IMPORTANT
PLEASE READ CAREFULLY BEFORE SIGNING,
SIGNIFICANT REPRESENTATIONS ARE CALLED FOR HEREIN
SUBSCRIPTION AGREEMENT
AND
LETTER OF INVESTMENT INTENT
The undersigned (the "Subscriber") hereby subscribes to purchase from
Preferred Voice, Inc., a Delaware corporation (the "Company") 160,000 shares of
Preferred Voice, Inc. $.001 par value common stock (the "Securities") at a
purchase price of $1.25. A wire transfer to the account of Preferred Voice, Inc.
in the amount of $ 200,000.00 for such Securities has been made in connection
herewith.
1. General Representations. The Subscriber acknowledges and
represents as follows:
(a) The Subscriber has been given full access to information
regarding the Company (including the opportunity to meet with
Company officers and to review all material books and records,
material contracts and documents that Subscriber may have
requested) and has utilized such access for the purpose of
obtaining all information the Subscriber deems necessary for
purposes of making an informed investment decision. The
Subscriber currently owns other securities issued by the
Company.
(b) The Subscriber understands that the purchase of the Securities
is a highly speculative investment and involves a high degree
of risk, that the Company may need additional financing in the
future, and that the Company makes no assurances whatever
concerning the present or prospective value of the Securities;
(c) The Subscriber has obtained, to the extent he or she deems
necessary, personal professional advice with respect to the
risks inherent in an investment in the Securities and the
suitability of such investment in light of the Subscribe's
personal financial condition and investment needs. Unless the
Subscriber has otherwise advised the Company in writing, the
Subscriber did not employ the services of a purchaser
representative, as defined in the Securities and Exchange
Commission's Regulation D, in connection with this investment;
(d) The Subscriber has sufficient knowledge and experience in
financial and business matters to be capable of evaluating the
merits and risks of a prospective investment in the
Securities; is experienced in making investments which involve
a high degree of risk, and is sophisticated in making
investment decisions; and believes that he or she is able to
bear the economic risk of an investment in the Securities,
including the total loss of such investment;
(e) The Subscriber realizes that (i) the purchase of the
Securities is a long-term investment, (ii) the purchaser of
the Securities must bear the economic risk of the investment
for an indefinite period of time because the Securities have
not been registered under the Securities Act of 1933, as
amended, (the "Act"), or applicable state laws or laws of
other countries and, therefore, the Securities cannot be sold
unless they are subsequently registered under the Act and such
other laws or exemptions from such registration are available,
(iii) the Company is not current in its reporting
responsibilities under the Securities Act of 1934, as amended,
(iv) there is no public market for the Securities and
the Subscriber may not be able to liquidate his or her
investment in the event of an emergency, or pledge the
Securities as collateral security for loans, and (v) the
transferability of the Securities is restricted and (A)
requires conformity with the restrictions contained in
paragraph 2 below, and (B) will be further restricted by a
legend placed on the certificate(s) representing the
Securities stating that the Securities have not been
registered under the Act and applicable state laws and
referencing the restrictions on transferability of the
Securities.
2. No Registration Under the Securities Laws. The Subscriber has been
advised that the Securities are not being registered under the Act or state
securities laws or securities laws of other nations pursuant to exemptions
from the Act and such laws, and that the Company's reliance upon such
exemptions is predicated in part on the representations of the Subscriber
contained herein. The Subscriber represents and warrants that the Securities
are being purchased for the Subscriber's own account and for investment
without the intention of reselling or redistributing the same, that no
agreement has been made with others regarding. the Securities and that the
Subscriber's financial condition is such that it is not likely that it will be
necessary to dispose of the Securities in the foreseeable future. The
Subscriber is aware that, in the view of the Securities and Exchange
Commission and state authorities that administer state securities laws, a
purchase of the Securities with an intent to resell by reason of any
foreseeable specific contingency or anticipated change in market values, or
any change in the condition of the Company or its business, or in connection
with a contemplated liquidation or settlement of any loan obtained for the
acquisition of the Securities and for which the Securities were pledged as
security, would represent an intent inconsistent with the representations set
forth above. The Subscriber further represents and agrees that, if contrary to
the foregoing intentions there should ever be a desire to dispose of or
transfer the Securities in any manner, the Subscriber shall not do so without
first obtaining (a) an opinion of counsel suitable to the Company that such
proposed disposition or transfer lawfully may be made without registration
pursuant to the Act and applicable securities laws of states and other nations
or (b) such registrations (it being expressly understood that the Company
shall not have any obligation to register the Securities for such purpose).
3. Registration Rights. If, at any time within three (3) years of the
date of this purchase, the Company proposes for any reason to register any of
its securities under the Securities Act other than a registration on Form S-8
relating solely to employee stock option or purchase plans, on Form S-4
relating solely to an SEC Rule 145 transaction or on any other form which does
not include substantially the same information as would be required to be
included in a registration statement covering the sale of the Securities, it
shall each such time give written notice to the holder of these Securities
("Holder" for purposes of this Section 3) of the Company's intention to
register such securities, and, upon the written request, given within thirty
(30) days after receipt of any such notice, of the Holders of the Securities
outstanding, to register any of the Securities, the Company shall cause the
Securities so requested by the Holder to be registered, whether such
Securities are outstanding or subject to purchase hereby, to be registered
under the Securities Act, all to the extent requisite to permit the sale or
other disposition by the Holder of the Securities so registered; provided,
however, that the Securities as to which registration had been requested need
not be included in such registration if in the opinion of counsel for the
Company and counsel for the Holder the proposed transfer by the Holder may be
effected without registration under the Securities Act and any certificate
evidencing the Securities need not bear any restrictive legend. In the event
that any registration pursuant to this Section 3 shall be, in whole or in
part, an underwritten offering of securities of the Company, then (i) any
request pursuant to this Section 3 to register the Securities may specify that
such shares are to be included in the underwriting on the same terms and
conditions as the shares of the Company's capital stock otherwise being sold
through underwriters under such registration, (ii) if the managing underwriter
of such offering determines that the number of shares to be offered by all
selling shareholders must be reduced, then the Company shall have the right to
reduce the number of shares registered on behalf of the Holder, provided that
the number of shares to be registered on behalf of the Holder shall not be
reduced to such an extent that the ratio of the shares which the Holder is
permitted to register to the total number of shares the Holder owns is less
than that ratio for any other selling shareholder, and (iii) the Holder will
be bound by the terms of the underwriting agreement and the conditions imposed
by the underwriter on selling shareholders.
4. State of Domicile. The Subscriber represents and warrants that the
Subscriber is a bona fide resident of, and is domiciled in, the state or
country so designated on the signature page hereto, and that the Securities
are being purchased solely for the beneficial interest of the Subscriber and
not as nominee for, or on behalf of, or for the beneficial interest of, or
with the intention to transfer to, any other person, trust, or organization.
5. Obligation to Update. The information provided by the Subscriber is
correct and complete as of the date hereof The Subscriber is informed of the
significance to the Company of the foregoing representations, and they are
made with the intention that the Company will rely upon them. If there should
be any adverse change in such information prior to the subscription being
accepted, the Subscriber will immediately provide the Company with such
information.
6. Entity Representation. The Subscriber makes the following
additional representations:
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(a) The Subscriber was not organized for the specific
purpose of acquiring the Securities; and
(b) This Agreement has been duly authorized by all
necessary actions of the Board of Directors,
shareholders, partners, trustees, or other duly
authorized acting body or person on the part of the
Subscriber, has been duly executed by an authorized
officer or representative of the Subscriber, and is a
legal, valid, and binding obligation of the
Subscriber enforceable in accordance with its terms.
Dated: July 1, 1999.
/s/ Xxxxxxxx Xxxxxxx
-----------------------------
Signature
Xxxxxxxx Xxxxxxx, Member Manager
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Name Typed or Printed, Title
JMG Capital Partners, L.P.
--------------------------------
Entity Name
0000 Xxxxxx xx xxx Xxxxx,
Xxxxx 0000
--------------------------------
Address
Xxx Xxxxxxx, Xxxxxxxxxx 00000
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City, State and Zip Code
(000) 000-0000
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(Area Code) Telephone Number
00-0000000
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Tax Identification or Social
Security Number
The Subscription Agreement and Letter of Investment Intent is
accepted as of July 1, 1999.
PREFERRED VOICE, INC.
/s/ G. Xxx Xxxxxx
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BY: G. Xxx Xxxxxx
Its: President & CEO
