SECURITIES PURCHASE AGREEMENT
Exhibit
99.1
0000
00xx
Xxxxxx Xxxx
Xxxxxxxxx,
XX 00000
Ladies
& Gentlemen:
The
undersigned, _________________________________(the “Investor”),
hereby confirms its agreement with you as follows:
1. This
Securities Purchase Agreement (the “Agreement”) is made as of
June 29, 2007 between nFinanSe Inc., a Nevada corporation (the
“Company”), and the Investor.
2. The
Company has authorized the sale and issuance of up to (i) 2,023,199 shares
(the
“Common Shares”) of Common Stock of the Company, $0.001 par
value per share (the “Common Stock”), (ii) 1,000,000 shares
(the “Preferred Shares”) of Series B 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”);
and (iii) warrants (the form of which is attached hereto as Exhibit B)
(the “Warrants”) to purchase up to 1,511,600 shares of Common
Stock at an exercise price of $5.00 per share (the “Warrant
Shares”), subject to adjustment by the Company, to certain accredited
investors in a private placement (the “Offering”), as
follows:
|
·
|
For
the first $999,999 invested, each Investor shall receive (i)
Common Shares at the purchase price of $3.00 per Common Share, and
(ii)
Warrants to purchase such number of Warrants Shares that is equal
to 50%
of the Common Shares purchased.
|
|
·
|
For
amounts invested between $1,000,000 and $1,999,998, each
Investor shall receive (i) Preferred Shares at the purchase price
of $3.00
per Preferred Share, and (ii) Warrants to purchase such number of
Warrant
Shares that is equal to 50% of the Preferred Shares
purchased.
|
|
·
|
For
amounts invested over $1,999,998, each Investor shall
receive (i) for the amount equal to 25% of the investment over $1,999,999,
Common Shares at a purchase price of $3.00 per Common Share; (ii)
for the
amount equal to 75% of the investment over $1,999,999, Preferred
Shares at
a purchase price of $3.00 per Preferred Share; and (iii) Warrants
to
purchase such number of Warrant Shares that is equal to 50% of the
Common
Shares and Preferred Shares
purchased.
|
3. 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.”)
4. Pursuant
to the Terms and Conditions for Purchase of the Securities attached hereto
as
Annex I and incorporated herein by reference as if fully set forth
herein (the “Terms and Conditions”), the Company and the
Investor agree that the Investor will purchase from the Company and the Company
will issue and sell to the Investor:
|
·
|
___________
Common Shares, for a purchase price of $3.00 per
share;
|
|
·
|
___________
Preferred Shares, for a purchase price of $3.00 per share;
and
|
|
·
|
Warrants
to purchase ____________ Warrant Shares, exercisable at $5.00 per
Warrant
Share.
|
Unless
otherwise requested by the Investor, certificates and warrant documents
representing the Common Shares, Preferred Shares and Warrants purchased by
the
Investor will be registered in the Investor’s name and address as set forth
below. The Common Shares, the Preferred Shares and the Warrants are
sometimes referred to collectively herein as the
“Securities.”
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
the Securities 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).
AGREED
AND ACCEPTED:
NFINANSE
INC. Investor:
By: ______________________________________
______________________________________
______________________________________
By: Print
Name: ________________________________
Title:
Title: _____________________________________
Address: __________________________________
Tax
ID
No.: _______________________________
Contact
name: ______________________________
Telephone: ________________________________
Fax:
______________________________________
E-mail:*
___________________________________
Name
in
which shares should be registered (if different):
_________________________________________
*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.
2
ANNEX
I
TERMS
AND CONDITIONS FOR PURCHASE OF THE SECURITIES
1. Authorization
and Sale of the Securities. Subject to these Terms and
Conditions, the Company has authorized the sale of up to 2,023,199 Common
Shares, 1,000,000 Preferred Shares and 1,511,600 Warrants. The
Company reserves the right to increase or decrease this number.
2. Agreement
to Sell and Purchase the Securities; 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 Common Shares, Preferred Shares and
Warrants set forth in Paragraph 3 of the Securities 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 Securities Purchase Agreement, including
these Terms and Conditions, with certain other investors (the “Other
Investors”) and expects to complete sales of the Securities to
them. (The Investor and the Other Investors are hereinafter sometimes
collectively referred to as the “Investors,” and the Securities
Purchase Agreement to which these Terms and Conditions are attached and the
Securities 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 the Securities commencing
upon the date on which the Company provides the Investors with the proposed
purchase price and concluding upon the date (the “Subscription
Date”) on which the Company has (i) executed Agreements with Investors
for the purchase of at least an aggregate of $9,069,597 of Common Shares,
Preferred Shares and Warrants, as the case may be, 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 the
Securities. The Company may not enter into any Agreements after the
Subscription Date.
3. Delivery
of the Securities at Closing. The completion of the purchase and
sale of the Securities (the “Closing”) shall occur on June 29,
2007 (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 Common Shares and/or Preferred Shares and warrant
documents representing the number of Warrants set forth in Paragraph 3 of the
Securities Purchase Agreement, each such certificate and document to be
registered in the name of the Investor or, if so indicated on the signature
page
of the Securities Purchase Agreement, in the name of a nominee designated by
the
Investor.
The
Company’s obligation to issue the Securities 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 Securities
being purchased hereunder as set forth in Paragraph 3 of the Securities 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.
The
Investor’s obligation to purchase the Securities 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 an
aggregate of $9,069,597 Common Shares, Preferred Shares and Warrants, 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.
3
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 March 31, 2007 (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 Common Shares and 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 Common Shares and/or Preferred
Shares issuable pursuant to this Agreement, (ii) the number of shares of Common
Stock issuable upon conversion of the Preferred Stock the (“Conversion
Shares”), and (iii) the number of Warrant Shares issuable upon the
exercise of the Warrants.
4.3 Non-Contravention. The
execution and delivery of the Agreements, the issuance and sale of the
Securities 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 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 Securities
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
4.4 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”), of which, pursuant to the Offering, 5,844,688 of which are
issued and outstanding, and (B) 25,000,000 shares of preferred stock, of which,
pursuant to the Offering, 10,327,934 are issued and outstanding, which number
includes 9,327,934 issued and outstanding shares of Series A Convertible
Preferred Stock, par value $0.001 per share (the “Series A Preferred
Stock”). 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 Securities pursuant to the Offering, and except for the
Company’s currently outstanding shares of Series A Preferred Stock and 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 Securities 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 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 any of its opinions
with respect to the financial statements to be incorporated by reference from
the Company’s Exchange Act Documents 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 Placement
Agent; Board of Directors. The Placement Agent served as
placement agent for the Company’s offering of Series A Preferred Stock and, for
its services as placement agent, received a $117,000 fee and a warrant to
purchase 320,000 shares of Common Stock, exercisable at $1.10 per share and
expiring on December 27, 2011. In connection with the Offering, the
Placement Agent will receive a $634,872 fee and a warrant to purchase 120,928
shares of Common Stock, exercisable at $3.30 per share and expiring on June
29,
2012. Xxxxxx X. Xxxxxxxxx, a current member of the Company’s Board of
Directors, is a co-founder and director of EGE Holdings, Ltd., a holding company
with ownership interests in investment banking, money management and venture
capital, including a 100% ownership interest in the Placement
Agent. Xx. Xxxxxxxxx received no compensation from EGE Holdings, Ltd.
or the Placement Agent related to the Company’s offering of Series A Preferred
Stock or the Offering.
5
4.7 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 Securities 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.
4.8 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 Securities 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.
4.9 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 the Securities 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 Securities, 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 Securities; (ii) the Investor is acquiring
the number of Common Shares, Preferred Shares and Warrants set forth in Section
3 of the Securities 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 the Securities or any arrangement or understanding with
any
other persons regarding the distribution of such Securities; (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 its Common Shares, Conversion Shares
and Warrant 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 Common Shares, Preferred Shares
and
Warrants set forth in Paragraph 3 of the Securities 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.
6
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 have 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 Securities as a result of any advertisement,
article, notice or other communication regarding the Securities 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 Securities and (ii) the shares of Common Stock
receivable upon conversion or exercise thereof, 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 Securities under an exemption under the Securities Act and
reserves the right to dispose of the Common Shares, Conversion Shares and
Warrant 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 Securities 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.
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.
7
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 Securities 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 the 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:
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 Securities 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.
8
8. Registration
of Common Shares, Conversion Shares and Warrant 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, as soon as reasonably practicable following the Closing Date, a
registration statement on such form as is then available to the Company (the
“Registration Statement”) to enable the resale of the Common
Shares, Conversion Shares and the Warrant Shares (referred to collectively
herein as, the “Registrable Securities”) 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
Securities purchased hereunder, the earlier of (i) the second anniversary of
the
Closing Date, (ii) the date on which the Investor may sell all Registrable
Securities 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
Registrable Securities acquired by such Investor through the sale of the
Securities 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
Registrable Securities 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 Registrable Securities
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;
(f) bear
all expenses in connection with the procedures in paragraph (a) through (e)
of
this Section 8.1 and the registration of the Registrable Securities 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.
9
10
8.2 Transfer
of Registrable SecuritiesAfter Registration; Suspension.
(a) The
Investor agrees that it will not effect any disposition of the Registrable
Securities or its right to purchase the Registrable Securities 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 Registrable Securities
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).
(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 Registrable Securities 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 Registrable
Securities 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 Registrable
Securities under the Registration Statement, provided that it arranges for
delivery of a current prospectus to the transferee of such Registrable
Securities.
(e) In
the event of a sale of Registrable Securities 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 C, and its
stock certificate, so that the Registrable Securities may be properly
transferred.
11
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
(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 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.
12
(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 Registrable Securities 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 subsection to contribute shall be in proportion to its
Investor sale of Registrable Securities 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
Registrable Securities shall cease and terminate as to any particular number
of
the Registrable Securities when such Registrable Securities 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 Registrable Securities 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 Registrable Securities 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
Securities Purchase Agreement.
13
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 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 Registrable Securities.
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.
14
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 the Securities purchased
hereunder made after the first anniversary of the Closing Date, make publicly
available such information as necessary to permit sales 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 the Securities
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 Securities, 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 Securities 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.
15
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 by nFinanSe Inc.
(the “Company”) of common stock, $0.001 par value per share
(“Common Stock”), Series B Preferred Stock, $0.001 par value
per share, and Warrants to purchase shares of Common Stock (collectively, the
“Securities”), to certain investors in a private placement (the
“Offering”).
The
Securities are being offered and sold by the Company (i) without registration
under the Securities Act of 1933, as amended (the “Act”) or the
securities laws of certain states, and (ii) in reliance on the exemptions
contained in (A) Section 4(2) of the Act, (B) Regulation D promulgated under
the
Act, and (C) on similar exemptions available under applicable state
laws. The Company must determine that a potential investor meets
certain suitability requirements before offering or selling the Securities
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 supplied herein.
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 applicable laws, regulations or any securities exchange
market or markets on which the Company’s securities are traded, listed or
quoted. However, by executing this Questionnaire you authorize 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 requirements applicable
to purchasers of the Securities. All potential investors must answer
all applicable questions and complete, date and sign this
Questionnaire. Please print or type your responses to each item below
and attach additional sheets of paper as necessary.
A. BACKGROUND
INFORMATION
Name: __________________________________________________________________________
Business
Address: ________________________________________________________________
(Number
and Street)
_______________________________________________________________________________
(City) (State) (Zip
Code)
Telephone
Number: (___) __________________________________________________________
Fax: (___) ______________________________________________________________________
E-mail: _________________________________________________________________________
Residence
Address: _______________________________________________________________
(Number
and Street)
_______________________________________________________________________________
(City) (State) (Zip
Code)
Telephone
Number: (___) ___________________________________________________________
If
an
individual: ____________________________________________________________________
Age: ______ Citizenship: ____________ Where
registered to vote: _____________
If
a
corporation, partnership, limited liability company, trust or other
entity: _______________________
Type
of
entity: ______________________________________________________________
State
of
formation:
_____________
Date
of formation: ________________
Social
Security or Taxpayer Identification
No.: ______________________________________________
Send
all
correspondence to (check one): ____ Residence
Address ____ Business
Address
Current
ownership of securities of the Company:
__________
shares of Series A
Convertible Preferred Stock
__________
shares of Common
Stock
options
to purchase __________ shares
of Common Stock
16
B. STATUS
AS ACCREDITED INVESTOR
The
undersigned is an “accredited investor” as such term is defined in Regulation D
promulgated under the Act, and 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
____ (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 such 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; a corporation; or a Massachusetts or similar business trust
or
a partnership not formed for the specific purpose of acquiring the Securities
offered and having 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 and whose purchase is directed
by a
sophisticated person as described in Rule 506(b)(2)(ii) of Regulation D;
or
____ (7) an
entity in which all of the equity owners are accredited investors (as defined
above).
17
C. REPRESENTATIONS
AND WARRANTIES
The
undersigned hereby represents and warrants to the Company as
follows:
1. Any
purchase of the Securities is made solely for the account of the undersigned
and
is 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; the undersigned shall immediately notify the Company of any
material changes to such information occurring prior to the closing of the
Securities Purchase Agreement to which this Questionnaire is attached (the
“Securities Purchase Agreement”), if any, or any other
information relating to the purchase of the 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 term is defined in the Securities Purchase
Agreement), as set forth in Section 8.2(c) of the Securities Purchase
Agreement. The undersigned is aware that, in such an event, the
Securities or Registrable Securities (as such term is defined in the Securities
Purchase Agreement) shall not be subject to ready liquidation and that the
Securities purchased by the undersigned would have to be held by the undersigned
during such suspension.
5. 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 shall not cause such
commitment to become excessive.
6. The
undersigned is able to bear the economic risk of an investment in the
Securities.
7. The
undersigned has carefully considered the potential risks relating to the Company
and a purchase of the Securities, including, among others, each of the risks
identified under the caption “Risk Factors” in the Exchange Act Documents (as
such term is defined in the Securities Purchase Agreement). The
undersigned fully understands that the Securities are a speculative investment
which involves a high degree of risk of loss of the undersigned’s entire
investment.
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 purposes of subsection
(4) herein, the principal residence of the investor must be valued (i) at
cost,
including the cost of improvements, or (ii) at a 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.
18
IN
WITNESS WHEREOF, the undersigned has executed this Investor Questionnaire this
_____ day of June, 2007, 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)
1-PH/2693990.6
19
Exhibit
A
See
attached.
1-PH/2693990.6
20
Exhibit
B
See
attached.
1-PH/2693990.6
21
Exhibit
C
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:_________________________
1-PH/2693990.6
22
