JUMA TECHNOLOGY CORP.
Exhibit
4.2
JUMA
TECHNOLOGY CORP.
SUBSCRIPTION
AGREEMENT made as of this ____ day of February, 2007 by and among JUMA
TECHNOLOGY CORP., a Delaware Company (the “Company”), and the undersigned (the
“Subscriber”).
WHEREAS,
the Company desires to sell promissory notes in the principal amount of up
to
$2,000,000 (the “Notes”) in a private placement to accredited investors (the
“Offering”). In addition to the Notes, investors will receive an amount of
shares of common stock, par value $0.001 per share of the Company equal to
one-half of a share for each dollar of principal amount of Notes purchased
(the
“Shares”). For purposes of illustration, if the undersigned purchases a $100,000
principal amount of promissory notes they would receive 50,000 share of common
stock in connection with their loan. The Notes shall be non-interest bearing
and
have a term of 18 months and shall be convertible at the holders’ option into
common stock of the Company at $1.00 per share, as set forth in the form of
Note
attached as Annex A hereto.
NOW,
THEREFORE, for and in consideration of the premises and the mutual covenants
hereinafter set forth, the parties hereto do hereby agree as
follows:
I.
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SUBSCRIPTION
FOR INTERESTS AND REPRESENTATIONS AND ACKNOWLEDGEMENTS BY
SUBSCRIBER
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1.1 Subject
to the terms and conditions hereinafter set forth, the Subscriber hereby
subscribes for and agrees to purchase from the Company $_______ principal amount
of Notes and the Company agrees to sell such Notes for said purchase price.
The
purchase price is payable by (i) check made payable to the Company, or
(ii) wire transfer in accordance with the wire transfer instructions set
forth on Exhibit A hereto, contemporaneously with the execution and delivery
of
this Subscription Agreement. The Notes and the Shares will be delivered by
the
Company within fourteen (14) days following the consummation of the private
placement as set forth in Article III hereof. The Subscriber understands that
there is no minimum number of Notes being offered in the private placement
and
the Company may close on and accept subscriptions as and when
received.
1.2 The
Subscriber recognizes that the purchase of the Notes involves a high degree
of
risk in that: (i) the Company has had only limited operations, to date, and
requires substantial funds in addition to the proceeds of this private placement
to fully effectuate its business plan; (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; (iii) the Subscriber
may not be able to liquidate the Subscriber’s investment;
(iv) transferability of the Notes is extremely limited and there is
currently no significant market for the Shares; and (v) in the event of a
disposition, an investor could sustain the loss of the investor’s entire
investment. For a discussion of the foregoing risks and additional risks
involved with an investment in the Notes, see Exhibit B, “Risk Factors” annexed
hereto. There can be no assurance that management's plans can ever be realized.
1.3 The
Subscriber represents that the Subscriber 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 Purchaser Questionnaire, and that the Subscriber
is able to bear the economic risk of an investment in the Notes.
1.4 The
Subscriber acknowledges that the Subscriber has prior investment experience,
including investment in non-listed and non-registered securities, or the
Subscriber has employed the services of an investment advisor, attorney or
accountant to evaluate the merits and risks of an investment in the Company
on
the Subscriber’s behalf, and that the Subscriber recognizes the highly
speculative nature of the Subscriber’s investment.
1.5 The
Subscriber hereby represents that the Subscriber has been furnished by the
Company with all information regarding the Company which the Subscriber had
requested or desired to know, that all documents which could be reasonably
provided have been made available for the Subscriber’s inspection and review,
and 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 private placement, and
any additional information which the Subscriber had requested. The Subscriber
hereby represents that except as provided in this Subscription Agreement no
representations or warranties have been made to the Subscriber by the Company
or
any agent, employee or affiliate of the Company and in entering into this
transaction, the Subscriber is not relying on any information, other than the
results of independent investigation by the Subscriber.
1.6 The
Subscriber hereby acknowledges that the private placement has not been reviewed
by the United States Securities and Exchange Commission (“SEC”) because of the
Company's representations that this is intended to be a non-public offering
pursuant to Sections 4(2) or 3(b) of the Act. The Subscriber represents that
the
Notes and Shares 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 Notes, Shares or
shares issuable upon conversion of the Notes (the “Conversion Shares”) unless
they are registered under the Act or unless an exemption from such registration
is available. The Notes, Shares and Conversion Share are sometimes collectively
referred to as the “Securities”.
1.7 The
Subscriber understands that the Securities 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 this
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 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 deferred
sale
to which such exemptions are not available.
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1.8 The
Subscriber understands that 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 and Conversion Shares under the Act, except as set forth
herein. The Subscriber consents that the Company may, if it desires, permit
the
transfer of the Securities 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”). 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
Purchaser Questionnaire or any sale or distribution by the undersigned
Subscriber in violation of any Securities Laws.
1.9 The
Subscriber consents to the placement of a legend on any certificate or other
document evidencing the Securities stating that they have not been registered
under the Act and setting forth or referring to the restrictions on
transferability and sale thereof.
1.10 The
Subscriber understands that the Company will review this Subscription Agreement
and the Confidential Purchaser Questionnaire and is hereby given authority
by
the undersigned to call the Subscriber’s bank or place of employment or
otherwise review the financial standing of the Subscriber; and it is further
agreed that the Company reserves the unrestricted right to reject or limit
any
subscription and to close the offer at any time.
1.11 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 it is a corporation or other entity.
1.12 The
Subscriber acknowledges that if the Subscriber is a Registered Representative
of
an NASD member firm, the Subscriber must give such firm the notice required
by
the NASD's Rules of Fair Practice, receipt of which must be acknowledged by
such
firm on the signature page hereof.
II. REPRESENTATIONS
BY THE COMPANY
2.1 The
Company represents and warrants to the Subscriber that prior to the consummation
of the private placement and at the closing date:
(a) The
Company is a Delaware company duly organized, existing and in good standing
under the laws of the State of Delaware and has the corporate power to conduct
the business which it conducts and proposes to conduct.
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(b) The
execution, delivery and performance of this Subscription Agreement by the
Company will have been duly approved by the Board of Directors of the Company
and all other actions required to authorize and effect the offer and sale of
the
Securities will have been duly taken and approved.
(c) The
Shares have been duly and validly authorized and when issued and paid for in
accordance with the terms hereof, will be fully paid and
nonassessable.
(d) The
execution and delivery of this Subscription Agreement, the issuance of the
Securities and the incurrence of the obligations herein set forth and the
consummation of the transactions herein contemplated, will not result in a
violation of, or constitute a default under, the certificate of incorporation
or
by-laws, in the performance or observance of any material obligations,
agreement, covenant or condition contained in any bond, debenture, note or
other
evidence of indebtedness to which the Company is a party or by which it or
any
of its properties may be bound or in violation of any material order, rule,
regulations, writ, injunction, or decree of any government, governmental
instrumentality or court, domestic or foreign.
III. TERMS
OF
SUBSCRIPTION
3.1 The
subscription period will begin on February 7, 2007and will terminate upon the
earlier to occur of (i) the sale of all of the Notes or (ii) 11:59 PM
Eastern time on February 28, 2007 unless extended by the Company for
an additional period or periods not exceeding 60 days in the aggregate (the
“Termination Date”). The purchase of Notes is not contingent upon the Company
making sales of any minimum number of Notes.
3.2 The
Subscriber hereby authorizes and directs the Company to deliver the Notes and
Shares to be issued to such Subscriber pursuant to this Subscription Agreement
either to the residential or business address indicated in the Confidential
Purchaser Questionnaire.
IV. USE
OF
PROCEEDS
4.1 The
Company expects to use the net proceeds of this private placement for the
potential acquisition of AGN Networks, Inc. and for working capital and general
corporate purposes.
V. PIGGYBACK
REGISTRATION RIGHTS
If
the
Company proposes to file a registration statement under the 1933 Act with
respect to an offering of Common Stock (i) for the Company's own account or
(ii)
for the account of any of its holders of Common Stock, then the Company shall
give written notice of such proposed filing to the Subscriber or its nominee
as
soon as practicable (but in no event less than 10 days before the anticipated
filing date), and such notice shall offer the Subscriber or its nominee the
opportunity to register such number of Shares and Conversion Shares as the
Subscriber or its nominee may request on the same terms and conditions as the
Company's or such holder's Common Stock (a "PIGGYBACK
REGISTRATION").
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VI. ANTI
DILUTION PROVISIONS
The
Shares purchased under this Subscription Agreement and the conversion price
of
the Notes will be subject to adjustment in the event of any stock splits, stock
dividends or similar reorganizations.
VII. MISCELLANEOUS
7.1 Any
notice or other communication given hereunder shall be deemed sufficient if
in
writing and sent by registered or certified mail, return receipt requested,
or
delivered by hand (or express delivery service) against written receipt
therefor, addressed to the Company, at 000 Xxxxxx Xxxxxx, Xxxxxxxxxxx, Xxx
Xxxx
00000, and to the Subscriber at 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 or hand delivery, except notices of change of address,
which shall be deemed to have been given when received.
7.2 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.
7.3 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 thereof and merges
and supersedes all prior discussions, agreements and understandings of any
and
every nature among them.
7.4 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 New York. The parties hereby agree that any dispute which may arise
between them arising out of or in connection with this Subscription Agreement
shall be adjudicated before a court located in New York City and they hereby
submit to the exclusive jurisdiction of the courts of the State of New York
located in New York, New York and of the federal courts in the Southern District
of New York with respect to any action or legal proceeding commenced by any
party, and irrevocably waive any objection they now or hereafter may have
respecting the venue of any such action or proceeding brought in such a court
or
respecting the fact that such court is an inconvenient forum, relating to or
arising out of this Subscription Agreement or any acts or omissions relating
to
the sale of the Interests hereunder, and consent to the service of process
in
any such action or legal proceeding by means of registered or certified mail,
return receipt requested, in care of the address set forth below or such other
address as the undersigned shall furnish in writing to the other
party.
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7.5 This
Subscription Agreement may be executed in counterparts. 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 Interests 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.
7.6 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.
7.7 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.
7.8 The
parties 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 the purposes and intent of this Subscription
Agreement.
7.9
This
Subscription Agreement shall be governed by and construed in accordance with
the
laws of the State of New York and the undersigned hereby consents to the
jurisdiction of the courts of the State of New York and/or the United States
District Court for the Southern District of New York.
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ALL
SUBSCRIBERS MUST COMPLETE THIS PAGE
IN
WITNESS WHEREOF,
the
undersigned has executed this Subscription Agreement on ____________,
2007.
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a Custodian For
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EXECUTION
BY SUBSCRIBER WHO IS A NATURAL PERSON
Exact
Name in Which Title is to be Held:
_______________________________________________________
(Signature)
_______________________________________________________
Name
(Please Print)
_______________________________________________________
Residence:
Number and Street
City:
______________________ Zip Code: ___________ State: ____________
Social
Security Number: ____________________________________________
Accepted
this_______ day of __________, 2007, on behalf of Juma Technology
Corp.
By: ___________________________
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EXECUTION
BY SUBSCRIBER WHICH IS A CORPORATION,
PARTNERSHIP,
TRUST, ETC.
Exact
Name in Which Title is to be Held:
_______________________________________________________
(Signature)
_______________________________________________________
Name
(Please Print)
_______________________________________________________
Title
of
Person Executing Agreement
_______________________________________________________
Number
and Street
City:
______________________ Zip Code: ___________ State: ___________
Tax
Identification Number: __________________________________________
Accepted
this ___ day of _____________, ________ on behalf of Juma Technology
Corp.
By:
_______________________________
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IN
WITNESS WHEREOF, the parties have executed this Subscription Agreement as of
the
day and year first written above.
Signature
of Subscriber(s)
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Name
of Subscriber(s)
[please
print]
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Address
of Subscriber(s)
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Social
Security or Taxpayer
Identification
Number of Subscriber(s)
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Number
of Interests Subscribed for
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$________________________________
Purchase
Price
Date: ____________,
2006
* 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
Article 3, Sections 28(a) and (b) of the Rules of Fair Practice.
_________________________________
Name
of
NASD Member Firm
_________________________________
By:
Authorized Officer
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Subscription Accepted: | ||
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By: | ||
President |
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Date: __________, 2007 |
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EXHIBIT
A
WIRE
TRANSFER INSTRUCTIONS
000
Xxxxxx Xxxxxx
Xxxxxxxxxxx,
XX 00000
Bank: | Washington Mutual Bank | |
Address: | 000 Xxxxx Xxxxxx, Xxxxxxxxx, XX 00000-0000 | |
ABA#: | 000000000 | |
Account #: | 4893164049 |
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EXHIBIT
B
CERTAIN
RISK FACTORS
THE
SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK.
BEFORE MAKING AN INVESTMENT IN JUMA THROUGH THE COMPANY, PROSPECTIVE ACQUIRER
OF
THE INTEREST OFFERED HEREIN SHOULD GIVE CAREFUL CONSIDERATION TO THE FOLLOWING
RISK FACTORS AFFECTING THE BUSINESS THE COMPANY AND ITS SECURITIES, TOGETHER
WITH OTHER INFORMATION IN THIS SUBSCRIPTION AGREEMENT.
X.
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Xxxx’x
Business Is Affected By The General Economic
Climate
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The
Company’s sales depend on the strength of the domestic and international
economies and in particular on demand for telecommunications equipment,
computers, software and other related technological products. The market for
telecommunication equipment has declined. In addition, there is increased
concern that demand for the types of products we offer will further soften
as a
result of domestic and global economic and political conditions.
B.
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Need
for Financing; Resulting
Dilution
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Juma’s
cash requirements will be significant. Juma is in need of additional financing.
In the event that such financing is not procured, Juma may be forced to curtail
its expansion plans. Although the Company contemplates raising up to $2,000,000
in this offering, the Company will require additional financing in the near
future. There can be no assurance that such financing would be available when
needed or that it would be available on acceptable terms. The raising of
additional financing would in all likelihood result in dilution to its
shareholders.
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C.
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Dependence
on Management
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Juma
is
dependent upon the efforts of its Management. The ability of Juma to
successfully conduct its business affairs will be subject to the capabilities
and business acumen of Management. Furthermore, the loss of any member of
Management could have a material adverse effect on Juma’s continued operations.
Juma is in the process of hiring additional management personnel. Any failure
by
Juma in hiring appropriate management personnel may have a materially adverse
effect on its business, financial condition, results of operations and future
prospects.
D.
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Dependence
on Qualified Personnel
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Competition
for qualified personnel in the Contact Center and Voice over Internet Protocol
industry among providers of converged communications solutions for voice, data
and video is intense. The future success of Juma’s business will depend on
Management’s ability to attract and retain high-caliber personnel. The loss of
the services of any of Juma’s key personnel, the inability to attract or retain
qualified personnel in the future or delays in hiring required personnel,
particularly engineers and salespeople, could have a materially adverse effect
on Juma’s business, financial condition, results of operations and future
prospects.
E.
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Ability
to Manage Growth
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Juma
must
continually implement and improve its products and/or services, operations,
operating procedures and quality controls on a timely basis, as well as expand,
train, motivate and manage its work force in order to accommodate anticipated
growth and compete effectively in its market segment. Successful implementation
of Juma’s strategy also requires that Juma establish and manage a competent,
dedicated work force and employ additional key employees in corporate
management, product design, client service and sales. There can be no assurance
that Juma’s personnel, systems, procedures and controls will be adequate to
support Juma’s existing and future operations. Any failure to implement and
improve such operations could have a material, adverse effect on Juma’s
business, operating results and financial condition.
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F.
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No
Assurance of Commercial Success; Uncertainty of Customer
Acceptance
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Juma
competes in a highly competitive market. Juma’s competitors have an established
way of doing business and consumers are accustomed to such established
procedures. Juma’s products and/or services may meet resistance from the current
market participants. As with any innovation, the acceptance of the product
and/or service may be slower than Juma anticipates. Certain events which inhibit
consumers’ willingness to communicate with others on, and especially to enter
into commercial transactions across, the Internet may materialize. Juma’s
prospects for success will therefore depend on its ability to successfully
market its services. Demand and market acceptance for Juma’s products and
services is subject to a high level of uncertainty. Any failure to attract
and
maintain customers could have a material, adverse effect on Juma’s business,
financial condition, results of operations or future prospects.
G.
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An
intense competition based on product capabilities, experience and
the
compatibility of our products with a variety of rapidly growing
competition in general
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The
markets, in which Juma competes in an intensely competitive, highly fragmented
and characterized by rapidly changing technology and evolving standards. Juma
has experienced and expects to continue to experience increases in competition
from current and potential competitors, many of which have significantly greater
financial, technical, marketing and other resources than does Juma.
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Juma’s
competitors may be able to respond more quickly to new or emerging technologies
and changes in customer requirements or devote greater resources to the
development, promotion and sales of their products than Juma will. Moreover,
certain current and potential competitors have or may rapidly establish greater
name recognition or more extensive customer bases that could be used to capture
market share from Juma. Increased competition could result in price reductions,
fewer customer orders, reduced gross margins and loss of market share, any
of
which could materially, adversely affect Juma’s business, financial condition
and results of operations. Current and potential competitors may make strategic
acquisitions or establish cooperative relationships among themselves or with
third parties, thereby increasing the ability of their product to address the
needs of Juma’s prospective customers. Accordingly, it is likely that new
competitors or alliances among current competitors may emerge and rapidly gain
significant market share. Such competition could materially adversely affect
Juma’s ability to obtain new contracts and maintenance and support renewals for
existing contracts on favorable terms. Further, competitive pressures could
require Juma to reduce the prices of its products and services, which could
materially adversely affect its business, financial condition and results of
operations. There can be no assurance that Juma will be able to compete
successfully against current and future competitors, and any failure on its
part
to do so would have a material adverse effect upon its business, financial
condition and results of operations.
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Our
market is subject to rapid technological change and to compete successfully,
we
must continually introduce new and enhanced products and services that achieve
broad market acceptance.
The
market for our products and services is characterized by rapid technological
change, evolving industry standards and vigorous customer demand for new
products, applications and services. To compete successfully, we must
continually enhance our existing telecommunications products, related software
and customer services, and develop new technologies and applications in a timely
and cost-effective manner. Any potential deferral or cancellation in the
introduction of new services or enhancements, the inability to develop and
refine such new services or enhancements or the failure of such services or
enhancements to achieve market acceptance could have a material adverse effect
on Juma’s business results of operations, financial performance and future
prospects. In addition, current competitors or new market entrants may offer
products, applications or services that are better adapted to changing
technology or customer demands and that could render our products and services
unmarketable or obsolete. This could lead to write-downs of inventory that
could
be material to our results of operations. In addition, if the markets for
computer-telephony applications, Internet Protocol network products, VOIP
products and applications, the security industry or related products fail to
develop or continue to develop more slowly than we anticipate, or if we are
unable for any reason to capitalize on any of these emerging market
opportunities our business, financial condition and operating results could
be
significantly harmed.
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Risk
Factors Relating to the Securities and the Company
a.
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Dependence
on Strategic Relationships
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Juma
believes that its success in penetrating markets for its products will depend
in
part on Juma’s ability to develop and maintain strategic relationships. The
Company further believes that such relationships will be important in order
to
validate its services, facilitate broad market acceptance of its products and
enhance its sales, marketing and distribution capabilities. Juma is currently
negotiating arrangements with certain companies, it has also entered into formal
strategic relationships with networking equipment manufacturers aligned with
advanced convergence features and Avaya interoperability, (Jupiter Networks
and
Extreme Networks). Any inability on Juma’s part to develop, attract or retain
strategic relationships, or the termination of one or more successful
relationships, could have a material, adverse effect on its business, financial
condition and results of operations.
b.
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Online
Security
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As
with
any commercial Internet application, Juma’s online activities could be the
target of online hacking and system tampering or wiretapping. One such example
would be a computer hacker entering and causing damage in some form to Juma’s
products or the manner in which it provides services. Juma will take all
possible steps to maintain the integrity of its system. However, there can
be no
assurance that such abuses can be prevented or even discovered. Any such abuses
may have a material, adverse effect on Juma’s business, financial condition and
results of operations.
17
c.
|
Proprietary
Rights
|
Juma
has
no patent-pending application on any of its intellectual property, and relies
on
a combination of trademarks, rights to certain domain names, trade secrets,
confidentiality provisions including, but not limited to, stipulations regarding
know-how, and other contractual provisions to protect its proprietary rights.
However, these measures afford only limited protection. Juma’s failure to
adequately protect its proprietary technology may entail material, adverse
consequences. Further, Juma’s competitors may independently develop technologies
similar to or superior to Juma’s own. Despite the Company’s efforts to protect
its proprietary technology, unauthorized parties may attempt to copy aspects
of
Juma’s products or to obtain and use trade secrets or other information that it
regards as proprietary. Juma’s future success will depend in part on its ability
to protect its proprietary rights and the technologies used in its principal
products. If Juma does not enforce and protect its property or if others bring
infringement claims against Juma, its business, financial condition and results
of operations may suffer material, adverse effects. There can be no assurance
that a patent will be granted or that, if granted, it will provide sufficient
protection.
We
are subject to a variety of other general risks and uncertainties inherent
in
doing business.
In
addition to the specific factors discussed above, we are subject to certain
risks that are inherent in doing business, such as general industry and market
conditions and growth rates, general economic and political conditions, costs
of
obtaining insurance, unexpected death or changes in key employees, changes
in
employment laws and regulations, changes in tax laws and regulations, and other
events that can impact revenues and the cost of doing business.
18
Risk
Factors Relating to the Securities and the Offering
d.
|
Control
by Management
|
As
of the
date of this Subscription Agreement, Management beneficially owns a majority
of
the outstanding capital stock in the Company. Accordingly, Management may be
in
a position to cause an increase in the authorized capital or cause the dilution,
or sale of assets of Juma, cause directors to be elected or removed and
generally control the affairs of Juma.
Lack
of Liquidity.
Currently
an extremely limited market exists for the Company’s securities and there can be
no assurance that a significant market will ever develop. Although, the Company
desires to establish a trading market, there can be no assurance as to the
timing of such event or whether the market, if established, will be sufficiently
liquid to enable the holder to liquidate his investment in the Company. The
Securities will be restricted securities and you may, therefore, be unable
to
sell such Securities except in accordance with an exemption from the
registration requirements under the Securities Act and applicable state
securities laws.
e.
|
Volatility
of the Market
|
The
securities markets have from time to time fluctuated significantly despite
the
absence of readily apparent reasons therefor. The market prices of the common
stock of many high technology and telecommunication companies have in the past
been, and can in the future be expected to be, particularly volatile. The market
price of the Shares of Common Stock is likely to be highly volatile, assuming
that a public market develops. The Shares of Common Stock may be subject to
considerable fluctuations as a result of various factors, including but not
limited to:
·
|
Technological
innovations or commercialization of new products by our
competitors;
|
19
·
|
The
release of research reports by securities
analysts;
|
·
|
Disputes
concerning patents or proprietary
rights;
|
·
|
Financial
results of other firms, particularly those in our industry, and
|
·
|
Economic
and other external factors.
|
20
CONFIDENTIAL
INFORMATION
THE
INFORMATION CONTAINED IN THIS SUBSCRIPTION AGREEMENT IS CONFIDENTIAL AND
PROPRIETARY TO THE COMPANY AND BEING SUBMITTED TO THE OFFEREE SOLELY FOR THE
OFFEREE’S CONFIDENTIAL USE WITH THE EXPRESS UNDERSTANDING THAT, WITHOUT THE
PRIOR WRITTEN PERMISSION OF THE COMPANY, SUCH PERSON WILL NOT RELEASE THIS
DOCUMENT OR DISCUSS THE INFORMATION CONTAINED HEREIN OR MAKE REPRODUCTIONS
OF OR
USE THIS SUBSCRIPTION AGREEMENT FOR ANY PURPOSE OTHER THAN EVALUATING A
POTENTIAL INVESTMENT IN THE MEMBERSHIP INTERESTS OFFERED
HEREBY.
THIS
SUBSCRIPTION AGREEMENT CONSTITUTES AN OFFER ONLY TO THE OFFEREE TO WHOM THIS
SUBSCRIPTION AGREEMENT IS INITIALLY DISTRIBUTED AND DOES NOT CONSTITUTE AN
OFFER
TO SELL OR A SOLICITATION OF AN OFFER TO BUY BY ANYONE IN ANY COUNTRY OR STATE
IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR TO ANY PERSON TO
WHOM
IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION. THE COMPANY RESERVES
THE
RIGHT TO ACCEPT OR REJECT ANY SUBSCRIPTION FOR MEMBERSHIP INTERESTS, IN WHOLE
OR
IN PART, FOR ANY REASON OR FOR NO REASON.
IN
DECIDING WHETHER TO PURCHASE THE NOTES, THE OFFEREE MUST CONDUCT AND RELY ON
HIS
OWN EVALUATION OF THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE
MERITS AND RISKS INVOLVED IN MAKING AN INVESTMENT DECISION WITH RESPECT TO
THE
NOTES. THE PROSPECTIVE INVESTOR SHOULD NOT CONSTRUE THE CON`TENTS OF THIS
SUBSCRIPTION AGREEMENT OR ANY PRIOR OR SUBSEQUENT COMMUNICATIONS FROM THE
COMPANY, OR ANY PROFESSIONAL ASSOCIATED WITH THE OFFERING, AS LEGAL OR TAX
ADVICE. THE OFFEREE AUTHORIZED TO RECEIVE THIS SUBSCRIPTION AGREEMENT SHOULD
CONSULT HIS OWN TAX COUNSEL, ACCOUNTANT OR BUSINESS ADVISOR, RESPECTIVELY,
AS TO
LEGAL, TAX AND RELATED MATTERS CONCERNING HIS PURCHASE OF THE
NOTES.
THE
INFORMATION PRESENTED HEREIN WAS PREPARED BY THE COMPANY AND IS BEING FURNISHED
SOLELY FOR USE BY THE OFFEREE IN CONNECTION WITH THE OFFERING. THE INFORMATION
CONTAINED IN THIS SUBSCRIPTION AGREEMENT HAS BEEN SUPPLIED BY THE COMPANY AND
HAS BEEN INCLUDED HEREIN IN RELIANCE ON THE COMPANY. THIS SUBSCRIPTION AGREEMENT
CONTAINS SUMMARIES OF CERTAIN DOCUMENTS, BELIEVED BY THE COMPANY TO BE ACCURATE,
BUT REFERENCE IS HEREBY MADE TO SUCH DOCUMENTS FOR COMPLETE INFORMATION
CONCERNING THE RIGHTS AND OBLIGATIONS OF THE PARTIES THERETO. COPIES OF SUCH
DOCUMENTS ARE AVAILABLE AT THE OFFICES OF THE COMPANY. ALL OF SUCH SUMMARIES
ARE
QUALIFIED IN THEIR ENTIRETY BY THIS REFERENCE.
21
EXCEPT
AS OTHERWISE INDICATED, THIS SUBSCRIPTION AGREEMENT SPEAKS AS OF THE DATE
HEREOF. NEITHER THE DELIVERY OF THIS SUBSCRIPTION AGREEMENT NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE
HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY AFTER THE DATE
HEREOF.
NO
GENERAL SOLICITATION WILL BE CONDUCTED AND NO OFFERING LITERATURE OR ADVERTISING
IN ANY FORM WILL OR MAY BE EMPLOYED IN THE OFFERING OF THESE NOTES, EXCEPT
FOR
THIS SUBSCRIPTION AGREEMENT (INCLUDING AMENDMENTS OR SUPPLEMENTS HERETO) AND
THE
DOCUMENTS SUMMARIZED HEREIN OR ATTACHED AS EXHIBITS HERETO. NO PERSON IS
AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED
IN THIS SUBSCRIPTION AGREEMENT OR THE DOCUMENTS SUMMARIZED HEREIN AND, IF GIVEN
OR MADE, SUCH OTHER INFORMATION OR REPRESENTATION MUST NOT BE RELIED
UPON.
BY
ACCEPTING DELIVERY OF THIS SUBSCRIPTION AGREEMENT, THE OFFEREE AGREES
(I) TO KEEP CONFIDENTIAL THE CONTENTS HEREOF, AND NOT TO DISCLOSE THE SAME
TO ANY THIRD PARTY OR OTHERWISE USE THE SAME FOR ANY PURPOSE OTHER THAN
EVALUATION BY SUCH OFFEREE OF A POTENTIAL PRIVATE INVESTMENT IN THE COMPANY,
AND
(II) TO RETURN THE SAME TO THE COMPANY IF THE OFFEREE DOES NOT SUBSCRIBE TO
PURCHASE ANY NOTES OR THE OFFEREE'S SUBSCRIPTION IS NOT
ACCEPTED.
22
THE
COMPANY WILL MAKE AVAILABLE TO THE OFFEREE, PRIOR TO THE CLOSING, THE
OPPORTUNITY TO ASK QUESTIONS OF AND TO RECEIVE ANSWERS FROM REPRESENTATIVES
OF
THE COMPANY CONCERNING THE COMPANY OR THE TERMS AND CONDITIONS OF THE OFFERING
AND TO OBTAIN ANY ADDITIONAL RELEVANT INFORMATION TO THE EXTENT THE COMPANY
POSSESSES SUCH INFORMATION OR CAN OBTAIN IT WITHOUT UNREASONABLE EFFORT OR
EXPENSE. THE OFFEREE AGREES TO ADVISE THE COMPANY IN WRITING IF HE IS RELYING
UPON ANY SUCH INFORMATION.
THE
OFFEREE SHOULD BE AWARE THAT HE MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS
OF
THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
23