THE PROMISSORY NOTES HEREUNDER HAVE NOT BEEN REGISTERED (I) UNDER ANY STATE SECURITIES LAWS; OR (II) UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). NEITHER THE NOTES NOR ANY PART THEREOF MAY BE OFFERED FOR SALE, PLEDGED, HYPOTHECATED, SOLD, ASSIGNED OR TRANSFERRED AT ANY TIME EXCEPT IN COMPLIANCE WITH THE TERMS AND CONDITIONS THEREUNDER; AND (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER ANY APPLICABLE STATE ACT OR IN A TRANSACTION WHICH IS EXEMPT FROM REGISTRATION UNDER SUCH STATE ACT OR WHICH IS OTHERWISE IN COMPLIANCE WITH SUCH STATE ACT; AND (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR IN A TRANSACTION WHICH IS EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OR WHICH IS OTHERWISE IN COMPLIANCE WITH THE SECURITIES ACT AND PURSUANT TO RULES AND REGULATIONS PROMULGATED THEREUNDER, INCLUDING, WITH RESPECT TO CERTAIN OFFERS AND SALES MADE IN RELIANCE ON REGULATION D (INCLUDING, WITHOUT LIMITATION, RULE 506(c) PROMULGATED THEREUNDER).
THIS SUBSCRIPTION AGREEMENT (this “Agreement”) has been executed by the undersigned (the “Investor”) and, upon its acceptance by the Manager (defined below) of NGD CAPITAL POWER YIELD I LLC, a Delaware limited liability company (the “Company”), shall be deemed a fully executed agreement, dated the date of such acceptance, by and between the Investor and the Company.
Total Amount of Investment: $
WHEREAS, the Company is offering (the “Offering”) for sale its promissory notes (each, a “Note” and collectively, the “Notes”) in the aggregate principal amount of $24,000,000. The minimum subscription for each Note hereunder is $100,000; although the Company reserves the right to accept subscriptions for lesser amounts; and
WHEREAS, the Investor desires to purchase a Note hereunder in the amount the Investor has indicated on the first page of this Agreement (the “Investment”);
NOW, THEREFORE, for and in consideration of the foregoing premises, the mutual covenants and agreements contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby agree as follows:
Recitals. The Recitals set forth above are a material part of this Agreement and are incorporated herein by this reference as if same were fully set forth hereinafter in their entirety.
Investment Objective. The Company’s objective is to deploy the loan proceeds from this Offering in furtherance of the Company’s business (the “Business”), which is to finance strategic development and operating initiatives across high-growth Florida real estate projects (each, a “Project” and collectively, the “Projects”) controlled, directly or indirectly, by Newgard Development Group Inc., a Florida corporation (the “NGD”), as more fully set forth in that certain “NGD Capital Power Yield I LLC Investment Summary” prepared by the Company (the “Investment Summary”). A copy of the Investment Summary is attached as an exhibit to the Subscription Booklet provided to the Investor with this Agreement (the “Subscription Booklet”), which is incorporated by reference into this Agreement.
Use of Proceeds. The Company intends to utilize the loan proceeds from this Offering to fund (i) the development of a flagship Project; (ii) costs and expenses related to new Projects (including, without limitation, acquisition costs, pursuit costs, pre-development expenses and general working capital); (iii) capitalized interest reserves to cover a portion of monthly payments to Investors during the term of the Notes; and (iv) offering-related costs, all at such times and in such a manner as determined by the Manager, in its sole discretion, as more fully set forth in the Investment Summary. By way of example only, assuming a total raise of $24,000,000 under this Offering, the following sets forth an illustration of the Manager’s potential allocation of the proceeds from this Offering:
• Approximately $10 million to fund the development of a flagship Project.
• Approximately $3 million toward pre-development funding for a second Project.
• Approximately $2 million for new acquisitions, pursuit costs, and general working capital.
• Approximately $1.2 million for vehicle setup, offering expenses, and capitalization costs.
• Approximately $7.8 million to fund capitalized interest reserves intended to cover monthly payments to Investors during the term of the Notes.
• Assumes total approximate allocation of $24 million.
The Manager reserves the right, in its sole discretion, to revise the foregoing allocations based on market conditions, particular Project needs and available opportunities, so long as such uses remain consistent with the Company’s overall investment strategy. In addition, the Company may deploy capital into Projects at rates or terms that exceed its payment obligations to Investors hereunder, thereby capturing a spread to support the operations and sustainability of the NGD Capital Power Yield I platform.
Terms of the Notes. Each Note shall bear interest at the rate of eighteen percent (18%) per annum with payments of interest only, due and payable monthly in arrears. Each Note shall mature with a balloon payment of principal and accrued and unpaid interest thereon due and payable on the third (3rd) anniversary of the effective date of the Note (the “Maturity Date”); provided, that the Maker may extend the Maturity Date, at Maker’s sole discretion without the approval of Payee, for two (2) additional one (1) year terms; provided Maker provides Payee written notice of its intent to exercise the extension right(s) prior to the applicable Maturity Date. The minimum principal amount of each Note shall be $100,000, although the Company reserves the right to accept subscriptions for lesser amounts. Each Note shall be secured, on a pari passu basis, by a corporate guaranty (the “Corporate Guaranty”) from NGD (in such capacity, the “Guarantor”), which is affiliated with the Company Principal (defined below). Other than with respect to the Corporate Guaranty, each Note is unsecured, may be prepaid at any time without premium or penalty and shall be governed by the laws of the State of Delaware. (See the form of Note set forth on page SB-4 of the Subscription Booklet). It is noteworthy, however, that the Company shall utilize a portion of the principal amount of each Note to cover monthly interest payments to Investors during the initial term of the Notes.
Formation, Ownership and Management of the Company. The Company was formed on May 7, 2025 in the state of Delaware under the name “NGD Capital Power Yield I LLC”. The sole member of the Company (in such capacity, the “Member”) and sole manager of the Company (in such capacity, the “Manager”) is NGD Capital LLC, a Florida limited liability company (“NGD Capital”) whose main principal is Harvey Hernandez (the “Company Principal”). As such, the Company Principal is responsible for the day-to-day operations of the Company’s Business. (See the Investment Summary (set forth on page SB-2 of the Subscription Booklet) for further background information regarding the Company Principal.) The principal address of the Company is 1 SE 3rd Avenue, Suite 3050, Miami, Florida 33131.
Subscription. The Investor, intending to be legally bound, hereby subscribes for and offers to purchase the Note upon and subject to the terms, conditions and provisions set forth herein and in the Note, which subscription shall involve, among other things, the Investment in the Company in the amount provided on the first page of this Agreement. The Investment shall be payable in full upon subscription.
The Investment shall be paid by the Investor to the Manager to be held in a segregated escrow account of the Company until such time as the Manager disburses the Investment to the general operating account of the Company. Detailed wire transfer/check instructions are set forth on page SB-5 of the Subscription Booklet.
Additionally, the Company anticipates engaging a fund administrator (the “Administrator”) to be responsible for, among other things, administering the disbursement and collection of subscription documents and performing certain other accounting, back-office, data processing, processing subscriptions, and transfer activities of Investors in the Company, certain anti-money laundering functions, and/or related administrative services.
Closings. The entire Subscription Booklet provided to the Investor with this Agreement must be returned to the Manager by no later than ten (10) business days of the receipt of the Subscription Booklet (inclusive of this Agreement), unless otherwise extended by the Manager in its sole discretion (the “Closing”). The Company may have one or more closings at its discretion until all of the Notes have been sold or the Company decides to complete the Offering before that time.
Termination of Offering. This Offering commenced as of the date set forth above and will end on May 31, 2026, unless otherwise extended by the Manager in its sole discretion.
Risk Factors. A purchase of the Note involves a high degree of risk. See the risk factors set forth on Schedule 1, attached hereto (“Risk Factors”). The Risk Factors are not intended to be an exhaustive list of the general or specific risks involved, but to identify certain risks that the Company currently foresees. The Investor should carefully consider all information contained herein and in the Risk Factors and should give particular consideration to such Risk Factors before deciding to purchase the Note offered hereby. Additional risks and uncertainties that are not yet identified or that the Company currently considers to be immaterial may also materially adversely affect the Company’s Business and financial condition in the future. Any of the risks described herein and in the Risk Factors could materially adversely affect the Company and could result in a complete loss of the principal and accrued and unpaid interest under the Note.
Investor Awareness. The Investor hereby acknowledges that the Investor has been furnished with, and has carefully read, the Note and understands the terms and conditions contained therein. The Investor is further aware of, and acknowledges that:
The Investor hereby agrees that this subscription is and shall be revocable at any time until accepted by the Company;
The Investor has been provided with, and had the opportunity to read and review, this Agreement and all exhibits hereto, and to ask questions and receive answers from designated representatives of the Company concerning any matter described therein. Specifically, THE INVESTOR HAS CONSIDERED CAREFULLY THE VARIOUS RISKS INVOLVED WITH MAKING ITS PURCHASE OF THE NOTE, SOME OF WHICH ARE SET FORTH IN THIS AGREEMENT. THE ORDER IN WHICH THE RISKS ARE DISCUSSED IS NOT NECESSARILY INDICATIVE OF THEIR RELATIVE IMPORTANCE. THERE MAY BE ADDITIONAL RISKS OF WHICH THE COMPANY AND THE MANAGERS ARE NOT AWARE. THIS IS A HIGHLY SPECULATIVE INVESTMENT AND ONLY THOSE PERSONS WHO CAN AFFORD A COMPLETE LOSS OF THEIR INVESTMENT SHOULD CONSIDER INVESTING IN THE COMPANY;
The Company has only recently been formed and has no financial and operating history;
The Company reserves the unrestricted right to reject any subscription, in whole or in part, in its sole discretion, and no subscription will be binding unless and until accepted by the Company. Subscriptions need not be accepted in the order received. Except as otherwise set forth herein, subscriptions shall become binding on the Investor, and shall not be revocable by the Investor, if and when accepted by the Company;
No Federal or state agency has passed upon the Note or made any finding or determination as to the fairness of the Investment made hereunder;
Neither the Company, Manager, nor any of their affiliates, employees, agents, directors, officers or consultants assume any responsibility for the tax consequences to the Investor of the Investment;
The Investor is subscribing for, and upon acceptance by the Company will become obligated to purchase, the Note, the ownership of which will require the Investor to fully fund the Investment in the amount provided on the first page of this Agreement;
The Investor must bear the economic risk of its Investment in the Company for an indefinite period of time, and must bear the risks of the full loss of the Investor’s Investment, since the Note has not been registered for sale under the Securities Act and pursuant to rules and regulations promulgated thereunder, including, with respect to certain offers and sales made in reliance on Regulation D (including, without limitation, Rule 506(c) promulgated thereunder), and, therefore, cannot be sold or otherwise transferred unless either it is subsequently registered under the Securities Act or an exemption from such registration is available, and the Note cannot be sold or otherwise transferred unless it is registered under applicable state securities or blue sky laws or an exemption from such registration is available;
The Investor understands that this Agreement may not be assigned without the prior written consent of the Manager, which consent may be withheld in the Manager’ sole discretion; and
The Company will not be registered as an “investment company” under the Investment Company Act of 1940, as amended (the “IC Act”), and the Manager, who will manage the Company, will not be registered as an “investment advisor” under the Investment Advisors Act of 1940, as amended.
Representations, Warranties and Covenants of Investor. In order to induce the Company and the Manager to accept this subscription, the Investor hereby represents and warrants to, and covenants with, the Company as follows:
If the Investor is a corporation, company, trust, estate or other entity, it is empowered, authorized and qualified to subscribe under this Agreement and to make its Capital Contribution and otherwise to comply with its obligations contained in this Agreement and the Note, and the person signing this Agreement and the Note on behalf of the Investor, if applicable, has been duly authorized by the Investor to do so. If the Investor is an individual, the Investor is of legal age to execute this Agreement and is legally competent to do so. This Agreement and the Note have been duly executed and delivered on behalf of the Investor and each constitutes the valid and binding agreement of the Investor, enforceable against it in accordance with its terms.
The execution, delivery and performance of this Agreement and the Note by the Investor do not and will not result in a breach of any of the terms, conditions or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, credit agreement, note or other evidence of indebtedness, or any lease or other agreement, or any license, permit, franchise or certificate, to which the Investor is a party or by which it is bound or to which any of its properties are subject, or require any authorization or approval under or pursuant to any of the foregoing, violate the organizational documents of the Investor, or violate in any material respect any statute, regulation, law, order, writ, injunction or decree to which the Investor is subject, which default or violation would materially adversely affect the business or financial condition of the Investor or impair the Investor’s ability to carry out its obligations under this Agreement and the Note.
The Investor, subject only to the acceptance of this Agreement by the Company, agrees to be bound by all of the provisions of this Agreement in the form delivered to the Investor which are applicable to the Investor, and has read, is familiar with, and understands the nature and scope of the rights and remedies provided to the Manager on behalf of the Company in this Agreement in the event of a failure to pay any part of the Investor’s Investment or other payment obligation under this Agreement when due, and is prepared to accept the exercise against the Investor of such rights and remedies in the event of such failure on the Investor’s part.
The Investor is not subscribing for the Note as a result of or subsequent to any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, any seminar, or any solicitation of a subscription by a person not previously known to the Investor in connection with investments in securities generally.
The Investor has reviewed and understands the risks of, and other considerations relating to, the purchase of the Note.
The Investor has requested and has been afforded the opportunity to ask questions and receive answers concerning the Company.
Representatives of the Company and the Manager have answered all inquiries that the Investor has made of them concerning the Company, the Manager, or any other matters relating to the formation and proposed operation of the Company and the terms of the Note. The Investor acknowledges that neither the Company nor the Manager nor any of their affiliates has rendered or will render any investment advice or securities valuation advice to the Investor, and that the Investor is neither subscribing for nor acquiring the Investor’s Note in reliance upon, or with the expectation of, any such advice.
The Investor acknowledges that the Company’s legal and accounting advisors represent the Company and not the Investor or any other investor. The Investor further acknowledges that such advisors, in assisting in the preparation of this Agreement, the Note and any other materials, have relied solely on information provided by the Company and have not conducted an independent inquiry to verify such information.
No representations or warranties have been made to the Investor with respect to the Investment or the Company, and the Investor has not relied upon any representation or warranty in making the subscription.
The Investor has such knowledge and experience in financial and business matters that the Investor is capable of evaluating the merits and risks of an investment in the Company and of making an informed investment decision with respect thereto.
The Investor acknowledges that neither the Company nor the Company’s counsel is obligated to register the Note under the Securities Act and/or any other U.S. Federal or state securities laws (collectively, “Securities Laws”). The Investor further understands that (i) the transfer of the Note may be substantially restricted by the Securities Laws and by the absence of a trading market therefore, and the transfer of the Note is additionally restricted by the terms of this Agreement; (ii) no trading market for the Note exists and none is expected to develop; and (iii) any sale or other disposition of the Note may result in unfavorable tax consequences to the Investor. The Investor acknowledges that the restrictions on the transferability of the Note are substantial and may require the Investor to hold the Note indefinitely.
The Investor has adequate means of providing for the Investor’s current and future needs and possible personal contingencies and has no need for liquidity of the Note.
Except as otherwise indicated herein, the Investor is the sole party-in-interest as to its Investment in the Company. The Investor is acquiring the Note in the Company for the Investor’s own account as principal for investment purposes and not with a view to the distribution or sale thereof, subject to any requirement of law that its property at all times be within its control.
The Investor has not been organized or reorganized for the specific purpose of acquiring the Investor’s Note, except as otherwise disclosed in writing to the Company. The Investor recognizes that the sale of the Note to the Investor will be based upon its representations, warranties and covenants set forth above, and, to the fullest extent permitted by applicable law, the Investor agrees on demand to indemnify and to hold harmless the Company, the Manager, each of their affiliates and each officer, director, shareholder, member, employee, agent, and/or partner thereof, and their successors and assigns, from and against any and all loss, damage, liability or expense, including costs and attorneys’ fees, to which they may be put or which they may incur by reason of, or in connection with, any misrepresentation made by the Investor in this Agreement or any other subscription document, any breach by the Investor of representations and warranties and/or any failure by the Investor to fulfill any covenants or agreements set forth in this Agreement or any other subscription document. All representations, warranties and covenants and the indemnification contained in this Agreement, the Note or any other subscription document, shall survive the acceptance of this subscription and the issuance of the Note to the Investor.
All information contained in this Agreement will be treated confidentially; however, the Investor agrees that the Manager may present this Agreement to such parties as the Manager deems appropriate if called upon to establish that the proposed offer and sale of the Note is exempt from registration under the Securities Act or IC Act, or meets the requirement of applicable state securities laws.
The Investor’s financial condition is such that he, she or it has no need for liquidity with respect to its Investment to satisfy any existing or contemplated undertaking or indebtedness and is able to bear the economic risk of its Investment for an indefinite period of time, including the risk of losing all of its Investment.
The Investor understands that the Company has been recently formed to operate the Business and has no operating history. The Business is in its early stages of operation, is not profitable, and their future profitability cannot be assured.
The Investor understands that (i) its subscription for the Note is irrevocable until the Offering period ends without the Company’s written consent; (ii) an investment in the Note is a speculative investment that involves a high degree of risk, including the risk of loss of the entire Investment of the Investor; (iii) no federal or state agency has passed upon the adequacy or accuracy of the information made available to the Investor, or made any finding or determination as to the fairness for investment, or any recommendation or endorsement of the Note as an investment; (iv) as described above, there will be restrictions on the transferability of the Note under the Securities Laws and this Agreement and there will be no public market for the Note, and, accordingly, it may not be possible for the Investor to liquidate its investment in the Note; (v) any anticipated federal and/or state income tax benefits applicable to the Note may be lost through changes in, or adverse interpretations of, existing laws and regulations; and (vi) there is no assurance that the Company will ever be profitable, or that the Investor’s Investment in the Note will ever be recoverable.
The Investor acknowledges that: (i) the risks inherent to this Investment have been fully considered; (ii) the Manager and its management team (collectively, “Management”) will have substantial and exclusive authority to conduct the operations of the Company; and (iii) an investment in the Note has neither been approved nor disapproved by the U.S. Securities and Exchange Commission (the “SEC”) or any other department or agency of any other jurisdiction, and such authorities have not passed upon the adequacy or accuracy of the disclosure provided to Investors in connection with an investment in the Note.
The Investor acknowledges that neither the Company nor any representative of the Company has made any representations or warranties in respect of the Business or the Company’s profitability.
Without limiting the generality of the foregoing, the Investor acknowledges and agrees that information, including the Investment Summary, any other any business plan or financial projections or forecasts or other information contained in written materials provided or made available to the Investor, and any oral, visual or other presentations made by the Company or its representatives to the Investor shall not be deemed a representation or warranty in respect of the matters therein. The Investor further acknowledges that (i) this Agreement and all exhibits thereto contain information that the Company believes is accurate and, as same relates to the projected revenues and expenses of the Business, data that the Company believes is a reasonable forecast of the results that the Company will achieve; however, as an accredited, experienced and sophisticated prospective investor, the Investor is aware that any proforma projected financial information (the “Proforma Financial Information”) presented in this Agreement was not prepared with a view toward compliance with the published guidelines of the SEC or the American Institute of Certified Public Accountants for generally accepted accounting principles; (ii) the Proforma Financial Information was prepared in good faith and is based upon assumptions currently believed to be reasonable, including management’s current assessment of business prospects, market trends, product pricing, competition, and other information; (iii) the assumptions and estimates underlying the Proforma Financial Information are inherently subject to varying degrees of uncertainty; (iv) the ability to achieve projected or forecasted results depends on the timing and occurrence of a complex series of internal and external future events, all difficult to predict, and many beyond the control of the Company. Additionally, unanticipated events and circumstances are likely to occur; (v) the Proforma Financial Information should not be relied upon as an indication of the actual results of operations that will be obtained; and (vi) as a result of the foregoing, the financial results of the Company may be materially adversely affected.
The Investor’s financial condition is such that it has no need for liquidity with respect to its Investment to satisfy any existing or contemplated undertaking or indebtedness and is able to bear the economic risk of its Investment for an indefinite period of time, including the risk of losing all of its Investment.
The Investor acknowledges and confirms that the Investor has engaged in a complete examination of all such documents provided by the Company in reaching the Investor’s decision to invest in the Company. The Investor further acknowledges and confirms that the Investor has had an opportunity to ask questions of and receive answers from the Company concerning the Note, the prospective contemplated Business and purpose of the Company, and with respect to any other matter the Investor has deemed relevant, and all such inquiries have been answered to the Investor’s satisfaction. In addition, the Investor acknowledges that Investor has obtained, in Investor’s judgment, sufficient information from the Company to evaluate the merits and risks of an investment in the Company.
The Investor (i) has been provided with a copy of this Agreement, the Subscription Booklet (including the Investment Summary and all other exhibits thereto) and the form of Note, and has reviewed same; and (ii) has performed a complete examination of all such documents, records, contracts and books to the extent deemed necessary by the Investor in reaching the Investor’s decision to invest in the Company. The Investor further acknowledges and confirms that the Investor has had an opportunity to ask questions of and receive answers from the Company concerning the Note, the prospective contemplated Business and purpose of the Company, and any other matter the Investor has deemed relevant, and all such inquiries have been answered to the Investor’s satisfaction.
The Investor understands that the Company and Management will be relying on the accuracy and completeness of all matters set forth in this Agreement, and the Investor represents and warrants to the Company, its Management and each of their affiliates that the information, representations, warranties, acknowledgments and all other matters set forth in this Agreement with respect to the Investor are complete, true and correct and does not fail to include any material fact necessary to make the facts stated, in light of the circumstances in which they are made, not misleading, and may be relied upon by them in determining whether the offer and sale of the Note to the Investor is exempt from registration under the Securities Laws, and the Investor will notify them immediately of any change in any statements made in this Agreement that occurs prior to the consummation of the purchase of the Note.
The Investor is (i) an “accredited investor” and has accurately completed the “Accredited Investor Representation Letter”, attached hereto as Exhibit A, in order to evidence same; and (ii) a “sophisticated person” in that the Investor has such knowledge and experience in financial and business matters that individually and/or with the aid of advisers, it is capable of evaluating the merits and risks of an investment in the Company by making an informed investment decision with respect thereto.
General Matters and Further Agreements.
The Investor, upon the request of the Company, will furnish promptly such further information, and execute and deliver such documents, as reasonably may be required in the determination of the Company to comply with, or to confirm compliance with, any applicable laws or regulations or other obligations of the Investor or the Company.
This Agreement, including, without limitation, the representations and warranties contained herein, shall survive (i) the sale of the Note to the Investor pursuant to this Agreement; and (ii) the death or legal disability of the Investor and shall be binding upon the Investor’s heirs, executors, administrators, successors and assigns.
Any notice, request, instruction or other document required or permitted to be given hereunder by any party to the other parties (or any of them) shall be in writing and shall be delivered via email, personally or mailed by certified mail, postage prepaid, return receipt requested or by national carrier (e.g., Federal Express) (such mailed notice to be effective on the date on which such receipt is acknowledged), addressed to (i) the Investor to the Investor’s address as set forth in the signature page to the Note; and (ii) to the Company, to NGD Capital Power Yield I LLC, 1 SE 3rd Avenue, Suite 3050, Miami, Florida 33131.
This Agreement and the Note constitute the entire agreement between the parties hereto with respect to the subject matter hereof and this Agreement may be amended only by a writing executed by both parties hereto.
This Agreement and the Note shall be governed by and construed in accordance with the laws of the State of Delaware (including, without limitation, the Delaware Limited Liability Company Act, as same may be amended from time to time), without regard to the provisions thereof regarding conflicts of laws. Venue for the exclusive enforcement hereof shall be Miami-Dade County, Florida.