purchaser representative

USA

If non-accredited investors are solicited in a private placement of securities, the issuer must reasonably believe that each investor has sufficient knowledge and experience in financial and business matters, either alone or with the aid of a purchaser representative, to evaluate and understand the merits and risks of the investment. See Section 506(b)(2)(ii) of the Securities Act.

A purchaser representative is defined as any person who meets, or which the issuer reasonably believes meets the following four conditions:

• It is not an affiliate, director, officer or other employee of the issuer, or beneficial owner of 10% or more of any class of the equity securities or 10% or more of the equity interest in the issuer except where the purchaser is:

o a relative of the purchaser representative by blood, marriage, or adoption and not more remote than a first cousin;

o a trust or estate in which the purchaser representative and any persons related to the purchaser representative collectively hold more than 50% of the beneficial interests (excluding contingent interests) or of which the purchaser representative serves as trustee, executor, or in any similar capacity; or

o a corporation or other organization of which the purchaser representative and any persons related to the purchaser representative collectively are the beneficial owners of more than 50% of the equity securities (excluding directors' qualifying shares) or equity interests.

• It has such knowledge and experience in financial and business matters that it is capable of evaluating, alone, or together with other purchaser representatives of the purchaser, or together with the purchaser, the merits and risks of the prospective investment.

• It is acknowledged by the purchaser in writing, during the course of the transaction, to be his purchaser representative in connection with evaluating the merits and risks of the prospective investment.

• It discloses to the purchaser in writing, a reasonable time before the sale of securities to that purchaser, any material relationship between itself or its affiliates and the issuer or its affiliates that then exists, that is mutually understood to be contemplated, or that has existed at any time during the previous two years, and any compensation received or to be received or interests in the fund during its offering.

See Regulation D of the Securities Act.