AskMeNow, Inc. Suite 250 Irvine, California 92614 Ladies and Gentlemen:
__________________,
2008
AskMeNow,
Inc.
00
Xxxxxxxxx Xxxx
Xxxxx
000
Xxxxxx,
Xxxxxxxxxx 00000
Ladies
and Gentlemen:
This
Subscription Agreement (the “Agreement”)
sets
forth the agreements and understandings between the undersigned (“Subscriber”)
and
AskMeNow, Inc., a corporation organized under the laws of Delaware (the
“Company”),
relating to Subscriber’s subscription for, and purchase of, the number of shares
of the Company’s Series D Convertible Preferred Stock, par value $.01 per share
(the “Series
D Stock”),
set
forth on the signature page hereto (the “Shares”),
at a
price of $1.00 per Share.
1. Conditions
to Subscription Acceptance and Closing.
Subscriber understands and agrees that this subscription and the closing of
the
transactions contemplated hereby (the “Closing”)
is
made subject to the following terms and conditions:
(a) The
Company has the right to accept or reject this subscription in whole or in
part.
Unless this subscription is rejected by the Company by January 31, 2008, this
subscription shall be deemed accepted in whole.
(b) On
or
prior to the date of the Closing, Subscriber shall have furnished the Company
with such information, documents, certificates and opinions as the Company
may
reasonably require to evidence the accuracy, completeness or satisfaction of
the
representations, warranties, covenants, agreements and conditions herein
contained or as the Company otherwise may reasonably require.
(c) In
consideration for Subscriber’s purchase of the Shares, at the Closing the
Company shall issue to Subscriber a warrant (the “Warrant”)
to
purchase ________ shares
of
the Company’s Common Stock (such shares subject to the Warrant, the
“Warrant
Shares”),
which
represents a warrant to purchase two (2) shares of Common Stock for every One
Dollar ($1.00) invested by Subscriber. The Warrant will be exercisable for
a
period of five (5) years at an exercise price equal to $0.10 per share, and
subject to redemption by the Company as set forth in the Warrant.
2. Subscriber
Representations and Warranties.
In
connection with Subscriber’s subscription for, and purchase of, the Shares and
the issuance of the Warrant, Subscriber represents and warrants to the Company
that:
(a) If
Subscriber is a natural person, Subscriber (i) is a bona fide resident of the
state or jurisdiction set forth on the signature page of this Agreement as
Subscriber’s home address, and has no present intention of becoming a resident
of any other state or jurisdiction; (ii) is at least 21 years of age; and (iii)
is legally competent to execute this Agreement, the Confidential Investor
Questionnaire included herewith, and any other documents and instruments
required in connection herewith or therewith, if any (the “Transaction
Documents”).
If
Subscriber is an entity, the person signing this Agreement and the Transaction
Documents on behalf of the entity is duly authorized to execute and deliver
this
Agreement and the Transaction Documents on behalf of Subscriber. This Agreement
and the Transaction Documents constitute the legal, valid and binding
obligations of Subscriber, enforceable in accordance with their terms, except
as
such enforceability may be limited by applicable bankruptcy, insolvency or
similar laws relating to or affecting generally the enforcement of creditors’
rights and remedies or by other equitable principles.
(c) Under
existing law, no approval, authorization, license, permit or other action by
or
filing with any Federal, state, municipal or other governmental commission,
board or agency is required on the part of Subscriber in connection with the
execution and delivery by Subscriber of this Agreement
and the Transaction
Documents, or the consummation of the transactions contemplated hereby and
thereby.
(d) There
are
no actions, suits or proceedings existing, pending or, to the knowledge of
Subscriber, threatened against or affecting Subscriber before any court,
arbitrator or governmental or administrative body or agency that would affect
the validity or enforceability of this Agreement
or
the
Transaction
Documents,
or that
would have a material adverse affect on the ability of Subscriber to perform
Subscriber’s obligations hereunder and thereunder.
(e) Subscriber
has such knowledge and experience in financial and business matters so as to
be
capable of evaluating and understanding, and has evaluated and understood,
the
merits and risks of an investment in the Company and the purchase of the Shares
and acquisition of the Warrant, and Subscriber has been given the opportunity
(i) to obtain information and to examine all documents relating to the Company
and the Company’s business, (ii) to ask questions of, and to receive answers
from, the Company concerning the Company, the Company’s business and the terms
and conditions of this investment, and (iii) to obtain any additional
information, to the extent the Company possesses such information or could
acquire such information without unreasonable effort or expense, necessary
to
verify the accuracy of any information previously furnished. All such questions
have been answered to Subscriber’s full satisfaction, and all information and
documents, records and books pertaining to this investment which Subscriber
has
requested have been made available to Subscriber. Subscriber expressly agrees
and acknowledges that the Company’s periodic and current filings with the
Securities and Exchange Commission (the “SEC”), which filings contain financial
statements and other information of interest to investors, are available via
the
SEC’s website at xxx.xxx.xxx.
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(f) Subscriber
is able to bear the substantial economic risks of Subscriber’s investment in the
Company and the purchase of the Shares and acquisition of the Warrant in that,
among other factors, Subscriber can afford to hold the Shares, the Warrant
and
any Warrant Shares issued upon exercise of the Warrant for an indefinite period
and can afford a complete loss of Subscriber’s investment in the
Company.
(g) No
material adverse change in Subscriber’s financial condition has taken place
during the past twelve (12) months, and Subscriber will have sufficient
liquidity with respect to Subscriber’s net worth for an adequate period of time
to provide for Subscriber’s needs and contingencies.
(h) Subscriber
is relying solely on Subscriber’s own decision and/or the advice of Subscriber’s
own adviser(s) with respect to an investment in the Company and the purchase
of
the Shares and acquisition of the Warrant, and has neither received nor relied
on any communication from the Company or its officers or agents regarding any
legal, investment or tax advice relating to an investment in the
Company.
(i) Subscriber
has had an opportunity to read and understand the provisions of this Agreement
and the Transaction Documents, to consult with Subscriber’s adviser(s) or
counsel regarding the operation and consequences of those provisions, and has
considered the effect of those provisions on Subscriber.
(j) Subscriber
recognizes that an investment in the Company involves substantial risks in
that,
among other factors: (i) the Company has only a limited operating history and
has not had profitable operations from its inception to date; (ii) the Company’s
current business is dependent on a single product, the AskMeNow™ service, which
has generated only limited revenue to date; (iii) qualified financial statements
for the Company question its ability to continue as a going concern; (iv) the
Company is engaged in an industry which is highly competitive and subject to
substantial risks, and many of the Company’s competitors have significantly
greater financial and technical resources; (v) as of the end of the Company’s
2007 fiscal year, the Company had a very limited amount of working capital
available to it and will require a significant amount of capital to continue
operations; and (vi) neither the Shares nor the Warrant or any Warrant Shares
will be registered under applicable federal and state securities laws (except
as
may be set forth in the Transaction Documents) and, accordingly, it may not
be
possible to liquidate an investment in the Company in case of immediate need
of
funds or any other emergency, if at all. Subscriber has taken full cognizance
of, and understands, such risks and has obtained sufficient information to
evaluate the merits and risks of an investment in the Company and the purchase
of the Shares and acquisition of the Warrant.
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(k) Subscriber
confirms that none of the Company’s officers nor any of the Company’s agents
have made any representations or warranties concerning an investment in the
Company, including, without limitation, any representations or warranties
concerning anticipated financial results, or the likelihood of success of the
operations, of the Company.
(l) Subscriber
is acquiring the Shares and the Warrant (including any Warrant Shares issuable
upon the exercise thereof) for Subscriber’s own account, for investment and not
with a view to, or in connection with, any public offering or distribution
of
the same and without any present intention to sell the same at any particular
event or circumstance. Subscriber has no agreement or other arrangement with
any
person to sell, transfer or pledge any part of the Shares, the Warrant or any
Warrant Shares which would guarantee Subscriber any profit or protect against
any loss with respect to the Shares or Warrant.
(m) Subscriber
understands that no U.S. Federal or state or international agency has passed
on
or made any recommendation or endorsement of an investment in the
Shares.
(n) Subscriber
understands that neither the Shares nor the Warrant (or any Warrant Shares
issuable upon exercise thereof) have been registered under the Securities Act
of
1933, as amended (the “Act”),
or
applicable U.S. state securities laws or any securities laws of any other
jurisdiction, and are being offered and sold under an exemption from
registration provided by such laws and the rules and regulations thereunder.
Further, Subscriber understands that the Company is under no obligation to
register the Shares or the Warrant (or any Warrant Shares issuable upon exercise
thereof) or to comply with any exemption under any applicable securities laws
with respect thereto or any other ownership interest in the Company except
as
may be set forth in the Transaction Documents. Subscriber may therefore be
required to bear the economic risks of an investment in the Company for an
indefinite period of time because the Shares and the Warrant (and any Warrant
Shares issuable upon exercise thereof) cannot be resold unless registered under
applicable securities laws or unless an exemption from such registration is
available. Subscriber also understands that (i) the exemption provided by Rule
144 under the Act may not be available because of the conditions and limitations
of such rule, and that in the absence of the availability of such rule, any
disposition by Subscriber of any securities of the Company may require
compliance with some other exemption under the Act; and, (ii) the Company is
under no obligation and does not plan to take any action in furtherance of
making Rule 144 or any other exemption so available.
(o) If
Subscriber is required in the future to file a Form 144 with the SEC in
connection with sales of Shares or the Warrant (or any Warrant Shares issuable
upon exercise thereof) or any other ownership interest in the Company pursuant
to Rule 144 under the Act, Subscriber will deliver a copy of such form to the
Company at the same time and each time Subscriber is required to file a copy
with the SEC.
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(p) Subscriber
is either (i) an “accredited investor” as such term is defined in Rule 501(a)
promulgated under the Act or (ii) not a “U.S. person” as defined in Rule 902 of
Regulation S promulgated under the Act, and will execute and deliver the
Confidential Investor Questionnaire attached hereto as Exhibit
A
simultaneously with the execution and delivery of this Agreement.
(q) Subscriber
agrees that the foregoing representations and warranties will survive the sale
of the Shares and issuance of the Warrant to Subscriber, as well as any
investigation made by any party relying on same.
(r) Except
as
Subscriber shall have clearly and expressly disclosed to the Company, Subscriber
has not authorized any underwriter, broker, dealer, agent or finder to act
on
Subscriber’s behalf (nor does Subscriber have any knowledge of any broker,
dealer, agent or finder purporting to act on Subscriber’s behalf) with respect
to Subscriber’s purchase of the Shares or acquisition of the Warrant and
Subscriber has not paid directly or indirectly any commission or similar
remuneration with respect to such acquisition. Subscriber hereby agrees to
indemnify and hold harmless the Company and its directors, officers and agents
from and against any cost, expense, claim, liability or damage arising out
of or
resulting from a breach of such representation and warranty.
3. General
Provisions.
(a) This
Agreement will be governed by and construed in accordance with the substantive
laws of the State of Delaware without regard to rules thereof relating to
conflicts of laws.
(b) This
Agreement and the Transaction Documents together constitute the entire agreement
between the parties with respect to the subject matter hereof and thereof and
supersede any prior subscription agreement for Shares executed by Subscriber.
This Agreement may be amended only by a writing executed by the
parties.
(c) The
Shares and the Warrant (and any Warrant Shares issuable upon exercise thereof)
will be assigned or transferred only in accordance with applicable law and
the
terms of this Agreement and the Transaction Documents.
(d) This
Agreement will survive Subscriber’s death or dissolution and will be binding
upon Subscriber’s successors, heirs, assignees, representatives and
distributees.
(Signatures
appear on next page.)
* * * * * *
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IN
WITNESS WHEREOF,
Subscriber has hereby executed this Agreement as of the date set forth
above.
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SUBSCRIBER:
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If
an Individual:
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If
an Entity:
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Name
of Entity: ____________________________________________
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Name:
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Name:
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(Please
print)
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Title:
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Mailing
Address:
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E-Mail
Address: __________________________________
Social
Security Number/U.S. Employer Identification Number:
__________________________________
Number
of
Shares for which Subscription is tendered:
__________________________________
Purchase
Price: __________________________________
Aggregate
Consideration: __________________________________
Warrants
Issued: __________________________________
ACCEPTED:
AskMeNow,
Inc.,
a
Delaware corporation
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By:
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Name:
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Title:
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Date
of
Acceptance: __________________________________
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EXHIBIT
A
Confidential
Investor Questionnaire
The
undersigned represents and warrants that he, she or it comes within one of
the
categories marked below, and that for any category marked, he, she or it has
truthfully set forth the factual basis or reason the undersigned comes within
that category. ALL INFORMATION IN RESPONSE TO THIS QUESTIONNAIRE WILL BE KEPT
STRICTLY CONFIDENTIAL. The undersigned agrees to furnish such additional
information as is reasonably necessary in order to verify the answers set forth
below.
Please
xxxx next to each applicable paragraph:
_____ a. The
undersigned is an individual (not a partnership, corporation, etc.) whose
individual net worth, or joint net worth with his or her spouse, presently
exceeds $1,000,000.
Explanation.
In
calculating net worth, you may include equity in personal property and real
estate, including your principal residence, cash, short-term investments, stock
and securities. Equity in personal property and real estate should be based
on
the appraised fair market value of such property, less
debt
secured by such property.
_____ b. The
undersigned is an individual (not a partnership, corporation, etc.) who had
an
income in excess of $200,000 in each of the two most recent years, or joint
income with his or her spouse in excess of $300,000 in each of those years
(in
each case including foreign income, tax exempt income and the full amount of
capital gains and losses, but excluding any income of other family members
and
any unrealized capital appreciation), and has a reasonable expectation of
reaching the same income level in the current year.
_____ c. The
undersigned is a director or executive officer of AskMeNow, Inc. or a subsidiary
thereof.
_____ d. The
undersigned is (i) a bank or a savings and loan association, (ii) a registered
broker dealer, (iii) an insurance company, (iv) a registered investment company
or business development company, (v) a licensed small business investment
company, (vi) a plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its political
subdivisions (or any agency or instrumentality thereof), for the benefit of
its
employees, if such plan has total assets in excess of $5,000,000, or (vii)
an
employee benefit plan within the meaning of Title I of ERISA, and (1) the
investment decision is made by a plan fiduciary which is either a bank, savings
and loan association, insurance company or registered investment adviser or
(2)
the plan has total assets in excess of $5,000,000 or is a self-directed plan
with investment decisions made solely by persons that are accredited
investors.
Describe
entity.
________________________________________________________
________________________________________________________
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_____ e. The
undersigned is a private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940, as amended.
Describe
entity.
_________________________________________________________
_________________________________________________________
_____ f. The
undersigned is a corporation, partnership, business trust or non-profit
organization within the meaning of Section 501(c)(3) of the Internal Revenue
Code, as amended, in each case not formed for the specific purpose of
potentially making an investment in connection herewith and with total assets
in
excess of $5,000,000.
Describe
entity.
__________________________________________________________
__________________________________________________________
_____ g. The
undersigned is a trust (not formed for the specific purpose of potentially
making an investment in connection herewith) with total assets in excess of
$5,000,000, where the purchase is directed by a person with the knowledge and
experience in financial and business matters to capably evaluate the merits
and
risks of the prospective investment, as set forth in Rule 506(b)(2)(ii)
promulgated under the Securities Act of 1933, as amended.
_____ h. The
undersigned is an entity all the equity owners of which are “accredited
investors” within one or more of the above categories.
Describe
entity.
__________________________________________________________
__________________________________________________________
_____ i. The
undersigned is not a “U.S. person” as defined in Rule 902 of Regulation S
promulgated under the Securities Act of 1933, as amended.
Explanation.
The
Securities Act defines a U.S. person as (i) any natural person resident in
the
United States; (ii) any partnership or corporation organized or incorporated
under the laws of the United States; (iii) any estate of which any executor
or
administrator is a U.S. person; (iv) any trust of which any trustee is a U.S.
person; (v) any agency or branch of a foreign entity located in the United
States; (vi) any non-discretionary account or similar account (other than an
estate or trust) held by a dealer or other fiduciary for the benefit or account
of a U.S. person; (vii) any discretionary account or similar account (other
than
an estate or trust) held by a dealer or other fiduciary organized, incorporated
or (if an individual) resident in the United States; and (viii) any partnership
or corporation if (A) organized or incorporated under the laws of any foreign
jurisdiction and (B) formed by a U.S. person principally for the purpose of
investing in securities not registered under the Securities Act, unless it
is
organized or incorporated, and owned, by accredited investors who are not
natural persons, estate or trusts.
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The
undersigned is aware of the significance of the foregoing representations.
The
undersigned is also aware that the above representations made by him, her or
it
will be relied upon in connection with any investment made in AskMeNow, Inc.
pursuant to the accompanying document or documents.
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Date:
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Signature
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name
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Address:
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