Explanatory Statement And Statement Of Non-Prejudice Prepared Pursuant To Section 36b-19(k) {POSEC}

EXPLANATORY STATEMENT AND STATEMENT OF NON-PREJUDICE PREPARED PURSUANT TO SECTION 36b-19(k) OF THE CONNECTICUT UNIFORM SECURITIES ACT AND SECTION 36b-31-19c OF THE REGULATIONS THEREUNDER EXPLANATORY STATEMENT This document is being prepared for presentation to each investor to who m certain unregistered securities were sold in violation of the Connecticu t Uniform Securities Act (the Act). An application to register those sec urities after-the-fact is being filed with the Securities and Business Investments Division of the Connecticut Department of Banking. The purpose of this document is to give you appro priate disclosure information, tell you about your rights and remedies under th e Act and give you the option of signing the attached Statement of Non-Prejudice. Note: You will not waive any of your rights under the Act by signing the Statement of Non-Prejudice. (Name of Issuer) of (Address of Issuer) submits that in (year) it sold securities in or from Connecticut without complying with Section 36b-16 of the Connecticut Uniform Securit ies Act. Section 36b-16 of the Act requires any person offering or selling nonexe mpt securities in Connecticut to register the offering with the Connecticut Department of Banking. The total number of securities sold without compliance with Section 36b- 16 of the Act was The aggregate cost of the securities sold without compliance with Sectio n 36b-16 of the Act was . American LegalNet, Inc. www.USCourtForms.com<<<<<<<<<********>>>>>>>>>>>>> 2Page 2 Commissions or other remuneration of per cent and/or totaling $ were paid to in connection with the sale of the securities. REMEDIES UNDER THE CONNECTICUT UNIFORM SECURITIES ACT Sec. 36b-29. (Formerly Sec. 36-498). Buyers remedies. (a) Any person who: (1) Offers or sells a security in violation of subsection (a) of section 3 6b-6, 36b-16 or subsection (b) of section 36b-24 or of any regulation or order under s ection 36b-22 which requires the affirmative approval of sales literature before it is used, or of any condition imposed under subsection (d) of section 36b-18 or subsection (g) or (h) of section 36b-19; or (2) offers or sells or materially assists any person who offers or sells a security by means of any untrue statement of a material fact or any omission to stat e a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, who knew or in the exercise o f reasonable care should have known of the untruth or omission, the buyer not knowing of the untruth or omission, and who does not sustain the burden of proof that h e did not know, and in the exercise of reasonable care could not have known, of the untr uth or omission, is liable to the person buying the security, who may sue either at law o r in equity to recover the consideration paid for the security, together with interest at eight per cent per year from the date of payment, costs and reasonable attorneys fees, less the amount of any income received on the security, upon the tender of the security, or for damages if he no longer owns the security. (b) (1) Any person who violates subsection (a) of section 36b-5 an d (2) any investment adviser who violates subsection (b) or (c) of section 36b-5, the reg istration requirement in subsection (c) of section 36b-6, or subsection (b) of section 36b -24, shall be liable to the recipient of investment advisory services for any consideration paid by the recipient for those services and any loss resulting from the investment advisory servi ces provided, less any profits earned by the recipient through transactions effected a s a result of the advice rendered, plus interest at the rate of eight per cent per year fr om the date of payment of the consideration, costs and reasonable attorneys fees. (c) Every person who directly or indirectly controls a person liable u nder subsections (a) and (b) of this section, every partner, officer or director of such a person, every person occupying a similar status or performing similar functions, every employ ee of such a person who materially aids in the act or transaction American LegalNet, Inc. www.USCourtForms.com<<<<<<<<<********>>>>>>>>>>>>> 3Page 3 constituting the violation and every broker-dealer or agent who material ly aids in the act or transaction constituting the violation are also liable jointly an d severally with and to the same extent as such person, unless the person who is so liable su stains the burden of proof that he did not know, and in exercise of reasonable care could not have known, of the existence of the facts by reason of which the liability is alleged to exist. There shall be contribution as in cases of contract among the several pe rsons so liable. (d) Any tender specified in this section may be made at any time befor e entry of judgment. (e) Every cause of action under sections 36b-2 to 36b-33, inclusive, s urvives the death of any person who might have been a plaintiff or defendant. (f) No person may bring an action under this section more than two yea rs after the date of the contract of sale or of the contract for investment advisory servi ces, except that (1) with respect to actions arising out of intentional misrepresentation or fraud in the purchase or sale of any interest in any limited partnership not required to be registered under the Securities Act of 1933, no person may bring an action more tha n one year from the date when the misrepresentation or fraud is discovered, except that no such action may be brought more than five years from the date of such misrepr esentation or fraud provided, with respect to an action pending on July 1, 1993, that asserts facts upon which a claim could be asserted under this section on and after Jul y 1, 1993, and which claim is asserted prior to January 1, 1994, no such action may be brought for intentional misrepresentation or fraud that occurred more than five year s prior to the date of the filing of the complaint in such action, and (2) with respe ct to actions arising out of intentional misrepresentation or fraud in the purchase or sale of securities other than securities described in subdivision (1) of this subsection, no pe rson may bring an action more than one year from the date when the misrepresentation or fr aud is discovered or in the exercise of reasonable care should have been discov ered, except that no such action may be brought more than three years from the date of suc