SUBSCRIPTION AGREEMENT
XXXXX CABARET INTERNATIONAL, INC.
Xxxxx Cabaret International, Inc.
00000 Xxxxxx Xxxx
Xxxxxxx, Xxxxx 00000
The undersigned, Xxx Xxxxxxxxxx (the "Subscriber") understands that Xxxxx
Cabaret International, Inc., a Texas Corporation (the "Company") is offering for
sale to the undersigned 150,000 shares of Common Stock (Common Stock) at a
purchase price of $2.50 per share, for a total aggregate purchase price of
$375,000.00. The Subscriber acknowledges and understands that the offering of
the Common Stock (the "Offering") is being made without registration of the
Common Stock under the Securities Act of 1933, as amended (the "Act"), or any
securities "blue sky" or other similar laws of any state ("State Securities
Laws").
1. SUBSCRIPTION. Subject to the terms and conditions hereof, the Subscriber
hereby subscribes for and agrees to purchase 150,000 shares of Common Stock
for the aggregate purchase price of $375,000.00 upon acceptance of this
Subscription Agreement.
2. PAYMENT FOR THE COMMON STOCK. The undersigned encloses herewith $375,000.00
required to purchase the Common Stock subscribed for hereunder. If this
subscription is not accepted by the Company for any reason, all documents
will be returned to the Subscriber.
3. REPRESENTATIONS AND WARRANTIES OF THE SUBSCRIBER. The Subscriber hereby
represents and warrants to and covenants with the Company, as well as each
officer, director and agent of the Company as follows:
(a) General
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(i) The Subscriber has all requisite authority to enter into
this Subscription Agreement and to perform all the obligations
required to be performed by the Subscriber hereunder.
(ii) The Subscriber is the sole party in interest and is not
acquiring the Common Stock as an agent or otherwise for any other
person. The Subscriber is a resident of the state set forth opposite
its name on the signature page hereto and (a) if a corporation,
partnership, trust or other form of business organization, it has its
principal office within such state; (b) if an individual, he or she
has his or her principal residence in such state; and (c) if a
corporation, partnership, trust or other form of business organization
which was organized for the specific purpose or acquiring the Common
Stock, all of the beneficial owners are residents of such state.
(iii) The Subscriber recognizes that the total amount of funds
tendered to purchase the Common Stock is placed at the risk of the
business and may be
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completely lost. The purchase of the Common Stock of the Company as an
investment involves extreme risk.
(iv) The Subscriber realizes that the Common Stock cannot
readily be sold as the shares of Common Stock are restricted
securities, that it may not be possible to sell or dispose of the
Common Stock and therefore the Common Stock must not be purchased
unless the Subscriber has liquid assets sufficient to assure that such
purchase will cause no undue financial difficulties and the Subscriber
can provide for current needs and personal contingencies.
(v) The Subscriber confirms and represents that he is able (a)
to bear the economic risk of his investment, (b) to hold the
securities for an indefinite period of time, and (c) to afford a
complete loss of his investment. The Subscriber also represents that
he has (x) adequate means of providing for his current needs and
personal contingencies, and (y) has no need for liquidity in this
particular investment.
(vi) The Subscriber has not become aware of the offering of
Common Stock of the Company by any form of general solicitation or
advertising, including, but not limited to advertisements, articles,
notices or other communications published in any newspaper, magazine
or other similar media or broadcast over television or radio or any
seminar or meeting where those individuals that have attended have
been invited by any such or similar means of general solicitation or
advertising.
(b) Information Concerning the Company.
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(i) The Subscriber acknowledges that he has received all
current information about the Company including the Company's (A) Form
10-KSB for the fiscal year ended September 30, 2004, (B) Form 10-QSB
for the Company's quarter ended December 31, 2004; and (C) Form 8-K of
the Company filed September 17, 2004 and January 24, 2005 ("Filed
Documents").
(ii) The Subscriber or his representative is familiar with
the business and financial condition, properties, operations and
prospects of the Company, and, at a reasonable time prior to the
execution of this Subscription Agreement, that he and his
representative have been afforded the opportunity to ask questions of
and receive satisfactory answers from the Company's officers and
directors, or other persons acting on the Company's behalf, concerning
the business and financial condition, properties, operations and
prospects of the Company and concerning the terms and conditions of
the offering of the Common Stock and has asked such questions as he or
his representative desires to ask and all such questions have been
answered to the full satisfaction of the Subscriber.
(iii) The Subscriber has been furnished, has carefully read,
and has relied solely (except for information obtained pursuant to
(iv) below, on the information contained in the Filed Documents, and
Subscriber has not received any other offering literature or
prospectus, and no verbal or written representations or warranties
have been made to Subscriber by the Company, or its employees or
agents, other than the representations of the Company set forth herein
and in the Filed Documents.
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(iv) The Subscriber has had an unrestricted opportunity to: (i)
obtain additional information concerning the offering of Common Stocks
(the "Offering"), the Common Stock, the Company and any other matters
relating directly or indirectly to Subscriber's purchase of the Common
Stock; and (ii) ask questions of, and receive answers from the Company
concerning the terms and conditions of the Offering and to obtain such
additional information as may have been necessary to verify the
accuracy of the information contained in the Filed Documents.
(v) The Subscriber understands that, unless the Subscriber
notifies the Company in writing to the contrary, all the
representations and warranties contained in this Subscription
Agreement will be deemed to have been reaffirmed and confirmed, taking
into account all information received by the Subscriber.
(vi) The Subscriber understands that the purchase of the Common
Stock involves various risks, including, but not limited to, those
outlined in this Subscription Agreement.
(vii) The Subscriber acknowledges that no representations or
warranties have been made to the Subscriber by the Company as to the
tax consequences of this investment, or as to profits, losses or cash
flow which may be received or sustained as a result of this
investment.
(viii) All documents, records and books pertaining to a
proposed investment in the Common Stock which the Subscriber or his
representative has requested have been made available to the
Subscriber.
(ix) The Subscriber or his representative has been provided
access to all information requested in evaluating his purchase of the
Common Stock.
(c) Status of the Subscriber
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(i) The Subscriber represents that the Subscriber is an
Accredited Investor as that term is defined in the Act as that term is
defined in the Act (check each category of "Accredited Investor" below
which is applicable to the Subscriber):
( ) (A) a natural person whose individual net worth, or
joint net worth with that person's spouse, at the time of his purchase
exceeds $1,000,000; or
( ) (B) 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 has a reasonable expectation of reaching the same
income level in the current year.
(ii) The Subscriber agrees to furnish any additional information
requested to assure compliance with applicable Federal and State
Securities Laws in connection with the purchase and sale of the Common
Stock.
(d) Restrictions on Transfer or Sale of the Common Stock
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(i) The Subscriber is acquiring the Common Stock subscribed solely
for the Subscriber's own beneficial account, for investment purposes,
and not with view to, or for resale in connection with, any
distribution of the Common Stock. The Subscriber understands that the
offer and the sale of the Common Stock has not been registered under
the Act or any State Securities Laws by reason of specific exemptions
under the provisions thereof which depend in part upon the investment
intent of the Subscriber and of the other representations made by the
Subscriber in this Subscription Agreement. The Subscriber understands
that the Company is relying upon the representations, covenants and
agreements contained in this Subscription Agreement (and any
supplemental information) for the purposes of determining whether this
transaction meets the requirements for such exemptions.
(ii) The Subscriber understands that the shares of Common Stock are
"restricted securities" under applicable federal securities laws and
that the Act and the rules of the Securities and Exchange Commission
(the "Commission") provide in substance that the Subscriber may
dispose of the Common Stock only pursuant to an effective registration
statement under the Act or an exemption therefrom. While the Company
has agreed to grant "piggy-back" registration rights to the Holder
hereof, the Subscriber acknowledges that the Company may not file a
Registration Statement with the Commission and that if filed, no
representation is made as to when such Registration Statement would be
declared effective by the Commission. The certificates evidencing the
shares of Common stock offered hereby will bear a legend which clearly
sets forth this restriction. The Subscriber understands that the
Subscriber may not at any time demand the purchase by the Company of
the Subscriber's Common Stock.
(iii) The Subscriber agrees: (A) that the Subscriber will not sell,
assign, pledge, give, transfer or otherwise dispose of the Common
Stock or any interest therein, or make any offer or attempt to do any
of the foregoing, except pursuant to a registration of the Common
Stock under the Act and all applicable State Securities Laws or in a
transaction which is exempt from the registration provisions of the
Act and all applicable State Securities Laws; (B) that the Company and
any transfer agent for the Common Stock shall not be required to give
effect to any purported transfer of any of the Common Stock except
upon compliance with the foregoing restrictions; and (C) that a
restrictive legend will be placed on the certificates representing the
Common Stock.
(iv) The Subscriber has not offered or sold any portion of the
subscribed for Common Stock and has no present intention of dividing
such Common Stock with others or of reselling or otherwise disposing
of any portion of such Common Stock either currently or after the
passage of a fixed or determinable period of time or upon the
occurrence or nonoccurrence of any predetermined event or
circumstance.
4. SURVIVAL AND INDEMNIFICATION. All representations, warranties and covenants
contained in this Agreement and the indemnification contained in this
Paragraph 4 shall survive (i) the acceptance of the Subscription Agreement
by the Company and (ii) the death or disability of the Subscriber. The
Subscriber acknowledges the meaning and legal consequences of the
representations, warranties and covenants in Paragraph 3 hereof and that
the Company has relied upon such representations, warranties and covenants
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in determining the Subscriber's qualification and suitability to purchase
the Common Stock. The Subscriber hereby agrees to indemnify, defend and
hold harmless the Company, and its officers, directors, employees, agents
and controlling persons, from and against any and all losses, claims,
damages, liabilities, expenses (including attorneys' fees and
disbursements), judgment or amounts paid in settlement of actions arising
out of or resulting from the untruth of any representation herein or the
breach of any warranty or covenant herein. Notwithstanding the foregoing,
however, no representation, warranty, covenant or acknowledgment made
herein by the Subscriber shall in any manner be deemed to constitute a
waiver of any rights granted to it under the Securities or State Securities
laws.
5. NOTICES. All notices and other communications provided for herein shall be
in writing and shall be deemed to have been duly given if delivered
personally or sent by registered or certified mail, return receipt
requested, postage prepaid, or overnight air courier guaranteeing next day
delivery:
(a) if to the Company, to it at the following address:
XXXXX CABARET INTERNATIONAL, INC.
00000 Xxxxxx Xxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxxx Xxxxxx
Telephone No. (000) 000 0000
Facsimile No: (000) 000 0000
(b) if to the Subscriber, at the address set forth on the last page hereof
or directly to the Subscriber at the address set forth on the
signature page hereto, or at such other address as either party shall
have specified by notice in writing to the other.
All notice and communications shall be deemed to have been duly given: at
the time delivered by hand, if personally delivered; two days after being
deposited in the mail, postage prepaid, if mailed; and the next day after
timely delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee
receives it.
6. ASSIGNABILITY. This Subscription Agreement is not assignable by the
Subscriber, and may not be modified, waived or terminated except by an
instrument in writing signed by each of the parties hereto.
7. BINDING EFFECT. Except as otherwise provided herein, this Subscription
Agreement shall be binding upon and inure to the benefit of the parties and
their heirs, executors, administrators, successors, legal representatives
and assigns, and the agreements, representations, warranties and
acknowledgments contained herein shall be deemed to be made by and be
binding upon such heirs, executors, administrators, successors, legal
representatives and assigns. If the Subscriber is more than one person, the
obligation of the Subscriber shall be joint and several and the agreements,
representations, warranties and acknowledgments contained herein shall be
deemed to
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be made by and be binding upon each such person and his heirs, executors,
administrators and successors.
8. ENTIRE AGREEMENT. This Subscription Agreement constitutes the entire
agreement of the Subscriber and the Company relating to the matters
contained herein, superseding all prior contracts or agreements, whether
oral or written.
9. GOVERNING LAW. This Subscription Agreement shall be governed and controlled
as to the validity, enforcement, interpretations, construction and effect
and in all other aspects by the substantive laws of the State of Texas. In
any action between or among any of the parties, whether arising out of this
Agreement or otherwise, each of the parties irrevocably consents to the
exclusive jurisdiction and venue of the federal and state courts located in
Xxxxxx County, Texas.
10. SEVERABILITY. If any provision of this Subscription Agreement or the
application thereof to any Subscriber or circumstance shall be held invalid
or unenforceable to any extent, the remainder of this Subscription
Agreement and the application of such provision to other subscriptions or
circumstances shall not be affected thereby and shall be enforced to the
greatest extent permitted by law.
11. HEADINGS. The headings in this Subscription Agreement are inserted for
convenience and identification only and are not intended to describe,
interpret, define, or limit the scope, extent or intent of this
Subscription Agreement or any provision hereof.
12. AMOUNT OF COMMON STOCK SUBSCRIBED FOR. The Subscriber hereby subscribes to
purchase 150,000 shares of Common Stock of the Company at $2.50 per share
for a total consideration of $375,000.00.
13. COUNTERPARTS AND FACSIMILES. This Subscription Agreement may be executed in
multiple counterparts and in any number of counterparts, each of which
shall be deemed an original but all of which taken together shall
constitute and be deemed to be one and the same instrument and each of
which shall be considered and deemed an original for all purposes. This
Agreement shall be effective with the facsimile signature of any of the
parties set forth below and the facsimile signature shall be deemed as an
original signature for all purposes and the Agreement shall be deemed as an
original for all purposes.
IN WITNESS WHEREOF, the undersigned Subscriber has executed this
Subscription Agreement this ____ day of February, 2005.
[SIGNATURES ON FOLLOWING PAGE]
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/s/ Xxx Xxxxxxxxxx
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Signature of Investor
Xxx Xxxxxxxxxx
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Name (Please type or print)
Signature of Spouse or Co-Owner if funds are to be
invested as joint tenants by the entirety or
community property.
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Name (Please type or print)
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Xxxxxx Xxxxxxx
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Xxxx Xxxxx Zip
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ACCEPTED by the Company this the ____ day of February, 2005.
Xxxxx Cabaret International, Inc.
By:/s/ Xxxx Xxxxxx
__________________________________
Xxxx Xxxxxx, President
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