STOCK PURCHASE AGREEMENT
Exhibit
99.2
0000
00xx
Xxxxxx Xxxx
Xxxxxxxxx,
XX 00000
Ladies
& Gentlemen:
The
undersigned, _________________________________(the “Investor”),
hereby confirms its agreement with you as follows:
1. This
Stock Purchase Agreement (the “Agreement”)
is
made as of December 28, 2006 between nFinanSe Inc., a Nevada corporation
(the
“Company”),
and
the Investor.
2. The
Company has authorized the sale and issuance of up to 4,000,000 shares (the
“Preferred
Shares”)
of
Series A Preferred Stock of the Company, $0.001 par value per share (the
rights
and preferences of which are as provided in that certain Certificate of
Designations, Rights and Preferences attached hereto as Exhibit
A)
(the
“Preferred
Stock”),
subject to adjustment by the Company, to certain accredited investors in
a
private placement (the “Offering”).
The
Company has further authorized the issuance of 5,327,930 shares of Preferred
Stock to certain accredited investors in exchange (the “Exchange”)
for
all of the Company’s outstanding Senior Secured Convertible Promissory Notes
(the “Exchange
Shares”).
The
Preferred Shares and the Exchange Shares will be convertible into shares
of the
Company’s common stock, $0.001 par value per share (collectively and as
converted, the “Conversion
Shares”).
The
Preferred Shares and the Conversion Shares are referred to herein collectively
as the “Securities”.
3. The
Company and the Investor agree that the Investor will purchase from the Company
and the Company will issue and sell to the Investor ___________ Preferred
Shares, for a purchase price of $_______ per share, or an aggregate purchase
price of $_______________, pursuant to the Terms and Conditions for Purchase
of
Preferred Shares attached hereto as Annex I
and
incorporated herein by reference as if fully set forth herein (the “Terms
and Conditions”).
Unless otherwise requested by the Investor, certificates representing the
Preferred Shares purchased by the Investor will be registered in the Investor’s
name and address as set forth below.
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4. The
Investor represents that, except as set forth below, (a) it has had no position,
office or other material relationship within the past three years with the
Company or persons known to it to be affiliates of the Company, (b) neither
it,
nor any group of which it is a member or to which it is related, beneficially
owns (including the right to acquire or vote) any securities of the Company
and
(c) it has no direct or indirect affiliation or association with any NASD
member
as of the date hereof. Exceptions:
_______________________________________________________________________________________
_______________________________________________________________________________________.
(If
no
exceptions, write “none.” If left blank, response will be deemed to be
“none.”)
The
Investor hereby confirms, by signing in the space provided below, that the
foregoing correctly sets forth the agreement between the Investor and the
Company with respect to the purchase of Preferred Shares in the Offering.
By
executing this Agreement, the Investor acknowledges that the Company may
use the
information in paragraph 4 above and the name and address information below
in
preparation of the Registration Statement (as defined in Annex 1).
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AGREED
AND ACCEPTED:
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Investor:
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By:
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NFINANSE,
INC.
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Print
Name:
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Title:
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By:
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Title:
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Address:
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Tax
ID No.
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Contact
name:
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Telephone:
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Fax:
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E-mail:*
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Name
in which shares should be registered (if different):
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*By
providing an e-mail address, the Investor hereby consents to electronic delivery
of the documents and notices required to be delivered pursuant to this
Agreement.
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ANNEX
I
TERMS
AND CONDITIONS FOR PURCHASE OF PREFERRED SHARES
1. Authorization
and Sale of the Preferred Shares.
Subject
to these Terms and Conditions, the Company has authorized the sale of up
to
4,000,000 Preferred Shares. The Company reserves the right to increase or
decrease this number.
2. Agreement
to Sell and Purchase the Preferred Shares; Subscription Date.
2.1 At
the
Closing (as defined in Section 3), the Company will sell to the Investor,
and
the Investor will purchase from the Company, upon the terms and conditions
hereinafter set forth, the number of Preferred Shares set forth in Paragraph
3
of the Stock Purchase Agreement to which these Terms and Conditions are attached
at the purchase price set forth thereon.
2.2 The
Company may enter into the same form of Stock Purchase Agreement, including
these Terms and Conditions, with certain other investors (the “Other
Investors”)
and
expects to complete sales of Preferred Shares to them. (The Investor and
the
Other Investors are hereinafter sometimes collectively referred to as the
“Investors,”
and
the Stock Purchase Agreement to which these Terms and Conditions are attached
and the Stock Purchase Agreements (including attached Terms and Conditions)
executed by the Other Investors are hereinafter sometimes collectively referred
to as the “Agreements.”)
The
Company may accept executed Agreements from Investors for the purchase of
Preferred Shares commencing upon the date on which the Company provides the
Investors with the proposed purchase price per Share and concluding upon
the
date (the “Subscription
Date”)
on
which the Company has (i) executed Agreements with Investors for the purchase
of
at least 4,000,000 Preferred Shares, and (ii) notified Emerging Growth Equities,
Ltd., in its capacity as placement agent for this transaction (the “Placement
Agent”),
in
writing that it is no longer accepting additional Agreements from Investors
for
the purchase of Preferred Shares. The Company may not enter into any Agreements
after the Subscription Date.
3. Delivery
of the Preferred Shares at Closing.
The
completion of the purchase and sale of the Preferred Shares (the “Closing”)
shall
occur on December 28, 2006 (the “Closing
Date”),
at
the offices of the Company’s counsel or at such other place as may be agreed
upon by the Company and the Placement Agent. At the Closing, the Company
shall
deliver to the Investor, or a representative of the Investor, one or more
stock
certificates representing the number of Preferred Shares set forth in Paragraph
3 of the Stock Purchase Agreement, each such certificate to be registered
in the
name of the Investor or, if so indicated on the signature page of the Stock
Purchase Agreement, in the name of a nominee designated by the
Investor.
The
Company’s obligation to issue the Preferred Shares to the Investor shall be
subject to the following conditions, any one or more of which may be waived
by
the Company: (a) prior receipt by the Company of a certified or official
bank
check or wire transfer of funds in the full amount of the purchase price
for the
Preferred Shares being purchased hereunder as set forth in Paragraph 3 of
the
Stock Purchase Agreement; (b) completion of the purchases and sales under
the
Agreements with the Other Investors; and (c) the accuracy of the representations
and warranties made by the Investors and the fulfillment of those undertakings
of the Investors to be fulfilled prior to the Closing.
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The
Investor’s obligation to purchase the Preferred Shares shall be subject to the
following conditions, any one or more of which may be waived by the Investor:
(a) Investors shall have executed Agreements for the purchase of at least
4,000,000 Preferred Shares, and (b) the representations and warranties of
the
Company set forth herein shall be true and correct as of the Closing Date
in all
material respects.
4. Representations,
Warranties and Covenants of the Company.
The
Company hereby represents and warrants to, and covenants with, the Investor,
as
follows:
4.1 Organization.
The
Company is duly organized and validly existing in good standing under the
laws
of the jurisdiction of its organization. The Company has full power and
authority to own, operate and occupy its properties and to conduct its business
as presently conducted and as described in the documents filed by the Company
under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”),
since
the end of its most recently completed fiscal year through the date hereof,
including, without limitation, its report on Form 10-KSB for the year ended
September 30, 2006 and its report on Form 10-QSB for the quarter ended June
30,
2006 (the “Exchange
Act Documents”)
and is
registered or qualified to do business and in good standing in each jurisdiction
in which the nature of the business conducted by it or the location of the
properties owned or leased by it requires such qualification and where the
failure to be so qualified would have a material adverse effect upon the
financial condition, earnings, business or business prospects, properties
or
operations of the Company (a “Material
Adverse Effect”),
and
no proceeding has been instituted in any such jurisdiction, revoking, limiting
or curtailing, or seeking to revoke, limit or curtail, such power and authority
or qualification.
4.2 Due
Authorization and Valid Issuance.
The
Company has all requisite power and authority to execute, deliver and perform
its obligations under the Agreements, and the Agreements have been duly
authorized and validly executed and delivered by the Company and constitute
legal, valid and binding agreements of the Company enforceable against the
Company in accordance with their terms, except as rights to indemnity and
contribution may be limited by state or federal securities laws or the public
policy underlying such laws, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws
affecting creditors’ and contracting parties’ rights generally and except as
enforceability may be subject to general principles of equity (regardless
of
whether such enforceability is considered in a proceeding in equity or at
law).
The Preferred Shares being purchased by the Investor hereunder will, upon
issuance and payment therefor pursuant to the terms hereof, be duly authorized,
validly issued, fully-paid and nonassessable. The Company has reserved from
its
duly authorized capital stock: (i) the number of Preferred Shares issuable
pursuant to this Agreement, and (ii) the number of Conversion Shares issuable
upon conversion of the Preferred Stock.
4.3 Non-Contravention.
The
execution and delivery of the Agreements, the issuance and sale of the Preferred
Shares under the Agreements, the fulfillment of the terms of the Agreements
and
the consummation of the transactions contemplated thereby will not (A) conflict
with or constitute a violation of, or default (with the passage of time or
otherwise) under, (i) any material bond, debenture, note or other evidence
of
indebtedness, lease, contract, indenture, mortgage, deed of trust, loan
agreement, joint venture or other agreement or instrument to which the Company
is a party or by which it or any of its properties are bound, (ii) the
charter, by-laws or other organizational documents of the Company, or (iii)
any
law, administrative regulation, ordinance or order of any court or governmental
agency, arbitration panel or
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authority
applicable to the Company or their respective properties, except in the case
of
clauses (i) and (iii) for any such conflicts, violations or defaults which
are
not reasonably likely to have a Material Adverse Effect or (B) result in
the
creation or imposition of any lien, encumbrance, claim, security interest
or
restriction whatsoever upon any of the material properties or assets of the
Company or an acceleration of indebtedness pursuant to any obligation, agreement
or condition contained in any material bond, debenture, note or any other
evidence of indebtedness or any material indenture, mortgage, deed of trust
or
any other agreement or instrument to which the Company is a party or by which
any of them is bound or to which any of the material property or assets of
the
Company is subject except in cases not reasonably likely to have a Material
Adverse Effect. No consent, approval, authorization or other order of, or
registration, qualification or filing with, any regulatory body, administrative
agency, or other governmental body in the United States or any other person
is
required for the execution and delivery of the Agreements and the valid issuance
and sale of the Preferred Shares to be sold pursuant to the Agreements, other
than such as have been made or obtained, and except for any post-closing
securities filings or notifications required to be made under federal or
state
securities laws.
4.4 Capitalization.
The
entire authorized capital stock of the Company consists of (A) 200,000,000
shares of common stock, par value $0.001 per share (the “Common
Stock”),
3,829,028 of which are issued and outstanding, and (B) 25,000,000 shares
of
preferred stock, of which, pursuant to the Offering and the Exchange, 9,327,930
are issued and outstanding. All shares of the Company’s issued and outstanding
capital stock have been duly authorized, are validly issued and outstanding,
and
are fully paid and nonassessable. There are no dividends which have accrued
or
been declared but are unpaid on the capital stock of the Company. No person
has
any right of first refusal, preemptive right, right of participation or any
similar right to participate in the transactions contemplated by this Agreement.
Except as a result of the purchase and sale of the Preferred Shares pursuant
to
the Offering and the issuance of the Exchange Shares pursuant to the Exchange,
and except for employee and director stock options under the Company’s equity
compensation plans and outstanding warrants as disclosed in the Exchange
Act
documents, there are no outstanding options, warrants, rights to subscribe
to,
calls or commitments of any character whatsoever relating to, or securities,
rights or obligations convertible into or exchangeable for, or giving any
person
any right to subscribe for or acquire, any shares of Common Stock, or contracts,
commitments, understandings or arrangements by which the Company is or may
become bound to issue additional shares of Common Stock, or securities or
rights
convertible or exchangeable into shares of Common Stock. The issuance and
sale
of the Preferred Shares will not obligate the Company to issue shares of
Common
Stock or other securities to any person (other than the Purchasers) and will
not
result in a right of any holder of Company securities to adjust the exercise,
conversion, exchange or reset price under such securities.
4.5 Financial
Statements; Accountants.
The
consolidated financial statements of the Company and the related notes contained
in the Exchange Act Documents present fairly in all material respects, in
accordance with generally accepted accounting principles, the financial position
of the Company as of the dates indicated, and the results of its operations
and
cash flows for the periods therein specified and are consistent with the
books
and records of the Company except that the unaudited interim financial
statements were or are subject to normal and recurring year-end adjustments
which are not expected to be material in amount. Such financial statements
(including the related notes) have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the
periods therein specified, except as may be included in the notes to such
financial statements, or in the case of unaudited statements, as may be
permitted by the SEC on Form 10-QSB under the Exchange Act and except as
disclosed in the Exchange Act Documents. The other financial information
contained in the Exchange Act
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Documents
has been prepared on a basis consistent with the financial statements of
the
Company. To the Company’s knowledge, Xxxxxxx & Xxxxxx, P.A., who the Company
expects will consent to the inclusion in the Registration Statement referred
to
in Section 8.1 hereof of its opinion with respect to the financial statements
to
be incorporated by reference from the Company’s Annual Report on Form 10-KSB for
the year ended September 30, 2006 into the Registration Statement (as defined
below) and the prospectus which forms a part thereof, are independent
accountants as required by the Securities Act of 1933, as amended (the
“Securities
Act”),
and
the rules and regulations promulgated thereunder.
4.6 Company
not an “Investment Company”.
The
Company has been advised of the rules and requirements under the Investment
Company Act of 1940, as amended (the “Investment
Company Act”).
The
Company is not, and immediately after receipt of payment for the Preferred
Shares will not be, an “investment company” or an entity “controlled” by an
“investment company” within the meaning of the Investment Company Act and shall
conduct its business in a manner so that it will not become subject to the
Investment Company Act.
4.7 Transfer
Taxes.
On the
Closing Date, all stock transfer or other taxes (other than income taxes)
which
are required to be paid in connection with the sale and transfer of the
Preferred Shares to be sold to the Investor hereunder will be, or will have
been, fully paid or provided for by the Company and all laws imposing such
taxes
will be or will have been fully complied with.
4.8 Private
Offering.
Assuming (i) the correctness of the representations and warranties of the
Investors set forth in Section 5 hereof, (ii) the correctness of the information
provided in the Investor Questionnaire submitted by each of the Investors
and
(iii) that Placement Agent’s activities are consistent with the activities
permissible under Rule 506 of Regulation D of the Securities Act, the offer
and
sale of Preferred Shares hereunder is exempt from registration under the
Securities Act.
5. Representations,
Warranties and Covenants of the Investor.
5.1 The
Investor represents and warrants to, and covenants with, the Company that:
(i)
the Investor is an “accredited investor” as defined in Regulation D under the
Securities Act and the Investor is also knowledgeable, sophisticated and
experienced in making, and is qualified to make, decisions with respect to
investments in shares presenting an investment decision like that involved
in
the purchase of the Preferred Shares, including investments in securities
issued
by the Company and investments in comparable companies, and has requested,
received, reviewed and considered all information it deemed relevant in making
an informed decision to purchase the Preferred Shares; (ii) the Investor
is
acquiring the number of Preferred Shares set forth in Section 3 of the Stock
Purchase Agreement in the ordinary course of its business and for its own
account for investment only and with no present intention of distributing
any of
such Preferred Shares or any arrangement or understanding with any other
persons
regarding the distribution of such Preferred Shares; (iii) the Investor will
not, directly or indirectly, offer, sell, pledge, transfer or otherwise dispose
of (or solicit any offers to buy, purchase or otherwise acquire or take a
pledge
of) any of the Securities except in compliance with the Securities Act,
applicable state securities laws and the respective rules and regulations
promulgated thereunder; (iv) the Investor has answered all questions on the
Investor Questionnaire for use in preparation of the Registration Statement
and
the answers thereto are true, correct and complete as of the date hereof
and
will be true, correct and complete as of the Closing Date; (v) the Investor
will
notify the Company immediately of any change in any of such information until
such time as the Investor has sold all of
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its
Conversion Shares or until the Company is otherwise no longer required to
keep
the Registration Statement effective; and (vi) the Investor has, in connection
with its decision to purchase the number of Preferred Shares set forth in
Paragraph 3 of the Stock Purchase Agreement, relied only upon the Exchange
Act
Documents and the representations and warranties of the Company contained
herein. The Investor understands that neither this Offering nor the acquisition
of the Securities have been registered under the Securities Act or registered
or
qualified under any state securities law in reliance on specific exemptions
therefrom, which exemptions may depend upon, among other things, the bona
fide
nature of the Investor’s investment intent as expressed herein and the
information provided in the Investor’s Investor Questionnaire. Investor has
completed or caused to be completed and delivered to the Company the Investor
Questionnaire, which questionnaire is true, correct and complete in all material
respects.
5.2 The
Investor (other than individuals) is an entity duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization
with
full power and authority to enter into and to consummate the transactions
contemplated by this Agreement and otherwise to carry out its obligations
thereunder. The execution, delivery and performance by the Investor of the
transactions contemplated by this Agreement has been duly authorized by all
necessary corporate or similar action on the part of the Investor. This
Agreement has been duly executed by the Investor, and when delivered by the
Investor in accordance with the terms hereof, will constitute the valid and
legally binding obligation of the Investor, enforceable against it in accordance
with its terms, except (i) as limited by laws of general application relating
to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors’ rights generally, (ii) as limited by rules of law governing
specific performance, injunctive relief, or other equitable remedies and
(iii)
to the extent the indemnification provisions contained in this Agreement
may be
limited by applicable federal or state securities laws.
5.3 The
Investor is not purchasing the Preferred Shares as a result of any
advertisement, article, notice or other communication regarding the Preferred
Shares published in any newspaper, magazine or similar media or broadcast
over
television or radio or presented at any seminar or any other general
solicitation or general advertisement.
5.4 The
Investor is (i) acquiring the Preferred Shares and (ii) upon conversion of
the
Preferred Shares will acquire the Conversion Shares, in each case, for its
own
account and not with a view towards, or for resale in connection with, the
public sale or distribution thereof; provided, however, that by making the
representations herein, the Investor does not agree to hold any of the
Securities for any minimum or other specific term and reserves the right
to
dispose of the Preferred Shares under an exemption under the Securities Act
and
reserves the right to dispose of the Conversion Shares at any time in accordance
with or pursuant to a registration statement or an exemption under the
Securities Act. The Investor is acquiring the Preferred Shares hereunder
in the
ordinary course of its business.
5.5 The
Investor understands that the Securities are being offered and sold to it
in
reliance on specific exemptions from the registration requirements of United
States federal and state securities laws and that the Company is relying
in part
upon the truth and accuracy of, and the Investor’s compliance with, the
representations, warranties, agreements, acknowledgments and understandings
of
the Investor set forth herein in order to determine the availability of such
exemptions and the eligibility of the Investor to acquire the
Securities.
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5.6 The
Investor and its advisors, if any, have been furnished with all publicly
available materials relating to the business, finances and operations of
the
Company and such other publicly available materials relating to the offer
and
sale of the Securities as have been requested by the Investor. The Investor
and
its advisors, if any, have been afforded the opportunity to ask questions
of the
Company. Neither such inquiries nor any other due diligence investigations
conducted by the Investor or its advisors, if any, or its representatives
shall
modify, amend or affect the Investor’s right to rely on the Company’s
representations and warranties contained herein. The Investor understands
that
its investment in the Securities involves a high degree of risk.
5.7 The
Investor understands that no United States federal or state agency or any
other
government or governmental agency has passed on or made any recommendation
or
endorsement of the Securities or the fairness or suitability of the investment
in the Securities, nor have such authorities passed upon or endorsed the
merits
of the offering of the Securities.
6. Survival
of Representations, Warranties and Agreements.
All
covenants, agreements, representations and warranties made by the Company
and
the Investor herein shall survive the execution of this Agreement, the delivery
to the Investor of the Preferred Shares being purchased and the payment
therefor.
7. Transfer
Restrictions.
7.1 The
Securities may only be disposed of in compliance with state and federal
securities laws. Each Investor will not, directly or indirectly, offer, sell,
pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase
or otherwise acquire or take pledge of) any of the Securities except in
compliance with the Securities Act, applicable state securities laws and
the
respective rules and regulations promulgated thereunder. In connection with
any
transfer of Securities other than pursuant to an effective registration
statement, to the Company, to an affiliate of an Investor (who is an accredited
investor and executes a customary representation letter) or in connection
with a
pledge as contemplated in Section 7(b), the Company may require the transferor
thereof to provide to the Company an opinion of counsel selected by the
transferor and reasonably acceptable to the Company, the form and substance
of
which opinion shall be reasonably satisfactory to the Company, to the effect
that such transfer does not require registration of such transferred Securities
under the Securities Act, provided, however, that in the case of a transfer
pursuant to Rule 144, no opinion shall be required if the transferor provides
the Company with a customary seller’s representation letter reasonably
satisfactory to the Company, and if such sale is not pursuant to subsection
(k)
of Rule 144, a customary broker’s representation letter and a Form 144. Any such
transferee that agrees in writing to be bound by the terms of this Agreement
shall have the rights of an Investor under this Agreement. The Company shall
reissue certificates evidencing the Securities upon surrender of certificates
evidencing the Securities being transferred in accordance with this Section
7(a).
7.2 The
Investors agree to the imprinting, so long as is required by this Section
7, of
a legend on any of the Securities in substantially the following
form:
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THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND ARE SUBJECT TO RESTRICTIONS
ON TRANSFERABILITY AS SET FORTH IN THIS CERTIFICATE. THE SECURITIES REPRESENTED
HEREBY MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE
OF
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN OPINION OF COUNSEL,
ACCEPTABLE TO COUNSEL FOR THE COMPANY, TO THE EFFECT THAT THE PROPOSED SALE,
TRANSFER OR DISPOSITION MAY BE AFFECTED WITHOUT REGISTRATION UNDER THE
ACT.
The
Company acknowledges and agrees that an Investor may from time to time pledge
pursuant to a bona fide margin agreement with a registered broker-dealer
or
grant a security interest in some or all of the Securities, in accordance
with
all applicable securities laws, to a financial institution that is an
“accredited investor” as defined in Rule 501(a) under the Securities Act and, if
required under the terms of such arrangement, such Investor may transfer
pledged
or secured Preferred Shares to the pledgees or secured parties; provided
that
such Investor shall provide the Company with such documentation as is reasonably
requested by the Company to ensure that the pledge is pursuant to a bona
fide
margin agreement with a registered broker-dealer or a security interest in
some
or all of the Securities to a financial institution that is an “accredited
investor” as defined in Rule 501(a) under the Securities Act.
7.3 Certificates
evidencing the Securities shall not contain any legend (including the legend
set
forth in Section 7(b)), (i) following any sale of such Securities pursuant
to
Rule 144, or (ii) if such Securities are eligible for sale under Rule 144(k),
or
(iii) if such legend is not required under applicable requirements of the
Securities Act (including judicial interpretations and pronouncements issued
by
the staff of the SEC). The Company shall use its commercially reasonable
efforts
to cause its counsel to issue a legal opinion to the Company’s transfer agent
promptly upon the occurrence of any of the events in clauses (i), (ii) or
(iii)
above to effect the removal of the legend hereunder. The Company agrees that
at
such time as such legend is no longer required under this Section 7(c), it
will,
as promptly as practicable following the delivery by an Investor to the Company
or the Company’s transfer agent of a certificate representing Securities issued
with a restrictive legend, deliver or cause to be delivered to such Investor
a
certificate representing such Securities that is free from all restrictive
and
other legends.
7.4 The
Investor agrees that the removal of the restrictive legend from certificates
representing Securities as set forth in this Section 7 is predicated upon
the
Company’s reliance on, and the Investor’s agreement that, the Investor will not
sell any Securities except pursuant to either the registration requirements
of
the Securities Act, including any applicable prospectus delivery requirements,
or an exemption therefrom.
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8. Registration
of the Conversion Shares; Compliance with the Securities Act.
8.1 Registration
Procedures and Other Matters.
The
Company shall:
(a) subject
to receipt of necessary information from the Investors after prompt request
from
the Company to the Investors to provide such information, prepare and file
with
the SEC, within 60 days after the Closing Date, (or, if the 60th day after
the
Closing Date is not a business day, then the first business day thereafter)
a
registration statement on such form as is then available to the Company (the
“Registration
Statement”)
to
enable the resale of the Conversion Shares by the Investors from time to
time
through the OTC Bulletin Board or in privately-negotiated
transactions;
(b) use
its
commercially reasonable efforts, subject to receipt of necessary information
from the Investors after prompt request from the Company to the Investors
to
provide such information, to cause the Registration Statement to become
effective;
(c) use
its
commercially reasonable efforts to prepare and file with the SEC such amendments
and supplements to the Registration Statement and the prospectus used in
connection therewith as may be necessary to keep the Registration Statement
current, effective and free from any material misstatement or omission to
state
a material fact for a period not exceeding, with respect to each Investor’s
Preferred Shares purchased hereunder, the earlier of (i) the second anniversary
of the Closing Date, (ii) the date on which the Investor may sell all Conversion
Shares then held by the Investor without restriction by the volume limitations
of Rule 144(e) of the Securities Act, or (iii) such time as all Conversion
Shares acquired by such Investor through the sale of Preferred Shares in
this
Offering have been sold pursuant to a registration statement;
(d) furnish
(which may be furnished electronically) to the Investor with respect to the
Conversion Shares registered under the Registration Statement such number
of
copies of the Registration Statement, prospectuses and preliminary prospectuses
in conformity with the requirements of the Securities Act and such other
documents as the Investor may reasonably request, in order to facilitate
the
public sale or other disposition of all or any of the Conversion Shares by
the
Investor; provided, however, that the obligation of the Company to deliver
copies of prospectuses or preliminary prospectuses to the Investor shall
be
subject to the receipt by the Company of reasonable assurances from the Investor
that the Investor will comply with the applicable provisions of the Securities
Act and of such other securities or blue sky laws as may be applicable in
connection with any use of such prospectuses or preliminary
prospectuses;
(e) file
documents required of the Company for normal blue sky clearance in states
specified in writing by the Investor and use its commercially reasonable
efforts
to maintain such blue sky qualifications during the period the Company is
required to maintain the effectiveness of the Registration Statement pursuant
to
Section 8.1(c); provided, however, that the Company shall not be required
to
qualify to do business or consent to service of process in any jurisdiction
in
which it is not now so qualified or has not so consented;
10
(f) bear
all
expenses in connection with the procedures in paragraph (a) through (e) of
this
Section 8.1 and the registration of the Conversion Shares pursuant to the
Registration Statement except with respect to any legal or attorney fees
incurred by any of the Investors in connection with the Registration Statement
and any amendments thereto; and
(g) advise
the Investor (which advisement may occur electronically), promptly after
it
shall receive notice or obtain knowledge of the issuance of any stop order
by
the SEC delaying or suspending the effectiveness of the Registration Statement
or of the initiation or threat of any proceeding for that purpose; and it
will
promptly use its commercially reasonable efforts to prevent the issuance
of any
stop order or to obtain its withdrawal at the earliest possible moment if
such
stop order should be issued.
The
Investor acknowledges that the Company may include on the Registration
Statement; shares of Common Stock of the Company for resale by certain other
stockholders of the Company, and that the Company may file a subsequent
registration statement for the resale of shares of Common Stock by certain
other
stockholder of the Company.
8.2 Transfer
of Conversion Shares After Registration; Suspension.
(a) The
Investor agrees that it will not effect any disposition of the Conversion
Shares
or its right to purchase the Conversion Shares that would constitute a sale
within the meaning of the Securities Act except as contemplated in the
Registration Statement referred to in Section 8.1 and as described below
or as
otherwise permitted by law, and that it will promptly notify the Company
of any
changes in the information set forth in the Registration Statement regarding
the
Investor or its plan of distribution.
(b) Except
in
the event that paragraph (c) below applies, the Company shall (i) if deemed
necessary by the Company, use commercially reasonable efforts to prepare
and
file from time to time with the SEC a post-effective amendment to the
Registration Statement or a supplement to the related prospectus or a supplement
or amendment to any document incorporated therein by reference or file any
other
required document so that such Registration Statement will not contain an
untrue
statement of a material fact or omit to state a material fact required to
be
stated therein or necessary to make the statements therein not misleading,
and
so that, as thereafter delivered to purchasers of the Conversion Shares being
sold thereunder, such prospectus will not contain an untrue statement of
a
material fact or omit to state a material fact required to be stated therein
or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; (ii) provide the Investor (which may
occur electronically) upon its request copies of any documents filed pursuant
to
Section 8.2(b)(i); and (iii) inform each Investor that the Company has
complied with its obligations in Section 8.2(b)(i) (or that, if the Company
has
filed a post-effective amendment to the Registration Statement which has
not yet
been declared effective, the Company will notify the Investor to that effect,
will use its commercially reasonable efforts to secure the effectiveness
of such
post-effective amendment as promptly as possible and will promptly notify
the
Investor when the amendment has become effective).
11
(c) Subject
to paragraph (d) below, in the event (i) of any request by the SEC or any
other
federal or state governmental authority during the period of effectiveness
of
the Registration Statement for amendments or supplements to a Registration
Statement or related prospectus or for additional information; (ii) of the
issuance by the SEC or any other federal or state governmental authority
of any
stop order suspending the effectiveness of a Registration Statement or the
initiation of any proceedings for that purpose; (iii) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Conversion Shares for sale
in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; or (iv) of any event or circumstance which, upon the advice of its
counsel, necessitates the making of any changes in the Registration Statement
or
prospectus, or any document incorporated or deemed to be incorporated therein
by
reference, so that, in the case of the Registration Statement, it will not
contain any untrue statement of a material fact or any omission to state
a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of the prospectus, it will not
contain any untrue statement of a material fact or any omission to state
a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; then the Company shall deliver a certificate in writing (which
may
be delivered electronically) to the Investor (the “Suspension
Notice”)
to the
effect of the foregoing and, upon receipt of such Suspension Notice, the
Investor will refrain from selling any Conversion Shares pursuant to the
Registration Statement (a “Suspension”)
until
the Investor’s receipt of copies of a supplemented or amended prospectus
prepared and filed by the Company, or until it is advised in writing by the
Company that the current prospectus may be used, and has received copies
of any
additional or supplemental filings that are incorporated or deemed incorporated
by reference in any such prospectus. In the event of any Suspension, the
Company
will use its commercially reasonable efforts to cause the use of the prospectus
so suspended to be resumed as soon as reasonably practicable after the delivery
of a Suspension Notice to the Investor.
(d) Provided
that a Suspension is not then in effect, the Investor may sell Conversion
Shares
under the Registration Statement, provided that it arranges for delivery
of a
current prospectus to the transferee of such Conversion Shares.
(e) In
the
event of a sale of Conversion Shares by the Investor pursuant to the
Registration Statement, the Investor must also deliver to the Company’s transfer
agent, with a copy to the Company, a Certificate of Subsequent Sale
substantially in the form attached hereto as Exhibit B,
and its
stock certificate, so that the Conversion Shares may be properly
transferred.
8.3 Indemnification.
For the
purpose of this Section 8.3:
(i) the
term
“Selling
Stockholder”
shall
include the Investor and any affiliate of such Investor;
(ii) the
term
“Registration
Statement”
shall
include the prospectus in the form first filed with the SEC pursuant to Rule
424(b) of the Securities Act or filed as part of the Registration Statement
at
the time of effectiveness if no Rule 424(b) filing is required, and any exhibit,
supplement or amendment included in or relating to the Registration Statement
referred to in Section 8.1; and
12
(iii) the
term
“untrue
statement”
shall
include any untrue statement or alleged untrue statement, or any omission
or
alleged omission to state in the Registration Statement a material fact required
to be stated therein or necessary to make the statements therein, in the
light
of the circumstances under which they were made, not misleading.
(a) The
Company agrees to indemnify and hold harmless each Selling Stockholder from
and
against any losses, claims, damages or liabilities to which such Selling
Stockholder may become subject (under the Securities Act or otherwise) insofar
as such losses, claims, damages or liabilities (or actions or proceedings
in
respect thereof) arise out of, or are based upon any untrue statement of
a
material fact contained in the Registration Statement as amended at the time
of
effectiveness or any omission of a material fact required to be stated therein
or necessary to make the statements therein not misleading, and the Company
will
reimburse such Selling Stockholder for any reasonable and documented legal
expenses and any other actual, accountable out-of-pocket documented expenses
reasonably incurred in investigating, defending or preparing to defend any
such
action, proceeding or claim, or preparing to defend any such action, proceeding
or claim, provided,
however,
that
the Company shall not be liable in any such case to the extent that such
loss,
claim, damage or liability arises out of, or is based upon, an untrue statement
made in such Registration Statement or any omission of a material fact required
to be stated therein or necessary to make the statements therein not misleading
in reliance upon and in conformity with written information furnished to
the
Company by or on behalf of such Selling Stockholder specifically for use
in
preparation of the Registration Statement or the failure of such Selling
Stockholder to comply with its covenants and agreements contained in this
Agreement. The Company shall reimburse each Selling Stockholder for the amounts
provided for herein within a reasonable period of time after demand
thereof.
(b) The
Investor agrees to indemnify and hold harmless the Company (and each person,
if
any, who controls the Company within the meaning of Section 15 of the Securities
Act, each officer of the Company who signs the Registration Statement and
each
director of the Company) from and against any losses, claims, damages or
liabilities to which the Company (or any such officer, director or controlling
person) may become subject (under the Securities Act or otherwise), insofar
as
such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of, or are based upon, (i) any failure to comply
with
the covenants and agreements contained in this Agreement, or (ii) any untrue
statement of a material fact contained in the Registration Statement or any
omission of a material fact required to be stated therein or necessary to
make
the statements therein not misleading if such untrue statement or omission
was
made in reliance upon and in conformity with written information furnished
by or
on behalf of the Investor specifically for use in preparation of the
Registration Statement, and the Investor will reimburse the Company (or such
officer, director or controlling person), as the case may be, for any legal
or
other expenses reasonably incurred in investigating, defending or preparing
to
defend any such action, proceeding or claim.
(c) Promptly
after receipt by any indemnified person of a notice of a claim or the beginning
of any action in respect of which indemnity is to be sought against an
indemnifying person pursuant to this Section 8.3, such indemnified person
shall notify the indemnifying person in writing of such claim or of the
commencement of such action, but the omission to so notify the indemnifying
person will not relieve it from any liability which it may have to any
indemnified person under this Section 8.3 (except to the extent that such
omission materially and adversely affects the indemnifying person’s ability to
defend such action) or from any liability otherwise than under this
Section 8.3. Subject to the provisions hereinafter stated, in case any
13
such
action shall be brought against an indemnified person, the indemnifying person
shall be entitled to participate therein, and, to the extent that it shall
elect
by written notice delivered to the indemnified person promptly after receiving
the aforesaid notice from such indemnified person, shall be entitled to assume
the defense thereof. After notice from the indemnifying person to such
indemnified person of its election to assume the defense thereof, such
indemnifying person shall not be liable to such indemnified person for any
legal
expenses subsequently incurred by such indemnified person in connection with
the
defense thereof, provided,
however,
that if
there exists or shall exist a conflict of interest that would make it
inappropriate, in the opinion of counsel to the indemnified person, for the
same
counsel to represent both the indemnified person and such indemnifying person
or
any affiliate or associate thereof, the indemnified person shall be entitled
to
retain its own counsel at the expense of such indemnifying person; provided,
however, that no indemnifying person shall be responsible for the fees and
expenses of more than one separate counsel (together with appropriate local
counsel) for all indemnified parties. In no event shall any indemnifying
person
be liable in respect of any amounts paid in settlement of any action unless
the
indemnifying person shall have approved the terms of such settlement;
provided
that
such consent shall not be unreasonably withheld. No indemnifying person shall,
without the prior written consent of the indemnified person, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified person is or could have been a party and indemnification could
have
been sought hereunder by such indemnified person, unless such settlement
includes an unconditional release of such indemnified person from all liability
on claims that are the subject matter of such proceeding.
(d) If
the
indemnification provided for in this Section 8.3 is unavailable to or
insufficient to hold harmless an indemnified person under subsection (a)
or (b)
above in respect of any losses, claims, damages or liabilities (or actions
or
proceedings in respect thereof) referred to therein, then each indemnifying
person shall contribute to the amount paid or payable by such indemnified
person
as a result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect the relative
fault of the Company on the one hand and the Investor, as well as any other
Selling Stockholders under such registration statement on the other in
connection with the statements or omissions or other matters which resulted
in
such losses, claims, damages or liabilities (or actions in respect thereof),
as
well as any other relevant equitable considerations. The relative fault shall
be
determined by reference to, among other things, in the case of an untrue
statement, whether the untrue statement relates to information supplied by
the
Company on the one hand or an Investor or other Selling Stockholder on the
other
and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement. The Company and
the
Investor agree that it would not be just and equitable if contribution pursuant
to this subsection (d) were determined by pro rata allocation (even if the
Investor and other Selling Stockholders were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified person as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to
above
in this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified person in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of
this
subsection (d), the Investor shall not be required to contribute any amount
in
excess of the amount by which the net amount received by the Investor from
the
sale of the Conversion Shares to which such loss relates exceeds the amount
of
any damages which such Investor has otherwise been required to pay by reason
of
such untrue statement. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Investor’s obligations in this
14
subsection
to contribute shall be in proportion to its Investor sale of Conversion Shares
to which such loss relates and shall not be joint with any other Selling
Stockholders.
(e) The
Investor hereby acknowledges that it is a sophisticated business person who
was
represented by counsel during the negotiations regarding the provisions hereof
including, without limitation, the provisions of this Section 8.3, and is
fully informed regarding said provisions. The Investor further acknowledges
that
the provisions of this Section 8.3 fairly allocate the risks involved in
the Offering. The Investor and the Company are advised that federal or state
public policy as interpreted by the courts in certain jurisdictions may be
contrary to certain of the provisions of this Section 8.3, and the Investor
and the Company hereto hereby expressly waive and relinquish any right or
ability to assert such public policy as a defense to a claim under this
Section 8.3 and further agree not to attempt to assert any such
defense.
8.4 Termination
of Conditions and Obligations.
The
conditions precedent imposed by Section 5 or this Section 8 upon the
transferability of the Conversion Shares shall cease and terminate as to
any
particular number of the Conversion Shares when such Conversion Shares shall
have been effectively registered under the Securities Act and sold or otherwise
disposed of in accordance with the intended method of disposition set forth
in
the Registration Statement covering such Conversion Shares or at such time
as an
opinion of counsel reasonably satisfactory to the Company shall have been
rendered to the effect that such conditions are not necessary in order to
comply
with the Securities Act.
8.5 Information
Available.
So long
as the Registration Statement is effective covering the resale of Conversion
Shares owned by the Investor, the Company will furnish to the
Investor:
(a) as
soon
as practicable after it is available, one copy of (i) its Annual Report to
Stockholders (which Annual Report shall contain financial statements audited
in
accordance with generally accepted accounting principles by a national firm
of
certified public accountants), (ii) its Annual Report on Form 10-KSB and
(iii) its Quarterly Reports on Form 10-QSB (the foregoing, in each
case, excluding exhibits);
(b) upon
the
reasonable request of the Investor, an adequate number of copies of the
prospectuses to supply to any other party requiring such prospectuses;
and
(c) if
agreed
to by the Investor on the signature page to this Agreement, the documents
required to be delivered by the Company pursuant to this Agreement, except
for
the prospectus or preliminary prospectus required to be delivered pursuant
to
Section 8.1(d) herein, shall be delivered to the Investor in electronic form
to
the e-mail address provided by the Investor on the signature page of the
Stock
Purchase Agreement.
9. Notices.
All
notices, requests, consents and other communications hereunder shall be in
writing, shall be mailed (A) if within the United States by first-class
registered or certified airmail, or nationally recognized overnight express
courier, postage prepaid, by facsimile or e-mail (if agreed to by the Investor),
or (B) if delivered from outside the United States, by international
express courier, facsimile or e-mail (if agreed to by the Investor), and
shall
be deemed given (i) if delivered by first-class registered or certified
mail, three business days after so mailed, (ii) if delivered by nationally
recognized overnight carrier, one business day after so mailed, (iii) if
delivered by International Federal Express, two business days after so
15
mailed,
(iv) if delivered by facsimile or e-mail, upon electronic confirmation of
receipt and shall be delivered as addressed as follows:
(a) if
to the
Company, to:
0000
00xx
Xxxxxx Xxxx
Xxxxxxxxx,
XX 00000
Attn:
Xxxxxxx X. Xxxxxxxx, Chief Financial Officer
(b) with
a
copy to:
Xxxxxx,
Xxxxx & Bockius LLP
0000
Xxxxxx Xxxxxx
Xxxxxxxxxxxx,
XX 00000
Attention:
Xxxxxx X. Xxxxxx, Esq.
(c) if
to the
Investor, at its mail or e-mail address on the signature page hereto, or
at
such
other
address or addresses as may have been furnished to the Company in
writing.
10. Changes.
This
Agreement may not be modified or amended except pursuant to an instrument
in
writing signed by the Company and the Investor; provided, however, the
provisions of Section 8.1 may not be amended without the prior written consent
of at least a majority in interest of the Conversion Shares.
11. Headings.
The
headings of the various sections of this Agreement have been inserted for
convenience of reference only and shall not be deemed to be part of this
Agreement and do not affect its interpretation.
12. Severability.
In case
any provision contained in this Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of
the
remaining provisions contained herein shall not in any way be affected or
impaired thereby.
13. Governing
Law.
This
Agreement shall be governed by, and construed in accordance with, the internal
laws of the State of Florida, without giving effect to the principles of
conflicts of law.
14. Counterparts.
This
Agreement may be executed in two or more counterparts, including facsimile
counterparts, each of which shall constitute an original, but all of which,
when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.
15. Rule
144.
The
Company covenants that it will use commercially reasonable efforts to timely
file the reports required to be filed by it under the Securities Act and
the
Exchange Act and the rules and regulations adopted by the SEC thereunder
(or, if
the Company is not required to file such reports, it will, upon the request
of
any Investor holding Preferred Shares purchased hereunder made after the
first
anniversary of the Closing Date, make publicly available such information
as
necessary to permit sales
16
pursuant
to Rule 144 under the Securities Act), and it will use commercially reasonable
efforts to take such further action as any such Investor may reasonably request,
all to the extent required from time to time to enable such Investor to sell
Preferred Shares and/or Conversion Shares purchased hereunder without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144 under the Securities Act, as such rule may be amended
from time to time, or (b) any similar rule or regulation hereafter adopted
by
the SEC.
16. Confidential
Information.
The
Investor represents to the Company that, at all times during the Company’s
offering of the Preferred Shares, the Investor has maintained in confidence
all
non-public information regarding the Company received by the Investor from
the
Company or its agents, including information about the Offering of the Preferred
Shares and covenants that it will continue to maintain in confidence such
information until such information (a) becomes generally publicly available
other than through a violation of this provision by the Investor or its agents
or (b) is required to be disclosed in legal proceedings (such as by
deposition, interrogatory, request for documents, subpoena, civil investigation
demand, filing with any governmental authority or similar process), provided,
however, that before making any use or disclosure in reliance on this
subparagraph (b) the Investor shall give the Company at least fifteen (15)
days
prior written notice (or such shorter period as required by law) specifying
the
circumstances giving rise thereto and will furnish only that portion of the
non-public information which is legally required and will exercise its
commercially reasonable efforts to obtain reliable assurance that confidential
treatment will be accorded any non-public information so furnished.
17
INVESTOR
QUESTIONNAIRE
To: nFinanSe
Inc.
0000
00xx
Xxxxxx Xxxx
Xxxxxxxxx,
XX 00000
This
Investor Questionnaire (“Questionnaire”)
must
be completed by each potential investor in connection with the offer and
sale up
of Series A Preferred Stock of the Company, $0.001 par value per share (the
“Preferred
Stock”),
to
certain investors in a private placement (the “Offering”). The
Securities are being offered and sold by nFinanSe Inc. (the “Company”)
without registration under the Securities Act of 1933, as amended (the
“Act”),
and
the securities laws of certain states, in reliance on the exemptions contained
in Section 4(2) of the Act and on Regulation D promulgated thereunder and
in
reliance on similar exemptions under applicable state laws. The Company must
determine that a potential investor meets certain suitability requirements
before offering or selling Preferred Stock to such investor. The purpose
of this
Questionnaire is to assure the Company that each investor will meet the
applicable suitability requirements. The information supplied by you will
be
used in determining whether you meet such criteria, and reliance upon the
private offering exemption from registration is based in part on the information
herein supplied.
This
Questionnaire does not constitute an offer to sell or a solicitation of an
offer
to buy any security. Your answers will be kept strictly confidential except
as
required by law, regulation or any market on which the Company’s securities are
traded, listed or quoted. However, by signing this Questionnaire you will
be
authorizing the Company to provide a completed copy of this Questionnaire
to
such parties as the Company deems appropriate in order to ensure that the
offer
and sale of the Securities will not result in a violation of the Act or the
securities laws of any state and that you otherwise satisfy the suitability
standards applicable to purchasers of the Preferred Stock. All potential
investors must answer all applicable questions and complete, date and sign
this
Questionnaire. Please print or type your responses and attach additional
sheets
of paper if necessary to complete your answers to any item.
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A.
BACKGROUND
INFORMATION
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Name:
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Business
Address:
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(Number
and Street)
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(City)
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(State)
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(Zip
Code)
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Telephone
Number:
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(
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Fax:
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(
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E-mail:
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Residence
Address:
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(Number
and Street)
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(City)
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Telephone
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If
an individual:
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Age:
_______
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Citizenship:
_______
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Where
registered to vote: ___________
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If
a corporation, partnership, limited liability company, trust
or other
entity:
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Type
of entity:
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State
of formation:
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Date
of formation:
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Social
Security or Taxpayer Identification No.
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Send
all correspondence to (check one):
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Residence Address
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Business Address
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Current
ownership of securities of the Corporation:
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__________
shares of common stock, par value $0.001 per share (the “Common
Stock”)
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options
to purchase __________ shares of Common Stock
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18
B. STATUS
AS ACCREDITED INVESTOR
The
undersigned is an “accredited investor” as such term is defined in Regulation D
under the Act, as at the time of the sale of the Securities the undersigned
falls within one or more of the following categories (Please
initial one or more, as applicable):1
As used in this Questionnaire, the term “net worth” means the excess of total
assets over total liabilities. In computing net worth for the purpose of
subsection (4), the principal residence of the investor must be valued at
cost,
including cost of improvements, or at recently appraised value by an
institutional lender making a secured loan, net of encumbrances. In determining
income, the investor should add to the investor’s adjusted gross income any
amounts attributable to tax exempt income received, losses claimed as a limited
partner in any limited partnership, deductions claimed for depiction,
contributions to an XXX or XXXXX retirement plan, alimony payments, and any
amount by which income from long-term capital gains has been reduced in arriving
at adjusted gross income.
____
(1) a
bank as
defined in Section 3(a)(2) of the Act, or a savings and loan association or
other institution as defined in Section 3(a)(5)(A) of the Act whether
acting in its individual or fiduciary capacity; a broker or dealer registered
pursuant to Section 15 of the Securities Exchange Act of 1934; an insurance
company as defined in Section 2(13) of the Act; an investment company
registered under the Investment Corporation Act of 1940 or a business
development company as defined in Section 2(a)(48) of that Act; a Small
Business Investment Corporation licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business Investment
Act of 1958; a plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its political
subdivisions for the benefit of its employees, if such plan has total assets
in
excess of $5,000,000; or an employee benefit plan within the meaning of the
Employee Retirement Income Security Act of 1974 if the investment decision
is
made by a plan fiduciary, as defined in Section 3(21) of such Act, which is
either a bank, savings and loan association, insurance company, or registered
investment adviser, or if the employee benefit plan has total assets in excess
of $5,000,000 or, if a self-directed plan, with the investment decisions
made
solely by persons that are accredited investors;
____
(2) a
private
business development company as defined in Section 202(a)(22) of the
Investment Adviser Act of 1940;
____
(3) an
organization described in Section 501(c)(3) of the Internal Revenue Code of
1986, as amended, corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the Securities
offered, with total assets in excess of $5,000,000;
____
(4) a
natural
person whose individual net worth, or joint net worth with that person’s spouse,
at the time of such person’s purchase of the Securities exceeds
$1,000,000;
____
(5) a
natural
person who had an individual income in excess of $200,000 in each of the
two
most recent years or joint income with that person’s spouse in excess of
$300,000 in each of those years and has a reasonable expectation of reaching
the
same income level in the current year;
____
(6) a
trust,
with total assets in excess of $5,000,000, not formed for the specific purpose
of acquiring the Securities offered, whose purchase is directed by a
sophisticated person as described in Rule 506(b)(2)(ii) of Regulation D;
and
____
(7) an
entity
in which all of the equity owners are accredited investors (as defined
above).
19
C. REPRESENTATIONS
The
undersigned hereby represents and warrants to the Company as
follows:
|
1.
|
Any
purchase of the Securities would be solely for the account of the
undersigned and not for the account of any other person or with
a view to
any resale, fractionalization, division, or distribution
thereof.
|
|
2.
|
The
information contained herein is complete and accurate and may be
relied
upon by the Company, and the undersigned will notify the Company
immediately of any material change in any of such information occurring
prior to the closing, if any, with respect to the purchase of Securities
by the undersigned or any
co-purchaser.
|
|
3.
|
There
are no suits, pending litigation, or claims against the undersigned
that
could materially affect the net worth of the undersigned as reported
in
this Questionnaire.
|
|
4.
|
The
undersigned acknowledges that there may occasionally be times when
the
Company determines that it must suspend the use of the prospectus
forming
a part of the Registration Statement (as such terms are defined
in the
Stock Purchase Agreement to which this Questionnaire is attached),
as set
forth in Section 8.2(c) of the Stock Purchase Agreement. The undersigned
is aware that, in such event, the Preferred Stock or Conversion
Shares (as
that term is defined in the Stock Purchase Agreement) will not
be subject
to ready liquidation, and that any securities purchased by the
undersigned
would have to be held during such suspension. The overall commitment
of
the undersigned to investments which are not readily marketable
is not
excessive in view of the undersigned’s net worth and financial
circumstances, and any purchase of the Securities will not cause
such
commitment to become excessive. The undersigned is able to bear
the
economic risk of an investment in the Preferred
Stock.
|
|
5.
|
The
undersigned has carefully considered the potential risks relating
to the
Company and a purchase of the Preferred Stock, and fully understands
that
the Preferred Stock is a speculative investment which involve a
high
degree of risk of loss of the undersigned’s entire investment. Among
others, the undersigned has carefully considered each of the risks
identified under the caption “Risk Factors” in the Exchange Act Documents
(as that term is defined in the Stock Purchase
Agreement).
|
IN
WITNESS WHEREOF, the undersigned has executed this Questionnaire this _____
day
of _______, 2006, and declares under oath that it is truthful and
correct.
Print
Name
By:
__________________________________________________________________
Signature
Title: __________________________________________________________________
(required
for any purchaser that is a corporation, partnership, trust or other
entity)
20
Exhibit
A
See
attached.
21
Exhibit
B
CERTIFICATE
OF SUBSEQUENT SALE
[Transfer
Agent Name]
[Transfer
Agent Address]
[Transfer
Agent Address]
|
RE:
|
Sale
of Shares of Common Stock of nFinanSe Inc. (the “Company”) pursuant to the
Company’s prospectus dated _____________, 200__ (the
“Prospectus”)
|
Dear
Sir/Madam:
The
undersigned hereby certifies, in connection with the sale of shares of Common
Stock of the Company included in the table of Selling Shareholders in the
Prospectus, that the undersigned has sold the shares pursuant to the Prospectus
and in a manner described under the caption “Plan of Distribution” in the
Prospectus and that such sale complies with all securities laws applicable
to
the undersigned, including, without limitation, the Prospectus delivery
requirements of the Securities Act of 1933, as amended.
Selling
Shareholder (the beneficial
owner):_______________________________________
Record
Holder (e.g., if held in name of
nominee):__________________________________
Restricted
Stock Certificate
No.(s):______________________________________________
Number
of
Shares Sold:_______________________________________________________
Date
of
Sale:________________________________________________________________
In
the
event that you receive a stock certificate(s) representing more shares of
Common
Stock than have been sold by the undersigned, then you should return to the
undersigned a newly issued certificate for such excess shares in the name
of the
Record Holder and BEARING
A RESTRICTIVE LEGEND.
Further, you should place a stop transfer on your records with regard to
such
certificate.
Very
truly yours,
Dated: __________________ By:__________________________
Print
Name:___________________
Title:_________________________
22
