MELANIE SENTER LUBIN Securities Commissioner J. JOSEPH CURRAN, JR. Attorney General CARMEN M. SHEPARD DONNA HILL STATON Deputy Attorneys General STATE OF MARYLAND OFFICE OF THE ATTORNEY GENERAL TELECOPIER NO. (410) 576-6532 SECURITIES DIVISION FORM MLOE-2 INSTRUCTIONS MARYLAND LIMITED OFFERING EXEMPTION Under the Maryland Securities Act Pursuant to Regulations 02.02.04.09 -- .13 1. To be eligible to use this form and the limited offering exemption upon which it is based, the requirements of COMAR Regulations 02.02.04.09 --.13 ("MLOE") must be met. You should review these requirements and adhere to them strictly in using this form. Failure to adhere to these requirements may expose the issuer and its management and principal owners to civil and criminal liability and administrative sanctions under the Maryland Securities Act. 2. If a disclosure document is required under COMAR 02.02.04.12C, this form or a disclosure document containing the information required by this form must be delivered to each prospective purchaser of securities before a sale to that purchaser. 3. This form is intended to be used as a simple disclosure document to be reviewed by prospective investors before investing. Responses shall not be misleading and shall be clear, concise, accurate, and complete. Technical language, terms of art, industry jargon, and legal "boilerplate" language should be avoided. Responses to the questions in the form should result in disclosure of the material facts concerning the issuer and the offering. ANY ADDITIONAL DISCLOSURES YOU BELIEVE NECESSARY OR APPROPRIATE FOR THIS PURPOSE SHOULD BE SET FORTH ON SEPARATE SHEETS AND ATTACHED. Note: This form is designed to be completed by the management of the issuer in consultation with legal counsel and other professional advisors. Although not required by MLOE, issuers are urged to prepare a business plan prior to and in preparation of their securities offering. 4. The issuer is required to provide fair and complete disclosures, including material factors, both adverse and favorable, that will or are likely to affect the issuer or its business. 5. The disclosure requirements of this form are continuing in nature for the duration of the offering, and any material change in any of the information provided in this form must be communicated to each investor. In the event of a change in any material fact or circumstance affecting the issuer or the offering, each investor shall be given the opportunity to withdraw his investment. American LegalNet, Inc. www.USCourtForms.com THE OMISSION TO INVESTORS CRIMINAL AND AND FEDERAL OF A MATERIAL FACT OR MISSTATEMENT OF A MATERIAL FACT (WHETHER BY THIS FORM OR OTHERWISE) MAY GIVE RISE TO CIVIL LIABILITIES UNDER THE MARYLAND SECURITIES ACT SECURITIES LAWS. USE OF FORM MLOE-2 Part I of Form MLOE-2 is intended for use by corporations, limited liability companies, real estate investment trusts, and limited partnerships. Persons preparing an offering of securities of another entity are encouraged to consult with legal counsel in order to provide equivalent disclosure for the relevant business entity to the items of disclosure described in the Form MLOE-2. NOTE: Partnership issuers may find useful the disclosure guidelines contained in the Industry Guides under the Securities Act of 1933 issued by the U.S. Securities and Exchange Commission. Part II of Form MLOE-2 is available for all issuers subject to requirements of COMAR 02.02.04.12C(2), regardless of the type of business entity involved. If the anticipated aggregate offering price of any offering (regardless of the amount of proceeds received) under this exemption exceeds $150,000, the issuer is required to file a notice on Form MLOE-1 with the Securities Commissioner not later than fifteen (15) days after the first sale of securities in Maryland. * * * * * * * * * * * * * * * * * * ISSUERS HAVING QUESTIONS ABOUT THE USE OR CONTENT OF FORM MLOE-2 SHOULD DIRECT INQUIRIES TO: Office of the Attorney General Securities Division 200 St. Paul Place Baltimore, Maryland 21202-2020 (410) 576-6360 IF ADDITIONAL SPACE IS REQUIRED TO RESPOND COMPLETELY TO ANY ITEM, PLEASE ATTACH ADDITIONAL SHEETS. ii American LegalNet, Inc. www.USCourtForms.com