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
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, 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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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.
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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
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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.
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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.
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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.
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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
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(Registration Instructions)
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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
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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
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