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EXHIBIT 99.5
2000 NONSTATUTORY STOCK OPTION AGREEMENT
THIS NONSTATUTORY STOCK OPTION AGREEMENT (the "Option Agreement") is made and
entered into as of the date set forth on the signature page hereto (the "Grant
Date"), by and between Reliance Computer Corp., a Delaware corporation (the
"Company"), and the person designated as Optionee on the signature page hereto
(the "Optionee"). The Company has granted Optionee this option (the "Option") to
purchase a total of that number of shares of Common Stock of the Company as set
forth on the signature page hereto (the "Shares"), at the price determined as
provided herein, and in all respects subject to the terms, definitions and
provisions of the Reliance Computer Corp. 2000 Long Term Incentive Plan (the
"Plan") adopted by the Company, which is incorporated herein by reference. In
the event of a conflict between the terms and provisions of this Agreement and
the terms and provisions of the Plan, the Plan shall control. Unless otherwise
defined herein, the terms defined in the Plan shall have the same defined
meanings herein.
Pursuant to the Plan, the Board or the Committee has determined that it is to
the advantage and best interest of the Company to grant this Option to the
Optionee.
1. NATURE OF THE OPTION.
This Option is NOT intended by the Company and the Optionee to qualify as an
Incentive Stock Option as defined in Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), but instead is granted as a Nonstatutory Option
within the meaning of the Plan.
2. EXERCISE PRICE.
The exercise price is as set forth on the signature page hereto for each share
of Common Stock.
3. VESTING AND EXERCISABILITY.
This Option shall vest and become exercisable during its term in accordance with
the Plan and as follows:
3.1 VESTING.
___________________________________________________________.
3.2 RIGHT TO EXERCISE
3.2.1 Subject to the provisions of this Section 3.2, this
Option shall be exercisable immediately, in whole or
in part, to the extent the Option has vested prior
to exercise as provided in Sections 3.1.1.1 and
3.1.1.2. If exercised in part, the balance of this
Option shall be exercisable at any time thereafter,
subject to the vesting requirements of Section 3.1.
3.2.2 This Option may not be exercised for a fraction of a
share.
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3.2.3 In the event of termination of Optionee's Continuous
Status as an Service Provider, the exercisability of
the Option is governed by this Section 3.2 and
Section 7 below.
3.2.4 In no event may this Option be exercised after the
date of expiration of the term of this Option as set
forth in Section 12 below.
3.3 METHOD OF EXERCISE. This Option shall be exercisable by
written notice in the form attached hereto as Exhibit A, which
shall state the election to exercise the Option, the number of
Shares in respect of which the Option is being exercised, and
such other representations and agreements as to the holder's
investment intent with respect to such shares of Common Stock
as may be required by the Company pursuant to the provisions
of the Plan. Such written notice shall be signed by the
Optionee and shall be delivered in person or by certified mail
to the Secretary of the Company. The written notice shall be
accompanied by payment of the exercise price in any form
permitted under Section 5 below. This Option shall be deemed
exercised upon receipt by the Company of such written notice
accompanied by the exercise price.
No Shares will be issued pursuant to the exercise of the
Option unless such issuance and such exercise shall comply
with all relevant provisions of law and the requirements of
any stock exchange upon which the Shares may then be listed.
The Company agrees to take such reasonable actions as may be
necessary to cause the issuance of the Shares to be in
compliance with the aforementioned laws and requirements.
Assuming such compliance, for income tax purposes the Shares
shall be considered transferred to the Optionee on the date on
which the Option is exercised with respect to such Shares.
4. OPTIONEE'S REPRESENTATIONS AND SECURITIES LAW COMPLIANCE. In connection
with the issuance of the Option, Optionee represents the following:
4.1 PURCHASE ENTIRELY FOR OWN ACCOUNT. Optionee is entering into
this Agreement for its own account for investment PURPOSES
only and not with a view to, or for the resale in connection
with, any "distribution" thereof for purposes of the
Securities Act of 1933, as amended (the "Securities Act"). In
the event the Shares purchasable pursuant to the exercise of
this Option have not been registered under the Securities Act
of 1933, as amended, at the time this Option is exercised, (a)
the Company may require Optionee, concurrently with the
exercise of all or any portion of this Option, to deliver to
the Company an Investment Representation Statement containing
the statements (to the extent required under applicable law)
set forth in Exhibit B and (b) the certificate for the Shares
shall bear appropriate legends.
4.2 DISCLOSURE OF INFORMATION. Optionee has received all the
information it considers necessary or appropriate for deciding
whether to enter into this Agreement. Optionee has had an
opportunity to ask questions and receive answers from the
Company regarding the Company, its business and the terms and
conditions of this Agreement. Optionee is sufficiently aware
of the Company's business affairs and financial condition to
reach an informed and knowledgeable decision to enter into
this Agreement.
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4.3 INVESTMENT EXPERIENCE. Optionee is an investor in securities
of companies in the development stage and acknowledges that it
is able to fend for itself, can bear the economic risk and
complete loss of its investment and has such knowledge and
experience in financial or business matters that it is capable
of evaluating the merits and risks of entering into this
Agreement. Optionee has carefully considered and has, to the
extent it believes such discussion necessary, discussed with
its professional legal, tax, accounting and financial advisors
the suitability of entering into this Agreement for its
particular tax and financial situation.
4.4 RESTRICTED SECURITIES. Optionee understands that the Option
and its underlying Shares are characterized as "RESTRICTED
SECURITIES" under the federal securities laws inasmuch as they
are being acquired from the Company in a transaction not
involving a public offering and that under such laws and
applicable regulations such securities may be resold without
registration under the Securities Act, only in certain limited
circumstances. In this connection, Optionee understands that,
in the view of the Securities and Exchange Commission (the
"SEC"), the statutory basis for any exemption from
registration may be unavailable if Optionee's representation
was predicated solely upon a present intention to hold these
securities for the minimum capital gains period specified
under tax statutes, for a deferred sale, for or until an
increase or decrease in the market price of these securities,
or for a period of one year or any other fixed period in the
future. Optionee further understand that these securities must
be held indefinitely unless subsequently registered under the
Securities Act or unless an exemption from registration is
otherwise available (such as Rule 144). Moreover, Optionee
understands that the Company is under no obligation to
register the Securities.
4.5 RULE 144. Optionee is familiar with the provisions of Rule
144, promulgated under THE Securities Act, which, in
substance, permits limited public resale of "RESTRICTED
SECURITIES" acquired, directly or indirectly, from the issuer
thereof (or from an affiliate of such issuer), in a non-public
offering subject to the satisfaction of certain conditions,
including, among other things: (1) The availability of certain
public information about the Company; (2) the resale occurring
after prescribed holding periods and then, under some
circumstances, subject to certain volume restrictions during
any three month period, (3) the sale being made through a
broker in an unsolicited "broker's transaction" or in
transactions directly with a market maker, as said term is
defined under the Securities Exchange Act of 0000 (xxx
"Xxxxxxxx Xxx"). There can be no assurances that the
requirements of Rule 144 will be met, or that these securities
will ever be saleable. Optionee further understand that at the
time it wishes to sell these securities there may be no public
market upon which to make such a sale, and that, even if such
a public market then exists, the Company may not be satisfying
the current public information requirements of Rule 144, and
that, in such event, Optionee would be precluded from selling
these securities under Rule 144 even if the minimum holding
period had been satisfied.
4.6 OPINION OF COUNSEL FOR DISPOSITION OF UNDERLYING SHARES. In
the event that the Shares purchasable pursuant to the exercise
of this Option have not been registered under the Securities
Act at the time the Option is exercised, in connection with
any disposition of such Shares, Optionee may be required to
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furnish to the Company, at Optionee's expense, an opinion of
its counsel, satisfactory to the Company in form and
substance, to the effect that disposition will not require
registration.
4.7 ACCREDITED INVESTOR. Optionee represents and warrants that it
is an Accredited Investor (as defined in Rule 501 under the
Securities Act), by reason of having or being (check each of
the following representations that is applicable):
[ ] (a) Individual net worth, or joint net worth his or her spouse, in
excess of $1,000,000.
[ ] (b) Individual income in excess of $200,000 for the two most recent
years or joint income with his or her spouse in excess of $300,000 in each of
those years and a reasonable expectation of income at that level in the current
year.
[ ] (c) A director or executive officer of the Company.
[ ] (d) OPTIONEE IS NOT AN ACCREDITED INVESTOR.
5. METHOD OF PAYMENT.
Payment of the exercise price shall be by (i) cash, (ii) check, (iii) surrender
of other shares of Common Stock of the Company which either have been owned by
the Optionee for more than six months on the date of surrender or were not
acquired, directly or indirectly, from the Company and have a Fair Market Value
on the date of surrender equal to the exercise price of the Shares as to which
the Option is being exercised, or (iv) if the Common Stock is publicly traded
and the Shares purchasable have been registered under the Securities Act of
1933, as amended, at the time of Option exercise, delivery of a properly
executed exercise notice together with irrevocable instructions to an agent of
the Company to sell the Shares and promptly deliver to the Company that portion
of the sale or loan proceeds required to pay the exercise price.
6. RESTRICTIONS ON EXERCISE.
This Option may not be exercised if the issuance of such Shares upon such
exercise or the method of payment of consideration for such shares would
constitute a violation of any applicable federal or state securities or other
law or regulation, including any rule under Part 207 of Title 12 of the Code of
Federal Regulations ("Regulation G") as promulgated by the Federal Reserve
Board. As a condition to the exercise of this Option, the Company may require
Optionee to make any representation and warranty to the Company as may be
required by any applicable law or regulation.
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7. TERMINATION OF STATUS AS A SERVICE PROVIDER.
In the event of termination of Optionee's Continuous Status as a Service
Provider, the vested portion, if any, of this Option shall continue to remain
outstanding and the unvested portion of this Option, if any, shall be cancelled.
In the event this Option is partially or wholly vested on the date of
termination of Optionee's Continuous Status as a Service Provider and is not
exercised within the earlier of (a) the period set forth in Section 12 or (b)
six months after termination of Optionee's Continuous Status as a Service
Provider (or within eighteen months in the case of termination as a result of
Optionee's death or Permanent Disability), this Option shall terminate.
Notwithstanding the foregoing, nothing herein shall prevent the Company from
entering into an agreement with a service provider upon the termination of
his/her Continuous Status as a Service Provider to repurchase any Shares issued
to the service provider prior to such date upon the exercise of options granted
under the Plan. Permanent Disability exists if an individual is unable to
perform his ordinary and customary duties as a service provider of the Company
by reason of any medically determinable physical or mental impairment which can
be expected to result in death or which has lasted or can be expected to last
for a continuous period of not less than 12 months.
8. NON-TRANSFERABILITY OF OPTION.
This Option may not be transferred in any manner otherwise than by will, or by
the laws of descent or distribution, or pursuant to a qualified domestic
relations order as defined by the Code or regulations thereunder, and may be
exercised during the lifetime of Optionee only by the Optionee or the spouse of
the Optionee who obtained the Option pursuant to a qualified domestic relations
order. The terms of this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.
9. COMPANY RIGHT OF FIRST REFUSAL.
9.1 In the event the Optionee exercises this Option and proposes
to sell, pledge or otherwise transfer any Shares (other than
under the Buy-Out Option described in Section 17 below), the
Company shall have a right of first refusal (the "Right of
First Refusal") with respect to such Shares. Optionee agrees
that in no event will Optionee sell, pledge or otherwise
transfer any Shares except in compliance with this Section.
Before any proposed transfer, Optionee shall give a written
notice (the "Transfer Notice") to the Company describing fully
the proposed transfer, including the number of Shares proposed
to be transferred, the proposed transfer price and the name
and address of the proposed transferee. The Company shall have
the right to purchase the Shares subject to the Transfer
Notice on the terms set forth in the Transfer Notice by
delivery to the Optionee of a notice of exercise of the
Company's Right of First Refusal within thirty (30) days after
the date the Transfer Notice is delivered to the Company. The
Company's rights under this Section 9.1 shall be freely
assignable, in whole or in part. In the event the Company
and/or its assignee elects to purchase the Shares subject to
the Transfer Notice, the Company and/or its assignee must
purchase all the Shares subject to the Transfer Notice.
9.2 If the Company fails to exercise in full the Right of First
Refusal within thirty (30) days from the date the Transfer
Notice is delivered to the Company, the
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Optionee may, not later than ninety (90) days following
delivery to the Company of the Transfer Notice, conclude a
transfer of the Shares subject to the Transfer Notice on the
terms and conditions described in the Transfer Notice. Any
proposed transfer on terms and conditions different from those
described in the Transfer Notice, as well as any subsequent
proposed transfer by the Optionee, shall again be subject to
the Right of First Refusal and shall require compliance by the
Optionee with the procedure described in this Section 9. If
the Company exercises the Right of First Refusal, the parties
shall consummate the sale of shares of Stock on the terms set
forth in the Transfer Notice within thirty (30) days after the
delivery of the Transfer Notice to the Company.
9.3 All transferees of Shares or any interest therein, other than
the Company, shall be required as a condition of such transfer
to agree in writing (in a form satisfactory to the Company)
that they will receive and hold such Shares or interests
subject to the provisions of this Agreement, including a Right
of First Refusal with respect to any subsequent transfer of
the Shares and the Buy-Out Option. Any sale or transfer of any
Shares shall be void unless the provisions of this Section 9
are met.
9.4 The Right of First Refusal shall terminate at such time as a
public market exists for the Company's Common Stock (or any
other stock issued by the Company, or any successor, in
exchange for the Shares). For the purpose of this Agreement, a
"public market" shall be deemed to exist if quotations for
such stock are reported by the automated quotations system
operated by the National Association of Securities Dealers
Automated Quotations System (NASDAQ) or by an equivalent
quotations system or if the stock is listed on a stock
exchange.
9.5 The Right of First Refusal shall not apply to a transfer of
the Shares to the Optionee's ancestors or descendants or
spouse or to a trustee for their benefit, provided that such
transferee shall agree in writing (in a form satisfactory to
the Company) to take the Shares subject to all terms of this
Agreement, including (i) a Right of First Refusal with respect
to any subsequent transfer of the Shares and (ii) the Buy-Out
Option described in Section 17.
10. ADJUSTMENT FOR REORGANIZATIONS, STOCK SPLITS, ETC.
In the event of any change in the outstanding Common Stock by reason of any
stock dividend, stock split, recapitalization, reclassification, combination or
exchange of shares, merger, consolidation or the like, an appropriate and
proportional substitution or adjustment shall be made for or in (a) the number
and class of Shares subject to outstanding Options and Awards of Restricted
Stock (b) the Option Price of Options, and (c) the aggregate number and class of
Shares for which Awards thereafter may be made under this Plan. No fractional
Shares shall be issuable on account of any action or occurrence under this
Section 10. Notwithstanding the foregoing, the Committee, in its sole
discretion, may determine to issue scrip certificates in respect to any
fractional Shares, which scrip certificates shall be in a form and have such
terms and conditions as the Committee in its discretion shall prescribe.
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11. TRANSFERABILITY OF THE SHARES.
11.1 Shares which are issued by an exercise of this Option shall be
subject to the transfer restrictions of Section 7.6, the Right
of First Refusal in Section 9, the Buy-Out Option described in
Section 17, and the other transfer restrictions set forth
herein. Accordingly, such Shares may be sold, transferred,
pledged, hypothecated or otherwise disposed of only as
provided herein.
11.2 The certificate or certificates evidencing any of the Shares
shall be endorsed with legends substantially as follows:
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED
ONLY IN ACCORDANCE WITH THE TERMS OF THE STOCK OPTION
AGREEMENT PURSUANT TO WHICH SUCH SHARES WERE PURCHASED, WHICH
AGREEMENT INCLUDES RESTRICTIONS ON TRANSFER, RIGHTS OF FIRST
REFUSAL AND BUY-OUT OPTION IN FAVOR OF THE CORPORATION. A COPY
OF SUCH AGREEMENT IS ON FILE WITH THE SECRETARY OF THE
CORPORATION."
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY APPLICABLE STATE SECURITIES LAWS AND MAY BE OFFERED, SOLD,
OR TRANSFERRED ONLY IF (A) REGISTERED OR QUALIFIED PURSUANT TO
THE PROVISIONS OF THAT ACT AND ANY APPLICABLE STATE SECURITIES
LAWS OR (B) IF IN THE OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY AN EXEMPTION OR EXCEPTION FROM SUCH REGISTRATION AND
QUALIFICATION REQUIREMENTS IS AVAILABLE."
11.3 Transfer or sale of the Shares is subject to restrictions on
transfer imposed by state and Federal securities laws. Any
transferee from Optionee shall hold Shares subject to all the
provisions hereof and shall acknowledge the same by signing a
copy of this Agreement.
12. TERM OF OPTION.
This Option may not be exercised more than ten (10) years from the date of grant
of this Option, and may be exercised during such term only in accordance with
the Plan and the terms of this Agreement.
13. TAX ON EXERCISE.
Optionee understands that, under current law and assuming that the Option is a
Nonstatutory Option, he will be treated for federal income tax purposes as
having received ordinary income at the time of exercise of the Option in an
amount equal to the difference between the exercise price and the Fair Market
Value of the Shares at the date of exercise.
14. WITHHOLDING OF TAXES.
Subject to Section 13 of the Plan, upon the exercise of this Option, the Company
shall have the right to require Optionee or Optionee's permitted successor in
interest to pay to the Company the amount of any taxes which the Company may be
required to withhold with respect to such
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Shares. In its sole discretion, the Company may permit Optionee to make such
payment in whole or in part by delivery of other shares of Common Stock owned
by, and in the possession of, Optionee, such shares to be valued at their Fair
Market Value on the date of surrender.
15. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF
DELAWARE APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY IN DELAWARE,
WITHOUT REGARD TO THE CONFLICTS OF LAW PROVISIONS OF DELAWARE OR ANY OTHER
JURISDICTION.
16. NOTICES.
Any notice required or permitted under this Agreement shall be given in writing
by express courier or by postage prepaid, United States registered or certified
mail, return receipt requested, to the address set forth below or to such other
address for a party as that party may designate by ten (10) days advance written
notice to the other parties. Notice shall be effective upon the earlier of
receipt or three (3) days after delivery.
If to the Company: Reliance Computer Corp.
0000 Xxxxxx Xxxx
Xxxxx Xxxxx, XX 00000
Attn: Corporate Secretary
If to Optionee: As set forth on the signature page hereto.
17. BUY-OUT OPTION.
The Option is subject to a Buy-Out Agreement of even date herewith which gives
the Company a Buy-Out Option, exercisable after the date on which Optionee's
employment with, or rendering of services to, the Company is terminated, to
purchase all of Optionee's Shares at a price determined in part by an
independent appraisal. Execution by Optionee of the Buy-Out Agreement with
respect to the Shares covered by the option shall be a condition precedent to
the grant of the Option to Optionee hereunder.
Reliance Computer Corp.
a Delaware Corporation
By: _______________________________________
Title: ____________________________________
OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO SECTION
3 HEREOF IS EARNED ONLY BY CONTINUING PROVISION OF SERVICES TO THE COMPANY (AND
NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING
SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS OPTION,
THE TRANSACTIONS
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CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT
CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS AN EMPLOYEE
OR SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL. NOTHING
IN THIS AGREEMENT OR THE PLAN SHALL EXPAND OR LIMIT IN ANY MANNER WHATSOEVER THE
RIGHT OR POWER OF THE COMPANY TO TERMINATE OPTIONEE'S EMPLOYMENT OR SERVICE
RELATIONSHIP WITH OR WITHOUT CAUSE.
NOTE CAREFULLY: This Option Agreement is subject to a Buy-Out Agreement of
approximately even date herewith which gives the Company a Buy-Out Option,
exercisable after the date on which Optionee's employment with, or rendering of
services to, the Company is terminated, to purchase all of Optionee's Shares at
a price determined in part by an independent appraisal. This Option Agreement
also gives the Company the Right of First Refusal on any transfer of the Shares
by Optionee under certain circumstances.
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Optionee acknowledges receipt of a copy of the Plan and certain information
related thereto and represents that Optionee is familiar with the terms and
provisions thereof, and hereby accepts the Option subject to all of the terms
and provisions thereof. Similarly, Optionee acknowledges receipt of a copy of
the Buy-Out Agreement and represents that Optionee is familiar with the terms
and provisions thereof, and hereby accepts the Option subject to all of the
terms and provisions thereof. Optionee has reviewed the Plan, the Buy-Out
Agreement and this Option Agreement in their entirety, has had an opportunity to
obtain the advice of independent legal counsel prior to executing the Buy-Out
Agreement and this Option Agreement, and fully understands all provisions of the
Plan, this Option Agreement, and the Buy-Out Agreement. Optionee hereby agrees
to accept as binding, conclusive and final all decisions or interpretations of
the Committee upon any questions arising under the Plan.
OPTIONEE HAS COMPLETED THE ITEMS SET FORTH IN SECTION 4.7 ABOVE.
Date: Optionee Signature:
--------------------------- --------------------------------
Shares: Optionee Name:
--------------------------- --------------------------------
Exercise Price: Optionee Address:
---------------------------
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SIGNATURE PAGE TO NONSTATUTORY STOCK OPTION AGREEMENT
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By his or her signature below, the spouse of Optionee affirms that he/she has
read in their entirety, and agrees to be bound by all of the terms and
conditions of, the foregoing Option Agreement (including the provisions thereof
relating to the Right of First Refusal), the Plan and the Buy-Out Agreement.
Spouse:
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EXHIBIT A
NOTICE OF EXERCISE OF STOCK OPTION
Reliance Computer Corp.
0000 Xxxxxx Xxxx
Xxxxx Xxxxx, XX 00000
Attn: Secretary
The undersigned hereby elects to exercise the option indicated below with
respect to the number of shares of Common Stock of Reliance Computer Corp. (the
"Company") set forth:
Option Grant Date: ____________________________________
Type of Option: ______ Incentive Stock Option
______ Nonstatutory Option
Number of Shares Being Exercised: ________________________ Shares
Exercise Price Per Share: $_______________________
Total Exercise Price: $_______________________
Method of Payment: ______ Cash
______ Check
Enclosed herewith is payment in full of the total exercise price, a copy of the
Option Agreement and executed copy of an Investment Representation Statement
(Exhibit B).
My exact name, current address and social security number are:
Name: ________________________ Address:
SSN: __________________________ _____________________________________
_____________________________________
Dated: _____________________ ______________________________
(Optionee's Signature)
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EXHIBIT B
INVESTMENT REPRESENTATION STATEMENT
PURCHASER: ________________________________________
COMPANY: RELIANCE COMPUTER CORP.
SECURITY: COMMON STOCK
AMOUNT: ________________________________________
In connection with the purchase of the above-listed Securities, I, the
Purchaser, represent to the Company the following:
(a) I am sufficiently aware of the Company's business affairs and financial
condition to reach an informed and knowledgeable decision to acquire the
Securities. I am purchasing these Securities for my own account for investment
purposes only and not with a view to, or for the resale in connection with, any
"distribution" thereof for purposes of the Securities Act of 1933, as amended
(the "Securities Act").
(b) I understand that the Securities have not been registered under the
Securities Act in reliance upon a specific exemption therefrom, which exemption
depends upon, among other things, the bona fide nature of my investment intent
as expressed herein. In this connection, I understand that, in the view of the
Securities and Exchange Commission (the "SEC"), the statutory basis for such
exemption may be unavailable if my representation was predicated solely upon a
present intention to hold these securities for the minimum capital gains period
specified under tax statutes, for a deferred sale, for or until an increase or
decrease in the market price of the Securities, or for a period of one year or
any other fixed period in the future. In addition, I understand the Securities
have not been registered under the Delaware Corporation Law.
(c) I further understand that the Securities must be held indefinitely unless
subsequently registered under the Securities Act or unless an exemption from
registration is otherwise available (such as Rule 144 under the Securities Act).
Moreover, I understand that the company is under no obligation to register the
Securities. In addition, I understand that the certificate evidencing the
Securities will be imprinted with a legend which prohibits the transfer of the
Securities unless they are registered or such registration is not required in
the opinion of counsel for the Company.
(d) I am familiar with the provisions of Rule 144, promulgated under the
Securities Act, which, in substance, permits limited public resale of
"restricted securities" acquired, directly or indirectly, from the issuer
thereof (or from an affiliate of such issuer), in a non-public offering subject
to the satisfaction of certain conditions, including, among other things: (1)
The availability of certain public information about the Company; (2) the resale
occurring not less than a prescribed period after the party has purchased, and
made full payment for, within the meaning of Rule 144, the securities to be
sold, (3) the sale being made through a broker in an unsolicited "broker's
transaction" or in transactions directly with a market maker, as said term is
defined under the Securities Exchange Act of 1934 (the "Exchange Act") and the
amount of
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securities being sold during any three month period not exceeding the specified
limitations stated therein, if applicable. There can be no assurances that the
requirements of Rule 144 will be met, or that the Securities will ever be
saleable.
(e) I further understand that at the time I wish to sell the Securities there
may be no public market upon which to make such a sale, and that, even if such a
public market then exists, the company may not be satisfying the current public
information requirements of Rule 144, and that, in such event, I would be
precluded from selling the Securities under Rule 144 even if the two-year
minimum holding period had been satisfied.
(f) I further understand that in the event all of the applicable requirements of
Rule 144 are not satisfied, registration under the Securities Act, compliance
with Regulation A, compliance with some other registration exemption or the
notification to the Company of the proposed disposition by me and the furnishing
to the company of (i) detailed information regarding the disposition, and (ii)
opinion of my counsel to the effect that such disposition will not require
registration (I understand such counsel's opinion shall concur with the opinion
by counsel for the Company and I shall have been informed of such compliance)
will be required and that, notwithstanding the fact that Rule 144 is not
exclusive, the Staff of the SEC has offered its opinion that persons proposing
to sell private placement securities other than in a registered offering and
otherwise than pursuant to Rule 144 will have a substantial burden of proof in
establishing that an exemption from registration is available for such offers or
sales, and that such persons and their respective brokers who participate in
such transactions do so at their own risk.
(g) I understand that this Investment Representation Statement is intended to
restrict the above-listed Securities only to the extent required by applicable
law, and that it shall not be construed to increase the limitations on transfer
of the above-listed Securities beyond the requirements of applicable law.
Signature of Purchaser:
________________________________________
Date:______________________________
