EXHIBIT 4.2
EXHIBIT B
BY EXECUTING THIS SUBSCRIPTION AGREEMENT, AN INVESTOR IS
NOT WAIVING ANY RIGHTS UNDER THE FEDERAL SECURITIES LAWS.
SUBSCRIPTION AGREEMENT AND POWER OF ATTORNEY
YOSEMITE MORTGAGE FUND II, LLC
1. SUBSCRIPTION. The undersigned investor ("Investor") hereby applies
to become a Member in Yosemite Mortgage Fund II, LLC, a California limited
liability company (the "Company"), and agrees to purchase the number of units of
limited liability company interest in the Company (the "Units") stated below in
accordance with the terms and conditions of the Limited Liability Company
Operating Agreement (the "Operating Agreement"), a copy of which is contained in
the Prospectus of the Company, and tenders the amount required to purchase the
Units ($10.00 per Unit, 1,000 Unit minimum purchase). The Units which the
Investor offers to purchase hereby shall not be deemed issued to, or owned by,
the Investor until: (a) the Investor has fully paid in cash for such Units, and
(b) the Manager of the Company has in its sole discretion accepted Investor's
offer of purchase. A sale of Company Units to an Investor may not be completed
until at least five business days after the date the Investor receives a
Prospectus. The Manager will send each Investor a confirmation of purchase
within five business days of acceptance of the Subscription Agreement.
Purchasers of Units whose payments have been held in the Escrow Account will be
admitted as Members not later than 15 days following the closing of the Escrow
Account and payment to the Company of the proceeds therein. Thereafter,
purchasers of Units will be admitted as Members not later than the last day of
the calendar month following the date their subscription was accepted by the
Manager. Subscriptions shall be accepted or rejected no sooner than 5 business
days and after 30 days of their receipt; if rejected, all funds shall be
returned to the subscriber within 10 business days.
2. SUBSCRIPTION AMOUNT. The Investor subscribes $_____________ and
encloses such sum herewith as the purchase price of _____________ Units ($10.00
per Unit) (Minimum 1,000 Units for $10,000).
3. PAYMENT OF SUBSCRIPTION. The amount of the Investor's subscription
set forth above either (a) has already been delivered by wire transfer, to the
account set forth below, or (b) is enclosed in the form of a certified or bank
check.
The undersigned hereby directs Capitol City Escrow, Inc., 0000 Xxxx Xxxxxx,
Xxxxx X-000, Xxxxxxxxxx, XX 00000, as Escrow Agent, to pay to the Company the
funds delivered by the Investor for the Units, to the extent the Investor's
subscription has been accepted, subject to the Escrow Agent's receiving the
Minimum Proceeds described in Section 3.1 below. The Investor acknowledges that
the Manager can accept or reject all or any part of this subscription in its
sole discretion, and that this offering may be terminated at any time by the
Manager. If the Investor's subscription is rejected in part, the funds delivered
herewith, to the extent the application is so rejected, will be returned to
Investor as soon as practicable without interest or deduction, except to the
extent of any interest actually earned.
3.1. As described in the Prospectus under Plan of
Distribution, payments for Units will be held by the Escrow Agent in a
segregated account (the Escrow Account) until the Escrow Agent has
received payment for subscriptions accepted by the Company for not
fewer than 500,000 Units (the Minimum Offering), corresponding to not
less than an aggregate of $5,000,000 in subscription payments (the
Minimum Proceeds).
3.2. If the Minimum Proceeds have not been received by the
Escrow Agent on or before the end of the Escrow Agent's business day on
______________ 31, 2002, the Escrow Agent will promptly return your
payments in full, with interest, if any has been earned, to you at the
address shown on the Subscription Agreement Signature Page.
3.3. If the Minimum Proceeds have been received by the Escrow
Agent on or before ______________ 31, 2002, the offering by the Company
will continue, without use of Escrow Agent or any escrow agent, to seek
to distribute in its initial public offering a total of 10,000,000
Units for $50,000,000. The Escrow Account will be closed upon the
Escrow Agent's distribution of funds either (a) to the Company after
the Escrow Agent receives the Minimum Proceeds, or (b) to the
Investors, in accordance with Section 3.2. Proceeds from sales of Units
in the offering following the close of the Escrow Account will be paid
directly to the Company for its use as described in the Prospectus
under Use of Proceeds.
4. REPRESENTATIONS BY THE UNDERSIGNED. The Investor represents and
assures the Company that the Investor:
4.1. has received the Prospectus of the Company dated
______________, 2002;
4.2. understands that no federal or state agency has made any
finding or determination as to the fairness for public investment in,
nor any recommendation nor endorsement of, the Units;
4.3. understands that Units are offered for a minimum
investment of $10,000;
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4.4. understands that there will be no public market for the
Units, that there are substantial restrictions on repurchase, sale,
assignment or transfer of the Units, and that it may not be possible
readily to liquidate this investment;
4.5. meets the following suitability standards:
(a) if a resident of California has a minimum annual
gross income of $65,000 and net worth of $150,000 or in the
alternative, a net worth of $250,000;
(b) if a resident from Oklahoma, a minimum annual
gross income of $60,000 and net worth of $60,000, or in the
alternative, a net worth of $225,000;
(c) if a resident of any other state, a minimum
annual gross income of $45,000 and a minimum net worth of
$45,000, or in the alternative, a minimum net worth of
$150,000; net worth is determined exclusive of home, home
furnishings and automobiles; and
(d) if purchasing for a fiduciary account, these
minimum standards are met by the beneficiary, the fiduciary
account, or a donor or grantor who directly or indirectly
supplies the funds to purchase Units if the donor or grantor
is the fiduciary;
4.6. if an individual, has attained the age of majority (as
established in the state in which domiciled), and, in any event, is
under no disability with respect to entering into a contractual
relationship with the Company;
4.7. if a trustee, is the trustee for the trust on behalf of
which it is purchasing the Units, and has due authority to purchase
Units on behalf of the trust;
4.8. fully indemnifies and holds harmless the Company, its
Manager, and its Affiliates from any and all claims, actions, causes of
action, damages, and expenses (including legal fees and expenses)
whatsoever which may result from a breach or alleged breach of any of
the representations by Investor contained herein;
4.9. understands that if this is a Uniform Gifts to Minors Act
("UGMA") or Uniform Transfers to Minors Act ("UTMA") custodial account,
Investor represents and warrants that the Units belong to the minor and
the Units, whether or not withdrawn, will only be used for the benefit
of the minor. Investor also understands that the minor has the legal
right to withdraw the Units for any purpose when he or she reaches the
age that the custodianship terminates - usually 18 or 21 depending upon
the state UGMA/UTMA law and/or terms of the custodianship.
5. ADOPTION OF OPERATING AGREEMENT. The Investor hereby adopts,
accepts, and agrees to be bound by all terms and provisions of the Operating
Agreement and to perform all obligations therein imposed upon a Member with
respect to Units to be purchased. Upon acceptance of this Subscription Agreement
by the Manager on behalf of the Company and payment in full of the subscription
price, the undersigned shall become a Member for all purposes of the Operating
Agreement.
6. LIMITATION ON ASSIGNMENT. The Investor acknowledges that the Units
may be assigned only as provided in the Operating Agreement and further
acknowledges the restrictions on resale, transfer, or assignment of the Units
set forth in the Operating Agreement and as described in the Prospectus.
7. SPECIAL POWER OF ATTORNEY. The Investor hereby makes, constitutes,
and appoints the Manager of the Company to be such person's true and lawful
attorney-in-fact to sign and acknowledge, file and record:
7.1. any amendment to the Articles of Organization required or
permitted under the laws of the State of California or of any other
state to be filed or which the Manager deems advisable to prepare,
execute and file;
7.2. any other instrument or document which may be required to
be filed by the Company by any governmental agency or by the laws of
any state, or which the Manager deems it advisable to file; and
7.3. any documents which may be required to effect the
continuation of the Company, the admission of a substituted Member, or
the dissolution and termination of the Company, provided such
continuation, admission, or dissolution and termination are in
accordance with the terms of the Operating Agreement.
7.4. The foregoing grant of authority:
(a) is a Special Power of Attorney coupled with an
interest, is irrevocable, shall survive the death of the
Investor and shall not be affected by the subsequent
incapacity of the Investor;
(b) may be exercised by the Manager for each Member
by a facsimile signature of or on behalf of the Manager or by
listing all of the Members and by executing any instrument
with a single signature of or on behalf of the Company, acting
as attorney-in-fact for all of them; and
(c) shall survive the delivery of an assignment by a
Member of the whole or any portion of his interest; except
that where the assignee thereof has been approved by the
Manager for admission to the Company as a substituted Member,
the Special Power of Attorney shall survive the delivery of
such assignment for the sole purpose of enabling such person
to execute, acknowledge, and file any instrument necessary to
effect such substitution.
8. PURCHASE BY FIDUCIARY. If the Investor is purchasing the Units
subscribed hereby in a fiduciary capacity, the above representations and
warranties are to be deemed to have been made on behalf of the person(s) for
whom the Investor is so purchasing except that such person(s) need not be over
18 years of age.
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9. NOTIFICATION OF MANAGER. The Investor agrees to notify the Manager
immediately if any of the foregoing statements made herein shall become untrue.
10. OPERATING AGREEMENT GOVERNS. In the event of any conflict between
the provisions of the Operating Agreement and any instrument or document
executed, acknowledged, filed or recorded by the Manager pursuant to this
special power of attorney, the Operating Agreement will govern.
11. REINVESTMENT OF DISTRIBUTIONS. The Company maintains a Distribution
Reinvestment Plan ("Plan") under which distributions of income of the Company
may be reinvested for the purchase of additional Units, at a price of $10.00 per
Unit, rather than being received in cash. See Prospectus at page __. So long as
the Investor meets the suitability standards established by the Company and by
the securities law administrator of the state in which the Investor is
domiciled, and subject to possible suspension or termination of the Plan by the
Manager, as set forth in the Operating Agreement, the Investor will continue to
participate in the Plan if it elects option A below. Option B below will
constitute an election not to participate in the Plan. The Investor may change
his election at any time by written notice to the Company. Please choose one or
the other of the two options by your initials in the appropriate blank. If you
initial neither blank, you will be considered to have elected to receive your
distributions in cash (Option B).
A. ___ Investor elects to participate in the
Company Distribution Reinvestment Plan.
B. ___ Investor elects not to participate in the
Company Distribution Reinvestment Plan and
to receive distributions in cash.
12. OWNERSHIP OF UNITS. The Investor's interest will be owned and
should be shown on the Company's records as follows:
Check one: ___ Individual Ownership (for UGMA/UTMA custodial
accounts include date of birth and SSN of minor below)
___ Joint Tenants with Right of Survivorship (all joint
tenants must individually complete and sign application)
___ Tenants in Common (all tenants in common must
individually complete and sign application
___ Community Property (only one spouse required to complete
and sign application)
___ Custodian (Individual Retirement Accounts)
___ Other Qualified Retirement Plans
___ Revocable Grantor Trust (include copy of first and last
pages of trust document including signatures and section
discussing powers of trustees)
___ Irrevocable Trust (include copy of first and last
pages of trust document including signatures and
section discussing powers of trustees)
___ Corporation
___ Partnership
___ Nonprofit Organization
(Please Print)
Name________________________________________________________________________________________________________________________________
First Middle Last
or Entity's legal name
------------------------------------------------------------------------------------------------------------------------------------
Resident or Entity's Address
------------------------------------------------------------------------------------------------------------------------------------
City State Zip Code
-------------------------------------------- -------------------------------------------
Home Telephone Number (if applicable) Business Telephone Number (if applicable)
(include area code) (include area code)
Date of Birth_________________________________________________ (Needed for first five ownership types only)
Occupation____________________________________________________ (Needed for first five ownership types only)
Marital Status (check one): Single_______ Married________ (Needed for first five ownership types only)
Citizenship: U.S.______ Other__________________________ (Needed for first five ownership types only)
Investment Objective:
Current income with retention of capital______(check)
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Other (please explain):
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Investor's Financial Status and Suitability:
Fair Market Net Worth $__________________________
Liquid Fair Market Net Worth $__________________________
Gross Income $__________________________
Investor's Years of Investment Experience ___________________________
Investor's Tax Bracket (if individual) ___________________________%
Please initial here to acknowledge your understanding that it may not be
possible to readily liquidate your investment in the Company:
Please initial here to acknowledge your understanding that if you move to a
state in which the Company Units are not registered under that state's
securities law, you may not be able to purchase additional Units or receive new
Units through your participation in the Dividend Reinvestment
Plan:__________________________
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PLEASE COMPLETE THIS SECTION FOR SECOND INDIVIDUAL OF JTROS OR TENANTS IN COMMON ACCOUNTS
(Please Print)
Name________________________________________________________________________________________________________________________________
First Middle Last
or Entity's legal name
------------------------------------------------------------------------------------------------------------------------------------
Resident or Entity's Address
------------------------------------------------------------------------------------------------------------------------------------
City State Zip Code
-------------------------------------------- -------------------------------------------
Home Telephone Number (if applicable) Business Telephone Number (if applicable)
(include area code) (include area code)
Date of Birth_________________________________________________ (Needed for first five ownership types only)
Occupation____________________________________________________ (Needed for first five ownership types only)
Marital Status (check one): Single_______ Married________ (Needed for first five ownership types only)
Citizenship: U.S.______ Other__________________________ (Needed for first five ownership types only)
Investment Objective:
Current income with retention of capital______(check)
Other (please explain):
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
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Investor's Financial Status and Suitability:
Fair Market Net Worth $__________________________
Liquid Fair Market Net Worth $__________________________
Gross Income $__________________________
Investor's Years of Investment Experience ___________________________
Investor's Tax Bracket (if individual) ___________________________%
Please initial here to acknowledge your understanding that it may not be
possible to readily liquidate your investment in the Company:
Please initial here to acknowledge your understanding that if you move to a
state in which the Company Units are not registered under that state's
securities law, you may not be able to purchase additional Units or receive new
Units through your participation in the Dividend Reinvestment
Plan:__________________________
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13. IF APPLICABLE, THE ACCOUNT REPRESENTATIVE AND INVESTMENT FIRM
PRINCIPAL MUST EACH SIGN BELOW IN ORDER TO SUBSTANTIATE COMPLIANCE WITH APPENDIX
F TO ARTICLE 3, SECTION 34 OF THE NASD'S RULES OF FAIR PRACTICE.
IN WITNESS WHEREOF, the undersigned Investor has executed this
Subscription Agreement and Power of Attorney.
Dated: ______________, 200__
___________________________________ _______________________________________
Authorized Signature of Subscriber Social Security Number or Federal Tax
Identification Number
___________________________________
Authorized Signature of Subscriber _______________________________________
(if more than one) Social Security Number or Federal Tax
Identification Number
ACCEPTED:
Yosemite Mortgage Fund II, LLC
By MFP Management LLC, Manager
By: ____________________________________
Xxxxxx X. Xxxxxx, General Manager
Dated: ______________, ______
The Account Representative and Principal signing below each have
reasonable grounds to believe, based on information obtained from the above
Investor concerning his or her investment objectives, other investments,
financial situation and needs and any other information known by either of them,
that investment in the Partnership is suitable for such Investor in light of his
or her financial position, net worth and other suitability characteristics, and
that the Investor meets the suitability requirements applicable to this
offering.
The undersigned account representative and principal have advised the
above Investor that no market for the securities being offered exists nor is one
expected to develop, and that the Investor may not be able to liquidate his or
her investment in the event of an emergency or for any other reason.
______________________________________ ________________________________________
Signature of Investment Firm Principal Signature of Account Representative
______________________________________ ________________________________________
Please PRINT Name and Title Please PRINT Account Representative Name
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APPENDIX A
RESTRICTIONS ON TRANSFER SET FORTH
IN RULE 260.141.11 OF
THE CALIFORNIA CODE OF REGULATIONS TITLE 10, CHAPTER 3 (THE CODE)
(a) The issuer of any security upon which a restriction on transfer has been
imposed pursuant to Section 260.102.6, 260.141.10 or 260.534 shall cause a copy
of this section to be delivered to each issuee or transferee of such security.
(b) It is unlawful for the holder of any such security to consummate a sale or
transfer of such security, or any interest therein, without the prior written
consent of the Commissioner (until this condition is removed pursuant to Section
260.141.12 of these rules), except:
(1) to the issuer;
(2) pursuant to the order or process of any court;
(3) to any person described in Subdivision (i) of Section 25102 of the
Code or Section 260.105.14 of these rules;
(4) to the transferors ancestors, descendants or spouse or any
custodian or trustee for the account of the transferor or the
transferors ancestors, descendants or spouse; or to a transferee by a
trustee or custodian for the account of the transferee or the
transferees ancestors, descendants or spouse;
(5) to the holders of securities of the same class of the same issuer;
(6) by way of gift or donation inter vivos or on death;
(7) by or through a broker-dealer licensed under the Code (either
acting as such or as a finder) to a resident of a foreign state,
territory or country who is neither domiciled in this state to the
knowledge of the broker-dealer, nor actually present in this state if
the sale of such securities is not in violation of any securities law
of the foreign state, territory or country concerned;
(8) to a broker-dealer licensed under the Code in a principal
transaction, or as an underwriter or member of an underwriting
syndicate or group;
(9) if the interest sold or transferred is a pledge or other lien given
by the purchaser to the seller upon a sale of the security for which
the Commissioner's written consent is obtained or under this rule is
not required;
(10) by way of a sale qualified under Sections 25111, 25112, or 25113,
or 25121 of the Code, of the securities to be transferred, provided
that no order under Section 25140 or Subdivision (a) of Section 25143
is in effect with respect to such qualification;
(11) by a corporation to a wholly owned subsidiary of such corporation,
or by a wholly owned subsidiary of a corporation to such corporation;
(12) by way of an exchange qualified under Section 25111, 25112, or
25113 of the Code, provided that no order under Section 25140 or
Subdivision (a) of Section 25148 is in effect with respect to such
qualification;
(13) between residents of foreign states, territories or countries who
are neither domiciled nor actually present in this state;
(14) to the State Controller pursuant to the Unclaimed Property Law or
to the administrator of the unclaimed property law of another state; or
(15) by the State Controller pursuant to the Unclaimed Property Law or
to the administrator of the unclaimed property law of another state,
if, in either such case, such person (i) discloses to potential
purchasers at the sale that transfer of the securities is restricted
under this rule, (ii) delivers to each purchaser a copy of this rule,
and (iii) advises the Commissioner of the name of each purchaser;
(16) by a trustee to a successor trustee when such transfer does not
involve a change in the beneficial ownership of the securities,
provided that any such transfer is on the condition that any
certificate evidencing the security issued to such transferee shall
contain the legend required by this section.
(c) The certificate representing all such securities subject to such a
restriction on transfer, whether upon initial issuance or upon any transfer
thereof, shall bear on their face a legend, prominently stamped or printed
thereon in capital letters of not less than 10-point size, reading as follows:
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IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR ANY
INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE PRIOR
WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA,
EXCEPT AS PERMITTED IN THE COMMISSIONERS RULES.
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