SUBSCRIPTION AGREEMENT FOR SUBSCRIBERS OF UNITS OF IPTIMIZE, INC. November 2005
Name:
________________
Offeree
No. _________
FOR
SUBSCRIBERS
OF
UNITS
OF
November
2005
NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY BODY HAS
APPROVED OR DISAPPROVED OF THE SECURITIES OR PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS SUBSCRIPTION PACKAGE. ANY REPRESENTATION TO THE CONTRARY IS
A
CRIMINAL OFFENSE.
1
INSTRUCTIONS:
| I. |
Items
to be delivered by all Subscribers:
|
| a. |
One
(1) completed and executed Subscription
Agreement.
|
| b. |
Payment
in the amount of subscription, by wire
transfer of funds or check.
All checks should be made payable to “IPtimize,
Inc.”
|
FOR
WIRE
INSTRUCTIONS CONTACT:
Account:
IPtimize,
Inc.
Account
#: 4128005867
Routing
#: ▇▇▇▇▇▇▇▇▇
Amount: state
amount to be invested
Vectra
Bank - Southwest Branch
▇▇▇▇
▇.
▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Bank
Telephone:
(▇▇▇)
▇▇▇-▇▇▇▇
IPtimize
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
ALL
DOCUMENTS SHOULD BE RETURNED BY MAIL TO:
IPtimize
- Nevada
▇▇▇▇
▇.
▇▇▇▇▇▇ ▇▇▇., #▇▇▇
▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone:
▇▇▇-▇▇▇-▇▇▇▇
Fax:
▇▇▇-▇▇▇-▇▇▇▇
Attn:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
VP - Business Development
2
THE
SECURITIES OFFERED HEREBY MAY ONLY BE OFFERED OR SOLD TO “ACCREDITED INVESTORS”
WHO MEET THE SUITABILITY STANDARDS FOR INVESTMENT AS EXPRESSED IN THIS
SUBSCRIPTION AGREEMENT AND THE QUALIFIED PURCHASER
QUESTIONNAIRE.
AN
INVESTMENT MADE IN THE SECURITIES OFFERED HEREBY IS SPECULATIVE AND SUITABLE
ONLY FOR PERSONS WHO HAVE SUBSTANTIAL FINANCIAL RESOURCES, WHO HAVE NO NEED
FOR
LIQUIDITY IN THIS INVESTMENT AND WHO UNDERSTAND OR HAVE BEEN ADVISED WITH
RESPECT TO THE TAX CONSEQUENCES OF, AND RISK FACTORS ASSOCIATED WITH, THIS
INVESTMENT AND WHO ARE ABLE TO BEAR THE SUBSTANTIAL ECONOMIC RISK OF THIS
INVESTMENT FOR AN INDEFINITE PERIOD OF TIME AND WITHSTAND A TOTAL LOSS OF THEIR
INVESTMENT.
THIS
DOCUMENT DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY STATE OR OTHER
JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION IS NOT
AUTHORIZED.
PROSPECTIVE
INVESTORS ARE NOT TO CONSTRUE THE CONTENTS OF THIS SUBSCRIPTION AGREEMENT AS
LEGAL OR TAX ADVICE. EACH PROSPECTIVE INVESTOR SHOULD CONSULT AND RELY UPON
ITS
OWN COUNSEL, ACCOUNTANT OR BUSINESS ADVISOR AS TO LEGAL, TAX, AND RELATED
MATTERS CONCERNING ITS INVESTMENT.
NO
PERSON HAS BEEN AUTHORIZED TO MAKE ANY REPRESENTATIONS OR FURNISH ANY
INFORMATION WITH RESPECT TO OUR COMPANY OR THE SECURITIES OTHER THAN THE
REPRESENTATIONS AND INFORMATION SET FORTH IN THIS SUBSCRIPTION AGREEMENT AND
ANY
OTHER DOCUMENTS OR OTHER INFORMATION FURNISHED BY US.
WE
WILL MAKE AVAILABLE, PRIOR TO THE CONSUMMATION OF THE OFFERING, TO EACH
PROSPECTIVE INVESTOR, ITS PURCHASER REPRESENTATIVE(S), OR BOTH, THE OPPORTUNITY
TO ASK QUESTIONS OF, AND RECEIVE ANSWERS FROM, US OR A PERSON ACTING ON OUR
BEHALF CONCERNING THE TERMS AND CONDITIONS OF THIS OFFERING, OUR COMPANY OR
ANY
OTHER RELEVANT MATTERS, AND TO OBTAIN ANY ADDITIONAL INFORMATION, TO THE EXTENT
THAT WE POSSESS SUCH INFORMATION OR CAN ACQUIRE IT WITHOUT UNREASONABLE EFFORT
OR EXPENSE.
THIS
OFFER MAY BE WITHDRAWN AT ANY TIME BEFORE THE CLOSING DATE OF THIS OFFERING
(AS
DEFINED HEREIN) AND IS SPECIFICALLY MADE SUBJECT TO THE TERMS DESCRIBED IN
THIS
SUBSCRIPTION AGREEMENT. WE RESERVE THE RIGHT TO REJECT ANY SUBSCRIPTION IN
WHOLE
OR IN PART OR TO ALLOT TO ANY PROSPECTIVE INVESTOR LESS THAN THE NUMBER OF
MEMBERSHIP INTERESTS SUBSCRIBED FOR BY SUCH INVESTOR.
3
THIS
SUBSCRIPTION AGREEMENT HAS BEEN PREPARED BY US SOLELY FOR THE BENEFIT OF
INVESTORS INTERESTED IN THIS PROPOSED PRIVATE PLACEMENT OF COMMON STOCK AND
WARRANTS. DISTRIBUTION OF THIS DOCUMENT TO ANY PERSON OTHER THAN SUCH OFFEREE
AND THOSE PERSONS RETAINED TO ADVISE SUCH PERSONS WITH RESPECT THERETO IS
UNAUTHORIZED, AND ANY REPRODUCTION OF THIS DOCUMENT, IN WHOLE OR IN PART, OR
THE
DIVULGENCE OF ANY OF ITS CONTENTS, WITHOUT OUR PRIOR WRITTEN CONSENT, IS
PROHIBITED.
EACH
OFFEREE, BY ACCEPTING DELIVERY OF THIS DOCUMENT, AGREES TO RETURN IT AND ALL
RELATED EXHIBITS AND OTHER DOCUMENTS TO US IF: (i) THE OFFERREE DOES NOT INTEND
TO SUBSCRIBE FOR THE PURCHASE OF SECURITIES; (ii) THE OFFEREE’S SUBSCRIPTION IS
NOT ACCEPTED; OR (iii) THE OFFERING IS TERMINATED.
THE
OFFERING IS BEING MADE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE
SECURITIES ACT FOR AN OFFER AND SALE OF SECURITIES WHICH DOES NOT INVOLVE A
PUBLIC OFFERING. EACH PURCHASER OF THE SECURITIES OFFERED HEREBY, IN MAKING
ITS
PURCHASE, WILL BE DEEMED TO HAVE MADE CERTAIN ACKNOWLEDGMENTS, REPRESENTATIONS,
AND AGREEMENTS AS SET FORTH HEREIN. PURCHASERS SHOULD BE AWARE THAT THEY MAY
BE
REQUIRED TO BEAR THE FINANCIAL RISK OF THEIR INVESTMENT FOR AN INDEFINITE PERIOD
OF TIME AND MAY LOSE THEIR TOTAL INVESTMENT.
THE
INFORMATION CONTAINED HEREIN HAS BEEN PROVIDED BY US AND OTHER SOURCES
IDENTIFIED HEREIN, BUT THERE CAN BE NO ASSURANCE AS TO THE ACCURACY OR
COMPLETENESS OF SUCH INFORMATION. NO REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, IS MADE BY US AS TO THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION,
AND NOTHING CONTAINED HEREIN IS OR SHOULD BE RELIED UPON AS A PROMISE OR
REPRESENTATION BY US. WE MAKE NO REPRESENTATIONS AS TO OUR FUTURE PERFORMANCE,
INCLUDING, BUT NOT LIMITED TO, ANY PROTECTIONS CONCERNING OUR FUTURE OPERATING
RESULTS OR MARKET ACCEPTANCE OF OUR PRODUCTS AND/OR
SERVICES.
EACH
PROSPECTIVE PURCHASER OF THE UNITS MUST COMPLY WITH ALL APPLICABLE LAWS AND
REGULATIONS IN FORCE IN ANY JURISDICTION IN CONNECTION WITH THE SUBSEQUENT
OFFER
OR SALE OF ANY SECURITIES PURCHASED PURSUANT TO THIS SUBSCRIPTION AGREEMENT.
IN
MAKING AN INVESTMENT DECISION, PROSPECTIVE PURCHASERS MUST RELY ON THEIR OWN
EXAMINATION OF US AND OUR PROSPECTS AND THE TERMS OF THIS OFFERING, INCLUDING
THE MERITS OF THE INVESTMENT AND THE RISKS INVOLVED.
4
THIS
SUBSCRIPTION AGREEMENT CONTAINS SUMMARIES BELIEVED TO BE ACCURATE IN ALL
MATERIAL RESPECTS AS TO THE TERMS OF CERTAIN DOCUMENTS DESCRIBED HEREIN, BUT
REFERENCE IS HEREBY MADE TO THE ACTUAL DOCUMENTS (COPIES OF WHICH WILL BE MADE
AVAILABLE TO PROSPECTIVE PURCHASERS UPON REQUEST TO US FOR COMPLETE INFORMATION
WITH RESPECT THERETO) AND ALL SUCH SUMMARIES ARE QUALIFIED IN THEIR ENTIRETY
BY
SUCH REFERENCE.
THIS
SUBSCRIPTION AGREEMENT (TOGETHER WITH ANY AMENDMENTS OR SUPPLEMENTS AND ANY
OTHER INFORMATION THAT MAY BE FURNISHED TO YOU BY US) INCLUDES OR MAY INCLUDE
CERTAIN STATEMENTS, ESTIMATES AND FORWARD-LOOKING PROJECTIONS WITH RESPECT
TO
OUR ANTICIPATED FUTURE PERFORMANCE. SUCH STATEMENTS, ESTIMATES AND
FORWARD-LOOKING PROJECTIONS REFLECT VARIOUS ASSUMPTIONS OF OUR MANAGEMENT THAT
MAY OR MAY NOT PROVE TO BE CORRECT AND INVOLVE VARIOUS RISKS AND UNCERTAINTIES.
THIS
DOCUMENT DOES NOT PURPORT TO BE ALL-INCLUSIVE OR CONTAIN ALL INFORMATION THAT
YOU MAY DESIRE IN INVESTIGATING US. YOU MUST RELY ON YOUR OWN EXAMINATION OF
US
AND THE TERMS OF THIS OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED IN
MAKING AN INVESTMENT DECISION WITH RESPECT TO THE SECURITIES OFFERED HEREBY.
PRIOR TO MAKING AN INVESTMENT DECISION REGARDING THE UNITS, YOU SHOULD CONSULT
YOUR OWN COUNSEL, ACCOUNTANTS AND OTHER ADVISORS AND CAREFULLY REVIEW AND
CONSIDER YOUR INVESTMENT AND THIS SUBSCRIPTION AGREEMENT.
NASAA
Uniform Legend
IN
MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION
OF US
AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE
SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES
COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES
HAVE
NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT, ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE. THESE SECURITIES ARE
SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED
OR RESOLVED EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE
FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF
TIME.
5
Private
Placement of Common Stock
($1,500,000
Unit Offering)
SUBSCRIPTION
AGREEMENT AND
CONFIDENTIAL
INVESTOR QUESTIONNAIRE
THIS
SUBSCRIPTION AGREEMENT is entered into as of this _______ day of
______________ 2005,
between
IPtimize,
Inc.,
a
Colorado corporation with its principal offices at ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇; phone: ▇▇▇-▇▇▇-▇▇▇▇ (the “Company”), and the
undersigned (the “Subscriber”).
IPtimize,
Inc. (referred to herein as the “Company”, “we”, “our” or “us”) is offering to
those persons who are “accredited investors” as defined under Rule 501 of
Regulation D under the Securities Act of 1933, as amended (the “Securities Act”)
and applicable state securities laws and who also satisfy the suitability
criteria set forth under “Terms of the Offering,” 50 Units (the “Units”) at an
offering price of $30,000 per Unit (the “Offering Price”), which equals $0.30
per share purchased. Each Unit consists of 100,000 shares (the “Shares”) of the
Company’s common stock, par value $0.01 per share (the “Common Stock”) and
100,000 common stock purchase warrants (the “Warrants”) to purchase 100,000
shares of Common Stock at an exercise price of $0.75 per share, subject to
certain adjustments, exercisable for a term of three (3) years from the
Expiration Date (as defined). We may sell fractional Units at our
discretion.
The
Units
are being offered on a no-minimum, $1,500,000 maximum, best-efforts basis.
The
minimum investment in this offering is $30,000 (or One Unit), subject to the
Company’s right to accept subscriptions in lesser amounts. The offering will
terminate on December 31, 2005, unless extended by the Company at its sole
discretion, without notice.
Each
share of Common Stock and Warrant underlying the Units Interest shall be
restricted and shall not be transferable except in accordance with the
provisions of the Securities Act of 1933, as amended (the “Act”)
and
the rules and regulations promulgated thereunder by the Securities Exchange
Commission. Each Subscriber should thoroughly review the Risk Factors of the
Company and this Offering set forth in the Confidential Offering
Memorandum.
The
undersigned (or its authorized representative) understands that it may cancel
this subscription by means of a written notice received by the Company at any
time before the Company has accepted the subscription. The undersigned further
understands that this subscription is not binding until the Company accepts
it,
which acceptance is at the sole discretion of the Company, by executing this
Agreement where indicated. The Company may accept this subscription in whole
or
in part. If the Company accepts this subscription only in part, the Company
shall cause to be returned to the undersigned any amounts paid by the
undersigned, but not accepted on behalf of the Company. Upon acceptance by
the
Company of the subscription, the subscription will become irrevocable unless
the
law of the state of residence of the undersigned provides otherwise. If the
Company does not accept the Subscription, this Agreement shall be null and
void,
the Company shall cause to be returned to the undersigned any amounts paid
by
the undersigned, and the Company and the undersigned shall have no further
obligation to each other hereunder.
6
In
consideration of the premises and the mutual covenants hereinafter set forth,
the parties hereto do hereby agree as follows:
|
I.
|
SUBSCRIPTION
FOR SHARES AND REPRESENTATIONS BY AND COVENANTS OF
SUBSCRIBER
|
As
an
inducement to the Company to accept the subscription, the Subscriber represents
and warrants (which representations and warranties shall be deemed continuing
and shall survive the execution, delivery and performance of this Agreement
and
the Closing) as follows:
1.1 Subject
to the terms and conditions hereof, the Subscriber hereby subscribes for and
agrees to purchase from the Company _____________ Units as defined above at
$30,000
per Unit, which equals $0.30 per share of Common Stock purchased. Each Unit
consists of 100,000 shares of the Company’s Common Stock, and Warrants to
purchase 100,000 shares of Common Stock for a total purchase price of
$______________ (the “Purchase Price”) payable in currency of the United States
payable to IPtimize,
Inc.
or by
wire transfer of funds.
1.2
The
Subscriber recognizes that the purchase of Units involves a high degree of
risk
in that (i) the Company is in the development stage, has not completed
development of all of its proposed service products and may require further
investment funds in addition to the proceeds of this private placement; (ii)
an
investment in the Company is highly speculative, and only investors who can
afford the loss of their entire investment should consider investing in the
Company and the Units; (iii) investors may not be able to liquidate their
investment; (iv) transferability of the Shares and Warrants is extremely
limited; and (v) in the event of a disposition of Shares and/or Warrants, an
investor could sustain the loss of his entire investment, as well as other
risk
factors.
1.3 The
Subscriber represents that he or she is an “accredited investor” as such term is
defined in Rule 501 of Regulation D promulgated under the United States
Securities Act of 1933, as amended (the “Act”), as indicated by the Subscriber’s
responses to the Confidential Investor Questionnaire contained in Article VI
hereof, and that the Subscriber is able to bear the economic risk of an
investment in the Units.
1.4 The
Subscriber acknowledges that Subscriber either: (i) has a preexisting personal
or business relationship with the Company or with one or more of its officers,
directors or controlling persons; or (ii) by reason of the Subscriber’s business
or financial experience, including investment in non-listed and non-registered
securities, or the business or financial experience of the Subscriber’s
professional advisors who are unaffiliated with and who are not compensated
by
the Company or any affiliate or selling agent of the Company, directly or
indirectly - could reasonably be assumed to have the capacity to protect the
Subscriber’s own interests in connection with an investment in the Units. The
Subscriber further acknowledges that he or she has the capacity to evaluate
the
merits and risks of such an investment and that the Subscriber recognizes the
highly speculative nature of this investment. The
Subscriber is not subscribing for any Interests 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 meeting, or any solicitation of a subscription by a person not
previously known to the Subscriber in connection with investments in securities
generally.
7
1.5 The
Subscriber acknowledges receipt and careful review of the documents provided
herewith (the “Offering Documents” attached as Exhibit A) and hereby represents
that the Subscriber has been furnished by the Company during the course of
this
transaction with all information regarding the Company which the Subscriber
had
requested or desired to know; that all documents which could be reasonably
provided, including the Company’s internal business plans, operating
projections, have been made available for the Subscriber’s inspection and
review; that such information and documents have, in Subscriber’s opinion,
afforded the Subscriber generally with the same substantive information that
would be provided to the Subscriber in a registration statement filed under
the
Act; that the Subscriber has been afforded the opportunity to ask questions
of
and receive answers from duly authorized officers or other representatives
of
the Company concerning the terms and conditions of the Offering and the Offering
Documents; and that Subscriber has been provided any additional information
which the Subscriber had requested.
1.6 The
Subscriber acknowledges that this Offering may involve tax consequences, and
that the contents of the Offering Documents do not contain tax advice or
information. The Subscriber acknowledges that the Subscriber must retain the
Subscriber’s own professional advisors to evaluate the tax and other
consequences of an investment in the Units.
1.7 The
Subscriber acknowledges that this Offering has not been reviewed by the United
States Securities and Exchange Commission (“SEC”). The Subscriber represents
that the Shares and Warrants being purchased by the Subscriber are being
purchased for the Subscriber’s own account, for investment and not for
distribution or resale to others. The Subscriber agrees that the Subscriber
will
not sell or otherwise transfer the Shares and/or Warrants unless they are
registered under the Act or unless an exemption from such registration is
available.
1.8 The
Subscriber understands that the Units, Shares, Warrants and the shares of Common
Stock underlying the Warrants, have not been registered under the Act by reason
of a claimed exemption under the provisions of the Act which depends, in part,
upon the Subscriber’s investment intention. In that connection, the Subscriber
understands that it is the position of the SEC that the statutory basis for
such
exemption would not be present if the Subscriber’s representation merely meant
that the Subscriber’s present intention was to hold such securities for a short
period, such as the capital gains period of tax statutes, for a deferred sale,
for a market rise, assuming that a market develops, or for any other similarly
fixed period. The Subscriber realizes that, in the view of the SEC, a purchase
now with an intent to resell would represent a purchase with an intent
inconsistent with the Subscriber’s representation to the Company, and the SEC
might regard such a sale or disposition as a sale to which such exemptions
are
not available.
8
1.9 The
Subscriber understands that there is no public market for the Units, Shares,
Warrants and the shares of Common Stock underlying the Warrants,. The Subscriber
understands that even if a public market develops for the Units, Shares,
Warrants and the shares of Common Stock underlying the Warrants,, Rule 144
(the “Rule”) promulgated under the Act requires, among other conditions, a
one-year holding period prior to the resale (in limited amounts) of securities
acquired in a non-public offering without having to satisfy the registration
requirements under the Act. The Subscriber understands that the Company makes
no
representation or warranty regarding its fulfillment in the future of any
reporting requirements under the Securities Exchange Act of 1934, as amended,
or
its dissemination to the public of any current financial or other information
concerning the Company, as is required by the Rule as one of the conditions
of
its availability. The Subscriber understands and hereby acknowledges that the
Company is under no obligation to register the Units, Shares, Warrants and
the
shares of Common Stock underlying the Warrants. The Subscriber consents that
the
Company, if it desires, may permit the transfer of the Units, Shares, Warrants
and the shares of Common Stock underlying the Warrants, out of the Subscriber’s
name only when the Subscriber’s request for transfer is accompanied by an
opinion of counsel reasonably satisfactory to the Company that neither the
sale
nor the proposed transfer results in a violation of the Act or any applicable
state “blue sky” laws (collectively “Securities Laws”) and subject to the
provisions of Section 1.10 hereof. The Subscriber agrees to hold the Company
and
its directors, officers and controlling persons and their respective heirs,
representatives, successors and assigns harmless and to indemnify them against
all liabilities, costs and expenses incurred by them as a result of any
misrepresentation made by the Subscriber contained herein or in the Confidential
Investor Questionnaire contained in Article VI hereof or any sale or
distribution by the undersigned Subscriber in violation of any Securities
Laws.
1.10 The
Subscriber consents to the placement of a legend on any certificate or other
document evidencing the Units, Shares, Warrants and the shares of Common Stock
underlying the Warrants, stating that they have not been registered under the
Act and setting forth or referring to the restrictions on transferability and
sale thereof.
1.11 The
Subscriber understands that the Company will review this Subscription Agreement
and the Confidential Investor Questionnaire contained herein and hereby is
given
authority by the undersigned, if an individual, to call his or her bank or
place
of employment or otherwise review the financial standing of the Subscriber
insofar as is relevant to the Subscriber’s representations herein; and it is
further agreed that the Company reserves the unrestricted right to reject or
limit any subscription and to close any offer of Shares at any time. The
Subscriber further understands that the Company reserves the right to
oversubscribe the Offering at its sole discretion.
1.12 The
Subscriber hereby represents that the address of Subscriber furnished by the
Subscriber at the end of this Subscription Agreement is the undersigned's
principal residence, if the Subscriber is an individual, or its principal
business address, if the Subscriber is a corporation or other
entity.
1.13 The
Subscriber hereby represents and warrants that, except as set forth in the
Offering Documents, no representations or warranties have been made to the
Subscriber by the Company or any agent, employee, representative or affiliate
of
the Company and that, in entering into this transaction and subscribing for
Units, the Subscriber is not relying on any information, other than that
contained in the Offering Documents and the results of Subscriber’s independent
investigation.
9
1.14 The
Subscriber acknowledges that at such time, if ever, as the Units, Shares,
Warrants and the shares of Common Stock underlying the Warrants, are registered,
sales of such securities will be subject to Securities Laws, which may require,
among other requirements, any securities to be sold through a registered
broker-dealer or in reliance upon an exemption from registration.
1.15 The
Subscriber acknowledges that the Company, at its discretion, may elect to engage
the services of one or more broker/dealers registered with the National
Association of Securities Dealers (“NASD”) and may pay such broker/dealers up to
ten percent (10%) of the gross proceeds of the Offering in commissions.
1.16 The
Subscriber acknowledges that the officers and directors of the Company may
participate in this Offering and may purchase some or all of the Minimum or
Maximum Offering.
1.17.
The
Subscriber:
(a)
Within
the last five years, has not been convicted of any criminal offense in
connection with the offer, purchase or sale of any security, or involving fraud
or deceit;
(b)
Is
not
currently subject to any state or federal administrative enforcement order
or
judgment, entered within the last five years, finding fraud or deceit in
connection with the purchase or sale of any security; or
(c)
Is
not
currently subject to any order, judgment or decree of any court of competent
jurisdiction, entered with the last five years, temporarily, preliminarily
or
permanently restraining or enjoining such party from engaging in or continuing
to engage in any conduct or practice involving fraud or deceit in connection
with the purchase or sale of any security.
1.18 The
undersigned (or its authorized representative) understands that the Units are
being purchased without the furnishing of any offering literature or prospectus
other than this Agreement and the Offering
Memorandum.
| II. |
TERMS
OF SUBSCRIPTION
|
2.1 The
Subscriber hereby authorizes and directs the Company to deliver the securities
to be issued to such Subscriber pursuant to this Subscription Agreement to
the
residential or business address indicated in the Confidential Investor
Questionnaire included herein.
10
2.2 The
Subscriber hereby authorizes and directs the Company to return any funds for
unaccepted subscriptions to the same account from which the funds were drawn,
including any customer account maintained with the Placement Agent, if
applicable.
2.3 If
the
Subscriber is not a United States person, such Subscriber hereby represents
that
he, she or it has satisfied itself as to the full observance of the laws of
its
jurisdiction in connection with any invitation to subscribe for the Units or
any
use of this Agreement, including (i) the legal requirements within its
jurisdiction for the purchase of the Shares, (ii) any foreign exchange
restrictions applicable to such purchase, (iii) any governmental or other
consents that may need to be obtained, and (iv) the income tax and other tax
consequences, if any, that may be relevant to the purchase, holding, redemption,
sale or transfer of the Units, Shares, Warrants and the shares of Common Stock
underlying the Warrants,. The Subscriber represents and warrants that the
Subscriber's subscription and payment for, and the Subscriber’s continued
beneficial ownership of the Units, Shares, Warrants and the shares of Common
Stock underlying the Warrants,, will not violate any applicable securities
or
other laws of the Subscriber's jurisdiction.
| III. |
MISCELLANEOUS
|
3.1 Any
notice or other communication given hereunder shall be deemed sufficient if
in
writing and sent by registered or certified mail, return receipt requested.
Notices sent to the Company shall be addressed to the Company’s office at
▇▇▇▇
▇. ▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
or fax
at (▇▇▇)
▇▇▇-▇▇▇▇.
Notices
sent to the Subscriber shall be addressed to the Subscriber’s address indicated
on the last page of this Subscription Agreement. Notices shall be deemed to
have
been given on the date of mailing, except notices of change of address, which
shall be deemed to have been given when received.
3.2 This
Subscription Agreement shall not be changed, modified or amended except by
a
writing signed by the parties to be charged, and this Subscription Agreement
may
not be discharged except by performance in accordance with its terms or by
a
writing signed by the party to be charged.
3.3 This
Subscription Agreement shall be binding upon and inure to the benefit of the
parties hereto and to their respective heirs, legal representatives, successors
and assigns. This Subscription Agreement sets forth the entire agreement and
understanding between the parties as to the subject matter hereof and merges
and
supersedes all prior discussions, agreements and understandings of any and
every
nature among them.
3.4 Notwithstanding
the place where this Subscription Agreement may be executed by any of the
parties hereto, the parties expressly agree that all the terms and provisions
hereof shall be construed in accordance with and governed by the laws of the
State of Colorado.
3.5 Each
of
the Company and the Subscriber agree that any action or proceeding based hereon,
or arising out of the Memorandum hereunder, shall be brought and maintained
exclusively in the courts of the State of Colorado located in the County of
Arapahoe or in the United States District Court for the District of Colorado.
The Company and the Subscriber each hereby irrevocably submit to the
jurisdiction of the courts of the State of Colorado located in the County of
Arapahoe and of the United States District Court for the District of Colorado
for the purpose of any such action or proceeding as set forth above and
irrevocably agree to be bound by any judgment rendered thereby in connection
with such action or proceeding. Each of the Company and the Subscriber hereby
irrevocably waive, to the fullest extent permitted by law, any objection which
either may have, or at any time hereafter may have, to the laying of venue
of
any such action or proceeding brought in any such court referred to above and
any claim that any such action or proceeding has been brought in an inconvenient
forum.
11
3.6 This
Subscription Agreement may be executed in counterparts and may be executed
by
facsimile. Upon the execution and delivery of this Subscription Agreement by
the
Subscriber, this Subscription Agreement shall become a binding obligation of
the
Subscriber with respect to the purchase of Shares as herein provided; subject,
however, to the right hereby reserved to the Company to enter into the same
agreements with other subscribers and to add and/or to delete other persons
as
subscribers.
3.7 The
holding of any provision of this Subscription Agreement to be invalid or
unenforceable by a court of competent jurisdiction shall not affect any other
provision of this Subscription Agreement, which shall remain in full force
and
effect.
3.8 It
is
agreed that a waiver by either party of a breach of any provision of this
Subscription Agreement shall not operate, or be construed, as a waiver of any
subsequent breach by that same party.
3.9 The
parties to this Subscription Agreement agree to execute and deliver all such
further documents, agreements and instruments and take such other and further
action as may be necessary or appropriate to carry out more fully the purposes
and intent of this Subscription Agreement.
3.10 The
Company agrees not to disclose the names, addresses or any other information
about the Subscriber, except as required by law, provided that the Company
may
use information relating to the Subscriber in any registration statement under
the Act.
(REMAINDER
OF THIS PAGE INTENTIONALLY LEFT BLANK)
12
|
IV.
|
CONFIDENTIAL
INVESTOR QUESTIONNAIRE
|
4.1 Subscriber
Categories.
The
Subscriber represents and warrants that he, she or it comes within one category
marked below, and that for any category marked, he, she or it has truthfully
set
forth, where applicable, the factual basis or reason the Subscriber comes within
that category. ALL INFORMATION IN RESPONSE TO THIS SECTION WILL BE KEPT STRICTLY
CONFIDENTIAL. The undersigned agrees to furnish any additional information
which
the Company deems necessary in order to verify the answers set forth
below.
|
Category
A _____
|
The
undersigned is an individual (not a
partnership, corporation, etc.) whose individual net worth, or
joint net
worth with his or her spouse, presently exceeds
$1,000,000.
|
|
Explanation: In
calculating net worth you may include equity in personal property
and real
estate, including your principal residence, cash, short-term investments,
stock and securities. Equity in personal property and real estate
should
be based on the fair market value of such property less debt secured
by
such property.
|
|
|
Category
B _____
|
The
undersigned is an individual (not a
partnership, corporation, etc.) who had an income in excess of
$200,000 in
each of the two most recent years, or joint income with his or
her spouse
in excess of $300,000 in each of those years (in each case including
foreign income, tax exempt income and full amount of capital gains
and
losses but excluding any income of other family members and any
unrealized
capital appreciation) and has a reasonable expectation of reaching
the
same income level in the current year.
|
|
Category
C _____
|
The
undersigned is a director or executive
officer of the Company which is issuing and selling the
Shares.
|
|
Category
D _____
|
The
undersigned is a bank; a savings and loan
association; insurance company; registered investment company;
registered
business development company; licensed small business investment
company
(“SBIC”); or employee benefit plan within the meaning of Title I of ERISA
and (a) the investment decision is made by a plan fiduciary which
is
either a bank, savings and loan association, insurance company
or
registered investment advisor, or (b) the plan has total assets
in excess
of $5,000,000 or is a self directed plan with investment decisions
made
solely by persons that are accredited investors.
|
|
_____________________________________
_____________________________________
(describe
entity)
|
13
|
Category
E _____
|
The
undersigned is a private business
development company as defined in section 202(a)(22) of the Investment
Advisors Act of 1940.
|
|
_____________________________________
_____________________________________
(describe
entity)
|
|
|
Category
F _____
|
The
undersigned is either a corporation,
partnership, Massachusetts business trust, or non-profit organization
within the meaning of Section 501(c)(3) of the Internal Revenue
Code, in
each case not formed for the specific purpose of acquiring the
Shares and
with total assets in excess of $5,000,000.
|
|
_____________________________________
_____________________________________
(describe
entity)
|
|
|
Category
G _____
|
The
undersigned is a trust with total assets in
excess of $5,000,000, not formed for the specific purpose of acquiring
the
Shares, where the purchase is directed by a "sophisticated person"
as
defined in Regulation 506(b)(2)(ii).
|
|
Category
H _____
|
The
undersigned is an entity (other than a
trust) all the equity owners of which are "accredited investors"
within
one or more of the above categories. If relying upon this Category
alone,
each equity owner must complete a separate copy of this
Agreement.
|
|
_____________________________________
_____________________________________
(describe
entity)
|
|
|
Category
I _____
|
The
undersigned is not within any of the
categories above and is therefore not an accredited
investor.
|
The
undersigned covenants and agrees that the undersigned will notify the Company
at
any time on or prior to the Company’s acceptance of this subscription in the
event that the representations and warranties in this Agreement shall cease
to
be true, accurate and complete.
| 4.2 |
Suitability.
(Please answer each question)
|
|
(a)
|
For
an individual
Subscriber, please describe your current employment, including
the company
by which you are employed and its principal
business:
|
____________________________________________________
____________________________________________________
____________________________________________________
|
(b)
|
For
an individual
Subscriber, please describe any college or graduate degrees held
by
you:
|
____________________________________________________
____________________________________________________
____________________________________________________
14
| (c) |
For
all
Subscribers, please check types of prior
investments:
|
| U.S. Government Securities ____ | Private Placements ____ | |
| Publicly Traded Corporate ____ | Mutual Funds ____ | |
| Real Estate Investments ____ | Other (describe) ____ |
|
(d)
|
For
all
Subscribers, please state whether you have participated in other
private
placements before:
|
YES_____
NO_____
|
(e)
|
For
all
Subscribers, please indicate frequency of such prior participation
in
private placements:
|
| Public Companies | Private Companies | Companies |
| Frequently _____ | _____ | _____ |
| Occasionally _____ | _____ | _____ |
| Never _____ | _____ | _____ |
| 4.3 |
Manner
In Which Title to be Held.
(Circle one)
|
|
(a)
|
Individual
Ownership
|
| (b) |
Community
Property
|
| (c) |
Joint
Tenant with Right of Survivorship (both parties must
sign)
|
| (d) |
Partnership*
|
| (e) |
Tenants
in Common
|
| (f) |
Company*
|
|
(g)
|
Trust*
|
| (h) |
Other
|
*If
Shares are being subscribed for by an entity, the attached Certificate of
Signatory must also be completed.
| 4.4 |
NASD
Affiliation:
|
Are
you
associated with an NASD member firm? (Please check one)
YES_____
NO_____
15
If
Yes,
please describe:
|
(1)
|
The
NASD defines a “person associated with a member” or “associated person of
a member” as being every sole proprietor, general or limited partner,
officer, director or branch manager of any member, or any natural
person
occupying a similar status or performing similar functions, or
any natural
person engaged in the investment banking or securities business
who is
directly or indirectly controlling or controlled by such member
(for
example, any employee), whether or not any such person is registered
or
exempt from registration with the NASD. Thus, “person associated with a
member” or “associated person of a member” includes a sole proprietor,
general or limited partner, officer, director or branch manager
of an
organization of any kind (whether a corporation, partnership or
other
business entity) which itself is either a “member” or a “Person associated
with a member” or “associated person of a member.” In addition, an
organization of any kind is a “person associated with a member” or
“associated person of a member” if its sole proprietor or any one of its
general or limited partners, officers, directors or branch managers
is a
“member,” “person associated with a member” or “associated person of a
member.”
|
|
(2)
|
The
NASD defines a “member” as being any individual, partnership, corporation
or other legal entity that is a broker or dealer admitted to membership
in
the NASD.
|
*If
Subscriber is a Registered Representative with an NASD member firm, have
the
following acknowledgment signed by the appropriate party:
The
undersigned NASD member firm acknowledges receipt of the notice required
by Rule
3050 of the NASD Conduct Rules or any successor rules or
regulations.
_______________________________________________
Name
of
NASD Member Firm
By: __________________________________
Authorized
Officer
Date: _____________________
4.5
Reliance.
The
undersigned is informed of the significance to the Company of the foregoing
representations and answers contained in the Confidential Investor Questionnaire
contained in this Article V and such answers have been provided under the
assumption that the Company will rely on them.
16
Private
Placement of Common Stock Shares
($1,500,000
Unit Offering)
INVESTOR
INFORMATION PAGE
NUMBER
OF
UNITS ________________
x $30,000 = $________________
| Name (both if purchasing jointly) | Business or Entity Name | |
| Home Address | Business Address | |
| Home City, State and Zip Code | Business City, State and Zip Code | |
| Home Telephone | Business Telephone | |
| Home Telephone-Other | Business Telephone-Other | |
| Home Facsimile | Business Facsimile | |
| Home E-Mail | Business E-Mail | |
| Tax ID# or Social Security # | Employer ID# or License # | |
| Other | Other |
Name
in
which securities should be issued:
____________________________________
17
SUBSCRIPTION
AGREEMENT
Private
Placement of Common Stock Shares
($1,500,000
Unit Offering)
INVESTOR
SIGNATURE PAGE
IN
WITNESS WHEREOF, the parties have executed this Subscription Agreement
as
of the
day and year first written above.
NUMBER
OF
UNITS _________________
x $30,000 = $________________
| Signature | Signature (if purchasing jointly) | ||
| Name Typed or Printed | Name Typed or Printed |
18
SUBSCRIPTION
AGREEMENT
Private
Placement of Common Stock Shares
($1,500,000
Unit Offering)
COMPANY
ACCEPTANCE PAGE
SUBSCRIPTION
AGREEMENT ACCEPTED AND AGREED TO:
| Principal Amount | $______________ |
| Number of Units: | ______________ |
| Name of Subscriber: | ____________________________________ |