SUBSCRIPTION AGREEMENT
VIANET TECHNOLOGIES, INC.
Subscription Agreement for the Purchase of Units consisting of
Common Stock and Common Stock Purchase Warrants
The undersigned (the "Investor") hereby subscribes for the
number of units ("Units") set forth on page 13 hereof of Vianet Technologies,
Inc. (the "Company"), each Unit consisting of (i) 20,000 shares of the Company's
common stock ("Common Stock") and (ii) 30,000 Common Stock purchase warrants
(the "Warrants"), each Warrant entitling the holder thereof to purchase one
share of Common Stock at an exercise price that is equal to $4.50. The Units are
being offered in connection with the Company's private placement (the
"Offering") of a maximum of $6,000,000 (the "Offering") of Units at a price of
$60,000 per Unit. The Offering shall be on a "best efforts" basis.
The number of shares of Common Stock included with a Unit was
determined by dividing the per Unit purchase price of $60,000 by $3.00. For each
share of Common Stock included within a Unit, one and one-half Warrants were
also included.
By accepting this subscription, the Company hereby agrees that if, at
any time the Company proposes to register any of its securities under the
Securities Act, (other than the registration statement it is currently preparing
to file in connection with the recently completed financing, or a merger or
pursuant to Form S-8 or other comparable form), the Company shall automatically
include the Common Stock offered herein (referred to as the "Registerable
Securities") in such registration statement, provided however that in connection
with such registration, if the Company shall determine for any reason not to
register or to delay the registration of such Registerable Securities, the
Company may give written notice of such determination to each Holder and
thereupon shall be relieved of its obligation to register any Registerable
Securities issued or issuable in connection with such registration (but not from
its obligation to pay registration expenses in connection therewith or to
register the Registerable Securities in a subsequent registration); and in the
case of a determination to delay a registration, shall thereupon be permitted to
delay registering any Registerable Securities for the same period as the delay
in respect of securities being registered for the Company's own account.
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Notwithstanding anything contained herein, the Company shall not be
required to include any of the Holders' Registerable Securities in an
underwritten offering of the Company's securities unless such Holders accept the
terms of the underwriting as agreed upon between the Company and the
underwriters selected by it (provided such terms are usual and customary for
selling stockholders) and the Holders agree to execute and/or deliver such
documents in connection with such registration as the Company or the managing
underwriter may reasonably request.
In the event the Holders have not sold all of their Registerable
Securities in connection with a registration statement or otherwise pursuant to
this provision, the Company shall effect the registration of all or any
remaining Registerable Securities as soon as practicable, but not later than 180
days after the effective date of such registration statement; provided, however,
that such period may be extended or delayed by the Company for one period of up
to 45 days if, upon the advice of counsel at the time such registration is
required to be filed, or at the time the Company is required to exercise its
best efforts to cause such registration statement to become effective, such
delay is advisable and in the best interests of the Company because of the
existence of non-public material information, or to allow the Company to
complete any pending audit of its financial statements.
In the case of each such registration effected by the Company, the
Company will keep the undersigned or its Permitted Assignee advised in writing
as to the initiation of each registration and as to the completion thereof. As
used in this Subscription Agreement, "Permitted Assignee" shall mean an
"affiliate" of the undersigned as defined in Rule 144 of the Securities Act or
any other transferee pursuant to a transfer made in compliance with applicable
state and federal securities laws. At its expense, the Company will:
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(a) Keep such registration current for a period of 9 months or
until the undersigned or its Permitted Assignee has completed
the distribution described in the registration statement
relating thereto, or is permitted to sell all such
Registerable Securities pursuant to Rule 144 of the Act,
whichever last occurs.
(b) Furnish such number of prospectuses and other documents
incident thereto as the undersigned or its Permitted Assignee
from time to time may reasonably request.
In addition, the undersigned shall furnish to the Company such
information regarding the undersigned and any information relating to the
registration of any of the Company's securities as the Company may reasonably
request in writing and as shall be reasonably be required in connection with any
registration.
In connection with the Offering, the Company may engage the
services of an NASD member firm to act as a placement agent, in which case such
NASD member firm shall be entitled to receive a commission of up to 10% of the
gross proceeds derived from the sale of Units and warrants to purchase up to 10%
of the aggregate amount of Units sold in the Offering (the "Agent's Warrants"),
except that any such placement agent shall not be entitled to any commission on
Units placed by the Company.
The undersigned agrees to pay an aggregate of $60,000 as a
subscription for each Unit being purchased hereunder. The entire purchase price
is due and payable upon the execution of this Subscription Agreement, and shall
be payable by wire transfer or check subject to collection, to the order of
"Continental Stock Transfer & Trust Company, as Agent for Vianet Technologies,
Inc. " The wire transfer instructions may be obtained from the Company.
The Company shall have the right to reject this subscription
in whole or in part.
The undersigned acknowledges that the Unit(s) being purchased
hereunder have not been registered under the Securities Act, or the securities
laws of any state, that, absent an exemption from registration contained in
those laws, the Unit(s) and the securities underlying the Unit(s) would require
registration, and that the Company's reliance upon such exemption is based upon
the undersigned's representations, warranties, and agreements contained in this
Subscription Agreement and the accompanying Confidential Prospective Purchaser
Questionnaire (collectively, the "Subscription Documents").
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1. The undersigned represents, warrants, and agrees as
follows:
a. The undersigned agrees that this Subscription Agreement
is and shall be irrevocable.
b. The undersigned has carefully read the Confidential
Private Offering Memorandum, dated February 7, 2000, and exhibits thereto (the
"Memorandum"), and the Subscription Documents (collectively, the "Offering
Materials"), all of which the undersigned acknowledges has been provided to the
undersigned. The undersigned has been given the opportunity to ask questions of,
and receive answers from, the Company concerning the terms and conditions of
this Offering and the Offering Materials and to obtain such additional
information, to the extent the Company possesses such information or can acquire
it without unreasonable effort or expense, necessary to verify the accuracy of
same as the undersigned reasonably desires in order to evaluate the investment.
The undersigned understands the Offering Materials, and the undersigned has had
the opportunity to discuss any questions regarding any of the Offering Materials
with his counsel or other advisor. Notwithstanding the foregoing, the only
information upon which the undersigned has relied is that set forth in the
Offering Materials. The undersigned has received no representations or
warranties from the Company, its employees, agents or attorneys in making this
investment decision other than as set forth in the Offering Materials. The
undersigned does not desire to receive any further information.
c. The undersigned is aware that the purchase of the
Unit(s) is a speculative investment involving a high degree of risk, that there
is no guarantee that the undersigned will realize any gain from this investment,
and that the undersigned could lose the total amount of this investment. The
undersigned has specifically reviewed the section in the Memorandum entitled
"Risk Factors".
d. The undersigned understands that no federal or state
agency has made any finding or determination regarding the fairness of this
Offering, or any recommendation or endorsement of this Offering.
e. The undersigned is purchasing the Unit(s) for the
undersigned's own account, with the intention of holding the Unit(s) and with no
present intention of dividing or allowing others to participate in this
investment or of reselling or otherwise participating, directly or indirectly,
in a distribution of the Unit(s), and shall not make any sale, transfer, or
pledge thereof without registration under the Securities Act and any applicable
securities laws of any state or unless an exemption from registration is
available under those laws.
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f. The undersigned represents that he is an "accredited
investor", as such term is defined in Rule 501 of Regulation D promulgated under
the Securities Act. The Investor is referred to the section of the Memorandum
entitled "Plan of Distribution - Investor Suitability Standards" for a full
explanation of such term.
g. The undersigned represents that, if an individual, he
has adequate means of providing for his or her current needs and personal and
family contingencies and has no need for liquidity in this investment in the
Unit(s). The undersigned has no reason to anticipate any material change in his
or her personal financial condition for the foreseeable future.
h. The undersigned is financially able to bear the
economic risk of this investment, including the ability to hold the Unit(s)
indefinitely, or to afford a complete loss of his investment in the Unit(s).
i. The undersigned represents that the undersigned's
overall commitment to investments which are not readily marketable is not
disproportionate to the undersigned's net worth, and the undersigned's
investment in the Unit(s) will not cause such overall commitment to become
excessive. The undersigned understands that the statutory basis on which the
Unit(s) are being sold to the undersigned and others would not be available if
the undersigned's present intention were to hold the Unit(s) for a fixed period
or until the occurrence of a certain event. The undersigned realizes that, in
the view of the SEC, a purchase now with a present intent to resell by reason of
a foreseeable specific contingency or any anticipated change in the market
value, or in the condition of the Company, or that of the industry in which the
business of the Company is engaged or in connection with a contemplated
liquidation, or settlement of any loan obtained by the undersigned for the
acquisition of the Unit(s), and for which such Unit(s) may be pledged as
security or as donations to religious or charitable institutions for the purpose
of securing a deduction on an income tax return, would, in fact, represent a
purchase with an intent inconsistent with the undersigned's representations to
the Company, and the SEC would then regard such sale as a sale for which the
exemption from registration is not available. The undersigned will not pledge,
transfer or assign this Subscription Agreement.
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j. The undersigned represents that the funds provided for
this investment are either separate property of the undersigned, community
property over which the undersigned has the right of control, or are otherwise
funds as to which the undersigned has the sole right of management. The
undersigned is purchasing the Unit(s) with the undersigned's funds and not with
the funds of any other person, firm, or entity and is acquiring the Unit(s) for
the undersigned's account. No person other than the undersigned has any
beneficial interest in the Unit(s) being purchased hereunder.
k. FOR PARTNERSHIPS, CORPORATIONS, TRUSTS, OR OTHER
ENTITIES ONLY: If the undersigned is a partnership, corporation, trust or other
entity, (i) the undersigned has enclosed with this Subscription Agreement
appropriate evidence of the authority of the individual executing this
Subscription Agreement to act on its behalf (e.g., if a trust, a certified copy
of the trust agreement; if a corporation, a certified corporate resolution
authorizing the signature and a certified copy of the articles of incorporation;
or if a partnership, a certified copy of the partnership agreement), (ii) the
undersigned represents and warrants that it was not organized or reorganized for
the specific purpose of acquiring the Unit(s), (iii) the undersigned has the
full power of such entity to make the representations and warranties made herein
on its behalf, and (iv) this investment in the Company has been affirmatively
authorized, if required, by the governing board of such entity and is not
prohibited by the governing documents of the entity.
l. The address shown under the undersigned's signature at
the end of this Subscription Agreement is the undersigned's principal residence
if he or she is an individual, or its principal business address if it is a
corporation or other entity.
m. The undersigned has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of an investment in the Units.
n. The undersigned acknowledges that the certificates for
the Common Stock underlying the Units, which the undersigned will receive, will
contain a legend substantially as follows:
THE SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT").
THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND NOT
WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD,
TRANSFERRED, MADE SUBJECT TO A SECURITY INTEREST, PLEDGED, HYPOTHECATED
OR OTHERWISE DISPOSED OF UNLESS AND UNTIL REGISTERED UNDER THE ACT, OR
AN OPINION OF COUNSEL FOR THE COMPANY IS RECEIVED THAT REGISTRATION IS
NOT REQUIRED UNDER SUCH ACT. THE SECURITIES WHICH ARE REPRESENTED BY
THIS CERTIFICATE ARE SUBJECT TO THE PROVISIONS OF A SUBSCRIPTION
AGREEMENT, DATED ________________ , 2000, BETWEEN THE HOLDER AND THE
COMPANY, A COPY OF WHICH IS AVAILABLE AT THE OFFICES OF THE COMPANY.
The undersigned further acknowledges that a stop transfer order will be placed
upon the certificates for the securities in accordance with the Securities Act.
The undersigned further acknowledges that the Company is under no obligation to
aid the undersigned in obtaining any exemption from registration requirements.
2. The undersigned expressly acknowledges and agrees that the
Company is relying upon the undersigned's representations contained in the
Subscription Documents.
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3. The undersigned irrevocably appoints and authorizes the
Company to take such action as agent and attorney-in-fact on his behalf and to
exercise such power and authority as said agent and attorney-in-fact would have
if personally acting, with respect to all matters arising in connection with
securing the Company's Registration obligations as set forth in this
subscription agreement, with full power and authority to execute, deliver and
enforce for and on behalf of the undersigned all such agreements, consents and
documents. Neither the Company nor any of its directors, officers, agents or
employees shall be liable for any action taken or not taken in connection with
the authority granted pursuant to the preceding sentence, or incur any liability
by acting in reliance upon any notice, consent, certificate, statement or other
writing believed by it or them to be genuine. The undersigned shall indemnify
the Company against any cost, expense (including counsel fees and
disbursements), claim, demand, action, loss or liability (except any thereof
arising out of the gross negligence or willful misconduct of the Company) that
the Company may suffer or incur in connection with any action or inaction
pursuant to the foregoing appointment as agent and attorney-in-fact.
4. The undersigned also agrees that he will be subject to any
lock-up imposed by NASDAQ or any other regulatory agency.
5. The Company has been duly and validly incorporated and is
validly existing and in good standing as a corporation under the laws of the
State of Nevada. The Company has all requisite power and authority, and all
necessary authorizations, approvals and orders required as of the date hereof to
own its properties and conduct its business as described in the Memorandum and
to enter into this Subscription Agreement and to be bound by the provisions and
conditions hereof.
6. Except as otherwise specifically provided for hereunder, no
party shall be deemed to have waived any of his rights hereunder or under any
other agreement, instrument or papers signed by any of them with respect to the
subject matter hereof unless such waiver is in writing and signed by the party
waiving said right. Except as otherwise specifically provided for hereunder, no
delay or omission by any party in exercising any right with respect to the
subject matter hereof shall operate as a waiver of such right or of any such
other right. A waiver on any one occasion with respect to the subject matter
hereof shall not be construed as a bar to, or waiver of, any right or remedy on
any future occasion. All rights and remedies with respect to the subject matter
hereof, whether evidenced hereby or by any other agreement, instrument, or
paper, will be cumulative, and may be exercised separately or concurrently.
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7. The parties have not made any representations or warranties
with respect to the subject matter hereof not set forth herein, and this
Subscription Agreement, together with any instruments executed simultaneously
herewith, constitutes the entire agreement between them with respect to the
subject matter hereof. All understandings and agreements heretofore had between
the parties with respect to the subject matter hereof are merged in this
Subscription Agreement and any such instruments executed simultaneously
herewith, which alone fully and completely expresses their agreement.
8. This Subscription Agreement may not be changed, modified,
extended, terminated or discharged orally, but only by an agreement in writing,
which is signed by all of the parties to this Subscription Agreement.
9. The parties agree to execute any and all such other further
instruments and documents, and to take any and all such further actions
reasonably required to effectuate this Subscription Agreement and the intent and
purposes hereof.
10. This Subscription Agreement shall be governed by and
construed in accordance with the laws of the State of New York, excluding choice
of law principles thereof, and the undersigned hereby consents to the
jurisdiction of the courts of the State of New York and the United States
District Courts situated therein, without giving effect to the actual domiciles
of the parties.
11. Any reference in this Subscription Agreement to the male
gender shall be deemed to refer to the feminine or neuter where applicable.
12. This Subscription Agreement may be executed in
counterparts each of which shall be deemed an original and all of which taken
together shall constitute one and the same instrument.
13. Upon the execution and delivery of this Subscription
Agreement by the Investor, this Subscription Agreement shall become a binging
obligation of the Investor with respect to the purchase of the Units as herein
provided.
14. Any notice or other communication given hereunder shall be
deemed sufficient if in writing and hand delivered or sent by registered or
certified mail, return receipt requested, or overnight mail or delivery,
addressed to Vianet Technologies, Inc. at 00 Xxxxxx Xxxxxx 0xx Xxxxx , Xxx Xxxx,
New York 10012 Attention: President, and to the Investor at his address
indicated on the signature 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.
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ALL SUBSCRIBERS MUST COMPLETE THIS PAGE
NAME: ______________________________________
IN WITNESS WHEREOF, the undersigned has executed this
Subscription Agreement on this day of , 2000.
x ($60,000 Per Unit) = $
--------------------- -------------------------
Units Subscribed
1. _ Individual 8. _ As a Custodian for
2. _ Joint Tenants with Right of Survivorship
3. _ Community Property ______________________
Under the Uniform Gift
4. _ Tenants in Common to Minors Act of the
State.
5. _ Corporation/Partnership 9. _ Married with Separate
Property
6. _ XXX of______________________________ 10. _ Xxxxx
7. _ Trust
Date Opened__________________
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EXECUTION BY SUBSCRIBER WHO IS A NATURAL PERSON
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Exact Name in Which Title is to be Held
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Signature
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Name (Please Print)
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Residence: Number and Street
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City State Zip Code
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Social Security Number
Accepted this __ day of __________, 2000, on behalf of:
VIANET TECHNOLOGIES, INC.
By:____________________________
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EXECUTION BY SUBSCRIBER WHO IS A CORPORATION,
PARTNERSHIP, TRUST, ETC.
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Exact Name in Which Title is to be Held
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Signature
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Name (Please Print)
--------------------------------------------------------------------------------
Title of Signatory
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Business Address: Number and Street
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City State Zip Code
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Employer or NASD affiliation
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Tax Identification Number
Accepted this __ day of ________, 2000, on behalf of:
VIANET TECHNOLOGIES, INC.
By:___________________________
