REGULATION S SECURITIES SUBSCRIPTION AGREEMENT
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), AND MAY NOT BE OFFERED OR SOLD IN THE UNITED
STATES OR TO U.S. PERSONS (OTHER THAN DISTRIBUTORS) UNLESS THE SECURITIES ARE
REGISTERED UNDER THE ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENT OF
THE ACT IS AVAILABLE. THIS SUBSCRIPTION AGREEMENT SHALL NOT CONSTITUTE AN OFFER
TO SELL NOR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES IN ANY JURISDICTION
IN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.
This Regulation S Securities Subscription Agreement (the "Agreement")
is executed by the undersigned (the "Subscriber") in connection with the offer
and subscription by the undersigned to purchase shares of Series 1 Convertible
Preferred Stock (the "Preferred Stock") of Global Intellicom, Inc., a Nevada
corporation (the Company"). The Company is offering 300,000 shares of the
Preferred Stock at a price of $10.00 per share ("Shares"). The Preferred Stock
shall have a liquidation preference equal to $10.00 per Share. The Preferred
Stock may be converted into non legended and freely tradable Common Stock of the
Company after 41 days from the closing at a conversion rate equal to the lesser
of (a) 70% of the closing bid price of the Common Stock on the day of closing or
(b) 70% of the average closing bid price over the five trading days prior to the
date of conversion. This Subscription and, if accepted by the Company, the offer
and sale of Preferred Stock and the underlying Common Stock (collectively, the
"Securities"), are being made in reliance upon the provisions of Regulation S
("Regulation S") under the United States Securities Act of 1933, as amended (the
"Act"). The undersigned, in order to induce the Company to enter into the
transaction contemplated hereby and acknowledging that the Company will rely on
warranties contained herein.
1. Offer to Subscribe; Purchase Price
The Subscriber hereby offers to purchase and subscribes for the
number of shares of Preferred Stock, set forth on the signature page
to this Agreement. The Closing shall take place as set forth in the
escrow instructions attached as Exhibit A hereto.
2. Representations; Access to Information; Independent Investigation
(a) Offshore Transaction. Subscriber represents and warrants to the
Company that (i) Subscriber is not a "U.S. person" as that term is
defined in Rule 902 (o) of Regulation S; (ii) Subscriber is not
organized under the laws of the United States and was not formed for
the purpose of investing in Regulation S Securities and is not
registered under the Act; (iii) the offer and sale of the Shares will
be made in an offshore transaction and, at the same time of execution
of this Subscription Agreement, Subscriber was outside the United
States; (iv) Subscriber is purchasing the Shares for its own account
and not on behalf of any U.S. person or with a view to or in
connection with any distribution, resale, subdivision or
fractionalization of the Shares for an indefinite period of time for
a U.S. person and the sale of the Shares has not been prearranged
with any buyer in the United States; (v) the Subscriber and to the
best knowledge of the Subscriber each distributor, if any,
participating in the offering of the Shares, to the best knowledge of
Subscriber, has agreed and Subscriber agrees that all offers and
sales of the Shares prior to the expiration
of a period commencing on the closing of the offering of the Shares
and ending forty days thereafter shall not be made to U.S. persons or
for the account or benefit of U.S. persons and shall otherwise be
made in compliance with the provisions of Regulation S; (vi)
Subscriber understands the restrictions on transfer of the Shares
imposed by this Agreement and U.S. securities laws and agrees to
comply with such restrictions; and (vii) the offer and sale of the
Shares to Subscriber does not violate the securities or other laws of
Subscriber's jurisdiction. Subscriber is not a distributor or dealer.
Subscriber and its controlling persons agree to indemnify the Company
for any misrepresentation contained herein.
(b) Current Public Information. The Company represents that it is a
"reporting issuer" as defined in Rule 902 (1) of Regulation S in that
it has a class of securities registered under Section 12(b) or 12(g)
of the Securities Exchange Act of ▇▇▇▇, (▇▇▇ "▇▇▇▇▇▇▇▇ ▇▇▇"), or is
required to file reports pursuant to Section 15(d) of the Exchange
Act and has filed all the material required to be filed pursuant to
the Exchange Act for a period of at least twelve months preceding the
date hereof (or for such shorter period as the Company was required
to file such material). The Company has furnished Subscriber with
copies of such information as may be requested by Subscriber.
(c) Independent Investigation; Access. Subscriber, in electing to
subscribe for the Securities hereunder, has relied upon an
independent investigation made by it and its representatives, if any,
and has, prior to the date hereof, been given access to and the
opportunity to examine all books and records of the Company, and all
material contracts and documents of the Company. Subscriber has been
given no oral or written representations or assurances from the
Company or any representation of the Company other than as set forth
in this Agreement or in a document executed by a duly authorized
representative of the Company making reference to this Agreement.
(d) No Government Recommendation or Approval. Subscriber understands that
no United States federal or state agency has passed upon or made any
recommendation or endorsement of the Company, this transaction or the
purchase of the Securities.
(e) The Company has not offered the Securities to the Subscriber in the
United States or, to the best knowledge of Subscriber, to any person
in the United States or any U.S. Person.
(f) No Directed Selling Efforts in Regard to this Transaction. To the
best knowledge of Subscriber and the Company neither the Company or
any person acting for the Company has conducted any "directed selling
efforts" as that term is defined in Rule 902 of Regulation S.
3. Resales
The transaction restriction in connection with this offshore offer
and sale restrict the Purchaser from offering or selling to U.S.
Persons for a forty day period. Rule 903(c)(2)(iii) governs the forty
day transaction restriction. The Purchaser hereby agrees to comply
with that restriction notwithstanding that the rules do not require
the placement of such a restrictive legend on the share certificate.
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Section 5 of the 1933 Act does not apply to sales of the Shares
outside the United States. Rule 904 provides a safe harbor for
determining that a resale has occurred outside the United States.
Section 5 of the 1933 Act prohibits resale of the Shares in the
United States except pursuant to an effective registration statement
or an exemption from registration for which the Purchaser qualifies,
including under Regulation S. The Purchaser understands the
requirements for qualifying for the exemption from registration,
other than as provided by Regulation S, are afforded by Section 4(1)
of the 1933 Act and that there can be no assurance that the Purchaser
will be able to qualify for exemption afforded by Section 4(1) of the
1933 Act. The Seller shall have no liability in the event the
Purchaser is unable to qualify for the exemption afforded by Section
4(1).
The Purchaser understands that the offer and sale of the Shares are
not being registered under the 1933 Act. The Seller is relying on the
rules governing offers and sales made outside the United States
pursuant to Regulation S. Rules 901 through 904 of Regulation S
govern this transaction.
Subscriber acknowledges and agrees that the Securities may only be
resold (a) in compliance with Regulation S; (b) pursuant to a
Registration Statement under the Act; or (c) pursuant to an exemption
from registration. Company special counsel will deliver an opinion at
closing to the effect that an exemption is available.
4. Subsequent Transfer of Securities
Subject to compliance with applicable securities law and the terms of
the Preferred Stock, the Company agrees, and shall instruct its
transfer agent, that the Securities may be transferred to any person
or entity who is not an affiliate of the Company without (a) any
further restriction on transfer or (b) the entry of a "stop transfer"
order against such Securities, provided that the person(s) or
entity(ies) requesting transfer furnish the appropriate
representations to the Company's legal counsel.
5. Registration of Securities.
The Company hereby agrees that upon the occurrence of a regulatory
development including, but not limited to, an amendment or proposed
amendment of Regulation S, or the existence of any "no-action" or
interpretive guidance, whether oral or written, for the SEC, which
calls into substantial questions the ability of Purchaser to resell
the Common Stock issuable upon conversion of the Preferred Stock
without registration, the Company shall promptly and expeditiously
file and use its best efforts to cause to become effective, a
registration statement on Form S-3 under the Securities Act and
relevant Blue Sky Laws covering the sale of the Common Stock issuable
upon conversion of the Preferred Stock. Such best efforts shall
include, but not limited to, promptly responding to all comments
received by the staff of the SEC, providing Purchaser or its counsel
with contemporaneous copy of all written communications from 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. Any such registration statement shall
remain effective for up to 12 months or until all of the Securities
are sold, whichever is earlier. 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 Stock
issuable upon
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conversion of the Preferred Stock. The company shall bear and pay all
expenses incurred in connection with any such registration, excluding
discounts and commissions. The foregoing shall not in any way limit
Purchaser's rights in connection with the shares of Common Stock
issuable upon conversion of the Preferred Stock from selling such
shares (i) pursuant to Regulation S or (ii) pursuant to any exemption
from registration under the Securities Act.
6. Governing Law
This Agreement shall be governed by and construed in accordance with
the laws of the State of Nevada except for matters arising under the
Act or the Securities Exchange Act of 1934 which matters shall be
construed and interpreted in accordance with such laws.
Number of Shares purchased _________________ for total of $_________.
The undersigned acknowledges that this subscription shall not be
effective unless accepted by the Company as indicated below.
Dated this ___ day of August, 1996.
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(Name) (Please Print)
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(Signature)
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(Mailing Address)
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(Registration instructions)
THIS SUBSCRIPTION IS ACCEPTED BY THE COMPANY ON THE ABOVE DATE.
GLOBAL INTELLICOM, INC.
By: ___________________________
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