SUBSCRIPTION AGREEMENT
XXXXXXXXX.XXX, INC.
XxxxXxxxx.xxx, Inc.
000 Xxxxx Xxxxxx
Xxxxx, Xxxxx 00000
Gentlemen:
The undersigned, intending to be legally bound, hereby irrevocably
applies to purchase from XxxxXxxxx.xxx, Inc. ("XxxxXxxxx.xxx"), a Texas
corporation, the number of Shares (the "Shares") indicated beside the
undersigned's signature.
1. Subscription. Subject to the terms and conditions hereof and the
provisions of the Prospectus (the '"Prospectus") dated August 13, 2001, as
amended by Post Effective Amendment No. 3, dated March 28, 2002, describing an
offering by XxxxXxxxx.xxx of shares of its common stock, in the undersigned
hereby irrevocably subscribes for the number of Shares indicated below and
agrees to deliver herewith to XxxxXxxxx.xxx, Inc. his check payable to the order
of "XxxxXxxxx.xxx, Inc." in an amount equal to $0.25 times the number of Shares
for which the undersigned has subscribed.
2. Acceptance of Subscription. The undersigned agrees that XxxxXxxxx.xxx
shall have the right to accept or reject this subscription, in whole or in part,
and that this subscription shall be deemed to be accepted by XxxxXxxxx.xxx, only
when it is executed by XxxxXxxxx.xxx. Once accepted by XxxxXxxxx.xxx, this
subscription shall be irrevocable. In the event this subscription is rejected by
XxxxXxxxx.xxx, the proceeds of this subscription will be returned promptly to
the undersigned, without interest.
3. Representations and Warranties of the Undersigned. The undersigned
hereby represents and warrants to and covenants with XxxxXxxxx.xxx, the other
shareholders of XxxxXxxxx.xxx and each officer, employee and agent of each of
the foregoing that:
(a) He has adequate means of providing for his current needs
and possible personal contingencies, and he has no need now, and
anticipates no need in the foreseeable future, to sell the Shares for
which he hereby subscribes. He is able to bear the economic risks of
this investment, and consequently, without limiting the generality of
the foregoing, he is able to hold his Shares for an indefinite period
of time and has a sufficient net worth to sustain a loss of his entire
investment in the Shares in the event such loss should occur.
(b) (i) He either is (A) a director, executive officer or
general partner of XxxxXxxxx.xxx, (B) a natural person with an
individual net worth, or joint net worth with his spouse, at the time
of his purchase of the Shares in excess of $1,000,000, (C) a natural
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person with individual income in excess of $200,000 in each of the two
most recent years and reasonably expects an income in excess of
$200,000 in the current year, (D) a natural person with joint income
with his spouse in excess of $300,000 in each of the two most recent
years and reasonably expects a joint income with his spouse in excess
of $300,000 in the current year, (E) a trust with total assets in
excess of $5,000,000 which was not formed for the specific purpose of
acquiring Shares and whose purchases are directed by a person having
such knowledge and experience in financial and business matters that is
capable of calculating the merits and risks of an investment in Shares,
(F) an entity all the equity owners of which are persons meeting the
requirements of one or more of the above subcategories (A), (B), (C),
(D) or (E) above or is otherwise an "accredited investor" (as such term
is defined under Regulation D promulgated under Section 4(2) of the
Securities Act of 1933, as amended (the "Act"); or
(ii) the Shares represent less than his net worth or
he has (A) an individual net worth or joint net worth with his spouse
at the time of such person's purchase of the Shares (exclusive of home,
furnishings and automobiles) of $225,000 or more, without regard to an
investment in the Shares, and individual or joint, "taxable income," as
defined in Section 63 of the Internal Revenue Code of 1986, of $100,000
or more for the current year and the two previous years, (B) an
individual or joint net worth with his or her spouse in excess of
$1,000,000 (inclusive of home, furnishings and automobiles), (C) an
individual or joint net worth with his spouse in excess of $500,000
(exclusive of home, furnishings and automobiles), or (D) a combined
"gross income" as defined in Section 61 of the Code of $200,000 or more
for the current year and for the two previous years; provided that
subscriptions shall not be accepted from more than thirty-five such
persons described in this subsection (ii).
(c) He, together with his Purchaser Representative (as such
term is defined in Rule 501 of Regulation D promulgated under the Act),
if applicable, has such knowledge and experience in financial, tax and
business matters that he is capable of evaluating the terms and risks
of the prospective investment in the Shares and is able to bear the
economic risk of such investment for an indefinite period.
(d) He recognizes that his investment in the Shares involves a
high degree of risk which may result in the loss of the total amount of
his investment. He acknowledges that he has been advised and is fully
aware that XxxxXxxxx.xxx's business is a highly speculative and
uncertain venture involving a high degree of risk, the advantages and
benefits of which are generally limited to a certain group of
investors.
(e) He is aware that he must bear the economic risk of his
investment in the Shares for an indefinite period of time because no
public market for the Shares currently exists and there can be no
assurance that such a market will be developed in the future.
(f) He has had the opportunity to obtain any information
necessary to verify the accuracy of the information provided to him and
to evaluate the merits of his investment, and
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has been given the opportunity to meet with officials of XxxxXxxxx.xxx
and its Affiliates and to have said officials answer any questions
regarding the terms and conditions of this particular investment, and
all such questions have been answered to his full satisfaction. In
reaching the conclusion that he desires to acquire the Shares, he has
carefully evaluated his financial resources and investments and
acknowledges that he is able to bear the economic risks of this
investment.
(g) In making his decision to become an Investor, he has
relied solely upon his review of such documents and independent
investigations made by him, without assistance of XxxxXxxxx.xxx, its
Affiliates or their employees or agents.
(h) He acknowledges that although he has been advised that
Rule 144, promulgated under the Act, is expected to be applicable or
contemplated to become applicable to the resale of the Shares, he
acknowledges that after the expiration of one year after the date the
registration statement of which this Prospectus is a part became
effective, XxxxXxxxx.xxx will not be obligated to make the filings and
reports, or make available publicly the information, which is a
condition to the availability of Rule 144 or take any other action in
furtherance of making any other exemption available.
(i) He will provide XxxxXxxxx.xxx such information as may be
reasonably requested by XxxxXxxxx.xxx to enable it to satisfy itself as
to his knowledge and experience and his ability to bear the economic
risk of an investment in the Shares.
(j) If the undersigned is a corporation, partnership, trust or
other entity, it is authorized and qualified to become a Investor in,
and authorized to make its capital contributions to XxxxXxxxx.xxx, and
the person signing this Subscription Agreement on behalf of such entity
has been duly authorized by such entity to do so.
(k) If the undersigned is a corporation or a partnership, the
person signing the Subscription Agreement on its behalf hereby
represents and warrants that the information contained in each
Purchaser Questionnaire completed by each shareholder of such
corporation or partner of such partnership is true and correct with
respect to such shareholder or partner (and if any such shareholder or
partner is itself a corporation or a partnership, with respect to all
persons having an Unit in such corporation or partnership, whether
directly or indirectly) and that the person signing this Subscription
Agreement has made due inquiry to determine the truthfulness and
accuracy of the information contained in any such Purchaser
Questionnaire.
(l) If the undersigned is purchasing the Shares in a
representative or fiduciary capacity, the representations and
warranties contained herein (and in any other written statement or
document delivered to XxxxXxxxx.xxx in connection herewith) shall be
deemed to have been made on behalf of the person or persons for whom
such Shares are being purchased.
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(m) The foregoing representations, warranties and agreements
together with all other representations and warranties made or given by
the undersigned to XxxxXxxxx.xxx in any other written statement or
document delivered in connection with the transactions contemplated
hereby, shall be true and correct in all respects on and as of the date
of the admission of the undersigned to XxxxXxxxx.xxx as if made on and
as of such date and shall survive such date.
4. Indemnification. The undersigned acknowledges that he understands
the meaning and legal consequences of the representations, warranties and
covenants set forth in Section 3 hereof and that XxxxXxxxx.xxx has relied and
will rely upon such representations, warranties and covenants and he hereby
agrees to indemnify and hold harmless XxxxXxxxx.xxx, each Investor therein, and
their respective officers, directors, partners, controlling persons, agents and
employees, from and against any and all loss, damage, or liability, joint or
several, and any action in respect thereof, to which any such person may become
subject to or arising out of a breach of any such representation, warranty or
covenant or the inaccuracy of such certifications. All representations,
warranties and covenants contained in this Subscription Agreement, and the
indemnification contained in this Section 4, shall survive the acceptance of
this subscription and the admission of the Investors as shareholders of
XxxxXxxxx.xxx.
5. Survival. All representations, warranties and covenants
contained in this Subscription Agreement, and the indemnification contained in
Section 4 hereof, shall survive the acceptance of the subscription. The
undersigned acknowledges and agrees that this Subscription Agreement shall
survive the death or disability of the undersigned.
6. ARBITRATION.
(a) (i) Arbitration is final and binding on the parties.
(ii) The parties are waiving their right to seek
remedies in court, including the right to a jury trial.
(iii) Pre-arbitration discovery is generally more
limited than and different from court proceedings.
(iv) The arbitrators' award is not required to
include factual findings or legal reasoning and any parties'
right to appeal or to seek modification of rulings by the
arbitrators is strictly limited.
v) The panel of arbitrators will typically include a
minority of arbitrators who were or are affiliated with the
securities industry.
(b) Any controversy or claim arising out of or relating to the
Investor's investment in the Shares, including, but not limited to, any
interpretation, breach or dispute concerning any of the terms or
provisions of this Subscription Agreement,
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which disagreement is not settled in writing within thirty days after
it arises, shall be settled by arbitration in Dallas, Texas, in
accordance with the laws of the State of Texas and under the rules then
obtaining of the American Arbitration Association (or any successor
thereto), and judgment upon the award rendered in said arbitration
shall be final and may be entered in any court in the State of Texas
having jurisdiction thereof. Any party hereto may apply for such
arbitration.
7. Governing Law. THIS SUBSCRIPTION AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED IN ALL RESPECTS BY THE
LAWS OF THE STATE OF TEXAS.
NUMBER OF SHARES SUBSCRIBED FOR (fill in the following line)
-------------------------------
Share(s) at $ per Share.
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EXECUTED this _____ day of ________________________, 2001.
THIS AGREEMENT CONTAINS A PRE-DISPUTE ARBITRATION CLAUSE FOUND IN
SECTION 6.
Signature of Subscriber Signature of Subscriber's Spouse
(or Other Co-Owner)
Subscriber's Name Subscriber's Spouse (or Other Co-Owner)
(Print or Type) (Print or Type)
Please indicate the classification of ownership:
Individually:
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Trust:
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Corporation:
------------------
Joint Tenants:
------------------
Tenants in Common:
------------------
Community Property:
------------------
Other:
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APPROVAL AND ACCEPTANCE OF SUBSCRIPTION ON THIS ______ DAY OF
_____________, .
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XxxxXxxxx.xxx, INC.
By:
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Name:
----------------------
Title:
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