IPTIMIZE, INC. Private Placement of Common Stock (2003 Offering) SUBSCRIPTION AGREEMENT AND CONFIDENTIAL INVESTOR QUESTIONNAIRE
IPTIMIZE,
INC.
Private
Placement of Common Stock
(2003
Offering)
CONFIDENTIAL
INVESTOR QUESTIONNAIRE
THIS
SUBSCRIPTION AGREEMENT is entered into as of this _____ day of _____________________,
between IPtimize,
Inc.,
a
Colorado corporation with its principal offices at 0000 X. Xxxxxxxx Xx., Xxxxx
000, Xxxxxx, Xxxxxxxx 00000; phone: 000-000-0000 (the “Company”), and the
undersigned (the “Subscriber”).
WHEREAS,
the Company seeks an investment of up to $500,000 in exchange for up to
3,000,000 shares (“ownership interests” or the “Shares”) of the Company’s Common
Stock (collectively the “Offering”) on the terms and conditions hereinafter set
forth. Such Offering is comprised of two parts: (i) up to $100,000 in
Convertible Bridge Notes, convertible into up to 500,000 Common Stock Shares
and
an additional up to 500,000 Warrants at $0.01; and (ii) the Common Stock
Offering of up to $400,000, offering up to 2,000,000 at $0.20 per
Share.
WHEREAS,
the Subscriber desires to participate in the Offering, on the terms set forth
herein;
NOW,
THEREFORE, for and in consideration of the premises and the mutual covenants
hereinafter set forth, the parties hereto do hereby agree as
follows:
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I.
|
SUBSCRIPTION
FOR SHARES AND REPRESENTATIONS BY AND COVENANTS OF
SUBSCRIBER
|
1.1 Subject
to the terms and conditions hereof, the Subscriber hereby subscribes for and
agrees to purchase from the Company _____________ Shares as defined above at
$0.20
per Share
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 Shares 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 Shares; (iii) investors may not be able to liquidate their
investment; (iv) transferability of the Shares is extremely limited; and (v)
in
the event of a disposition of Shares, an investor could sustain the loss of
his
entire investment, as well as other risk factors.
1
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 Shares.
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 Shares. 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.
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 Shares.
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 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 unless they are registered under the Act or unless an
exemption from such registration is available.
1.8 The
Subscriber understands that the Shares 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.
2
1.9 The
Subscriber understands that there is no public market for the Shares or the
underlying Common Stock into which Shares are convertible. The Subscriber
understands that even if a public market develops for the Common Stock issuable
upon conversion of the Shares, 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 Shares or the Common Stock issuable upon conversion
of the Shares under the Act, with the exception of certain limited registration
rights set forth in Article IV hereof. The Subscriber consents that the Company,
if it desires, may permit the transfer of the Shares 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 Shares 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.
3
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
Shares, the Subscriber is not relying on any information, other than that
contained in the Offering Documents and the results of Subscriber’s independent
investigation.
1.14 The
Subscriber acknowledges that at such time, if ever, as the Shares 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.
In
the event such Common Stock is registered in the event of an initial public
offering, the Subscriber will be granted “piggy back” registration rights,
subject to the approval of the Underwriter.
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.
| II. |
TERMS
OF SUBSCRIPTION
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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.
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.
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 Shares
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 Shares. The Subscriber represents and warrants that
the
Subscriber's subscription and payment for, and the Subscriber’s continued
beneficial ownership of the Shares, will not violate any applicable securities
or other laws of the Subscriber's jurisdiction.
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| III. |
MISCELLANEOUS
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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
0000
X. Xxxxxxxx Xx., Xxxxx 000, Xxxxxx, Xxxxxxxx 00000,
or fax
at (000)
000-0000.
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.
5
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)
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| 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.
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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.
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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.
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|
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.
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Category
C _____
|
The
undersigned is a director or executive
officer of the Company which is issuing and selling the
Shares.
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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.
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|
_____________________________________
_____________________________________
(describe
entity)
|
7
|
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.
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|
_____________________________________
_____________________________________
(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).
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|
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:
|
____________________________________________________
____________________________________________________
____________________________________________________
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|
(b)
|
For
an individual
Subscriber, please describe any college or graduate degrees held
by
you:
|
____________________________________________________
____________________________________________________
____________________________________________________
| (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_____
9
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.
10
Private
Placement of Common Stock Shares
(2003
Offering)
INVESTOR
INFORMATION PAGE
NUMBER
OF
SHARES ________________
x $0.20 = $________________
| 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:
____________________________________
11
SUBSCRIPTION
AGREEMENT
Private
Placement of Common Stock Shares
(2003
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
SHARES _________________
x $0.20 = $________________
| Signature | Signature (if purchasing jointly) | ||
| Name Typed or Printed | Name Typed or Printed |
Name
in
which securities should be issued:
____________________________________
This
Subscription Agreement is agreed to and accepted as of
________________________
|
Xxxx X. Xxxxx
Chairman and Chief Executive Officer
|
Xxxxxxx X. Xxxxx
President and Chief Operating Officer
|
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