Terms & Conditions
ACCREDITED INVESTOR CERTIFICATION –
By agreeing to the following terms and conditions, you are certifying that you are an Accredited Investor (“AI”), a broker legally acting on behalf of an Accredited Investor or an entity with accredited status. Accreditedoffering.com, (“AO” or “Company”) is not representing itself to be a broker/dealer or a brokerage house for the purpose of evaluating certain securities and offerings. Although AO may have on its team one or more of the following, registered broker-dealers; registered investment advisers; licensed attorneys; and certified public accountants, none of the parties are acting in a capacity to assist in the determination as to whether you are an AI. For individual deals the vast majority of the postings if not the entirety have no foundation as a security, and therefore the posting(s) should not constitute an “offer” in the context of securities law. Nevertheless, by agreeing to the terms and conditions here, you are certifying that you are an Accredited Investor (“AI”), a broker legally acting on behalf of an Accredited Investor or an entity with accredited status.
RELIANCE ON REPRESENTATIONS; INDEMNITY –
I understand that the Company and its counsel [and the Placement Agent and its counsel] are relying upon my representations in the Letter and upon the supporting documentation to be delivered by me or on my behalf in connection with the Letter (collectively, the “Investor Information”). I agree to indemnify and hold harmless [the Company, its/the Company, the Placement Agent, their respective] directors, officers, [shareholders/members,] representatives and agents, and any person who controls any of the foregoing, against any and all loss, liability, claim, damage and expense (including [reasonable] attorneys’ fees) arising out of or based upon any misstatement or omission in the Investor Information or any failure by me to comply with any covenant or agreement made by me in the investor information.
THERE IS NO SALE OF SECURITIES ON THE SITE, THE SALE OF SECURITIES NOT INITIATED BY AO, NOT PRESENTED BY AO AND NOT VERIFIED BY AO –
For any security listed on the site, there will only be a “teaser” posting stating the bare minimum about the type fund or security being proposed. The Company does not warrant the quality of the offering, does not endorse the offering, and does not guarantee the investment. The role of AO is to simply connect an accredited investor to a content provider. For any PPM or other formal offering, the information will be delivered directly from the offeror to you. AO has no ability to regulate the offerings and/or the relationship of the parties. You hereby indemnify AO for any loss, claim or other similar liability related to the offering. The content provider will be responsible to ensure the securities, if offered, are being sold only to “accredited investors” as defined in Rule 501(a) of Regulation D of the Securities Act of 1933, as amended (the “Securities Act”). The content provider may require a representation letter, whereby the purpose of the Accredited Investor Representation Letter (the “Letter”) is to collect information from you to determine whether you are an Accredited Investor and otherwise meet the suitability criteria established by the content provider for investing in the Securities. As part of verifying your status as an Accredited Investor, you may be asked to submit supporting documentation.
“I AGREE” MEANS I CERTIFY AS TO THE FOLLOWING –
I am submitting this Accredited Investor Representation Certification in connection related to the offering(s) of AO. I understand that no securities are being sold by the company, but as a precaution, this document is intended to ensure that any actual or potential security interests and/or securities are being sold only to accredited investors (“AI”) as defined in Rule 501(a) of Regulation D of the Securities Act of 1933, as amended (the “Securities Act”). I hereby represent and warrant to the Company that I qualify as an Accredited Investor on the basis of one or more of the following:
I am a NATURAL PERSON and;
(1) Income Test: My individual income exceeded $200,000 in each of the two most recent years or my joint income together with my spouse exceeded $300,000 in each of those years; and I reasonably expect to earn individual income of at least $200,000 this year or joint income with my spouse of at least $300,000 this year. If necessary to complete one of the transactions, if requested, to support the representation I will deliver to the Company copies of Form W-2, Form 1099, Schedule K-1 of Form 1065 or a filed Form 1040 for each of the two most recent years showing my income or my joint income with my spouse as reported to the IRS for each of those years. I understand that I may redact such documents to avoid disclosing personally identifiable information, such as Social Security numbers or other items not necessary to confirm annual income; OR [ B ] My salary or my joint salary with my spouse is publicly available information that has been reported in a document made available by the U.S. government or any state or political subdivision thereof (for example, reported in a filing with the Securities and Exchange Commission) and if requested I will deliver to the Company copies of such publicly available materials identifying me or me and my spouse by name and disclosing the relevant salary information for each of the two most recent years; OR [ C ] In accordance with the procedures described below under the heading “Independent Third-Party Verification,” if requested I will assist in arranging for a registered broker-dealer, SEC-registered investment adviser, licensed attorney, or certified public accountant to deliver to the Company written confirmation of my status as an Accredited Investor based on my individual income or my joint income together with my spouse.
Net Worth Test: I hereby certify that my individual net worth, or my joint net worth together with my spouse, exceeds $1,000,000. For these purposes, “net worth” means the excess of total assets at fair market value (including all personal and real property, but excluding the estimated fair market value of my primary residence) minus total liabilities. For these purposes, “liabilities”: exclude any mortgage or other debt secured by my primary residence in an amount of up to the estimated fair market value of that residence; but include any mortgage or other debt secured by my primary residence in an amount in excess of the estimated fair market value of that residence.
I confirm that my total individual liabilities, or my total joint liabilities together with my spouse, do not exceed the maximum threshold. I represent that all liabilities necessary to determine my individual net worth, or my joint net worth together with my spouse, for the purpose of determining my status as an Accredited Investor are reflected in the dollar amount in the preceding sentence.
In addition, I confirm that I have not incurred any incremental mortgage or other debt secured by my primary residence in the 60 days preceding the date of this certification, and I will not incur any incremental mortgage or other debt secured by my primary residence prior to the date of the closing for the sale of the Securities. I agree to promptly notify the Company if, between the date of this Letter and the date of the closing for the sale of the Securities, I incur any incremental mortgage or other debt secured by my primary residence.
SHARING OF INVESTOR INFORMATION
As you move forward in the purchasing process, you may be asked to provide an accredited investor representation letter to be used by an issuer and its placement agent (if any) in an unregistered offering of securities under Rule 506(c) of Regulation D of the Securities Act. Historically, Rule 506 offers a “safe harbor” from the registration requirements of the Securities Act prohibited the use of general solicitation and general advertising in private placements undertaken in reliance on that rule. However, effective September 23, 2013, the SEC amended Rule 506 to create a new subsection (c) that permits the use of general solicitation in a Rule 506(c) offering if: Each purchaser in the offering is an accredited investor (AI). In this scenario, the issuer takes reasonable steps to verify that each purchaser is an AI. In addition, all other terms and conditions of Rules 501, 502(a) and 502(d) must be satisfied. For more on these rule amendments. This accredited investor certification is designed to help an issuer satisfy the requirement in Rule 506(c) that it take reasonable steps to verify that each purchaser is an AI.
Depending on the posting, and whether independent verification is needed, ) I will deliver to the Company: (i) Copies of bank statements, brokerage statements, other statements of securities holdings, certificates of deposit, tax assessments and/or appraisal reports issued by independent third parties that show my individual assets or my joint assets together with my spouse; and (ii) A copy of a consumer credit report for me (or copies of consumer credit reports for me and my spouse) issued by TransUnion, EquiFax or Experian. I understand that each document described in paragraphs (i) and (ii) above must be dated no earlier than three months prior to the date of the closing for the sale of the Securities. I understand that I may redact any of these documents to avoid disclosing personally identifiable information, such as Social Security numbers, that is not necessary to confirm net worth.
In accordance with the procedures described below under the heading “Independent Third-Party Verification,” I will assist in arranging for a registered broker-dealer, SEC-registered investment adviser, licensed attorney, or certified public accountant to deliver to the Company written confirmation of my status as an Accredited Investor based on my individual net worth or my joint net worth together with my spouse.
I understand and agree that, upon giving prior notice to me, which is hereby given, the Company may present the Investor Information to such parties as it deem[s] appropriate to establish that the issuance and sale of the Securities (a) is exempt from the registration requirements of the Securities Act or (b) meets the requirements of applicable state securities laws; provided, however, that the Company need not give prior notice before presenting the Investor Information to their legal, accounting and financial advisors.
REASONABLE STEPS –
The Reasonable Steps Verification Requirement under Rule 506(c) – To clarify the reasonable steps requirement, Rule 506(c) lists non-mandatory, nonexclusive verification methods for natural person purchasers. Under the rule, an issuer is deemed to have taken reasonable steps in verifying the AI status of a natural person if it uses one of these four methods: 1) Income. If basing the determination of AI status on a purchaser’s income: „ review Internal Revenue Service (IRS) forms that report the purchaser’s income for the past two years; and obtain a written representation from the purchaser that it reasonably expects to reach the income level required to qualify as an AI in the current year. 2) Net worth. If basing the determination of AI status on a purchaser’s net worth: review one or more specified documents dated within the past three months, including bank statements, brokerage statements and tax assessments (to confirm assets) and a report from one of the national consumer reporting agencies (to confirm liabilities); and obtain a written representation from the purchaser that it has disclosed all liabilities necessary to make a net worth determination. 3) Third-party verification. Obtain a written representation from an acceptable third party designated by the purchaser that the third party has taken reasonable steps to verify the purchaser’s AI status within the past three months and has determined that the purchaser is an AI. Acceptable third parties for these purposes are limited to: registered broker-dealers; registered investment advisers; licensed attorneys; and certified public accountants. „
In finalizing Rule 506(c), the SEC rejected a suggestion by some commentators that a purchaser’s so-called “check the box” self-certification of AI status should, by itself, be sufficient to satisfy the AI verification requirement. While this type of self-certification is generally considered sufficient to confirm AI status in a Rule 506(b) offering, the SEC clearly rejected simple self-certification for Rule 506(c) offerings. In its release adopting the final rule amendments, the SEC stated: “We do not believe that an issuer will have taken reasonable steps to verify accredited investor status if it, or those acting on its behalf, required only that a person check a box in a questionnaire or sign a form, absent other information about the purchaser indicating accredited investor status.” (SEC Release No. 33-9415 (July 10, 2013) (Adopting Release).) The Reasonable Steps Specified in Rule 506(c)(2)(ii) are Non-exclusive and Nonmandatory. The Adopting Release stated that whether an issuer’s steps are reasonable under Rule 506(c) is a principles-based determination and that what is reasonable depends on the particular facts and circumstances of each purchaser and transaction. An issuer can still satisfy the reasonable steps requirement even if it does not use any of the specified safe harbor measures set out in Rule 506(c) (2)(ii).
The cover letter generically addresses prospective purchasers of the issuer’s securities and explains: the role of the accredited investor representation letter; and that each purchaser must deliver a signed letter, together with any required supporting documentation. The representation letter itself, which must be completed, signed by each prospective purchaser (whether natural person or legal entity) and delivered to the issuer or placement agent with the supporting documentation. Third-party verification letter. A form of third-party verification letter attached to the accredited investor representation letter as Annex A. The verification letter should be sent by the issuer or placement agent to a third party named by the purchaser (for example, a registered broker-dealer or licensed attorney) if that purchaser elects to rely on a third party to verify its status as an AI. Once the issuer and its counsel have revised all three parts of this Standard Document to reflect the particular circumstances of the issuer and the offering, the letter (all three parts, as a package) should be sent to prospective purchasers as part of the full package of disclosure and subscription documents. Where an accredited investor representation letter like this one is being used, the subscription agreement should make clear that the issuer’s acceptance of the prospective purchaser’s subscription is conditioned upon, among other things, the issuer’s review and acceptance of the purchaser’s signed representation letter and all required supporting documentation.
I AM AN ENTITY –
If you are acting on behalf of an entity, the entire agreement still applies to you in your individual capacity, as representative for the entity, and as to the entity itself. For the purpose of certification herein, I am a LEGAL ENTITY that is one or more of the following:
A bank as defined in Section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary capacity.
A broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended.
An insurance company as defined in the Securities Act.
An investment company registered under the Investment Company Act of 1940 (the “Investment Company Act”).
A business development company as defined in Section 2(a)(48) of the Investment Company Act.
(a) I have previously purchased securities issued by the Company in a Rule 506 offering as an Accredited Investor, and that offering was consummated before September 23, 2013;
(b) I continue to hold the Company securities purchased in that Rule 506 offering;
(c) I certify that I qualify as an Accredited Investor as of the date of this certification; and (d) I undertake to promptly notify the Company if I cease to qualify as an Accredited Investor at any time between the date of this certification and the date of the closing for the sale of the Securities.
A private business development company as defined in the Investment Advisors Act of 1940.
A Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or 301(d) of the Small Business Investment Act of 1958.
An organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the Securities, with total assets in excess of $5,000,000.
A plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000.
An employee benefit plan within the meaning of Title I of the Employment Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in such Act, which is either a bank, savings and loan association, insurance company, or registered investment advisor, or if the employee benefit plan has total assets in excess of $5,000,000, or if a self-directed plan, the investment decisions are made solely by persons that are accredited investors.
A trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities, whose purchase is directed by a “sophisticated” person.
An entity in which all of the equity owners are Accredited Investors. (NOTE: If box (12) is checked, each equity owner of the entity must individually complete and submit to the Company its own copy of this certification.)
PLACEMENT AGENT –
Use of a Placement Agent – The role of a placement agent is to help the issuer structure an offering and find potential investors that are willing and able to invest in the issuer. The placement agent acts as an agent on behalf of the issuer but does not purchase the offered securities directly, either for its own account or for its clients. There is no requirement that an issuer use a placement agent. If the issuer does intend to use a placement agent, the parties should decide up front which party will collect and review the signed investor representation letters and related supporting documentation to confirm each prospective purchaser’s AI status. While the obligation to confirm AI status rests with the issuer, it may rely on other parties, including its placement agent, to assist with or perform the reasonable steps to verify. (However, because the obligation to take reasonable steps under Rule 506(c) is the issuer’s, the issuer and its counsel should carefully supervise and review all AI verification work done by a placement agent.) The issuer and its counsel should ensure that the bracketed optional language in this form is revised to reflect: The presence or absence of a placement agent. If a placement agent is present, whether it or the issuer is responsible for collecting and reviewing the investor representation letters and related supporting documentation. Even if the placement agent is the party that collects and reviews the documents, the issuer should maintain (or arrange for the placement agent to maintain) records of the verification steps taken.
WHAT IS AN ACCREDITED INVESTOR –
What does it mean to be an accredited investor? Under the federal securities laws, a company or private fund may not offer or sell securities unless the transaction has been registered with the SEC or an exemption from registration is available. Certain securities offerings that are exempt from registration may only be offered to, or purchased by, persons who are accredited investors. One principal purpose of the accredited investor concept is to identify persons who can bear the economic risk of investing in these unregistered securities. Unlike offerings registered with the SEC in which certain information is required to be disclosed, companies and private funds, such as a hedge fund or venture capital fund, engaging in these exempt offerings do not have to make prescribed disclosures to accredited investors. These offerings, sometimes referred to as private placements, involve unique risks and you should be aware that you could lose your entire investment. The SEC recently adopted rules to permit general advertising for certain exempt offerings.
Are you an accredited investor? An accredited investor, in the context of a natural person, includes anyone who: earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year, OR has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence). On the income test, the person must satisfy the thresholds for the three years consistently either alone or with a spouse, and cannot, for example, satisfy one year based on individual income and the next two years based on joint income with a spouse. The only exception is if a person is married within this period, in which case the person may satisfy the threshold on the basis of joint income for the years during which the person was married and on the basis of individual income for the other years. In addition, entities such as banks, partnerships, corporations, nonprofits and trusts may be accredited investors. Of the entities that would be considered accredited investors and depending on your circumstances, the following may be relevant to you: any trust, with total assets in excess of $5 million, not formed to specifically purchase the subject securities, whose purchase is directed by a sophisticated person, or any entity in which all of the equity owners are accredited investors.
In this context, a sophisticated person means the person must have, or the company or private fund offering the securities reasonably believes that this person has, sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of the prospective investment.
How do I calculate my net worth? To qualify as an accredited investor under the net worth test, you must have a net worth that exceeds $1 million, either alone or with a spouse. If calculating joint net worth with a spouse, it is not necessary that property be held jointly. Calculating net worth involves adding up all your assets and subtracting all your liabilities. The resulting sum is your net worth. The value of your primary residence is not included in your net worth calculation. In addition, any mortgage or other loan on the residence does not count as a liability up to the fair market value of the residence. If the loan is for more than the fair market value of the residence (i.e.,
if your mortgage is underwater), then the loan amount that is over the fair market value counts as a liability under the net worth test. Further, any increase in the loan amount in the 60 days prior to your purchase of the securities (even if the loan amount does not exceed the value of the residence) will count as a liability as well. The reason for this is to prevent net worth from being artificially inflated through converting home equity into cash or other assets.
What if I am no longer an accredited investor? The rules defining accredited investor were changed with the passage of the Dodd-Frank Act to exclude a primary residence from the net worth test. This means that some investors who were accredited investors prior to July 20, 2010 are now not accredited investors. For these investors, any purchase rights, such as preemptive rights or rights of first offer, related to securities that they invested in as accredited investors prior to July 20, 2010 are grand-fathered in, provided that certain conditions are met. This means that the investor can still exercise these rights even though the investor may not meet the current definition of accredited investor.
DEAL VETTING –
AO does not warrant the quality of the postings. AO will deliver best efforts in determining that the deal represented is in fact an effective offer that represents actual value and market readiness. However, you, as the buyer, should consider all listings, regardless of represented condition, to be “as is” in the strictest sense – meaning buyer beware. By agreeing to the terms and conditions herein you are indemnifying Accredited Offering, Inc. from any liability regarding the deal presented, the net effect of the deal, the parties within the deal or other consequences of pursuing the transaction. You will be required to conduct your own due diligence about each offering. AO will provide additional deal vetting with one of our experts as an option to you as the consumer (for a quoted consulting fee), and even if one of the AO experts is used, you personally are responsible for the outcome of the transaction.
DO NOT CALL LIST
By accepting these terms and conditions, if a phone number is provided, Accredited Offering has the right to contact you even if you are listed on the Do Not Call registries. If you wish not to be contacted by Accredited Offering by phone, please request to be placed on our Do Not Call list. Accredited Offering reserves the right to amend or alter this document, along with posting agreements, marketing materials, company policies and other company information.