EXHIBIT 10.4

 

 

Print Name of Subscriber: John P. Leighton

 

SUBSCRIPTION AGREEMENT

 

Crown Financial Group, Inc.

525 Washington Blvd., 34th Fl.

Jersey City, NJ 07310

 

Ladies and Gentlemen:

 

1. Subscription I John P. Leighton (sometimes referred to herein as the
(“Investor”) hereby subscribe for and agree to purchase 28,986 shares (“Shares”)
of common stock, par value $            .01 per share (“Common Stock”), of Crown
Financial, Inc. (“Company”), a New Jersey corporation, at a purchase price per
share that equals the average closing bid price of a share of Common Stock on
the stock exchange or quotation system that represents the primary market for
shares of the Common Stock in the five trading days preceding the date of the
Agreement hereof, or $3.45 per share. The total purchase price for the shares
submitted herewith is $100,000.

 

2. Purchase. I have (i) instructed my bank to wire funds in the amount indicated
above from my account as such bank to: Crown Financial Group, Inc.; or (ii)
hereby tender to the Company cash or a check made payable to Crown Financial
Group, Inc. in the amount indicated above. I hereby tender two manually executed
copies of this Subscription Agreement and my completed and executed Confidential
Purchaser Questionnaire.

 

3. Acceptance or Rejection of Subscription. The Company has the right to reject
this subscription for the Shares, in whole or in part for any reason and at any
time prior to a Closing, notwithstanding prior receipt by me of notice of
acceptance of my subscription. In the event of the rejection of this
subscription, my subscription payment will be promptly returned to me without
interest or deduction and this Subscription Agreement shall have no force or
effect. In the event my subscription is accepted and there is a Closing, my
subscription proceeds will be released to the Company and the certificates
representing the Shares for which I have subscribed will be sent to me.

 

4. Closing and Delivery of Shares. The Company may close on these funds at any
time at its discretion and use such funds for any use connected with the
furtherance of the stated business plan attached hereto. The Shares subscribed
for herein shall not be deemed issued to or owned by me until two copies of this
Subscription Agreement have been executed by me and countersigned by the
Company.

 

5. Disclosure. This offering is limited to accredited investors as defined in
Section 2(15) of the Securities Act of 1933, as amended (“Securities Act”), and
Rule 501 promulgated thereunder, in reliance upon the exemption contained in
Sections 3(b), 4(2) or 4(6) of the Securities Act and applicable state
securities laws. Accordingly, the Shares are being sold without registration
under the Securities Act. I acknowledge receipt of the Company’s Form 10-K,
recent quarterly Form lO-Q filings and recent Form 8-K filings and represent
that I have carefully reviewed and understand the such documents and its
exhibits. I have received all information and materials regarding the Company
that I have requested.

 

1

--------------------------------------------------------------------------------

I fully understand that the Shares are speculative investments that involve a
high degree of risk of loss of my entire investment I fully understand the
nature of the risks involved in purchasing the Shares and I am qualified by my
knowledge and experience to evaluate investments of this type. I have carefully
considered the potential risks relating to the Company and purchase of its
Shares. Both my advisors, if any, and I have had the opportunity to ask
questions of and receive answers from representatives of the Company or persons
acting on its behalf concerning the Company and the terms and conditions of a
proposed investment in the Company and my advisors, if any, and I have also had
the opportunity to obtain additional information necessary to verify the
accuracy of information furnished about the Company. Accordingly, I have
independently evaluated the risks of purchasing the Shares.

 

6. Documents to be Delivered by Holder(s). Each of the Holder(s) participating
in any of the foregoing offerings shall furnish to the Company a completed and
executed questionnaire provided by the Company requesting information
customarily sought of selling security holders.

 

7. Investor Representations and Warranties. I acknowledge, represent and warrant
to, and agree with, the Company as follows:

 

(a) I am aware that my investment involves a high degree of risk, and I have
read and fully understand the Documents.

 

(b) I acknowledge and am aware that there is no assurance as to the future
performance of the Company.

 

(c) I am purchasing the Shares for my own account for investment and not with a
view to or for sale in connection with the distribution of the Shares, nor with
any present intention of selling or otherwise disposing of all or any part of
the Shares. I understand that there is not now, and may not ever be, any market
for the Shares. I agree that (i) the purchase of the Shares is a long-term
investment; and (ii) I may have to bear the economic risk of investment for an
indefinite period of time because the Shares have not been registered under the
Securities Act and, notwithstanding the registration rights granted herein, the
Shares may never by registered and cannot be resold, pledged, assigned, or
otherwise disposed of unless they are subsequently registered under said
Securities Act and under applicable securities laws of certain states or an
exemption from such registration under the Securities Act or any state
securities Laws. I hereby authorize the Company to place a legend denoting the
restrictions on the Shares.

 

(d) I recognize that the Shares, as an investment, involve a high degree of risk
including, but not limited to, the risk of economic losses from operations of
the Company and the total loss of my investment I believe that the investment in
the Shares is suitable for me based upon my investment objectives and financial
needs, and I have adequate means for providing for my current financial needs
and contingencies and have no need for liquidity with respect to my investment
in the Company.

 

2

--------------------------------------------------------------------------------

(e) I have been given access to full and complete information regarding the
Company and have utilized such access to my satisfaction for the purpose of
obtaining information. Furthermore, I have either met with or been given
reasonable opportunity to meet with officers concerning of the Company for the
purpose of asking questions of, and receiving answers from, such officers
concerning the terms and conditions of the offering of the Shares and the
business and operations of the Company and to obtain any additional information,
to the extent reasonably available.

 

(f) I have such knowledge and experience in financial and business matters and
to be capable of evaluating the merits and risks of an investment in the Shares
and have obtained. in my judgment. sufficient information from the Company to
evaluate the merits and risks of an investment in the Company. I have not
utilized any person as my purchaser representative as defined in Regulation D
promulgated by the Commission pursuant to the Securities Act in connection with
evaluating such merits and risks.

 

(g) I have relied solely upon my own investigation in making a decision to
invest in the Company.

 

(h) I have received no representation or warranty from the Company or any of its
respective officers, directors, employees or agents in respect of my investment
in the Company and I have received no information (written or otherwise) from
them relating to the Company or its business other than as set forth in the
Documents. I am not participating in the offering as a result of or subsequent
to: (i) any advertisement. article, notice or other communication published in
any newspaper. magazine or similar media or broadcast over television. radio or
the Internet; or (ii) any seminar or meeting whose attendees have been invited
‘by any general solicitation or general advertising.

 

(i) I have had full opportunity to ask questions and to receive satisfactory
answers concerning the offering and other matters pertaining to my investment
and all such questions have been answered to my full satisfaction.

 

(j) I have been provided an opportunity to obtain any additional information
concerning the offering and the Company and all other information to the extent
the Company possesses such information or can acquire it without unreasonable
effort or expense.

 

(k) I am an “accredited investor” as defined in Section 2(15) of the Securities
Act and in Rule 501 promulgated thereunder.

 

(l) I understand that (i) the Shares and the underlying securities have not been
registered under the Securities Act or the securities laws of certain states in
reliance on specific exemptions from registration; (ii) no securities
administrator of any state or the federal government has recommended or endorsed
this offering or made any finding or determination relating to the fairness of
an investment in the Company; and (iii) the Company is relying on my
representations and agreements for the purpose of determining whether this
transaction meets the requirements of the exemptions afforded by the Securities
Act and certain state securities laws.

 

(m) I have been urged to seek independent advice from my professional advisors
relating to the suitability of an investment in the Company in view of my
overall financial needs and with respect to the legal and tax implications of
such investment.

 

3

--------------------------------------------------------------------------------

(n) If the Investor is a corporation, company, trust, employee benefit plan,
individual retirement account, Keogh Plan, or other tax-exempt entity, it is
authorized and qualified to become an Investor in the Company and the person
signing this Subscription Agreement on behalf of such entity has been duly
authorized by such entity to do so.

 

(o) I hereby acknowledge and am aware that except for any rescission rights that
may be provided under applicable laws, I am not entitled to cancel, terminate or
revoke this subscription, and any agreements made in connection herewith shall
survive my death or disability.

 

8. Indemnification. I hereby agree to indemnify and hold harmless the Company,
its respective officer, directors, stockholders, employees, agents and attorneys
against any and all losses, claims, demands, liabilities, and expenses
(including reasonable legal or other expenses, including reasonable attorneys’
fees and other expenses reasonably incurred in investigating, preparing or
defending against any claim whatsoever incurred by the indemnified party in any
action or proceeding between the indemnitor and indemnified party or between the
indemnified party and any third party or otherwise) incurred by each such person
in connection with defending or investigating any such claims or liabilities,
whether or not resulting in any liability to such person, to which any such
indemnified party may become subject under the Securities Act, under any other
statute, at common law or otherwise, insofar as such losses, claims, demands,
liabilities and expenses (a) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact made by me and contained in this
Subscription Agreement, or (b) arise out of or are based upon any breach by me
of any representation, warranty, or agreement made by me contained herein.

 

9. Miscellaneous.

 

9.1. Severability; Remedies. In the event any parts of this Subscription
Agreement are found to be void, the remaining provisions of this Subscription
Agreement shall nevertheless be binding with the same effect as though the void
parts were deleted.

 

9.2. Counterparts. This Subscription Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. The execution of this
Subscription Agreement may be by actual or facsimile signature.

 

9.3. Benefit. This Subscription Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, executors, personal
representatives, successors and assigns.

 

9.4 Governing Law and Jurisdiction. This Subscription Agreement will be deemed
to have been made and delivered in New Jersey and will be governed as to
validity, interpretation, construction, effect and in all other respects by the
internal laws of the State of New Jersey. The Company and the Investor each
hereby (i) agrees that any legal suit, action or proceeding arising out of or
relating to this Subscription Agreement shall be instituted exclusively in New
Jersey; (ii) waives any objection to the venue of any such suit, action or
proceeding; and (iii) irrevocably consents to the jurisdiction of the National
Association of Securities Dealers, Inc. in any such suit, action or proceeding.
The Company further agrees to accept and acknowledge service or any and all
process that may be served in any such suit, action or proceeding in
arbitration.

 

4

--------------------------------------------------------------------------------

9.5 Notices. All notices, offers, acceptance and any other acts under this
Subscription Agreement (except payment) shall be in writing, and shall be
sufficiently given if delivered to the addressees in person, by overnight
courier service, or, if mailed, postage prepaid, by certified mail, (return
receipt requested), and shall be effective five days after being placed in the
mail if mailed, or upon receipt or refusal of receipt, if delivered personally
or by courier, in each case addressed to a party .The addresses for such
communications shall be:

 

  Investor: At the address designated on the signature page of this Subscription
Agreement.  

 

  The  Company: Crown Financial Group, Inc.

             525 Washington Boulevard

           34th Floor

           Jersey City, NJ 07310

           Attn: Michael T. Dorsey, General Counsel

 

or to such other addresses as any of them, by notice to the others, may
designate from time to time.

 

9.5. Oral Evidence. This Subscription Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior oral and written agreements between the parties hereto with respect to the
subject matter hereof. This Subscription Agreement may not be changed, waived,
discharged, or terminated orally but, rather, only by a statement in writing
signed by the party or parties against whom enforcement or the change, waiver,
discharge or termination is sought.

 

9.6. Section Headings. Section headings herein have been inserted for reference
only and shall not be deemed to limit or otherwise affect, in any matter, or be
deemed to interpret in whole or in part, any of the terms or provisions of this
Subscription Agreement.

 

9.7. Survival of Representations, Warranties and Agreements. The
representations, warranties and agreements contained herein shall survive the
delivery of, and the payment for, the Securities.

 

9.8. Acceptance or Subscription. The Company may accept this Subscription
Agreement at any time for all or any portion of the Shares subscribed for by
executing a copy hereof as provided.

 

(Remainder of the page intentionally left blank)

 

5

--------------------------------------------------------------------------------

Manner in Which Title is to be Held (check one)

 

  x Individual Ownership

  ¨ Community Property

  ¨ Joint Tenant with Right of Survivorship (both parties must sign)

  ¨ Partnership

  ¨ Tenants in common

  ¨ Corporation

  ¨ Trust

  ¨ Other (please indicate)

 

INDIVIDUAL INVESTORS

 

/s/ John P. Leighton            

--------------------------------------------------------------------------------

Signature (Individual)

 

 

 

--------------------------------------------------------------------------------

Signature (all record holders should sign)

 

John P. Leighton

Name(s) Typed or Printed

Address to Which Correspondence

Should be Directed

John P. Leighton

C/o Crown Financial Group, Inc.

525 Washington Blvd., 34th Fl.

Jersey City, New Jersey 07310

Social Security Number

 

--------------------------------------------------------------------------------

 

The foregoing is accepted and the Company hereby agrees to be bound by its
terms.

 

        Crown Financial Group, Inc. Dated: October 20, 2003       By:  
/s/    Michael T. Dorsey              

--------------------------------------------------------------------------------

 

6