EXHIBIT 10.11
EXECUTION
XXXXXX - FEA SUBSCRIPTION
CONTRIBUTION AND SUBSCRIPTION AGREEMENT
This CONTRIBUTION AND SUBSCRIPTION AGREEMENT made as of August 13, 2004
(this "Agreement"), by and between XXXXXXX XXXXXX, an individual
("Contributor"), and XXXXXXX EQUITIES OF ARIZONA, LLC, an Arizona limited
liability company ("FEA").
RECITALS:
A. Contributor desires to contribute One Hundred Thousand Dollars and 00/100
($100,000.00) (the "Contributed Sum") to FEA in exchange for membership
interests in FEA (the "Membership Interests") and FEA desires to accept
such contribution and issue the Membership Interests.
B. The Membership Interests are more specifically described in that certain
Amended and Restated Operating Agreement of Xxxxxxx Equities of Arizona,
LLC dated as of the date hereof (the "FEA Operating Agreement"), among
Xxxxxxx Partners, LLC, an Arizona limited liability company, Xxxxxxx
Equities Operating Partnership, LP, a Delaware limited partnership (the
"Partnership"), Contributor, Xxxxxxxx Xxxxxxx and Xxxxxx Xxxxxxx, each an
individual.
NOW THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Contribution and Subscription.
1.1 Contribution and Subscription. On the terms hereof, Contributor has
contributed to FEA the Contributed Sum in exchange for the Membership Interests
and FEA desires to accept such contribution and issue the Membership Interests
(the "Subscription").
1.2 Ancillary Documents. On the date hereof, Contributor shall deliver
to FEA a duly completed and executed Form W-9, FIRPTA Affidavit and Accredited
Investor Questionnaire, each in the form attached as Exhibit A to this Agreement
(this Agreement, the Accredited Investor Questionnaire, Form W-9 and FIRPTA
Affidavit collectively referred to as, the "Subscription Documents").
2. Representations, Warranties and Covenants of FEA. Contributor hereby
acknowledges, represents and warrants to, and covenants and agrees with FEA
that:
2.1 Authority; Authorization; Execution and Delivery.
(a) Contributor has full power and authority to enter into the
Subscription Documents and to consummate the transactions contemplated thereby.
(b) The execution and delivery of the Subscription Documents by
Contributor and the consummation by Contributor of the transactions contemplated
thereby have been duly authorized by all necessary action on the part of
Contributor and will not constitute or result in a breach or default under, or
conflict with or violate, any agreement or other undertaking, to which
Contributor is a party or by which Contributor is bound or with any judgment,
decree, statute, order, rule or regulation applicable to Contributor or
Contributor's assets, and, if Contributor is not an individual, will not violate
any provisions of the organizational or other formation or governing documents
of Contributor.
(c) The Subscription Documents have been duly executed and delivered by
Contributor and constitute valid and legally binding obligations of Contributor,
enforceable against Contributor in accordance with and subject to their
respective terms, subject to applicable bankruptcy, insolvency, moratorium or
other similar laws relating to creditors' rights and general principles of
equity. The signatures on the Subscription Documents are genuine, and the
signatory, if Contributor is an individual, has legal competence and capacity to
execute the same, or, if Contributor is not an individual, the signatory has
been duly authorized to execute the same on behalf of Contributor.
2.2 Purchase for Investment.
(a) Contributor is acquiring the Subscribed Units for Contributor's own
account (or if Contributor is a trustee, for a trust account) for investment
only, and not with a view to or for sale in connection with any distribution of
all or any part of the Membership Interests.
(b) Contributor hereby agrees that Contributor shall not, directly or
indirectly, transfer all or any part of the Membership Interests (or solicit any
offers to buy, purchase or otherwise acquire or take a pledge of all or any part
of the Membership Interests) except in accordance with (i) the registration
provisions of the Securities Act of 1933, as amended (the "Securities Act"), and
the regulations thereunder or an exemption from such registration provisions;
(ii) any applicable state or non-U.S. securities laws; (iii) the terms of this
Agreement; and (iv) the FEA Operating Agreement, as applicable.
(c) Contributor understands that (i) Contributor must bear the economic
risk of an investment in the Membership Interests for an indefinite period of
time because, among other reasons, the offering and sale of the Membership
Interests have not been registered under the Securities Act and, therefore, the
Membership Interests cannot be sold unless such resale is subsequently
registered under the Securities Act or an exemption from such registration is
available; and (ii) sales or transfers of the Membership Interests are further
restricted by the provisions of the FEA Operating Agreement, and may be
restricted by other applicable securities laws. If at any time the Membership
Interests are evidenced by certificates or other documents, each such
certificate or other document shall contain a legend stating that (x) the
Membership Interests, (1) have not been registered under the Securities Act or
the securities laws of any state; (2) have been issued pursuant to a claim of
exemption from the registration provisions of the Securities Act and any state
securities law which may be applicable; and (3) may not be sold, transferred or
assigned without compliance with the registration provisions of the Securities
Act and the regulations thereunder and any other applicable Federal or state
securities laws or compliance with applicable exemptions therefrom; and (y)
sale, transfer or assignment of the Membership Interests, as applicable, is
further subject to restrictions contained in the FEA Operating Agreement the
Membership Interests may not be sold, transferred or assigned unless and to the
extent permitted by, and in accordance with, the provisions of the FEA Operating
Agreement.
2.3 Information.
(a) Contributor has carefully reviewed this Agreement and the FEA
Operating Agreement. Contributor has been provided an opportunity to ask
questions of, and Contributor has received answers thereto satisfactory to
Contributor from, FEA or its representatives regarding the terms and conditions
of the offering of the Membership Interests, and Contributor has obtained all
additional information requested by Contributor of FEA and its representatives
to verify the accuracy of all information furnished to Contributor regarding the
transfer of the Membership Interests.
(b) Contributor is not relying on FEA or any of its subsidiaries,
affiliates or any of their respective representatives or agents with respect to
any tax or other economic considerations involved in connection with the
Membership Interests.
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(c) Contributor has been advised to consult with his or its tax, legal
and other advisors regarding the subscription of the Membership Interests and
its effects, the tax consequences of making and not making a transfer hereunder,
and has obtained, in Contributor's judgment, sufficient information to evaluate
the merits and risks of such subscription and investment.
(d) Contributor has not been furnished with and has not relied on any
oral or written representation from any party other than his or its advisors in
connection with the transfer of the Membership Interests that is not contained
in this Agreement.
2.4 Economic and Liquidity Risk.
(a) Contributor has such knowledge and experience in financial and
business matters such that Contributor is capable of evaluating the merits and
risks of making a subscription for the Membership Interests, and that
Contributor has evaluated the risks of investing in the Membership Interests and
has determined that they are a suitable investment for Contributor.
(b) Contributor understands that an investment in the Membership
Interests is a speculative investment that involves very significant risks and
tax uncertainties and that Contributor is prepared to bear all of the economic,
tax and other risks of an investment in the Membership Interests for an
indefinite period of time, and is able to withstand a total loss of
Contributor's investment in the Membership Interests.
(c) Contributor has adequate net worth and no need for liquidity in its
investment in the Membership Interests.
2.5 Eligibility; Accredited Investor Status. Contributor is an
"accredited investor" as defined in Regulation D under the Securities Act.
Contributor will, upon request, execute, deliver and/or provide any additional
documents deemed by FEA to be necessary or desirable to confirm Contributor's
such status.
2.6 Residence; Etc. The signature pages attached to this Agreement
correctly set forth
(a) if Contributor is a natural person, the principal residence of
Contributor;
(b) if Contributor is a corporation, partnership, limited liability
company, business trust or other entity (an "Entity"), the place of business
(or, if there is more than one place of business, the chief executive office) of
Contributor;
(c) if Contributor is an Entity other than a general partnership, the
state of incorporation, organization or formation of Contributor;
(d) if Contributor is a trust (other than a business trust), the
principal residence and place of business (or, if there is more than one place
of business, the chief executive office) of each trustee of Contributor that is
a natural person; and
(e) if Contributor is a trust (other than a business trust), the place
of business (or, if there is more than one place of business, the chief
executive office) and state of incorporation, organization or formation of each
trustee of Contributor that is an Entity.
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2.7 Status as Foreign Person. Contributor is not a foreign person and
is not owned directly or indirectly, in whole or in part, by a foreign person as
determined for purposes of Section 1445 of the Code, and the regulations
promulgated thereunder.
2.8 Continuing Efforts. Subject to the terms and conditions herein
provided, Contributor covenants and agrees to use its best efforts to take, or
cause to be taken, all actions and do, or cause to be done, all things
necessary, proper and/or appropriate to consummate and make effective the
transactions contemplated by this Agreement.
2.9 No Brokers or Finders. Contributor has not entered into any
agreement and is not otherwise liable or responsible to pay any brokers' or
finders' fees or expenses to any person or Entity with respect to this Agreement
or the Membership Interests.
3. Representations, Warranties and Covenants of FEA. FEA hereby a
acknowledges, represents and warrants to, and covenants and agrees with,
Contributor that:
3.1 Authority; Authorization; Execution and Delivery.
(a) FEA has full power and authority to enter into this Agreement and
to consummate the transactions contemplated herein.
(b) The execution and delivery of this Agreement and the consummation
by FEA of the transactions contemplated herein have been duly authorized by all
necessary action on the part of FEA.
(c) This Agreement has been duly executed and delivered by FEA and
constitutes the valid and legally binding obligations of FEA, enforceable
against FEA in accordance with and subject to its terms, subject to applicable
bankruptcy, insolvency, moratorium or other similar laws relating to creditors'
rights and general principles of equity.
3.2 Commercially Reasonable Efforts. Subject to the terms and
conditions herein provided, FEA covenants and agrees to use commercially
reasonable efforts to take, or cause to be taken, all actions and do, or cause
to be done, all things necessary, proper and/or appropriate to consummate and
make effective the transactions contemplated by this Agreement.
4. Survival. The representations, warranties, covenants and agreements
contained in this Agreement and the Accredited Investor Questionnaire shall
survive the consummation of the transactions contemplated herein.
5. Indemnity.
5.1 Contributor hereby agrees to indemnify and defend FEA and its
direct and indirect partners, members, shareholders, officers, directors and
affiliates (each, an "Indemnified Party") against and to hold them harmless from
any and all damage, loss, liability and expense incurred or suffered by any
Indemnified Party arising out of or based upon the inaccuracy of any
representation or warranty or breach of any covenant or agreement made or to be
performed by Contributor pursuant to the Subscription Documents.
5.2 FEA hereby agrees to indemnify and defend Contributor against any
and all damage, loss, liability and expense incurred or suffered by any of them
out of or based upon the inaccuracy of any representation or warranty or breach
of any agreement made or to be performed by FEA pursuant to this Agreement.
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6. Power of Attorney; Amendments to FEA Operating Agreement. By executing
this Agreement, Contributor hereby irrevocably constitutes and appoints the
Partnership as his or its attorney-in-fact and agent with full power of
substitution to take any and all actions and execute the FEA Operating Agreement
and any and all such amendments to the FEA Operating Agreement and any other
document and agreement relating to the Membership Interests or this Agreement,
on Contributor's behalf and in Contributor's name, as the Partnership may deem
necessary or desirable.
7. General Provisions.
7.1 Modification. Neither this Agreement nor any provisions hereof
shall be waived, modified, discharged or terminated except by an instrument in
writing signed by the party against whom any waiver, modification, discharge or
termination is sought.
7.2 Notices. All notices, requests and other communications hereunder
must be in writing and will be deemed to have been duly given only if delivered
personally or by facsimile transmission or mailed (first class postage prepaid)
to the parties at the following addresses or facsimile numbers:
If to Contributing Member: Xxxxxxx Xxxxxx
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
If to FEA: Xxxxxxx Equities of Arizona, LLC
0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Facsimile: 000-000-0000
with a copy to:
Xxxxxxxx Chance US LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx X. Xxxxxxxxx, Esq.
Facsimile: 000-000-0000
All such notices, requests and other communications will (a) if delivered
personally to the applicable addressees as provided in this Section 7.2, be
deemed given upon delivery; (b) if delivered by facsimile transmission to the
applicable facsimile numbers as provided in this Section 7.2, be deemed given
upon receipt; and (c) if delivered by mail to the applicable addressees as
provided in this Section 7.2, be deemed given upon receipt or refusal (in each
case regardless of whether such notice, request or other communication is
received by any other Entity or person to whom a copy of such notice is to be
delivered pursuant to this Section 7.2). Any party from time to time may change
its address, facsimile number or other information for the purpose of notices to
that party by giving notice specifying such change to the other parties hereto
in accordance with this Section 7.2.
7.3 Binding Effect. Except as otherwise provided herein, this Agreement
shall be binding upon and inure to the benefit of the parties and their heirs,
executors, administrators, successors, legal representatives and permitted
assigns. If Contributor is itself more than one person, the obligations of such
persons shall be joint and several and the acknowledgements, representations,
warranties, covenants and agreements herein contained shall be deemed to be made
by and be binding upon each such person and his or her heirs, executors,
administrators, successors, legal representatives and permitted assigns.
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7.4 Entire Agreement. The Subscription Documents and the documents
referred to therein contain the entire agreement of the parties with respect to
the issuance and subscription of the Membership Interests, and there are no
representations, warranties, covenants or other agreements except as stated or
referred to herein or therein.
7.5 Assignability. This Agreement is not transferable or assignable by
any party hereto. This Agreement shall be for the benefit of the parties hereto.
7.6 Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Arizona.
7.7 Counterparts. This Agreement may be executed by facsimile signature
and through the use of separate signature pages or in counterparts, and each of
such counterparts shall, for all purposes, constitute one agreement binding on
the parties hereto, notwithstanding that the parties hereto are not signatories
to the same counterpart.
7.8 Further Assurances. Contributor will, from time to time, execute
and deliver to FEA all such other and further instruments and documents and take
or cause to be taken all such other and further action FEA may reasonably
request in order to effect the transactions contemplated by this Agreement.
Without limiting the foregoing, FEA may request from Contributor such additional
information as it may deem necessary to evaluate the eligibility of Contributor
to acquire the Membership Interests, and may request from time to time such
information as it may deem necessary to determine the eligibility of Contributor
to hold the Membership Interests or to enable FEA to determine Contributor's
compliance with applicable regulatory requirements or tax status, and
Contributor shall provide such information as may reasonably be requested.
7.9 Severability. If any term or provision of this Agreement shall to
any extent be invalid or unenforceable, the remainder of this Agreement shall
not be affected thereby, and each term and provision of this Agreement shall be
valid and enforceable to the fullest extent permitted by law. Upon the
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties shall negotiate in good faith to modify this
Agreement so as to effect their original intent as closely as possible in an
acceptable manner to the end that transactions contemplated hereby are fulfilled
to the extent possible.
7.10 Specific Performance. The parties hereto acknowledge that there
would be no adequate remedy at law if any party fails to perform any of its
obligations hereunder, and accordingly agree that each party, in addition to any
other remedy to which it may be entitled at law or in equity, shall be entitled
to compel specific performance of the obligations of any other party under this
Agreement in accordance with the terms and conditions of this Agreement.
7.11 Expenses. Each of the parties hereto agrees to pay the expenses
incurred by it in connection with the negotiation, preparation, review,
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, including the fees and expenses of counsel to
such party.
[The remainder of this page has been intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
CONTRIBUTOR:
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Xxxxxxx Xxxxxx
FEA:
XXXXXXX EQUITIES OF ARIZONA, LLC,
an Arizona limited liability company
By: ___________________
Name:
Title: Manager
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EXECUTION
XXXXXX - FEA SUBSCRIPTION
EXHIBIT A
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FORM W-9
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SUBSTITUTE Part 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT Social Security
Form W-9 RIGHT AND CERTIFY BY SIGNING AND DATING BELOW Number(s) or Employer
Identification Number
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Department of Part 2 -- Certification -- Under penalties of perjury, I certify that: (1) The number shown
The Treasury on this form is my correct taxpayer identification number (or I am waiting for a number to
Internal Revenue be issued to me); (2) I am not subject to backup withholding because: (a) I am exempt from
Service backup withholding, or (b) I have not been notified by the Internal Revenue Service ("IRS")
that I am subject to backup withholding as a result of failure to report all interest or
dividends, or the IRS has notified me that I am no longer subject to backup withholding; and
(3) I am a U.S. person (including a U.S. resident alien).
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Payer's Certification Instructions -- You must cross out item (2) above if Part 3 --
Request for you have been notified by the IRS that you are subject to backup Awaiting TIN
Taxpayer withholding because you have failed to report all interest and |_|
Identification dividends on your tax return. However, if after being notified by
Number (TIN) the IRS that you were subject to backup withholding you received
another notification from the IRS that you are no longer subject
to backup withholding, do not cross out item (2).
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CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
(Applicable only if the box in Part 3 above is checked)
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (a) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administration office, or (b) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a taxpayer identification number within sixty days, 28 percent of all
reportable payments made to me thereafter will be withheld until I provide a
taxpayer identification number.
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Xxxxxxx Xxxxxx
Date: August 13, 2004
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EXHIBIT A (CONTINUED)
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FIRPTA AFFIDAVIT -- CERTIFICATE OF NON-FOREIGN STATUS
Section 1445 of the Internal Revenue Code provides that (a) a transferee of a
U.S. real property interest must withhold tax if the transferor is a foreign
person and (b) a partnership must withhold tax with respect to certain amounts
that are allocable to or would otherwise be distributed to a foreign person that
owns an interest in such partnership. To inform FEA and the Partnership that
withholding of tax is not required, the undersigned hereby certifies the
following as of the date hereof and as of the Closing Date:
1. Contributor, if an individual, is not a nonresident alien for
purposes of U.S. income taxation, and if not an individual, is not a foreign
corporation, foreign partnership, foreign trust, or foreign estate (as those
terms are defined in the Internal Revenue Code and Income Tax Regulations);
2. Contributor, if not an individual, is not a disregarded entity as
defined in Section 1.1445-2(b)(2)(iii) of the Income Tax Regulations promulgated
under the Internal Revenue Code.
3. Contributor's Social Security Number (for individuals) or Employer
Identification Number (for non-individuals) is: _____________; and
4. Contributor's address is: Xxxxxxx Xxxxxx, 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxx, Xxxxxxx 00000.
In addition, Contributor agrees to inform FEA if he or it becomes a foreign
person at any time during the three year period immediately following the date
of this notice.
I understand that this certification may be disclosed to the Internal Revenue
Service by FEA and that any false statement I have made here could be punished
by fine, imprisonment, or both.
Under penalties of perjury I declare that I have examined this certification and
to the best of my knowledge and belief it is true, correct and complete, and, if
this document is being signed on behalf of Contributor that is not an
individual, I further declare that I have authority to sign this document on
behalf of Contributor.
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Xxxxxxx Xxxxxx
Date: August 13, 2004
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EXHIBIT A (CONTINUED)
ACCREDITED INVESTOR QUESTIONNAIRE
Contributor hereby represents and warrants that he, she or it is an
"Accredited Investor," as such term is defined in Rule 501 under Regulation D of
the Securities Act based upon the fact that he, she or it meets at least one of
the following requirements (check all that apply):
____ (1) he or she is a natural person whose individual net worth, or joint
net worth with that person's spouse, at the time of his or her purchase exceeds
$1,000,000; or
____ (2) he or she is a natural person who had an individual income in
excess of $200,000 in each of the two most recent years or joint income with
that person's spouse in excess of $300,000 in each of those years and who has a
reasonable expectation of reaching the same income level in the current year; or
____ (3) it is a private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940; or
____ (4) it is a bank as defined in Section 3(a)(2) of the Securities Act,
or a 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 dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934; an insurance company as defined in Section 2(13) of the
Securities Act; an investment company registered under the Investment Company
Act of 1940 or a business development company as defined in Section 2(a)(48) of
that Act; a Small Business Investment Company licensed by the United States
Small Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958; 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; or 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-directed plan, with investment decisions
made solely by persons that are accredited investors; or
____ (5) it is an organization described in Section 501(c)(3) of the
Internal Revenue Code, corporation, Massachusetts or similar business trust, or
Company, not formed for the specific purpose of acquiring the Subscribed Units,
with total assets in excess of $5,000,000; or
____ (6) it is a trust, with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the Subscribed Units, whose
purchase is directed by a sophisticated person as described in Rule
506(b)(2)(ii) of the Securities Act; or
____ (7) it is an Entity in which all the equity owners are Accredited
Investors under any one of items (1) through (6) above.
Capitalized terms not defined herein shall have the meaning ascribed to such
terms in that certain Contribution and Subscription Agreement dated as of August
13, 2004, between Xxxxxxx Xxxxxx and Xxxxxxx Equities of Arizona, LLC.
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Xxxxxxx Xxxxxx
Date: August 13, 2004
