XXXXXXXX CAPITAL GROUP, INC.
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
(000) 000-0000
SUBSCRIPTION AGREEMENT
The undersigned (the "Subscriber"), hereby subscribes to purchase
shares of Common Stock, $.001 par value ("Shares"), issued by Xxxxxxxx Capital
Group, Inc., a Delaware corporation (the "Company"), in the amount set forth on
the signature page below ("Commitment"), on the terms and conditions set forth
herein. (Capitalized terms used and not defined in this Agreement have the
meanings assigned to them in the Offering Circular dated October 8, 1999
referred to below.)
1. SALE AND PURCHASE OF SHARES. Subject to the terms and conditions set
forth in this Agreement, and in reliance upon the representations and warranties
of the respective parties set forth in this Agreement, the Company hereby agrees
to sell to the Subscriber, and the Subscriber irrevocably subscribes for and
agrees to purchase from the Company, Shares in the amount of its Commitment.
2. MANNER OF PAYMENT. Payments made to purchase Shares shall be made on
or before the payment date (the "Payment Date"), which shall occur no later than
five business days from the date of this Agreement. Payments shall be made by
wire transfer or by personal check.
3. PAYMENT DEFAULT. If payment for the purchase of Shares is received
by the Company from the Subscriber later than 14 days after the Payment Date,
interest will be charged on the overdue amount, calculated at a daily rate equal
on an annualized basis to four percentage points over the highest rate of
interest reported from time to time as a "prime rate" by The Wall Street Journal
(provided that, if such rate is in excess of the maximum rate of interest
permitted by law, interest will be charged at such maximum rate). If a default
in a payment under this Subscription Agreement (including interest charges)
remains uncured for 30 days following a payment date, the Company may, at its
option, pursue any or all of the following remedies: (i) cancel the balance of
the Subscriber's subscription (including the installment as to which the
Subscriber had defaulted), (ii) assign the remaining balance of the Subscriber's
subscription (including the installment as to which the Subscriber has
defaulted) to another investor selected by the Company and/or (iii) repurchase
the Shares previously purchased by the Subscriber at a purchase price per Share
equal to the lesser of 60% of the Shares' then-current Net Asset Value or the
prices at which the Subscriber purchased the Shares. The election by the Company
to pursue one or more of these remedies will not preclude the Company from
pursuing any rights it may have to seek judicial enforcement of the Subscriber's
subscription obligation.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants that:
(i) The Company is duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the power and authority
to carry on its business as now conducted and as proposed to be conducted in the
Company's Offering Circular ("Offering Circular") and to issue the Shares
subscribed for hereby. This Agreement and any other documents executed and
delivered by the Company in connection herewith have been duly authorized,
executed and delivered by the Company, and are the legal, valid and binding
obligations of the Company enforceable in accordance with their respective
terms.
(ii) The execution and delivery of this Agreement and any other
documents executed and delivered by the Company in connection herewith do not,
and the performance and consummation of the transactions set forth or
contemplated herein will not, contravene or result in a default under any
provision of existing law or regulations to which the Company is subject, the
provisions of the charter, by-laws or other governing documents of the Company
or any indenture, mortgage or other instrument or agreement to which the Company
is a party or by which it is bound and does not require on the part of the
Company any approval, authorization, license or filing from or with any federal,
state, municipal or foreign board or agency (except such approvals,
authorizations, licenses or filings as have been obtained or made).
(iii) The Company has filed a notice of intent with the Securities and
Exchange Commission, pursuant to Section 54(a) of the 1940 Act, to in good faith
elect to be subject to the provisions of Sections 55 through 65 of the 1940 Act.
(iv) The Company warrants that it has complied in good faith with all
of the requisite requirements of Rules 601 through 610(a) of Regulation E, which
provide that subject to such compliance, shares issued thereunder are exempt
from the registration provisions of Section 5 of the Securities Act of 1933 and
are free trading at the time of issuance.
5. REPRESENTATIONS AND WARRANTIES OF SUBSCRIBER. The Subscriber represents
and warrants that:
(i) This Agreement and any other documents executed and delivered by
the Subscriber in connection herewith have been duly executed and delivered by
the Subscriber, and are the legal, valid and binding obligations of the
Subscriber enforceable in accordance with their respective terms.
(ii) If the Subscriber is an Individual Retirement Account ("XXX"), (a)
the Subscriber has the power and authority to purchase the Shares subscribed for
hereby, (b) the execution and delivery of this Agreement and any other documents
executed and delivered by the Subscriber in connection herewith do not, and the
performance and consummation of the transactions set forth or contemplated
herein will not, contravene or result in a default under any provision of
existing law or regulations to which the Subscriber is subject or the provisions
of any custodial agreement, trust instrument or other governing documents of the
Subscriber, and (c) the Subscriber has caused this Agreement to be executed by
one or more of its custodians or trustees thereunto duly authorized.
(iii) If the Subscriber is an employee benefit plan as defined in ERISA
(an "ERISA Plan"), (a) the execution and delivery of this Agreement and any
other documents executed and delivered by the Subscriber in connection herewith
do not, and the performance and consummation of the transactions set forth or
contemplated herein will not, contravene or result in a default under any
provision of existing law or regulations to which the Subscriber is subject or
the provisions of any trust instrument or other governing documents of the
Subscriber; (b) the Subscriber has caused this Agreement to be executed by one
or more of its fiduciaries thereunto duly authorized; and (c) such fiduciaries,
by executing and delivering this Agreement on behalf of such ERISA Plan,
represent and warrant that (w) they and their co-fiduciaries, if any, have been
informed of the Company's investment objectives, policies and strategies, (x)
the decision to invest plan assets in the Company was made with appropriate
consideration of relevant investment factors with regard to such ERISA Plan; (y)
such decision was made by such fiduciaries without reliance on any investment
advice or recommendation provided by the Company, and is consistent with the
duties and responsibilities imposed upon fiduciaries with regard to their
investment decisions under ERISA; and (z) if the Company's underlying assets are
deemed to be "plan assets" of ERISA Plan investors, such fiduciaries shall be
deemed to have appointed the Company as investment managers of the ERISA Plan
Subscribers with respect to the assets managed in the Company.
(iv) The Subscriber acknowledges that the Shares have not been
registered under the 1933 Act or any state securities laws but are exempt from
such registration pursuant to Regulation E of 1933 Act and the National
Securities Markets Improvements Act of 1996, and can be disposed of at the
discretion of the Subscriber, however, there may not be a public market for the
sale of the Shares at any future time.
(v) The Subscriber acknowledges that the Company will accept this
subscription, and issue the Shares as contemplated hereunder, in a transaction
intended to be exempt from registration under the 1933 Act under Regulation E
thereunder.
(vi) The Subscriber has received and carefully reviewed the Offering
Circular and understands that any information provided other than in the
Offering Circular has been furnished on the understanding that the Subscriber
will refer to the Offering Circular for an authoritative statement on all
matters covered therein with respect to the Company and other information
concerning the Offering. The Subscriber has had reasonable time and opportunity
to ask questions and receive answers concerning the terms and conditions of the
offering and the proposed operations of the Company, and has received responses
to such questions that it has chosen to ask. Subscriber acknowledges that any
information is not intended to predict actual performance of the Company and
that Subscriber has not relied on such information or that purpose. Subscriber
understands that past performance does not guarantee future results
(vii) The Subscriber recognizes that an investment in the Company
involves certain risks and it has taken full cognizance of and understands the
risk factors relating to a purchase of Shares, including those set forth under
the headings "Risk Factors" in the Offering Circular. The Subscriber is capable
of bearing a high degree of risk, including the possibility of a loss of its
investment and the lack of a public market such that it will not be possible to
readily liquidate the investment. The Subscriber has such knowledge and
experience in business and financial matters as to be capable of evaluating the
merits and risks of an investment in the Shares and protecting its own interest
in connection with the investment in the Shares.
(viii) The Subscriber acknowledges that it has not relied upon the
Company or any of its employees, directors, officers or agents for any
investment, tax, legal or ERISA advice in connection with its purchase of Shares
and that the Subscriber has consulted, to the extent necessary, its own advisers
with respect to the investment, tax, legal or ERISA considerations of a purchase
of Shares.
(ix) The Subscriber acknowledges that there have been no guarantees or
warranties made to it by the Company or any of its employees, directors,
officers or agents, expressly or by implication, other than as contained in the
Offering Circular, with respect to (i) the approximate length of time that it
will be required to remain an owner of its Shares; or (ii) the percentage of
profit and/or the amount or type of consideration, profit or loss to be realized
as a result of its investment.
(x) The Subscriber acknowledges that he/she meets the minimum
suitability requirements set forth by the Company with respect to this offering.
Specifically, Subscriber warrants that:
1) his or her net worth is in excess of SIXTY THOUSAND DOLLARS
($60,000.00) which is exclusive of home, furnishings and automobiles
and any liabilities secured by those assets and his or her expected
income (for the upcoming fiscal year) is at least TWENTY FIVE THOUSAND
DOLLARS ($25,000.00); or
2) his or her net worth is in excess of ONE HUNDRED THOUSAND DOLLARS
($100,000.00), which is exclusive of home, furnishings and automobiles and any
liabilities secured by those assets;
6. COVENANTS OF THE SUBSCRIBER. The Subscriber agrees with the Company
that:
(i) For so long as the Subscriber owns Shares, the Subscriber shall,
upon request, disclose to the Company such information with respect to direct or
indirect holdings of such Shares as the Company deems necessary to comply with
provisions of the Internal Revenue Code of 1986 applicable to the Company, to
comply with requirements of any other appropriate taxing authority, or to comply
with the provisions of the 1940 Act, as any of said laws may be amended from
time to time.
(ii) The Subscriber, if an XXX or an ERISA Plan, will furnish to the
Company promptly upon its request the information called for by applicable
"prohibited transaction" regulations of the Department of Labor and any other
information with respect to Subscriber's parties in interest as the Company may
reasonably require.
(iii) The Subscriber will indemnify and hold the Company harmless from
and against any and all loss, damage or liability due to or arising out of a
breach of any representation or warranty of the Subscriber in this Agreement or
any other document furnished by it to the Company.
(iv) The Subscriber acknowledges that the Company has the exclusive
right and unilateral discretion and authority to accept the subscription
agreement from Subscriber and may refuse to do so if: (a) it deems Subscriber
does not meet the minimum suitability requirements for this Offering; (b) the
Offering has been closed and there are no Shares to fulfill Subscriber's
subscription purchase; and (c) any other reasonable and justifiable basis to
withhold the subscription agreement from being fulfilled on the part of the
Company in issuing Shares to Subscriber. In the event of any of the foregoing
instances, subscriber will be promptly notified in writing by the Company of the
reasons for why it cannot accept the submitted subscription agreement from
Subscriber and will promptly refund any funds submitted by Subscriber via
company check to the Subscriber's address as provided in the subscription
agreement within 5 business days of such notification.
7. NOTICES. The address of the Subscriber for all purposes shall be the
address set forth on the signature page to this Agreement, or such other address
of which the Company has received notice in accordance with the provisions
hereof. The address of the Company for all purposes shall be 000 Xxxxx Xxxxxx
Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000 or such other address of which the
Subscriber has received notice in accordance with the provisions hereof. Any
notice or communication to be given under this Agreement shall be made in
writing and, unless otherwise herein provided, shall be deemed to have been
given when sent by first class to such party at such address.
8.. APPLICABLE LAW. This Agreement and the rights and obligations of
the parties hereunder shall be construed in accordance with and governed by the
laws of the State of Illinois.
9. COUNTERPARTS; OTHER AGREEMENTS. This Agreement may be executed in
any number of counterparts, and each of such counterparts shall, for all
purposes, constitute one agreement binding on all the parties, notwithstanding
that all parties are not signatories to the same counterpart.
10. MISCELLANEOUS. 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 assigns. This
Agreement constitutes the entire agreement among the parties pertaining to the
subject matter contained in this Agreement and supersedes all prior
understandings of the parties. The invalidity or unenforceability of any one
provision of this Agreement shall in no way affect the validity of any other
provision, and all other provisions shall remain in full force and effect. No
waiver by any party of any breach of any term hereof shall be construed as a
waiver of any subsequent breach of that term or any other term of the same or of
a different nature.
11. TAX CERTIFICATION. The Subscriber certifies that (1) the taxpayer
identification provided above the Subscriber signature is correct and (2) the
Subscriber is not subject to backup withholding because (i) the Subscriber has
not been notified that the Subscriber is subject to backup withholding as a
result of failure to report interest and dividends or (ii) the Internal Revenue
Service has not notified the Subscriber that the Subscriber is subject to backup
withholding. [Strike out clause (2) if incorrect.]
IN WITNESS WHEREOF, this Agreement has been executed by the Subscriber
as of the date of the Subscriber's signature set forth on the signature page
hereto and, if accepted by the Company, becomes an Agreement binding on the
Company as of the date of the signature signifying acceptance set forth on the
attached signature page.
SUBSCRIBER agrees to purchase _____________ shares of common stock of
Xxxxxxxx Capital Group, Inc. (at a purchase price of $.10 per share of common
stock) in the total amount of ______________ dollars, which is immediately
payable by check submitted with this subscription agreement payable to "Xxxxxxxx
Capital Group, Inc.", 000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx
00000.
SUBSCRIBER: I HEREBY ACKNOWLEDGE THAT I HAVE RECEIVED, READ AND UNDERSTAND THE
ACCOMPANYING OFFERING CIRCULAR AND MY INVESTMENT MADE HERE DOES NOT EQUAL TO
GREATER THAN 10% OF MY LIQUID NET WORTH.
--------------------------------------- ------------------
Signed: Date
Please Type or Print the following information:
Name: ________________ ___ ________________________________
First Init. Last
Home Address:
----------------------------------------------------
Street
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City / State Zip
Home Phone: ___________________ Work Phone: ________________
Other (Pager/Cellular)________________
Social Security Number or Taxpayer ID: ______-___-_____________
Email Address: _____________________________________________________ (REQUIRED)
Having received this Subscription Agreement and acknowledging receipt of funds
from the above Subscriber in the amount of __________ dollars for an issuance of
__________ Shares of common stock of Xxxxxxxx Capital Group, Inc., the
undersigned, having the authority to accept such subscription agreement and
having determined that there is no valid reason not to so accept such
Subscription Agreement, acknowledges its receipt and will instruct the Company's
transfer agent to record the above Subscriber as a holder of the above purchased
Shares as of the date written below.
__________________________________ Dated: _____/ ___/_______
Xxxx X. Xxxxx
Chairman and CEO
Xxxxxxxx Capital Group, Inc.
