SUBSCRIPTION
PROCEDURE
To Subscribe for Notes and
Warrants of
Novint Technologies,
Inc.
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1.
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Complete and
Sign the following
documents:
A. Subscription Agreement
B. Accredited Investor Questionnaire
C. Intercreditor Agreement
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2.
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Fax the signed Subscription Agreement and Accredited
Investor Questionnaire to, and send all signed originals to and
form of payment to:
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Novint
Technologies, Inc.
4601 Paradise
Boulevard NW, Suite B
Albuquerque,
New Mexico 87114
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3.
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Please make
your subscription payment payable to the order of “Novint
Technologies, Inc.”
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4.
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Wire Transfer
Instructions if paying by wire transfer:
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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:
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A.
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Subscription
of the Subscriber .
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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.
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B.
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Representations and Warranties of the
Subscriber
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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.
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.
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.
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