An Accredited Investor as defined in Rule 501 of Regulation D under the Securities Act of 1933, is one of the following:
- An individual whose annual income was in excess of $200,000 in each of the past two years and who reasonably expects his/her annual income to reach the same level in the current year, or whose joint annual income which his/her spouse was in excess of $300,000 in each of those years, and reasonably expects their joint annual income to reach the same level in the current year.
- An individual whose net worth or joint net worth with his/her spouse exceeds $1,000,000.
- A director, executive officer, manager or managing member of the Company.
- The subscribing Trust is a revocable trust that may be amended or revoked at any time by the grantors thereof, and all of the grantors are accredited investors by virtue of having a net work or joint net worth with a spouse of $1,000,000, or annual income or joint annual income with a spouse, in the two preceding calendar years, of $200,000 or $300,000, respectively, and reasonable expectations to meet such income levels for the current calendar year.
- The subscribing financial institution is (i) a bank, savings and loan association or other regulated financial institution; (ii) acting in its fiduciary capacity as Trustee; and (iii) subscribing for the purchase of Company Notes on behalf of the subscribing Trust.
- The subscriber is a trust, corporation or company with total assets in excess of $5,000,000 not formed for the specific purpose of acquiring the interests in the Company, whose purchase of the interests in the Company will be directed by a person whose knowledge and experience in financial and business matters is such that he or she is capable of evaluating the merits and risks of the investment in the Company.
- The subscriber is an entity in which all of the equity owners are accredited investors.
- The Subscriber is a bank as defined in section 3(a)(2) of the Securities Act of 1933 (the "Act"), or any savings and loan association or other institution as defined in section 3(a)(5)(A) of the Act whether acting in its individual or a fiduciary capacity.
- A broker or dealer registered pursuant to section 15 of the Securities Exchange Act of 1934.
- The Subscriber is an insurance company as defined in Section 2(13) of the Act.
- The Subscriber is an investment company registered under the Investment Company Act of 1940 or a business development company as defined in section 2(a)(48) of such Act.
- The Subscriber is a Small Business Investment Company licensed by the U.S. Small Business Administration under section 301 (c) or (d) of the Small Business Investment Act of 1958.
- The Subscriber is an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in section 3(21) of such Act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-direction plan, with investment decisions made solely by persons that are Accredited Investors.
- The Subscriber is a private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940.
For the purpose of calculating an investor's net worth above, "net worth" is generally defined as the difference between total assets and total liabilities. The value of the investor's primary residence much be excluded from net worth. The related amount of the note or other indebtedness secured by the investor's primary residence up to its fair market value also be excluded. Indebtedness secured by the primary residence in excess of the value of the home is considered a liability and must be deducted from the investor's net worth. In the case of fiduciary accounts, the net worth and/or income suitability requirements may be satisfied by the beneficiary of the account or by the fiduciary, if the fiduciary directly or indirectly provides funds for the investment.