EXHIBIT 99.1
SUBSCRIPTION AGREEMENT FOR PROMISSORY NOTE AND COMMON STOCK
THIS SUBSCRIPTION AGREEMENT is submitted by the undersigned person
(the
"Subscriber") to
Jacobs Financial
Group, Inc., a Delaware corporation with
principal offices
located at 300 Summers Street, Suite 970, Charleston, West
Virginia 25301
(the "Company") and, when accepted by the Company, shall
represent the agreement of the parties to the following:
SECTION 1. SUBSCRIPTION.
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1.1 The Company has
offered to the
undersigned
the opportunity to
purchase a promissory
note to be issued by the Company in the principal amount
of $_______________
in the form
attached hereto as Exhibit A (the "Bridge
Note"), together
with Common
Stock of the Company
(the "Common Shares" and
collectively with the Bridge Note, the "Securities").
1.2 The Subscriber hereby subscribes for the purchase of the
Securities
(the "Purchased
Securities")
for a price (the "Purchase Price") of
_______________________________ ($_______________) (such subscription referred
to herein as the "Subscription").
1.3 The Subscriber
has fully completed this Agreement, including
Appendices A and B attached hereto. Upon the execution hereof, the Subscriber
has delivered to the Company (i) two executed copies of this
Agreement, and (ii)
the Purchase Price by
a certified or bank check payable to the order of Jacobs
Financial Group,
Inc. or by wire transfer to the account specified by the
Company.
1.4 Upon receipt of the foregoing items and acceptance of this
Agreement by the Company's affixing its signature hereto,
this Agreement
shall
become effective,
and the Company shall
promptly deliver to the Subscriber one
fully-executed copy of this Agreement, countersigned by the Company,
and cause
the issuance to Subscriber of the Purchased Securities as provided
herein. If
the Subscription is not accepted, the Purchase Price will be
promptly refunded
to Subscriber, without interest.
SECTION 2. AGREEMENTS RESPECTING ISSUANCE OF BRIDGE NOTE AND COMMON
SHARES.
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2.1 Effective
immediately upon
acceptance of the Subscription and the
Company's receipt of
the Purchase Price,
the Company shall issue to Subscriber
the Bridge Note.
2.2 Following
the issuance of the
Bridge Note to
Subscriber, Common
Shares shall be issued to Subscriber in accordance with the
following:
(a) Upon retirement of
the Bridge Note at its Normal Maturity
Date (as defined
therein), the Company
shall issue to
Subscriber
a
number of Common Shares representing _______________percent (
______ %)
of the Common Stock of the Company outstanding immediately following
such issuance.
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(b) In the event
that, under its terms, the Bridge Note
becomes subject to Extended Maturity and is to be retired in
accordance
with the Amortization Schedule (each, as defined therein),
the Company
shall issue Common Shares to Subscriber as follows:
DATE OF ISSUANCE
NUMBER OF SHARES
----------------
----------------
Commencement of Extended Maturity
_____ % of outstanding
Each 6 month anniversary thereof until
_____% of outstanding
retirement of Bridge Note
The number of Common
Shares constituting
the percentage so provided
shall be computed taking into account the number of outstanding
shares
of Common Stock as of the applicable date, plus the Common Shares
to be
issued to Subscriber as of such date as provided herein. Subscriber's
entitlement to be
issued Common Shares under this Section 2.2(b) shall
terminate upon
retirement of the Bridge Note, including by prepayment
prior to the applicable 6 month anniversary of the commencement of
the
Extended Maturity.
SECTION 3.
REPRESENTATIONS AND
WARRANTIES OF THE
COMPANY.
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The Company represents and warrants to the Subscriber that:
3.1 This Agreement has been duly authorized, executed and delivered by
the Company,
and constitutes a legal, valid and binding obligation of the
Company, enforceable in accordance with its terms.
3.2 The Company
has the power and
authority to issue the Purchased
Securities, and, when
issued in accordance
herewith, the
Purchased Securities
shall be fully paid and non-assessable.
3.3 The Company has reserved for issuance in accordance
herewith, and
at all times during which the Bridge Note remains outstanding,
shall maintain in
reserve for
issuance in accordance herewith, a number of Common Shares
sufficient to fully satisfy the obligations of the Company pursuant
to Section 2
of this Agreement.
SECTION 4.
REPRESENTATIONS AND
WARRANTIES OF THE SUBSCRIBER.
-------------------------------------------------
The Subscriber represents and warrants to the Company that:
4.1 This Agreement has been duly authorized, executed and delivered by
the Subscriber,
and constitutes a
legal, valid and
binding obligation of
the
Subscriber, enforceable in accordance with its terms.
4.2 The Subscriber
understands the confidential nature of the subject
matter of this
Agreement and agrees
not to disclose the name of the Company or
any matters associated therewith
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<PAGE>
prior to the public
announcement by the
Company of the
transactions
effected
hereby. Further,
Subscriber understands that trading in the Common Stock of the
Company based upon
information derived
from the Company in the process of this
Subscription is
strictly prohibited and subject to legal prohibitions and
sanctions under federal securities laws.
4.3 The Subscriber
has had the
opportunity to review
the Bridge Note
and this Agreement with its counsel or other financial
advisors.
4.4 The Subscriber
has knowledge and experience in financial and
business matters
sufficient to enable it to evaluate the merits and risks of an
investment in the Purchased Securities.
4.5 The Subscriber is acquiring the Purchased Securities hereunder for
its own account,
solely for investment and not with a view to the resale
or
distribution thereof
within the
meaning of the Securities Act of 1933, as
amended (the "Securities Act").
4.6 The Subscriber
understands that its
acquisition of the
Purchased
Securities is an
illiquid and may be a long-term investment; and, without
impairing its financial condition, it is able to hold the Purchased
Securities
for an indefinite
period of time and would be able to suffer a complete loss of
its investment without undue financial hardship.
4.7 The Subscriber
has had an
opportunity
to ask questions of and
receive answers from the Company and its officers concerning the
Company and the
terms and conditions
of the Purchased
Securities and has had an opportunity to
obtain additional information from the Company to the extent deemed
necessary or
advisable by the
Subscriber in order to verify the accuracy of the information
obtained. The
Subscriber has, to the extent deemed necessary by the
Subscriber,
consulted with its own advisors (including the Subscriber's
attorney, accountant
or investment advisor)
regarding the
Subscriber's
investment in the Purchased
Securities and understands the significance and effect of its representations,
warranties, acknowledgments and agreements set forth in this
Agreement.
4.8 The Subscriber
has reviewed
copies of the public
filings of the
Company, including
those on Forms 10-KSB and 10-QSB. The Subscriber has, to the
extent deemed
necessary by the
Subscriber,
completed due diligence and such
independent investigation concerning the Company and the terms and
conditions of
the sale of the
Purchased Securities contemplated hereby as it has deemed
advisable.
4.9 The Subscriber
acknowledges that
neither the Company,
nor any of
its officers, representatives or affiliates, nor any other person
or entity, has
made any representations or warranties with respect to the Company,
its business
or the Purchased Securities other than as set forth herein.
4.10 The Subscriber
understands that the Purchased Securities have not
been registered under
the Securities Act in reliance upon an exemption from the
registration
requirements of the
Securities
Act pursuant to Section 4(2)
thereof, that the Purchased Securities have not been registered
under applicable
state securities laws, and that the Purchased Securities may not be
sold or
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<PAGE>
otherwise disposed of
unless registered under the Securities Act and applicable
state securities laws (the Company being under no obligation to so
register such
Purchased Securities)
or exempted from
registration. The
Subscriber
further
understands that
the exemption from registration afforded by Rule 144
promulgated under the Securities Act is not presently available with respect to
the Purchased Securities.
4.11 The Subscriber is an "Accredited Investor" as such term is
defined
in Rule 501 of
Regulation
D promulgated under the Securities Act and has
accurately completed Appendix A to this Agreement.
4.12 The Subscriber
acknowledges
that neither the Company nor any
person or entity
acting on its behalf has offered to sell any of the Purchased
Securities to the
Subscriber by means of
any form of general
solicitation or
advertising, including without limitation (i) any advertisement,
article, notice
or other communication published in any newspaper, magazine or
similar media, or
broadcast over
television
or radio, and (ii) any seminar or meeting whose
attendees have been invited by any general solicitation or general
advertising.
SECTION 5. GENERAL.
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5.1 NOTICES. All
notices, requests,
demands and other
communications
hereunder shall be in
writing and shall be deemed to have been
duly given if
delivered to the parties at the addresses set forth below or on Appendix B,
as
applicable, as same may be modified from time to time. Each such
notice, request
or other communication
shall be effective (a)
if given by facsimile or e-mail,
when electronic
confirmation
that such facsimile or
e-mail is received at the
facsimile number
or e-mail address set forth below or on Appendix B, as
applicable, if such facsimile or e-mail is transmitted on a
business day, and if
not, then on the next business day thereafter, or (b) if given by mail,
three
(3) days after mailed by registered or certified mail (return
receipt requested)
or (c) if given by express courier, on the day delivered by an express
courier
(with confirmation from recipient) to the following addresses:
(a) if to the Company, to:
Jacobs Financial Group, Inc.
300 Summers Street, Suite 970
Charleston, West Virginia 25301
Attention: President
Facsimile No.: 304-342-9726
(b) if to the Subscriber, to its mailing address and facsimile
number or e-mail address as shown on the Appendix B to this
Agreement.
Notice of any change in any address or facsimile number shall also be given in
the manner set forth
above. Whenever
the giving of notice is required, the
giving of such
notice may be waived by the party
entitled to receive such
notice.
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5.2 ENTIRE AGREEMENT.
This Agreement contains the entire agreement
between the
parties hereto with respect to the purchase and sale of the
Purchased Securities and supersedes all prior agreements or
understandings among
the parties related to such matters.
5.3 BINDING EFFECT.
This Agreement shall
be binding upon and inure to
the benefit of the parties hereto and their respective successors
and assigns.
5.4 AMENDMENT
AND MODIFICATION. This Agr
