UNIT SUBSCRIPTION AGREEMENT
To: TEK DIGITEL CORPORATION
Xxxxx 000-00000 Xxxxxxx Xxxx.
Xxxxxxxxxx, Xxxxxxxx
00000
GENTLEMEN/MESDAMES:
SUBSCRIPTION - The undersigned (the "Purchaser") hereby subscribes for and
agrees to purchase two million (2,000,000) units (the "Units") being offered by
TEK DIGITEL CORPORATION (the "Company") at a price of fifty cents (US$0.50) per
Unit for a total purchase price of $1,000,000 United States Dollars (the
"Purchase Price"), in accordance with the terms and conditions of the Offering
(the "Offering") made by the Company pursuant to exemptions under the Securities
Act of 1933 (the "Act" or "Securities Act"). The Subscription Agreement (the
"Agreement") may be rejected in whole or part by the Company.
CONSTITUTION OF THE UNITS - Each of the units (the "Units") will consist of one
no par value common share in the capital of the Company (a "Share") and:
(a) one Class D Warrant entitling the holder to purchase a further Share at an
exercise price of US $0.50 per Share up to and including November 30, 1999;
(b) one Class E Warrant entitling the holder to purchase a further Share at an
exercise price of US $0.50 per Share up to and including March 31, 2000;
(c) one Class F Warrant entitling the holder to purchase a further Share at an
exercise price of US $0.60 per Share up to and including August 31, 2000;
and
(d) one Class G Warrant entitling the holder to purchase a further Share at an
exercise price of US $0.65 per Share up to and including August 31, 2001.
For the purposes of this Agreement the Class D Warrants, the Class E Warrants,
the Class F Warrants and the Class G Warrants referred to above shall
collectively be referred to as the "Warrants". The Shares to be issued on
exercise of the Warrants shall be referred to as the "Warrant Shares".
The Warrants shall be subject to terms and conditions contained therein which
will provide, amongst other things, for an appropriate adjustment in class and
number of Warrant Shares issuable pursuant to any exercise thereof upon the
occurrence of certain stated events, including any subdivision, consolidation or
re-classification of common shares.
PAYMENT OF PURCHASE PRICE - The undersigned hereby tenders the full amount of
the Purchase Price, namely, $1,000,000 United States Dollars for the two million
(2,000,000) Units purchased by the undersigned. The stock certificates of the
Company representing the Shares comprising the Units and the certificates
representing the Warrants will be issued and held in trust pending delivery to
the undersigned promptly after the successful completion of the Offering. The
full amount of the Purchase Price, less any part of the Purchase Price
previously advanced directly to the Company, is
tendered to Xxxxxx X. Xxxxxxxx Law Corporation in trust for the Company by
wiring the funds for the Purchase Price to the following account to be held in
trust for the Company:
Bank: Bank of Montreal, 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, XX
Account: [account information deleted]
Transit: [transit information deleted]
Beneficiary: Xxxxxx X. Xxxxxxxx Law Corp.
REPRESENTATIONS AND WARRANTIES - The undersigned hereby represents and warrants
to the Company and to the Directors, Officers, and control persons of the
Company, jointly and severally as follows:
(A) The present financial condition of the undersigned can afford to bear the
financial risk of its investment in the Units without undo hardship in the
event the entire investment is lost;
(B) The undersigned is purchasing the Units solely for investment purposes and
has no intent of further distributing them;
(C) The undersigned has accomplished a thorough investigation of all relevant
facts regarding its investment, including but not limited to: analysis of
the risks involved in an investment in the Units, review of the Company's
financial condition, the Company's business, its industry and operations,
and all key personnel of the Company. The undersigned further represents it
has had the opportunity to ask any questions it may have of the Company and
has received satisfactory answers to those questions by the Company;
(D) The Purchaser is purchasing the Units under the exemption from registration
requirements available under Regulation S as promulgated pursuant to the
Act.
PURCHASER'S RIGHT TO APPOINT DIRECTORS - The Purchaser shall have the right to
appoint one director to the Company's board of directors annually upon
completion of the Offering and the right to appoint two directors to the
Company's board of directors annually upon the Purchaser exercising all of the
Warrants comprising the Units.
ACKNOWLEDGMENT OF CERTAIN FACTS - The undersigned acknowledges his or her
awareness and understanding of the following:
The Payment for the Purchase Price (or, in the case of rejection of a portion of
the undersigned's subscription, the part of the Purchase Price relating to such
rejected portion) will be returned promptly, without interest, on the basis
described herein, if the undersigned's subscription is rejected in whole or in
part. The Company will issue to the Purchaser a certificate representing the
Shares and Warrants purchased. The Shares forming part of the Units and the
Shares to be issued on exercise of the Warrants (the "Warrant Shares") may not
be transferred prior to the date that the Offering is completed (the "Closing
Date") and in any event subject to the resale restrictions set forth below:
THE SECURITIES OFFERED AND PURCHASED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT") AND THE
RULES AND REGULATIONS PROMULGATED THEREUNDER, AND MAY NOT BE OFFERED OR
SOLD DIRECTLY OR INDIRECTLY WITHIN THE UNITED STATES OR TO OR FOR THE
ACCOUNT OR BENEFIT OF U.S. PERSONS (AS DEFINED IN REGULATION S) EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AS TO SUCH SECURITIES
UNDER OR AN EXEMPTION FROM, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. THIS SUBSCRIPTION AGREEMENT SHALL NOT CONSTITUTE AN
OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES
OFFERED HEREBY IN THE UNITED STATES OR ANY OTHER JURISDICTION IN WHICH
SUCH AN OFFER OR SOLICITATION WOULD BE UNLAWFUL.
The Company, in its sole absolute discretion, may reduce the undersigned's
subscription to any number of Units that in the aggregate does not exceed the
number of Units hereby applied for without any prior notice to or further
consent by the undersigned. The undersigned hereby irrevocably constitutes and
appoints the Company and each officer of the Company, each of the foregoing
acting singly, in each case with full power of substitution, the true lawful
agent and attorney-in-fact of the undersigned, with full power and authority in
the undersigned's name, place and stead, to amend this Subscription Agreement
including in each case the undersigned's signature page thereto, to effect any
of the foregoing provisions of this Paragraph;
The undersigned will not sell or otherwise transfer the Shares without
registration under the Securities Act or pursuant to an applicable state
securities laws or exemption therefrom. The Shares forming part of the Units,
the Warrants and the Warrant Shares have not been registered under the
Securities Act or under the securities laws of any states. The undersigned
represents that the undersigned is purchasing the Units for the undersigned's
own account, for investment and not with a view to resale or distribution except
in compliance with the Act. The undersigned has not offered or sold any portion
of the Units being acquired nor does the undersigned have any present intention
of dividing such Units with others or of selling, distributing or otherwise
disposing of any portion of such Units either currently or after the passage of
a fixed or determinable period of time or upon the occurrence or non-occurrence
of any predetermined event or circumstance in violation of the Securities Act.
No United States or Canadian federal, or provincial agency (as the case may be)
has made any finding or determination as to the fairness of the terms of this
Subscription Agreement;
The Offering made hereunder is intended to be exempt from the registration under
the Securities Act by virtue of Section 4(2) of the 1933 Act and the provisions
of Regulation S in the case of "non- U.S. persons" (as defined in Regulation S
under the Securities Act), thereunder, which is in part dependent upon the
truth, completeness and accuracy of the statements made by the undersigned
herein;
The representations, warranties and agreements of the undersigned contained
herein and in any other writing delivered in connection with the transaction
contemplated hereby shall be true and correct in all respects on and as of the
date of the sale of the Units as if made on and as of such date and shall
survive the execution and delivery of this Subscription Agreement and the
purchase of the Units;
Insofar as indemnification for liabilities under the 1933 Act may be permitted
to directors, officers or controlling persons of the Company, the Company has
been informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in such Act and is
therefore unenforceable to such extent;
IN MAKING AN INVESTMENT DECISION PURCHASERS MUST RELY ON THEIR OWN EXAMINATION
OF THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS
INVOLVED, THE UNITS HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OF STATE SECURITIES
COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE
NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE;
THE SHARES FORMING PART OF THE UNITS, THE WARRANTS AND THE WARRANT SHARES MAY
NOT BE TRANSFERRED, RESOLD OR OTHERWISE DISPOSED OF EXCEPT AS PERMITTED UNDER
THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM. PURCHASERS SHOULD BE MADE AWARE THAT THEY
WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT.
In addition to the undersigned's representations, warranties and understandings
set forth elsewhere herein, if the undersigned is a non "U.S. person" as defined
in Regulation S as promulgated pursuant to the Securities Act, the undersigned
further represents, warrants and covenants that:
1. the undersigned is not a "U.S. person" as that term is defined in
Rule 902(o) of Regulation S;
2. the undersigned is not, and on the Closing Date will not be, an affiliate
of the Company;
3. at the execution of this Subscription Agreement, the undersigned was
outside the United States and no offer to purchase the Units was made in
the United States;
4. the undersigned agrees that all offers and sales of the Securities shall be
made in compliance with any applicable securities laws of any applicable
jurisdiction and, particularly, in accordance with Rule 903 and 904, as
applicable, or Regulation S or pursuant to registration of the securities
offered hereunder (the "Securities") under the Securities Act or pursuant
to an exemption from registration. In any case, none of the Securities have
been and will be offered or sold by the Subscriber to, or for the account
or benefit of a U.S. Person or within the United States until after the end
of a one year period commencing on the Closing Date (the "Restricted
Period"), as certified by the Company to the undersigned and, thereafter
only pursuant to an effective registration statement as to the Securities
or an applicable exemption therefrom;
5. the undersigned is not a distributor or dealer;
6. the transactions contemplated hereby (a) have not been and will not be
pre-arranged by the undersigned with a purchaser located in the United
States or a purchaser which is a U.S. Person, and (b) are not and will not
be part of a plan or scheme by the undersigned to evade the registration
provisions of the 1933 Act;
7. the undersigned shall take all reasonable steps to ensure compliance with
Regulation S; and
8. none of the undersigned, his affiliates or persons acting on their behalf
have conducted and shall not conduct any "directed selling efforts" as that
term is defined in Rule 902(b) of Regulation S, nor has the Subscriber, its
affiliates or persons acting on their behalf have conducted any general
solicitation relating to the offer and sale of any of the Securities in the
United States or elsewhere.
The undersigned will not engage in any activity for the purposes of, or that
could reasonable be excepted to have the effect of, conditioning the market in
the United States for any of the Securities;
Neither the undersigned nor any of his affiliates will directly or indirectly
maintain any short position, purchase or sell put or call options or otherwise
engage in any hedging activities in any of the Securities or any other
securities of the Company until after the end of the Restricted Period;
This Agreement may be rejected in whole or part by the Company in its sole and
absolute discretion;
The Company has limited financial and/or operational history;
The Company has acted as the Company's Sales Agent with respect to the Offering
of the Units;
The purchase of the Units is a speculative investment, which involves a high
degree of risk of loss by the undersigned of its entire investment;
No federal or state agency has made any finding or determination as to the
fairness of public investment, nor any recommendation or endorsement, of the
Units;
The Shares forming part of the Units, the Warrants and the Warrant Shares have
not been registered under either the Federal Securities Act of 1933 (the "Act")
or applicable state securities laws (the "States' Acts") and, therefore, cannot
be resold unless and the availability of an exemption from such registration is
determined to the reasonable satisfaction to be available by legal counsel for
the Company;
My offer to subscribe for Units in the Company as herein set out is
unconditional, irrevocable and non-transferable and has not been induced by any
warranties or representations with regard to the present or future value of the
Company's Shares;
The Units to be issued to me upon acceptance of this subscription will be issued
as an exempt trade, and no securities filings or clearances or reviews have been
or are being made in connection with such trade;
I hereby agree that the funds advanced by me hereunder will immediately be used
by the Company for general corporate purposes and will be characterized as a
non-interest bearing, non-callable loan by me to the Company until acceptance or
rejection of this subscription;
I confirm that neither the Company nor any director of the Company has made to
me or makes herein any representations about the present or future value of the
Company's Shares, and making this offer, I have relied solely on the
representations directly set out herein;
I confirm that it will be my responsibility to comply with the reporting
obligations, if any, that are required under the Act as result of the purchase
of the Securities that are the subject of the within Offer including the
reporting requirements resulting from the following:
(a) Rule 16 of the Act which provides reporting requirements for persons who
beneficially own more than 10% of any class of security of an issuer taking
into account that person's right to acquire equity securities through the
exercise of warrants; and
(b) Rule 13D or 13G which provides reporting requirements for persons who
beneficially own more than 5% of any class of security of an issuer taking
into account that person's right to acquire further securities within 60
days upon the exercise of warrants.
This Unit subscription constitutes the entire agreement between the undersigned
and the Company, and there are no other agreements, warranties, representations,
conditions or covenants, written or oral, express or implied, in respect of, or
which affect, the transactions herein contemplated, and this Unit subscription
supersedes and supplants any previous dealings whatsoever between the
undersigned and the Company in respect of the said transactions.
This Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of Wyoming, and to the extent it involves any United
States statute, in accordance with the laws of the United States.
The undersigned Purchaser hereby executes and delivers this Subscription
Agreement this 18th day of Oct., 1999.
Subscription for 2,000,000 Units of TEK DIGITEL CORPORATION.
/s/ Xxxxx Xxx Xxxx
------------------------
Signature of Purchaser
Printed Name: Xxxxx Xxx Xxxx
Address: 218 Sec. 2 Tun Hwa S. Rd
City, State, Zip: Taipei, Taiwan, ROC
