SUBSCRIPTION AGREEMENT AND
CONFIDENTIAL INVESTOR QUESTIONNAIRE
THIS SUBSCRIPTION AGREEMENT is entered into as of -----------------
1999, between CAVION TECHNOLOGIES, INC., a Colorado corporation with its
principal offices at 0000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000
(the "Company"), and the undersigned (the "Subscriber").
WHEREAS, the Company desires to issue promissory notes and warrants
for the purchase of the Company's Class A Common Stock, $0.0001 par value
(the "common stock"), in a private placement on the terms and conditions
set forth in the Term Sheet attached hereto as Exhibit A (the "Term
Sheet") and as hereinafter set forth;
WHEREAS, Neidiger, Tucker, Bruner, Inc. and First Capital
Investments, Inc. (the "Placement Agents") are each acting as placement
agents for the Company in connection with the offer and sale of the
promissory notes and warrants; and
WHEREAS, the Subscriber desires to acquire a promissory note, and
related warrant, in the amount set forth on the signature page hereof.
NOW, THEREFORE, for and in consideration of the premises and the
mutual covenants hereinafter set forth, the parties hereto do hereby agree
as follows:
I. SUBSCRIPTION FOR PROMISSORY NOTES AND WARRANTS AND
REPRESENTATIONS BY AND COVENANTS OF SUBSCRIBER
1.1 Subject to the terms and conditions hereof, the Subscriber
hereby subscribes for and agrees to purchase from the Company a promissory
note (a "Note") in the amount set forth on the signature page hereof, in a
minimum amount of $50,000. The Note shall bear interest at fourteen
percent (14%) per annum and mature upon the earlier to occur of (i) the
closing of the Company's initial public offering (the "IPO") as filed in
the SB-2 Registration Statement on June 10, 1999 with the U.S. Securities
and Exchange Commission, and as subsequently amended, file no. 333-80421
(the "SB-2"), or (ii) one year from the date of the Note. The form of
Note is attached hereto as Exhibit B. The purchase of each $50,000 Note
will entitle the Subscriber to receive a warrant (a "Warrant") to purchase
5,000 shares of common stock. The Warrant is exercisable for a period of
five years beginning on the earlier to occur of (i) the closing of the
IPO, or (ii) one year from the date of the Warrant. The form of Warrant
is attached hereto as Exhibit C. The Company agrees to sell such Notes
and Warrants to the Subscriber for said purchase price. The purchase
price is payable to Cavion Technologies, Inc. by certified check or wire
transfer, contemporaneously with the execution and delivery of this
Subscription Agreement. The Note and Warrant will be delivered by the
Company to the Subscriber not later than ten (10) days following the
consummation of this offering as set forth in Article II hereof.
1.2 The Subscriber recognizes that the purchase of the Note and
Warrant involves a high degree of risk in that (i) the Company is
relatively new and will require substantial funds in addition to the
proceeds of this private placement; (ii) an investment in the Company is
highly speculative, and only investors who can afford the loss of their
entire investment should consider investing in the Company and the Notes
and Warrants; (iii) investors may not be able to liquidate their
investment; (iv) transferability of the Notes and Warrants, and the common
stock issuable on exercise of the Warrants (collectively, the
"Securities") is restricted. There are additional risks associated with
this investment as more fully set forth herein and in the SB-2.
1.3 The Subscriber represents that he or she is an "accredited
investor" as such term is defined in Rule 501 of Regulation D promulgated
under the United States Securities Act of 1933, as amended (the "Act"), as
indicated by the Subscriber's responses to the Confidential Investor
Questionnaire contained in Article VI hereof, and that the Subscriber is
able to bear the economic risk of an investment in the Shares.
1.4 The Subscriber acknowledges that Subscriber either has a
preexisting personal or business relationship with the Company or with one
or more of its officers, directors or controlling persons, or by reason of
the Subscriber's business or financial experience, including investment in
non-listed and non-registered securities, or the business or financial
experience of the Subscriber's professional advisors who are unaffiliated
with and who are not compensated by the Company or any affiliate or
selling agent of the Company, directly or indirectly, could be reasonably
assumed to have the capacity to protect the Subscriber's own interests in
connection with an investment in the Notes and Warrants. The Subscriber
further acknowledges that he or she has the capacity to evaluate the
merits and risks of such an investment and that the Subscriber recognizes
the highly speculative nature of this investment.
1.5 The Subscriber acknowledges receipt and careful review of
the Term Sheet, the SB-2, and the exhibits thereto, (the SB-2 is attached
hereto as Exhibit D) (the "Offering Documents"); that the Subscriber has
been informed that he/she/it may review the Exhibits to the SB-2 upon
request to the Company; that the Subscriber has been afforded the
opportunity to ask questions of and receive answers from duly authorized
officers or other representatives of the Company concerning the terms and
conditions of the offering and the information in the Offering Documents;
and that Subscriber has been provided any additional information which the
Subscriber had requested.
1.6 The Subscriber acknowledges that this offering may involve
tax consequences, and that the contents of the Offering Documents do not
contain tax advice or information. The Subscriber acknowledges that the
Subscriber must retain the Subscriber's own professional advisors to
evaluate the tax and other consequences of an investment in the
Securities.
1.7 The Subscriber acknowledges that this offering has not been
reviewed by the United States Securities and Exchange Commission ("SEC")
because of the Company's representations that this is intended to be a
nonpublic offering pursuant to Sections 4(2) or 4(6) of the Act. The
Subscriber represents that the Securities being purchased by the
Subscriber are being purchased for the Subscriber's own account, for
investment and not for distribution or resale to others. The Subscriber
agrees that the Subscriber will not sell or otherwise transfer the
Securities unless they are registered under the Act or unless an exemption
from such registration is available.
1.8 The Subscriber understands that the Securities have not
been registered under the Act by reason of a claimed exemption under the
provisions of the Act which depends, in part, upon the Subscriber's
investment intention. In that connection, the Subscriber understands that
it is the position of the SEC that the statutory basis for such exemption
would not be present if the Subscriber's representation merely meant that
the Subscriber's present intention was to hold such securities for a short
period, such as the capital gains period of tax statutes, for a deferred
sale, for a market rise, assuming that a market develops, or for any other
similarly fixed period. The Subscriber realizes that, in the view of the
SEC, a purchase now with an intent to resell would represent a purchase
with an intent inconsistent with the Subscriber's representation to the
Company, and the SEC might regard such a sale or disposition as a sale to
which such exemptions are not available.
1.9 The Subscriber understands that there is no public market
for the Securities. The Subscriber understands that even if a public
market develops for the common stock issuable upon exercise of the
Warrants, Rule 144 (the "Rule") promulgated under the Act requires, among
other conditions, a one-year holding period prior to the resale (in
limited amounts) of securities acquired in a non-public offering without
having to satisfy the registration requirements under the Act. The
Subscriber understands that the Company makes no representation or
warranty regarding its fulfillment in the future of any reporting
requirements under the Securities Exchange Act of 1934, as amended, or its
dissemination to the public of any current financial or other information
concerning the Company, as is required by the Rule as one of the
conditions of its availability. The Subscriber understands and hereby
acknowledges that the Company is under no obligation to register the
Securities with the exception of certain limited registration rights set
forth in Article III hereof. The Subscriber consents that the Company
may, if it desires, permit the transfer of the Securities out of the
Subscriber's name only when the Subscriber's request for transfer is
accompanied by an opinion of counsel reasonably satisfactory to the
Company that neither the sale nor the proposed transfer results in a
violation of the Act or any applicable state "blue sky" laws (collectively
"Securities Laws") and subject to the provisions of Section 1.10 hereof.
The Subscriber agrees to hold the Company and its directors, officers and
controlling persons and their respective heirs, representatives,
successors and assigns harmless and to indemnify them against all
liabilities, costs and expenses incurred by them as a result of any
misrepresentation made by the Subscriber contained herein or in the
Confidential Investor Questionnaire contained in Article VI hereof or any
sale or distribution by the undersigned Subscriber in violation of any
Securities Laws.
1.10 The Subscriber consents to the placement of a legend on any
certificate or other document evidencing the Securities stating that they
have not been registered under the Act and setting forth or referring to
the restrictions on transferability and sale thereof.
1.11 The Subscriber understands that the Company will review
this Subscription Agreement and the Confidential Investor Questionnaire
contained herein and is hereby given authority by the undersigned, if an
individual, to call his or her bank or place of employment or otherwise
review the financial standing of the Subscriber insofar as is relevant to
the Subscriber's representations herein; and it is further agreed that the
Company reserves the unrestricted right to reject or limit any
subscription and to close any offer of Securities at any time.
1.12 The Subscriber hereby represents that the address of
Subscriber furnished by the Subscriber at the end of this Subscription
Agreement is the undersigned's principal residence if the Subscriber is an
individual or its principal business address if the Subscriber is a
corporation or other entity.
1.13 THE SUBSCRIBER HEREBY REPRESENTS AND WARRANTS THAT, EXCEPT
AS SET FORTH IN THE OFFERING DOCUMENTS, NO REPRESENTATIONS OR WARRANTIES
HAVE BEEN MADE TO THE SUBSCRIBER BY THE COMPANY OR ANY AGENT, EMPLOYEE,
REPRESENTATIVE OR AFFILIATE OF THE COMPANY AND THAT, IN ENTERING INTO THIS
TRANSACTION AND SUBSCRIBING FOR THE SECURITIES, THE SUBSCRIBER IS NOT
RELYING ON ANY INFORMATION, OTHER THAN THAT CONTAINED IN THE OFFERING
DOCUMENTS AND THE RESULTS OF SUBSCRIBER'S INDEPENDENT INVESTIGATION.
1.14 The Subscriber acknowledges that at such time, if ever, as
the shares of common stock issuable upon exercise of the Warrants are
registered, sales of such securities will be subject to Securities Laws,
which may require, among other requirements, any securities sold to be
sold through a registered broker-dealer or in reliance upon an exemption
from registration.
II. TERMS OF SUBSCRIPTION
2.1 The subscription period will begin on August 12, 1999 and
will terminate at 5:00 p.m. Denver time fourteen (14) days thereafter,
unless extended by the Company and the Placement Agents for up to an
additional fourteen (14) days (the "Termination Date"). The minimum
subscription per subscriber shall be a $50,000 Note and Warrant to
purchase 5,000 shares.
2.2 Placement of the Securities will be made by the Placement
Agents, who will receive a placement fee in the amount of 9% of the
purchase price of the Notes placed.
2.3 There is no minimum offering amount. The Company may
utilize the proceeds of this offering immediately upon receipt.
2.4 The Subscriber hereby authorizes and directs the Company to
deliver the securities to be issued to such Subscriber pursuant to this
Subscription Agreement to the residential or business address indicated in
the Confidential Investor Questionnaire included herein.
2.5 The Subscriber hereby authorizes and directs the Company to
return any funds for unaccepted subscriptions to the same account from
which the funds were drawn, including any customer account maintained with
the Placement Agent.
2.6 If the Subscriber is not a United States person, such
Subscriber hereby represents that he, she or it has satisfied itself as to
the full observance of the laws of its jurisdiction in connection with any
invitation to subscribe for the Shares or any use of this Agreement,
including (i) the legal requirements within its jurisdiction for the
purchase of the Securities, (ii) any foreign exchange restrictions
applicable to such purchase, (iii) any governmental or other consents that
may need to be obtained, and (iv) the income tax and other tax
consequences, if any, that may be relevant to the purchase, holding,
redemption, sale or transfer of the Securities. The Subscriber represents
and warrants that the Subscriber's subscription and payment for, and the
Subscriber's continued beneficial ownership of the Securities, will not
violate any applicable securities or other laws of the Subscriber's
jurisdiction.
III. REGISTRATION RIGHTS
3.1 CERTAIN DEFINITIONS. For purposes of this Section, the
following definitions shall apply:
(a) The terms "register," "registered," and "registration"
refer to a registration under the Act effected by preparing and filing a
registration statement in compliance with the Act, and the declaration or
ordering of effectiveness of such registration statement or amendment
thereto.
(b) The term "Registrable Securities" means any shares of
common stock issued or issuable upon exercise of the Warrants.
3.2 REGISTRATION RIGHTS.
(a) The Company currently intends to file an additional
registration statement under the Act as soon as practicable after the
effective date of the SB-2. The Company intends to include the
Registrable Securities in such registration statement. The Company does
not hereby make any representations as to the date on which the filing of
such registration will be made. When the Company determines to proceed
with the actual preparation and filing of such registration statement
under the Act, in connection with the proposed offer and sale of any of
its common stock by it or any of its security holders, the Company will,
except as herein provided, cause all such Registrable Securities to be
included in such registration statement, all to the extent required to
permit the sale or other disposition by the prospective seller or sellers
of the Registrable Securities to be so registered; provided, further, that
nothing herein shall prevent the Company from, at any time, abandoning or
delaying any registration. If the offering is underwritten, the
Registrable Securities included in any registration pursuant to this
Section 3.2 shall be included in the underwriting on the same terms and
conditions as the securities otherwise being sold through the underwriters
thereof. If in the good faith judgment of the managing underwriter, if
any, of such public offering the inclusion of all of the Registrable
Securities (the "Requested Stock") would interfere with the successful
marketing of the shares of stock offered by the Company, the number of
shares of Requested Stock otherwise to be included in the underwritten
public offering may be reduced pro rata (by number of shares) among the
holders thereof or excluded in their entirety if so required by the
underwriter. To the extent only a portion of the Requested Stock is
included in the underwritten public offering, those shares of Requested
Stock which are thus excluded from the underwritten public offering shall
be withheld from the market by the holders thereof for a period, not to
exceed 270 days, which the managing underwriter reasonably determines is
necessary in order to effect the underwritten public offering. The
obligation of the Company under this Section 3.2 shall not apply to
Registrable Securities that at such time are eligible for immediate resale
pursuant to the Rule (without regard to volume limitations).
(b) The Company may suspend the effectiveness of any such
registration effected pursuant to this Section 3.2 in the event, and for
such period of time as, such a suspension is required by the rules and
regulations of the SEC and may suspend use of the prospectus included in
the Registration Statement if such prospectus ceases to meet the
requirements of Section 10 of the Act. The Company will immediately
advise the security holders participating in such registration of any such
suspension, and will use its best efforts to cause such suspension to
terminate at the earliest possible date. The Subscriber agrees that
following receipt of any such notice, and until such suspension is
terminated, the Subscriber will not make use of the suspended prospectus
and will make no sales requiring delivery of such prospectus.
3.3 REGISTRATION PROCEDURES. If and when the Company is
required by the provisions of Section 3.2 to effect the registration of
Registrable Securities under the Act, the Company will:
(a) prepare and file with the SEC a registration statement
with respect to such securities, and use its best efforts to cause such
registration statement to become and remain effective until the
Registrable Securities are freely salable without the volume limitations
of the Rule;
(b) prepare and file with the SEC such amendments to such
registration statement and supplements to the prospectus contained therein
as may be necessary to keep such registration statement effective until
the Registrable Securities are freely salable without regard to the volume
limitations of the Rule;
(c) furnish to the security holders participating in such
registration and to the underwriters of the securities being registered
such reasonable number of copies of the registration statement,
preliminary prospectus, final prospectus and such other documents as such
underwriters may reasonably request in order to facilitate the public
offering of such securities;
(d) use its best efforts to register or qualify the
securities covered by such registration statement under such state
securities or blue sky laws of such jurisdictions as such participating
holders may reasonably request in writing within twenty (20) days
following the original filing of such registration statement, except that
the Company shall not for any purpose be required to execute a general
consent to service of process or to qualify to do business as a foreign
corporation in any jurisdiction wherein it is not so qualified;
(e) notify the security holders participating in such
registration, promptly after it shall receive notice thereof, of the time
when such registration statement has become effective or a supplement to
any prospectus forming a part of such registration statement has been
filed;
(f) notify such holders promptly of any request by the SEC
for the amending or supplementing of such registration statement or
prospectus or for additional information;
(g) prepare and file with the SEC, promptly upon the
request of any such holders, any amendments or supplements to such
registration statement or prospectus which, in the opinion of counsel for
such holders (and concurred in by counsel for the Company), is required
under the Act or the rules and regulations thereunder in connection with
the distribution of Common Stock by such holder;
(h) prepare and promptly file with the SEC and promptly
notify such holders of the filing of such amendment or supplement to such
registration statement or prospectus as may be necessary to correct any
statements or omissions if, at the time when a prospectus relating to such
securities is required to be delivered under the Act, any event shall have
occurred as the result of which any such prospectus or any other
prospectus as then in effect would include an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances in which they were
made, not misleading; and
(i) advise such holders, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance of any stop order by
the SEC suspending the effectiveness of such registration statement or the
initiation or threatening of any proceeding for that purpose and promptly
use its best efforts to prevent the issuance of any stop order or to
obtain its withdrawal if such stop order should be issued.
3.4 EXPENSES.
(a) With respect to each inclusion of Registrable
Securities in a registration statement pursuant to Section 3.2 hereof, all
fees, costs and expenses of and incidental to such registration, inclusion
and public offering (as specified in paragraph (b) below) in connection
therewith shall be borne by the Company; provided, however, that any
security holders participating in such registration shall bear their pro
rata share of underwriting discounts and commissions and transfer taxes.
(b) The fees, costs and expenses of registration to be
borne by the Company as provided in paragraph (a) above shall include,
without limitation but subject to paragraph (a) above, all registration,
filing, and NASD fees, printing expenses, fees and disbursements of
counsel and accountants for the Company, and all legal fees and
disbursements and other expenses of complying with state securities or
blue sky laws of any jurisdictions in which the securities to be offered
are to be registered and qualified. Fees and disbursements of counsel,
other advisors and accountants for the holders of Registrable Securities
and any other expenses incurred by the holders not expressly included
above shall be borne by the holders.
3.5 INDEMNIFICATION.
(a) The Company will indemnify and hold harmless each
holder of Registrable Securities which are included in a registration
statement pursuant to the provisions of Section 3.1 or 3.2 hereof, its
directors and officers, and any underwriter (as defined in the Act) for
such holder and each person, if any, who controls such holder or such
underwriter within the meaning of the Act, from and against, and will
reimburse such holder and each such underwriter and controlling person
with respect to, any and all loss, damage, liability, cost and expense to
which such holder or any such underwriter or controlling person may become
subject under the Act or otherwise, insofar as such losses, damages,
liabilities, costs or expenses are caused by any untrue statement or
alleged untrue statement of any material fact contained in such
registration statement, any prospectus contained therein or any amendment
or supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading; provided, however,
that the Company will not be liable in any such case to the extent that
any such loss, damage, liability, cost or expense arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made in conformity with information furnished by such
holder, such underwriter or such controlling person in writing
specifically for use in the preparation thereof.
(b) Each holder of Registrable Securities included in a
registration pursuant to the provisions of Section 3.2 hereof will
indemnify and hold harmless the Company, its directors and officers, any
controlling person and any underwriter from and against, and will
reimburse the Company, its directors and officers, any controlling person
and any underwriter with respect to, any and all loss, damage, liability,
cost or expense to which the Company or any controlling person and/or any
underwriter may become subject under the Act or otherwise, insofar as such
losses, damages, liabilities, costs or expenses are caused by any untrue
statement or alleged untrue statement of any material fact contained in
such registration statement, any prospectus contained therein or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading, in each case to
the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was so made in reliance
upon and in strict conformity with written information furnished by or on
behalf of such holder specifically for use in the preparation thereof.
(c) Promptly after receipt by an indemnified party
pursuant to the provisions of paragraph (a) or (b) of this Section 3.5 of
notice of the commencement of any action involving the subject matter of
the foregoing indemnity provisions such indemnified party will, if a claim
thereof is to be made against the indemnifying party pursuant to the
provisions of said paragraph (a) or (b), promptly notify the indemnifying
party of the commencement thereof; but the omission to so notify the
indemnifying party will not relieve it from any liability which it may
have to any indemnified party otherwise than under this Section 3.5. In
case such action is brought against any indemnified party and it notifies
the indemnifying party of the commencement thereof, the indemnifying party
shall have the right to participate in, and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party; provided, however, if the defendants in any action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are
different from or in addition to those available to the indemnified party,
or if there is a conflict of interest which would prevent counsel for the
indemnifying party from also representing the indemnified party, the
indemnified party or parties have the right to select separate counsel to
participate in the defense of such action on behalf of such indemnified
party or parties. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party pursuant
to the provisions of paragraph (a) or (b) for any legal or other expense
subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation, unless (i)
the indemnified party shall have employed counsel in accordance with the
provisions of the preceding sentence, (ii) the indemnifying party shall
not have employed counsel reasonably satisfactory to the indemnified party
to represent the indemnified party within a reasonable time after the
notice of the commencement of the action, or (iii) the indemnifying party
has authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party.
IV. MISCELLANEOUS
4.1 Any notice or other communication given hereunder shall be
deemed sufficient if in writing and sent by registered or certified mail,
return receipt requested. Notices sent to the Company shall be addressed
to the Company's office at 0000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx
00000, Attention: President. Notices sent to the Subscriber shall be
addressed to the Subscriber's address indicated on the last page of this
Subscription Agreement. Notices shall be deemed to have been given on the
date of mailing, except notices of change of address, which shall be
deemed to have been given when received.
4.2 This Subscription Agreement shall not be changed, modified
or amended except by a writing signed by the parties to be charged, and
this Subscription Agreement may not be discharged except by performance in
accordance with its terms or by a writing signed by the party to be
charged.
4.3 This Subscription Agreement shall be binding upon and inure
to the benefit of the parties hereto and to their respective heirs, legal
representatives, successors and assigns. This Subscription Agreement sets
forth the entire agreement and understanding between the parties as to the
subject matter hereof and merges and supersedes all prior discussions,
agreements and understandings of any and every nature among them.
4.4 Notwithstanding the place where this Subscription Agreement
may be executed by any of the parties hereto, the parties expressly agree
that all the terms and provisions hereof shall be construed in accordance
with and governed by the laws of the State of Colorado.
4.5 Each of the Company and the Subscriber agree that any
action or proceeding based hereon, or arising out of the Offering
Documents, shall be brought and maintained exclusively in the courts of
the State of Colorado located in the City and County of Denver or in the
United States District Court for the District of Colorado. The Company
and the Subscriber each hereby irrevocably submit to the jurisdiction of
the courts of the State of Colorado located in the City and County of
Denver and of the United States District Court for the District of
Colorado for the purpose of any such action or proceeding as set forth
above and irrevocably agree to be bound by any judgment rendered thereby
in connection with such action or proceeding. Each of the Company and the
Subscriber hereby irrevocably waive, to the fullest extent permitted by
law, any objection which it may have or hereafter may have to the laying
of venue of any such action or proceeding brought in any such court
referred to above and any claim that any such action or proceeding has
been brought in an inconvenient forum.
4.6 This Subscription Agreement may be executed in
counterparts. Upon the execution and delivery of this Subscription
Agreement by the Subscriber, this Subscription Agreement shall become a
binding obligation of the Subscriber with respect to the purchase of
Shares as herein provided; subject, however, to the right hereby reserved
to the Company to enter into the same agreements with other subscribers
and to add and/or to delete other persons as subscribers.
4.7 The holding of any provision of this Subscription Agreement
to be invalid or unenforceable by a court of competent jurisdiction shall
not affect any other provision of this Subscription Agreement, which shall
remain in full force and effect.
4.8 It is agreed that a waiver by either party of a breach of
any provision of this Subscription Agreement shall not operate, or be
construed, as a waiver of any subsequent breach by that same party.
4.9 The parties agree to execute and deliver all such further
documents, agreements and instruments and take such other and further
action as may be necessary or appropriate to carry out more fully the
purposes and intent of this Subscription Agreement.
4.10 The Company agrees not to disclose the names, addresses or
any other information about the Subscriber, except as required by law,
provided, that the Company may use information relating to the Subscriber
in any registration statement under the Act.
V. CONFIDENTIAL INVESTOR QUESTIONNAIRE
5.1 SUBSCRIBER CATEGORIES. The Subscriber represents, warrants,
covenant and agrees that, at the time such purchase will be made and as of
the date of this Subscription Agreement, the Subscriber is an "accredited
investor" as defined in Regulation D promulgated under the Act because of
one or more of the following:
(INITIAL ALL APPROPRIATE PARAGRAPHS BELOW;
YOU MUST INITIAL ONE PARAGRAPH)
---- The Subscriber is a private business development company as
defined in Section 202(a)(22) of the Investment Advisers Act of
1940;
---- The Subscriber is an organization described in Section 501(c)(3)
of the Internal Revenue Code, a corporation, a Massachusetts or
a similar business trust, or a partnership, not formed for the
specific purpose of acquiring the securities offered, with total
assets in excess of $5,000,000;
---- The Subscriber is a director, executive officer, or general
partner of the Partnership, or a director, executive officer or
general partner of a general partner of the Partnership;
---- The Subscriber is a natural person whose individual net worth,
or joint net worth with my spouse, at the time of my purchase
exceeds $1,000,000;
---- The Subscriber is 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 my spouse in excess of $300,000 in each of
those years and I have a reasonable expectation of reaching the
same income level in the current year.
---- The Subscriber is a trust, with total assets in excess of
$5,000,000, not formed for the specific purpose of acquiring the
securities offered, whose purchase is directed by a
sophisticated person as described in Section 230.506.(b)(2)(ii);
and
---- The Subscriber is an entity in which all of the equity owners
are accredited investors.
The Subscriber understands that, in determining whether the
Subscriber or the entity the Subscriber represents qualifies under
any of the foregoing categories of "accredited investor," the
Subscriber should be guided by the definition of "accredited
investor" in the Act. The Subscriber further understands that, to
the extent he, she or it have made representations as to his, her or
its net worth, assets or income herein, the Subscriber may be
requested by the Company to supply verifying documentation, including
but not limited to copies of federal income tax returns or other
governmental filings required by law, and the Company has the
Subscriber's permission to obtain information concerning my financial
condition, including but not limited to obtaining a credit report.
The Subscriber covenants and agrees that he, she or it will notify
the Company at any time on or prior to the Company's acceptance of
this subscription in the event that the representations and
warranties in this Agreement shall cease to be true, accurate and
complete.
5.2 MANNER IN WHICH TITLE TO BE HELD. (Circle one)
(a) Individual Ownership
(b) Community Property
(c) Joint Tenant with Right of Survivorship (both parties
must sign)
(d) Partnership*
(e) Tenants in Common
(f) Company*
(g) Trust*
(h) Other
5.3 NASD AFFILIATION:
Are you associated with an NASD member firm? (Please check
one)
YES------- NO-------
If Yes, please describe: ----------------------------------
-----------------------------------------------------------
--------------------------------------------------------
(1) The NASD defines a "person associated with a member" or "associated
person of a member" as being every sole proprietor, general or limited
partner, officer, director or branch manager of any member, or any natural
person occupying a similar status or performing similar functions, or any
natural person engaged in the investment banking or securities business
who is directly or indirectly controlling or controlled by such member
(for example, any employee), whether or not any such person is registered
or exempt from registration with the NASD. Thus, "person associated with
a member" or "associated person of a member" includes a sole proprietor,
general or limited partner, officer, director or branch manager of an
organization of any kind (whether a corporation, partnership or other
business entity) which itself is either a "member" or a "Person associated
with a member" or "associated person of a member." In addition, an
organization of any kind is a "person associated with a member" or
"associated person of a member" if its sole proprietor or any one of its
general or limited partners, officers, directors or branch managers is a
"member," "person associated with a member" or "associated person of a
member."
(2) The NASD defines a "member" as being any individual, partnership,
corporation or other legal entity that is a broker or dealer admitted to
membership in the NASD.
*IF SUBSCRIBER IS A REGISTERED REPRESENTATIVE WITH AN NASD
MEMBER FIRM, HAVE THE FOLLOWING ACKNOWLEDGMENT SIGNED BY
THE APPROPRIATE PARTY:
The undersigned NASD member firm acknowledges receipt of
the notice required by Rule 3050 of the NASD Conduct Rules or any
successor rules or regulations.
---------------------------------------------------
Name of NASD Member Firm
By: ----------------------------------------------
Authorized Officer
Date:----------------------------------------------
5.4 RELIANCE. The undersigned is informed of the significance
to the Company of the foregoing representations and answers contained in
the Confidential Investor Questionnaire contained in this Article V and
such answers have been provided under the assumption that the Company will
rely on them.
INDIVIDUAL INVESTOR SIGNATURE PAGE
----------------------------------
IN WITNESS WHEREOF, the parties have executed this Subscription
Agreement as of the day and year first written above.
AMOUNT OF PURCHASE (MUST BE AT LEAST $50,000): $-------------------------
PURCHASE OF EACH $50,000 NOTE ENTITLES PURCHASER TO 5,000 WARRANTS.
Signature Signature (if purchasing jointly)
--------------------------- -------------------------------
Name Typed or Printed Name Typed or Printed
--------------------------- -------------------------------
Address Address
--------------------------- -------------------------------
City, State and Zip Code City, State and Zip Code
--------------------------- -------------------------------
Telephone - Business Telephone - Business
--------------------------- -------------------------------
Telephone-Residence Telephone-Residence
--------------------------- -------------------------------
Facsimile - Business Facsimile - Business
--------------------------- -------------------------------
Facsimile - Residence Facsimile - Residence
--------------------------- -------------------------------
Tax ID# or Social Security # Tax ID# or Social Security #
ENTITY INVESTOR SIGNATURE PAGE
------------------------------
IN WITNESS WHEREOF, the parties have executed this Subscription
Agreement as of the day and year first written above.
AMOUNT OF PURCHASE (MUST BE AT LEAST $50,000): $------------------------
PURCHASE OF EACH $50,000 NOTE ENTITLES PURCHASER TO 5,000 WARRANTS.
PURCHASER:
---------------------------------------
Name typed or printed
SIGNATURE OF AUTHORIZED SIGNATORY
---------------------------------------
Name typed or printed
---------------------------------------
Title of authorized signatory
---------------------------------------
Address of Purchaser
---------------------------------------
City, State and Zip Code
---------------------------------------
Telephone - Business
---------------------------------------
Facsimile - Business
---------------------------------------
Tax ID# or Social Security # of Purchaser
Name in which securities should be issued: -----------------------------
Dated: -----------------------, 1999
This Subscription Agreement is agreed to and accepted as of -----------, -
------.
CAVION TECHNOLOGIES, INC.
By: ---------------------------------------
Title:-------------------------------------
