Document:

ex10p2.htm

 

 

	 	 EXHIBIT 10.2
	 	 
	 	 
	 	Cenveo, Inc.
	 	One Canterbury Green
	 	201 Broad Street, 6th Floor
	 	Stamford, CT 06901
	 	(203) 595-3000
	 	Fax (203) 595-3074

 

                                     June 22, 2006

 

Mr. Robert G. Burton, Jr.

201 Broad Street

Stamford, CT 06901

 

Dear Robert:

 

This letter agreement (and the attached Annex A, collectively, this "Agreement") governs certain terms of your employment as Senior Vice President, Investor Relations with Cenveo, Inc. (the "Company") and the terms under which your employment with the Company may be terminated. You and the Company hereby acknowledge that your employment with the Company constitutes "at-will" employment and that either party may terminate your employment at any time, upon written notice of termination, subject to and in accordance with the provisions of this Agreement.

 

1.   Termination of Employment.

 

(a)    If the Company terminates your employment without Cause, as defined in Annex A, or if you terminate your employment for Good Reason, as defined in Annex A, the Company will pay you, in lieu of any other severance benefit that would otherwise be payable to you, a lump sum payment within ten (10) days (or, if later, promptly after the time for revocation of the release referred to in Section 2 below has expired) after your termination equal to (a) $350,000, or your annual Base Salary in effect at the time of such termination, whichever is greater, (b) $350,000, or your target bonus opportunity for the calendar year in which such termination occurs, whichever is greater and (c) an automobile allowance of $1,000 per month for a period of twelve months.

 

In addition, you will immediately vest in all outstanding stock options or other equity grants issued to you as of the date of your termination and you will be entitled to receive your base salary through the date of such termination (to the extent not previously paid) plus all other amounts (other than any severance benefits) you are entitled to under the terms of the Company's benefit plans, programs, and policies through the date of your termination.

  

  

  

If you elect medical or dental coverage under the Company's group medical or dental plans pursuant to Section 4980B of the Code ("COBRA Coverage"), the Company will also pay or reimburse you, if paid by you, promptly upon your request, an amount equal to the premium for COBRA Coverage (for yourself and your dependents) during a period not to exceed twelve (12) months of such COBRA Coverage or such shorter period to which you and your dependents are entitled pursuant to COBRA.

 

(b)    If your employment is terminated for any other reason, including by reason of your death or disability, or if you voluntarily terminate your employment without Good Reason, you will be entitled to receive only your base salary through the date of such termination (to the extent not previously paid) plus all other amounts (other than any severance benefits) you are entitled to under the terms of the Company's benefit plans, programs, and policies through the date of your termination.

 

(c)    Except as specifically provided in this Section 1, you will not be entitled to any other compensation, severance or other benefits from the Company upon the termination of your employment for any reason.

 

2.   Delivery of Release. As a condition to the obligation of the Company to make the payments provided for in this Agreement and otherwise perform its obligations hereunder to you upon termination of your employment (other than due to your death), you or your legal representatives must deliver to the Company a general unconditional release in favor of the Company in form and substance satisfactory to the Company, and the time for revocation of such release must have expired without revocation by you. You are not obligated to seek other employment or take any other action by way of mitigation of the amounts payable to you under any of the provisions of this Agreement.

 

3.   Non-Competition and Non-Solicitation. You agree that at all times both during your employment and for twelve (12) months thereafter you will not directly or indirectly, (a) carry on, engage in, or otherwise provide services to, any business that competes anywhere in the United States with a portion of the Company's business representing more than 15% of the Company's consolidated revenues on the date of your termination of employment with the Company (b) solicit or hire, or assist others in the solicitation or hiring of, any of the employees of the Company or any of its subsidiaries or (c) solicit or otherwise interfere in any respect with the business relationships of the Company or any of its subsidiaries with any of their customers or suppliers. During such twelve (12) month period, you will not make any statements, comments, or communications that are reasonably likely to be considered to be disparaging, derogatory or detrimental to the good name or business reputation of the Company.

 

4.    Entire Agreement. This Agreement (including, without limitation, Annex A) constitutes the entire agreement and understanding between you and the Company with respect to the subject matter hereof, and may not be amended or modified except by subsequent written agreement executed by both parties hereto.

  

  

  

5.   Counterparts. This Agreement may be executed in two or more counterparts, each of which will constitute an original, and all of which together will constitute one and the same Agreement.

 

If the foregoing terms and conditions are acceptable and agreed to by you, please sign the line provided below to signify such acceptance and agreement and return the executed copy to the undersigned.

 

                                     CENVEO, INC.

 

 

                                     By:    /s/ Robert G. Burton, Sr.                           

                                     Name: Robert G. Burton, Sr.

                                     Title: Chairman and Chief Executive Officer

 

Accepted and Agreed this

22 day of June, 2006.

By:    /s/ Robert G. Burton, Jr.           

Robert G. Burton, Jr.

  

  

  

ANNEX A

 

DEFINITIONS AND MISCELLANEOUS TERMS

 

a.    "Cause" means:

 

(i)    the willful and continued failure of the Executive to perform substantially his duties with the Company (other than any such failure resulting from Executive's incapacity due to physical or mental illness or any such failure subsequent to Executive being delivered a notice of termination without Cause by the Company or delivering a notice of termination for Good Reason to the Company) after a written demand for substantial performance is delivered to Executive by the Company which specifically identifies the manner in which the Company believes that Executive has not substantially performed Executive's duties;

 

(ii)    the willful engaging by Executive in illegal conduct or misconduct which is demonstrably and materially injurious (monetarily or otherwise) to the Company or its subsidiaries;

 

(iii)    conviction of, or the pleading of nolo contendere with regard to, a crime constituting a felony; or

 

(iv)    dishonesty or misappropriation by Executive relating to the Company or any of its funds, properties or other assets.

 

A termination for Cause after a Change in Control (as defined in the Equity Plan, as of the date hereof) shall be based only on events occurring after such Change in Control; provided, however, the foregoing limitation shall not apply to an event constituting Cause that was not discovered by the Company prior to a Change in Control. For purpose of this definition, no act or failure to act by Executive shall be considered "willful" unless done or omitted to be done by Executive in bad faith and without reasonable belief that Executive's action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by Executive in good faith and in the best interests of the Company.

 

In order for a cessation of Executive's employment to be deemed to be a termination of Executive's employment for Cause for the conduct described above, (A) the Company shall have provided written notice to Executive that identifies such conduct, and (B) in the event that the event or condition is curable, Executive shall have failed to remedy such event or condition within thirty (30) days after Executive has received such written notice, and (C) the final determination that Executive's employment shall be terminated for Cause shall have been made (specifying the particular details thereof) by the Company. The Company must initially notify Executive of any event constituting Cause within ninety (90) days following the Company's knowledge of its existence or such event shall not constitute Cause under this Agreement.

 

  

  

  

ANNEX A

 

b.    "Good Reason" means, without Executive's express written consent, the occurrence of any of the following events:

 

(i)    the assignment to Executive of any duties or responsibilities (including reporting responsibilities) that are inconsistent with Executive's position(s), duties, responsibilities or status with the Company, or any diminution of such duties or responsibilities (other than temporarily while incapacitated because of physical or mental illness), or an adverse change in Executive's titles or offices (including Executive's membership on the Board) with the Company;

 

(ii)    a reduction by the Company in Executive's rate of annual base salary or annual target bonus opportunity (including any adverse change in the formula for such annual bonus target) or other incentive opportunities as the same may be increased from time to time thereafter;

 

(iii)    any requirement of the Company that Executive be based anywhere more than thirty-five (35) miles from his current location or such other place of employment as mutually agreed upon by the Company and Executive;

 

(iv)    any material breach of this Agreement by the Company, or the Company notifies Executive of the Company's intention not to observe or perform one or more of the material obligations of the Company under this Agreement; or

 

(v)    the failure of the Company to continue in effect Executive's participation in the Company's employee benefit plans, programs, arrangements and policies, at a level substantially equivalent in value to and on a basis consistent with the relative levels of participation of other similarly positioned senior executive officers.

 

Notwithstanding the foregoing, a Good Reason event shall not be deemed to have occurred if the Company cures such action, failure or breach within ten (10) days after receipt of notice thereof given by Executive. Executive's right to terminate employment for Good Reason shall not be affected by Executive's incapacities due to mental or physical illness and Executive's continued employment shall not constitute consent to, or a waiver of rights with respect to, any event or condition constituting Good Reason; provided, however, that Executive must provide notice of termination of employment within six (6) days following Executive's knowledge of an event constituting Good Reason or such event shall not constitute Good Reason under this Agreement.

 

  

  

  

ANNEX A

 

Confidentiality; Intellectual Property.

 

(a)    The Executive hereby acknowledge that, as an employee of the Company, the Executive will be making use of, acquiring and adding to confidential information of a special and unique nature and value relating to the Company and its subsidiaries. The Executive further recognize and acknowledge that all confidential information is the exclusive property of the Company and its subsidiaries, is material and confidential, and is critical to the successful conduct of the business of the Company and its subsidiaries. Accordingly, the Executive hereby covenant and agree that the Executive will use confidential information for the benefit of the Company and its subsidiaries only and will not at any time, directly or indirectly, during the term of the Executive's employment with the Company or at any time thereafter divulge,=reveal or communicate any confidential information to any person, firm, corporation or entity whatsoever, or use any confidential information for the Executive's own benefit or for the benefit of others, except as required in connection with the performance of the Executive's duties. The foregoing does not prohibit the Executive from making any disclosures required by applicable law, provided that whenever possible the Executive will give the Company prior notice of such contemplated disclosure and cooperate with the Company at its expense in seeking a protective order or other appropriate protection of such information.

 

(b)    All Intellectual Property, as defined in Annex A, and Technology, as defined in Annex A, created, developed, obtained or conceived of by the Executive during the Executive's employment, and all business opportunities presented to the Executive during the Executive's employment, will be owned by and belong exclusively to the Company, provided that they are reasonably related to any of the business of the Company as at the date of such creation, development, obtaining or conception, and the Executive will (i) promptly disclose any such Intellectual Property, Technology or business opportunity to the Company, and (ii) execute and deliver to the Company, without additional compensation, such instruments as the Company may require from time to time to evidence its ownership of any such Intellectual Property, Technology or business opportunity.

Enforcement of Covenants.

 

The Executive acknowledge that the restrictions contained in of this Agreement are a reasonable and necessary protection of the immediate interests of the Company, and any violation of these restrictions would cause substantial injury to the Company and that the Company would not have entered into this Agreement, without receiving the additional consideration offered by the Executive in binding the Executive to any of these restrictions. In the event of a breach or threatened breach by the Executive of any of these restrictions, the Company will be entitled to apply to any court of competent jurisdiction for an injunction restraining the Executive from such breach or threatened breach; provided, however, that the right to apply for an injunction shall not be construed as prohibiting the Company from pursuing any other available remedies for such breach or threatened breach. In the event that, notwithstanding the foregoing, a covenant included herein is deemed by any court to be unreasonably broad in any respect, it shall be modified in order to make it reasonable and shall be enforced accordingly. Without 

  

  

  

ANNEX A

 

limitation of, and notwithstanding the foregoing, in the event that, in any judicial proceeding, a court refuses to enforce any of the covenants contained herein, then the unenforceable covenant shall be deemed eliminated from the provisions hereof for the purpose of those proceedings to the extent necessary to permit the remaining covenants to be enforced. If any one or more of the provisions hereof is held to be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions hereof shall not be affected thereby. To the extent permitted by applicable law, the Executive and the Company waive any provision of law which renders any provision hereof invalid, illegal or unenforceable in any respect.

Indemnification.

 

The Executive's rights of indemnification under the Company's and any of its subsidiaries organizational documents, any plan or agreement at law or otherwise and the Executive's rights thereunder to director's and officer's liability insurance coverage for, in both cases, actions as an officer and/or director of the Company and its affiliates shall survive any termination of the Executive's employment.

 

Notices.

 

All notices or communications under this Agreement must be in writing, addressed (i) if to the Company to the attention of the General Counsel at the Company's headquarters address and (ii) if to the Executive, at the Executive's address first written above (or to any other addresses as either party may designate in a notice duly delivered as described in this paragraph). Any notice or communication must be delivered by telecopy, by hand or by courier. Notices and communications may also be sent by certified or registered mail, return receipt requested, postage prepaid, addressed as above and the third business day after the actual date of mailing will constitute the time at which notice was given.

 

Governin Law.

 

This Agreement will be governed by and construed in accordance with the laws of New York that apply to contracts made and performed entirely within such state.

 

Arbitration of Disputes.

 

Any dispute or controversy arising under or in connection with this Agreement that cannot be resolved by the Executive and the Company will be determined by arbitration in New York City, New York, in accordance with the rules set forth by the American Arbitration Association. The decision of the arbitrator will be final and binding on the Executive and the Company and judgment may be entered on such decision in any court of competent jurisdiction.

  

  

  

ANNEX A

 

Successors and Assigns.

This Agreement will inure to the benefit of and be enforceable by the Executive's legal representatives and heirs. This Agreement will inure to the benefit of and be binding upon the Company and its successors and assigns. As used in this Agreement, the term "Company" means the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, written agreement, or otherwise.

 

Withholding.

 

The Company may withhold from any amounts payable under this Agreement such federal, state or local taxes as are required to be withheld pursuant to any applicable law or regulation.

 

Entire Agreement; Modifications.

 

This Agreement (and the Annexes hereto) constitutes the entire agreement and understanding between the Executive and the Company with respect to the subject matter hereof, and may not be amended or modified except by subsequent written agreement executed by both parties hereto. At the Executive's request, the Company agrees to negotiate in good faith with the Executive to make such amendments to this Agreement as may be necessary or appropriate to comply with Section 409A of the Code.

  

  

  

Amendments to Robert G. Burton Jr.’s agreement dated June 22, 2006:

On December 29, 2008 as follows:

In order for your Severance Agreement to comply with the requirements of Section 409A of the Internal Revenue Code, we need to conform the definition of "Good Reason" to the definition accepted by the IRS or you may face a 20% penalty in the event you were entitled to severance payments. The deadline for such change is December 31, 2008.

Accordingly, please indicate your acceptance of the attached definition by signing this email in the space provided, initialing the attached definition and returning them to me prior to December 31, 2008.

Accepted and Agreed:

By:  /s/ ROBERT G. BURTON, JR.

        Robert G. Burton, Jr.

CENVEO CORP.

By:  /s/ TIMOTHY DAVIS

       Timothy M. Davis

b.  “Good Reason” means, without Executive’s express written consent, the occurrence of any of the following events:

(i)  a material diminution of Executive’s authority, duties or responsibilities;

(ii)  material reduction by the Company in Executive’s rate of annual base salary;

(iii)  any requirement of the Company that Executive be based anywhere more than thirty-five (35) miles from his current location or such other place of employment as mutually agreed upon by the Company and Executive if constituting a material change;  or

(iv)  any material breach of this Agreement by the Company.

Notwithstanding the foregoing, a Good Reason event shall not be deemed to have occurred if the Company cures such action, failure or breach within thirty (30) days after receipt of notice thereof given by Executive.  Executive’s right to terminate employment for Good Reason shall not be affected by Executive’s incapacities due to mental or physical illness and Executive’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any event or condition constituting Good Reason; provided, however, that Executive must provide notice of termination of employment within six (6) days following Executive’s knowledge of an event constituting Good Reason or such event shall not constitute Good Reason under this Agreement.

On August 10, 2011 as follows:

Mr. Robert G. Burton Jr. was appointed to position of President on August 10, 2011. The Company has orally amended his agreement. Commensurate with this promotion, Mr. Robert G. Burton Jr. receives an annual salary of $600,000 and is eligible for an incentive bonus of up to 110% of his annual salary.ex10-1.htm

SUBSCRIPTION AND PURCHASE AGREEMENT

FOR

Offering of up to $100,000

Consisting of 400,000 Shares of Common Stock

Price per Share $0.25

Accredited Investors and Non-Accredited Investors

________________________________________________________________

ALL INFORMATION HEREIN WILL BE TREATED CONFIDENTIALLY

_________________________________________________________________

Investor(s)                                __________________________

                                      __________________________

Number of Shares                       __________________________

Date Signed                                __________________________

  

1

  

	
 

SUBSCRIPTION AGREEMENT

Please read all instructions and the terms and conditions of this agreement carefully before filling out this application. If you need assistance, please contact, Daniel R. Van Ness at Stoecklein Law Group – drv@slgseclaw.com

When application is complete, mail the application and your investment to:Sport Tech Enterprises, Inc.

C/o Stoecklein Law Group

402 W. Broadway, Suite 690

                        San Diego, CA 92101

                                                                                                                                            (619) 704-1310

        Make checks payable to “Sport Tech Enterprises, Inc.”

 

Check this box if you are sending your subscription funds by wire transfer.

	
 

 I.                                                ACCOUNT REGISTRATION - Check One

 

	 
	  

	  

 

	
 o Individual Account

 o Joint Registration

 

If no box below is checked, we will issue the securities as JTWROS.

 

	 
	
 o Pension or Profit Sharing

 o Corporation, Partnership, Trust, Association or Other Entity

	  	  	  	
Joint Tenant with Right of Survivorship

	 	
 o IRA

	  	  
	  	  	  	
 

o Tenants in Common

	  	  	  	  
	  	  	  	
 

o Tenants by Entirety

	  	  	  	  
	  	  	  	
 

o Community Property

	  	  	  	  
	
 

                                                                                                                                                          

Name of APPLICANT, CUSTODIAN, CORPORATION, TRUST or BENEFICIARY

	  	  	  
	  	
 

M or F                                                                                              

	
 

 

Date of Birth                                                                                    

 

Soc. Sec./Tax ID # o

	  	
 

PLEASE PUT A CHECK NEXT TO THE SOC. SEC. # OR TAX ID. # RESPONSIBLE FOR TAXES.  WE WILL REPORT THIS NUMBER TO THE IRS.

	  
	
 

 

Name of JOINT TENANT or TRUSTEE (if applicable)

	  	  
	  	
 

M or F                                                                                                  

	
 

 

Date of Birth                                                                                        

	
 

 

Soc. Sec./Tax ID# o

	  	  
	
 

 

Name of ADDITIONAL TRUSTEE (if applicable)

	
 

 

Date of Trust

	  

Marital Status (please check one)        o  Single                      o  Married                      o  Separated                                o  Divorced

 

 

$________________ Investment Amount; __________ Share(s); (Minimum $_______ (_______ Shares) unless otherwise approved by the Company;

Increments of $_______ (_______ Shares))

HOME ADDRESS - THIS ADDRESS WILL BE USED FOR MAILING UNLESS YOU INDICATE OTHERWISE

ALSO COMPLETE ITEM II FOR MAILING TO CUSTODIAL IRAS

 

                                                                                                                                                                                                                                                                                                                 

Street Address                                                                                                                                                   Unit Number

City                               State                                 ZIP+4_______________

Home Phone Number _(_________)____________________________ Fax Number (           )____________________________________________________________

E-mail Address:   ________________________________________________________________________________________________

BUSINESS ADDRESS

Name of Company                                                                                              

 

 

Street Address                                                                                                                                          Suite Number                                        

City                                State                               ZIP+4________________

Business Phone Number (with Area Code) (_____) _________________________________/ Fax Number (with Area Code) (_____) ___________________________________

E-mail Address:   ________________________________________________________________________________________________

  

2

  

 

	
 II.                           ALTERNATIVE DISTRIBUTION INFORMATION (CUSTODIAN)

YOU MUST COMPLETE THIS SECTION IF THIS IS AN IRA INVESTMENT:

Name of Firm (Bank, Brokerage, Custodian):                                                                                                                                                                                                                                                                                                                                        

Account Name:                                                                                                                                                                                                                            

Account Number:                                                                                                                                                                                                                                                                                                                                                                                            

Name of Stock Certificate: _______________________________________________________________________________________

Representative Name: __________________________________________________________________________________________

Representative Phone Number: __________________________________________________________________________________

Address:                                                                                                                                                                                                                                      

City, State ZIP:                                                                                                                                                                                                                                                                                                                                                                                        

 

	
 III.                                                        SUBSCRIPTION AGREEMENT

You as an individual or you on behalf of the subscribing entity are being asked to complete this Subscription Agreement so a determination can be made as to whether or not you (it) are qualified to purchase securities under applicable federal and state securities laws.

Your answers to the questions contained herein must be true and correct in all respects, and a false representation by you may constitute a violation of law for which a claim for damages may be made against you.

Your answers will be kept strictly confidential; however, by signing this Subscription Agreement, you will be authorizing the Company to present a completed copy of this Subscription Agreement to such parties as they may deem appropriate in order to make certain that the offer and sale of the Securities will not result in a violation of the Securities Act of 1933, as amended, or of the securities laws of any state.

This Subscription Agreement does not constitute an offer to sell or a solicitation of an offer to buy securities or any other security.

All questions must be answered.  If the appropriate answer is "None" or "Not Applicable," please state so.  Please print or type your answers to all questions and attach additional sheets if necessary to complete your answers to any item.  Please initial any correction.

INDIVIDUAL SUBSCRIBERS:

If the Securities subscribed for are to be owned by more than one person, you and the other co-subscriber must each complete a separate Subscription Agreement (except if the co-subscriber is your spouse) and sign the Signature Page annexed hereto.  If your spouse is a co-subscriber, you must indicate your spouse's name and social security number.

CORPORATIONS, PARTNERSHIPS, PENSION PLANS AND TRUSTS:

The information requested herein relates to the subscribing entity and not to you personally (unless otherwise determined in the ACCREDITED INVESTOR STATUS section).

	
IV.                                                    ACCREDITED INVESTOR STATUS

 

	
TO BE AN ACCREDITED INVESTOR, YOU MUST MEET ONE OF THE FOLLOWING TESTS, PLEASE CHECK THE APPROPRIATE SPACES BELOW.

 

	
A.

	
INDIVIDUAL ACCOUNTS

I certify that I am an "accredited investor" because:

1      _______ I had an individual income of more than $200,000 in each of the two most recent calendar years, and I reasonably expect to have an individual income in excess of $200,000 in the current calendar year; or my spouse and I had joint income in excess of $300,000 in each of the two most recent calendar years, and we reasonably expect to have a joint income in excess of $300,000 in the current calendar year (note: Item V, Income Statement, must be completed if you check this option);

OR

	
  

	
2

	
_______ I have an individual net worth, or my spouse and I have a joint net worth, in excess of $1,000,000 (see explanation below regarding the Dodd-Frank Act).

	
  

	
Upon the enactment of the Dodd-Frank Act on July 21, 2010, the value of the person’s primary residence must be excluded from person’s calculation of net worth.  The related amount of indebtedness secured by the primary residence up to its fair market value is excluded.  Indebtedness secured by the residence in excess of the value of the home should be considered a liability and deducted from the investor’s net worth.

For purposes of this Subscription Agreement, "individual income" means "adjusted gross income" as reported for Federal income tax purposes, exclusive of any income attributable to a spouse or to property owned by a spouse:  (i) the amount of any interest income received which is tax-exempt under Section 103 of the Internal Revenue Code of 1986, as amended, (the "Code"), (ii) the amount of losses claimed as a limited partner in a limited partnership (as reported on Schedule E of form 1040), (iii) any deduction claimed for depletion under Section 611 et seq. of the Code and (iv) any amount by which income from long-term capital gains has been reduced in arriving at adjusted gross income pursuant to the provisions of Sections 1202 of the Internal Revenue Code as it was in effect prior to enactment of the Tax Reform Act of 1986.

For purposes of this Subscription Agreement, "joint income" means, "adjusted gross income," as reported for Federal income tax purposes, including any income attributable to a spouse or to property owned by a spouse, and increased by the following amounts: (i) the amount of any interest income received which is tax-exempt under Section 103 of the Internal Revenue Code of 1986, as amended (the "Code"), (ii) the amount of losses claimed as a limited partner in a limited partnership (as reported on Schedule E of Form 1040), (iii) any deduction claimed for depletion under Section 611 et seq. of the Code and (iv) any amount by which income from long-term capital gains has been reduced in arriving at adjusted gross income pursuant to the provisions of Section 1202 of the Internal Revenue Code as it was in effect prior to enactment of the Tax Reform Act of 1986.

For the purposes of the Subscription Agreement, "net worth" means (except as otherwise specifically defined) the excess of total assets at fair market value, including home and personal property, over total liabilities, including mortgages and income taxes on unrealized appreciation of assets.

	
  

	
B.

	
CORPORATIONS, PARTNERSHIPS, EMPLOYEE BENEFIT PLANS OR IRAS

	
  

	
(Please provide a copy of the Partnership Agreement, Limited Liability Company Operating Agreement, Profit Sharing Plan, or Notarized Corporate Resolution as applicable)

1      Has the subscribing entity been formed for the specific purpose of investing in the Securities?                                                                                                                                                       YES  NO

If your answer to question 1 is "No," CHECK whichever of the following statements (a-e) is applicable to the subscribing entity.  If your answer to question 1 is "Yes," the subscribing entity must be able to certify to statement (2) below in order to qualify as an "accredited investor."

  

3

  

 

The undersigned entity certifies that it is an "accredited investor" because it is:

(a)      _______ an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974, provided that the investment decision is made by a plan fiduciary, as defined in section 3(21) of such Act, and the plan fiduciary is a bank, savings and loan association, insurance company or registered investment adviser; OR

(b)      _______ an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974 that has total assets in excess of $5,000,000; OR

(c)      _______ each of its shareholders, partners, or beneficiaries meets at least one of the following conditions described above under Individual Accredited Investor Status in Section A of Item V above.  Please also CHECK the appropriate space in Section A of Item V above.  (Note:  Item V, Income Statement, must be completed for each shareholder, partner or beneficiary if you are relying upon an income standard by checking option 1 in Section A of Item IV above.) OR

(d)      _______ the plan is a self directed employee benefit plan and the investment decision is made solely by a person that meets at least one of the conditions described above under Individual Accredited Investor Status in Section A of Item IV above.  Please also CHECK the appropriate space in Section A of Item IV above. (Note:  Item V, Income Statement, must be completed if you are relying upon an income standard by checking option 1 in Section A of Item IV above.) OR

 (e)      _______ a corporation, a partnership or a Massachusetts or similar business trust with total assets in excess of $5,000,000.

	
  

	
2.

	
If the answer to Question 1 above is "Yes," please certify the statement below is true and correct:

_______ The undersigned entity certifies that it is an accredited investor because each of its shareholder or beneficiaries meets at least one of the conditions described above under Individual Accredited Investor Status in Section A of Item IV above.  Please also CHECK the appropriate space in Section A of Item IV above. (Note:  Item V, Income Statement, must be completed if you are relying upon an income standard by checking option 1 in Section A of Item IV above.)

	
  

	
C.

	
TRUST ACCOUNTS

	
  

	
(Please provide complete copy of the Trust)

1.     Has the subscribing entity been formed for the specific purpose of investing in the Securities?                                                                                                                                                     YES  NO 

If your answer to question 1 is "No," CHECK whichever of the following statements (a-c) is applicable to the subscribing entity.  If your answer to question 1 is "Yes," the subscribing entity must be able to certify to the statement (c) below in order to qualify as an "accredited investor."

The undersigned trustee certifies that the trust is an "accredited investor" because:

(a)_______ The trust has total assets in excess of $5,000,000 and the investment decision has been made by a "sophisticated person" as described in Rule 506(b)(2)(ii) promulgated under the Act; OR

(b)_______ The trustee making the investment decision on its behalf is a bank (as defined in Section 3(a)(2) of the Act), a saving and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act, acting in its fiduciary capacity; OR

(c)_______ the grantor(s) of the trust may revoke the trust at any time and regain title to the trust assets and has (have) retained sole investment control over the assets of the trust and the (each) grantor(s) meets at least one of the conditions described above under Individual Accredited Investor Status.  Please also CHECK the appropriate space in that Section.

	
  

	
D.

	
ANY ENTITY (but not an individual person)

______ All of the equity owners of this entity are accredited investors.  (If you are checking this option EACH owner of the entity must complete Item IV, A, by checking option 1 or 2 or both, as applicable, and complete Item V if you checked option 1 of Item IV, A.  Make copies of pages 2 and 3 to do this and note each owner’s name on each copy.)

	
 

 V.                                  INCOME STATEMENT - (Round off to the nearest $5,000)

	
ALL ACCREDITED INVESTORS RELYING ON AN INCOME STANDARD (YOU ARE RELYING ON AN INCOME STANDARD IF YOU CHECKED ITEM IV(A)(1)) MUST COMPLETE THIS SECTION.

Please specify the amount of your:   Individual   Joint      Trust    Beneficiary     Shareholder     Partner

income (defined in page 2:  Accredited Investor Status) in calendar years 2009 and 2010 and your projected income for 2011.

	
 

2009

	
 

$                               

	  
	
 

2010

	
 

$                               

	  
	
 

2011

	
 

$                               

	
 

(projected)

Current occupation:                                                                                                                              

Name of Employer:                                                                                                                                                                                                                        

Position or Title:                                                                                                                Telephone number (             )                               -                                                                                          

    

Former employment                                                                                                           (if current employment is less than five years):

Name of Employer:                                                                                                           Position or Title:                                                                                                   

Position or Title:                                                                                                               Period Employed:                                           to                                                                                   

        

  

4

  

	
 

 VI.                                                                  CERTIFICATIONS

I understand that investment in the Securities is an illiquid investment. In particular, I recognize that: (i) I must bear the economic risk of investment in the Securities for an indefinite period of time, since the Securities have not been registered under the Securities Act of 1933 (the "Securities Act") and therefore cannot be sold unless either they are subsequently registered under the Securities Act or an exemption from such registration is available and a favorable opinion of counsel for the Company to that effect is obtained (if requested by the Company); and (ii) no established market will exist and it is possible that no public market for the Securities will develop. I consent to the affixing by the Company of such legends on certificates representing the Securities as any applicable federal or state securities law may require from time to time.

I represent and warrant to the Company that: (i) The financial information provided in the Subscription Agreement is complete, true and correct; (ii) I and my Investment Managers, if any, have received the Private Placement Memorandum (the “Memorandum”) and carefully reviewed and understand the risks of, and other considerations relating to, a purchase of Securities, including, but not limited to, the risks set forth under "Risk Factors" and the conflicts of interest set forth under “Conflicts of Interest” in the Memorandum; (iii) I and my Investment Managers, if any, have been afforded the opportunity to obtain any information necessary to verify the accuracy of any representations or information set forth in the Memorandum and have had all inquiries to the Company answered, and have been furnished all requested materials, relating to the Company and the offering and sale of the Securities and anything set forth in the Memorandum; (iv) neither I nor my Investment Managers, if any, have been furnished any offering literature by the Company or any of its affiliates, associates or agents other than the Memorandum, and the documents referenced therein; and (v) I am acquiring the Securities for which I am subscribing for my own account, as principal, for investment purposes only and not with a view to the resale or distribution of all or any part of the Securities; (vi) I acknowledge and consent to the existence of such actual and potential conflicts of interest between the Company and me, on the one hand, and the Company and its affiliates, on the other hand, and I waive any claim that the Company or I might otherwise have against the Company and its affiliates in respect of any transaction involving such conflicts; (vii) I acknowledge and consent that the Company and its affiliates may make such investments on their own behalf or on behalf of others, including, without limitation, on behalf of the Company or any other limited partnership or REIT affiliated with the Company.

The undersigned, if a corporation, partnership, trust or other form of business entity, (i) is authorized and otherwise duly qualified to purchase and hold the Securities, (ii) has obtained such additional tax and other advice that it has deemed necessary, (iii) has its principal place of business at its residence address set forth in this Subscription Agreement, and (iv) has not been formed for the specific purpose of acquiring the Securities (although this may not necessarily disqualify the subscriber as a purchaser). The persons executing the Subscription Agreement, as well as all other documents related to the Offering, represent that they are duly authorized to execute all such documents on behalf of the entity. (If the undersigned is one of the aforementioned entities, it agrees to supply any additional written information that may be required.)

All of the information which I have furnished to the Company and which is set forth in the Subscription Agreement is correct and complete as of the date of the Subscription Agreement. If any material change in this information should occur prior to my subscription being accepted, I will immediately furnish the revised or corrected information. I further agree to be bound by all of the terms and conditions of the Offering described in the Memorandum. I am the only person with a direct or indirect interest in the Securities subscribed for by this Subscription Agreement. I agree to indemnify and hold harmless the Company and its officers, directors and affiliates as well as the Company’s placement agents and all their officers, directors and affiliates from and against all damages, losses, costs and expenses (including reasonable attorneys' fees) that they may incur by reason of the failure of the undersigned to fulfill any of the terms or conditions of this Subscription Agreement or by reason of any breach of the representations and warranties made by the undersigned herein or in any document provided by the undersigned to the Company. This subscription is not transferable or assignable by me without the written consent of the Company.  If more than one person is executing this agreement, the obligations of each shall be joint and several and the representations and warranties contained in this Subscription Agreement shall be deemed to be made by, and be binding upon, each of these persons and his or her heirs, executors, administrators, successors and assigns. This subscription, upon acceptance by the Company, shall be binding upon my heirs, executors, administrators, successors and assigns. This Subscription Agreement shall be construed in accordance with and governed in all respects by the laws of the State of Nevada.

I certify that I, either alone or with my purchaser representative, have such knowledge and experience in financial and business matters that I am capable of evaluating the merits and risks of this investment.

Under penalties of perjury, I certify that (1) my taxpayer identification number shown in this Subscription Agreement is correct and (2) I am not subject to backup withholding because (a) I have not been notified that I am subject to backup withholding as a result of a failure to report all interest and dividends or (b) the Internal Revenue Service has notified me that I am no longer subject to backup withholding.  (If you have been notified that you are subject to backup withholding and the Internal Revenue Service has not advised you that backup withholding has been terminated, strike out item (2).)

The undersigned acknowledge that Stoecklein Law Group is acting solely as a collector/depositor in connection with the offering of the Shares and makes no recommendation with respect thereto.

BY SIGNING, I ACKNOWLEDGE THAT I HAVE CAREFULLY REVIEWED THE MEMORANDUM AND THE EXHIBITS ATTACHED THERETO RELATED TO THIS INVESTMENT AND AM BOUND BY THE TERMS OF THE SUBSCRIPTION AGREEMENT, THE MEMORANDUM AND THE EXHIBITS ATTACHED THERETO.

  

5

  

	
 

 VII.                                                      PATRIOT ACT REQUIREMENTS

The Patriot Act requires us to obtain the following information from you to detect and prevent the misuse of the world financial system.

	
1.

	
In the space provided below, please provide details of where monies were transferred from to the Company in relation to your subscription for the Shares.

	
 

 

 

 

COUNTRY

	
 

 

NAME OF BANK/FINANCIAL INSTITUTION

	
CONTACT NAME/PHONE NUMBER AT BANK/FINANCIAL INSTITUTION

	
 

 

 

NAME OF ACCOUNTHOLDER

	
 

 

 

ACCOUNT NUMBER

	  	  	  	  	  
	  	  	  	  	  

If the country from which the monies were transferred appears in the Approved Country List below, please go to number 3.  If the country does not appear, please go to number 2.

Approved Country List

Argentina                                        Germany                                         Liechtenstein                                         Spain

Australia                                         Gibraltar                                           Luxembourg                                          Switzerland

Bermuda                                          Guernsey                                        Mexico                                                   Turkey

Belgium                                           Hong Kong                                    Netherlands                                           United Kingdom

Brazil                                                Iceland                                            New Zealand                                         United States

British Virgin Islands                    Ireland                                             Norway

Canada                                            Isle of Man                                     Panama

Denmark                                          Italy                                                 Portugal

Finland                                            Japan                                               Singapore

France                                             Jersey

	
2.

	
If subscription monies were transferred to the Company from any country other than on the "Approved Country List" (see above), please provide the following documentation to the Company (all copies should be in English and certified as being "true and correct copies of the original" by a notary public of the jurisdiction of which you are resident).

	
(a)  

	
For Individuals:

	
(i)  

	
evidence of name, signature, date of birth and photographic identification

	
(ii)  

	
evidence of permanent address

	
(iii)  

	
where possible, a reference from a bank with whom the individual maintains a current relationship and has maintained such relationship for at least two years

	
(b)  

	
For Companies:

	
(i)  

	
a copy of its certificate of incorporation and any change of name certificate

	
(ii)  

	
a certificate of good standing

	
(iii)  

	
a register or other acceptable list of directors and officers

  

6

  

 

	
(iv)  

	
a properly authorized mandate of the company to subscribe in the form, for example, of a certified resolution which includes naming authorized signatories

	
(v)  

	
a description of the nature of the business of the company

	
(vi)  

	
identification, as described above for individuals, for at least two directors and authorized signatories

	
(vii)  

	
a register of members or list of shareholders holding a controlling interest

	
(viii)  

	
identification, as described above, for individuals who are beneficial owners of corporate shareholders which hold 10% or more of the capital share of the company

	
(c)  

	
For Partnerships and Unincorporated Businesses:

	
(i)  

	
a copy of any certificate of registration and a certificate of good standing, if registered

	
(ii)  

	
identification, as described above, for individuals and, where relevant, companies constituting a majority of the partners, owners or managers and authorized signatories

	
(iii)  

	
a copy of the mandate from the partnership or business authorizing the subscription in the form, for example, of a certified resolution which includes naming authorized signatories

	
(iv)  

	
a copy of constitutional documents (formation and partnership agreements)

	
(d)  

	
For Trustees:

	
(i)  

	
identification, as described above, for individuals or companies (as the case may be) in respect of the trustees

	
(ii)  

	
identification, as described above for individuals, of beneficiaries, any person on whose instructions or in accordance with those wishes the trustee/nominee is prepared or accustomed to act and the settlor of the trust

	
(iii)  

	
evidence of the nature of the duties or capacity of the trustee

	
3.

	
The Company is also required to verify the source of funds.  To this end, summarize the underlying source of the funds remitted to us (for example, where subscription monies were the profits of business (and if so please specify type of business), investment income, savings, etc.).

	
   Source of Funds

	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  

  

7

  

	
 

 VIII.                                                     ANTI-MONEY LAUNDERING ACT

 

	
  

	
WIRING FUNDS: Due to the Anti-Money Laundering Act, please adhere to the following procedure:

 

 

	
A.  

	
Complete Sections 1 through 3 above, as applicable, utilizing the information for the bank from which the wire will originate.

 

 

	
B.  

	
Attach a copy of your “Letter of Instruction” or other wire instructions showing your name, financial institution name (where wire will originate), account number, wire amount, and wire instructions (escrow agent information such as ABA routing number, escrow account number etc)-this must be signed and dated.

 

 

	
C.  

	
If monies will be wired from an account not matching the name on this Subscription Agreement, additional documentation may be necessary (please contact Paulson Investment Company, Inc.  for assistance). (619) 704-1310)

 

 

	
D.  

	
Submit Subscription Agreement to Paulson Investment Company, Inc. for processing at the same time of your wiring funds.

 

	
E.  

	
If wire confirmation does NOT show account number of wire origination, additional documentation will be required.

	
 

 IX.                                                                       SIGNATURES

The Subscription Agreement contains various statements and representations by subscribers and should be carefully reviewed in its entirety before executing this signature page.

I hereby certify that I have reviewed and am familiar with the terms of the Subscription Agreement. This Subscription Agreement incorporates by reference all forms of securities to be purchased.  I agree to be bound by all of the terms and conditions of this Subscription Agreement, the Memorandum, and all forms of securities presented to me.

Dated                                                                                               

Print name of individual subscriber, custodian, corporation,                        Signature of individual subscriber, authorized trustee: person, trustee:

 

                                                                                                                                                                                                                                                                      

Print name of co-subscriber, authorized person,                                            Signature of co-subscriber, authorized person, co-trustee if required by trust instrument:co-trustee if required by trust instrument:

 

                                                                                                                                                                                                                                                                         

Investment Authorization.  The undersigned corporation, partnership, benefit plan or IRA has all requisite authority to acquire the Securities hereby subscribed for and to enter into the Subscription Agreement, and further, the undersigned officer, partner or fiduciary of the subscribing entity has been duly authorized by all requisite action on the part of such entity to execute these documents on its behalf.  Such authorization has not been revoked and is still in full force and effect.

	
Check Box:

	


	
Yes

	


	
No

	


	
Not Applicable

CAPACITY CLAIMED BY SIGNER:

	
  

	


	
Individual(s)

	


	
Attorney-In-Fact

	
  

	


	
Partner(s)

	


	
Subscribing Witness

	
  

	


	
Trustee(s)

	


	
Guardian/Conservator

	
  

	


	
Corporate

	


	 	
Other:

	 

                    Officer(s)                                                          Title(s)                                                                        

  

8

  

 

	
 

X.                                   VERIFICATION OF INVESTMENT ADVISOR/BROKER

 

I state that I am familiar with the financial affairs and investment objectives of the investor named above and reasonably believe that a purchase of the Securities is a suitable investment for this investor and that the investor, either individually or together with his or her purchaser representative, understands the terms of and is able to evaluate the merits of this offering.  I acknowledge:

	
  

	
(a)

	
that I have reviewed the Memorandum,  Subscription Agreement and forms of securities presented to me, and attachments (if any) thereto;

	
  

	
(b)

	
that the Subscription Agreement and attachments thereto have been fully completed and executed by the appropriate party; and

	
  

	
(c)

	
that the subscription will be deemed received by the Company upon acceptance of the Subscription Agreement.

Broker/Dealer                                                              Account Executive

a                                                                                                ________________________________

(Name of Broker/Dealer)                                                        (Signature)

A                                                                                               ________________________________

(Street Address of Broker/Dealer Office)                            (Print Name)

                                                                                                                                                                              

(City of Broker/Dealer Office)   (State) (Zip)                      (Representative I.D. Number)

(              )                     -    ________________                                                                                              

(Telephone Number of Broker/Dealer Office)                    (Date)

(              ) _____________________________              ________________________________   

(Fax Number of Broker/Dealer Office)                                  (E-mail Address of Account Executive)

 

  

9

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