Exhibit 10.13
[FORM OF SUBSCRIPTION AGREEMENT]
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 _________________. 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 ___________________, 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
____________________, 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 _____________, 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 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 to the
following account:
Bank: _____________________________________
ABA #: ____________________________________
Account #: _________________________________
Account Name: Computershare Trust Company, Inc., as Escrow
Agent for Sardy House, LLC
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
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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 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:
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(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.
(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
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adequate means of providing for the Subscriber's current needs and
contingencies, and has no need for liquidity in the investment in
Membership Interests.
(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.
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 Sardy House, LLC/North and South
and South: Aspen, L.L.C.
c/o Hotel Lenado
000 X. Xxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attn: Xx. Xxxxxx X. Xxxxxx
If to the Subscriber: At the address of the Subscriber
set forth on the
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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]
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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:
--------------------------------------------------------------------------------
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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__.
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__.
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__.
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__.
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__.
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__.
14
EXHIBIT A
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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 the
employee benefit plan has total assets in excess of $5,000,000
or, if a self-
A-1
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:
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A-2
EXHIBIT B
SARDY HOUSE, LLC
Confidential Investor Questionnaire For Individuals
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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
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1. General Information
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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:
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Home Address:
----------------------------------------------------------------
-----------------------------------------------------------------------------
Mailing Address (complete if different from home address below):
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B-1
Relationship to subscriber: Spouse Parent
----- -----
Child Other Blood Relative
----- -----
Other (please specify)
-----
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2. Employment and Business Information
-----------------------------------
Occupation or Profession:
--------------------------------------------
Name of Current Employer:
--------------------------------------------
Business Address:
---------------------------------------------------
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Business Telephone:
---------------------------------------------------
Current Position or Title:
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Principal Responsibilities:
------------------------------------------
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Period Employed by Current Employer:
--------------------------------
3. Investment Objectives (Subscriber, Not Custodian):
---------------------
Order of INVESTMENT Secondary Residence Opportunity: ______
OBJECTIVES of
Subscriber [or of Long Term Capital Appreciation: ______
minor(s), not
custodian]: Number Current income: ______
preferences from 1
(most preferred) to 3 Liquidity: ______
(least preferred).
Reminder: This Other: ______
investment is most
appropriate for
persons seeking
primarily a long-term
secondary residence
opportunity and
secondarily possible
long-term capital
appreciation
associated with such
residence.
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 _____
B-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:
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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 _____
B-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
B-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
be purchased in joint name or as (if interest to be
community property) purchased in joint name or
as community property)
B-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.
B-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 Secondary Residence Opportunity: ______
OBJECTIVES of
Subscriber [or of Long Term Capital Appreciation: ______
minor(s), not
custodian]: Number Current income:
preferences from 1 ______
(most preferred) to 3
(least preferred).
Reminder: This Liquidity: ______
investment is most
appropriate for Other: ______
persons seeking ------
primarily a long-term
secondary residence
opportunity and
secondarily possible
long-term capital
appreciation
associated with such
residence.
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?
B-7
Yes _____ No _____
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.
B-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,
B-9
if any, of the corporation, partnership, LLC or trust or other
entity who, in connection with 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
B-10
business matters that such person is capable of
evaluating the risks and merits of an investment in
the Securities;
____ 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
B-11
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 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
Representative of Investor's
Authorized Representative
B-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 the
B-13
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
B-14
