit of
the United States of America;
(b) bank accounts or bank money-market accounts with
commercial banks with capital, surplus and undivided
profits aggregating in excess of $1 billion (based on
the most recent financial statements of such bank
which are then publicly available at the SEC or
otherwise); or
5
(c) short-term certificates of deposit issued by a
commercial bank with a combined capital and surplus
(or parent holding company of which has a combined
capital and surplus) of at least $50,000,000.
In the absence of specific written instructions by the Issuer, the
Escrow Agent shall invest and reinvest the Escrow Funds in bank money-market
accounts as set forth in paragraph (b) of this Section 4.
5. Disbursements of Escrow Funds.
(a) Completion of Offering.
(i) Completion of Minimum Offering. Escrow Agent
shall pay to North South by wire transfer the amount of the
Escrow Funds equal to the Purchase Price multiplied by the
number of Membership Interests purchased in the Minimum
Offering, excluding interest and other income earned on the
Escrow Funds, and deliver all documents and instruments,
including certificates representing the Membership Interests
for the Subscribers, no later than three (3) business days
following receipt by Escrow Agent of the following items:
(1) The Minimum Offering Notice;
(2) A Subscription Accounting, substantiating
the sale of the Minimum Offering;
(3) Subscription Agreements signed by all
Subscribers;
(4) Certificates representing the Membership
Interests for the Subscribers;
(5) Such other certificates, notices or other
documents as Escrow Agent, in its
discretion, shall reasonably require and
shall have requested from Issuer in writing;
and
(6) Cleared Subscription Funds.
At such time that Escrow Agent pays to North South in
accordance with the above terms the value of the Escrow Funds
equal to the Purchase Price multiplied by the number of
Membership Interests purchased in the Minimum Offering,
excluding interest and other income earned on such Escrow
Funds, Escrow Agent shall deliver to each Subscriber the
certificate representing the Membership Interests purchased by
such Subscriber. In addition, in order to credit the interest
and other income earned on the Escrow Funds toward the final
Purchase Price paid by the Subscribers for their Membership
Interests, Escrow Agent shall at such time pay by check to
each Subscriber such Subscriber's pro rata amount of interest
and other income earned on the Escrow Funds represented by
such Subscriber's Subscription Funds. Further, if the amount
of Subscription Funds paid by any Subscriber and deposited
into the Escrow Account exceeds the final Purchase Price for
the Membership Interests purchased by such Subscriber, Escrow
Agent shall include in the amount of the check to such
Subscriber the amount by which
6
the Subscription Funds paid by such Subscriber and deposited
into the Escrow Account exceeds the final Purchase Price.
In connection with the completion of the Minimum Offering and
the receipt of Escrow Funds from Escrow Agent in connection
therewith, North South acknowledges that it is solely
obligated and responsible for the application of such released
funds to payment of any commissions and referral fees in
connection with the sale of the Membership Interests and to
complete repayment of the outstanding indebtedness of the
Issuer to WestStar Bank under the Construction Loan Agreement,
as disclosed in the prospectus included in the Registration
Statement.
(ii) Subscription Funds Received After Completion
of Minimum Offering. Commencing 14 days after the completion
of the Minimum Offering, Escrow Agent shall pay to North South
by wire transfer the amount of the Escrow Funds equal to the
Purchase Price multiplied by the number of Membership
Interests purchased after the completion of the Minimum
Offering, excluding interest and other income earned on the
Escrow Funds, no later than three (3) business days following
receipt by the Escrow Agent of the items set forth in Sections
5(a)(i)(2), (3), (4), (5) and (6) above with respect to
Subscription Funds received after the completion of the
Minimum Offering (with the document set forth in Section
5(a)(i)(2) not subject to a requirement to re-substantiate the
sale of the Minimum Offering).
At such time that Escrow Agent pays to North South in
accordance with the above terms the value of the Escrow Funds
equal to the Purchase Price multiplied by the number of
Membership Interests purchased after completion of the Minimum
Offering, excluding interest and other income earned on such
Escrow Funds, Escrow Agent shall deliver to each Subscriber
the certificate representing the Membership Interests
purchased by such Subscriber. In addition, in order to credit
the interest and other income earned on the Escrow Funds
toward the final Purchase Price paid by the Subscribers for
their Membership Interests, Escrow Agent shall at such time
pay by check to each Subscriber such Subscriber's pro rata
amount of interest and other income earned on the Escrow Funds
represented by such Subscriber's Subscription Funds. Further,
if the amount of Subscription Funds paid by any Subscriber and
deposited into and remaining in the Escrow Account exceeds the
final Purchase Price for the Membership Interests purchased by
such Subscriber, Escrow Agent shall include in the amount of
the check to such Subscriber the amount by which the
Subscription Funds paid by such Subscriber and deposited into
and remaining in the Escrow Account exceeds the final Purchase
Price.
In connection with the receipt of Escrow Funds from Escrow
Agent after the completion of the Minimum Offering, North
South acknowledges that it is solely obligated and responsible
for the application of such released funds to payment of
7
any commissions and referral fees in connection with
the sale of the Membership Interests, as disclosed
in the prospectus included in the Registration
Statement.
The foregoing process for Subscription Funds received after
the completion of the Minimum Offering may be repeated every
14 days until receipt of the Maximum Offering Notice or the
termination or expiration of the offering.
Notwithstanding the foregoing, Escrow Agent shall not be obligated to
disburse the Escrow Funds to North South if Escrow Agent reasonably
believes that (i) Subscription Funds in full payment equal to the
required Cash Investment based on the Purchase Price for that number of
Membership Interests equal to or greater than the Minimum Offering have
not been received, deposited with and collected by Escrow Agent,
subject to the right of Issuer to consummate the sale of some, but not
all, of the Membership Interests (subject to the Minimum Offering
condition) or (ii) any of the certifications and opinions set forth in
the documents furnished to Escrow Agent are incorrect or incomplete.
(b) Decrease in Purchase Price. If Issuer determines to
decrease the Purchase Price after December 19, 2003, Issuer shall
promptly give written notice to the Escrow Agent of such decrease in
the Purchase Price, and, no later than ten (10) business days after the
public announcement by Issuer of such decrease in the Purchase Price,
Escrow Agent shall return to each Subscriber who submitted Subscription
Funds based on the Purchase Price prior to such decrease and which
Subscription Funds were deposited into and remain in the Escrow
Account, by check and by first class mail, that portion of the Escrow
Funds equal to the amount of the Subscription Funds paid by such
Subscriber and deposited into the Escrow Account, plus interest and
other income earned thereon.
(c) Termination of the Offering. No later than five (5)
business days after the receipt by Escrow Agent of written notice from
Issuer of a determination to terminate the offering and that there will
be no closing or further closing of the sale of Membership Interests to
Subscribers, Escrow Agent shall pay to each Subscriber, by bank draft
and by first class mail, that portion of the Escrow Funds equal to the
amount of the Subscription Funds paid by such Subscriber and deposited
into the Escrow Account, plus interest and other income earned thereon.
(d) Rejection or Withdrawal of Subscriptions. No later
than five (5) business days after receipt by Escrow Agent of written
notice from Issuer that Issuer has rejected or permitted a withdrawal
of any Subscription for which Subscription Funds have already been
deposited into the Escrow Account by Escrow Agent, Escrow Agent shall
pay to such Subscriber, by bank draft and by first class mail, that
portion of the Escrow Funds equal to the amount of the Subscription
Funds paid by such Subscriber and deposited into the Escrow Account,
plus interest and other income earned thereon.
(e) Expiration of Offering Period. Notwithstanding
anything to the contrary contained herein, if Escrow Agent shall not
have received the Minimum Offering Notice and cleared Subscription
Funds therefore on or before the Expiration Date, Escrow Agent shall,
within five (5) business days after such date and without any further
instruction or
8
direction from Issuer, return to each Subscriber, by bank draft and by
first class mail, that portion of the Escrow Funds equal to the amount
of the Subscription Funds paid by such Subscriber and deposited into
the Escrow Account, plus interest and other income earned thereon.
6. Suspension of Performance or Disbursement into Court. If, at
any time, there shall exist any dispute between Issuer, Underwriter, Escrow
Agent, Subscribers or any other person with respect to the holding or
disposition of any portion of the Escrow Funds or any other obligations of
Escrow Agent hereunder, or if at any time Escrow Agent is unable to determine,
to Escrow Agent's sole satisfaction, the proper disposition of any portion of
the Escrow Funds or Escrow Agent's proper actions with respect to its
obligations hereunder, or if Issuer has not within thirty (30) days of the
furnishing by Escrow Agent of a notice of resignation pursuant to Section 7
hereof appointed a successor Escrow Agent to act hereunder, then Escrow Agent
may, in its sole discretion, take either or both of the following actions:
(a) Suspend the performance of any of its obligations
under this Escrow Agreement until such dispute or uncertainty shall be
resolved to the sole satisfaction of Escrow Agent or until a successor
Escrow Agent shall have been appointed (as the case may be); and/or
(b) Petition (by means of an interpleader action or any
other appropriate method) any court of competent jurisdiction in
Denver, Colorado for instructions with respect to such dispute or
uncertainty, and pay to such court all funds held by it for holding and
disposition in accordance with the instructions of such court. In
determining the resolution of such dispute or uncertainty, such court
shall apply the laws of the State of Colorado.
Escrow Agent shall have no liability to Issuer, Underwriter,
Subscribers or any other person with respect to any such suspension of
performance or disbursement into court, specifically including any liability or
claimed liability that may arise, or be alleged to have arisen, out of or as a
result of any delay in the disbursement of funds held in the Escrow Account or
any delay in or with respect to any action required or requested of Escrow
Agent.
7. Resignation and Removal of Escrow Agent. Escrow Agent may
resign from the performance of its duties hereunder at any time by giving thirty
(30) days' prior written notice to Issuer, or may be removed by Issuer, with or
without cause, at any time by Issuer giving prior written notice to Escrow
Agent. Such resignation or removal shall take effect upon the appointment of a
successor Escrow Agent as provided herein below. Upon any such notice of
resignation or removal, Issuer shall appoint a successor Escrow Agent hereunder.
If the Issuer shall fail to appoint a successor Escrow Agent within thirty (30)
days after such notice of resignation or removal, the Escrow Agent shall have
the right to deposit the Escrow Funds to a court of competent jurisdiction for
the appointment of a successor Escrow Agent. Upon the acceptance in writing by a
successor Escrow Agent of any appointment as Escrow Agent hereunder, such
successor Escrow Agent shall thereupon succeed to and become vested with and
subject to all the rights, powers, privileges, duties and obligations of the
former Escrow Agent, and the former Escrow Agent shall be discharged from its
duties and obligations under this
9
Escrow Agreement, but shall not be discharged from any liability for actions
taken as Escrow Agent hereunder prior to such succession. After any former
Escrow Agent's resignation or removal, the provisions of this Escrow Agreement
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Escrow Agent under this Escrow Agreement.
8. Liability of Escrow Agent.
(a) Escrow Agent shall have no liability or obligation
with respect to the Escrow Funds other than as set forth in this Escrow
Agreement, except for any liability which may result from Escrow
Agent's willful misconduct or gross negligence. Escrow Agent's sole
responsibility shall be for the safekeeping and disbursement of the
Escrow Funds in accordance with the terms of this Escrow Agreement.
Escrow Agent shall have no implied duties or obligations and shall not
be charged with knowledge or notice of any fact or circumstance not
specifically set forth herein. Escrow Agent may rely upon any
instrument, whether bearing original, conformed or facsimile
signatures, not only as to its due execution, validity and
effectiveness, but also as to the truth and accuracy of any information
contained therein which Escrow Agent shall in good faith believe to be
genuine, to have been signed or presented by the person or parties
purporting to sign the same, and to conform to the provisions of this
Escrow Agreement. In no event shall Escrow Agent be liable for
incidental, indirect, special, consequential or punitive damages.
Escrow Agent shall not be obligated to take any legal action or
commence any proceeding in connection with the Escrow Funds or any
account in which the Escrow Funds are deposited or this Escrow
Agreement, or to appear in, prosecute or defend any such legal action
or proceeding. Without limiting the generality of the foregoing, Escrow
Agent shall not be responsible for or required to enforce any of the
terms or conditions of any Subscription Agreement with Subscribers or
any other agreement between Issuer and/or Subscribers. Escrow Agent
shall not be responsible or liable in any manner for the performance by
Issuer or any Subscribers of their respective obligations under any
Subscription Agreement nor shall Escrow Agent be responsible or liable
in any manner for the failure of Issuer, Underwriter or any third party
(including any Subscriber) to honor any of the provisions of this
Escrow Agreement. Escrow Agent may consult legal counsel selected by it
in the event of any dispute or question as to the construction of any
of the provisions hereof or of any other agreement or of its duties
hereunder, and shall incur no liability and shall be fully indemnified
from any liability whatsoever in acting in accordance with the opinion
or instruction of such counsel. Issuer shall promptly pay, upon demand,
the reasonable fees and expenses of any such counsel.
(b) Escrow Agent is authorized, in its sole discretion,
to comply with orders issued or process entered by any court with
respect to the Escrow Funds, without determination by Escrow Agent of
such court's jurisdiction in the matter. If any portion of the Escrow
Funds is at any time attached, garnished or levied upon under any court
order, or in case the payment, assignment, transfer, conveyance or
delivery of any such property shall be stayed or enjoined by any court
order, or in case any order, judgment or decree shall be made or
entered by any court affecting such property or any part thereof, then
and in any such event, Escrow Agent is authorized, in its sole
discretion, to rely upon and comply with any such order, writ, judgment
or decree which it is advised by legal
10
counsel selected by it that is binding upon it without the need for
appeal or other action; and if Escrow Agent complies with any such
order, writ, judgment or decree, it shall not be liable to any of the
parties hereto or to any other person or entity by reason of such
compliance even though such order, writ, judgment or decree may be
subsequently reversed, modified, annulled, set aside or vacated.
9. Indemnification of Escrow Agent. From and at all times after
the date of this Escrow Agreement, Issuer shall, except as otherwise hereinafter
provided, to the fullest extent permitted by law, indemnify and hold harmless
Escrow Agent and each officer, director, employee, attorney, agent and affiliate
of Escrow Agent (collectively, the "Indemnified Parties") against any and all
actions, claims (whether or not valid), losses, damages, liabilities, costs and
expenses of any kind or nature whatsoever (including without limitation
reasonable attorneys' fees, costs and expenses) incurred by or asserted against
any of the Indemnified Parties from and after the date hereof, whether direct,
indirect or consequential, as a result of, arising from or in any way relating
to any claim, demand, suit, action or proceeding (including any inquiry or
investigation) by any person, including without limitation Issuer or
Subscribers, whether threatened or initiated, asserting a claim for any legal or
equitable remedy against any person under any statute or regulation, including,
but not limited to, any federal or state securities laws, or under any common
law or equitable cause or otherwise, arising from or in connection with the
negotiation, preparation, execution, performance or failure of performance of
this Escrow Agreement or any transactions contemplated herein, whether or not
any such Indemnified Party is a party to any such action, proceeding, suit or
the target of any such inquiry or investigation; provided, however, that no
Indemnified Party shall have the right to be indemnified hereunder for any
liability finally determined by a court of competent jurisdiction, subject to no
further appeal, to have resulted solely from the gross negligence or willful
misconduct of such Indemnified Party. If any such action or claim shall be
brought or asserted against any Indemnified Party, such Indemnified Party shall
promptly notify Issuer in writing and Issuer shall promptly assume and enter an
appropriate defense for such Indemnified Party, including the employment of
counsel (reasonably satisfactory to such Indemnified Party) and the payment of
all expenses. Such Indemnified Party shall, in its sole discretion, have the
right to employ separate counsel (who may be selected by such Indemnified Party
in its sole discretion) in any such action and to participate in the defense
thereof, and the fees and expenses of such counsel shall be paid by such
Indemnified Party, except that Issuer shall be liable for and shall pay all such
fees and expenses if (i) Issuer agrees to pay such fees and expenses, (ii)
Issuer shall fail, in the reasonable discretion of such Indemnified Party, to
employ counsel reasonably satisfactory to the Indemnified Party in any such
action or proceeding, (iii) Issuer is the plaintiff in any such action or
proceeding, or (iv) the named parties to any such action or proceeding
(including any impleaded parties) include both Indemnified Party and Issuer, and
Indemnified Party shall have been advised by counsel that there may be one or
more legal defenses available to it which are different from or additional to
those available to Issuer. All such fees and expenses payable by Issuer pursuant
to the foregoing sentence shall be paid from time to time as incurred, both in
advance of and after the final disposition of such action or claim. The
obligations of Issuer under this Section 9 shall survive any termination of this
Escrow Agreement and the resignation or removal of Escrow Agent.
11
10. Compensation to Escrow Agent.
(a) Fees. Issuer shall pay to Escrow Agent the fees set
forth in the attached Exhibit B to this Escrow Agreement.
(b) No Disbursements from Escrow Funds to Pay Escrow
Agent or Other Parties. Escrow Agent is not authorized to disburse to
itself or any other person from the Escrow Funds (i) any amounts due to
Escrow Agent or any other party under this Section 10 or (ii) any
amount Escrow Agent or any Indemnified Party is entitled to seek
pursuant to Section 9 hereof. Notwithstanding the foregoing, Escrow
Agent may hold Escrow Funds until its fees are paid by Issuer.
11. Representations and Warranties. The Issuers make the following
representations and warranties to Escrow Agent:
(a) Each Issuer is a limited liability company duly
formed and validly subsisting under the laws of the State of Colorado,
and each Issuer has full power and authority to execute and deliver
this Escrow Agreement and to perform its obligations hereunder.
(b) This Escrow Agreement has been duly approved by all
necessary limited liability company action of each Issuer, including
any necessary approval by the members of each Issuer, has been executed
by duly authorized managers of each Issuer, and constitutes a valid and
binding agreement of each Issuer, enforceable in accordance with its
terms (except as limited by bankruptcy, insolvency, or other laws
affecting the enforcement of creditors' rights).
(c) The execution, delivery and performance by each
Issuer of this Escrow Agreement will not violate, conflict with, or
cause a default under the articles of organization or the operating
agreement of either Issuer, any applicable law or regulation, any court
order or administrative ruling or decree to which either Issuer is a
party or any of its property is subject, or any agreement, contract,
indenture or other binding arrangement to which either Issuer is a
party or any of its property is subject.
(d) No party other than the parties hereto and the
prospective Subscribers have, or shall have, any lien, claim or
security interest in the Escrow Funds or any part thereof. No financing
statement under the Uniform Commercial Code is on file in any
jurisdiction claiming a security interest in or describing (whether
specifically or generally) the Escrow Funds or any part thereof.
(e) Each Issuer hereby acknowledges that the status of
Escrow Agent is that of agent only for the limited purposes set forth
herein, and hereby represents and covenants that no representation or
implication shall be made that Escrow Agent has investigated the
desirability or advisability of investment in the Membership Interests
or has approved, endorsed or passed upon the merits of the investment
therein and that the name of Escrow Agent has not and shall not be used
in any manner in connection with the offer or sale of
12
the Membership Interests other than to state that Escrow Agent has
agreed to serve as Escrow Agent for the limited purposes set forth
herein, as disclosed in the prospectus included in the Registration
Statement.
(f) All of the representations and warranties of each
Issuer contained herein are true and complete as of the date hereof and
will be true and complete at the time of any deposits to or
disbursement from the Escrow Funds.
12. Notice. All notices and other communications hereunder shall
be in writing and shall be deemed to have been validly served, given or
delivered five (5) days after deposit in the United States mail, by certified
mail with return receipt requested and postage prepaid, when delivered
personally, one (1) day after delivery to any overnight courier, or when
transmitted by facsimile transmission facilities, and addressed to the party to
be noticed as follows:
If to Issuer: North and South Aspen, L.L.C.
c/o Hotel Lenado
000 X. Xxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attn: Xx. Xxxxxx X. Xxxxxx
Fax: (000) 000-0000
With a copy to: Xxxxx X. Xxxxxxxx, Esq.
Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP
0000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
If to Underwriter: X. X. Xxxxxxx & Company
0000 Xxxxxx Xxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attn: Xx. Xxxxx X. Xxxxxxx
Fax: (000) 000-0000
With a copy to: Xxxxxx X. Xxxxxx, Esq.
Rothgerber Xxxxxxx & Xxxxx LLP
One Xxxxx Center, Suite 3000
0000 Xxxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
If to Escrow Agent: Computershare Trust Company, Inc.
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attn: Corporate Trust
Fax: (000) 000-0000
13
or to such other address as each party may designate for itself by like notice.
13. Amendments or Waiver. This Escrow Agreement may be changed,
waived or discharged only by a writing signed by all of the parties hereto. No
delay or omission by any party in exercising any right with respect thereto
shall operate as a waiver. A waiver on any one occasion shall not be construed
as a bar to, or waiver of, any right or remedy on any future occasion.
14. Severability. To the extent any provision of this Escrow
Agreement is prohibited by or invalid under applicable law, such provision shall
be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Escrow Agreement.
15. Governing Law. This Escrow Agreement shall be construed and
interpreted in accordance with the internal laws of the State of Colorado
without giving effect to the principles or rules governing conflict of laws.
16. Entire Agreement. This Escrow Agreement constitutes the entire
agreement among the parties relating to the acceptance, collection, holding,
investment and disbursement of the Escrow Funds and sets forth in its entirety
the obligations and duties of Escrow Agent with respect to the Escrow Funds.
17. Assignability. This Escrow Agreement shall not be assignable
without the written consent of all of the parties hereto.
18. Binding Effects. All of the terms of this Escrow Agreement, as
it may be amended from time to time, shall be binding upon, inure to the benefit
of and be enforceable by the respective successors and permitted assigns of
Issuer, Underwriter, Subscribers and Escrow Agent.
19. Execution in Counterparts. This Escrow Agreement may be
executed in two or more counterparts, which when so executed shall constitute
one and the same agreement.
20. Termination. This Escrow Agreement may be terminated at any
time by a written document signed by all of the parties hereto. Upon the first
to occur of (a) the disbursement of all amounts of Escrow Funds pursuant to
Section 5 hereof or (b) the disbursement of all amounts of Escrow Funds into a
court pursuant to Section 6 hereof, this Escrow Agreement shall terminate and
Escrow Agent shall have no further obligation or liability whatsoever with
respect to this Escrow Agreement or the Escrow Funds.
21. Dealings. Escrow Agent and any stockholder, director, officer
or employee of Escrow Agent may buy, sell and deal in any of the securities of
Issuer and become pecuniarily interested in any transaction in which Issuer may
be interested, and contract and lend money to Issuer and otherwise act as fully
and freely as though it were not Escrow Agent under this Escrow Agreement.
Nothing herein shall preclude Escrow Agent from acting in any other capacity for
the Subscribers or any other person or entity.
14
22. Signatures by Facsimile. Any facsimile signature of any party
hereto shall constitute a legal, valid and binding execution hereof by such
party.
[Remainder of page intentionally left blank]
15
IN WITNESS WHEREOF, the parties hereto have caused this Escrow
Agreement to be executed as of the date first above written.
ISSUER:
SARDY HOUSE, LLC, NORTH AND SOUTH ASPEN, L.L.C.,
a Colorado limited liability company a Colorado limited liability company
By: BLOCK 66, LLC, By: /s/ Xxxxxx X. Xxxxxx
a Colorado limited liability ---------------------------------
company, Xxxxxx X. Xxxxxx, Manager
its Manager
By: /s/ Xxxxxx X. Xxxxxx
---------------------------
Xxxxxx X. Xxxxxx, Manager
UNDERWRITER:
X. X. XXXXXXX & COMPANY,
a Colorado corporation
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Xxxxx X. Xxxxxxx, President
ESCROW AGENT:
COMPUTERSHARE TRUST COMPANY, INC.,
a Colorado corporation,
as Escrow Agent
By: /s/ Xxxx X. Xxxx
----------------------------
Name: Xxxx X. Xxxx
Title: Corporate Trust Officer
By: /s/ Xxxxxx Xxxxx
----------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
16
Exhibit 10.1
EXHIBIT A
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT dated as of _______________________, 200__
(the "Agreement") is by and among the undersigned subscriber (the "Subscriber"),
Sardy House, LLC, a Colorado limited liability company (the "Company"), and
North and South Aspen, L.L.C., a Colorado limited liability company ("North and
South").
RECITALS
A. The Company and North and South are conducting a public
offering (the "Offering") through X.X. Xxxxxxx & Co. (the "Underwriter") of up
to 25 units of the Company's assessable limited liability company membership
interests (the "Membership Interests"), which allow for exclusive use of the
Sardy House in Aspen, Colorado. Each Membership Interest is governed by the
terms and conditions of the Company's Operating Agreement dated as of March 21,
2003, as amended (the "Operating Agreement"). All of the Membership Interests
being offered are held by North and South.
B. The Offering price is $750,000 per Membership Interest. This
price may be changed at any time after December 19, 2003. If the price is
decreased it will be decreased for all purchasers, and if the price is increased
it will be increased for all purchasers who have not as of that date executed
subscription agreements and submitted subscription funds.
C. In connection with the Offering, the Company has filed a
Registration Statement on Form SB-2 (Registration No. 333-105521) (together with
all amendments thereto, the "Registration Statement") with the Securities and
Exchange Commission (the "SEC"). As part of the Registration Statement, the
Company has filed with the SEC a prospectus dated November 10, 2003 (the
"Prospectus") which describes the Offering, the Membership Interests and the
Company, and which contains disclosures of other important information for
investors. The Registration Statement was declared effective by the SEC on
November 10, 2003, and no stop order has been entered by the SEC as of the date
hereof.
D. As disclosed in the Prospectus, the Offering is being
conducted on a "best efforts, all or none" basis as to a minimum of seven (7)
Membership Interests necessary to allow for complete repayment of the bank debt
of up to $4,350,000 on the Sardy House property, the sale of which seven (7)
Membership Interests must result in total proceeds of a minimum of $4,665,000
before any commissions and referral fees and excluding accrued interest on the
bank debt to the repaid, and on a "best efforts" basis as to the remaining 18
Membership Interests up to the maximum of 25 Membership Interests. If a minimum
of seven (7) Membership Interests are not sold by May 31, 2004, subject to
extension in the discretion of the Company, North and South and the Underwriter
of up to an additional 30 days, the Offering will be terminated and all money
received shall be returned to investors with interest within five (5) business
days. Until
A-1
the minimum is achieved, all funds received from investors shall be deposited
into an interest bearing escrow account, with interest to be credited toward the
final purchase price.
E. The Subscriber desires to purchase one or more Membership
Interests pursuant to the terms and conditions of the Offering as disclosed in
the Prospectus, and pursuant to the terms and conditions of this Agreement,
subject to acceptance of this Agreement by the Company and North and South in
their sole discretion.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, each intending
to be legally bound hereby, agree as follows:
1. Subscription for Purchase of Membership Interests. The
Subscriber hereby subscribes for and agrees to purchase from North and South a
total of ___________ units of the Membership Interests, in exchange for cash in
the amount of $750,000 per Membership Interest, or an aggregate purchase price
of $__________________. In connection therewith, the Subscriber agrees to become
a member of the Company, subject to all of the rights and obligations of a
member under the Operating Agreement, and to execute and deliver a signature
page to the Operating Agreement upon admission as a member of the Company.
2. Payment for Purchase of Membership Interests. Full payment for
the Membership Interests subscribed for under this Agreement shall be submitted
by the Subscriber along with this Agreement to the Company or the Underwriter.
Such payment shall be in the form of either a wire transfer or a check for the
aggregate purchase price payable to "Computershare Trust Company, Inc., as
Escrow Agent for Sardy House, LLC." A wire transfer shall be directed pursuant
to wire transfer instructions that will be provided by the Company or the
Underwriter upon the Subscriber's request. A check will be promptly forwarded to
the escrow agent pursuant to the terms and conditions of an escrow agreement
filed with the SEC as an exhibit to the Registration Statement and described in
the Prospectus.
3. Representations and Warranties by Subscriber. The Subscriber
hereby makes the following representations and warranties to the Company and
North and South:
(a) Receipt and Review of Prospectus and Operating
Agreement. The Subscriber has received and carefully reviewed and
considered the Prospectus and the Operating Agreement, which were
delivered to the Subscriber at least five business days prior to the
date of this Agreement. The Subscriber understands that neither the SEC
nor any state securities regulator has approved or disapproved of the
Membership Interests or determined if the Prospectus is truthful or
complete. In making a decision to purchase the Membership Interests,
the Subscriber has relied exclusively on the information contained in
the Prospectus and the Operating Agreement.
(b) Investor Suitability. The Subscriber understands that
an investment in the Membership Interests is suitable only for persons
of substantial financial means who can
A-2
afford not only the purchase price of the Membership Interests, but
also unlimited future assessments and the possibility of a complete
loss of their investment in the Membership Interests. Accordingly, the
Subscriber represents and warrants that the Subscriber is an
"accredited investor" as defined in Rule 501 of Regulation D under the
Securities Act of 1933, as evidenced by the Subscriber's completion of
the Accredited Investor Declaration attached hereto as Exhibit A, and
that the Subscriber has the objective of making a long-term investment
in the exclusive use program for the Sardy House property and is
prepared to forego the use of the invested funds for an indefinite
period of time. In addition, to facilitate a determination by the
Underwriter that there are reasonable grounds for believing that the
purchase of the Membership Interests hereunder is suitable for the
Subscriber, the Subscriber represents and warrants that the information
furnished by the Subscriber about the Subscriber's investment
objectives, investment experience, income, net worth, financial
situation, other investments, and other relevant information through
completion of the Confidential Investor Questionnaire form attached
hereto as Exhibit B is accurate and complete in all material respects.
(c) Subscriber Can Protect Own Interests. The Subscriber
has such knowledge and experience in financial, investment and business
matters that the Subscriber is capable of evaluating the merits and
risks of an investment in the Membership Interests and of making an
informed decision in purchasing the Membership Interests.
(d) Membership Interests are Subject to Transfer
Restrictions. The Subscriber understands that the Membership Interests
are subject to certain right of first refusal transfer restrictions as
set forth in the Operating Agreement, and cannot be resold except in
compliance with the terms and conditions of the Operating Agreement. In
addition, the Subscriber understands that certificates evidencing
ownership of the securities comprising the Membership Interests will
contain a legend providing that the transfer thereof is restricted,
except in compliance with the Operating Agreement. The Subscriber also
understands that there is no public trading market for the Membership
Interests and that the Company does not expect any trading market for
the Membership Interests to develop.
(e) Subscriber Purchasing Membership Interests for Own
Account. The Subscriber is purchasing the Membership Interests for the
Subscriber's own account, and not with a view to any resale or
"distribution" of the Membership Interests within the meaning of the
Securities Act of 1933.
(f) Subscriber Able to Bear Substantial Risks. The
Subscriber is aware that an investment in the Membership Interests is
subject to substantial risks as described in the Risk Factors section
of the Prospectus. Those risk factors include the following:
(i) Neither the Company nor its affiliated
manager nor the affiliate North and South has any prior
experience operating the proposed type of exclusive use
program for the Sardy House property.
A-3
(ii) Substantial reconstruction and renovation of
the Sardy House property must be completed before the
condition and amenities of the property will be as described
in the Prospectus, and any delays in the completion of that
project will delay the closing of the Offering.
(iii) There are significant limitations on the
transferability of the Membership Interests, including the
lack of any public market and rights of first refusal held by
the Company and North and South under the Operating Agreement.
(iv) Investors will be subject to unlimited
additional assessments, including assessments for operating
expenses, repair reserves, capital improvements and operating
deficits, and investors who fail to timely pay all assessments
may forfeit their exclusive occupancy rights and be subject to
other remedies.
(v) Investors may suffer a complete loss of
their investment if other investors do not timely pay all
required assessments.
(vi) If investors choose to rent out their
exclusive occupancy weeks, they may be unable to successfully
rent those weeks and the Company's affiliated manager will
receive substantial compensation if the weeks are rented.
(vii) There are substantial conflicts of interest
between the interests of investors and those of the Company,
the manager, North and South and their affiliates, including
the incentive to obtain satisfaction of the minimum Offering
conditions to relieve affiliates' personal debt obligations,
the operation of a competing hotel in Aspen and compensation
arrangements for the renovation and management of the property
and the rental of exclusive occupancy weeks.
(viii) Investors will be purchasing their
Membership Interests for an aggregate purchase price that
significantly exceeds the book value of the Membership
Interests and the appraised value of the renovated property as
a private residence, and investors will experience immediate
and substantial dilution.
The Subscriber understands these risks and is financially capable of
bearing the economic risks and burdens of an investment in the
Membership Interests, including the possibility of a complete loss of
the entire investment. The Subscriber understands that the Operating
Agreement right of first refusal transfer restrictions and the lack of
public market for the Membership Interests may prevent the transfer of
the Membership Interests in the amounts or at the times desired by the
Subscriber. The Subscriber has adequate means of providing for the
Subscriber's current needs and contingencies, and has no need for
liquidity in the investment in Membership Interests.
A-4
(g) Realtor Referral. The Subscriber understands that, as
disclosed in the Prospectus, in the event that the Subscriber was
referred to the Company by a licensed real estate broker (a "Realtor"),
a referral fee may be paid to such Realtor upon the completion of the
sale of Membership Interests to the Subscriber under this Agreement. To
ensure that any such referral, the completion of such sale and the
payment of any such referral fee complies with securities laws, the
Subscriber hereby represents and warrants that no Realtor has:
(i) made any offer to the Subscriber for the
sale of Membership Interests or solicited any offer from the
Subscriber for the purchase of Membership Interests, to the
Subscriber's knowledge made any advertisements in connection
with the Offering, or solicited the Subscriber as a new
referral prospect with respect to the Membership Interests
with whom the Realtor did not have a pre-existing
relationship;
(ii) delivered to the Subscriber the Prospectus
or any other materials in connection with the Offering, or
directed any marketing or selling activities to the Subscriber
with respect to the Membership Interests;
(iii) become involved in the sale or negotiation
of the sale of a Membership Interest to the Subscriber, or in
the preparation of any documentation required for such sale
under applicable state law; or
(iv) made any statements or communications to the
Subscriber in connection with the Offering other than
notifying the Subscriber that the Subscriber may be contacted
by representatives of the Company.
(h) Due Execution and Enforceability. All action on the
Subscriber's part required for the due execution and delivery of this
Agreement has been effectively taken, and this Agreement represents a
valid and binding obligation of the Subscriber, enforceable in
accordance with its terms, except as limited by applicable bankruptcy,
insolvency or other laws of general application affecting the
enforcement of creditors' rights. If the Subscriber is not an
individual, the execution and delivery by the Subscriber of this
Agreement has been duly authorized by all necessary corporate or other
action on behalf of the Subscriber, the performance of this Agreement
will not constitute a breach or violation of, default under, or
conflict with, the Subscriber's governing instruments, and the
individual signing this Agreement on behalf of the Subscriber has been
duly authorized by the Subscriber to do so. If the Subscriber is a
natural person, the Subscriber is at least 21 years of age and has full
legal capacity to enter into and perform his or her obligations under
this Agreement.
(i) Residence. The residence or the office or offices of
the Subscriber in which the Subscriber's investment decision with
respect to this Agreement was made is or are located at the address of
the Subscriber set forth on the signature page hereof.
A-5
4. Continuing Effect of Representations and Warranties. The
representations and warranties set forth in Section 3 hereof shall be true and
correct as of the date hereof and as of the date of the release of funds from
escrow for the purchase by the Subscriber of the Membership Interests hereunder
and the admission of the Subscriber as a member of the Company. If in any
respect such representations and warranties are not true and accurate prior to
the release of funds from escrow and the admission of the Subscriber as a member
of the Company, the Subscriber shall give immediate written notice of such fact
to the Company, specifying which representations and warranties are not true and
accurate and the reasons therefor.
5. Acceptance of Subscription Subject to Discretion. The
Subscriber understands that this Agreement may be accepted or rejected by the
Company and North and South in their sole discretion.
6. Limited Power of Attorney to Admit Subscriber as Member of
Company. The Subscriber hereby appoints Xxxxxx X. Xxxxxx, who is the Company's
Secretary and Treasurer, to act as the Subscriber's agent and true and lawful
attorney-in-fact in the Subscriber's name, place and stead with power and
authority to admit the Subscriber as a member of the Company and to execute any
and all instruments on behalf of the Subscriber that may be required to effect
the admission of the Subscriber as a member of the Company or to otherwise
comply with applicable law regarding the Subscriber's status as a member of the
Company.
7. Certification of Taxpayer Identification Number. The
Subscriber shall execute and deliver herewith an appropriate IRS Form W-9 or
Form W-8 (or the escrow agent's substitute forms therefor if furnished to the
Subscriber by the Company or the Underwriter) with respect to the certification
of the Subscriber's Taxpayer Identification Number and backup withholding
status.
8. Binding Agreement. The Subscriber agrees that this Agreement,
upon acceptance by the Company and North and South, is and shall be irrevocable.
This Agreement shall be binding upon the heirs, executors, administrators and
successors of the Subscriber.
9. Assignability. This Agreement is not transferable or
assignable by the Subscriber.
10. Notice. All notices and other communications hereunder shall
be in writing and shall be deemed to have been validly served, given or
delivered five (5) days after deposit in the United States mail, by certified
mail with return receipt requested and postage prepaid, when delivered
personally, or one (1) day after delivery to any overnight courier. For purposes
of notice, the addresses of the parties shall be as follows:
If to the Company/North and South: Sardy House, LLC/North and South
Aspen, L.L.C.
c/o Hotel Lenado
000 X. Xxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attn: Xx. Xxxxxx X. Xxxxxx
A-6
If to the Subscriber: At the address of the Subscriber set
forth on the signature page hereof.
11. Governing Law. This Agreement shall be construed in accordance
with and governed by the laws of the State of Colorado, without regard to any
conflicts of laws provisions thereof.
12. Venue. Any suit, action or proceeding arising out of or
relating to this Agreement shall be brought and maintained in a court or other
appropriate forum of competent jurisdiction located in Denver, Colorado. Each
party hereby irrevocably waives, to the fullest extent permitted by law, any
objection which such party may now or hereafter have, to the laying of venue of
any such suit, action or proceeding brought or maintained in a court or other
appropriate forum of competent jurisdiction located in Denver, Colorado, and any
claim that any such suit, action or proceeding has been brought or maintained in
an inconvenient forum.
13. Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof.
14. Severability. To the extent that any provision of this
Agreement is prohibited by or invalid under applicable law, such provision shall
be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
15. Execution in Counterparts. This Agreement may be executed in
counterparts and signature pages may be delivered by facsimile transmission.
[Remainder of page intentionally left blank]
A-7
IN WITNESS WHEREOF, the Subscriber has executed this Subscription
Agreement on the date set forth on the following applicable signature page
hereof.
The Subscriber desires to take title in the Membership Interests as
follows (check one):
___ (a) Individual (one signature required on Page 9),
___ (b) Joint Tenants with right of survivorship (both parties
must sign on Page 10),
___ (c) Tenants in Common (both parties must sign on Page 10),
___ (d) Trust (Trustee(s) must sign on Page 11),
___ (e) Partnership (general partner(s) must sign on Page 12),
___ (f) Corporation (authorized officer must sign on Page 13),
or
___ (g) Limited Liability Company (authorized party must sign
on Page 14).
The exact spelling of the names(s) under which title to the Membership
Interests shall be taken is:
A-8
SIGNATURE PAGE
FOR INDIVIDUAL SUBSCRIBERS
SUBSCRIBER
______________________________
Signature
______________________________
Social Security Number
______________________________
Print or Type Name
Residence Address:
______________________________
______________________________
______________________________
Executed this ______ day of _______________, 200__.
Accepted:
NORTH AND SOUTH ASPEN, L.L.C.,
a Colorado limited liability company
By: _______________________________
Xxxxxx X. Xxxxxx, Manager
SARDY HOUSE, LLC,
a Colorado limited liability company
By: BLOCK 66, LLC,
a Colorado limited liability company,
its Manager
By: _____________________________
Xxxxxx X. Xxxxxx, Manager
Executed this _______ day of ______________, 200__.
A-9
SIGNATURE PAGE
FOR SUBSCRIBERS WHO ARE
JOINT TENANTS OR TENANTS IN COMMON
SUBSCRIBER SUBSCRIBER
______________________________ ______________________________
Signature Signature
______________________________ ______________________________
Social Security Number Social Security Number
______________________________ ______________________________
Print or Type Name Print or Type Name
Residence Address Residence Address
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
Executed this ___ day of _________, 200__. Executed this ___ day of _________, 200__.
Accepted:
NORTH AND SOUTH ASPEN, L.L.C.,
a Colorado limited liability company
By: _______________________________
Xxxxxx X. Xxxxxx, Manager
SARDY HOUSE, LLC,
a Colorado limited liability company
By: BLOCK 66, LLC,
a Colorado limited liability company,
its Manager
By: ___________________________
Xxxxxx X. Xxxxxx, Manager
Executed this ____ day of _________, 200__.
A-10
SIGNATURE PAGE
FOR TRUST SUBSCRIBERS
TRUST
_________________________________________________________________
Name of Trust (Please print or type)
_________________________________________________________________
Name of Trustee (Please print or type)
_________________________________________________________________
Date Trust was formed
By:_______________________________________________________________
Trustee's Signature
Taxpayer Identification Number: _____________________________
Trustee's Address: ________________________________________
________________________________________
________________________________________
Executed this ______ day of ___________, 200__.
Accepted:
NORTH AND SOUTH ASPEN, L.L.C.,
a Colorado limited liability company
By: _______________________________
Xxxxxx X. Xxxxxx, Manager
SARDY HOUSE, LLC,
a Colorado limited liability company
By: BLOCK 66, LLC,
a Colorado limited liability company,
its Manager
By: ___________________________
Xxxxxx X. Xxxxxx, Manager
Executed this ____ day of _________, 200__.
A-11
SIGNATURE PAGE
FOR PARTNERSHIP SUBSCRIBERS
PARTNERSHIP
_________________________________________________________________
Name of Partnership (Please print or type)
By: ____________________________________________________________
Signature of a General Partner
By: ____________________________________________________________
Signature of Additional General Partner
(if required by partnership agreement)
Taxpayer Identification Number: _______________________
Partnership's Address: _______________________________
_______________________________
_______________________________
Executed this ______ day of _____________, 200__.
Accepted:
NORTH AND SOUTH ASPEN, L.L.C.,
a Colorado limited liability company
By: _______________________________
Xxxxxx X. Xxxxxx, Manager
SARDY HOUSE, LLC,
a Colorado limited liability company
By: BLOCK 66, LLC,
a Colorado limited liability company,
its Manager
By: _____________________________
Xxxxxx X. Xxxxxx, Manager
Executed this ____ day of _________, 200__.
A-12
SIGNATURE PAGE
FOR CORPORATE SUBSCRIBERS
CORPORATION
________________________________________________________________
Name of Corporation (Please print or type)
By: ____________________________________________________________
Signature of Authorized Officer
Printed Name: __________________________________________________
Title: _________________________________________________________
Taxpayer Identification Number: _____________________________
Corporation Address: _____________________________
_____________________________
_____________________________
Executed this _______ day of ________________, 200__.
Accepted:
NORTH AND SOUTH ASPEN, L.L.C.,
a Colorado limited liability company
By: _______________________________
Xxxxxx X. Xxxxxx, Manager
SARDY HOUSE, LLC,
a Colorado limited liability company
By: BLOCK 66, LLC,
a Colorado limited liability company,
its Manager
By: ____________________________
Xxxxxx X. Xxxxxx, Manager
Executed this ____ day of _________, 200__.
A-13
SIGNATURE PAGE
FOR LIMITED LIABILITY COMPANY SUBSCRIBERS
LIMITED LIABILITY COMPANY
________________________________________________________________
Name of Limited Liability Company (Please print or type)
By: ____________________________________________________________
Signature of Authorized Party
Printed Name: __________________________________________________
Title: _________________________________________________________
Taxpayer Identification Number: _____________________________
Company Address: _____________________________
_____________________________
_____________________________
Executed this _______ day of ________________, 200__.
Accepted:
NORTH AND SOUTH ASPEN, L.L.C.,
a Colorado limited liability company
By: _______________________________
Xxxxxx X. Xxxxxx, Manager
SARDY HOUSE, LLC,
a Colorado limited liability company
By: BLOCK 66, LLC,
a Colorado limited liability company,
its Manager
By: ___________________________
Xxxxxx X. Xxxxxx, Manager
Executed this ____ day of _________, 200__.
A-14
Exhibit 10.1
EXHIBIT A
ACCREDITED INVESTOR DECLARATION
The undersigned represents that the undersigned qualifies as an
"accredited investor," as that term is defined in Rule 501 of Regulation D
promulgated by the Securities and Exchange Commission under the Securities Act
of 1933, as amended (the "Securities Act"), because the undersigned is:
______ (1) A natural person whose individual net worth, or joint net
worth with that person's spouse, at the time of his or her
purchase exceeds $1,000,000;
______ (2) A 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 of $300,000 in each of those years,
and has a reasonable expectation of reaching those levels in
the current year;
______ (3) A trust, with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the securities
offered, whose purchase is directed by a sophisticated person
as described in Section (b)(2)(ii) of Rule 506 of Regulation D
under the Securities Act;
______ (4) A corporation, organization described in Section 501(c)(3)
of the Internal Revenue Code, 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;
______ (5) An entity in which all of the equity owners are accredited
investors;
______ (6) A bank as defined in Section 3(a)(2) of the Securities Act, or
a 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; a broker or dealer
registered pursuant to Section 15 of the Securities Exchange
Act of 1934; an insurance company as defined in Section 2(13)
of the Securities Act; an investment company registered under
the Investment Company Act of 1940 or a business development
company as defined in Section 2(a)(48) of the Securities Act;
a Small Business Investment Company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958; a 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; an 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
AA-1
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;
______ (7) A private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940; or
______ (8) A director, executive officer, or general partner of the
issuer of the securities being offered or sold, or any
director, executive officer, or general partner of a general
partner of that issuer.
Date: _________________, 200__
Signed: _________________________________________
By: _____________________________________
Printed Name: ___________________________
Title: __________________________________
Address: _________________________________________
_________________________________________
_________________________________________
_________________________________________
Tax Identification Number: _________________________________
AA-2
Exhibit 10.1
EXHIBIT B
SARDY HOUSE, LLC
Confidential Investor Questionnaire For Individuals
The primary purpose of this Confidential Investor Questionnaire is to
assure Sardy House, LLC, a Colorado limited liability company (the "Company")
and X.X. Xxxxxxx & Co. (the "Underwriter") that the prospective investor in the
Units (the "Units" or the "Securities") of the Company will be eligible to
invest in the Securities.
Please print or type your answers. If the answer to any questions is
"No" or "Not Applicable," please so state. Please provide information for all
subscribers, using separate questionnaires if necessary. Please do not combine
or consolidate financial information of co-subscribers, except that of your
spouse.
Except as set forth herein, your answers will at all times be kept
confidential. By signing this Confidential Investor Questionnaire, however, you
understand and agree that (i) the Underwriter is relying on the accuracy, truth
and completeness of your representations and statements set forth in your
response in this Confidential Investor Questionnaire, the Subscription Agreement
and any other document delivered by you to the Company and Underwriter in
determining whether the offer and sale of the Securities comply with applicable
federal and state securities laws, (ii) if your representations and statements
are not accurate, truthful and complete, you or the Company, or both, may be
found to be in violation of federal or state securities laws, and (iii) the
Company and Underwriter may present this Confidential Investor Questionnaire,
and other documents delivered by you to the Company or Underwriter, to the
appropriate parties if the Company or Underwriter is called upon to establish
the availability of exemptions from registration and other compliance with
federal and state securities laws and for other appropriate purposes.
The entire Confidential Investor Questionnaire For Individuals,
consisting of PART I and PART II, must be completed by all individual Investors.
PART I
1. General Information
Name of Investor: ____________________________________________
If ownership of the Securities will be held in the name of two or more
individuals, complete the following information for each of the other co-owners:
Name: __________________________________________________________________________
Home Address: __________________________________________________________________
________________________________________________________________________________
Mailing Address (complete if different from home address below):
________________________________________________________________________________
AB-1
Relationship to subscriber: _____ Spouse _____ Parent
_____ Child _____ Other Blood Relative
_____ Other (please specify)
_________________________________________
2. Employment and Business Information
Occupation or Profession: _____________________________________________
Name of Current Employer: _____________________________________________
Business Address: _____________________________________________________
_______________________________________________________________________
Business Telephone: ___________________________________________________
Current Position or Title: ____________________________________________
Principal Responsibilities: ___________________________________________
_______________________________________________________________________
Period Employed by Current Employer: __________________________________
3. Investment Objectives (Subscriber, Not Custodian):
Order of INVESTMENT OBJECTIVES of Subscriber Secondary Residence Opportunity: ______
[or of minor(s), not custodian]: Number
preferences from 1 (most preferred) to 3 Long Term Capital Appreciation: ______
(least preferred). Reminder: This investment
is most appropriate for persons seeking Current income: ______
primarily a long-term secondary residence
opportunity and secondarily possible long-term Liquidity: ______
capital appreciation associated with such
residence. Other: ______
4. Financial Information
a. Annual income: $_____________________
b. Net Worth: $_____________________
c. Do you have adequate means of providing for your current needs
and personal contingencies and no need for liquidity for your
investment?
Yes ____ No _____
AB-2
d. Are you able to bear the economic risk of an investment in the
Company of the size contemplated, including a complete loss of
your investment?
Yes ____ No_____
5. Educational Background
MAJOR (AREA OF
COLLEGE OR UNIVERSITY STUDY) DEGREE(S)
__________________________ _______________ ______________
__________________________ _______________ ______________
__________________________ _______________ ______________
6. Business Experience
Please provide details of any professional licenses, registrations or
other training or experience (including courses or seminars attended)
in financial, business or tax matters:
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
7. Ability to Make Investment Decisions
a. Do you have such knowledge and experience in financial matters
that you are capable of evaluating the merits and risks of
your prospective investment in the Company?
Yes ______ No ______
b. If the answer to (a) is No, do you intend to use a purchaser
representative together with whom you would be capable of
evaluating the merits and risks of your prospective investment
in the Company?
Yes _____ No _____
AB-3
PART II
(To Be Completed By All Investors)
8. Prior Investments
Have you previously purchased securities in a private placement or
securities which were otherwise subject to substantial limitations on
transferability?
Yes _____ No _____
Have you previously invested in private companies, speculative
ventures or ventures with no history of earnings from operations?
Yes _____ No _____
Other Investments: Current Market Value
------------------ --------------------
a. Real estate, other than principal residence (directly or
through partnerships or other entities managed by others) ___________________
b. Tax shelter programs (real estate, leasing, oil & gas, cattle) ___________________
c. Marketable securities (stocks, bonds, debentures, notes, cash) ___________________
d. Speculative or venture capital investments ___________________
e. Other private investment funds (hedge funds, commodity pools) ___________________
9. Purchaser Representative
Do you intend to use the services of a Purchaser Representative in
connection with evaluating the merits and risks of an investment in
the Company?
Yes _____ No _____
If "Yes", please state the name of the Purchaser
Representative:
______________________________________________________________
10. Taxable Year (check one): [ ] Calendar Year
[ ] Fiscal Year Ending ____________________
11. Agreements
The undersigned hereby understands, represents, warrants and agrees
to the following:
a. The information contained in this Confidential Investor
Questionnaire is true, complete and accurate and may be
relied upon by the Underwriter in determining the
undersigned's
AB-4
suitability as a purchaser of the Securities of the Company
and in establishing compliance with federal and state
securities laws;
b. The undersigned understands that any information contained in
this Confidential Investor Questionnaire that is untrue,
incomplete or inaccurate may result in the undersigned or the
Company, or both, being in violation of federal and state
securities laws, and that by subscribing to purchase the
Securities of the Company and executing this Confidential
Investor Questionnaire and the Subscription Agreement
contained in this Subscription Packet, the undersigned is
agreeing to indemnify the Company and Underwriter from damages
arising from those statements or from other matters;
c. The undersigned understands that a false statement or
representation may constitute a violation of law, and that any
person who suffers damage as a result of a false statement or
representation, may have claims against the undersigned for
damages;
d. The undersigned will notify the Underwriter immediately of any
material change in any of such information occurring prior to
the acceptance of the undersigned's subscription;
e. The undersigned understands that the Underwriter may request
further information in order to determine the suitability of
the undersigned's subscription and in establishing compliance
with federal and state securities laws. The undersigned shall
furnish this additional information promptly if the
undersigned desires to have the undersigned's subscription
considered further; and
f. The undersigned knows of no pending or threatened litigation
the outcome of which could adversely affect the answer to any
questions hereunder.
IN WITNESS THEREOF, the undersigned has completed the
foregoing statements and executed this Confidential Investor
Questionnaire this _____ day of __________, 200_.
_____________________________ ___________________________
Signature of Investor Printed name of Investor
_____________________________ ___________________________
Signature of co-owner (if interest to Print name of co-owner (if
be purchased in joint name or as interest to be purchased in
community property) joint name or as community
property)
AB-5
SARDY HOUSE, LLC
Confidential Investor Questionnaire for Entities
The primary purpose of this Confidential Investor Questionnaire is to assure
Sardy House, LLC, a Colorado limited liability company (the "Company") and X.X.
Xxxxxxx & Co (the "Underwriter"), that the prospective Investor in the Units
(the "Units" or the "Securities") of the Company will be eligible to invest in
the Securities.
Please print or type your answers. If the answer to any question is "No" or "Not
Applicable," please so state. Please provide information for all subscribers,
using separate questionnaires if necessary. Please do not combine or consolidate
financial information of co-subscribers.
Except as set forth herein, your answers will at all times be kept confidential.
By signing this Confidential Investor Questionnaire, however, you understand and
agree that (i) the Underwriter is relying on the accuracy, truth and
completeness of your representations and statements set forth in your responses
to this Confidential Investor Questionnaire, the Subscription Agreement and any
other document delivered by you to the Company and Underwriter in determining
whether the offer and sale of the Securities comply with applicable federal and
state securities laws, (ii) if your representations or responses are not
accurate, truthful and complete, you or the Company, or both, may be found to be
in violation of federal and state securities laws, and (iii) the Company and
Underwriter may present this Confidential Investor Questionnaire, and other
documents delivered by you to the Company and Underwriter, to the appropriate
parties if the Company or Underwriter is called upon to establish the
availability of exemptions from registration and other compliance with federal
and state securities laws and for other appropriate purposes.
The entire Confidential Investor Questionnaire, consisting of PART I, PART II
and PART III, must be completed by all Investors.
PARTNERSHIPS, CORPORATIONS, OTHER ENTITIES AND TRUSTS: If the Investor is a
partnership, this Confidential Investor Questionnaire should be completed by a
general partner of the partnership. If the Investor is a corporation or other
type of entity, this Confidential Investor Questionnaire should be completed by
the authorized officer or other person who is empowered to make the investment
decision on behalf of the corporation or other type of entity. If the Investor
is a trust, this Confidential Investor Questionnaire should be completed by the
trustee or the trustee's authorized representative. If the Investor is a limited
liability company (an "LLC"), this Confidential Investor Questionnaire should be
completed by the manager or the managing member of the LLC. In addition, each
partner of an investing partnership, each shareholder of an investing
corporation, each equity owner of an entity and each beneficiary of an investing
trust, may be required to complete a duplicate copy of PARTS I, II and III in
their entirety, if deemed necessary by the Company. FOR EXAMPLE, IN THE EVENT
THAT THE INVESTING ENTITY WAS FORMED FOR THE SPECIFIC PURPOSE OF MAKING THIS
INVESTMENT, EACH EQUITY OWNER OF SUCH ENTITY IS REQUIRED TO COMPLETE A SEPARATE
CONFIDENTIAL INVESTOR QUESTIONNAIRE TO ENSURE COMPLIANCE WITH APPLICABLE
SECURITIES LAWS.
AB-6
PART I
1. General Information
Name of Investor: _____________________________________________________
If ownership of the Securities will be held in the name of two or more entities
or persons, complete the following information for each of the other co-owners.
Name: __________________________________________________________________________
Street Address: ________________________________________________________________
________________________________________________________________________________
Mailing Address (complete only if different from street address above):
________________________________________________________________________________
________________________________________________________________________________
2. Business Information
Type of Business of Investor: _________________________________________
_______________________________________________________________________
_______________________________________________________________________
Period In Business: ___________________________________________________
3. Investment Objectives (Subscriber, Not Custodian):
Order of INVESTMENT OBJECTIVES of Subscriber [or Secondary Residence Opportunity: ______
of minor(s), not custodian]: Number preferences
from 1 (most preferred) to 3 (least preferred). Long Term Capital Appreciation: ______
Reminder: This investment is most appropriate
for persons seeking primarily a long-term Current income: ______
secondary residence opportunity and secondarily
possible long-term capital appreciation Liquidity: ______
associated with such
residence. Other: ______
4. Financial Information
a. Does the Investor have adequate means of providing for its
current needs and contingencies and no need for liquidity in
its investments?
Yes ______ No ______
b. Is the Investor able to bear the economic risk of an
investment in the Company of the size contemplated, including
a complete loss of its investment?
Yes _____ No _____
AB-7
PART II
5. General Information
a. Type of entity making investment (bank, insurance company,
corporation, partnership, LLC, trust, etc.):
______________________________________________________________
______________________________________________________________
______________________________________________________________
b. Date of Formation: ___________________________________________
c. Purpose of formation (please note particularly whether the
purpose is to make this investment):
______________________________________________________________
______________________________________________________________
d. If the entity is a partnership or taxed as a partnership
(including most LLCs), please list the name of the partners:
______________________________________________________________
6. Investment Authority
In order to establish that the Investor is authorized to invest in the
Securities, the following must be furnished:
a. Partnerships and LLCs must attach to this Confidential
Investment Questionnaire a copy of the partnership agreement
or operating agreement (together with articles of formation),
which may show that the person signing the subscription
documents is a general partner of the partnership or manager
(or managing member) of the LLC who has the authority to make
the investment decision and to execute the agreement.
b. Corporations must attach to this Confidential Investor
Questionnaire a certified copy of a resolution of the board of
directors showing that the corporation is authorized to make
this investment and that the person who is signing this
Confidential Investor Questionnaire and the other subscription
documents is authorized to do so.
c. Trusts must attach to this Confidential Investor Questionnaire
a copy of the trust agreement.
In addition, you may be required to provide additional
information with respect to investment authority including,
without limitation, an opinion of counsel.
AB-8
7. Investment Decision
If the entity is a partnership, did each partner elect whether to
participate in the partnership's investment in the Securities?
Yes ______ No _____
If the answer is yes, please state the number of partners who elected
to participate in this investment: _________________.
If the entity is a trust, may the trust be amended or revoked at any
time by the grantor(s)?
Yes _____ No _____
8. Ability to Make Investment Decisions
a. Do you have such knowledge and experience in financial matters
that you are capable of evaluating the merits and risks of the
prospective investment in the Company?
Yes _____ No _____
b. If the answer to (a) is No, do you intend to use a purchaser
representative together with whom you would be capable of
evaluating the merits and risks of the prospective investment
in the Company?
Yes _____ No _____
9. Representations and Warranties
The undersigned represents and warrants as follows:
a. The entity has been duly formed and is validly existing and in
good standing under the laws of the jurisdiction of its
formation with full power and authority to enter into the
transactions contemplated by the Subscription Agreement;
b. (i) The entity's officers, partners, managers (or
managing members) or trustees of the undersigned who,
on behalf of the undersigned, have considered the
purchase of the Securities and the advisors, if any,
of the corporation, partnership, LLC or trust or
other entity in connection with such consideration in
this Confidential Investor Questionnaire, and such
officers and advisors, if any, were duly authorized
to act for the corporation, partnership, LLC or trust
or other entity in reviewing such investment; and
(ii) In evaluating the merits and risks of the purchase of
the Securities, the corporation, partnership, LLC,
trust or other entity intends to rely upon the advice
of, or will consult with, the following persons:
c. The officers of the corporation, the partners of the
partnership, the manager (or managing member) of the LLC or
the trustees of the trust or other authorized representative
of the entity who, on its behalf, have considered the purchase
of the Securities and the advisors, if any, of the
corporation, partnership, LLC or trust or other entity who, in
connection with
AB-9
such consideration, together have such knowledge and
experience in financial and business matters that such
officer(s), partner(s), manager(s)/managing member(s),
trustee(s) and such advisor(s), if any, together are capable
of evaluating the merits and risks of purchase of the
Securities and of making an informed investment decision.
10. Accredited or Unaccredited Investor
The investor is:
____ A bank as defined in Section 3(a)(2) of the
Securities Act of 1933 (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 an individual or fiduciary
capacity;
____ A broker or dealer registered pursuant to Section 15
of the Securities Exchange Act of 1934;
____ An insurance company as defined in Section 2(13) of
the Securities Act;
____ An investment company registered under the Investment
Company Act of 1940 or a business development company
as defined in Section 2(a)(48) of that Act;
____ A Small Business Investment Company licensed by the
U.S. Small Business Administration under Section
301(c) or (d) of the Small Business Investment Act of
1958;
____ A 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;
____ An 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;
____ A private business development company as defined in
Section 202(a)(22) of the Investment Advisers Act of
1940;
____ An organization described in Section 501(c)(3) of the
Internal Revenue Code, corporation, Massachusetts or
similar business trust, or partnership, not formed
for the specific purpose of acquiring the securities
offered, with total assets in excess of $5,000,000;
____ A trust, with total assets in excess of $5,000,000,
not formed for the specific purpose of acquiring the
securities offered, whose purchase is directed by a
sophisticated person who has such knowledge and
experience in financial business matters that such
person is capable of evaluating the risks and merits
of an investment in the Securities;
AB-10
____ An entity in which all of the equity owners are
accredited investors; or
____ None of the above.
PART III
11. Prior Investments
Has the Investor previously purchased securities in a private placement
or securities which were otherwise subject to substantial limitations
on transferability?
Yes_____ No ______
Other Investments: Current Market Value
------------------ --------------------
a. Real estate, other than principal residence (directly or
through partnerships or other entities managed by others) ___________________
b. Tax shelter programs (real estate, leasing, oil & gas, cattle) ___________________
c. Marketable securities (stocks, bonds, debentures, notes, cash) ___________________
d. Speculative or venture capital investments ___________________
e. Other private investment funds (hedge funds, commodity pools) __________________
12. Purchaser Representative
Does the Investor intend to use the services of a Purchaser
Representative in connection with evaluating the merits and risks of an
investment in the Company?
Yes _____ No ______
If "Yes", please state the name of the Purchaser Representative:
____________________________________________________
13. Taxable Year (check one): [ ] Calendar Year
[ ] Fiscal Year Ending ____________________
14. Agreements
The undersigned hereby represents warrants and agrees to the following:
a. The information contained in this Confidential Investor
Questionnaire is true, complete and accurate and may be relied
upon by the Underwriter in determining the undersigned's
suitability as a purchaser of the Securities of the Company
and in establishing compliance with federal and state
securities laws;
AB-11
b. The undersigned understands that any information contained in
this Confidential Investor Questionnaire that is untrue,
incomplete or inaccurate may result in the undersigned or the
Company, or both, being in violation of federal or state
securities laws, and that by subscribing to purchase the
Securities of the Company and executing this Confidential
Investor Questionnaire and the Subscription Agreement
contained in this Subscription Packet, the undersigned is
agreeing to indemnify the Company and Underwriter from damages
arising from those statements or from other matters;
c. The undersigned understands that a false statement or
representation may constitute a violation of law, and that any
person who suffers damage as a result of a false statement or
representation may have a claim against the undersigned for
damages;
d. The undersigned will notify the Underwriter immediately of any
material change in any of such information occurring prior to
the acceptance of the undersigned's subscription;
e. The undersigned understands that the Underwriter may request
further information in order to determine the suitability of
the undersigned's subscription and in establishing compliance
with federal and state securities laws. The undersigned will
furnish this additional information promptly if the
undersigned desires to have the undersigned's subscription
considered further; and
f. The undersigned know of no pending or threatened litigation
the outcome of which could adversely affect the answer to any
questions hereunder.
IN WITNESS WHEREOF, the undersigned has completed the
foregoing statements and executed this Confidential Investor
Questionnaire this ____ day of ____________, 200_.
________________________________
Printed Name of Investor Entity
BY: ________________________________ ________________________________
Signature of Investor's Authorized Print Name and Title of Investor's
Representative Authorized Representative
AB-12
SARDY HOUSE, LLC
Purchaser Representative Questionnaire
To be completed on behalf of all Investors who
are utilizing a Purchaser Representative
Please Print or Type:
Name of Investor: ______________________________________________________________
The following information pertains to the Purchaser Representative advising the
Investor:
Name: __________________________________________________________________________
Business Address: ______________________________________________________________
________________________________________________________________________________
Age: ____________ Business Telephone: ____________
1. State your present occupation or position, indicating period of such
practice or employment and field or professional specialization, if
any:
2. State your educational background, including any business or
professional education, including degrees received, if any:
3. Describe your prior experience in advising clients with respect to
investments of this type:
4. List any professional licenses or registrations (including bar
admissions, accountant certifications, real estate brokerage licenses,
SEC or state broker-dealer registrations) held by you:
5. Describe generally any business, financial or investment experience
that would help you to evaluate the merits and risks of this
investment:
6. State your relationship (family, business, professional, etc.) with the
Investor:
7. State whether you or any of your affiliates have any material
relationship with Sardy House, LLC (the "Company") or any affiliates of
the Company, whether any such material relationship is understood to be
contemplated or has been in effect during the last two years. If so,
describe
AB-13
the nature of the relationship and indicate the amount of compensation
received or to be received as a result of the relationship:
8. State whether, in advising the Investor in connection with the
investment in the Company, you will be relying in part on the
Investor's own experience in certain areas. If so, describe the areas
where you will be relying on the Investor's expertise:
9. State whether, in advising the Investor in connection with the
investment in the Company, you will be relying in part upon the
expertise of an additional representative. If so, give the name and
address of that additional representative and describe the area for
which you will be relying on his expertise:
I understand that the Company will be relying on the accuracy and
completeness of my responses to the foregoing questions and I represent
and warrant to it as follows:
a. I am acting as a representative for the above-named Investor
in connection with an investment in the Company;
b. the answers to the above questions are complete and correct
and may be relied upon in determining whether the offering in
connection with which I have executed this Purchaser
Representative Questionnaire is exempt from registration under
the Securities Act of 1933, as amended, pursuant to Regulation
D thereunder or otherwise;
c. I will notify the Underwriter immediately of any material
change in any statement made herein occurring prior to the
closing of any purchase by the Investor of an interest in the
Company; and
d. I personally (or, if I have responded in the affirmative in
response to questions 8 and 9 above, together with the
Investor or the additional representatives indicated above)
have such knowledge and experience in financial and business
matters that I am capable of evaluating the merits and risks
of an investment in the Company.
I have executed this Purchaser Representative Questionnaire this ____ day of
______________, 200_.
_____________________________________
Signature of Purchaser Representative
______________________________________
Print Name of Purchaser Representative
AB-14
Exhibit 10.1
EXHIBIT B
COMPUTERSHARE TRUST COMPANY, INC.
SARDY HOUSE, LLC
ESCROW AGENT FEE SCHEDULE
Account Acceptance and Annual Administrative Fee $5,000
The above fee includes the following services:
- Receipt of the Subscription Agreements
- Processing the Subscription Funds
- Verification of the Collection of Subscription Funds
Subscription Agreements Received and Reviewed $10 each.
Deposit for Return of Funds to Subscribers $150
Return of Funds to Subscribers $20 each
The above fee is required in the event the following services are
required:
- Check issuance
- Calculation of Interest earned and paid to Subscribers
- 1099's issued to Subscribers
- Bank Reconciliation
- Stationary and Supply Expense
- Out-of-Pocket Expense
Tax Reporting - Transmittal of Information to IRS $250
1099 Issuance $1.75 per form
Out-of-Pocket Expenses At cost
- Included but not limited to: attorney fees, printing, stationary,
express mail charges, wire transfer fees and postage.
THE ACCEPTANCE, ANNUAL AND DEPOSIT FEES ARE PAYABLE AT THE CLOSING OF THE
ESCROW. Special or extraordinary events, such as amendments to the documents or
disputes are not included in the above fees, and we reserve the right to charge
an additional amount based on the time incurred in handling such events should
they occur. Late charges are 1 1/2% per month on outstanding balances owing 45
days from date of invoice.
B-1
