EXHIBIT 99.5
STANSBURY HOLDINGS CORPORATION
NOTE OFFERING MEMORANDUM
CALIFORNIA INVESTORS:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE CALIFORNIA CORPORATIONS CODE BY REASON OF SPECIFIC
EXEMPTIONS THEREUNDER RELATING TO THE LIMITED AVAILABILITY OF THE OFFERING.
THESE SECURITIES CANNOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF TO ANY
PERSON OR ENTITY UNLESS SUBSEQUENTLY REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE CALIFORNIA CORPORATIONS CODE, IF SUCH REGISTRATION IS
REQUIRED.
DELAWARE INVESTORS:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE DELAWARE SECURITIES ACT BY REASON OF SPECIFIC
EXEMPTIONS THEREUNDER RELATING TO THE LIMITED AVAILABILITY OF THE OFFERING.
THESE SECURITIES CANNOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF TO ANY
PERSON OR ENTITY UNLESS SUBSEQUENTLY REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE DELAWARE SECURITIES ACT, IF SUCH REGISTRATION IS
REQUIRED.
FLORIDA INVESTORS:
EACH FLORIDA RESIDENT WHO SUBSCRIBES FOR THE PURCHASE HEREIN HAS THE
RIGHT, PURSUANT TO SECTION 517.061(11)(A)5 OF THE FLORIDA STATUTES (THE "FLORIDA
SECURITIES INVESTOR PROTECTION ACT"), TO WITHDRAW HIS SUBSCRIPTION FOR THE
PURCHASE WITHIN THREE BUSINESS DAYS AFTER THE EXECUTION AND DELIVERY OF THE
SUBSCRIPTION AGREEMENT OR PAYMENT FOR THE SECURITIES HAS BEEN MADE, WHICHEVER IS
LATER, AND RECEIVE A FULL REFUND OF ALL MONIES PAID. WITHDRAWAL AND REFUND WILL
BE WITHOUT ANY FURTHER LIABILITY TO ANY PERSON. TO ACCOMPLISH THIS WITHDRAWAL, A
SUBSCRIBER MUST SEND A LETTER OR FAX TO THE COMPANY AT 676 LOUIS DRIVE,
WARMINSTER, PENNSYLVANIA 18974, FAX NO.(215) 328-9560, INDICATING HIS INTENTION
TO WITHDRAW. SUCH LETTER MUST BE SENT AND POSTMARKED, AND ANY FAX, COURIER OR
HAND DELIVERY MUST BE RECEIVED, PRIOR TO THE END OF THE AFOREMENTIONED THIRD
BUSINESS DAY. IT IS PRUDENT TO SEND SUCH LETTER BY CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO ENSURE THAT IT IS RECEIVED AND ALSO TO EVIDENCE THE TIME
IT WAS MAILED, UNLESS SAME IS PERSONALLY DELIVERED. IF THE REQUEST IS MADE
VERBALLY TO THE COMPANY (IN PERSON OR BY TELEPHONE TO AN OFFICER OR DIRECTOR OF
THE COMPANY AT (215) 328-9566, A WRITTEN
CONFIRMATION THAT THE REQUEST HAS BEEN RECEIVED SHOULD BE
REQUESTED.
MARYLAND INVESTORS:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE MARYLAND SECURITIES ACT BY REASON OF SPECIFIC
EXEMPTIONS THEREUNDER RELATING TO THE LIMITED AVAILABILITY OF THE OFFERING.
THESE SECURITIES CANNOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF TO ANY
PERSON OR ENTITY UNLESS SUBSEQUENTLY REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE MARYLAND SECURITIES ACT, IF SUCH REGISTRATION IS
REQUIRED.
MASSACHUSETTS INVESTORS:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE MASSACHUSETTS SECURITIES ACT BY REASON OF SPECIFIC
EXEMPTIONS THEREUNDER RELATING TO THE LIMITED AVAILABILITY OF THE OFFERING.
THESE SECURITIES CANNOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF TO ANY
PERSON OR ENTITY UNLESS SUBSEQUENTLY REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE MASSACHUSETTS SECURITIES ACT, IF SUCH REGISTRATION IS
REQUIRED.
MINNESOTA INVESTORS:
THESE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER CHAPTER 80A OF THE MINNESOTA SECURITIES LAWS AND MAY NOT BE
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO REGISTRATION OR AN
EXEMPTION THEREFROM.
NEW JERSEY INVESTORS:
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE BUREAU OF
SECURITIES OF THE STATE OF NEW JERSEY, NOR HAS THE BUREAU PASSED ON OR ENDORSED
THE MERITS OF THIS OFFERING. THE FILING OF THE OFFERING WITHIN DOES NOT
CONSTITUTE APPROVAL OF THE ISSUE OR THE SALE THEREOF BY THE BUREAU OF
SECURITIES. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
OKLAHOMA INVESTORS:
THESE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE OKLAHOMA SECURITIES ACT. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED
FOR VALUE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION OF THEM UNDER THE
SECURITIES ACT OF 1933 AND/OR THE OKLAHOMA SECURITIES ACT, OR AN OPINION OF
COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED UNDER
SUCH ACT OR ACTS.
PENNSYLVANIA INVESTORS:
UNDER THE PROVISIONS OF SECTION 207(M)(2) OF THE PENNSYLVANIA
SECURITIES ACT OF 1972, A PENNSYLVANIA RESIDENT WHO ACCEPTS AN OFFER TO PURCHASE
SECURITIES EXEMPTED FROM REGISTRATION BY SECTION 203(D) DIRECTLY FROM AN ISSUER
OR AFFILIATE OF AN ISSUER SHALL HAVE THE RIGHT TO WITHDRAW HIS ACCEPTANCE
WITHOUT INCURRING ANY LIABILITY TO THE SELLER OR ANY OTHER PERSON WITHIN TWO
BUSINESS DAYS FROM THE DATE OF RECEIPT BY THE ISSUER OF HIS WRITTEN BINDING
CONTRACT OF PURCHASE OR, IN THE CASE OF A TRANSACTION IN WHICH THERE IS NO
WRITTEN BINDING CONTRACT OF PURCHASE, WITHIN TWO BUSINESS DAYS AFTER HE MAKES
THE INITIAL PAYMENT FOR THE SECURITIES BEING OFFERED.
EACH PERSON ENTITLED TO EXERCISE THE RIGHT TO WITHDRAW GRANTED BY
SECTION 207(M), AND WHO WISHES TO EXERCISE SUCH RIGHT, MUST WITHIN THE
AFOREMENTIONED TWO BUSINESS DAYS CAUSE A WRITTEN NOTICE OR TELEGRAM TO BE SENT
TO THE COMPANY AT THE ADDRESS PROVIDED IN THE PLACEMENT OFFERING MEMORANDUM
INDICATING HIS INTENTION TO WITHDRAW. SUCH LETTER OR TELEGRAM MUST BE SENT AND
POSTMARKED ON OR PRIOR TO THE AFOREMENTIONED SECOND BUSINESS DAY. IF YOU ARE
SENDING A LETTER, IT IS PRUDENT TO SEND IT BY CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO ENSURE THAT IT IS RECEIVED AND ALSO TO EVIDENCE THE TIME IT WAS
MAILED. SHOULD YOU MAKE THIS REQUEST ORALLY, YOU MUST ASK FOR WRITTEN
CONFIRMATION THAT YOUR REQUEST HAS BEEN RECEIVED.
ALL PENNSYLVANIA INVESTORS WILL BE REQUIRED TO AGREE IN WRITING THAT
THEY WILL NOT SELL THESE shares WITHIN TWELVE MONTHS AFTER THE DATE OF PURCHASE
OF SUCH shares.
RHODE ISLAND INVESTORS:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE RHODE ISLAND UNIFORM SECURITIES ACT
BY REASON OF SPECIFIC EXEMPTIONS THEREUNDER RELATING TO THE LIMITED AVAILABILITY
OF THE OFFERING. THESE SECURITIES CANNOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF TO ANY PERSON OR ENTITY UNLESS SUBSEQUENTLY REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE RHODE ISLAND UNIFORM SECURITIES ACT,
IF SUCH REGISTRATION IS REQUIRED.
TEXAS INVESTORS:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE TEXAS SECURITIES ACT, BY REASON OF SPECIFIC EXEMPTIONS
THEREUNDER RELATING TO THE LIMITED AVAILABILITY OF THE OFFERING. THESE
SECURITIES CANNOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF TO ANY PERSON OR
ENTITY UNLESS SUBSEQUENTLY REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF TEXAS, IF SUCH REGISTRATION IS REQUIRED. THE
UNITS OFFERED HEREBY ARE BEING OFFERED AND SOLD IN TEXAS IN RELIANCE UPON THE
EXEMPTION UNDER SECTION 109.13 OF THE TEXAS SECURITIES ACT. TEXAS INVESTORS ARE
SUBJECT TO THE ADDITIONAL SUITABILITY REQUIREMENT IMPOSED BY THE REGULATIONS OF
THE TEXAS SECURITIES BOARD; THE TOTAL COST OF THE PROPOSED INVESTMENT SHALL NOT
EXCEED 20% OF THE INVESTOR'S NET WORTH (OR JOINT NET WORTH WITH THE INVESTOR'S
SPOUSE) AT THE TIME OF SALE.
VIRGINIA INVESTORS:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE VIRGINIA SECURITIES ACT BY REASON OF SPECIFIC
EXEMPTIONS THEREUNDER RELATING TO THE LIMITED AVAILABILITY OF THE OFFERING.
THESE SECURITIES CANNOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF TO ANY
PERSON OR ENTITY UNLESS SUBSEQUENTLY REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE VIRGINIA SECURITIES ACT, IF SUCH REGISTRATION IS
REQUIRED.
RESTRICTION ON RESALE
THESES SHARES ARE SUBJECT TO RESTRICTIONS ON TRANSFER
AND RESALE, AND MAY NOT BE TRANSFERRED OR RESOLD
EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND APPLICABLE STATE SECURITIES LAWS.
INVESTORS ARE REQUIRED TO BEAR THE FINANCIAL RISKS OF
INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
NOTE OFFERING TO CERTAIN NOTEHOLDERS
OF STANSBURY HOLDINGS CORPORATION
$ 485,462.31 in 90-day Notes
$1,197,000.00 in 180-day Notes
$1,365,248.00 in 5-year Notes
Stansbury Holdings Corporation (the "Company") is offering $485,462.31
in principal amount of promissory notes with a 90 day term (the "90-day Notes"),
$1,197,000.00 in principal amount of promissory notes with a 180-day term (the
"180-day Notes"), and $1,365,248.00 in principal amount of promissory notes with
a 5 year term (the "5-year Notes") (collectively, the 90-day Notes, 180-day
Notes, and 5-year Notes are referred to as the "Notes").
The Notes are offered in part for the persons who have previously
purchased the Company's promissory notes. These prior purchasers of the
Company's promissory notes are being offered the right to rescind their purchase
and either receive the return of their consideration (as explained in the
Company's Recession Offer to the purchasers of those promissory notes) or to
elect to continue their investment through this Note Offering. The Notes are
also offered to investors who wish to purchase the Notes other than as a
continuation of their investments in existing promissory notes of the Company.
A purchaser of the Notes will receive the Note and four shares of the
Company's common stock for each $1 in principal amount of the Note purchased. A
summary of the terms of the Notes follows.
90-day Note 180-day Note 5-year Note
Note plus 4 shares of Note plus 4 shares of Note plus 4 shares of
common stock for each $1 common stock for each $1 common stock for each $1
of principal amount of the of principal amount of the of principal amount of the
Note Note Note
90 day term 180 day term 5 year term
Company may convert to Company may convert to Original period for
common stock: interest common stock: interest Company redemption has
converted at amount due, converted at amount due, passed. No conversion
principal converted at principal converted at feature
125% of the principal 125% of the principal
amount amount
Secured by a first lien on
Unsecured Unsecured the Company's claim to the
Hamilton vermiculite
project
The Company intends to use the proceeds from the sale of the Notes for
working capital (see discussion of use of proceeds, below).
In making an investment in the Notes, the associated common stock to be
received in connection with the purchase of the Notes, and the common stock to
be received if the principal and interest of the any Notes are converted to
common stock (collectively, the "Associated Stock"), purchasers of the Notes and
Associated Stock must rely on their own examination of the Notes and Associated
Common Stock, and the terms of this Note Offering. Neither the Securities and
Exchange Commission nor any state securities commission has passed upon the
accuracy or completeness of these offering materials or upon an investment in
the debt or equity of the Company. The Notes and Associated Stock are offered
pursuant to an exemption from the necessity to register the offering with the
Securities and Exchange Commission; however, the Securities and Exchange
Commission has not made an independent determination that the offering of the
Notes or the Associated Stock is exempt from registration. The Notes and
Associated Stock are intended only for persons or entities who or which do not
have a need for liquidity with respect to their investment and who or which can
afford to lose a portion or all of their invested funds.
No person has been authorized to give any information or to make any
representations other than those contained or specifically provided for in these
offering materials, and if given or made, such information or representations
must not be relied upon. These offering materials do not constitute an offer to
sell or solicitation of an offer to buy any securities other than the Notes and
Associated Stock offered hereby, nor an offer of the Notes or Associated Stock
to any person in any state or jurisdiction in which, or to any person to whom,
such offer would be unlawful. Without limiting any obligation that may arise to
provide additional information in the event of material changes involving the
Company, neither the delivery of these offering materials nor any sale made
hereunder shall under any circumstance create an implication that there has been
no change in the affairs of the Company subsequent to the date hereof.
The Company's most recent proxy statement and report to shareholders,
which includes its most recent annual report on Form 10-KSB, and the Company's
most recent quarterly report on Form 10-QSB, is included with and is
incorporated as part of these offering materials.
The following table sets forth the information concerning the estimated
use of proceeds from the sale of the Notes. The Company has assumed, in
estimating its use of proceeds, that no current holders of its promissory notes
will accept its recision offer, and that the Company will sell $500,000 in
additional amounts of Notes pursuant to this Notes Offering. The Company's
assumptions may or may not be correct. The amounts set forth below are estimates
and may vary from the actual amount available to the Company and from actual
expenditures.
AMOUNT OF ADDITIONAL FUNDS AVAILABLE
FROM THIS NOTE OFFERING
- -----------------------
180-day Notes $1,000,000
USE OF ADDITIONAL FUNDS
- -----------------------
Cash portion for
planned purchase of vermiculite mine $ 500,000
Working capital $ 500,000
CONFIDENTIAL PURCHASER QUESTIONNAIRE
AND
SUBSCRIPTION AGREEMENT
CONFIDENTIAL PURCHASER QUESTIONNAIRE
STANSBURY HOLDINGS CORPORATION
(THE "COMPANY")
The purpose of this Questionnaire is to determine whether you meet the
standards determined by the Company for the purchase of Notes. Your answers
will, at all times, be kept strictly confidential. However, each person who
subscribes to purchase Notes from the Company hereby agrees that the Company may
present this Questionnaire to such parties as it deems appropriate to establish
the availability under any federal or state securities laws of an exemption from
registration of the private placement of the Notes. The Company will rely on the
accuracy of your responses to the following questions. You are reminded that you
have indemnified the Company against loss in the event any of your responses
contain material misrepresentations or omissions of material information.
Please complete the Questionnaire as thoroughly as possible and sign,
date and return one copy to the Company. Questions applicable only to
individuals should be omitted by entity investors.
1. Name:__________________________________________________________________
Age or date of formation:______________________________________________
Number of dependents:__________________________________________________
State where registered to vote:________________________________________
State of issuance of driver's license:_________________________________
Citizenship or jurisdiction of formation:______________________________
2. Home Address and Telephone Number:
_______________________________________________________________________
_______________________________________________________________________
3. Business Address and Telephone Number:_________________________________
_______________________________________________________________________
4. Describe your current employment, including the company by which you
are employed, and its principal business and your job responsibilities
and functions.
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
5. Describe your principal employment or business activities during the
last five years.
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
6. If an individual investor, is your NET WORTH, including homes, home
furnishings and automobiles, but excluding all current debts and
obligations to pay money, in excess of $1,000,000. Yes_____ No_____
If an entity investor, are your total assets in excess of $5,000,000.
Yes_____ No_____
7. If you are an individual investor, does your individual income or your
and income with your spouse for 1997 and 1998 and the income which you
reasonably expect for 1999 satisfy the levels below:
INCOME INCOME WITH SPOUSE
------ ------------------
1997 $200,000 $300,000
1998 $200,000 $300,000
1999 $200,000 $300,000
Either my income or my income with my spouse satisfies the above
levels. Yes_____ No_____ .
8. If an individual investor, do you expect your current level of income
to significantly decrease in the foreseeable future? Yes No .
9. Do you have any other investments or contingent liabilities which you
reasonably anticipate could cause you to need sudden cash requirements
in excess of cash readily available to you? Yes_____ No_____
10. If the investor is a corporation, partnership, association, trust or
unincorporated organization, the undersigned represents that it has not
been formed for the specific purpose of making the investment
contemplated herein.
11. If the investor is a partnership, association or unincorporated
organization that has been in existence for less than one year, supply
the following information:
(a) Date organized:_______________________________________________
(b) Number of partners:___________________________________________
(c) Purpose of organization:______________________________________
(d) Types of prior Investment:____________________________________
REPRESENTATIONS AND WARRANTIES:
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 the Company as follows:
(i) The answer to the above questions are complete and correct
and may be relied upon by the Company in determining whether the Offering in
which I propose to participate is exempt from registration under federal and
state securities laws;
(ii) I will notify the Company immediately of any material
change in any statement made herein occurring prior to the closing of any
purchase by me of an interest in the Company; and
(iii) I am able to bear the economic risk of the investment
for an indefinite period of time and, at the present time, could afford a
complete loss of such investment.
IN WITNESS WHEREOF, I have executed this Confidential Purchaser
Questionnaire this ______ day of __________________, 1999.
INDIVIDUAL:
____________________________________
Subscriber's Name
____________________________________
Subscriber's Signature (*)
____________________________________
*If investment is taken in joint names, both must sign.
ENTITY:
____________________________________
Name of Entity
By:_________________________________
Its:________________________________
SUBSCRIPTION AGREEMENT
TO: The Board of Directors
Stansbury Holdings Corporation (the "Company")
GENTLEMEN:
1. SUBSCRIPTION. The undersigned hereby irrevocably subscribes
for and agrees to purchase the principal amount of promissory notes (the
"Notes") of Stansbury Holdings Corporation (the "Company") set forth on the
Signature Page attached hereto, and described in the Note Offering Memorandum
dated May 15, 1999 (the "Memorandum").
2. PAYMENT.
(a) The undersigned agrees to pay a sum equal to the face
value of the Notes and is delivering herewith either canceled promissory notes
of the Company in like amount or a check in the principal amount of the Note
payable to the order of the Company or has wire transferred such funds; and
(b) The undersigned understands that if the undersigned's
subscription is rejected for any reason, all documents will be returned promptly
along with the undersigned's funds without interest and without any deductions.
3. REPRESENTATIONS AND WARRANTIES. By executing this Subscription
Agreement, the undersigned further:
(a) acknowledges that the undersigned has received and
carefully read the Memorandum is familiar with and understands the Memorandum,
and has based his or her decision to invest on the information contained in the
Memorandum, and has not been furnished with any other offering literature or
prospectus which is inconsistent or contradictory in any material way with the
Memorandum;
(b) represents and warrants that he or she is acquiring
the Notes and associated common stock for his or her own account for investment
purposes and not with a view to resale or distribution and that he or she will
not sell or otherwise transfer the Notes or associated common stock except in
accordance with restrictions on transfer contained in the Memorandum;
(c) represents and warrants that he or she has such
knowledge and experience in financial and business matters that he or she is
capable of evaluating the merits and risks of the prospective investment;
(d) represents and warrants that he or she is able to
bear the economic risk of losing his or her entire investment in the Notes;
(e) represents and warrants that his or her investment in
the Notes is suitable for him or her and that his or her overall commitment to
investments which are not readily marketable is not disproportionate to his or
her net worth, and his or her investment in the Notes will not cause such
overall commitment to become excessive;
(f) represents and warrants that if an individual, (i) he
or she is at least 21 years of age, (ii) he or she is a citizen of the United
States, (iii) he or she has adequate means of providing for his or her current
needs and personal contingencies, (iv) he or she has no need for liquidity in an
investment in the Notes, (v) he or she maintains his or her domicile and is not
a transient or temporary resident at the address shown below, (vi) all of his or
her investments in and commitments to non-marketable securities and similar
investments are, and after his or her purchase of the Notes will be, reasonable
in relation to the undersigned's net worth and current needs, and (vii) the
personal financial information provided by the undersigned accurately reflects
his or her financial condition with respect to which he or she does not
anticipate any material adverse changes;
(g) understands that the Company shall have the right, in
its sole discretion, to accept or reject this subscription, in whole or in part,
at any time prior to acceptance, or to allocate to him or her less than the
principal amount of Notes he or she has subscribed for; the Company will notify
him or her whether this subscription is accepted or rejected; in the event this
subscription is rejected, any payment will be returned without interest or
charge and all of the undersigned's obligations hereunder shall terminate;
(h) understands that the Notes and associated common
stock have not been registered under the Securities Act of 1933, as amended (the
"1933 Act"), and, as the result thereof, are subject to substantial restrictions
on transfer, which restrictions are described in the Memorandum, and that the
offering and sale of the Notes and associated common stock are exempt from
registration under the 1933 Act by virtue of Section 3(b) of the 1933 Act and
Regulation D promulgated thereunder;
(i) agrees and understands that he or she will not sell
or otherwise transfer any Notes or associated common stock or any interest
therein unless the Notes or associated common stock (as applicable) are
registered under the Securities Act of 1933, as amended and any other applicable
federal or state securities laws or the undersigned obtains an opinion of
counsel which is satisfactory to the Company (both as to the issuer of the
opinion and the form and substance thereof) that the Notes or associated common
stock (as applicable) may be transferred in reliance on an applicable exemption
from such registration requirements;
(j) understands that (i) the Company has no obligation to
register the Notes or associated common stock for resale under any federal or
state securities laws or to take any action which would make available any
exemption from the registration requirements of such laws, and (ii) the
undersigned therefore may be precluded from selling or otherwise transferring or
disposing the Notes or associated common stock or any portion thereof for an
indefinite period of time or at any particular time and may therefore have to
bear the
economic risk of investment in the Notes for an indefinite period of time;
(k) agrees that if and to the extent required by an
underwriter of the Company's shares in an initial public offering, the
undersigned will execute a "lock-up" agreement regarding some or all of his or
her common stock thereby agreeing not to sell such shares for a period of time
after completion of the public offering whether or not such shares are included
in the public offering;
(l) understands that no federal or state agency has
approved or disapproved the Notes or associated common stock, passed upon or
endorsed the merits of the Offering thereof, or made any finding or
determination as to the fairness of the Notes for investment;
(m) acknowledges that all material documents, records,
and books pertaining to this investment have on request been made available to
him or her and his or her advisers and that he or she has had the opportunity to
ask questions of, and receive answers from, an officer of the Company concerning
the Company and this Offering;
(n) acknowledges that if he or she is purchasing the
Notes subscribed for hereby in a fiduciary capacity, the above representations
and warranties shall be deemed to have been made on behalf of the person or
persons for whom he or she is so purchasing;
(o) acknowledges that the Company has made available to
him or her the opportunity to ask questions of, and receive answers regarding
the Company's proposed business operations and this Offering to the extent it
possesses such information, or can acquire it without unreasonable effort or
expense, necessary to verify the accuracy of the information given to him or
her;
(p) ACKNOWLEDGES THAT HE OR SHE UNDERSTANDS THAT IF HE OR
SHE IS A FLORIDA RESIDENT, PURSUANT TO SECTION 517.06l(11)l(a)(5) OF THE FLORIDA
STATUTES, WHEN SALES ARE MADE TO FIVE OR MORE PERSONS IN FLORIDA, FLORIDA
INVESTORS HAVE A THREE DAY RIGHT OF RESCISSION; IF A FLORIDA RESIDENT HAS
EXECUTED A SUBSCRIPTION AGREEMENT, HE OR SHE MAY ELECT, WITHIN THREE BUSINESS
DAYS AFTER SIGNING THE SUBSCRIPTION AGREEMENT, TO WITHDRAW FROM THE SUBSCRIPTION
AGREEMENT AND TO RECEIVE A FULL REFUND AND RETURN (WITHOUT INTEREST) OF ANY
MONEY PAID BY HIM OR HER; TO ACCOMPLISH SUCH WITHDRAWAL, A FLORIDA RESIDENT NEED
ONLY SEND A LETTER TO THE COMPANY AT THE ADDRESS SET FORTH IN THE MEMORANDUM
INDICATING HIS OR HER INTENTION TO WITHDRAW; SUCH LETTER MUST BE SENT AND
POSTMARKED PRIOR TO THE END OF THE AFOREMENTIONED THIRD BUSINESS DAY; IF A
FLORIDA RESIDENT SENDS A LETTER, IT IS PRUDENT TO SEND IT BY CERTIFIED MAIL,
RETURN RECEIPT REQUESTED, TO INSURE THAT IT IS RECEIVED AND ALSO TO EVIDENCE THE
TIME AND DATE WHEN IT IS MAILED;
(q) understands that the Notes and associated common
stock are being offered and sold in reliance on specific exemptions from the
registration requirements of federal and state securities laws and that the
Company and the principals and controlling persons thereof are relying upon the
truth and accuracy of the representations, warranties, agreements,
acknowledgments, and understandings set forth herein in order to determine the
applicability of such exemptions and the suitability of the undersigned to
acquire Notes;
(r) if the investor is a trust, 401(k) plan, IRA, or
qualified retirement plan, the undersigned is the person with authority to make
investment decisions for such entity; and
(s) represents and warrants that the information set
forth herein concerning the undersigned is complete, true and correct.
4. ACKNOWLEDGMENT AND UNDERSTANDING. The undersigned acknowledges
that he or she understands the meaning of the representations made by him or her
in this Subscription Agreement, and that such information must be true and
correct inasmuch as the Company is relying upon the accuracy of such
information. The undersigned hereby agrees to indemnify and hold the Company
harmless from and against any and all loss, costs, expenses, judgments, damages
and liabilities (including, without limitation, court costs and attorneys' fees)
arising out of any material omission or misrepresentation or breach of warranty
or agreement under this Subscription Agreement, any purchaser questionnaire
submitted by the undersigned, or in connection with the sale or distribution by
the undersigned of the Notes and associated common stock in violation of the
1933 Act or other applicable laws.
5. SURVIVAL. The representations and warranties shall survive
execution and delivery of this Subscription Agreement and the undersigned's
investment on the Company.
6. GOVERNING LAW. This agreement shall be governed by,
interpreted under, and construed in accordance with, the internal laws of the
State of Florida applicable to agreements made and to be performed within the
State of Florida without regard to the principles of conflicts-of-law thereof.
7. GENDER. References in this Subscription Agreement to male or
female genders shall apply to the neuter gender if the subscriber is an entity
unless the context clearly indicates otherwise.
Exact name in which the note and stock certificate should be issued:
____________________________
Principal amount of Note
Subscribed for: INDIVIDUAL:
$_____________ _________________________
__________________________ I am enclosing existing Company
Subscriber's Name promissory notes in the principal amount
(Please Print) of:
$_____________
__________________________
Subscriber's Signature (*) I am enclosing a check in the amount of
$_____________
__________________________ _____________________________
Social Security Number
_____________________________
Date
_____________________________
Date
*If investment is taken in joint names, both must sign.
ENTITY:
__________________________
Name of Entity
By:_______________________
Its:______________________
__________________________
Federal Employer
Identification Number
__________________________
Date
EXHIBITS
The Company's Proxy Materials, including its Annual Report on Form 10-KSB for
the year ended December 31, 1998
The Company's Quarterly Report on Form 10-QSB for the quarter ended March 31,
1999
The form of the 90-day Note
The form of the 180-day Note
The form of the 5-year Note