SUBSCRIPTION AGREEMENT
000
Xxxxxxxxx Xxxxxx
Xxxxx
000
Xxx Xxxx,
XX 00000
Ladies
and Gentlemen:
1. Pursuant
to prior understandings and discussions, the undersigned (“Subscriber”) hereby agrees to
purchase from the Congressional Effect Family of Funds, a Delaware trust (the
“Trust”), Ten Thousand
(10,000) shares (the “Shares”) of beneficial
interest of the Congressional Effect Fund, a series of the Trust, with a par
value of $0.01 per Share, at a price of Ten Dollars ($10.00) per
share. Subscriber hereby acknowledges (i) that this subscription
shall not be deemed to have been accepted by the Trust until the Trust indicates
its acceptance by returning to Subscriber an executed copy of this subscription,
and (ii) that acceptance by the Trust of this subscription is conditioned upon
the information and representations of Subscriber hereunder being complete, true
and correct as of the date of this subscription and as of the date of closing of
sale of the Shares to Subscriber.
2. Until
actual delivery of the purchase price to the Trust and acceptance by the Trust
of the purchase price and this Subscription Agreement, the Trust shall have no
obligation to Subscriber. The Trust may revoke a prior acceptance of
this Subscription Agreement at any time prior to delivery to and acceptance by
the Trust of the purchase price for the Shares.
3. Subscriber
understands, acknowledges and agrees as follows:
(a) Subscriber
has such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of investment in the Trust and of
making an informed investment decision.
(b) Subscriber
has the capacity to protect his own interest in connection with this transaction
by reason of his prior personal or business relationships with the Trust or its
officers or directors or his business or financial experience.
(c) Subscriber
understands that because the Shares have not been registered under the
Securities Act of 1933, as amended (the “Securities Act”) or applicable
state securities laws, Subscriber cannot dispose of any or all of the Shares
unless such Shares are subsequently registered under the Securities Act, and/or
applicable state securities laws, or exemptions from such registration are
available. Subscriber acknowledges and understands it has no right to
require the Trust to register the Shares, except as provided in this
Agreement. Subscriber further understands that the Trust, as a
condition to the transfer of any of the Shares, may require that the request for
transfer be accompanied by opinion of counsel satisfactory to the Trust, in form
and substance satisfactory to the Trust and preceded by prior written notice, to
the effect that the proposed transfer does not result in violation of the
Securities Act or applicable state securities laws, unless such transfer is
covered by an effective registration statement under the Securities Act and all
applicable state securities laws. Subscriber understands that each
certificate representing the Shares and any securities issued upon conversion or
exercise of any securities in, the Shares or on account of ownership thereof
will bear the following legend or one substantially similar
thereto:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES
LAWS OF ANY STATE. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT
AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, MORTGAGED,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH SHARES UNDER THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT
REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS.
(2) The
representations, warranties, understandings, acknowledgments and agreements in
this Agreement are true and accurate as of the date hereof, shall be true and
accurate as of the date of the acceptance hereof by the Trust and shall survive
thereafter.
(3) This
Agreement shall be enforced, governed and construed in all respects in
accordance with the laws of the State of Delaware, as such laws are applied by
Delaware courts to agreements entered into and to be performed in Delaware, and
shall be binding upon Subscriber, his heirs, estate, legal representatives,
successors and assigns and shall inure to the benefit of the Trust and its
successors and assigns.
(4) Subscriber
agrees not to transfer or assign this Agreement, or any of his interest herein,
without the express written consent of the Trust.
(5) This
Agreement constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes any and all prior or
contemporaneous representations, warranties, agreements and understandings in
connection therewith. This Agreement may be amended only by a writing
executed by all parties hereto. This Agreement may be executed in one
or more counterparts.
(6) Subscriber
recognizes it is important under the Securities Act and state securities law
that the Trust determine if potential investors are “accredited investors,” as
defined in Appendix
A attached hereto. Subscriber represents that it is an
“accredited investor.” Subscriber further represents that it is a
citizen of the State of New York. Subscriber is not a resident of any
other jurisdiction.
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IN
WITNESS WHEREOF, Subscriber has executed this Subscription Agreement this 5th
day of May 2008.
| Subscription: | ||
| 10,000 | ||
| Number of Shares | ||
| $100,000 | ||
| Total Payment Enclosed | ||
| CONGRESSIONAL EFFECT MANAGEMENT, LLC | ||
| /s/ Xxxx X. Xxxxxx | ||
| By: Xxxx X. Xxxxxx, Managing Member |
Acceptance:
The
foregoing Subscription Agreement is accepted on this the 5th day of May,
2008.
| CONGRESSIONAL EFFECT FAMILY OF FUNDS | ||
| By: /s/ Xxxx X. Xxxxxx | ||
| Xxxx X. Xxxxxx, Trustee |
APPENDIX
A
An
Accredited Investor is defined as follows:
1. a natural
person whose individual net worth, or joint net worth, with that person’s
spouse, at the time of purchase exceeds $1,000,000;
2. 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 (the year in which the purchase is
made);
3. any
trust, with total assets in excess of $5,000,000, not formed for the specific
purpose of investing in the Trust, whose purchase is directed by a sophisticated
person having such knowledge and experience in financial and business matters
that he is capable of evaluating the risks and merits of investing in the
Trust;
4. a
director or executive officer of the Trust;
5. an
organization described in Section 501(c)(3) of the Internal Revenue Code,
corporation, Massachusetts or similar business trust, or partnership, not formed
for the specific purpose of acquiring the securities offered, with total assets
in excess of $5,000,000;
6. a bank as
defined in the Securities Act of 1933 (the “Act”), or a savings and loan
association or other institution as defined in the Act whether acting in its
individual or fiduciary capacity; a broker or dealer registered under the
Securities Exchange Act of 1934; an insurance company as defined in the Act; an
investment company registered under the Investment Company Act of 1940 or a
business development company as defined in the Act; a Small Business Investment
Company licensed under the Small Business Investment Act of 1958; an employee
benefit plan within the meaning of Title I of the Employee Retirement Income
Security Act of 1974, if the investment decision is made by a plan fiduciary,
which is either a bank, savings and loan association, an 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;
7. a
“private business development company” as defined in the Investment Advisers Act
of 1940; or
8. an entity
in which all of the equity owners are accredited
investors.
