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▇▇▇▇▇ ONLINE, INC.
SUBSCRIPTION AGREEMENT
▇▇▇▇▇ Online, Inc.
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Gentlemen:
1. Subscription. The undersigned (the "Purchaser"), intending to be legally
bound, hereby irrevocably agrees to purchase from ▇▇▇▇▇ Online, Inc. (the
"Company") the number of units (the "Units") set forth on the signature page
hereof, at a purchase price of $45,000 per Unit. Each Unit consists of 10,000
shares of Common Stock, par value $.01 per share, of the Company (the "Common
Stock") and a Warrant to purchase 10,000 shares of the Common Stock during the
period commencing on January 1, 2000 and expiring on January 31, 2000, subject
to certain vesting conditions set forth therein (the "Warrants"). This
subscription is submitted to you in accordance with and subject to the terms and
conditions described in this Subscription Agreement and the Term Sheet of the
Company dated February 24, 1999, as amended or supplemented from time to time,
including all attachments, schedules and exhibits thereto (the "Term Sheet"),
relating to the offering by the Company of a minimum of 11 Units (the "Minimum
Amount") and a maximum of 22 Units (the "Offering").
The terms of the Offering are more completely described in the Term Sheet
and such terms are incorporated herein in their entirety. Certain terms used but
not otherwise defined herein shall have the respective meanings provided in the
Term Sheet.
2. Payment. The Purchaser encloses herewith a check payable to, or will
immediately make a wire transfer payment to, "▇▇▇▇▇▇▇ Krooks ▇▇▇▇ & Ball P.C.,
Escrow Agent for ▇▇▇▇▇ Online, Inc." in the full amount of the purchase price of
the Units being subscribed for. To request wire transfer instructions, please
contact ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, telephone no. (203) ▇▇▇- ▇▇▇▇. Such funds will be
held for the Purchaser's benefit, and will be returned promptly, without
interest, penalty, expense or deduction if this Subscription Agreement is not
accepted by the Company, the Offering is terminated pursuant to its terms or by
the Company, or the Minimum Amount of Units is not sold.
3. Deposit of Funds. All payments made as provided in Section 2 hereof shall be
deposited as soon as practicable with ▇▇▇▇▇▇▇ Krooks ▇▇▇▇ & Ball P.C., as escrow
agent (the "Escrow Agent"), in an escrow account (the "Escrow Account") until
the earliest to occur of (a) the closing of the sale of the Minimum Amount of
Units (the "First Closing"), (b) the rejection of such subscription or (c) the
termination of the Offering by the Company. The Company may continue to offer
and sell the Units and conduct additional closings (each, a "Closing") for the
sale of additional Units after the First Closing and until the termination of
the Offering.
4. Acceptance of Subscription. The Purchaser understands and agrees that the
Company in its sole discretion reserves the right to accept or reject this or
any other subscription for ▇▇▇▇▇,
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in whole or in part, notwithstanding prior receipt by the Purchaser of notice of
acceptance of this subscription. The Company shall have no obligation hereunder
until the Company shall execute and deliver to the Purchaser an executed copy of
this Subscription Agreement. If this subscription is rejected in whole or the
Offering is terminated or the Minimum Amount is not raised, all funds received
from the Purchaser will be returned without interest, penalty, expense or
deduction, and this Subscription Agreement shall thereafter be of no further
force or effect. If this subscription is rejected in part, the funds for the
rejected portion of this subscription will be returned without interest,
penalty, expense or deduction, and this Subscription Agreement will continue in
full force and effect to the extent this subscription was accepted.
5. Representations and Warranties. The Purchaser hereby acknowledges,
represents, warrants and agrees as follows:
(a) None of the shares of Common Stock or the Warrants contained in the Units or
the shares of Common Stock underlying the Warrants contained in the Units and
offered pursuant to the Term Sheet are registered under the Securities Act of
1933, as amended (the "Securities Act") or any state securities laws. The
Purchaser understands that the offering and sale of the Units is intended to be
exempt from registration under the Securities Act, by virtue of Section 4(2)
thereof based, in part, upon the representations, warranties and agreements of
the Purchaser contained in this Subscription Agreement;
(b) The Purchaser and the Purchaser's attorney, accountant, purchaser
representative and/or tax advisor, if any (collectively, the "Advisors") have
received the Term Sheet and all other documents requested by the Purchaser, have
carefully reviewed them and understand the information contained therein, and
the Purchaser and the Advisors, if any, prior to the execution of this
Subscription Agreement, have had access to the same kind of information which
would be available in a registration statement filed by the Company under the
Securities Act;
(c) Neither the Securities and Exchange Commission nor any state securities
commission has approved the Units, the shares of Common Stock, the Warrants or
any of the shares of Common Stock underlying the Warrants, or passed upon or
endorsed the merits of the Offering or confirmed the accuracy or determined the
adequacy of the Term Sheet. The Term Sheet has not been reviewed by any Federal,
state or other regulatory authority;
(d) All documents, records, and books pertaining to the investment in the Units
(including, without limitation, the Term Sheet) have been made available for
inspection by the Purchaser and the Advisors, if any;
(e) The Purchaser and the Advisors, if any, have had a reasonable opportunity to
ask questions of and receive answers from a person or persons acting on behalf
of the Company concerning the offering of the Units and the business, financial
condition, results of operations and prospects of the Company, and all such
questions have been answered to the full satisfaction of the Purchaser and the
Advisors, if any;
(f) In evaluating the suitability of an investment in the Company, the Purchaser
has not relied upon any representation or other information (oral or written)
other than as stated in the Term Sheet or as contained in documents or answers
to questions so furnished to the Purchaser or the Advisors, if any, by the
Company;
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(g) The Purchaser is unaware of, is no way relying on, and did not become aware
of the offering of the Units through or as a result of, any form of general
solicitation or general advertising including, without limitation, any article,
notice, advertisement or other communication published in any newspaper,
magazine or similar media or broadcast over television or radio, in connection
with the offering and sale of the Units and is not subscribing for Units and did
not become aware of the offering of the Units through or as a result of any
seminar or meeting to which the Purchaser was invited by, or any solicitation of
a subscription by, a person not previously known to the Purchaser in connection
with investments in securities generally;
(h) The Purchaser has taken no action which would give rise to any claim by any
person for brokerage commissions, finders' fees or the like relating to this
Subscription Agreement or the transactions contemplated hereby (other than
commissions and warrants to be paid by the Company to VM Equity Partners);
(i) The Purchaser, together with the Advisors, if any, have such knowledge and
experience in financial, tax and business matters, and, in particular,
investments in securities, so as to enable them to utilize the information made
available to them in connection with the offering of the Units to evaluate the
merits and risks of an investment in the Units and the Company and to make an
informed investment decision with respect thereto;
(j) The Purchaser is not relying on the Company or any of its employees or
agents with respect to the legal, tax, economic and related considerations of an
investment in the Units, and the Purchaser has relied on the advice of, or has
consulted with, only his own Advisors;
(k) The Purchaser is acquiring the Units solely for such Purchaser's own account
for investment and not with a view to resale or distribution thereof, in whole
or in part. The Purchaser has no agreement or arrangement, formal or informal,
with any person to sell or transfer all or any part of the Units, the Warrants
or the shares of Common Stock issuable upon conversion of the Warrants contained
in the Units; and the Purchaser has no plans to enter into any such agreement or
arrangement;
(l) The Purchaser must bear the substantial economic risks of the investment in
the Units indefinitely because none of the securities included in the Units may
be sold, hypothecated or otherwise disposed of unless subsequently registered
under the Securities Act and applicable state securities laws or an exemption
from such registration is available. Legends shall be placed on the securities
included in the Units to the effect that they have not been registered under the
Securities Act or applicable state securities laws and appropriate notations
thereof will be made in the Company's stock books. Stop transfer instructions
will be placed with the transfer agent of the securities constituting the Units.
The Company has agreed that purchasers of the Units will have, with respect to
the shares of Common Stock underlying the Warrants included in the Units, the
registration rights described in Section 6 described herein. Notwithstanding
such registration rights, it is not anticipated that there will be any market
for resale of the Units, Warrants or Common Stock and such securities will not
be freely transferable at any time in the foreseeable future;
(m) The Purchaser has adequate means of providing for such Purchaser's current
financial needs and foreseeable contingencies and has no need for liquidity of
the investment in the Units for an indefinite period of time;
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(n) The Purchaser is aware that an investment in the Units involves a number of
very significant risks and, in particular, acknowledges that the Company has had
a limited operating history and is not profitable;
(o) The Purchaser meets the requirements of at least one of the suitability
standards for an "accredited investor" as set forth on the Accredited Investor
Certification contained herein;
(p) The Purchaser: (i) if a natural person represents that the Purchaser has
reached the age of 21 and has full power and authority to execute and deliver
this Subscription Agreement and all other related agreements or certificates and
to carry out the provisions hereof and thereof; (ii) if a corporation,
partnership, limited liability company, association, joint stock company, trust,
unincorporated organization or other entity, such entity was not formed for the
specific purpose of acquiring the Units, such entity is duly organized, validly
existing and in good standing under the laws of the state of its organization,
the consummation of the transactions contemplated hereby is authorized by, and
will not result in a violation of state law or its charter or other
organizational documents, such entity has full power and authority to execute
and deliver this Subscription Agreement and all other related agreements or
certificates and to carry out the provisions hereof and thereof and to purchase
and hold the securities constituting the Units, the execution and delivery of
this Subscription Agreement has been duly authorized by all necessary action,
this Subscription Agreement has been duly executed and delivered on behalf of
such entity and is a legal, valid and binding obligation of such entity; and
(iii) if executing this Subscription Agreement in a representative or fiduciary
capacity, it has full power and authority to execute and deliver this
Subscription Agreement in such capacity and on behalf of the subscribing
individual, ▇▇▇▇, partnership, trust, estate, corporation, limited liability
company or other entity for whom the Purchaser is executing this Subscription
Agreement, and such individual, ▇▇▇▇, partnership, trust, estate, corporation,
limited liability company or other entity has full right and power to perform
pursuant to this Subscription Agreement and make an investment in the Company,
and that this Subscription Agreement constitutes a legal, valid and binding
obligation of such entity. The execution and delivery of this Subscription
Agreement will not violate or be in conflict with any order, judgment,
injunction, agreement or controlling document to which the Purchaser is a party
or by which it is bound;
(q) The Purchaser and the Advisors, if any, had the opportunity to obtain any
additional information, to the extent the Company had such information in its
possession or could acquire it without unreasonable effort or expense, necessary
to verify the accuracy of the information contained in the Term Sheet and all
documents received or reviewed in connection with the purchase of the Units and
have had the opportunity to have representatives of the Company provide them
with such additional information regarding the terms and conditions of this
particular investment and the financial condition, results of operations,
business and prospects of the Company deemed relevant by the Purchaser or the
Advisors, if any, and all such requested information, to the extent the Company
had such information in its possession or could acquire it without unreasonable
effort or expense, has been provided to its full satisfaction;
(r) The Purchaser represents to the Company that any information which the
undersigned has heretofore furnished or furnishes herewith to the Company is
complete and accurate and may be relied upon by the Company in determining the
availability of an exemption from registration under Federal and state
securities laws in connection with the offering of securities as described in
the Term Sheet. The Purchaser further represents and warrants that it will
notify and supply corrective information to the Company immediately upon the
occurrence of any change therein occurring prior to the Company's issuance of
the securities contained in the Units;
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(s) The Purchaser has significant prior investment experience, including
investment in non-listed and non-registered securities. The Purchaser is
knowledgeable about investment considerations in development-stage companies.
The Purchaser has a sufficient net worth to sustain a loss of its entire
investment in the Company in the event such a loss should occur. The Purchaser's
overall commitment to investments which are not readily marketable is not exces
sive in view of its net worth and financial circumstances and the purchase of
the Units will not cause such commitment to become excessive. The investment is
a suitable one for the Purchaser;
(t) The Purchaser is satisfied that it has received adequate information with
respect to all matters which it or the Advisors, if any, consider material to
its decision to make this investment;
(u) No oral or written representations have been made, or oral or written
information furnished, to the Purchaser or the Advisors, if any, in connection
with the offering of the Units which are in any way inconsistent with the
information contained in the Term Sheet;
(v) Within five days after receipt of a request from the Company, the Purchaser
will provide such information and deliver such documents as may reasonably be
necessary to comply with any and all laws and ordinances to which the Company is
subject;
(w) THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF CERTAIN STATES AND ARE BEING
OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF
SAID ACT AND SUCH LAWS. THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER SAID ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER
REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR
ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE TERM
SHEET. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL; and
(z) (For ERISA plans only)The fiduciary of the ERISA plan represents that he has
been informed of and understands the Company's investment objectives, policies
and strategies, and that the decision to invest "plan assets" (as such term is
defined in ERISA) in the Company is consistent with the provisions of ERISA that
require diversification of plan assets and impose other fiduciary
responsibilities. The Purchaser fiduciary or Plan (a) is responsible for the
decision to invest in the Company; (b) is independent of the Company or any of
its affiliates; (c) is qualified to make such investment decision, and (d) in
making such decision, the Purchaser fiduciary or Plan has not relied primarily
on any advice or recommendation of the Company or any of its affiliates.
6. Registration Rights.
(a) In the event that the Company seeks to effect a public offering of its
securities and, in such regard, the Company shall determine to proceed with the
actual preparation and filing of a registration statement under the Securities
Act in connection with the proposed offer and sale of any of its securities by
it or any of its security holders (other than a registration statement on Form
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▇-▇, ▇-▇ or other limited purpose form), then the Company will give written
notice of such determination to all holders of Units ("Holders"). Upon the
written request of the Holders (the "Responding Holders"), within twenty (20)
days after receipt of any such notice from the Company, the Company will, except
as provided herein, cause all, or any portion so requested, of the shares of
Common Stock contained in the Units and the shares of Common Stock underlying
the Warrants contained in the Units (collectively the "Registrable Securities")
owned by the Responding Holders to be included in such registration statement,
all to the extent requisite to permit the sale or other disposition by the
prospective seller or sellers of the Registrable Securities to be so registered;
provided, however, that nothing provided herein shall either (i) require the
Company to file any registration statement at any time or (ii) prevent the
Company from, at any time, abandoning or delaying any such registration. If any
registration pursuant to this Section 6(a) shall be underwritten, in whole or in
part, the Company shall require that the Registrable Securities requested for
inclusion pursuant to this Section 6(a) be included in the underwriting on the
same terms and conditions as the securities otherwise being sold through the
underwriters. Notwithstanding the foregoing, if the managing underwriter
determines and advises in writing that the inclusion of all or any portion of
the Registrable Securities proposed to be included in the underwritten public
offering, together with any other issued and outstanding securities proposed to
be included therein by holders of securities other than the Responding Holders,
would interfere with the successful marketing of such securities, then the
number of such Registrable Securities that the managing underwriter believes may
be sold in such underwritten public offering shall be allocated for inclusion in
the registration statement in the following order of priority: (i) the
securities being offered by the Company: (ii) to the extent not in conflict with
prior agreements of the Company, the number of Registrable Securities then owned
by each Responding Holder, on a pro rata basis, based upon the number of
Registrable Securities sought to be registered by each such Responding Holder;
and (iii) the number of securities held by holders other than Responding
Holders, on a pro rata basis, based upon the number of securities sought to be
registered by each such other holder. The Registrable Securities that are
excluded from the underwritten public offering shall be withheld from the market
by the Responding Holders for a period that the managing underwriter reasonably
determines to be necessary to effect the underwritten public offering (the
"Holdback Period").
(b) When the Company is required by the provisions of Section 6(a) to
effect the registration of Registrable Securities under the Act, the Company
will:
1. prepare and file with the Securities and Exchange Commission ("SEC")
a registration statement with respect to such securities, and use
its best efforts to cause such registration statement to become and
remain effective until such time as all of the Registrable
Securities may be sold without regard to volume limitations under
Rule 144 under the Securities Act ("Rule 144");
2. prepare and file with the SEC such amendments to such registration
statement and supplements to the prospectus contained therein as may
be necessary to keep such registration statement effective such time
as all of the Registrable Securities may be sold without regard to
volume limitations under Rule 144;
3. furnish to the security holders participating in such registration
and to the underwriters of the securities being registered such
reasonable number of copies of the registration statement,
preliminary prospectus, final
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prospectus and such other documents as such underwriters may
reasonably request in order to facilitate the public offering of
such securities;
4. use its best efforts to register or qualify the securities covered
by such registration statement under such state securities or blue
sky laws of such jurisdictions as such participating holders may
reasonably request in writing, except that the Company shall not for
any purpose be required to execute a general consent to service of
process or to qualify to do business as a foreign company in any
jurisdiction wherein it is not so qualified;
5. notify the security holders participating in such registration,
promptly after it shall receive notice thereof, of the time when
such registration statement has become effective or a supplement to
any prospectus forming a part of such registration statement has
been filed;
6. notify such holders promptly of any request by the SEC for the
amending or supplementing of such registration statement or
prospectus or for additional information;
7. prepare and file with the SEC, promptly upon the request of any such
holders, any amendments or supplements to such registration
statement or prospectus which, in the opinion of counsel for such
holders (and concurred with by counsel for the Company), is required
under the Securities Act or the rules and regulations thereunder in
connection with the distribution of Registrable Securities by such
holder;
8. prepare and promptly file with the SEC and promptly notify such
holders of the filing of such amendment or supplement to such
registration statement or prospectus as may be necessary to correct
any statements or omissions if, at the time when a prospectus
relating to such securities is required to be delivered under the
Securities Act, any event shall have occurred as the result of which
any such prospectus would include an untrue statement of a material
fact or omit to state any material fact necessary to make the
statement therein, in light of the circumstances in which they were
made, not misleading; and;
9. advise such holders, promptly after it shall receive notice or
obtain knowledge thereof, of the issuance of any stop order by the
SEC suspending the effectiveness of such registration statement or
the initiation or threatening of any proceeding for that purpose and
promptly use its best efforts to prevent the issuance of any stop
order or to obtain its withdrawal if such stop order should be
issued.
(c) With respect to the registration, all fees, costs and expenses of and
incidental to such registration and public offering (as specified below) in
connection therewith shall be borne by the Company, provided, however, that any
security holders participating in such registration shall bear their pro rata
share of the underwriting discount and commission and transfer taxes. The fees,
costs and expenses of registration to be borne
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by the Company as provided above shall include, without limitation, all
registration, filing and NASD fees, printing expenses, fees and disbursements of
counsel and accountants for the Company, and all legal fees and disbursements
and other expenses of complying with state securities or blue sky laws of any
jurisdictions in which the securities to be offered are to be registered and
qualified. Fees and disbursements of counsel and accountants for the selling
security holders and any other expenses incurred by the selling security holders
not expressly included above shall be borne by the selling security holders; and
(d) 1. The Company will indemnify and hold harmless each holder of
Registrable Securities which are included in a registration statement pursuant
to the provisions of Section 6(a) hereof, its directors and officers, and any
underwriter (as defined in the Securities Act) for such holder and each person,
if any, who controls such holder or such underwriter within the meaning of the
Securities Act, from and against, and will reimburse such holder and each such
underwriter and controlling person with respect to, any and all loss, damage,
liability, cost and expense to which such holder or any such underwriter or
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, damages, liabilities, costs or expenses are caused by
any untrue statement or alleged untrue statement of any material fact contained
in such registration statement, any prospectus contained therein or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading; provided, however, that
the Company will not be liable in any such case to the extent that any such
loss, damage, liability, cost or expense arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission so
made in conformity with information furnished by such holder, such underwriter
or such controlling person in writing specifically for use in the preparation
thereof.
2. Each holder of the Registrable Securities included in a registration
pursuant to the provisions of Section 6(a) will indemnify and hold harmless the
Company, its directors and officers, any controlling person and any underwriter
from and against, and will reimburse the Company, its directors and officers,
any controlling person and any underwriter with respect to, any and all loss,
damage, liability, cost or expense to which the Company or any controlling
person and/or any underwriter may become subject under the Securities Act or
otherwise, insofar as such losses, damages, liabilities, costs or expenses are
caused by any untrue statement or alleged untrue statement of any material fact
contained in such registration statement, any prospectus contained therein or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein in light of the
circumstances in which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was so made in reliance upon and in
strict conformity with written information furnished by or on behalf of such
holder specifically for use in the preparation thereof.
3. Promptly after receipt by an indemnified party pursuant to the
provisions of paragraph (1) or (2) of this Section 6(c) of notice of the
commencement of any action involving the subject matter of the foregoing
indemnity provisions such indemnified party will, if a claim thereof is to be
made against the indemnifying party pursuant to the provisions of said paragraph
(1) or (2), promptly notify the indemnifying party of the
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commencement thereof; but the omission to so notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than hereunder. In case such action is brought against any indemnified
party and it notifies the indemnifying party of the commencement thereof, the
indemnifying party shall have the right to participate in, and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory to such indemnified
party, provided, however, if the defendants in any action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or in addition to
those available to the indemnifying party, or if there is a conflict of interest
which would prevent counsel for the indemnifying party from also representing
the indemnified party, the indemnified party or parties have the right to select
separate counsel to participate in the defense of such action on behalf of such
indemnified party or parties. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party pursuant to the
provisions of said paragraph (1) or (2) for any legal or other expense
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation unless (i) the indemnified
party shall have employed counsel in accordance with the provisions of the
preceding sentence, (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after the notice of the commencement of the action or (iii)
the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party.
7. Intentionally deleted.
8. Indemnification. The Purchaser agrees to indemnify and hold harmless the
Company and its officers, directors, employees, agents, control persons and
affiliates against all losses, liabilities, claims, damages, and expenses
whatsoever (including, but not limited to, any and all expenses incurred in
investigating, preparing, or defending against any litigation commenced or
threatened) based upon or arising out of any actual or alleged false
acknowledgment, representation or warranty, or misrepresentation or omission to
state a material fact, or breach by the Purchaser of any covenant or agreement
made by the Purchaser herein or in any other document delivered in connection
with this Subscription Agreement.
9. Irrevocability; Binding Effect. The Purchaser hereby acknowledges and agrees
that the subscription hereunder is irrevocable by the Purchaser, except as
required by applicable law, and that this Subscription Agreement shall survive
the death or disability of the Purchaser and shall be binding upon and inure to
the benefit of the parties and their heirs, executors, administrators,
successors, legal representatives, and permitted assigns. If the Purchaser is
more than one person, the obligations of the Purchaser hereunder shall be joint
and several and the agreements, representations, warranties, and acknowledgments
herein shall be deemed to be made by and be binding upon each such person and
such person's heirs, executors, administrators, successors, legal
representatives, and permitted assigns.
10. Modification. This Subscription Agreement shall not be modified or waived
except by an instrument in writing signed by the party against whom any such
modification or waiver is sought.
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11. Notices. Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be mailed by certified mail, return
receipt requested, or delivered against receipt to the party to whom it is to be
given (a) if to Company, at the address set forth above, or (b) if to the
Purchaser, at the address set forth on the signature page hereof (or, in either
case, to such other address as the party shall have furnished in writing in
accordance with the provisions of this Section 11). Any notice or other
communication given by certified mail shall be deemed given at the time of
certification thereof, except for a notice changing a party's address which
shall be deemed given at the time of receipt thereof.
12. Assignability. This Subscription Agreement and the rights, interests and
obligations hereunder are not transferable or assignable by the Purchaser and
the transfer or assignment of the Units, the Shares of Common Stock, the
Warrants and the shares of Common Stock issuable upon conversion of the Warrants
shall be made only in accordance with all applicable laws.
13. Applicable Law. This Subscription Agreement shall be governed by and
construed in accordance with the laws of the State of New York relating to
contracts entered into and to be performed wholly within such State. The
Purchaser hereby irrevocably submits to the exclusive jurisdiction of any ▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Federal court sitting in New York County over
any action or proceeding arising out of or relating to this Subscription
Agreement or any agreement contemplated hereby, and the Purchaser hereby
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined exclusively in such New York State or Federal court. The
Purchaser further waives any objection to venue in such State and any objection
to an action or proceeding in such State on the basis of a non-convenient forum.
The Purchaser further agrees that any action or proceeding brought against the
Company shall be brought only in New York State or United States Federal courts
sitting in New York County. THE PURCHASER AGREES TO WAIVE ITS RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
SUBSCRIPTION AGREEMENT OR ANY DOCUMENT OR AGREEMENT CONTEMPLATED HEREBY.
14. Blue Sky Qualification. The purchase of Units under this Subscription
Agreement is expressly conditioned upon the exemption from qualification of the
offer and sale of the Units from applicable Federal and state securities laws.
The Company shall not be required to qualify this transaction under the
securities laws of any jurisdiction and, should qualification be necessary, the
Company shall be released from any and all obligations to maintain its offer,
and may rescind any sale contracted, in the jurisdiction.
15. Use of Pronouns. All pronouns and any variations thereof used herein shall
be deemed to refer to the masculine, feminine, neuter, singular or plural as the
identity of the person or persons referred to may require.
16. Confidentiality. The Purchaser acknowledges and agrees that any information
or data it has acquired from or about the Company, not otherwise properly in the
public domain, was received in confidence. The Purchaser agrees not to divulge,
communicate or disclose, except as may be required by law or for the performance
of this Agreement, or use to the detriment of the Company or for the benefit of
any other person or persons, or misuse in any way, any confidential information
of the Company, including any scientific, technical, trade or business secrets
of the Company and any scientific, technical, trade or business materials that
are treated by the Company as confidential or proprietary, including, but not
limited to, ideas, discoveries, inventions,
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developments and improvements belonging to the Company and confidential
information obtained by or given to the Company about or belonging to third
parties.
17. Miscellaneous.
(a) This Agreement constitutes the entire agreement between the Purchaser and
the Company with respect to the subject matter hereof and supersedes all prior
oral or written agreements and understandings, if any, relating to the subject
matter hereof. The terms and provisions of this Agreement may be waived, or
consent for the departure therefrom granted, only by a written document executed
by the party entitled to the benefits of such terms or provisions.
(b) The Purchaser's representations and warranties made in this Agreement shall
survive the execution and delivery hereof and delivery of the Units.
(c) Each of the parties hereto shall pay its own fees and expenses (including
the fees of any attorneys, accountants, appraisers or others engaged by such
party) in connection with this Agreement and the transactions contemplated
hereby whether or not the transactions contemplated hereby are consummated.
(d) This Agreement may be executed in one or more counterparts each of which
shall be deemed an original, but all of which shall together constitute one and
the same instrument.
(e) Each provision of this Subscription Agreement shall be considered separable
and if for any reason any provision or provisions hereof are determined to be
invalid or contrary to applicable law, such invalidity or illegality shall not
impair the operation of or affect the remaining portions of this Subscription
Agreement.
(f) Paragraph titles are for descriptive purposes only and shall not control or
alter the meaning of this Subscription Agreement as set forth in the text.
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Accredited Investor Certification
(Initial the appropriate box(es))
___ (i) I am a natural person who had individual income of more than $200,000
in each of the most recent two years or joint income with my spouse in
excess of $300,000 in each of the most recent two years and reasonably
expect to reach that same income level for the current year ("income", for
purposes hereof, should be computed as follows: individual adjusted gross
income, as reported (or to be reported) on a federal income tax return,
increased by (1) any deduction of long-term capital gains under section
1202 of the Internal Revenue Code of 1986 (the "Code"), (2) any deduction
for depletion under Section 611 et seq. of the Code, (3) any exclusion for
interest under Section 103 of the Code and (4) any losses of a partnership
as reported on Schedule E of Form 1040);
___ (ii) I am a natural person whose individual net worth (i.e., total assets
in excess of total liabilities), or joint net worth with my spouse, will
at the time of purchase of the Units be in excess of $1,000,000;
___ (iii) The Purchaser is an investor satisfying the requirements of Section
501(a)(1), (2) or (3) of Regulation D promulgated under the Securities
Act, which includes but is not limited to, a self-directed employee
benefit plan where investment decisions are made solely by persons who are
"accredited investors" as otherwise defined in Regulation D;
___ (iv) The Purchaser is a trust, which trust has total assets in excess of
$5,000,000, which is not formed for the specific purpose of acquiring the
Units offered hereby and whose purchase is directed by a sophisticated
person as described in Rule 506(b)(ii) of Regulation D and who has such
knowledge and experience in financial and business matters that he is
capable of evaluating the risks and merits of an investment in the Units;
___ (v) I am a director or executive officer of ▇▇▇▇▇ Online, Inc.; or
___ (vi) The Purchaser is an entity (other than a trust) in which all of the
equity owners meet the requirements of at least one of the above
subparagraphs.
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If the purchaser is an INDIVIDUAL, and if purchased as JOINT TENANTS, as TENANTS
IN COMMON, or as COMMUNITY PROPERTY:
___________________________________ ________________________________________
Print Name(s) Social Security Number(s)
___________________________________ ________________________________________
Signature(s) of Purchaser(s)
___________________________________ ________________________________________
Date Address
If the purchaser is a PARTNERSHIP, CORPORATION, LIMITED LIABILITY COMPANY or
TRUST:
___________________________________ ________________________________________
Name of Partnership, Federal Taxpayer
Corporation, Limit Identification Number
Liability Company or
Trust
___________________________________
Date
By:________________________________ ________________________________________
Name: State of Organization
Title:_____________________________ ________________________________________
Address
Amount Subscribed: $______________
SUBSCRIPTION ACCEPTED AND AGREED TO
this day of 1999
▇▇▇▇▇ Online, Inc.
By:________________________________
Authorized Officer
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