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SUBSCRIPTION PROCEDURE To Subscribe for Notes and Warrants of Novint Technologies, Inc.

Warrant Agreement

SUBSCRIPTION PROCEDURE

 

To Subscribe for Notes and Warrants of

Novint Technologies, Inc. | Document Parties: NOVINT TECHNOLOGIES INC You are currently viewing:
This Warrant Agreement involves

NOVINT TECHNOLOGIES INC

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Title: SUBSCRIPTION PROCEDURE To Subscribe for Notes and Warrants of Novint Technologies, Inc.
Governing Law: Delaware     Date: 12/9/2008

SUBSCRIPTION PROCEDURE

 

To Subscribe for Notes and Warrants of

Novint Technologies, Inc., Parties: novint technologies inc
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SUBSCRIPTION PROCEDURE

 

To Subscribe for Notes and Warrants of

Novint Technologies, Inc.

 

 

1.

Complete and Sign the following documents:

 

A. Subscription Agreement

B. Accredited Investor Questionnaire

C. Intercreditor Agreement

 

 

 

2.

Fax the signed Subscription Agreement and Accredited Investor Questionnaire to, and send all signed originals to and form of payment to:

 

Novint Technologies, Inc.

Attn: CEO

4601 Paradise Boulevard NW, Suite B

Albuquerque, New Mexico 87114

Phone: 505-463-1469

Fax: 866-298-4420

 

3.

Please make your subscription payment payable to the order of “Novint Technologies, Inc.”  

 

4.

Wire Transfer Instructions if paying by wire transfer:

 

Wells Fargo Bank, NM

Routing Number: 121000248

Account Number: 5737226273

Account Name: Novint Technologies, Inc.

 

Thank you for your interest.

 

 

 


 

SUBSCRIPTION AGREEMENT

 

This SUBSCRIPTION AGREEMENT (“ Subscription Agreement ”) is made and entered into as of December 4, 2008 by and among Novint Technologies, Inc. , a Delaware corporation (“ Company ”), and the subscribers whose names and addresses are set forth on the signature page hereto (each a “ Subscriber ”).

 

The Notes and Warrants are sometimes referred to herein as the “ Securities .”

 

In connection with this subscription, Subscriber and the Company agree as follows:

 

A.

Subscription of the Subscriber .

 

1.  Purchase of Notes and Warrants.  The undersigned Subscriber hereby irrevocably agrees, represents and warrants with, to and for the benefit of the Company, that such Subscriber is executing this Subscription Agreement in connection with the subscription by the Subscriber for (i) that principal amount of the 8% Senior Secured Promissory Note (the “ Note ”) in the form attached hereto as Exhibit A in the amount as set forth on the signature page hereof (the “ Subscription Price ”) (which aggregate amount for all Subscribers shall be a maximum of $3,000,000, plus up to an additional $1,250,000 from accredited investors who are qualifying game publishers, developers or other strategic investors, plus any amount subscribed to by prior investors who have preemptive rights) and (ii) warrants, in the form attached hereto as Exhibit B (the “ Warrants ”) to acquire up to that number of shares of common stock of the Company equal to the Subscription Price divided by $1.00 (as exercised, the “ Warrant Shares ”). The Warrants are exercisable for a term of five (5) years from December 4, 2008 (the “ Initial Closing Date ”) at an exercise price of $1.00 per share.  All principal and interest on the Note shall be due and payable one year following the Initial Closing Date.

 

The Subscriber understands that the Company is relying upon the accuracy and completeness of the information contained herein in complying with its obligations under federal and state securities and other applicable laws. Subject to the terms and conditions of this Subscription Agreement, upon execution and delivery hereof by the Subscriber, the Subscriber hereby agrees to purchase the Securities pursuant to the transaction hereof, and against concurrent delivery of the purchase price for such shares. The date upon which the final subscription is accepted by the Company from a Subscriber, the full Subscription Price has been tendered, and all conditions to closing on such subscription have been satisfied, shall be a “ Closing. ”    Following the Initial Closing Date there may be multiple Closings for additional subscriptions under this Subscription Agreement.

 

 

 


 

 

2.  Offering . This offering of the Securities (the “ Offering ”) is being made to a limited group of investors, all of whom shall represent to the Company pursuant to this Subscription Agreement that they are “accredited investors,” as that term is defined in Regulation D promulgated under the Securities Act of 1933, as amended (the “ Securities Act ”) or who have otherwise been qualified as investors by the Company. All of the Securities offered hereby are being sold by the Company. The Company is offering the Securities for the consideration set forth herein. The Offering is being made on a “best efforts” basis.  The maximum offering by the Company is $3,000,000 worth of Securities, plus up to an additional $1,250,000 from accredited investors who are qualifying game publishers, developers or other strategic investors, plus any amount subscribed to by prior investors who have preemptive rights. This amount may be increased at the Company’s discretion.  The Offering will terminate on February 9, 2009 (the “ Termination Date ”), unless the Company terminates the offering earlier or extends the Termination Date up to an additional 45 days.

 

3.  Refinance . In the event that the Notes are not repaid within one year from the Initial Closing Date, the Company shall have the option to refinance the Notes and the accrued interest with 10% Convertible Senior Secured Promissory Notes (the “ Convertible Notes ”) at a conversion price of $0.50 per share in the form attached hereto as Exhibit C .  For every two shares issued on conversion of the Convertible Notes, the Holder (defined therein) will receive a warrant to purchase one share of common stock of the Company at an exercise price of $0.50 per share (the “ Conversion Warrants ”).  The Conversion Warrants shall be in the form attached hereto as Exhibit B . The Conversion Warrants are exercisable for a term of five (5) years from the Initial Closing Date herein.

 

4. Intercreditor Agreement .  Concurrent with the execution of this Subscription Agreement, the undersigned Subscriber hereby irrevocably agrees to execute and become a party to the Intercreditor Agreement attached hereto as Exhibit D (the “ Intercreditor Agreement ”) with each other Subscriber hereunder recognizing that the security interests granted to such Subscriber under the Notes and the Convertible Notes rank pari passu with the security interests granted by the Company to the other parties to the Intercreditor Agreement.

 

B.

Representations and Warranties of the Subscriber

 

The Subscriber hereby represents and warrants to the Company as of the date hereof:

 

1.  Place of Business . The principal place of business address set forth below is such Subscriber’s true and correct principal place of business and is the only jurisdiction in which an offer to sell the Securities was made to such Subscriber and such Subscriber has no present intention of moving its principal place of business to or of becoming a resident of any other state or jurisdiction.

 

2.  Sale or Transfer of the Securities.  The Subscriber understands that the Securities have not been registered under the Securities Act, or under the laws of any other jurisdiction. The Subscriber understands and agrees that transfer or sale of the Securities may be restricted or prohibited unless they are subsequently registered under the Securities Act and, where required, under the laws of other jurisdictions or an exemption from registration is available. The Subscriber will not offer, sell, transfer or assign its Securities or any interest therein in contravention of this Subscription Agreement, the Securities Act or any state or federal law. The Subscriber understands and acknowledges that, because of the substantial restrictions on the transferability of the Securities, it may not be possible for the Subscriber to liquidate the Subscriber’s investment in the Company readily, even in the case of an emergency.

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3.  Representation of Accredited Investor Status, Investment Experience and Ability to Bear Risk . Subscriber acknowledges that the Offering has not been registered with the Securities and Exchange Commission because the Company is relying on an exemption from registration under Section 4(2) of the Securities Act and Regulation D promulgated thereunder. Subscriber   believes that at the time of the sale of the Securities to Subscriber, Subscriber (or, if Subscriber is a corporation, limited liability company or trust, each of its equity owners) qualifies as an “accredited investor” (as defined under Rule 501 of Regulation D promulgated under the Securities Act) and has completed the Accredited Investor Questionnaire attached hereto as Exhibit E in support of this representation and warranty.

 

In addition, Subscriber is knowledgeable and experienced with respect to the financial and business activities contemplated by the Company and is capable of evaluating the risks and merits of investing in the Securities and, in making a decision to proceed with this investment, has not relied upon any representations, warranties or agreements, other than those set forth in this Subscription Agreement and can bear the economic risk of an investment in the Company for an indefinite period of time, and can afford to suffer the complete loss thereof.

 

4.  Own Advice . In connection with the Subscriber’s investment in the Company, the Subscriber has carefully considered and has, to the extent the Subscriber believes such discussion necessary, discussed with the Subscriber’s professional legal, tax and financial advisers (the “ Investment Advisors ”) the suitability of an investment in the Securities for the Subscriber’s particular tax and financial situation and the Subscriber has determined that the Securities are a suitable investment for the Subscriber.

 

5.  Risks . The Subscriber represents and warrants that the Subscriber is aware (i) that the Securities involve a substantial degree of risk of loss of the Subscriber’s entire investment and that there is no assurance of any income from the Subscriber’s investment; and (ii) that any federal and/or state income tax benefits which may be available to the Subscriber, if any, may be lost through the adoption of new laws or regulations, to changes to existing laws and regulations and to changes in the interpretation of existing laws and regulations. The Subscriber further represents that the Subscriber is relying solely on the Subscriber’s own conclusions or the advice of the Subscriber’s Investment Advisors with respect to tax aspects of any investment in the Securities. The Subscriber further represents that it has read and reviewed the Company’s filings made with the Securities and Exchange Commission.

 

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6.  Inquiries . The Subscriber and its Investment Advisors have been given access to, and prior to the execution of this Subscription Agreement, have been provided with an opportunity to ask questions of, and receive answers from, the Company officers concerning the Company and the terms and conditions of the Offering and the Securities, and to obtain any other information which the Subscriber and the Subscriber’s Investment Advisors required with respect to the Company and an investment in the Company in order to evaluate such investment and verify the accuracy of all information furnished to the Subscriber and its Investment Advisors regarding the Company. All such questions, if asked, were answered satisfactorily and all information or documents provided were found to be satisfactory. Neither the Subscriber nor its Investment Advisors have been furnished any offering literature on which they have relied on other this Subscription Agreement and the Subscriber and its Investment Advisors have relied only on this Subscription Agreement. At no time was the Subscriber presented with or solicited by any leaflet, public promotion meeting, newspaper or magazine article, radio or television advertisement or any other form of general advertising or general solicitation.

 

7.  Authority . The Subscriber is authorized and has full right and power to subscribe for the Securities and to perform the Subscriber’s obligations pursuant to the provisions of this Subscription Agreement; the person signing this Subscription Agreement and any other instrument executed and delivered herewith on behalf of such Subscriber has been duly authorized by such entity and has full power and authority to do so. If the Subscriber is a corporation, partnership, unincorporated association or other entity, the person signing this agreement has the legal capacity to authorize, deliver and be bound by this Subscription Agreement and to take all actions required pursuant hereto and further certifies that all necessary approvals of directors, shareholders or otherwise have been given and obtained; and if the Subscriber is an individual, it is of the full age of majority in the jurisdiction in which the Subscriber is resident and is legally competent to execute, deliver and be bound by this Subscription Agreement and take all action pursuant hereto.

 

8.  No Default . The execution and delivery of this Subscription Agreement and the consummation of the transactions contemplated hereby and thereby will not conflict with, or result in any violation of or default pursuant to, any provision of any governing instrument applicable to the Subscriber, or any agreement or other instrument to which the Subscriber is a party or by which the Subscriber or any of the Subscriber’s properties are bound or any permit, franchise, judgment, decree, statute, rule or regulation applicable to the Subscriber or any of the Subscriber’s business or properties.

 

9.  ERISA . If the Subscriber is an employee benefit plan subject to ERISA, then such Subscriber acknowledges that such Subscriber has been informed of and understands the operations and business of the Company, and represents that such Subscriber’s investment in the Company (i) is permissible under the documents and instruments governing such plan; (ii) satisfies the diversification requirements of ERISA; (iii) is prudent considering all the facts and circumstances, including the fact that there is no trading market for the Securities; and (iv) is not a “prohibited transaction” within the meaning of Section 406 of ERISA.

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10.  Purchase Entirely For Own Account . This Subscription Agreement is made with the Subscriber in reliance upon the Subscriber’s representations to the Company, which by the Subscriber’s execution of this Subscription Agreement, the Subscriber hereby confirms, that the Securiti


 
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