VOICENET, INC.
100,000 Shares of Series A Convertible Preferred Stock
ACCREDITED INVESTOR SUBSCRIPTION AGREEMENT
To: VOICENET, INC.
0000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Dear Gentlemen:
The undersigned purchaser (the "Purchaser") hereby confirms its agreement with
Voicenet, Inc., a Delaware corporation (the "Company"), as follows:
1. Issuance of Securities. The Company proposes to issue and sell up to 100,000
Series A Convertible Preferred Stock (the "Shares") at a price of $30 per Share,
representing $3,000,000 in principal amount of its Shares. Commencing
immediately, the Shares sold hereunder shall be convertible at the option of the
Purchaser of the Shares into the Company's Common Stock, par value $.001 per
share (the "Common Stock"), at a price per share of Common Stock equal to ninety
percent (90%) of the average closing "bid" price of the Company's publicly
traded Common Stock for the thirty (30) trading days prior to the conversion
date as reported by Bloomberg Financial L.P. All 100,000 Shares are convertible
into shares of Common Stock. The terms, rights and preferences for the Shares
shall be substantially as set forth on the Certificate attached as exhibit A
hereto and made a part hereof.
The Shares will be offered and sold to you pursuant to an exemption from
registration provided by Regulation D ("Regulation D") and Rule 144A ("Rule
144A") promulgated under the Securities Act of 1933, as amended (the "Act"). The
Company has provided you with a copy of the Form 10-KSB of the Company for the
year ended December 31, 1997 and 1998 and its Form 10-QSB of the Company for the
period ended June 30, 1999 as filed with the Securities and Exchange Commission
(collectively, the "Disclosure Documents"), relating to the Company, the Common
Stock and the Shares.
Upon original issuance thereof, and until such time as the same is no longer
required under the applicable requirements of the Act, the Shares (and all
securities issued in exchange therefor, in substitution thereof or upon
conversion thereof, including the Common Stock) shall bear the following legend:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE
OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH
ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED."
2. Agreement to Sell and Purchase Shares. On the basis of the representations
and warranties contained in this Accredited Investor Stock Purchase Agreement
(this "Agreement"), and subject to its terms and conditions and further subject
to acceptance of this Agreement by the Company, the Company agrees to issue and
sell the Shares to the Purchaser and the Purchaser agrees, to purchase from the
Company the amount of Shares set forth on the signature page hereof which is
$3,000,000 in principal amount of Shares in the aggregate.
3. Delivery and Payment. Payment for the Shares shall be made in cash upon
subscription. Upon acceptance of the subscription by the Company, the Company
shall deliver the Shares to Purchaser. There is no minimum offering amount, and
accordingly subscription funds shall be immediately available for disbursement
to and use by the Company.
4. Representations and Warranties of the Purchaser. The Purchaser hereby
represents and warrants to the Company as follows:
(a) The Purchaser has received a copy of the Disclosure Documents and the
Purchaser has carefully reviewed the Disclosure Documents and this Agreement.
The Purchaser has had full opportunity to ask questions of the Company, or one
of its representatives regarding the Company. All documents and information
reasonably requested by the Purchaser from the Company or its representatives
have been provided to Purchaser?s satisfaction.
(b) The Purchaser has the full right, power and authority to enter into this
Agreement and to carry out and consummate the transactions contemplated herein.
This Agreement constitutes the legal, valid and binding obligation of the
Purchaser enforceable in accordance with its terms.
(c) The Purchaser is acquiring the Shares for his own account and risk and not
as part of any plan or scheme to evade the registration requirements of the Act,
and no other person has any interest in or participation in the Shares or any
right, option, security interest, pledge or other interest in or to the Shares.
The Purchaser understands and agrees that he must bear the economic risk of its
investment in the Shares for an restricted period of time as set forth in the
Agreement.
(d) The Purchaser understands that the offer and sale of the Shares is being
made only by means of this Agreement. In deciding to subscribe for Shares, the
Purchaser has not considered any information other than that contained in the
Disclosure Documents and this Agreement and any documents provided to the
Purchaser by the Company upon request. The Purchaser acknowledges that each of
such documents contain on the cover thereof a legend as to the absence of
registration of the Shares under the Act and the restrictions arising under the
Act. The Purchaser is aware that the purchase of the Shares involves a high
degree of risk, the Company has a limited operating history, the Company has had
no operating income, the Company is in the development stage and has not
commercialized any products, the Company has an significant accumulated deficit,
the Company has incurred losses since inception and will likely incur losses for
the near foreseeable future and that the Purchaser may sustain, and has the
financial ability to sustain, the loss of his entire investment. The Purchaser
understands and agrees that it must bear the economic risk of its investment in
the Shares for an indefinite period of time. The Shares and the shares of Common
Stock issuable upon conversion of the Shares have not been registered under the
Act. The Shares and the shares of Common Stock issuable upon conversion may not
be offered or sold, directly or indirectly unless registered or exempt from
registration under the Act and any applicable state securities or blue sky laws
(the "State Acts").
(e) If the Purchaser is a corporation or trust or other entity, the officer or
trustee or other person executing this Agreement represents and warrants that he
is authorized to so sign; that the entity is authorized by the governing
documents of the entity as the case may be, to make this investment;
(f) The Purchaser is an "accredited investor" as defined under Regulation D,
promulgated under the Securities Act.
(g) The undersigned (i) has adequate means of providing for his current needs
and possible personal contingencies, and has no need for liquidity of his
investment in the Company, (ii) can bear the economic risk of losing his entire
investment herein, and (iii) has alone, or together with
his Purchaser Representative (as hereinafter defined), such knowledge and
experience in financial matters that he is capable of evaluating the relative
risks and merits of this investment.
(h) He acknowledges that (i) the person or persons, if any, named at the foot
of this Agreement has or have acted as his "Purchaser Representative" as defined
in Rule 501 under Regulation D of the Securities Act, (ii) in evaluating his
investment as contemplated hereby, he has been advised by his Purchaser
Representative(s), as to the merits and risks of the investment in general and
the suitability of the investment for the undersigned in particular, and (iii)
his Purchaser Representative, if any, has or have confirmed to the undersigned
in writing (a copy of which instrument shall be annexed to this Agreement by the
undersigned upon execution) of any past, present or future material
relationship, actual or contemplated, between the Purchaser Representative and
the Company or any affiliate of the Company.
(i) That it never has been represented, guaranteed, or warranted to him by any
broker, the Company, its officers, directors, its agents, or employees or any
other person, expressly or by implication, as to the percentage of profits
and/or amount of or type of consideration, gain, profit, income or loss
(including tax write-offs and/or tax benefits) to be realized, if any, as a
result of this venture.
(j) That the Company will rely on this offer and the Purchaser's
representations and accordingly this offer may not be canceled, rescinded or
otherwise revoked by the undersigned.
(k) In addition, in the event the undersigned is executing this Agreement on
behalf of an employee benefit plan ("Plan") subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), in accordance with
the provisions of the instrument or instruments governing such Plan and its
related trust, the undersigned is a "fiduciary" of such Plan and trust (within
the meaning of section 3(21) (A) of ERISA), the execution and delivery of this
Agreement with respect to the Plan and trust have been duly authorized; and the
undersigned is aware of, in making this investment, and has taken into
consideration, among other things, risk and return factors and the anticipated
effect of an investment in the Company on the diversification, liquidity and
cash flow needs of the Plan and the projected effect of the investment in
meeting the Plan's funding objectives and has concluded that this investment is
a prudent one.
The foregoing representations and warranties are true and accurate as of the
date hereof and shall be true and accurate as of the date of delivery of the
subscription funds to the Company and shall survive such delivery.
If in any respect such representations and warranties shall not be true and
accurate prior to delivery of the funds, the undersigned shall give written
notice of such fact to the Company, specifying which representations and
warranties are not true and accurate and the reasons therefor. To insure receipt
of such letter by the Company, it should be sent by Certified Mail, Return
Receipt Requested.
5. Representations and Warranties of the Company. The Company represents and
warrants to the Purchaser, except as otherwise disclosed in the Disclosure
Documents, that:
(a) True and correct copies of the Disclosure Documents and the amendments
thereto have been delivered by the Company to the Purchaser.
(b) This Agreement has been duly authorized, validly executed and delivered by
the Company and is a legally valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms.
(c) The authorized, issued and outstanding capital stock and other securities
of the Company conform in all material respects to the descriptions thereof in
the Disclosure Documents. The shares of authorized, issued and outstanding
capital stock of the Company have been duly authorized and validly issued and
are fully paid, nonassessable and free of preemptive or similar rights. The
Shares to be issued by the Company and the shares of Common Stock to be issued
upon conversion of the Shares have been duly authorized and, when issued and
delivered against payment therefor in accordance with the terms of this
Agreement in the case of the Shares, or upon conversion, with respect to the
Common Stock, will be in the case of the Shares validly issued and outstanding
and will constitute valid and legal obligations of the Company enforceable
against it in accordance with their terms and in the case of the Common Stock,
validly issued, fully paid, nonassessable and free of preemptive or similar
rights.
(d) The Company has been duly organized and is validly existing as corporation
in good standing under the laws of the State of Delaware. The Company has the
power and authority necessary to enter into and perform its obligations under
this Agreement, and to issue, sell and deliver the Shares to be sold by it
pursuant hereto.
6. Indemnification. The undersigned acknowledges that he understands the
meaning and legal consequences of the representations and warranties contained
in Paragraph 4 hereof, and he hereby agrees to indemnify and hold harmless the
Company, the officers, directors, shareholders, employees, agents and each
affiliate, agent or employee thereof from and against any and all loss, damage
or liability due to or arising out of a breach of any representation or warranty
of the undersigned contained in this Agreement.
7. Transferability. The undersigned agrees not to transfer or assign this
Agreement, or any of his interest herein, and further agrees that the assignment
and transferability of the Shares acquired pursuant hereto shall be made only in
accordance with this Agreement.
8. Revocation. The undersigned agrees that he shall not cancel, terminate or
revoke this Agreement or any agreement of the undersigned made hereunder and
that this Agreement shall survive the death or disability of the undersigned.
9. Miscellaneous. Notices given pursuant to any provision of this Agreement
shall be addressed as follows: (i) if to the Company, Voicenet, Inc., attention:
Chief Executive Officer, to the address set forth above, (ii) if to the
Purchaser at the address set forth at the signature page of this Agreement, or
in any case to such other address as the person to be notified may have
requested in writing.
Except as otherwise provided, this Agreement has been and is made solely for the
benefit of and shall be binding upon the Company, you, any controlling persons
referred to herein, and their respective successors and assigns, all as and to
the extent provided in this Agreement, and no other persons shall acquire or
have any right under or by virtue of this Agreement. Your rights under this
Agreement are not assignable.
THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS
THEREOF.
This Agreement may be signed in various counterparts, which together shall
constitute one and the same instrument. Please confirm that the foregoing
correctly sets forth the agreement between the Company the Purchaser by signing
this Agreement and completing the information requested below.
IN WITNESS WHEREOF, the Purchaser has executed this Agreement, the date set
forth below.
Amount of Shares
subscribed for: US$
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Name of Purchaser:
By:
(Signature) -------------------------------------
Date:
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Title, if applicable
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Address:
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Telephone Number:
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Telecopier Number:
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Social Security No. or Tax I.D. No. (if applicable):
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Accepted this day of
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, l999
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VOICENET, INC.
By:
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