THIS SUBSCRIPTION AGREEMENT IS EXECUTED IN RELIANCE UPON THE EXEMPTION PROVIDED
BY SECTION 4(2) AND REGULATION D, RULE 506 FOR TRANSACTIONS NOT INVOLVING A
PUBLIC OFFERING UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"). THIS OFFERING IS BEING MADE ONLY TO ACCREDITED INVESTORS.
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SUBSCRIPTION AGREEMENT
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THIS SUBSCRIPTION AGREEMENT (this "Agreement") has been executed by the
undersigned in connection with the private placement of up to a maximum of
400,000 shares of Common Stock, par value $0.001 (hereinafter referred to as the
"Common Stock"), of iLink Telecom, Inc., a corporation organized under the laws
of the State of Nevada (symbol "ILTE") (hereinafter referred to as the
"Company"). The Common Stock being sold pursuant to this Agreement has not been
registered under the Securities Act. The offer of the Common Stock and, if this
Subscription Agreement is accepted by the Company, the sale of Common Stock, is
being made in reliance upon Section 4(2) of the Securities Act. (All dollar
amounts in this Agreement are expressed in U.S. Dollars).
The undersigned Purchaser:
NAME: ___________________________________________________________
ADDRESS: ___________________________________________________________
___________________________________________________________
if applicable, a [Corporate][Partnership][Trust] organized under the laws of
_____________, (hereinafter referred to as the "Purchaser") hereby represents
and warrants to, and agrees with the Company as follows:
ARTICLE 1
SUBSCRIPTION
Subscription
1.1 The undersigned Purchaser hereby subscribes to purchase _______ shares of
Common Stock (the "Common Shares"), having a purchase price of $2.00 per Common
Share, at an aggregate purchase price of $________ (the "Subscription Funds").
Minimum Subscription
1.2 A minimum number of 100,000 Common Shares must be purchased by the
Purchaser.
Method of Payment
1.3 The Purchaser shall pay the Subscription Funds by delivering good funds in
United States Dollars by way of wire transfer of funds to the Company's
attorneys, Xxxxxx Eng Xxxx & Xxxxxxxx (the "Escrow Agent") pursuant to the terms
of the Escrow Instructions attached hereto as Annex I (the "Escrow
Instructions") concurrent with the execution and delivery of this
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Agreement to the Escrow Agent. By signing this Agreement, the Purchaser and the
Company each agree to all of the terms and conditions of, and become a party to,
the Escrow Instructions attached hereto, all of the provisions of which are
incorporated herein by this reference as if set forth in full. The wire transfer
instructions are:
XXXXXX ENG LINN & XXXXXXXX TRUST ACCOUNT
Xxxxx Fargo Bank
000 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
ABA No.: 000000000
Account No.: 0168-032878
On the date upon which the conditions precedent enumerated in Article 6
hereof are satisfied (the "Closing Date") the Company shall take up the
Subscription Funds and issue to the Purchaser a certificate or certificates
representing the Common Shares (the "Certificates") pursuant to Article 7
hereof. As stated in the Escrow Instructions, the Company and the Purchaser
agree that in the event that the Closing Date does not occur on or before
January 31, 2000 the Escrow Agent shall forthwith return the whole amount of the
Subscription Funds to the Purchaser. The Purchaser acknowledges that the
subscription for Common Shares hereunder may be rejected by the Company in its
sole discretion.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
Representations and Warranties
2.1 The Purchaser represents and warrants in all material respects to the
Company, with the intent that the Company will rely thereon in entering into
this Agreement and in completing the transactions contemplated hereby, that:
(a) Accredited Investor. The Purchaser is an "accredited investor" as
that term is defined in Regulation D promulgated under the
Securities Act by virtue of being (initial all applicable responses)
_____ A small business investment company licensed by the U.S. Small
Business Administration under the Small Business Investment
Company Act of 1958,
_____ A business development company as defined in the Investment
Company Act of 1940,
_____ A national or state-chartered commercial bank, whether acting
in an individual or fiduciary capacity,
_____ An insurance company as defined in Section 2(13) of the
Securities Act,
_____ An investment company registered under the Investment Company
Act of 1940,
_____ An employee benefit plan within the meaning of Title I of the
Employee Retirement Income Security Act of 1974, where the
investment decision is made by a plan fiduciary, as defined in
Section 3(21) of such Act,
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which is either a bank, insurance company, or registered
investment advisor, or an employee benefit plan which has
total assets in excess of $5,000,000,
_____ A private business development company as defined in Section
202(a)(22) of the Investment Advisors Act of 1940,
_____ An organization described in Section 501(c)(3) of the Internal
Revenue Code, a corporation or a partnership with total assets
in excess of $5,000,000,
_____ A natural person (as opposed to a corporation, partnership,
trust or other legal entity) whose net worth, or joint net
worth together with his/her spouse, exceeds $1,000,000,
_____ Any trust, with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the securities
offered, whose purchase is directed by a sophisticated person
as described in Section 506(b)(2)(ii) of Regulation D,
_____ A natural person (as opposed to a corporation, partnership,
trust or other legal entity) whose individual income was in
excess of $200,000 in each of the two most recent years (or
whose joint income with such person's spouse was at least
$300,000 during such years) and who reasonably expects an
income in excess of such amount in the current year, or
_____ A corporation, partnership, trust or other legal entity (as
opposed to a natural person) and all of such entity's equity
owners fall into one or more of the categories enumerated
above;
(b) Experience. The Purchaser is sufficiently experienced in financial
and business matters to be capable of evaluating the merits and
risks of its investments, and to make an informed decision relating
thereto, and to protect its own interests in connection with the
purchase of the Common Shares;
(c) Own Account. The Purchaser is purchasing the Common Shares for its
own account or for the account of beneficiaries for whom the
Purchaser has full investment discretion, each of which
beneficiaries is bound to all of the terms and provisions hereof
including all representations and warranties herein. The Purchaser
is purchasing the Common Shares for investment purposes only and not
with an intent or view towards further sale or distribution (as such
term is used in Section 2(11) of the Securities Act) thereof, and
has not pre-arranged any sale with any other purchaser;
(d) Not Underwriter. The Purchaser is not an underwriter, or dealer in,
the Common Shares, and the Purchaser is not participating, pursuant
to a contractual agreement, in a distribution of the Common Shares;
(e) Exemption. The Purchaser understands that the offer and sale of the
Common Shares is not being registered under the Securities Act based
on the exemption from registration provided by Rule 506 promulgated
under Section 4(2) of the Securities Act and that the Company is
relying on such exemption.
(f) Importance of Representations. The Purchaser understands that the
Common Shares are being offered and sold to it in reliance on an
exemption from the registration requirements of the Securities Act,
and that the Company is relying upon the truth and accuracy of the
representations, warranties, agreements,
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acknowledgments and understandings of the Purchaser set forth herein
in order to determine the applicability of such safe harbor and the
suitability of the Purchaser to acquire the Common Shares;
(g) No Registration. The Common Shares have not been registered under
the Securities Act and may not be transferred, sold, assigned,
hypothecated or otherwise disposed of, unless such transaction is
the subject of a registration statement filed with and declared
effective by the Securities and Exchange Commission (the "SEC") or
unless an exemption from the registration requirements under the
Securities Act, such as Rule 144, is available. The Purchaser
represents and warrants and hereby agrees that all offers and sales
of the Common Sharesshall be made only pursuant to such registration
or to such exemption from registration;
(h) Risk. The Purchaser acknowledges that the purchase of the Common
Sharesinvolves a high degree of risk, is aware of the risks and
further acknowledges that it can bear the economic risk of the
Common Shares, including the total loss of its investment;
(i) Current Information. The Purchaser has been furnished with or has
acquired copies of all requested information concerning the Company,
including the most recent financial statements of the Company;
(j) Independent Investigation. The Purchaser, in making the decision to
purchase the Preferred Shares subscribed for, has relied upon
independent investigations made by it and its purchaser
representatives, if any, and the Purchaser and such representatives,
if any, have prior to any sale to it, been given access and the
opportunity to examine all material contracts and documents relating
to this offering and an opportunity to ask questions of, and to
receive answers from, the Company or any person acting on its behalf
concerning the terms and conditions of this offering. The Purchaser
and its advisors, if any, have been furnished with access to all
materials relating to the business, finances and operation of the
Company and materials relating to the offer and sale of the Common
Shareswhich have been requested. The Purchaser and its advisors, if
any, have received complete and satisfactory answers to any such
inquiries;
(k) No Recommendation or Endorsement. The Purchaser understands that no
federal or state agency has passed on or made any recommendation or
endorsement of the Common Shares;
(l) The Purchaser. If the Purchaser is a partnership, corporation or
trust, the person executing this Agreement on its behalf represents
and warrants that
(i) he or she has made due inquiry to determine the truthfulness
of the representations and warranties made pursuant to this
Agreement, and
(ii) he or she is duly authorized (and if the undersigned is a
trust, by the trust agreement) to make this investment and to
enter into and execute this Agreement on behalf of such
entity;
(m) Non-Affiliate Status. The Purchaser and any affiliate of the
Purchaser represent, warrant and covenant that they are not an
affiliate of the Company; and
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(n) No Advertisement or General Solicitation. The sale of the Common
Shares has not been advertised through any article, notice or other
communication published in any newspaper, magazine, or similar media
or broadcast over television or radio; or through any seminar or
meeting whose attendees have been invited by any general
solicitation or general advertising.
Non-Merger and Survival
2.2 The representations and warranties of the Purchaser contained herein will be
true at the date of execution of this Agreement by the Purchaser and as of the
Closing Date in all material respects as though such representations and
warranties were made as of such times and shall survive the Closing Date and the
delivery of the Certificates.
Indemnity
2.3 The Purchaser agrees to indemnify and save harmless the Company from and
against any and all claims, demands, actions, suits, proceedings, assessments,
judgments, damages, costs, losses and expenses, including any payment made in
good faith in settlement of any claim (subject to the right of the Purchaser to
defend any such claim), resulting from the breach of any representation or
warranty of such party under this Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
3.1 The Company represents and warrants in all material respects to the
Purchaser, with the intent that the Purchaser will rely thereon in entering into
this Agreement and in completing the transactions contemplated hereby, that:
(a) Listed Company Status. The Company is required to make current
filings with the SEC pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act"), the Common
Stock is quoted on the NASD "Bulletin Board" and the Company has
received no notice, either oral or written, with respect to its
continued eligibility for such listing;
(b) Legality. The Company has the requisite corporate power and
authority to enter into this Agreement and to issue, sell and
deliver the Common Shares; this Agreement and the issuance, sale and
delivery of the Common Shareshereunder and the transactions
contemplated hereby have been duly and validly authorized by all
necessary corporate action by the Company; this Agreement and the
Common Shareshave been duly and validly executed and delivered by
and on behalf of the Company, and are valid and binding agreements
of the Company, enforceable in accordance with their respective
terms, except as enforceability may be limited by general equitable
principles, bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium, or other laws affecting creditors'
rights generally. The Common Shares will not subject the holders
thereof to personal liability by reason of being such holders;
(c) Proper Organization. The Company is a corporation duly organized,
validly existing and in good standing under the laws of its
jurisdiction of incorporation and is duly qualified as a foreign
corporation in all jurisdictions where the failure to be so
qualified would have a materially adverse effect on its business,
taken as whole;
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(d) No Legal Proceedings. There is no action, suit or proceeding before
or by any court or any governmental agency or body, domestic or
foreign, now pending or to the knowledge of the Company, threatened,
against or affecting the Company, or any of its properties or
assets, which might result in any material adverse change in the
condition (financial or otherwise) or in the earnings, business
affairs of business prospects of the Company, or which might
materially and adversely affect the properties or assets thereof;
(e) Non-Default. The Company is not in default in the performance or
observance of any material obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust or
other material instrument or agreement to which it is a party or by
which it or its property may be bound;
(f) No Misleading Statements. The information provided by the Company to
the Purchaser does not contain any untrue statement of a material
fact or omit to state any material fact;
(g) No Adverse Change. There has been no material adverse change in the
financial condition, earnings, business prospects of the Company;
(h) Absence of Non-Disclosed Facts. There is no fact known to the
Company (other than general economic conditions known to the public
generally) that has not been disclosed in writing to the Purchaser
that (i) could reasonably be expected to have a material adverse
effect on the condition (financial or otherwise) or in the earnings,
business affairs, business prospects, properties or assets of the
Company; or (ii) could reasonably be expected to materially and
adversely affect the ability of the Company to perform its
obligations pursuant to this Agreement;
(i) Non-Contravention. The execution and delivery of this Agreement and
the consummation of the issuance of the Common Shares and the
transactions contemplated by this Agreement do not and will not
conflict with or result in a breach by the Company of any of the
terms or provisions of, or constitute a default under the Articles
of Incorporation or By-laws 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 it or any of its
properties or assets are bound, or any existing applicable decrees,
judgment or order of any court, Federal or State regulatory body,
administrative agency or other domestic governmental body having
jurisdiction over the Company or any of its properties or assets.
Non-Merger and Survival
3.2 The representations and warranties of the Company contained herein will be
true at the date of execution of this Agreement by the Company and as of the
Closing Date in all material respects as though such representations and
warranties were made as of such times and shall survive the Closing Date and the
delivery of the Certificates.
Indemnity
3.3 The Company agrees to indemnify and save harmless the Purchaser from and
against any and all claims, demands, actions, suits, proceedings, assessments,
judgments, damages, costs, losses and expenses, including any payment made in
good faith in settlement of any claim (subject to the right of the Company to
defend any such claim), resulting from the breach of any representation,
warranty or covenant of such party under this Agreement.
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ARTICLE 4
COVENANTS OF THE COMPANY
Covenants of the Company
4.1 The Company covenants and agrees with the Purchaser that:
(a) Filings. The Company shall make all necessary filings in connection
with the sale of the Commmon Shares as required by the laws and
regulations of all appropriate jurisdictions and securities
exchanges;
(b) Compliance with Section 13. The Company shall, from and after the
Closing Date, use its best efforts to comply with the requirements
of Section 13 of the Exchange Act and maintain the quotation of the
Common Stock on the NASD "Bulletin Board" or other quotation medium
which is senior to the NASD "Bulletin Board";
(c) Registration Statement. No later than ninety (90) days after the
Closing Date, the Company shall file a registration statement on
Form SB-2 (or similar form) under the Securities Act and under all
applicable Blue Sky laws covering the Common Shares and shall use
its best efforts to cause such registration statement to be declared
effective by the SEC at the earliest practicable date, all at the
Company's sole cost and expense. Such best efforts shall include
promptly responding to all comments received by the staff of the
SEC, and promptly preparing and filing amendments to such
registration statement which are responsive to the comments received
from the staff of the SEC, and in no event later than twenty-one
(21) days from receipt by the Company of the comments of the staff
of the SEC. Such registration statement shall name the Purchaser as
a selling shareholder and shall provide for the sale of the Common
Shares by the Purchaser from time to time directly to purchasers or
in the over-the-counter market or through or to securities brokers
or dealers that may receive compensation in the form of discounts,
concessions, or commissions. The Company shall provide the Purchaser
with such number of copies of the prospectus as shall be reasonably
requested to facilitate the sale of the Common Shares. None of the
foregoing shall in any way limit the Purchaser's rights to sell the
Common Shares in reliance on an exemption from the registration
requirements under the Securities Act in connection with a
particular transaction;
(d) Currency of Registration Statement. The Company shall use its best
efforts to maintain the currency of the registration statement filed
with the SEC and under all applicable Blue Sky laws in respect of
the Common Shares and shall in any event remain effective for up to
12 months from the Closing Date or until all of the Common Shares
are sold, whichever is earlier; and
(e) Opinion. In the event the Company fails to register the resale of
the Common Shares, the Company will, upon the presentation of an
opinion of the Purchaser's counsel, allow the Purchaser to offer and
sell the Common Shares in reliance on the provisions of Rule 144
provided that the holding period and other requirements of such Rule
144 are met.
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Survival
4.2 The covenants set forth in this Article shall survive the Closing for the
benefit of the Purchaser.
ARTICLE 5
ISSUANCE OF CERTIFICATES
On or prior to the Closing Date, the Company will prepare and issue one or
more Certificates for the Common Stock registered in such name or names as
specified by the Purchaser and cause the same to be delivered to the Escrow
Agent pursuant to the Escrow Instructions. Such Certificate(s) (unless a
registration statement is in effect as provided for in Article 4 hereof or
another exemption may be relied upon) shall bear a legend in substantially the
following form:
THESE SECURITIES HAVE BEEN ISSUED PURSUANT TO THE SECTION 4(2)
EXEMPTION TO THE REGISTRATION PROVISIONS UNDER THE SECURITIES ACT OF
1933, AS AMENDED. THESE SECURITIES CANNOT BE TRANSFERRED, OFFERED,
OR SOLD UNLESS THE SECURITIES ARE REGISTERED UNDER THE SECURITIES
ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT IS AVAILABLE.
ARTICLE 6
CONDITIONS PRECEDENT
Conditions Precedent to the Company's Obligation to Sell
6.1 The Purchaser understands and agrees that the Company's obligation to sell
the Common Shares is conditioned upon the following being satisfied on or before
the Closing Date:
(a) Acceptance and Delivery of Agreement. The receipt and acceptance by
the Company of this Agreement, as evidenced by execution of this
Agreement by the President or any Vice President or the Chief
Financial Officer of the Company, and the delivery thereof to the
Escrow Agent; and
(b) Payment in Full. Delivery to the Escrow Agent by the Purchaser of
good funds as payment in full for the purchase of the Common Shares.
Conditions Precedent to the Purchaser's Obligation to Purchase
6.2 The Company understands that the Purchaser's obligation to purchase the
Common Shares is conditioned upon the following being satisfied on or before the
Closing Date:
(a) Acceptance and Delivery of Agreement. The receipt by the Escrow
Agent of the Company's acceptance of this Agreement as provided in
Paragraph 6.1(a) above;
(b) Receipt of Certificates. The receipt by the Escrow Agent of the
Certificate or Certificates representing the Common Shares; and
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(c) Acquisition of 9278 Distributor Inc. The closing of the acquisition
by the Company of 9278 Distributor Inc., a New York corporation.
ARTICLE 7
CLOSING
Closing shall be effected pursuant to the Escrow Instructions through the
delivery of the Subscription Funds to the Company by the Escrow Agent, together
with a duly executed copy of this Agreement, the delivery of certificates
evidencing the Common Stock to the Purchaser (or the Purchaser's Representative)
by the Escrow Agent, together with a duly executed copy of this Agreement, and
the delivery of the duly executed Irrevocable Instructions to the Transfer Agent
by the Escrow Agent.
ARTICLE 8
GENERAL PROVISIONS
Governing Law
8.1 This Agreement shall be governed by and construed under the law of the State
of New York without regard to its choice of law provision. Any disputes arising
out of, in connection with, or with respect to this Agreement, the subject
matter hereof, the performance or non-performance of any obligation hereunder,
or any of the transactions contemplated hereby shall be adjudicated in a Court
of competent civil jurisdiction sitting in the City of New York, New York and
nowhere else.
Successors and Assigns
8.2 This Agreement shall inure to the benefit of and be binding on the
respective successors and assigns of the parties hereto.
Indemnification of Escrow Agent
8.3 Each of the Company and the Purchaser jointly and severally agree that the
Escrow Agent has no liability as a result of any fraudulent or unlawful conduct
of any other party, and jointly and severally agree to indemnify and hold the
Escrow Agent harmless against any losses, claims, damages, or liabilities, to
which it may become subject pursuant to its actions under this Agreement or the
Escrow Instructions, except as to any loss, claim, damage, or liability arising
out of or is based upon any action not taken in good faith, or any action or
omission that constitutes gross negligence or willful misconduct by the Escrow
Agent.
Execution by Counterparts and Facsimile
8.4 This Agreement may be executed in counterparts and by facsimile, each of
which when executed by any party will be deemed to be an original and all of
which counterparts will together constitute one and the same Agreement.
[Remainder of page intentionally left blank]
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SIGNATURE PAGE FOR INDIVIDUAL PURCHASER
IN WITNESS WHEREOF, the undersigned represents that the foregoing
statements are true and that he, she or they have executed this Subscription
Agreement on this __________ day of ______________, _____.
____________________________________ __________________________________
Printed Name Signature
____________________________________ __________________________________
Printed Name Signature
Agreed to this _____ day of ____________, ___________:
ILINK TELECOM, INC.
By:_________________________________
Title:______________________________
This is page __ to the Subscription Agreement dated as of the above date between
iLink Telecom, Inc. and the above Purchaser.
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SIGNATURE PAGE FOR ENTITIES
IN WITNESS WHEROF, the undersigned represents that the foregoing statements are
true and that it caused this Subscription Agreement to be duly executed on its
behalf on this _______ day of ___________, ______.
____________________________________
Printed Name of Purchaser
By:_________________________________
(Signature of Authorized Person)
____________________________________
(Printed Name and Title)
Agreed to this ________ day of __________, _____:
ILINK TELECOM, INC.
By:_________________________________
Title:______________________________
This is page __ to the Subscription Agreement dated as of the above date between
iLink Telecom, Inc. and the above Purchaser.
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Full Name and Address of Purchaser for Registration Purposes:
NAME:_________________________________________________________________________
ADDRESS:______________________________________________________________________
XXX.XX.:______________________________________________________________________
FAX NO.:______________________________________________________________________
CONTACT NAME:_________________________________________________________________
Delivery Instructions (if different from Registration Name):
NAME:_________________________________________________________________________
ADDRESS:______________________________________________________________________
XXX.XX.:______________________________________________________________________
FAX NO.:______________________________________________________________________
CONTACT NAME:_________________________________________________________________
SPECIAL INSTRUCTIONS:_________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
