SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported) June 25, 1997
PREFERRED VOICE, INC.
(Exact name of registrant as specified in charter)
Delaware 33-92894 75-2440201
(State of Other Juris- (Commission (IRS Employer
diction of Incorporation) File Number) Identification No.)
12655 N. Central Expwy, Suite 800, Dallas, Texas 75243
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (972) 458-9950
PREFERRED/TELECOM, INC.
(Former name or former address, if changed since last report)
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ITEM 9 SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S
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On June 25, 1997, Preferred Voice, Inc. ("Preferred") completed the
offering of 3 units (the "Units") for aggregate gross proceeds of U.S. $480,000
to three private foreign investors. Each Unit consisted of one 12% Convertible
Debenture in the principal amount of $ 160,000 payable on or before December 25,
1997, (the "Debenture") and one common stock purchase warrant (the "Warrant") to
purchase 160,000 shares of common stock (the "Common Stock"), par value $.001
per share, of Preferred Voice, Inc. The Debenture entitles the Holder to convert
the unpaid principal balance into fully paid and nonassessable shares of Common
Stock of the Company at a price of $.87 per share prior to the Debenture payment
date of December 25, 1997. The Debentures are secured by a media credit as
described in the Collateral Assignment of Media Credit and the Prepaid Purchase
Order attached as Exhibit A to the Debentures. The Warrant entitles the holder
to purchase 160,000 additional shares of Common Stock at a price of U.S. $1.00
per share at any time prior to the close of business on June 25, 2000, subject
to adjustment in connection with certain anti-dilution provisions.
One Unit was purchased by the holder of two (2) previously issued
debentures in the aggregate principal amount of $150,000 (with accrued interest
of $10,000) canceling such debentures in exchange for a Unit pursuant to the
terms of the Subscription Agreement (the "Exchange Subscription Agreement"). Two
(2) Units were purchased pursuant to a cash payment schedule set forth in the
respective Subscription Agreements (the "Cash Subscription Agreements").
The offering was conducted pursuant to Regulation S promulgated under the
United States Securities Act of 1933, as amended, and to exemptions from the
offering requirements in any jurisdiction in which the Units were offered.
Accordingly, the Units were not offered or sold in the United States or to U.S.
persons, as defined in Regulation S.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired
Not Applicable
(b) Pro Forma Financial Information
Not Applicable
(c) Exhibits
10.1 Form of Twelve Percent Convertible
Subordinated Debenture
10.2 Form of Warrant
10.3 Form of Exchange Subscription Agreement
10.4 Form of Cash Subscription Agreement
<PAGE>
SIGNATURE
Pursuant to the requirements o the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PREFERRED VOICE, INC.
Date: July 9, 1997 By:/s/ Mary G. Merritt
-------------------
Mary G. Merritt, Secretary/Treasurer
(Principal Financial Officer)
THIS CONVERTIBLE SUBORDINATED DEBENTURE(THE "DEBENTURE") AND THE SECURITIES TO
BE ISSUED UPON CONVERSION OF THIS DEBENTURE HAVE NOT BEEN REGISTERED UNDER
EITHER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR APPLICABLE
STATE SECURITIES LAWS (THE "STATE ACTS"), AND SHALL NOT BE SOLD, PLEDGED,
HYPOTHECATED, DONATED OR OTHERWISE TRANSFERRED (WHETHER OR NOT FOR
CONSIDERATION) BY THE HOLDER EXCEPT BY REGISTRATION OR PURSUANT TO AN EXEMPTION
FROM REGISTRATION UPON THE ISSUANCE TO THE COMPANY OF A FAVORABLE OPINION OF
COUNSEL OR OTHER EVIDENCE REASONABLE SATISFACTORY TO THE COMPANY TO THE EFFECT
THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE 1933 ACT AND THE STATE
ACTS. IN ADDITION, THE DEBENTURE AND THE SECURITIES TO BE ISSUED UPON CONVERSION
OF THIS DEBENTURE MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES (AS DEFINED IN
REGULATION S UNDER THE 1933 ACT) OR TO OR FOR THE ACCOUNT OR BENEFIT OF U.S.
PERSONS (AS DEFINED IN REGULATION S) EXCEPT PURSUANT TO REGULATION S AND
PURSUANT TO REGISTRATION UNDER THE 1933 ACT OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT.
THE DEBENTURE AND THE SECURITIES TO BE ISSUED UPON CONVERSION OF THIS DEBENTURE
ARE BEING OFFERED PURSUANT TO THE EXEMPTION FROM REGISTRATION WITH THE UNITED
STATES SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") CONTAINED IN
REGULATION S FOR OFFERS AND SALES OF SECURITIES THAT OCCUR OUTSIDE THE UNITED
STATES TO NON- U.S. PERSONS (WITHIN THE MEANING OF REGULATION S). NO
REGISTRATION STATEMENT OR APPLICATION TO REGISTER THESE SECURITIES HAS BEEN OR
WILL BE FILED WITH THE COMMISSION OR UNDER THE SECURITIES LAWS OF ANY COUNTRY OR
JURISDICTION. THIS DEBENTURE AND THE SECURITIES TO BE ISSUED UPON CONVERSION OF
THIS DEBENTURE HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE COMMISSION. BECAUSE
THE DEBENTURE HAS BEEN ISSUED PURSUANT TO REGULATION S, THE DEBENTURE MAY NOT BE
EXERCISED BY OR ON BEHALF OF ANY U.S. PERSON (AS DEFINED IN REGULATION S) UNLESS
REGISTERED UNDER THE 1933 ACT OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE,
AND THE DEBENTURE MAY NOT BE EXERCISED WITHIN THE UNITED STATES AND SECURITIES
MAY NOT BE DELIVERED WITHIN THE UNITED STATES UPON EXERCISE, OTHER THAN IN
OFFERINGS DEEMED TO MEET THE DEFINITION OF AN "OFFSHORE TRANSACTION" PURSUANT TO
REGULATION S, UNLESS REGISTERED UNDER THE 1933 ACT OR AN EXEMPTION FROM
REGISTRATION IS APPLICABLE
<PAGE>
PREFERRED VOICE, INC.
TWELVE PERCENT CONVERTIBLE
SUBORDINATED DEBENTURE
, 1997 Dallas, Texas $
- ------------ --------------
Preferred Voice, Inc., hereinafter called the "Company," a corporation duly
organized and existing under the laws of the State of Delaware, for value
received, hereby promises to pay to the order of _____________ , the sum of
__________ ($______ ) at the times ________ and in the manner hereinafter
provided, with interest on the unpaid balance of such principal sum at the rate
of twelve percent (12%) per annum.
The principal and interest on this Debenture shall be payable at the
principal office of the Holder or at such other address as the Holder shall from
time to time designate.
This Debenture is one of a series of Twelve Percent Convertible
Subordinated Debentures (the "Debentures")in an aggregate principal amount of up
to Four Hundred and Eighty Thousand Dollars ($480,000.00).
1. The principal and interest of this Debenture is due and payable six (6)
months from the date hereof ("Payment Date") on demand of holder made on or
after that date.
2. This Debenture may not be prepaid without the consent of the Holder.
3. The Holder hereof may at any time prior to the Payment Date on five (5)
days written notice to the Company or its successor convert the unpaid principal
balance hereof into fully paid and nonassessable shares (the "Debenture Shares")
of Common Stock of the Company or its successor, at a price of $.87 per share by
delivering the Debenture to the Company or its successor. The price shall not be
subject to adjustment under any circumstances, including, without limitation,
any stock split, merger, or recapitalization. The certificate representing the
Debenture Shares shall be delivered within ten (10) days of receipt of the
Debenture.
The Debenture will not be permitted to be exercised on behalf of a U.S.
person (as defined in Regulation S) unless a written opinion of counsel to the
effect that the Debenture and the Debenture Shares have been registered under
the Securities Act of 1933, as amended (the "Securities Act" ),or are exempt
from registration thereunder has been provided to the Company. The Debenture
will not be permitted to be exercised within the United States and the Debenture
Shares will not be delivered within the United States upon exercise therof
(other than in an offering deemed to meet the definition of "offshore
transaction" pursuant to Regulation S) unless a written opinion of counsel to
the effect that the Debenture and the Debenture Shares have been registered
under the Securities Act or are exempt from the registration requirements of the
Securities Act under an exemption thereunder has been provided to the Company.
<PAGE>
4. To secure the payment to the holders (the "Holders") of the Debentures
of the interest and principal on the Debentures, the Company hereby grants to
the Holders on a pro rata basis, and the Holders herby accept on a pro rata
basis, the media credit as described in the Collateral Assignment of Media
Credit and the Prepaid Purchase Order, attached together hereto as Exhibit "A"
and incorporated herin by this reference.
The Company shall deposit with Bisbro Investments Company Ltd. as
representative (the "Representative") of the Holders the Prepaid Purchase Order
for Media Credit upon the closing of the sale of the Debentures, the title to
which shall be transferred to the Holders upon default of the terms of the
Debentures in accordance with the Collateral Assignment of Media Credits as set
forth above.
At the Holders' request, the Company shall execute and/or deliver to the
Representative, at any time or times hereafter, all security documents including
but not limited to UCC-1 financing statements that the Representative may
reasonably request, in form and substance acceptable to the Representative to
evidence Holders' security interest in the Collateral, and the Company shall pay
the costs of any recording or filing of the same. The Company will cooperate
with and deliver any security documents to such persons as the Representative in
its sole discretion, may deem appropriate. The Company hereby specifically
agrees and consents that a copy of this Debenture or of a financing statement is
sufficient as a financing statement as may be filed with any governmental clerk
as evidence of Holders' security interest in the Collateral.
5. Except as provided in Section 7 hereto, Notice shall be deemed to have
been given three (3) days following when sent by a recognized international
courier service, all charges prepaid, addressed to (a) the registered Holder at
his last address as it appears on the registration books of the Company kept for
that purpose at the office of the Secretary or (b) the Company's principal
office, as appropriate.
6. The Company covenants and agrees and the Holder of this Debenture, by
acceptance hereof, covenants, expressly for the benefit of the present and
future holders of Senior Indebtedness (defined herein), that, upon any
dissolution, winding up, or liquidation, whether or not in bankruptcy,
insolvency, or receivership proceedings, the Company shall not pay, and the
Holder of this Debenture shall not be entitled to receive, any amount in respect
of the principal of, and interest on, the Debenture unless and until the Senior
Indebtedness shall have been paid or otherwise discharged. Upon any dissolution,
winding up, or liquidation, any payment or distribution of assets of the
Company, whether in cash, property or securities which the Holder of this
Debenture would be entitled to receive but for the provisions hereof, shall be
<PAGE>
paid by the liquidating trustee or agent or other person making such payment or
distribution, whether a trustee in bankruptcy, a receiver, a liquidating
trustee, or otherwise, directly to the holders of Senior Indebtedness after
giving effect to any concurrent payment or distribution to the holders of Senior
Indebtedness. This section 6 is intended to be effective only in the event of
distributions made in the course of termination of the Company. The
subordination herein provided applies to payments or distributions by the
Company only and shall not affect the right of the Holder of this Debenture to
collect and retain payment from any co-obligor, guarantor or surety.
Subject to the payment in full of all Senior Indebtedness in the manner and
to the extent set forth in this section 6, the Holder of the Debenture shall be
subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions of assets of the Company applicable to Senior
Indebtedness until the Debentures shall be paid in full, and for the purpose of
such subrogation no payments or distributions to the holders of Senior
Indebtedness by or on behalf of the Company or by or on behalf of the Holder of
the Debenture shall, as between the Company and the Holder of the Debenture, be
deemed to be payment by the Company to or on account of the Debenture.
Except as specifically set forth above, nothing contained in this section 6
or elsewhere herein shall or is intended to impair, as between the Company, its
creditors and the Holder of this Debenture, the unconditional and absolute
obligation of the Company to pay the Holder of this Debenture the principal of
and interest on this Debenture as when and when the same become due and payable
in accordance with the terms or to affect the relative rights of the Holder of
this Debenture and the creditors of the Company; nor shall anything herein
prevent the Holder of this Debenture from exercising all remedies otherwise
permitted by applicable law upon default under this Debenture, subject to the
right, if any, of the holders of Senior Indebtedness in respect to cash,
property, or securities of the Company received upon the exercise of any such
remedy if such results in a liquidation of the Company.
The term "Senior Indebtedness" shall mean the principal of, premium, if
any, and interest on all indebtedness of the Company, whether outstanding on the
date of this Agreement or thereafter created, incurred, assumed or guaranteed,
for (i) money borrowed from or guaranteed to others or representing purchase
money indebtedness, (ii) lease obligations with respect to equipment leased for
a period of at least one year, (iii) charges of a common carrier subject to the
jurisdiction of the Federal Communications Commission, (iv) charges for billing
and collection services and data processing services provided by third party
<PAGE>
vendors, (v) all indebtedness of the Company, whether outstanding on the date of
this Debenture or thereafter, incurred, assumed, or guaranteed, for money
borrowed from or guaranteed to banks or institutional lenders, and (vi) any
renewals, refundings, extensions, or modifications of any of the foregoing.
7. If any of the following events (herein called "Events of Default") shall
occur:
(a) the Company shall default in the payment of an installment of
principal or interest of the Debenture when the same shall become due
and payable, whether at any stated due date, at maturity, by
acceleration, or otherwise;
(b) the Company (i) shall make an assignment for the benefit of
creditors, (ii) shall file a voluntary petition in bankruptcy, (iii)
shall be adjudicated as bankrupt or insolvent, (iv) shall file any
petition or answer seeking for itself any reorganization, arrangement,
composition, readjustment, dissolution or similar relief under any
present or future statute, law or regulation, or shall file any answer
admitting the material allegations of a petition filed against the
Company in any such proceeding, (v) shall seek or consent to or
acquiesce in the appointment of a trustee, receiver or liquidator of
the Company or of all or any substantial part of the properties of the
Company, or (vi) the Company or its Board of Directors shall take any
action looking to the dissolution or liquidation of the Company; or
(c) within sixty (60) days after the commencement of any proceeding
against the Company seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief
under any present or future statute, law or regulation, such
proceedings shall not have been dismissed, or within sixty (60) days
after the appointment without the consent or acquiescence of the
Company of any trustee, receiver, or liquidator of the Company or of
all or any substantial part of the properties of the Company, such
appointment shall have not been vacated;
(d) the Collateral is attached, seized, levied upon or subjected to a
writ or distress warrant, or come within the possession of any
receiver, trustee, custordian or assignee for the benefit of creditors
and the same is not cured within thirty (30)days thereafter; an
application is made by any individual, firm or entity other than the
<PAGE>
Company for the appointment of a receiver, trustee, or custodian for
the Collateral and the same is not dismissed within thirty (30) days
after the application therefor; or
(e) a notice of lien, levy or assessment is filed of record with
respect to the Collateral by the United States, or by any state,
county, municipal, privincial, federal or other government agency, or
any taxes or debts owing to any of the foregoing become a lien or
encumbrance upon the Collateral, and such lien or encumbrance is not
released within thirty (30) days after its creation; or
then, and in any such event, the registered Holder may at any time, at his
option, by written notice or notices to the Company, declare the entire unpaid
principal balance of and accrued interest on the Debenture owned by such
registered Holder to be due and payable, whereupon the same shall forthwith
mature and become due and payable without presentment, demand, protest, or
notice, all of which are hereby waived. In addition, Holders shall have the
following rights and remedies:
(i) all of the rights and remedies of a secured party
under the Uniform Commercial Code, or other applicable law,
all of which rights and remedies shall be cumulative, and
none exclusive, to the extent permitted by law, in addition
to any other rights and remedies contained in this
Debenture;
(ii) the right to sell, use, or to otherwise dispose of
the Collateral as set forth in the Collateral Assignment of
Media Credits. The proceeds realized from the sale of any
Collateral shall be applied first to the reasonable costs
and expenses attendant upon such sale; second to interest
due upon the Debenture and third to the principal of the
Debentures. If any deficiency shall arise, the Company shall
remain liable to the Holders therfor; and
(iii) an additional 20% administrative transaction fee
in order to cover Holders' costs of disposition of the
Collateral upon default, which fee the parties agree is a
reasonable administrative disposition cost.
In connection with the exercise of such remedies, any notice required to be
given by the Representative on behalf of the Holders of a sale, lease, other
disposition of the Collateral or any other intended action by the
Representative, which is deposited in the United States mail, postage prepaid
<PAGE>
and duly addressed to the Company, at the address set forth in the Subscription
Agreement (as hereinafter defined), twenty (20) days prior to such proposed
action, shall constitue commercially and fair notice thereof to the Company.
8. This Debenture, when registered, is transferable by any registered
Holder in person or by his attorney duly authorized in writing on a register
maintained by the Company, only on the surrender of this Debenture, duly
endorsed without recourse and subject to the restrictions on transfer set forth
in the Offshore Securities Subscription Agreement (the "Subscription Agreement")
pursuant to which the original Holder of this Debenture acquired this Debenture.
The Company will not be required to make any transfer unless and until it
receives this Debenture duly and properly endorsed without recourse by the
registered Holder or by his attorney duly authorized in writing. The Company may
treat the registered Holder as the absolute owner for the purpose of receiving
payment of or on account of principal and interest due, and for all other
purposes, and may require guaranty of authenticity of signatures with respect to
endorsements.
9. Each maker, surety, guarantor, endorser or other party liable for the
payment of this Debenture, in whole or in part, hereby expressly waives
presentment and demand for payment, notice of intention to accelerate maturity,
notice of acceleration of maturity, protest and notice of protest and
nonpayment, bringing of suit and diligence in taking any action to collect sums
owing hereon, and agree that this Debenture, and any payment hereunder, may be
extended from time to time without in any way affecting such liability.
All references to the Company herein shall, and shall be deemed to, include
its successors and assigns, and all covenants, stipulations, promises and
agreements contained herein by or on behalf of the Company shall be binding upon
its successors and assigns, whether so expressed or not.
<PAGE>
IN WITNESS WHEREOF, PREFERRED VOICE, INC. has caused this
Debenture to be executed in its corporate name and in its behalf by its Chief
Executive Officer, his signature to be attested by its Secretary and its
corporate seal to be hereunto affixed and this Debenture to be dated, issued,
and delivered, all on the day of , 1997, each of such officers being thereunto
duly authorized.
PREFERRED VOICE, INC.
---------------------
G. Ray Miller
Chief Executive Officer
ATTEST:
- -------------------
Mary Merritt
Secretary
THIS WARRANT AND THE SECURITIES TO BE ISSUED UPON EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER EITHER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"1933 ACT") OR APPLICABLE STATE SECURITIES LAWS (THE "STATE ACTS"), AND SHALL
NOT BE SOLD, PLEDGED, HYPOTHECATED, DONATED OR OTHERWISE TRANSFERRED (WHETHER OR
NOT FOR CONSIDERATION) BY THE HOLDER EXCEPT BY REGISTRATION OR PURSUANT TO AN
EXEMPTION FROM REGISTRATION UPON THE ISSUANCE TO THE COMPANY OF A FAVORABLE
OPINION OF COUNSEL OR OTHER EVIDENCE REASONABLE SATISFACTORY TO THE COMPANY TO
THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE 1933 ACT AND
THE STATE ACTS. IN ADDITION, THE WARRANT AND THE SECURITIES TO BE ISSUED UPON
EXERCISE OF THIS WARRANT MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES (AS
DEFINED IN REGULATION S UNDER THE 1933 ACT) OR TO OR FOR THE ACCOUNT OR BENEFIT
OF U.S. PERSONS (AS DEFINED IN REGULATION S) EXCEPT PURSUANT TO REGULATION S AND
PURSUANT TO REGISTRATION UNDER THE 1933 ACT OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT.
THE WARRANT AND THE SECURITIES TO BE ISSUED UPON EXERCISE OF THIS WARRANT ARE
BEING OFFERED PURSUANT TO THE EXEMPTION FROM REGISTRATION WITH THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") CONTAINED IN REGULATION S
FOR OFFERS AND SALES OF SECURITIES THAT OCCUR OUTSIDE THE UNITED STATES TO
NON-U.S. PERSONS (WITHIN THE MEANING OF REGULATION S). NO REGISTRATION STATEMENT
OR APPLICATION TO REGISTER THESE SECURITIES HAS BEEN OR WILL BE FILED WITH THE
COMMISSION OR UNDER THE SECURITIES LAWS OF ANY COUNTRY OR JURISDICTION. THIS
WARRANT AND THE SECURITIES TO BE ISSUED UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN APPROVED OR DISAPPROVED BY THE COMMISSION. BECAUSE THE WARRANT HAS BEEN
ISSUED PURSUANT TO REGULATION S, THE WARRANT MAY NOT BE EXERCISED BY OR ON
BEHALF OF ANY U.S. PERSON (AS DEFINED IN REGULATION S) UNLESS REGISTERED UNDER
THE 1933 ACT OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE, AND THE WARRANT MAY
NOT BE EXERCISED WITHIN THE UNITED STATES AND SECURITIES MAY NOT BE DELIVERED
WITHIN THE UNITED STATES UPON EXERCISE, OTHER THAN IN OFFERINGS DEEMED TO MEET
THE DEFINITION OF AN "OFFSHORE TRANSACTION" PURSUANT TO REGULATION S, UNLESS
REGISTERED UNDER THE 1933 ACT OR AN EXEMPTION FROM REGISTRATION IS APPLICABLE
<PAGE>
No.________ ______Warrants
PREFERRED VOICE, INC.
WARRANT CERTIFICATE
This warrant certificate ("Warrant Certificate") certifies that for value
received _____________ (the "Initial Warrant Holder") or registered assigns is
the owner of the number of warrants specified above, each of which entitles the
holder thereof to purchase, at any time on or before the Expiration Date
hereinafter provided, one fully paid and non-assessable share of Common Stock,
$0.00l par value per share, of Preferred Voice, Inc., a Delaware corporation
(the "Company"), at a purchase price of $1.00 per share of Common Stock payable
in lawful money of the United States of America, in cash, by official bank or
certified check, or by wire transfer ("Warrants").
1. Warrant; Purchase Price
Each Warrant shall entitle the holder thereof to purchase one share of
Common Stock, $0.001 par value per share, of the Company ("Common Stock") during
the period commencing on the date hereof and ending on the Expiration Date. The
purchase price payable upon exercise of a Warrant shall be $1.00 (the "Purchase
Price"). The Purchase Price and number of Warrants evidenced by this Warrant
Certificate are subject to adjustment as provided in Article 7. Common Stock
purchased or subject to purchase pursuant to the Warrants shall be called
"Warrant Shares" herein.
2. Exercise; Expiration Date
2.1 Subject to Section 4 hereto, each Warrant is exercisable, at the option
of the holder, at any time after issuance and on or before the Expiration Date.
In the case of exercise of less than all the Warrants represented by a Warrant
Certificate, the Company shall cancel the Warrant Certificate upon the surrender
thereof and shall execute and deliver a new Warrant Certificate for the balance
of such Warrants.
2.2 The term "Expiration Date" shall mean 5:00 p.m. Dallas time on June 25,
2000, or if such date shall in the State of Texas be a holiday or a day on which
banks are authorized to close, then 5:00 p.m. Dallas time the next following day
which in the State of Texas is not a holiday or a day on which banks are
authorized to close.
3. Registration and Transfer on Company Books
3.1 The Company shall maintain books for the registration and transfer of
Warrant Certificates.
3.2 Prior to due presentment for registration of transfer of this Warrant
Certificate, the Company may deem and treat the registered holder as the
absolute owner thereof.
<PAGE>
3.3 The Company shall register upon its books any transfer of a Warrant
Certificate upon surrender of same to the Company accompanied (if so required by
the Company) by a written instrument of transfer duly executed by the registered
holder or by a duly authorized attorney and subject to the restrictions on
transfer set forth in the Offshore Securities Subscription Agreement pursuant to
which the original holder of this Warrant acquired the Warrant. Upon any such
registration of transfer, new Warrant Certificate(s) shall be issued to the
transferee(s) and the surrendered Warrant Certificate shall be canceled by the
Company. A Warrant Certificate may also be exchanged, at the option of the
holder, for new Warrant Certificates representing in the aggregate the number of
Warrants evidenced by the Warrant Certificate surrendered.
4. Securities Exercise Provisions
4.1 The Warrant Shares will not be registered under the Securities Act or
any state securities law and shall not be transferable unless registered or an
exemption from registration is available. A legend to the foregoing effect will
be placed on any certificate representing such shares.
4.2 The Warrant will not be permitted to be exercised on behalf of a U.S.
person (as defined in Regulation S) unless a written opinion of counsel to the
effect that the Warrant and the shares (the "Warrant Shares") of common stock of
the Company to be issued upon exercise of the Warrant have been registered under
the Securities Act or are exempt from registration thereunder has been provided
to the Company. The Warrant will not be permitted to be exercised within the
United States upon exercise thereof (other than in an offering deemed to meet
the definition of "offshore transaction" pursuant to Regulation S) unless a
written opinion of counsel to the effect that the Warrant and the Warrant Shares
have been registered under the Securities Act or are exempt from the
registration requirements of the Securities Act under an exemption thereunder
has been provided to the Company.
5. Reservation of Warrant Shares
The Company covenants that it will at all times reserve and keep available
out of its authorized Common Stock, solely for the purpose of issue upon
exercise of the Warrants, such number of shares of Common Stock as shall then be
issuable upon the exercise of all outstanding Warrants. The Company covenants
that all shares of Common Stock which shall be issuable upon exercise of the
Warrants shall be duly and validly issued and fully paid and non-assessable and
free from all taxes, liens and charges with respect to the issue thereof.
<PAGE>
6. Loss or Mutilation
Upon receipt by the Company of reasonable evidence of the ownership of and
the loss, theft, destruction or mutilation of any Warrant Certificate and, in
the case of loss, theft or destruction, of indemnity reasonably satisfactory to
the Company, or, in the case of mutilation, upon surrender and cancellation of
the mutilated Warrant Certificate, the Company shall execute and deliver in lieu
thereof a new Warrant Certificate representing an equal number of Warrants. 7.
Adjustment of Purchase Price and Number of Warrant Shares Deliverable
7.1 The Purchase Price and the number of shares of Common Stock purchasable
pursuant to this Warrant shall be subject to adjustment from time to time as
hereinafter set forth in this Article 7. Whenever reference is made in this
Article 7 to the issue or sale of shares of Common Stock, or simply shares, such
term shall mean any stock of any class of the Company other than preferred stock
with a fixed limit on dividends and a fixed amount payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company.
The shares issuable upon exercise of the Warrants shall however be shares of
Common Stock of the Company, par value $0.00l per share, as constituted at the
date hereof, except as otherwise provided in Sections 7.3 and 7.4.
7.2 In case the Company shall at any time change as a whole, by subdivision
or combination in any manner or by the making of a stock dividend, the number of
outstanding shares into a different number of shares, with or without par value,
(i) the number of shares which immediately prior to such change the holder of
each Warrant shall have been entitled to purchase pursuant to this Warrant shall
be increased or decreased in direct proportion to the increase or decrease,
respectively, in the number of shares outstanding immediately prior to such
change, and (ii) the Purchase Price in effect immediately prior to such change
shall be increased or decreased in inverse proportion to such increase or
decrease in the number of such shares outstanding immediately prior to such
change. For the purpose of this Section 7.2, the number of shares outstanding at
any given time shall not include shares in the treasury of the Company.
7.3 In case of any capital reorganization or any reclassification of the
capital stock of the Company or in case of the consolidation or merger of the
Company with another corporation, or in case of any sale, transfer or other
disposition to another corporation of all or substantially all the property,
assets, business and good will of the Company, the holder of each Warrant shall
thereafter be entitled to purchase (and it shall be a condition to the
consummation of any such reorganization, reclassification, consolidation,
<PAGE>
merger, sale, transfer or other disposition that appropriate provision shall be
made so that such holder shall thereafter be entitled to purchase) the kind and
amount of shares of stock and other securities and property receivable in such
transaction which a shareholder receives who holds the number of shares which
the Warrant entitled the holder to purchase immediately prior to such capital
reorganization, reclassification of capital stock, consolidation, merger, sale,
transfer or other disposition; and in any such case appropriate adjustments
shall be made in the application of the provisions of this Article 7 with
respect to rights and interests thereafter of the holder of the Warrants to the
end that the provisions of this Article 7 shall thereafter be applicable, as
nearly as reasonably may be, in relation to any shares or other property
thereafter purchasable upon the exercise of the Warrants.
7.4 In the event the Company shall declare a dividend upon the Common Stock
payable otherwise than out of earnings or earned surplus or otherwise than in
shares of Common Stock or in stock or obligations directly or indirectly
convertible into or exchangeable for such shares, the holder of each Warrant
shall, upon exercise of the Warrant, be entitled to purchase, in addition to the
number of shares deliverable upon such exercise, against payment of the Warrant
Price therefor but without further consideration, the cash, stock or other
securities or property which the holder of the Warrant would have received as
dividends (otherwise than out of such earnings or earned surplus and otherwise
than in shares or in obligations convertible into or exchangeable for Common
Stock) if continuously since the date hereof such holder (i) had been the holder
of record of the number of shares deliverable upon such exercise and (ii) had
retained all dividends in stock or other securities (other than shares or such
convertible or exchangeable stock or obligations) paid or payable in respect of
said number of shares or in respect of any such stock or other securities so
paid or payable as such dividends.
7.5 No certificate for fractional shares shall be issued upon the exercise
of the Warrants, but in lieu thereof the Company shall purchase any such
fractional interest calculated to the nearest cent.
7.6 Whenever the Purchase Price is adjusted as herein provided, the Company
shall forthwith deliver to each Warrant holder a statement signed by the
President of the Company and by its Treasurer or Secretary stating the adjusted
Purchase Price and number of shares determined as herein specified. Such
statement shall show in detail the facts requiring such adjustment, including a
statement of the consideration received by the Company for any additional stock
issued.
7.7 In the event at any time:
(i) The Company shall pay any dividend payable in stock upon its
Common Stock or make any distribution (other than cash dividends)
to the holders of its Common Stock; or
(ii) The Company shall offer for subscription pro rata to the
holders of its Common Stock any additional shares of stock of any
class or any other rights; or
<PAGE>
(iii) The Company shall effect any capital reorganization or any
reclassification of or change in the outstanding capital stock of
the Company (other than a change in par value, or a change from
par value to no par value, or a change from no par value to par
value, or a change resulting solely from a subdivision or
combination of outstanding shares), or any consolidation or
merger, or any sale, transfer or other disposition of all or
substantially all its property, assets, business and good will as
an entirety, or the liquidation, dissolution or winding up of the
Company; or
(iv) The Company shall declare a dividend upon its Common Stock
payable otherwise than out of earnings or earned surplus or
otherwise than in Common Stock or any stock or obligations
directly or indirectly convertible into or exchangeable for
Common Stock;
then, in any such case, the Company shall cause at least thirty days' prior
notice to be mailed to the registered holder of each Warrant at the address of
such holder shown on the books of the Company. Such notice shall also specify
the date on which the books of the Company shall close, or a record be taken,
for such stock dividend, distribution or subscription rights, or the date on
which such reclassification, reorganization, consolidation, merger, sale,
transfer, disposition, liquidation, dissolution, winding up or dividend, as the
case may be, shall take place, and the date of participation therein by the
holders of shares if any such date is to be fixed, and shall also set forth such
facts with respect thereto as shall be reasonably necessary to indicate the
effect of such action on the rights of the holders of the Warrants.
8. Governing Law
8.1 This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed by its officers thereunto duly authorized and its corporate seal
to be affixed hereon as of the 25th day of June, 1997.
PREFERRED VOICE, INC.
BY:
--------------------------
Chairman of the Board
Attest:
- ------------------
Secretary
OFFSHORE SECURITIES
SUBSCRIPTION AGREEMENT
THIS SECURITIES SUBSCRIPTION AGREEMENT is executed in reliance upon the
transaction "safe harbor" afforded by Regulation S ("Regulation S") as
promulgated by the Securities and Exchange Commission ("SEC"), under the United
States Securities Act of 1933, as amended ("Securities Act").
THIS AGREEMENT has been executed by the undersigned in connection with
the offering of units (the "Units), with each Unit consisting of one 12%
Convertible Debenture in the principal amount of $ 160,000.00 (the "Debenture")
and one warrant (the "Warrant") to purchase 160,000 shares of common stock (the
"Common Stock"), par value $.001 per share, of Preferred Voice, Inc., located at
12655 N. Central Expressway, Suite 800, Dallas, Texas 75243, a corporation
organized under the laws of the State of Delaware, United States of America
(hereinafter referred to as "the Company"). The undersigned (hereinafter
referred to as "Buyer") is located at and is a corporation organized under the
laws of or is a citizen and resident of the country set forth below Buyer's
signature, and hereby represents and warrants to, and agrees with the Company as
follows:
1. AGREEMENT TO SUBSCRIBE. The undersigned hereby subscribes for one
Unit, in consideration for (i) cancellation of two debentures (the "Prior
Debentures"), dated November 12, 1996 and December 27, 1996, in the aggregate
principal amount of $150,000 issued to Buyer by the Company with accrued
interest of $10,000.00 and all interest in the collateral serving the prior
debentures.
2. REPRESENTATIONS OF BUYER.
Buyer represents and warrants to the Company as follows:
a. Offshore Transaction.
(i) At the time the buy order to purchase the Units was
originated, Buyer was outside the United States, Buyer is
outside the United States on the date of the execution and
delivery of this Agreement and Buyer is a resident at the
address set forth below Buyer's signature as Buyer's primary
residence;
(ii) No offer of the Units was made to Buyer in the United
States;
(iii) The transactions contemplated by this Agreement;
(a) have not been prearranged with a
purchaser in the United States which is
a U.S. person, and
(b) are not part of a plan or scheme to
evade the registration provisions of
the Securities Act;
(iv) Buyer is not a citizen of the United States; and
(v) Buyer is not a U.S. person nor is the Buyer acquiring
the Units or the securities comprising the Units for the
benefit of a U.S. person, as defined in
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<PAGE>
Regulation S. The term "U.S. Person", as defined in
Regulation S, means:
(a) any natural person resident in the
United States;
(b) any partnership or corporation organized
or incorporated under the laws of the
United States;
(c) any estate of which any executor or
administrator is a U.S. person, unless
an executor or administrator who is not
a U.S. person has sole or shared
investment discretion with respect to
the assets of the estate and the estate
is governed by foreign law;
(d) any trust of which any trustee is a U.S.
person; unless a professional fiduciary
(trustee) who is not a U.S. person has
sole or shared investment discretion
with respect to the assets of the trust
and no trust beneficiary (and no trust
settlor if a revocable trust) is a U.S.
person;
(e) any agency or branch of a foreign entity
located in the United States;
(f) any non-discretionary account or similar
account (other than an estate or trust)
held by a dealer or other fiduciary for
the benefit or account of a U.S. person;
(g) any discretionary account or similar
account (other than an estate or trust)
held by a dealer or other fiduciary for
the benefit or account of a U.S. person;
(h) any partnership or corporation if:
(1) organized or incorporated
under the laws of any foreign jurisdiction;
and
(2) formed by a U.S. person
principally for the purpose of investing in
securities not registered under the
Securities Act, unless it is organized or
incorporated, and owned, by accredited
investors (as defined in Rule 501(a) under
the Securities Act) who are not natural
persons, estates or trusts;
With respect to any agencies or branches of U.S. persons located outside
the United States for valid business reasons and engaged in the insurance or
banking business, and subject to substantive insurance or banking regulation (as
applicable) in the jurisdiction where located, the agency or branch is not
considered to be a U.S. person.
b. Investment Representations. Buyer is purchasing the Units and the
securities comprising the Units for Buyer's own account and for investment
purposes and not with a view towards distribution. Buyer does not have any
contract, understanding or arrangement with any person to sell, transfer or
grant participation to such person or any third person with respect to the Units
or the securities comprising the Units.
2
<PAGE>
c. Restrictions on Debentures and Warrants.
(i) Buyer understands that neither the Units nor the
securities comprising the Units have been registered under
the Securities Act, any state securities law or the laws of
any foreign jurisdiction and have not been approved or
disapproved by the SEC;
(ii) Buyer understands that the Units and the securities
comprising the Units are being offered and sold to Buyer in
reliance on the Regulation S safe harbor from the
registration requirements of the Securities Act and that the
Company is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgments and
understandings of Buyer set forth herein in order to
determine the applicability of such safe harbor and the
suitability of Buyer to acquire the Units and the securities
comprising the Units;
(iii) Buyer agrees that from the date hereof until the
forty-first (41st) day after the final closing of the sale
of all Units sold by the Company pursuant to Regulation S
(the "Restricted Period"), Buyer, or any successor, or any
Professional (as defined in Section 2c.(iv) hereof) (except
for sales of any Units or the securities comprising the
Units registered under the Securities Act or otherwise
exempt from such registration) (a) will not sell any of the
Units or the securities comprising the Units to a U.S.
Person or for the account or benefit of a U.S. Person or
anyone believed to be a U.S. Person, (b) will not engage in
any efforts to sell the Units or the securities comprising
the Units in the United States, and (c) will send to a
Professional acting as agent or principal, a confirmation or
other notice stating that the Professional is subject to the
same restrictions on transfer to U. S. Persons or for the
account of U.S. Persons during the Restricted Period as
provided herein. The Company will not honor or register and
will not be obligated to honor or register any transfer in
violation of these provisions; to assure full compliance
with the restrictions placed on the resale of securities
offered pursuant to Regulation S, the Company shall place on
the certificates representing the Debentures and the
Warrants comprising the Units the restrictive legend
attached hereto as Exhibit "A" and Exhibit "B",
respectively;
(iv) A "Professional" is a "distributor" as defined in Rule
902(c) under the Securities Act (generally any underwriter,
or other person, who participates, pursuant to a contractual
arrangement, in the distribution of the Units or the
securities which comprise the Units); a dealer as defined in
Section 2(12) of the United States Securities Exchange Act
of 1934, as amended (the "Exchange Act")(encompassing those
who engage in the business of trading or dealing in
securities as agent, broker, or principal); or a person
receiving a selling concession, fee or other remuneration in
respect of the Units or the securities comprising the Units
sold;
(v) Buyer covenants that (a) the Warrant will not be
exercised on behalf of a U.S. person (as defined in
Regulation S) or (b) a written opinion of counsel, in form
and substance satisfactory to the Company, to the effect
that the Warrant and the shares (the " Warrant Shares") of
Common Stock to be issued on exercise of the Warrant have
been registered under the Securities Act or are exempt from
registration thereunder will be provided to the Company;
(vi) Buyer covenants that (a) the Warrant will not be
exercised within the United States, and the Warrant Shares
will not be delivered within the United States upon exercise
thereof (other than in an offering deemed to meet the
definition of "offshore transaction" pursuant to Regulation
3
<PAGE>
S), or (b) a written opinion, in form and substance
satisfactory to the Company, to the effect that the Warrant
and the Warrant Shares have been registered under the
Securities Act or are exempt from the registration
requirements of the Securities Act under an exemption
thereunder will be provided to the Company;
(vii) Buyer covenants that (a) the Debenture will not be
exercised on behalf of a U.S. person (as defined in
Regulation S) or (b) a written opinion of counsel, in form
and substance satisfactory to the Company, to the effect
that the Debenture and the shares (the "Debenture Shares")
of Common Stock to be issued on conversion of the Debenture
have been registered under the Securities Act or are exempt
from registration thereunder will be provided to the
Company; and
(viii) Buyer covenants that (a) the Debenture will not be
exercised within the United States, and the Debenture Shares
will not be delivered within the United States upon exercise
thereof (other than in an offering deemed to meet the
definition of "offshore transaction" pursuant to Regulation
S), or (b) a written opinion in form and substance
satisfactory to the Company, to the effect that the
Debenture and the Debenture Shares have been registered
under the Securities Act or are exempt from the registration
requirements of the Securities Act under an exemption
thereunder will be provided to the Company.
d. Access to Information. Buyer has had the opportunity to ask questions
and receive answers from the Company concerning the Company, the terms and
conditions of this offering, and to obtain from the Company any additional
information that the Company possesses or may obtain without unreasonable effort
or expense that is necessary for Buyer to make an informed investment decision.
The Company encourages Buyer to review the Company's disclosure documents that
have been filed with the SEC (collectively, the "Company Reports"). By virtue of
the Company Reports, including all documents referred to therein, Buyer has had
access to all material and relevant information necessary to enable Buyer to
make an informed investment decision. All data requested by Buyer from the
Company or its representatives concerning the business and financial condition
of the Company and the terms and conditions of the offering has been furnished
to Buyer's satisfaction. Buyer understands that there are numerous and
substantial risks associated with the purchase of the Units and the securities
comprising the Units that could result in a total loss of the Buyer's
investment.
e. Understanding of Investment Risks. Buyer understands that realization of
the objectives of the Company is subject to significant economic and business
risks.
f. No Government Recommendation or Approval. Buyer understands that no
Federal, State or foreign government agency has passed on or made any
recommendation or endorsement of the Units or the securities comprising the
Units. No registration statement or application to register these securities has
been or will be filed with the SEC or under the securities laws of any country
or jurisdiction and these securities cannot be sold, transferred or otherwise
disposed of unless registered under such laws or exemptions from registration
are available. In addition, the securities may not be offered or sold in the
United States or to a U.S. person unless the securities are sold in accordance
with Regulation S and pursuant to registration under the Securities Act, or
pursuant to an available exemption from registration thereunder. These
securities have not been approved or disapproved by the SEC nor has the SEC
passed upon the accuracy or adequacy of any information supplied by the Company.
Any representation to the contrary is a criminal offense. The SEC does not pass
upon the merits of or give its approval to any securities offered or the terms
of any offering, nor dies it pass upon the accuracy or completeness of any
offering circular or offering selling literature. These securities are offered
pursuant to an exemption from registration under the Securities Act; but no
securities regulatory authority has made an independent determination that the
securities offered hereunder are exempt from registration.
4
<PAGE>
g. Resales of Securities. All subsequent offers and sales of the Units and
the securities that comprise the Units shall be made in compliance with
Regulation S and shall be made pursuant to registration of the Units and the
securities which comprise the Units under the Securities Act or pursuant to
another exemption from such registration.
h. Subscription Agreement. The Subscription Agreement has been duly
authorized, validly executed and delivered on behalf of the Buyer and is a valid
and binding agreement in accordance with its terms, subject to general
principles of equity and to bankruptcy or other laws affecting the enforcement
of creditors' rights generally.
i. Non-contravention. If Buyer is not a natural person, the execution and
delivery of the Subscription Agreement and the consummation of the purchase of
the Units and the securities which comprise the Units and the transactions
contemplated by this Subscription Agreement do not and will not conflict with or
result in a breach by the Buyer of any of the terms or provision of, or
constitute a default under, the organization documents (i.e., articles of
incorporation and bylaws, partnership agreement, trust indenture or similar
documents) of Buyer or any indenture, mortgage, deed of trust or other material
agreement or instrument to which Buyer is a party or by which its or any of its
respective properties or assets are bound, or any existing applicable law, rule
or regulation or any applicable law, rule or regulation or any applicable
decree, judgment or order of any court or regulatory body, administrative agency
or other governmental body having jurisdiction over the Buyer or any of its
properties or assets.
j. Sophistication. Buyer is knowledgeable and experienced in business and
financial matters and capable of evaluating the merits and risks of, and making
an informed decision with regard to, the investment in the Units and the
securities which comprise the Units, is able to bear the economic risk of loss
of its investment in the Units, has been granted the opportunity to make a
thorough investigation of the affairs of the Company, and has availed itself of
such opportunity either directly or through its authorized representatives.
Buyer understands that the investment in the Company is subject to significant
economic and business risks.
k. No Advertisement. Buyer acknowledges that its purchase of the Units has
not been make through or as a result of and the distribution of the Units is not
being accompanied by an advertisement.
l. No Offering Memorandum. Buyer acknowledgments that it has not received
or reviewed any material which appears or purports to describe the business and
affairs of the Company and which was prepared primarily for delivery to and
review by prospective investors in connection with the offering of Units.
3. REPRESENTATION OF THE COMPANY.
a. Reporting Company Status. The Company is a "reporting company" as
defined by Rule 902 of Regulation S. The Company is in material compliance, to
the extent applicable, with all filing obligations under Section 13 of the
Exchange Act.
b. Offshore Transaction. The Company has not offered the Units or the
securities which comprise the Units that are the subject of this Agreement to
any person in the United States, any identifiable groups of U. S. citizens
abroad, or to any U.S. person as that term is defined in Section 902(o) of
Regulation S.
c. No Directed Selling Efforts. In regard to the transaction contemplated
by this Agreement, the Company has not conducted any "directed selling efforts"
as that term is defined in Rule 902 of Regulation S, nor has the Company
conducted any general solicitation relating to the offer and sale of the Units
or the securities which comprise the Units that are the subject of this
transaction to persons resident within the United States or elsewhere.
5
<PAGE>
d. Concerning the Units. The shares of Common Stock, and the Warrants which
comprise the Units, when issued and delivered, will be duly and validly
authorized and issued and will not subject the holders thereof to personal
liability by reason of being such holders. There are no preemptive rights of any
stockholder of the Company.
e. Subscription Agreement. The Subscription Agreement has been duly
authorized, validly executed and delivered on behalf of the Company and is a
valid and binding agreement in accordance with its terms, subject to general
principles of equity and to bankruptcy or other laws affecting the enforcement
of creditors' rights generally.
f. Non-contravention. The execution and delivery of the Subscription
Agreement and the consummation of the issuance of the shares of Common Stock and
the Warrants which comprise the Units and the transactions contemplated by this
Subscription Agreement do not and will not conflict with or result in a breach
by the Company of any of the terms or provision of, or constitute a default
under, the certificate of incorporation or bylaws of the Company or any
indenture, mortgage, deed of trust or other material agreement or instrument to
which the Company is a party or by which its or any of its respective properties
or assets are bound, or any existing applicable law, rule or regulation or any
applicable law, rule or regulation or any applicable decree, judgment or order
of any court, Federal or State regulatory body, administrative agency or other
governmental body having jurisdiction over the Company or any of its properties
or assets.
g. Approvals. The Company is not aware of any authorization, approval or
consent of any governmental body which is legally required for the issuance and
sale of the shares of Common Stock and Warrants which comprise the Units as
contemplated by the Subscription Agreement.
h. Continuous Offering. The sale of the shares of Common Stock and Warrants
which comprise the Units pursuant to this Agreement is not a "continuous
offering" as defined in Rule 902(m) or, if it is a continuous offering, the sale
of the shares of Common Stock and Warrants which comprise the Units hereunder is
the last sale thereunder and the "Restricted Period" as defined in Rule 902(m)
commences on the date of such last sale.
4. SAFE HARBOR; RELIANCE ON REPRESENTATIONS. Buyer understands that neither
the offer and sale of the Units nor the securities which comprise the Units are
being registered under the Securities Act. The Company is relying on the rules
governing offers and sales made outside the United States pursuant to Regulation
S and Buyer's representations hereunder.
5. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL. Buyer understands that
the Company's obligation to sell the Units is conditioned upon:
a. The receipt and acceptance by the Company of this Subscription Agreement
for the Units executed by Buyer as evidenced by execution of this Subscription
Agreement by the Company;
b. Delivery to the Company of the Prior Debenture marked canceled;
c. Execution and delivery to the Company of documentation satisfactory to
the Company terminating the Loan Agreement pursuant to which the Prior
Debentures were issued.
6
<PAGE>
6. BUYER'S ACKNOWLEDGMENT. Buyer represents and warrants that at the time
of the purchase, Buyer does not have a short or hedge position in the Units or
the securities which comprise the Units. During the Restricted Period, Buyer, in
the United States, (a) shall not effect short sales in the Units or the
securities which comprise the Units, and (b) shall not hedge, through short
sales, options or otherwise, Buyer's purchase of such securities. Buyer has no
agreement or understanding with any person with respect to the resale of the
Units and the securities which comprise the Units.
IN WITNESS WHEREOF, this Offshore Securities Subscription Agreement was
duly executed on this _______ day of the month of __________ , 1997.
Official Signatory of the Company:
PREFERRED VOICE, INC.
By:_______________________
Print Name:_______________
Title:____________________
Name of Buyer:______________________
(please print)
____________________________________
(Signature)
Title, if Buyer is not a natural person:___________________________
(please print)
____________________________________
Primary Residence of Buyer
7
<PAGE>
(Registration Instructions)
8
<PAGE>
EXHIBIT "A"
THIS CONVERTIBLE SUBORDINATED DEBENTURE(THE "DEBENTURE") AND THE SECURITIES TO
BE ISSUED UPON CONVERSION OF THIS DEBENTURE HAVE NOT BEEN REGISTERED UNDER
EITHER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT") OR APPLICABLE
STATE SECURITIES LAWS (THE "STATE ACTS"), AND SHALL NOT BE SOLD, PLEDGED,
HYPOTHECATED, DONATED OR OTHERWISE TRANSFERRED (WHETHER OR NOT FOR
CONSIDERATION) BY THE HOLDER EXCEPT BY REGISTRATION OR PURSUANT TO AN EXEMPTION
FROM REGISTRATION UPON THE ISSUANCE TO THE COMPANY OF A FAVORABLE OPINION OF
COUNSEL OR OTHER EVIDENCE REASONABLE SATISFACTORY TO THE COMPANY TO THE EFFECT
THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE 1933 ACT AND THE STATE
ACTS. IN ADDITION, THE DEBENTURE AND THE SECURITIES TO BE ISSUED UPON CONVERSION
OF THIS DEBENTURE MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES (AS DEFINED IN
REGULATION S UNDER THE 1933 ACT) OR TO OR FOR THE ACCOUNT OR BENEFIT OF U.S.
PERSONS (AS DEFINED IN REGULATION S) EXCEPT PURSUANT TO REGULATION S AND
PURSUANT TO REGISTRATION UNDER THE 1933 ACT OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT.
THE DEBENTURE AND THE SECURITIES TO BE ISSUED UPON CONVERSION OF THIS DEBENTURE
ARE BEING OFFERED PURSUANT TO THE EXEMPTION FROM REGISTRATION WITH THE UNITED
STATES SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") CONTAINED IN
REGULATION S FOR OFFERS AND SALES OF SECURITIES THAT OCCUR OUTSIDE THE UNITED
STATES TO NON-U.S. PERSONS (WITHIN THE MEANING OF REGULATION S). NO REGISTRATION
STATEMENT OR APPLICATION TO REGISTER THESE SECURITIES HAS BEEN OR WILL BE FILED
WITH THE COMMISSION OR UNDER THE SECURITIES LAWS OF ANY COUNTRY OR JURISDICTION.
THIS DEBENTURE AND THE SECURITIES TO BE ISSUED UPON CONVERSION OF THIS DEBENTURE
HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE COMMISSION. BECAUSE THE DEBENTURE
HAS BEEN ISSUED PURSUANT TO REGULATION S, THE DEBENTURE MAY NOT BE EXERCISED BY
OR ON BEHALF OF ANY U.S. PERSON (AS DEFINED IN REGULATION S) UNLESS REGISTERED
UNDER THE 1933 ACT OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE, AND THE
DEBENTURE MAY NOT BE EXERCISED WITHIN THE UNITED STATES AND SECURITIES MAY NOT
BE DELIVERED WITHIN THE UNITED STATES UPON EXERCISE, OTHER THAN IN OFFERINGS
DEEMED TO MEET THE DEFINITION OF AN "OFFSHORE TRANSACTION" PURSUANT TO
REGULATION S, UNLESS REGISTERED UNDER THE 1933 ACT OR AN EXEMPTION FROM
REGISTRATION IS APPLICABLE
9
<PAGE>
EXHIBIT "B"
THIS WARRANT AND THE SECURITIES TO BE ISSUED UPON EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER EITHER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"1933 ACT"), OR APPLICABLE STATE SECURITIES LAWS (THE "STATE ACTS"), AND SHALL
NOT BE SOLD, PLEDGED, HYPOTHECATED, DONATED OR OTHERWISE TRANSFERRED (WHETHER OR
NOT FOR CONSIDERATION) BY THE HOLDER EXCEPT BY REGISTRATION OR PURSUANT TO AN
EXEMPTION FROM REGISTRATION UPON THE ISSUANCE TO THE COMPANY OF A FAVORABLE
OPINION OF COUNSEL OR OTHER EVIDENCE REASONABLE SATISFACTORY TO THE COMPANY TO
THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE 1933 ACT AND
THE STATE ACTS. IN ADDITION, THE WARRANT AND THE SECURITIES TO BE ISSUED UPON
EXERCISE OF THIS WARRANT MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES (AS
DEFINED IN REGULATION S UNDER THE 1933 ACT) OR TO OR FOR THE ACCOUNT OR BENEFIT
OF U.S. PERSONS (AS DEFINED IN REGULATION S) EXCEPT PURSUANT TO REGULATION S AND
PURSUANT TO REGISTRATION UNDER THE 1933 ACT OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT.
THE WARRANT AND THE SECURITIES TO BE ISSUED UPON EXERCISE OF THIS WARRANT ARE
BEING OFFERED PURSUANT TO THE EXEMPTION FROM REGISTRATION WITH THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") CONTAINED IN REGULATION S
FOR OFFERS AND SALES OF SECURITIES THAT OCCUR OUTSIDE THE UNITED STATES TO
NON-U.S. PERSONS (WITHIN THE MEANING OF REGULATION S). NO REGISTRATION STATEMENT
OR APPLICATION TO REGISTER THESE SECURITIES HAS BEEN OR WILL BE FILED WITH THE
COMMISSION OR UNDER THE SECURITIES LAWS OF ANY COUNTRY OR JURISDICTION. THIS
WARRANT AND THE SECURITIES TO BE ISSUED UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN APPROVED OR DISAPPROVED BY THE COMMISSION. BECAUSE THE WARRANT HAS BEEN
ISSUED PURSUANT TO REGULATION S, THE WARRANT MAY NOT BE EXERCISED BY OR ON
BEHALF OF ANY U.S. PERSON (AS DEFINED IN REGULATION S) UNLESS REGISTERED UNDER
THE 1933 ACT OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE, AND THE WARRANT MAY
NOT BE EXERCISED WITHIN THE UNITED STATES AND SECURITIES MAY NOT BE DELIVERED
WITHIN THE UNITED STATES UPON EXERCISE, OTHER THAN IN OFFERINGS DEEMED TO MEET
THE DEFINITION OF AN "OFFSHORE TRANSACTION" PURSUANT TO REGULATION S, UNLESS
REGISTERED UNDER THE 1933 ACT OR AN EXEMPTION FROM REGISTRATION IS APPLICABLE
10
OFFSHORE SECURITIES
SUBSCRIPTION AGREEMENT
THIS SECURITIES SUBSCRIPTION AGREEMENT is executed in reliance upon the
transaction "safe harbor" afforded by Regulation S ("Regulation S") as
promulgated by the Securities and Exchange Commission ("SEC"), under the United
States Securities Act of 1933, as amended ("Securities Act").
THIS AGREEMENT has been executed by the undersigned in connection with
the offering of units (the "Units), with each Unit consisting of one 12%
Convertible Debenture in the principal amount of $ 160,000.00 (the "Debenture")
and one warrant (the "Warrant") to purchase 160,000 shares of common stock (the
"Common Stock"), par value $.001 per share, of Preferred Voice, Inc., located at
12655 N. Central Expressway, Suite 800, Dallas, Texas 75243, a corporation
organized under the laws of the State of Delaware, United States of America
(hereinafter referred to as "the Company"). The undersigned (hereinafter
referred to as "Buyer") is located at and is a corporation organized under the
laws of or is a citizen and resident of the country set forth below Buyer's
signature, and hereby represents and warrants to, and agrees with the Company as
follows:
1. AGREEMENT TO SUBSCRIBE. The undersigned hereby subscribes for one
Unit for an aggregate purchase price of One Hundred and Sixty Thousand Dollars
($160,000.00)("Purchase Price") payable in United States Dollars. The Purchase
Price shall be payable in accordance with the payment schedule set forth in
Exhibit A hereto, (the "Schedule"), This Subscription Agreement shall constitute
a binding agreement to pay the Purchase Price in accordance with the Schedule.
The Debenture and the Warrant shall be issued at the closing; provided, however
, that if the undersigned defaults in the payment of the Purchase Price in
accordance with the Schedule, the Company may at its option by written notice to
the undersigned either(a) declare the entire unpaid balance of the Purchase
Price due and payable, whereupon the same shall forthwith mature and become due
and payable without further presentment, demand, protest or notice, all of which
are hereby waived or (b) elect to cause the Debenture to be converted into
shares of Common Stock based on the amount of the Purchase Price advanced to the
Company by the undersigned at the conversion ratio set forth in Section 3 of the
Debenture and to cancel the Warrant and the unpaid balance of the Purchase
Price.
2. REPRESENTATIONS OF BUYER.
Buyer represents and warrants to the Company as follows:
a. Offshore Transaction.
(i) At the time the buy order to purchase the Shares was
originated, buyer was outside the United States, Buyer is
outside the United States on the date of the execution and
delivery of this Agreement and Buyer is a resident at the
address set forth below Buyer's signature as Buyer's primary
residence;
(ii) No offer of the Units was made to Buyer in the United
States;
(iii) The transactions contemplated by this Agreement;
(a) have not been prearranged with a
purchaser in the United States which is
a U.S. person, and
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(b) are not part of a plan or scheme to
evade the registration provisions of the
Securities Act;
(iv) Buyer is not a citizen of the United States; and
(v) Buyer is not a U.S. person nor is the Buyer acquiring
the Units or the securities comprising the Units for the
benefit of a U.S. person, as defined in Regulation S. The
term "U.S. Person", as defined in Regulation S, means:
(a) any natural person resident in the
United States;
(b) any partnership or corporation
organized or incorporated under the
laws of the United States;
(c) any estate of which any executor or
administrator is a U.S. person,
unless an executor or administrator who
is not a U.S. person has sole or shared
investment discretion with respect to
the assets of the estate and the estate
is governed by foreign law;
(d) any trust of which any trustee is a
U.S. person; unless a professional
fiduciary (trustee) who is not a U.S.
person has sole or shared investment
discretion with respect to the assets
of the trust and no trust beneficiary
(and no trust settlor if a revocable
trust) is a U.S. person;
(e) any agency or branch of a foreign
entity located in the United States;
(f) any non-discretionary account or
similar account (other than an estate
or trust) held by a dealer or other
fiduciary for the benefit or account of
a U.S. person;
(g) any discretionary account or similar
account (other than an estate or trust)
held by a dealer or other fiduciary for
the benefit or account of a U.S.
person;
(h) any partnership or corporation if:
(1) organized or incorporated under
the laws of any foreign jurisdiction; and
(2) formed by a U.S. person
principally for the purpose of investing in
securities not registered under the
Securities Act, unless it is organized or
incorporated, and owned, by accredited
investors (as defined in Rule 501(a) under
the Securities Act) who are not natural
persons, estates or trusts;
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With respect to any agencies or branches of U.S. persons located
outside the United States for valid business reasons and engaged in the
insurance or banking business, and subject to substantive insurance or banking
regulation (as applicable) in the jurisdiction where located, the agency or
branch is not considered to be a U.S. person.
b. Investment Representations. Buyer is purchasing the Units and the
securities comprising the Units for Buyer's own account and for investment
purposes and not with a view towards distribution. Buyer does not have any
contract, understanding or arrangement with any person to sell, transfer or
grant participation to such person or any third person with respect to the Units
or the securities comprising the Units.
c. Restrictions on Debentures and Warrants.
(i) Buyer understands that neither the Units nor the
securities comprising the Units have been registered under
the Securities Act, any state securities law or the laws of
any foreign jurisdiction and have not been approved or
disapproved by the SEC;
(ii) Buyer understands that the Units and the
securities comprising the Units are being offered and sold
to Buyer in reliance on the Regulation S safe harbor from
the registration requirements of the Securities Act and that
the Company is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgments and
understandings of Buyer set forth herein in order to
determine the applicability of such safe harbor and the
suitability of Buyer to acquire the Units and the securities
comprising the Units;
(iii) Buyer agrees that from the date hereof until the
forty-first (41st) day after the final closing of the sale
of all Units sold by the Company pursuant to Regulation S
(the "Restricted Period"), Buyer, or any successor, or any
Professional (as defined in Section 2c.(iv) hereof) (except
for sales of any Units or the securities comprising the
Units registered under the Securities Act or otherwise
exempt from such registration) (a) will not sell any of the
Units or the securities comprising the Units to a U.S.
Person or for the account or benefit of a U.S. Person or
anyone believed to be a U.S. Person, (b) will not engage in
any efforts to sell the Units or securities comprising the
Units in the United States, and (c) will send to a
Professional acting as agent or principal, a confirmation or
other notice stating that the Professional is subject to the
same restrictions on transfer to U. S. Persons or for the
account of U.S. Persons during the Restricted Period as
provided herein. The Company will not honor or register and
will not be obligated to honor or register any transfer in
violation of these provisions; to assure full compliance
with the restrictions placed on the resale of securities
offered pursuant to Regulation S, the Company shall place on
the certificates representing the Debentures and the
Warrants comprising the Units the restrictive legend
attached hereto as Exhibit "B" and Exhibit "C",
respectively;
(iv) A "Professional" is a "distributor" as defined in
Rule 902(c) under the Securities Act (generally any
underwriter, or other person, who participates, pursuant to
a contractual arrangement, in the distribution of the Units
or the securities which comprise the Units); a dealer as
defined in Section 2(12) of the United States Securities
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Exchange Act of 1934, as amended (the "Exchange
Act")(encompassing those who engage in the business of
trading or dealing in securities as agent, broker, or
principal); or a person receiving a selling concession, fee
or other remuneration in respect of the Units or the
securities comprising the Units sold;
(v) Buyer covenants that (a) the Warrant will not be
exercised on behalf of a U.S. person (as defined in
Regulation S) or (b) a written opinion of counsel, in form
and substance satisfactory to the Company, to the effect
that the Warrant and the shares (the " Warrant Shares") of
Common Stock to be issued on exercise of the Warrant have
been registered under the Securities Act or are exempt from
registration thereunder will be provided to the Company;
(vi) Buyer covenants that (a) the Warrant will not be
exercised within the United States, and the Warrant Shares
will not be delivered within the United States upon exercise
thereof (other than in an offering deemed to meet the
definition of "offshore transaction" pursuant to Regulation
S), or (b) a written opinion, in form and substance
satisfactory to the Company, to the effect that the Warrant
and the Warrant Shares have been registered under the
Securities Act or are exempt from the registration
requirements of the Securities Act under an exemption
thereunder will be provided to the Company.
(vii) Buyer covenants that (a) the Debenture will not
be exercised on behalf of a U.S. person (as defined in
Regulation S) or (b) a written opinion of counsel, in form
and substance satisfactory to the Company, to the effect
that the Debenture and the shares (the "Debenture Shares")
of Common Stock to be issued on conversion of the Debenture
have been registered under the Securities Act or are exempt
from registration thereunder will be provided to the
Company; and
(viii) Buyer covenants that (a) the Debenture will not
be exercised within the United States, and the Debenture
Shares will not be delivered within the United States upon
exercise thereof (other than in an offering deemed to meet
the definition of "offshore transaction" pursuant to
Regulation S), or (b) a written opinion in form and
substance satisfactory to the Company, to the effect that
the Debenture and the Debenture Shares have been registered
under the Securities Act or are exempt from the registration
requirements of the Securities Act under an exemption
thereunder will be provided to the Company.
d. Access to Information. Buyer has had the opportunity to ask questions
and receive answers from the Company concerning the Company, the terms and
conditions of this offering, and to obtain from the Company any additional
information that the Company possesses or may obtain without unreasonable effort
or expense that is necessary for Buyer to make an informed investment decision.
The Company encourages Buyer to review the Company's disclosure documents that
have been filed with the SEC (collectively, the "Company Reports"). By virtue of
the Company Reports, including all documents referred to therein, Buyer has had
access to all material and relevant information necessary to enable Buyer to
make an informed investment decision. All data requested by Buyer from the
Company or its representatives concerning the business and financial condition
of the Company and the terms and conditions of the offering has been furnished
to Buyer's satisfaction. Buyer understands that there are numerous and
substantial risks associated with the purchase of the Units and the securities
comprising the Units that could result in a total loss of the Buyer's
investment.
e. Understanding of Investment Risks. Buyer understands that realization of
the objectives of the Company is subject to significant economic and business
risks.
f. No Government Recommendation or Approval. Buyer understands that no
Federal, State or foreign government agency has passed on or made any
recommendation or endorsement of the Units or the securities comprising the
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Units. No registration statement or application to register these securities has
been or will be filed with the SEC or under the securities laws of any country
or jurisdiction and these securities cannot be sold, transferred or otherwise
disposed of unless registered under such laws or exemptions from registration
are available. In addition, the securities may not be offered or sold in the
United States or to a U.S. person unless the securities are sold in accordance
with Regulation S and pursuant to registration under the Securities Act, or
pursuant to an available exemption from registration thereunder. These
securities have not been approved or disapproved by the SEC nor has the SEC
passed upon the accuracy or adequacy of any information supplied by the Company.
Any representation to the contrary is a criminal offense. The SEC does not pass
upon the merits of or give its approval to any securities offered or the terms
of any offering, nor dies it pass upon the accuracy or completeness of any
offering circular or offering selling literature. These securities are offered
pursuant to an exemption from registration under the Securities Act; but no
securities regulatory authority has made an independent determination that the
securities offered hereunder are exempt from registration.
g. Resales of Securities. All subsequent offers and sales of the Units and
the securities that comprise the Units shall be made in compliance with
Regulation S and shall be made pursuant to registration of the Units and the
securities which comprise the Units under the Securities Act or pursuant to
another exemption from such registration.
h. Subscription Agreement. The Subscription Agreement has been duly
authorized, validly executed and delivered on behalf of the Buyer and is a valid
and binding agreement in accordance with its terms, subject to general
principles of equity and to bankruptcy or other laws affecting the enforcement
of creditors' rights generally.
i. Non-contravention. If Buyer is not a natural person, the execution and
delivery of the Subscription Agreement and the consummation of the purchase of
the Units and the securities which comprise the Units and the transactions
contemplated by this Subscription Agreement do not and will not conflict with or
result in a breach by the Buyer of any of the terms or provision of, or
constitute a default under, the organization documents (i.e., articles of
incorporation and bylaws, partnership agreement, trust indenture or similar
documents) of Buyer or any indenture, mortgage, deed of trust or other material
agreement or instrument to which Buyer is a party or by which its or any of its
respective properties or assets are bound, or any existing applicable law, rule
or regulation or any applicable law, rule or regulation or any applicable
decree, judgment or order of any court or regulatory body, administrative agency
or other governmental body having jurisdiction over the Buyer or any of its
properties or assets.
j. Sophistication. Buyer is knowledgeable and experienced in business and
financial matters and capable of evaluating the merits and risks of, and making
an informed decision with regard to, the investment in the Units and the
securities which comprise the Units, is able to bear the economic risk of loss
of its investment in the Units, has been granted the opportunity to make a
thorough investigation of the affairs of the Company, and has availed itself of
such opportunity either directly or through its authorized representatives.
Buyer understands that the investment in the Company is subject to significant
economic and business risks.
k. No Advertisement. Buyer acknowledges that its purchase of the Units has
not been make through or as a result of and the distribution of the Units is not
being accompanied by an advertisement.
l. No Offering Memorandum. Buyer acknowledgments that it has not received
or reviewed any material which appears or purports to describe the business and
affairs of the Company and which was prepared primarily for delivery to and
review by prospective investors in connection with the offering of Units.
5
<PAGE>
3. REPRESENTATION OF THE COMPANY.
a. Reporting Company Status. The Company is a "reporting company" as
defined by Rule 902 of Regulation S. The Company is in material compliance, to
the extent applicable, with all filing obligations under Section 13 of the
Exchange Act.
b. Offshore Transaction. The Company has not offered the Units or the
securities which comprise the Units that are the subject of this Agreement to
any person in the United States, any identifiable groups of U. S. citizens
abroad, or to any U.S. person as that term is defined in Section 902(o) of
Regulation S.
c. No Directed Selling Efforts. In regard to the transaction contemplated
by this Agreement, the Company has not conducted any "directed selling efforts"
as that term is defined in Rule 902 of Regulation S ,nor has the Company
conducted any general solicitation relating to the offer and sale of the Units
or the securities which comprise the Units that are the subject of this
transaction to persons resident within the United States or elsewhere.
d. Concerning the Units. The Units and the securities which comprise the
Units, when issued and delivered, will be duly and validly authorized and issued
and will not subject the holders thereof to personal liability by reason of
being such holders. There are no preemptive rights of any stockholder of the
Company.
e. Subscription Agreement. The Subscription Agreement has been duly
authorized, validly executed and delivered on behalf of the Company and is a
valid and binding agreement in accordance with its terms, subject to general
principles of equity and to bankruptcy or other laws affecting the enforcement
of creditors' rights generally.
f. Non-contravention. The execution and delivery of the Subscription
Agreement and the consummation of the issuance of the shares of the Units and
the securities which comprise the Units and the transactions contemplated by
this Subscription Agreement do not and will not conflict with or result in a
breach by the Company of any of the terms or provision of, or constitute a
default under, the certificate of incorporation or bylaws of the Company or any
indenture, mortgage, deed of trust or other material agreement or instrument to
which the Company is a party or by which its or any of its respective properties
or assets are bound, or any existing applicable law, rule or regulation or any
applicable law, rule or regulation or any applicable decree, judgment or order
of any court, Federal or State regulatory body, administrative agency or other
governmental body having jurisdiction over the Company or any of its properties
or assets.
g. Approvals. The Company is not aware of any authorization, approval or
consent of any governmental body which is legally required for the issuance and
sale of the Units and the securities which comprise the Units as contemplated by
the Subscription Agreement.
h. Continuous Offering. The sale of the Units and the securities which
comprise the Units pursuant to this Agreement is not a "continuous offering" as
defined in Rule 902(m) or, if it is a continuous offering, the sale of the Units
and the securities which comprise the Units hereunder is the last sale
thereunder and the "Restricted Period" as defined in Rule 902(m) commences on
the date of such last sale.
4. SAFE HARBOR; RELIANCE ON REPRESENTATIONS. Buyer understands that neither
the offer and sale of the Units nor the securities which comprise the Units are
being registered under the Securities Act. The Company is relying on the rules
governing offers and sales made outside the United States pursuant to Regulation
S and Buyer's representations hereunder.
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<PAGE>
5. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL. Buyer understands that
the Company's obligation to sell the Units is conditioned upon:
a. The receipt and acceptance by the Company of this
Subscription Agreement for the Units executed by Buyer as
evidenced by execution of this Subscription Agreement by the
Company; and
b. Delivery to the Company of the first payment
provided for in the Schedule.
6. BUYER'S ACKNOWLEDGMENT. Buyer represents and warrants that at the time
of the purchase, Buyer does not have a short or hedge position in the Units or
the securities which comprise the Units. During the Restricted Period, Buyer, in
the United States, (a) shall not effect short sales in the Units or the
securities which comprise the Units, and (b) shall not hedge, through short
sales, options or otherwise, Buyer's purchase of such securities. Buyer has no
agreement or understanding with any person with respect to the resale of the
Units and the securities which comprise the Units.
IN WITNESS WHEREOF, this Offshore Securities Subscription Agreement was
duly executed on this _______ day of the month of __________ , 1997.
Official Signatory of the Company:
PREFERRED VOICE, INC.
By:_______________________
Print Name:_______________
Title:____________________
Name of Buyer:______________________
(please print)
____________________________________
(Signature)
Title, if Buyer is not a natural person:___________________________
(please print)
____________________________________
Primary Residence of Buyer
7
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(Registration Instructions)
8
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EXHIBIT "A"
Payment Schedule
First payment $ 7,500.00
Second payment on or before July 31, 1997 $ 7,500.00
Third payment on or before August 31, 1997 $ 7,500.00
Final payment on or before September 31, 1997 $ 137,500.00
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EXHIBIT "B"
THIS CONVERTIBLE SUBORDINATED DEBENTURE(THE "DEBENTURE") AND THE SECURITIES TO
BE ISSUED UPON CONVERSION OF THIS DEBENTURE HAVE NOT BEEN REGISTERED UNDER
EITHER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT") OR APPLICABLE
STATE SECURITIES LAWS (THE "STATE ACTS"), AND SHALL NOT BE SOLD, PLEDGED,
HYPOTHECATED, DONATED OR OTHERWISE TRANSFERRED (WHETHER OR NOT FOR
CONSIDERATION) BY THE HOLDER EXCEPT BY REGISTRATION OR PURSUANT TO AN EXEMPTION
FROM REGISTRATION UPON THE ISSUANCE TO THE COMPANY OF A FAVORABLE OPINION OF
COUNSEL OR OTHER EVIDENCE REASONABLE SATISFACTORY TO THE COMPANY TO THE EFFECT
THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE 1933 ACT AND THE STATE
ACTS. IN ADDITION, THE DEBENTURE AND THE SECURITIES TO BE ISSUED UPON CONVERSION
OF THIS DEBENTURE MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES (AS DEFINED IN
REGULATION S UNDER THE 1933 ACT) OR TO OR FOR THE ACCOUNT OR BENEFIT OF U.S.
PERSONS (AS DEFINED IN REGULATION S) EXCEPT PURSUANT TO REGULATION S AND
PURSUANT TO REGISTRATION UNDER THE 1933 ACT OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT.
THE DEBENTURE AND THE SECURITIES TO BE ISSUED UPON CONVERSION OF THIS DEBENTURE
ARE BEING OFFERED PURSUANT TO THE EXEMPTION FROM REGISTRATION WITH THE UNITED
STATES SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") CONTAINED IN
REGULATION S FOR OFFERS AND SALES OF SECURITIES THAT OCCUR OUTSIDE THE UNITED
STATES TO NON-U.S. PERSONS (WITHIN THE MEANING OF REGULATION S). NO REGISTRATION
STATEMENT OR APPLICATION TO REGISTER THESE SECURITIES HAS BEEN OR WILL BE FILED
WITH THE COMMISSION OR UNDER THE SECURITIES LAWS OF ANY COUNTRY OR JURISDICTION.
THIS DEBENTURE AND THE SECURITIES TO BE ISSUED UPON CONVERSION OF THIS DEBENTURE
HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE COMMISSION. BECAUSE THE DEBENTURE
HAS BEEN ISSUED PURSUANT TO REGULATION S, THE DEBENTURE MAY NOT BE EXERCISED BY
OR ON BEHALF OF ANY U.S. PERSON (AS DEFINED IN REGULATION S) UNLESS REGISTERED
UNDER THE 1933 ACT OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE, AND THE
DEBENTURE MAY NOT BE EXERCISED WITHIN THE UNITED STATES AND SECURITIES MAY NOT
BE DELIVERED WITHIN THE UNITED STATES UPON EXERCISE, OTHER THAN IN OFFERINGS
DEEMED TO MEET THE DEFINITION OF AN "OFFSHORE TRANSACTION" PURSUANT TO
REGULATION S, UNLESS REGISTERED UNDER THE 1933 ACT OR AN EXEMPTION FROM
REGISTRATION IS APPLICABLE
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EXHIBIT "C"
THIS WARRANT AND THE SECURITIES TO BE ISSUED UPON EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER EITHER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"1933 ACT"), OR APPLICABLE STATE SECURITIES LAWS (THE "STATE ACTS"), AND SHALL
NOT BE SOLD, PLEDGED, HYPOTHECATED, DONATED OR OTHERWISE TRANSFERRED (WHETHER OR
NOT FOR CONSIDERATION) BY THE HOLDER EXCEPT BY REGISTRATION OR PURSUANT TO AN
EXEMPTION FROM REGISTRATION UPON THE ISSUANCE TO THE COMPANY OF A FAVORABLE
OPINION OF COUNSEL OR OTHER EVIDENCE REASONABLE SATISFACTORY TO THE COMPANY TO
THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE 1933 ACT AND
THE STATE ACTS. IN ADDITION, THE WARRANT AND THE SECURITIES TO BE ISSUED UPON
EXERCISE OF THIS WARRANT MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES (AS
DEFINED IN REGULATION S UNDER THE 1933 ACT) OR TO OR FOR THE ACCOUNT OR BENEFIT
OF U.S. PERSONS (AS DEFINED IN REGULATION S) EXCEPT PURSUANT TO REGULATION S AND
PURSUANT TO REGISTRATION UNDER THE 1933 ACT OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT.
THE WARRANT AND THE SECURITIES TO BE ISSUED UPON EXERCISE OF THIS WARRANT ARE
BEING OFFERED PURSUANT TO THE EXEMPTION FROM REGISTRATION WITH THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") CONTAINED IN REGULATION S
FOR OFFERS AND SALES OF SECURITIES THAT OCCUR OUTSIDE THE UNITED STATES TO
NON-U.S. PERSONS (WITHIN THE MEANING OF REGULATION S). NO REGISTRATION STATEMENT
OR APPLICATION TO REGISTER THESE SECURITIES HAS BEEN OR WILL BE FILED WITH THE
COMMISSION OR UNDER THE SECURITIES LAWS OF ANY COUNTRY OR JURISDICTION. THIS
WARRANT AND THE SECURITIES TO BE ISSUED UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN APPROVED OR DISAPPROVED BY THE COMMISSION. BECAUSE THE WARRANT HAS BEEN
ISSUED PURSUANT TO REGULATION S, THE WARRANT MAY NOT BE EXERCISED BY OR ON
BEHALF OF ANY U.S. PERSON (AS DEFINED IN REGULATION S) UNLESS REGISTERED UNDER
THE 1933 ACT OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE, AND THE WARRANT MAY
NOT BE EXERCISED WITHIN THE UNITED STATES AND SECURITIES MAY NOT BE DELIVERED
WITHIN THE UNITED STATES UPON EXERCISE, OTHER THAN IN OFFERINGS DEEMED TO MEET
THE DEFINITION OF AN "OFFSHORE TRANSACTION" PURSUANT TO REGULATION S, UNLESS
REGISTERED UNDER THE 1933 ACT OR AN EXEMPTION FROM REGISTRATION IS APPLICABLE
11
