<PAGE> 1
EXHIBIT 4.1
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT (the "Agreement") is made as of the day of
July, 2000, by and among SONUS COMMUNICATION HOLDINGS, INC., a Delaware
corporation ("Sonus" or the "Company"), and the investors who complete and
return to Sonus the attached Schedule A, which is expressly made a part hereof
(the "Investors").
W I T N E S S E T H
WHEREAS, the Company desires to sell to the Investors up to 5,000,000
Units (the "Units" as defined in Section 1 below) offered by the Company,
subject to the terms and conditions set forth herein; and
WHEREAS, the Investors desire to purchase such Units;
NOW, THEREFORE, in consideration for the mutual covenants and agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Unit. Each Unit sold hereunder shall include two shares of the common
stock of the Company, par value $.0001 per share (the "Common Stock") and one
common stock purchase warrant, which entitles the holder to purchase one share
of the Common Stock for $.60 per share (the "Warrant"), as adjusted in
accordance with the terms of the Warrant.
2. Purchase and Sale of Units.
a. Sale and Issuance.Subject to the terms and conditions of this
Agreement and the Private Placement Memorandum dated July 5, 2000 to which this
Agreement is attached (the "PPM"), each Investor agrees, severally but not
jointly, to purchase at the Closing (as hereinafter defined), and Sonus agrees
to sell and issue at the Closing, the number of Units set forth on the
Investor's signature page, attached hereto as Schedule A, for the purchase price
of 60/100 Dollar ($.60) per Unit, to be paid by check, subject to collection, or
wire transfer, from Investor and delivered to Sonus upon execution and delivery
hereof by Investor.
b. Maximum Offering. The offering of the Units ("Offering") shall
be conducted by Sonus. There is no minimum subscription for Units or minimum
aggregate offering. The maximum subscription is 5,000,000 Units, or $3,000,000.
Subject to the foregoing, closings will be held at the discretion of the
Company, upon receipt of subscriptions and acceptance thereof by Sonus. An
executed copy of this Subscription Agreement, and a statement of accredited
investor, together with the purchase price, should be returned to the Company.
All funds will be held at Commercial Bank of New York, pending Closing, and will
be returned in full, without interest, if Sonus rejects a subscription or
terminates the Offering. This Offering shall terminate on July 27, 2000, unless
extended by the Company in its sole discretion (the "Termination Date").
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c. Closings. The purchase and sale of the Units shall take place
at a closing at the office of the Company, 254 West 31st Street, 3rd Floor, New
York, New York 10001, upon receipt of acceptable subscriptions by Sonus, or at
such other time and place as Sonus may designate (the "Closing"); provided that
all Closings shall take place no later than the Termination Date. At the
Closing, Sonus shall accept the subscription payments against delivery to its
transfer agent of irrevocable instructions directing the transfer agent to issue
to the Investors certificates representing the portion of their Units comprised
of Common Stock and against issuance of the Warrants to Investors.
3. Representations and Warranties of Sonus. Sonus hereby represents and
warrants to each Investor as follows:
a. Organization, Good Standing and Qualification. Sonus is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, and has all requisite power and authority to carry on
its business as now conducted. Sonus is duly qualified to transact business, and
is in good standing, in each jurisdiction in which the failure to so qualify
would have a material adverse effect on its business.
b. Capitalization. The authorized capital of Sonus consists of
100,000,000 shares of Common Stock, par value $.0001, of which 7,398,071 are
issued and outstanding, not including any options, warrants or convertible
securities.
c. Authorization. All corporate action on the part of the Company
necessary for the authorization, execution and delivery of this Agreement, the
performance of all obligations of the Company hereunder and the authorization,
issuance and delivery of the Units, to the extent that the foregoing requires
performance on or prior to the Closing, has been taken or will be taken on or
prior to the Closing, and the Company has all requisite corporate power and
authority to enter into this Agreement.
4. Representations and Warranties of Investors. Each Investor hereby
represents and warrants to Sonus as follows:
a. Power and Authority; Binding Obligation. Investor has full
power and authority to enter into this Agreement. This Agreement has been duly
executed and delivered by Investor and, assuming due authorization, execution
and delivery by Sonus, constitutes Investor's valid and legally binding
obligation enforceable against the Investor in accordance with its terms,
subject to the effect of any applicable bankruptcy, reorganization, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
moratorium or similar laws affecting creditors' rights generally, subject, as to
enforceability, to the effect of general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
and subject to the effect of applicable securities laws as to rights of
indemnification.
b. Purchase Entirely for Own Account, Etc.. The Units to be
purchased by Investor hereunder will be acquired for investment for Investor's
own account, not as a nominee
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or agent, and not with a view to the resale or distribution of any part thereof.
Investor has no present intention of selling, granting any participation in, or
otherwise distributing the Units. Investor does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participations to any person with respect to the Units. The Investor has not
construed the contents of this Agreement, or any additional agreement with
respect to the proposed investment in the Units or any prior or subsequent
communications from Sonus, or any of its officers, employees or representatives,
as investment, tax or legal advice, or as information necessarily applicable to
such Investor's particular financial situation. The Investor has consulted its
own financial advisor, tax advisor, legal counsel and accountant, as necessary
or desirable, as to matters concerning his investment in the Units.
c. Disclosure. Investor has received or reviewed all the
information which such Investor has requested for the purposes of determining
the merits of the Units as an investment. Investor has read and understands the
PPM. Investor has also received and reviewed a copy of the Company's audited
financial statements for the fiscal year ended December 31, 1999 and the
Amendment No. 1 to Form SB-2 filed on March 22, 2000. Investor has had an
opportunity to ask questions and receive answers from the Company regarding the
Company, its business, and the terms and conditions of the offering of Units.
INVESTOR ACKNOWLEDGES AND AGREES THAT THE PURCHASE OF THE UNITS INVOLVES A HIGH
DEGREE OF RISK, INCLUDING, WITHOUT LIMITATION, THOSE SET FORTH IN THE PPM, AND
MAY RESULT IN A LOSS OF THE ENTIRE AMOUNT INVESTED. THERE IS NO ASSURANCE THAT
THE COMPANY'S OPERATIONS WILL BE PROFITABLE IN THE FUTURE OR THAT ANY PUBLIC
MARKET FOR THE UNITS WILL BE AVAILABLE.
d. Accredited Investor. Investor is an accredited investor as
defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as
amended ("Securities Act"). The information provided by Investor on the
Statement of Accredited Investor is true and correct in all respects. Investor
is capable of bearing the economic risk of an investment in the Units, including
the possible loss of Investor's entire investment. Investor has such knowledge
and experience in financial or business matters that it is capable of evaluating
the merits and risks of an investment in the Units offered hereby. If other than
an individual, Investor has not been organized solely for the purpose of
acquiring the Units.
e. Restricted Securities. Investor understands that the Units
being purchased hereunder are "restricted securities" as defined in the
Securities Act, and that under federal and state securities laws the Units may
be resold without registration under the Securities Act only in certain limited
circumstances. The Company has agreed to file a registration statement with the
Securities and Exchange Commission (the "Commission") within 30 days after the
Closing of this Offering with respect to the resale of the Units, but there can
be no assurance that such registration statement will become effective and such
registration statement shall cover only the number shares of Common Stock which
the Investors requests to have registered within five days after the Closing.
Investor is familiar with Rule 144 promulgated by the Commission under the
Securities Act, and understands the resale limitations imposed thereby and by
the Securities Act generally. Investor also acknowledges that the Units are
subject to significant restrictions on transfer, pledge or hypothecation in the
manner described in the PPM.
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f. Legends. It is understood that certificates or other evidence
of the Units may bear the following legend, as well as any legend required by
the laws of any state:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION
STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT
OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH
REGISTRATION IS NOT REQUIRED PURSUANT TO A VALID EXEMPTION
THEREFROM UNDER THE SECURITIES ACT OF 1933, AS AMENDED."
g. Consents and Approvals; No Conflict. (i) The execution and
delivery of this Agreement by the Investor does not, and the performance of this
Agreement by the Investor will not, require any consent, approval, authorization
or other action by, or filing with or notification to, any governmental or
regulatory authority, except where failure to obtain such consent, approval,
authorization or action, or to make such filing or notification, would prevent
Investor from performing any of its material obligations under this Agreement.
(ii) The execution, delivery and performance of this
Agreement by the Investor does not (A) in the case of any Investor that is not
an individual, conflict with or violate the charter or by-laws, partnership or
other governing documents of such Investor, or (B) except as would not have a
material adverse effect on the ability of the Investor to consummate the
transactions contemplated by this Agreement, conflict with or violate any law,
rule, regulation, order, writ, judgment, injunction, decree, determination or
award applicable to the Investor.
5. Covenants of Investors. Each Investor hereby covenants with Sonus
as follows:
a. Limitations on Disposition. Investor shall not make any
disposition of all or any portion of the Units unless and until such proposed
disposition shall in all respects comply with the terms and conditions of the
PPM, and, in addition thereto:
i. There is then in effect a registration statement under
the Securities Act covering such proposed disposition, and such disposition is
made in accordance with such registration statement; or
ii. Such Investor shall have notified Sonus of the
proposed disposition and shall have furnished Sonus with a detailed statement of
the circumstances surrounding the proposed disposition, and, if requested by
Sonus, such Investor shall have furnished the Company with an opinion of
counsel, in form and substance satisfactory to Sonus, that such disposition will
not require registration of the Units under the Securities Act.
b. Confidentiality. Investor shall maintain in confidence, and
shall not use or disclose without the prior written consent of Sonus, any
information that is furnished to it by the
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Company or its agents in connection with this Agreement. This obligation of
confidentiality shall not apply, however, to any information (i) in the public
domain through no unauthorized act or failure to act by any Investor, (ii)
lawfully disclosed to such Investor by a third party who possessed such
information without any obligation of confidentiality, (iii) known previously by
such Investor or lawfully developed by such Investor independent of any
disclosure by Sonus or its agents or (iv) disclosed to legal or financial
advisors in the ordinary course of evaluating this investment; provided,
however, that such advisors agree to be bound by the provisions of this Section
5.b. Investor shall return to Sonus all materials containing such information
upon request by Sonus in the event that Investor's subscription is not accepted
by Sonus.
6. Conditions of Investor's Obligations at Closing. The obligations of
each Investor hereunder are subject to, and contingent upon, the fulfillment, on
or before each Closing, of each of the following conditions, the waiver of which
shall not be effective against any Investor who does not consent in writing
thereto:
a. Representations and Warranties. The representations and
warranties of Sonus contained in Section 3 hereof shall be true and correct on
and as of the Closing with the same effect as though such representations and
warranties had been made on and as of the date of such Closing.
b. Performance. Sonus shall have performed and complied with all
agreements, obligations and covenants contained in this Agreement that are
required to be performed or complied with by it on or before the Closing;
provided that the obligations of the Investors shall not be subject to or
contingent upon the issuance by Sonus of the Units to the persons or entities
who submit the attached Schedule A who have not performed or tendered the
performance of their obligations required to be performed under this Agreement
on or prior to the Closing.
7. Conditions of Sonus's Obligations at Closing. The obligations of
Sonus to each Investor hereunder are subject to and contingent upon the
fulfillment by such Investor, on or before the Closing, of each of the following
conditions:
a. Representations and Warranties. The representations and
warranties of each Investor contained herein shall be true and correct on and as
of the Closing with the same effect as though such representations and
warranties had been made on and as of the date of such Closing.
b. Payment of Purchase Price by Investors. Each Investor shall
have delivered to Sonus the purchase price specified in Schedule A attached
hereto, in the manner specified in Section 2 hereof.
c. Statement of Accredited Investor. Each Investor shall have
delivered to Sonus the Statement of Accredited Investor in the form set forth in
Schedule B attached hereto, and the information provided therein shall be
complete and correct on and as of the Closing with the same effect as though
such information had been provided as of the date of such Closing.
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8. Registration Rights. (a) The Company will, at its expense, within 30
days of the date of the final Closing, file with the Commission an amendment to
the Registration Statement on SB-2 currently on file with the Commission or file
another Registration Statement on the appropriate form seeking to permit the
resale without restriction of the Shares sold in this Offering (the "SEC
Filing") to the extent the Investor has requested such Shares be included in
such registration within 5 days after the date of the final Closing.
(b) The obligation of the Company under this Section 8 shall be
limited to one (1) registration statement. If any registration pursuant to this
Section 8(b) shall be underwritten in whole or in part, the Company may require
that the Shares requested for inclusion pursuant to this Section 8(b) be
included in the underwriting on the same terms and conditions as the securities
otherwise being sold through the underwriters. In the event that the Shares
requested for inclusion pursuant to this Section 8(b) together with any other
shares would, in the good faith judgment of the managing underwriter of such
public offering, reduce the number of shares to be offered by the Company or
interfere with the successful marketing of the securities offered by the
Company, the Company will include in such registration such Shares of each
Investor which is pro rata, based on the number of securities which in the
opinion of such underwriters can be sold and on the number of securities which
all Investors request be included in the registration. The rights of all
Investors under this Section 8(b) shall terminate at such time as the Investors
may sell all of their Shares without restriction or limitation either under Rule
144 or under any other exemption from registration under the Securities Act or
as the Shares are registered for resale with the Commission.
(c) With respect to each registration statement prepared and filed
pursuant to this Section 8(a) and each inclusion of Shares in a registration
statement pursuant to Section 8(b) hereof, the fees, costs and expenses of
registration to be borne by the Company shall include all registration expenses.
With respect to any registration, the Investor shall bear his, her or its
respective selling and legal expenses.
9. In the case of each registration effected by the Company pursuant to
this Agreement, the Company will keep the Investors advised in writing as to the
initiation of each registration and as to the completion thereof. At its
expense, the Company will:
(a) Keep such registration effective for a period of one year or
until the Investors have completed the distribution described in
the registration statement relating thereto, whichever first
occurs;
(b) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus
used in connection with such registration statement as may be
necessary to reflect facts or events representing material or
fundamental change in the information set forth therein or
otherwise necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities
covered by such registration statement;
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(c) Furnish such number of prospectuses and other documents incident
thereto, including any amendment of or supplement to the
prospectus, as an Investor from time to time may reasonably
request;
(d) Notify each seller of Shares covered by such registration
statement at any time of the happening of any event as a result
of which the prospectus included in such registration statement,
as then in effect, includes an untrue statement of a material
fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading or incomplete in light of the circumstances then
existing, and at the request of any such seller, prepare and
furnish to such seller a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers of
such shares, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or incomplete in the light of the
circumstances then existing; and
(e) Provide a transfer agent and registrar for all Shares covered by
such registration statement and a CUSIP number for all such
Shares, in each case not later than the effective date of such
registration.
10. Indemnification.
a. Indemnification. The Investor agrees, if any of Investor's Shares are
included in the securities as to which such registration, qualification or
compliance is being effected, to indemnify the Company, each of its directors
and officers, each underwriter, if any, of the Company's securities covered by
such a registration statement, each Person who controls the Company or such
underwriter within the meaning of Section 15 of the Securities Act, and each
other such investor, each of its officers and directors and each Person
controlling such investor within the meaning of Section 15 of the Securities
Act, against all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any such registration statement,
prospectus, offering circular or other document, or any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse the
Company, such investors, such directors, officers, Persons, underwriters or
control Persons for any legal or any other expenses reasonably incurred, as such
expenses are incurred, in connection with investigating or defending any such
claim, loss, damage, liability or action, in each case to the extent, but only
to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to the Company by you.
Notwithstanding the foregoing, your liability under this subsection shall be
limited in an amount equal to the initial price of the Shares sold by you,
unless such liability arises out of or is based on willful misconduct by you.
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b. Indemnification Procedure. Each party entitled to indemnification
under this Section (the "Indemnified Party") shall give notice to the party
required to provide indemnification (the "Indemnifying Party") after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not be
unreasonably withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Agreement, unless the failure
to give such notice is materially prejudicial to an Indemnifying Party's ability
to defend such action, and provided further that the Indemnifying Party shall
not assume the defense for matters as to which there is a conflict of interest
or separate and different defenses. No Indemnifying Party, in the defense of any
such claim or litigation, shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation.
11. Miscellaneous.
a. Survival of Warranties. The representations, warranties and
covenants of the Investors contained in this Agreement shall survive the
execution and delivery of this Agreement and the Closing.
b. Successors and Assigns. This Agreement may not be assigned by
any party hereto. The terms and conditions of this Agreement shall inure to the
benefit of, and be binding upon, the respective successors of the parties.
Nothing in this Agreement, express or implied, is intended to confer upon any
party, other than the parties hereto or their respective successors, any rights,
remedies, obligations or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
c. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the principles of conflict of laws thereof.
d. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
e. Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
f. Notices. Unless otherwise provided, any notice required or
permitted hereunder shall be given by personal service upon the party to be
notified, by nationwide
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overnight delivery service or upon deposit with the United States Post Office,
by certified mail, return receipt requested and:
i. if to Sonus, addressed to SONUS COMMUNICATION
HOLDINGS, INC., c/o Mr. John Friedman, 254 West 31st Street, 3rd Floor, New
York, NY 10001 with a copy to Cecil E. Martin, III, Esq., McGuireWoods LLP,
Seven Saint Paul Street, Baltimore, Maryland 21202 or at such other address as
the Company may designate by notice to each of the Investors in accordance with
the provisions of this Section 11; and
ii. if to the Investors, at their respective addresses
indicated on the signature pages hereof, or at such other addresses as any one
or more Investors may designate by notice to Sonus in accordance with the
provisions of this Section 11.
g. Expenses. Irrespective of whether a Closing is effected, Sonus
and the Investors shall pay all of their own costs and expenses incurred with
respect to the negotiation, execution, delivery and performance of this
Agreement. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorney's fees, costs and necessary disbursements in addition to any
other relief to which such party may be entitled.
h. Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either prospectively or
retroactively), only with the written consent of Sonus and a majority in
interest of the Investors purchasing Units in this Offering.
i. Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provisions shall be excluded
from this Agreement and the balance of this Agreement shall be interpreted as if
such provision were so excluded, and this Agreement shall be otherwise
enforceable in accordance with its terms.
j. Entire Agreement. This Agreement (including the exhibits and
schedules hereto) constitutes the entire agreement among the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements,
understandings, negotiations and discussions, whether oral or written, of the
parties hereto.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
SONUS COMMUNICATION HOLDING, INC.
By:
--------------------------------
John K. Friedman, Esq.
President & Chief Operating Officer
[Investor Signature Pages Follow]
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SCHEDULE A
INVESTOR SIGNATURE PAGE FOR
SONUS COMMUNICATION HOLDINGS, INC.
COMMON STOCK PURCHASE AGREEMENT
PLEASE PRINT OR TYPE, USE INK ONLY. (ALL PARTIES MUST SIGN)
The undersigned investor hereby certifies that he (i) has received and
relied solely upon the Common Stock Purchase Agreement, the PPM and their
exhibits and schedules, (ii) agrees to all the terms and conditions of this
Common Stock Purchase Agreement, (iii) meets the suitability standards set forth
herein, and (iv) is a resident of the state or foreign jurisdiction indicated
below.
No. of Units Subscribed for ($.60 for each Unit): _________________________
Amount of Subscription: $________________________________
<TABLE>
<S> <C> <C>
If other than individual check one and
-------------------------------------------------------------- indicate capacity of signatory under the
signature:
Name of Investor (Print)
[ ] Trust
-------------------------------------------------------------- [ ] Estate
Name of Joint Investor (if any) (Print) [ ] Uniform Gifts to Minors Act of
State of ____________
[ ] Attorney-in-fact
-------------------------------------------------------------- [ ] Company
Signature of Investor [ ] Other
-------------------------------------------------------------- If Joint Ownership, Check one:
Signature of Joint Investor (if any) [ ] Joint Tenants with Right of
Survivorship
[ ] Tenants in Common
-------------------------------------------------------------- [ ] Tenants by the Entirety
Capacity of Signatory (if applicable) [ ] Community by Property
-------------------------------------------------------------- Backup Withholding Statement:
Social Security or Taxpayer Identification Number [ ] Please check this box only if the
investor is subject to backup
withholding
</TABLE>
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<TABLE>
<S> <C> <C>
Residence Address Foreign Person:
[ ] Please check this box only if the
investor is a nonresident alien,
_________________________________________ foreign Company, foreign
City State Zip Code partnership, foreign trust or
foreign estate.
Telephone: ( )
</TABLE>
The investor agrees to the terms of this Agreement and, as required by the
Regulations pursuant to the Internal Revenue Code, certifies under penalty of
perjury that (1) the Social Security Number or Taxpayer Identification Number
and address provided above is correct, (2) the investor is not subject to backup
withholding (unless the Backup Withholding Statement box is checked) either
because he has not been notified that he is subject to backup withholding as a
result of a failure to report all interest or dividends or because the Internal
Revenue Service has notified him that he is no longer subject to backup
withholding and (3) the investor (unless, the Foreign Person box above is
checked) is not a nonresident alien, foreign partnership, foreign trust or
foreign estate.
THE SUBSCRIPTION FOR UNITS OF SONUS COMMUNICATION HOLDINGS, INC. BY THE
ABOVE NAMED INVESTOR(S) IS ACCEPTED THIS ________DAY OF JULY, 2000.
SONUS COMMUNICATION HOLDINGS, INC.
By:_______________________________________
John K. Friedman
President & Chief Operating Officer
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SCHEDULE B
STATEMENT OF ACCREDITED INVESTOR
To: SONUS COMMUNICATION HOLDINGS, INC. (the "Company")
Ladies and Gentlemen:
The undersigned hereby refers to the Common Stock Purchase Agreement
executed and delivered to the Company by the undersigned as of the date
herewith. In connection with the subscription thereunder by the undersigned to
purchase securities of the Company, the undersigned hereby represents and
warrants that such individual or entity meets at least one of the tests listed
on the attached Exhibit I for an "accredited investor" (as such term is defined
under Regulation D promulgated pursuant to the Securities Act of 1933, as
amended).
Dated: , 2000
----------------------
Very truly yours,
-----------------------------------
Name of Individual #1 or Entity
-----------------------------------
Authorized Signature
-----------------------------------
Name of Individual #2, if applicable
-----------------------------------
Authorized Signature
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EXHIBIT I TO SCHEDULE B
ACCREDITED INVESTOR STATUS
NOTE: "Accredited Investors" are accorded special status under the federal
securities laws. Individuals who hold certain positions with an issuer or its
affiliates, or who have certain minimum individual income or certain minimum net
worth (each as described below) may qualify as Accredited Investors.
Partnerships, companies or other entities may qualify as Accredited Investors if
they fulfill certain financial and other standards, or if all of their equity
owners have incomes and/or net worth which qualify them individually as
Accredited Investors, and trusts may qualify as Accredited Investors if they
meet certain financial and other tests (as described below).
You may qualify as an Accredited Investor under Regulation D promulgated
under the Securities Act of 1933 (the "Securities Act") if you meet any of the
following tests:
FOR INDIVIDUALS ONLY
1. You are a manager or an executive officer of SONUS COMMUNICATION
HOLDINGS, INC.. An "executive officer" is the chairman, chief executive officer,
president, any vice president in charge of a principal business unit, division
or function (such as sales, administration or finance), any other officer who
performs a policy making function or any other person who performs similar
policy making functions for SONUS COMMUNICATION HOLDINGS, INC.
OR
2. You had individual income (exclusive of any income attributable
to your spouse) of more than $200,000 in 1998 and 1999 and reasonably expect to
have an individual income in excess of $200,000 in 2000, or your spouse and you
had a joint income in excess of $300,000 in 1998 and 1999, and you reasonably
expect to have a joint income in excess of $300,000 in 2000. For purposes
hereof, income means adjusted gross income, as reported for federal income tax
purposes, increased by the following amounts: (i) the amount of any tax exempt
interest income under Section 103 of the Internal Revenue Code (the "Code")
received, (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 of the Code or (iv) any amount by which income
has been reduced in arriving at adjusted gross income pursuant to the provisions
of Section 1202 of the Code. In determining personal income, however, unrealized
capital gains should not be included.
OR
3. You have an individual net worth, or your spouse and you have a
combined net worth, in excess of $1,000,000. For purposes of this statement,
"net worth"
<PAGE> 15
means the excess of total assets at fair market value, including home, home
furnishings and automobiles, over total liabilities.
FOR TRUSTS ONLY
4. The Trust has total assets in excess of $3,000,000, was not
formed for the specific purpose of acquiring securities of SONUS COMMUNICATION
HOLDINGS, INC., and the purchase of such securities is directed by a person with
such knowledge and experience in financial and business matters that he is
capable of evaluating the risks and merits of the prospective investment in such
securities.
FOR COMPANIES, PARTNERSHIPS OR OTHER PURCHASING ENTITIES
5. Any company, partnership, limited liability company or limited
liability partnership not formed for the specific purpose of acquiring
securities of SONUS COMMUNICATION HOLDINGS, INC., with total assets in excess of
$3,000,000.
OR
6. All equity owners of the purchasing entity, if any, are
Accredited Investors.
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