Exhibit 1.2.
REGULATION S SECURITIES SUBSCRIPTION AGREEMENT
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES COMMISSION OF ANY STATE UNDER ANY STATE SECURITIES LAW. THEY ARE
BEING OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER REGULATION "S"
("REGULATION S") PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), SECURITIES MAY NOT OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE UNITED
STATES OR TO U.S. PERSONS (AS SUCH TERM IS DEFINED IN REGULATION S) UNLESS THE
SECURITIES ARE REGISTERED UNDER THE ACT AND QUALIFIED UNDER APPLICABLE STATE
SECURITIES LAWS, OR SUCH OFFERS, SALES AND TRANSFERS ARE MADE PURSUANT TO
AVAILABLE EXEMPTIONS FROM THE REGISTRATION AND QUALIFICATION REQUIREMENTS OF
THOSE LAWS.
THIS SUBSCRIPTION AGREEMENT DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, ANY OF THE SECURITIES OFFERED HEREBY BY OR TO
ANY PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE AN
UNLAWFUL INVESTMENT. THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. IN MAKING
AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE
COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND THE RISKS
INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE
SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING
AUTHORITIES HAVE NOT CONFIRMED OR DETERMINED THE ACCURACY OR ADEQUACY OF THIS
DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
This Regulation S Securities Subscription Agreement (the "Agreement" or the
"Subscription Agreement") is executed by the undersigned, Bentley House
Furniture Company, a Philippine corporation, with offices at 502 Midland
Mansion, Xxxxxxx Xxxxxx Ave, Makati City MM, Philippines, and its affiliates
("the subscriber"), herein represented by its Chief Executive Officer Xxxxxxxx
Xxxxxxx-Xxxxxxx, in connection with a payment due to the Subscriber for the sale
of real property, manufacturing facility, machinery and all improvements, goods
and chattels, to (the "Company"). The Company has an obligation to the
Subscriber in the amount of $6,000,000 in respect of the sale. Under the terms
of the Agreement, payment may be made with common stock, $.001 par value per
share, of the Company ("Shares"). The solicitation of this Subscription and, if
accepted by the Company, the sale of common shares, are being made in reliance
upon the provisions of Regulation S ("Regulation S") promulgated under the
United States Securities Act of 1933, as amended (the "Act"). The shares
issuable are sometimes referred to herein as the "Securities." The Subscriber
wishes to subscribe for the amount of common shares set forth in Section 1 in
accordance with the terms and conditions of this agreement. It is agreed as
follows:
1. Offer to Subscribe; Purchase Price
The Subscriber hereby offers to purchase and subscribe for 1,000,000 shares of
common stock of the Company ("Shares"), representing a total purchase price of
$6,000,000, in accordance with the terms and conditions set forth in the "Deed
of Absolute Sale" attached hereto as EXHIBIT 'C'. The Closing shall be deemed to
occur when this Agreement has been executed by both the Subscriber and the
Company (the "Closing").
2. Representations; Access to Information; Independent Information;
Independent Investigation
The Subscriber represents and warrants to and covenants with the Company, on its
own behalf and on behalf of each person or entity for which the Subscriber is
acting as a fiduciary, follows:
2.1 Offshore Transaction. The Subscriber represents and warrants to the
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Company that (i) neither the Subscriber nor any investors on whose behalf the
Subscriber may purchase and hold Shares (the "Investors") is a "U.S. person" as
that term is defined in Rule 902(k) of Regulation S (a copy of which definition
is attached as Exhibit A), and neither the Subscriber nor any Investor is an
entity organized or incorporated under the laws of any foreign jurisdiction by
any "U.S person" principally for the purpose of investing in securities not
registered under the Act, unless the Subscriber is or was organized or
incorporated by "U.S. persons" who are accredited investors (as defined in Rule
501(a) under the Act) and who are not natural persons, estates or trusts
("Institutional Investors"), and all owners of interests in such entity who are
"U.S. persons" are Institutional Investors, and not natural persons, estates or
trusts; (ii) the Shares were not offered to the Subscriber or to any Investor in
the United States and at the time of execution of this Subscription Agreement
and of any offer to the Subscriber or to the Investors to purchase the Shares
hereunder, the Subscriber and each such Investor was physically outside the
United States; (iii) the Subscriber is purchasing the Securities for its own
account and not on behalf of or for the benefit of any "U.S. person" and the
sale and resale of the Securities have not been prearranged with any buyer in
the United States; (iv) the Subscriber and to the best knowledge of the
Subscriber each distributor, if any, participating in the offering of the
Securities, has agreed and the Subscriber hereby agrees that all offers and
sales of the Securities prior to the expiration of a period commencing on the
Closing and ending one (1) year later (the "Distribution Compliance Period")
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. Subscriber has not been engaged or acted as or on behalf of a
distributor or dealer (and is not an affiliate of a distributor or dealer) with
respect to this transaction.
2.2 Independent Investigation. The Subscriber, in offering to subscribe for
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the Securities hereunder, has relied upon an independent investigation made by
it 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. The Subscriber will keep confidential all non-public
information regarding the Company that the Subscriber receives from the Company.
In making its decision to accept the Shares as payment in full for the assets
described in the "Deed of Absolute Sale" attached hereto as EXHIBIT 'C', the
Subscriber is not relying on any oral or written representations or assurances
from the Company or any other person or any representation of the Company or any
other person other than as set forth in this Agreement, public filings of the
Company or in a document executed by a duly authorized representative of the
Company making reference to this Agreement. The Subscriber has such experience
in business and financial matters that it is capable of evaluating the risk of
its investment and determining the suitability of its investment. The
Subscriber is a sophisticated investor as defined in Rule 506(b)(2)(ii) of
Regulation D, and an "Accredited Investor" as defined in Rule 501 of Regulation
D, a copy of which definition is attached hereto as Exhibit B.
2.3 Economic Risk. The Subscriber understands and acknowledges that in
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accepting the Shares as payment in full for the assets described in the "Deed of
Absolute Sale" attached hereto as EXHIBIT 'C' ("Payment") this transaction
involves a high degree of risk, including a possible total loss of the present
and or future value of the Shares. The Subscriber represents that the
Subscriber is able to bear the economic risk of accepting the Shares as Payment.
In making this statement the Subscriber hereby represents and warrants that the
Subscriber has adequate means of providing for the Subscriber's current needs
and contingencies; the Subscriber is able to afford to hold the Shares for an
indefinite period and the Subscriber further represents that the Subscriber has
such knowledge and experience in financial and business matters that the
Subscriber is capable of evaluating the merits and risks of accepting the Shares
as Payment. Further, the Subscriber represents that the Subscriber is able to
bear the economic risks of accepting the Shares as Payment; the Subscriber has
no present need for liquidity in such Shares; the Subscriber can afford a
complete loss of the value of the Shares; and the Subscriber is willing to
accept such inherent risks in accepting the Shares as Payment.
2.4 No Government Recommendation or Approval. The Subscriber understands
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that no United States federal or state agency or similar agency of any other
country has passed upon or made any recommendation or endorsement of the
Company, this transaction or the subscription of the Shares.
2.5 No Directed Selling Efforts in Regard to this Transaction. The
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Subscriber has not, and to the best of the Subscriber's knowledge, neither the
Company nor any distributor, if any, participating in the offering of the
Securities nor any person acting for the Company or any such distributor has
conducted any "directed selling efforts" as that term is defined in Rule 902 of
Regulation S. Such activity includes, without limitation, the mailing of printed
material to investors residing in the United States, the holding of promotional
seminars in the United States, the placement of advertisements with radio or
television stations broadcasting in the United States or in publications with a
general circulation in the United States, which discuss the offering of Shares.
2.6 Reliance on Representation. This Agreement is made by the Company with
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the Subscriber in reliance upon such Subscriber's representations and covenants
made in this Section 2, which by his execution of this Agreement the Subscriber
hereby confirms. If the Subscriber includes or consists of more than one person
or entity, the obligations of the Subscriber shall be joint and several and the
representations and warranties herein contained shall be deemed to be made by
and be binding upon each such person or entity and their respective heirs,
executors, administrators, successors and assigns.
2.7 No Registration. Subscriber understands that the Shares issuable have
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not been registered under the Act and are being offered and sold pursuant to an
exemption from registration contained in the Act based in part upon the
representations of Subscriber contained herein.
2.8 No Public Solicitation. Subscriber knows of no public solicitation or
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advertisement of an offer in connection with the proposed issuance and sale of
the Common Shares.
2.9 Investment Intent. Subscriber is acquiring the Shares to be issued and
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sold hereunder for the Subscriber's own account (or for beneficiaries accounts
over which the Subscriber has investment discretion but no discretionary voting
or dispositive authority). Subscriber and each other party acquiring the Shares
issuable pursuant to this Agreement are acquiring such securities for investment
and not with a view to the distribution thereof. Subscriber understands that
Subscriber must bear the economic risk of this investment indefinitely unless
such Shares are registered pursuant to the Act, or an exemption from such
registration is available, and that the Company has no present intention of
registering any such sale of the Shares. Subscriber represents and warrants to
the Company that it has no plan or intention of selling the Shares in the United
States, has made no predetermined arrangements to sell the Shares and that the
offering by the Subscriber to accept the Company's securities as Payment, as
contemplated in this Agreement, together with any subsequent resale of the
Shares, is not part of a plan or scheme to evade the registration provisions of
the Act. Subscriber currently has no short position in the Shares, including
any short call position or any long put position or any contract or arrangement
that has the effect of eliminating or substantially diminishing the risk of
ownership of the Shares, nor has engaged in any hedging transaction with respect
to the Shares. Subscriber covenants that neither Subscriber nor its affiliates
nor any person acting on its or their behalf has the intention of entering, has
entered or will enter during the Distribution Compliance Period, into any put
option, short position or any hedging transaction or other similar instrument or
position with respect to the Shares or securities of the same class as the
Shares and neither Subscriber nor any of its affiliates nor any person acting on
its or their behalf will use at any time Shares acquired pursuant to this
Agreement to settle any put option, short position or other similar instrument
or position during the Distribution Compliance Period and for one (1) year
thereafter.
2.10 No Sale in Violation of the Act. Subscriber further covenants that
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Subscriber will not make any sale, transfer or other disposition of the Shares
in violation of the Act (including Regulation S), the Securities Exchange Act of
1934, as amended (the "Exchange Act") or the rules and regulations of the
Securities and Exchange Commission (the "Commission") promulgated thereunder.
2.11 Incorporation and Authority. Subscriber has the full power and
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authority to execute, deliver and perform this Agreement and to perform its
obligations hereunder. This Agreement has been duly approved by all necessary
action of Subscriber, including any necessary shareholder approval, has been
executed by persons duly authorized by Subscriber, and constitutes a valid and
legally binding obligation of Subscriber, enforceable in accordance with its
terms.
2.12 No Reliance on Tax Advice. Subscriber has reviewed with his, her or
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its own tax advisors the foreign, federal, state and local tax consequences of
this investment, where applicable, and the transactions contemplated by this
Agreement. Subscriber is relying solely on such advisors and not on any
statements or representations of the Company or any of its agents and
understands that Subscriber (and not the Company) shall be responsible for the
Subscriber's own tax liability that may arise as a result of this investment or
the transactions contemplated by this Agreement, including, but not limited to,
any and all taxes, fees, liens, encumbrances and other costs associated with the
transfer to the Company of the assets in accordance with the terms and
conditions of the "Deed of Absolute Sale" attached hereto as EXHIBIT 'C'.
2.13 Independent Legal Advice. Subscriber acknowledges that Subscriber has
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had the opportunity to review this Agreement and the transactions contemplated
by this Agreement with his or her own legal counsel. Subscriber is relying
solely on such counsel and not on any statements or representations of the
Company or any of its agents for legal advice with respect to this investment or
the transactions contemplated by this Agreement, except for the representations,
warranties and covenants set forth herein.
2.14 Compliance. If Subscriber becomes subject to Section 13(d) of the
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Exchange Act, Subscriber will duly file the required Schedule(s) thereunder.
2.15 Not an Affiliate. Subscriber is not an officer, director or
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"affiliate" (as that term is defined in Rule 405 of the SEC) of the Company.
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2.16 No Pledges. Subscriber has not pledged the Securities, and will not
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pledge the Securities during the Distribution Compliance Period, as collateral
in a margin account or otherwise with a "U.S. Person."
2.17 No Inquiries. Subscriber has not been the subject of a regulatory
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inquiry by the Commission.
2.18 Warranties of Other Parties. If Subscriber is purchasing the Shares
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for the accounts of parties other than Subscriber (as contemplated by Section
2.9 above), Subscriber has full power and authority to make the representations,
warranties and agreements made pursuant to this Agreement on behalf of the
owners of such accounts, and agrees that each representation, warranty and
agreement made by Subscriber herein is also made by and on behalf of each owner
of each such account.
3. Resales
Subscriber acknowledges and agrees that the Securities may and will 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 under
the Act.
4. Legends, Subsequent Transfer of Securities
4.1 Legends. The certificate(s) representing the Common Shares shall bear
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the legend set forth below and any other legend, if such legend or legends are
reasonably required by the Company to comply with state, federal or foreign law.
Assuming that there are no changes in the material facts set forth in Section 2
of this Agreement or applicable law from the date hereof, the certificate
representing the Shares after the Distribution Compliance Period shall have
language that signifies the Shares become eligible for resale in accordance with
Rule 144. The legend upon issuance shall read as follows:
"The Common Shares of Xxxxxx.xxx, Inc. (the "Issuer") represented by this
certificate have been issued pursuant to Regulation S, promulgated under the
Securities Act of 1933, as amended (the "Act"), and have not been registered
under the Act or any applicable state securities laws. These shares may not be
offered or sold within the United States or to or for the account of a "U.S.
person" (as that term is defined in Regulation S) during the period commencing
on the date of sale of these shares and ending one year later. Subsequent to
the Distribution Compliance Period, these shares may not be offered or sold
unless such offer or sale is registered or exempt from registration under the
Act."
4.2 Transfers. Subject to receipt of a legal opinion from legal counsel to
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the Company, the Company agrees, and shall instruct its agents, that the
Securities may be transferred to any person or entity who is not an affiliate of
the Company if such transfer occurs after the Distribution Compliance Period,
without (a) any further restriction on transfer (provided the transfer is made
in compliance with the Act) or (b) the entry of a "stop transfer" order against
such Common Shares, and the Common Shares delivered to the transferee subsequent
to the Distribution Compliance Period shall bear a legend reflecting the Shares
are eligible for resale in accordance with Rule 144.
5. Representations, Warranties and Covenants of Company
The Company represents and warrants to and covenants with the Subscriber as
follows:
5.1 Organizations Good Standing, and Qualification. The Company is a
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corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
carry on its business as now conducted and as proposed to be conducted. The
Company is duly qualified to transact business and is in good standing in each
jurisdiction in which the failure to so qualify would have a material adverse
effect on the business or properties of the Company and its subsidiaries taken
as a whole. The Company to its knowledge is not the subject of any pending or
threatened administrative or legal proceeding by the Internal Revenue Service,
the taxing authorities of any state or local jurisdiction, or the Securities and
Exchange Commission which have not been disclosed in the reports referred to in
Section 5.5 below.
5.2. Corporate Condition. None of the Company's filings made pursuant to
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the Exchange Act, including, but not limited to, those reports referenced in
Section 5.5 below, contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements made, in light
of the circumstances under which they were made, not misleading. There have
been no material adverse changes in the Company's financial condition or
business since the date of those reports which have not been disclosed to
Subscriber in writing.
5.3 Authorization. All corporate action on the part of the Company, its
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officers, directors and shareholders necessary for the authorization, execution
and delivery of this Agreement, the performance of all obligations of the
Company hereunder and the authorization, issuance (or reservation for issuance)
of the Shares have been taken, and this Agreement constitutes a valid and
legally binding obligation of the Company, enforceable in accordance with its
terms.
5.4 Valid Issuance of the Shares. The Shares, when issued, sold and
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delivered in accordance with the terms hereof for the consideration expressed
herein, will have been issued in compliance with all applicable U.S. federal and
state securities laws. The Shares when issued in accordance with the terms
thereof, shall be duly and validly issued and outstanding, fully paid and
nonassessable, and based on the representations and warranties of Subscriber and
any transferee of the Shares will be issued in compliance with all applicable
U.S. federal and state securities laws.
5.5 Current Public Information. The Company represents and warrants to the
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Subscriber that the Company is a "reporting Issuer" as defined in Regulation S
and it has a class of securities registered under Section 12(g) of the Exchange
Act and has filed all the materials required to be filed as reports 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 by law to file
such material). The Subscriber has obtained copies of the Company's Form 10-KSB
Annual Report for the year ended December 31, 2000 and Form 10-QSB for the
fiscal quarter ended March 31, 2001. The Company undertakes to furnish the
Subscriber with copies of such other information as may be reasonably requested
by the Subscriber prior to consummation of this Offering.
5.6 No Directed Selling Efforts in Regard to this Transaction. The Company
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has not, and to the best of the Company's knowledge neither the Subscriber nor
any distributor, if any, participating in the offering of the Securities nor any
person acting for the Company or any such distributor has conducted any
"directed selling efforts" as that term is defined in Regulation S. Such
activity includes, without limitation, the mailing of printed material to
investors residing in the United States, the holding of promotional seminars in
the United States, the placement of advertisements with radio or television
stations broadcasting in the United States or in publications with a general
circulation in the United States, which discuss the offering of Shares. The
Company represents and warrants that the Offering is not part of a plan or
scheme to evade the registration provisions of the Act.
5.7 No Conflicts. The execution and delivery of this Agreement and the
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consummation of the issuance of the 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
Certificate of Incorporation or bylaws of the Company, or any indenture,
mortgage, deed of trust or other material payment 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 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.
5.8 Issuance of Securities. The Company will issue one or more certificates
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in the name of Subscriber in such denominations to be specified by the
Subscriber prior to closing. The Company warrants that no instructions other
than these instructions, and instructions for a "stop transfer" until the end of
the Distribution Compliance Period, have been given to the transfer agent and
also warrants that the Shares shall otherwise be available for resale in
accordance with Rule 144 subsequent to the Distribution Compliance Period by
Subscriber on the books and records of the Company subject to compliance with
Federal and State securities laws. Nothing in this section shall affect in any
way Subscriber's obligations and agreement to comply with all applicable
securities laws upon future resale of the Shares.
5.9 No Action. The Company has not taken and will not take any action that
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will affect in any way the running of the Distribution Compliance Period or the
ability of Subscriber to resell the Shares in accordance with Rule 144 and other
applicable securities laws and the Agreement subsequent to the Distribution
Compliance Period.
5.10 Compliance with Laws. As of the date hereof, the conduct of the
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business of the Company complies in all material respects with all material
statutes, laws, regulations, ordinances, rules, judgments, orders or decrees
applicable thereto. The Company has not received notice of any alleged
violation of any statute, law, regulations, ordinance, rule, judgment, order or
decree from any governmental authority. The Company shall comply with all
applicable securities laws with respect to the sale of the Shares, including but
not limited to the filing of all reports required to be filed in connection
therewith with the Shares and Exchange Commission or any stock exchange or the
NASD or any other regulatory authority.
5.11 Litigation. Except as disclosed in the Company's Quarterly Report on
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Form 10-QSB, there is no action, suit or proceeding before or by any court or
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, which could reasonably be expected to result in any material
adverse change in the business, financial condition or results of operations of
the Company, or which could reasonably be expected to materially and adversely
affect the properties or assets of the Company.
5.12 No U.S. Offering. The Company represents that, to the best of its
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knowledge, it has not offered the issuance of Shares contemplated by this
Agreement in the United States or to any "U.S. person."
5.13 Disclosures. There is no fact known to the Company (other than general
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economic conditions known to the public generally) that has not been disclosed
in writing to the Subscriber that (a) could reasonably be expected to have a
material adverse effect on the business, financial condition or results of
operations of the Company, or which could reasonably be expected to materially
and adversely affect the properties or assets of the Company or (b) could
reasonably be expected to materially and adversely affect the ability of the
Company to perform its obligations pursuant to this Subscription Agreement.
5.14 Commissions. No commissions, fees or similar payments were payable by
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the Company in respect to this Agreement.
6. Opinion of Counsel
Subscriber shall, upon receipt of the Shares, receive an opinion letter from
counsel to the Company, to the effect that, based upon the representations and
warranties of the Company and each Subscriber in the Offering, the offer and
sale of the Shares to the Subscriber is exempt from the registration
requirements of the Securities Act under Regulation S.
7. Governing Law
This Agreement shall be governed by and construed in accordance with the laws of
the State of Colorado, U.S.A., applicable to agreements made in and wholly to be
performed in that jurisdiction, except for matters arising under the Act or the
Exchange Act which matters shall be construed and interpreted in accordance with
such laws.
7.1 Subscriber and the Company each hereby irrevocably agree to submit any
and all disputes between them arising under this Agreement to binding,
non-appealable arbitration, to be conducted in accordance with this Section 7.
The parties further agree irrevocably to submit themselves, in any suit to
confirm the judgment or finding of such arbitrator, to the jurisdiction of the
Superior Court for the County of Arapaho, State of Colorado, and hereby waive
and agree not to assert (by way of motion, as a defense or otherwise) (a) any
and all objections to jurisdiction that they may have under the laws of the
State of Colorado or the United States, and (b) any claim (i) that it or
[he/she] is not subject personally to jurisdiction of such court, (ii) that such
forum is inconvenient, (iii) that venue is improper, or (iv) that this Agreement
or its subject matter may not for any reason be arbitrated or enforced as
provided in this Section 7.
7.2 The aggrieved party shall, upon written notice to the other, submit any
dispute or controversy respecting actual or alleged breach of, or interpretation
of, or enforcement of, this Agreement to binding non-appealable arbitration
before a retired judge of the Superior Court of the State of Colorado in and for
the County of Arapaho, to be conducted by means of a reference pursuant to the
applicable sections of the Colorado Code of Civil Procedures. Within ten (10)
business days after receipt of the notice submitting a dispute or controversy to
arbitration, the parties shall attempt in good faith to agree upon an arbitrator
to whom the dispute will be referred and on a joint statement of contentions.
Failing agreement thereto within ten (10) business days after receipt of such
notice, each party shall name three (3) retired judges and thereafter either
party may file a petition seeking the appointment of one of the persons named by
the party as a referee by the presiding Judge of the Superior Court, which
petition shall recite in a clear and meaningful manner the factual basis of the
controversy between the parties and the issues to be submitted to the referee
for decision. Each party hereby agrees that service of process in such action
will be deemed accomplished and completed when a copy of the documents is sent
in accordance with the notice provisions in Section 7 hereof.
7.3 The hearing before the referee shall be held within thirty (30) days
after the parties reach agreement as to the identity of the referee (or within
thirty (30) days after the appointment of a referee by the court). Unless more
extensive discovery is expressly permitted by the referee, each party shall have
only the right to two document production requests, shall serve but two sets of
interrogatories and shall only be entitled to depose those witnesses which the
referee expressly permits, it being the parties' intention to minimize discovery
procedures and to hold the hearing on an expedited basis. The referee shall
establish the discovery schedule promptly following submission of the joint
statement of contentions (or the filing of the answer to the petition) which
schedule shall be strictly adhered to. To the extent the contentions of the
parties relate to custom or practice in the Company's business model, or the
technical industry generally, or to accounting matters, the referee shall select
an independent expert or accountant (as applicable) with substantial experience
in the industry segment involved to provide recommendations to the referee. All
decisions of the referee shall be in writing and shall not be subject to appeal.
The referee shall make all rulings in accordance with Colorado law and shall
have authority equal to that of a Superior Court judge, to grant equitable
relief in an action pending in Reston Superior Court in which all parties have
appeared.
7.4 Except as otherwise provided in this Agreement, the fees and costs of
the referee and of any experts retained shall be shared equally by the parties
to such dispute. The referee shall award legal fees, disbursements and
reimbursement of other expenses to the prevailing party for such amounts, if
any, as determined by the referee to be appropriate. Judgment upon the referee's
award may be entered as if after trial in accordance with Colorado law.
8. Entire Agreement, Amendment
This Agreement and the other documents delivered pursuant hereto constitute the
full and entire understanding and agreement between the parties with regard to
the subjects hereof and thereof, and no party shall be liable or bound to any
other party in any manner by any warranties, representations or covenants except
as specifically set forth herein or therein. Except as expressly provided
herein, neither this Agreement nor any term hereof may be amended, waived,
discharged or terminated other than by a written instrument signed by the party
against whom enforcement of any such amendment, waiver, discharge or termination
is sought.
9. Notices, Etc.
Any notice, demand or request required or permitted to be given by either the
Company or the Subscriber pursuant to the terms of this Agreement shall be in
writing and shall be deemed given when delivered personally or by facsimile,
with a hard copy to follow by two day courier addressed to the parties at the
addresses of the parties set forth at the end of this Agreement or such other
address as a party may request by notifying the other in writing.
10. Counterpart
This Agreement may be executed in any number of counterparts, each of which
shall be enforceable against the parties actually executing such counterparts,
and all of which together shall constitute one instrument.
11. Severability
If any term, provision or covenant in this Agreement is held to be invalid, void
or unenforceable, (i) the remainder of the terms, provisions and covenants in
this Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated, and (ii) to the fullest extent possible, the
provisions of this Agreement (including, without limitation, all portions of any
section of this Agreement containing any such provision held to be invalid, void
or unenforceable that are not themselves invalid, void or unenforceable) shall
be construed so as to give effect to the intent manifested by the provision held
invalid, void or unenforceable.
12. Indemnification. The Subscriber and the Company mutually agree to
indemnify and hold harmless each party and each of its affiliates, counsel,
stockholders, directors, officers, employees and controlling persons, within the
meaning of Section 15 of the Securities Act of 1933, as amended, or Section 20
of the Securities Exchange Act of 1934, for any violations of state or federal
securities laws by either party or any of its officers, other employees, agents,
affiliates, counsel, stockholders, directors, and controlling persons. The
Subscriber shall save the Company harmless from and against and shall indemnify
the other for any and all liabilities, losses, costs, expenses, or damages
howsoever caused by reason of any injury (whether to body, property, or personal
or business character or reputation) sustained by any person or to any person or
to property by reason of any act, neglect, default, or omission of the Company
or any of the Company's agents, employees, or other representatives in Company's
entering into this Agreement as a result of any misrepresentation or misconduct
by the Subscriber. In the event the Company is sued in any court for damages by
reason of the Company's relationship with the Subscriber and as a result of any
misrepresentation or misconduct by the Subscriber, the Subscriber shall defend
that court action (or cause that court action to be defended), at the
Subscriber's sole expense and the Subscriber shall pay and discharge any
judgment that may be rendered in any such court action. In the event the
Subscriber fails or neglects to defend the Company in any such court action, the
Company may defend such court action and any expenses, including attorney's
fees, which the Company may pay or incur in defending any such court action and
the amount of any judgment which the Company may be required to pay shall be
reimbursed promptly by the Subscriber to the Company upon demand therefor by the
Company.
13. Title and Subtitles
The titles and subtitles used in this Agreement are used for convenience only
and are not to be considered in construing or interpreting this Agreement.
Executed this 28th day of June 2001
Bentley House Furniture Company, a Xxxxxx.xxx, Inc. a Delaware
Philippine corporation, with Corporation with offices at 1600
offices at 502 Midland Mansion, Broadway, Suite 2400, Denver,
Xxxxxxx Xxxxxx Ave, Makati City MM, Colorado 8020,
Philippines,
By: By:
------------------------------- --------------------------------
/s/Xxxxxxxx Xxxxxxx-Xxxxxxx /s/Xxxxxx X. Xxxxxxxx
Xxxxxxxx Xxxxxxx-Xxxxxxx Xxxxxx X. Xxxxxxxx
EXHIBIT A
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Definition of "U.S. Person"
Pursuant to Rule 902 (k) of Regulation S, the terms "U.S. person" and "United
States" are defined as follows:
U.S. Person
------------
(1) "U.S. person" means:
(i) Any natural person resident in the United States;
(ii) Any partnership or corporation organized or incorporated under the laws of
the United States;
(iii) Any estate of which any executor or administrator is a "U.S. person";
(iv) Any trust of which any trustee is a "U.S. person";
(v) Any agency or branch of a foreign entity located in the United States;
(vi) 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" ;
(vii) Any discretionary account or similar account (other than an estate or
trust) held by a dealer or other fiduciary organized incorporated, or (if
an individual) resident in the United States; and
(viii)Any partnership or corporation if: (A) organized or incorporated under
the laws of any foreign jurisdiction; and (B) formed by a "U.S. person"
principally for the purpose of investing in securities not registered under
the Securities Act of 1933, as amended (the "Act") unless it is, organized
or incorporated, and owned, by accredited investors (as defined in Rule 501
(a) of the Act) who are not natural persons, estates or trusts.
(2) Notwithstanding paragraph (o) (1) of this rule, any discretionary account
or similar account (other than an estate or trust) held for the benefit or
account of a non-U.S. person by a dealer or other professional fiduciary
organized, incorporated, or (if an individual) resident in the United
States shall not be deemed a "U.S. person".
(3) Notwithstanding paragraph (o)(d), any estate of which any professional
fiduciary acting as executor or administrator is a "U.S. person" shall not
be deemed a "U.S. person" if:
(i) An executor or administrator of the estate who is not a "U.S. person" has
sole or shared investment discretion with respect to the assets of the
estate; and
(ii) The estate is governed by foreign law.
(4) Notwithstanding paragraph (o)(1), any trust of which any professional
fiduciary acting as trustee is a "U.S. person" shall not be deemed a "U.S.
person" if a trustee who is not a "U.S. person" has sole or shared
investment discretion with respect to the trust assets, and no beneficiary
of the trust (and no settlor if the trust is revocable) is a "U.S. person."
(5) Notwithstanding paragraph (o)(1), an employee benefit plan established and
administered in accordance with the law of a country other than the United
States and customary practices and documentation of such country shall not
be deemed a "U.S. person."
(6) Notwithstanding paragraph (o)(1), any agency or branch of a "U.S. person"
located outside the United States shall not be deemed a "U.S. person" if:
(i) The agency or branch operates for valid business reasons, and
(ii) The agency or branch is engaged in the business of insurance or banking and
is subject to substantive insurance or banking regulation, respectively, in
the jurisdiction where located.
(7) The International Monetary Fund, the International Bank for Reconstruction
and Development, the Inter-American Development Bank, the Asian Development
Bank, the African Development Bank, the United Nations, and their agencies,
affiliates and pension plans, and any other similar international
organizations, their agencies, affiliates and pension plans shall not be
deemed "U.S. persons".
United States
--------------
"United States" means the United States of America, its territories and
possessions, any State of the United States, and the District of Columbia.
EXHIBIT B
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Definition of "Accredited Investor"
Pursuant to Rule 501 (a) of Regulation D, the term "Accredited Investor" is
defined as follows:
1. Any bank as defined in section 3(a)(2) of the Securities Act of 1933 (the
"Act"), or any savings and loan association or other institution as defined
in section 3(a)(5)(A) of the Act whether acting in its individual or
fiduciary capacity; any broker or dealer registered pursuant to section 15
of the Securities Exchange Act of 1934; any insurance company as defined in
section 2(13) of the Act; any investment company registered under the
Investment Company Act of 1940 or a business development company as defined
in section 2(a)(48) of that Act; Small Business Investment Company licensed
by the U.S. Small Business Administration under section 301(c) or (d) of
the Small Business Investment Act of 1958; any plan established and
maintained by a state, its political subdivisions, or any agency or
instrumentality of a state or its political subdivisions for the benefit of
its employees, if such plan has total assets in excess of $5,000,000;
employee benefit plan within the meaning of the Employee Retirement Income
Security Act of 1974, If the investment decision is made by a plan
fiduciary, as defined in section 3(21) of such Act, which is either a bank,
savings and loan association, insurance company, or registered investment
adviser, or if the employee benefit plan has total assets in excess of
$5,000,000 or, if a self-directed plan, with investment decisions made
solely by persons that are accredited investors.
2. Any private business development company as defined in section 202(a)(22)
of the Investment Advisers Act of 1940.
3. Any organization described in section 501(c)(3) of the Internal Revenue
Code, corporation, Massachusetts or similar business mat, or partnership,
not formed for the specific purpose of acquiring the securities offered,
with total assets in excess of $5,000,000.
4. Any director, executive officer, or general partner of the issuer of the
securities being offered or sold, or any director, executive officer, or
general partner of a general partner of that issuer.
5. Any natural person whose individual net worth, or joint net worth with that
person's spouse, at the time of his purchase exceeds $1,000,000.
6. Any natural person who had an individual income in excess of $200,000 in
each of the two most recent years or joint income with that person's spouse
in excess of $300,000 in each of those years and has a reasonable
expectation of reaching the same income level in the current year.
7. 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 (b)(2)(ii) of
Rule 506.
8. Any entity in which all of the equity owners are accredited investors.
