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Exhibit 10.2
REGULATION S SECURITIES SUBSCRIPTION AGREEMENT
XXXX/BIOPHILE INTERNATIONAL CORPORATION
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE
BECAUSE THEY ARE BELIEVED TO BE EXEMPT FROM REGISTRATION UNDER REGULATION S
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). 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 the subscription of the undersigned to purchase an aggregate of 1,100 shares
(the "Securities") of Convertible Preferred Stock, Series F, par value $10 per
share of XXXX/Biophile International Corporation, a Delaware corporation (the
"Company"), Shares at a price of $1,100,000 . The terms and provisions of the
Securities are set forth in the form of Certificate of Designation attached
hereto as Exhibit A. This Agreement and the offer and sale of the Securities
contemplated hereby are being made in reliance upon the provisions of Regulation
S ("Regulation S ") under the Securities Act of 1933, as amended (the "Act").
The Subscriber, in order to induce the Company to enter into the transaction
contemplated hereby and acknowledging that the Company will rely thereon
represents, warrants and agrees as follows:
1. Offer to Subscribe; Purchase Price. The Subscriber hereby
offers to purchase and subscribes for the Securities for an
aggregate price of $1,100,000. The closing of the transactions
contemplated hereby (the "Closing") shall be deemed to occur
when this Agreement has been executed by both Subscriber and
Company. Payment shall be made at the Closing by delivering
immediately available funds in United States dollars by wire
transfer for simultaneous closing by delivery of securities
versus payment. The Company agrees to deliver certificates
representing the Securities subscribed for at the Closing. The
date on which the Closing occurs is hereafter referred to as
the Closing Date.
2. Subscriber Representations; Access to Information; Independent
Investigation
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(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) the Subscriber is not, and on the Closing Date will
not be, an affiliate of the Company; (iii) at the execution of
this Subscription Agreement, Subscriber was outside the United
States and no offer to purchase the Securities was made in the
United States; (iv) the Subscriber agrees that all offers and
sales of the Securities prior to the expiration of a period
commencing on the Closing and ending forty (40) days
thereafter (the"Restricted 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; (v) Subscriber is not a distributor or dealer;
(vi) the transactions contemplated hereby (a) have not been
and will not be pre-arranged by the Subscriber with a
purchaser located in the United States or a purchaser which is
a U.S. Person, and (b) are not and will not be part of a plan
or scheme by the Subscriber to evade the registration
provisions of the Act; (vii) the Subscriber shall take all
reasonable steps to ensure its compliance with Regulation S
and shall promptly send to each purchaser (x) who acts as a
distributor, underwriter, dealer or other person participating
pursuant to a contractual arrangement in the distribution of
the Securities or receiving a selling concession, fee or other
remuneration in respect of any of the Securities, or (y) who
purchases prior to the expiration of the Restricted Period, a
confirmation or other notice to the purchaser stating that the
purchaser is subject to the same restrictions on offers and
sales as the Subscriber pursuant to Section 903(c)(2)(iv) of
Regulation S; and (viii) none of the Subscriber, its
affiliates or persons acting on their behalf have conducted
and shall not conduct any "directed selling efforts" as that
term is defined in Rule 902(b) of Regulation S, nor has the
Subscriber, its affiliates or persons acting on their behalf
have conducted any general solicitation relating to the offer
and sale of any of the Securities in the United States or
elsewhere.
(b) Beneficial Owner. Subscriber is purchasing the
Securities for its own account or for the account of
beneficiaries for whom Subscriber has full investment
discretion with respect to the Securities and whom Subscriber
has full authority to bind, so that each such beneficiary is
bound hereby as if such beneficiary were a direct Subscriber
hereunder and all representations, warranties and agreements
herein were made directly by such beneficiary.
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(c) Directed Selling Efforts. Subscriber will not
engage in any activity for the purpose of, or that could
reasonably be expected to have the effect of, conditioning the
market in the United States for any of the Securities sold
hereunder. To the best knowledge of the Subscriber, neither
the Company nor any person acting for the Company has
conducted any "directed selling efforts" as that term is
defined in Rule 902 of Regulation S.
(d) Short Position. Neither Subscriber nor any of its
affiliates will directly or indirectly maintain any short
position in any securities of the Company until after the end
of the Restricted Period.
(e) Independent Investigation. Subscriber in electing
to subscribe for the Securities hereunder, has relied solely
upon the representations and warranties of the Company set
forth in this Agreement and on independent investigation made
by it and its representatives, if any, and Subscriber has been
given no oral or written representations or assurance 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.
(f) No Government Recommendation or Approval.
Subscriber understands 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 purchase of the Securities.
3. The Company Represents, Covenants and Warrants the following:
(a) Reporting Company Status. The Company is a
corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and is duly
qualified as a foreign corporation in all jurisdictions in
which the failure to so qualify would have a material adverse
effect on the Company and its subsidiaries taken as a whole.
The Company is a "Reporting Issuer" as defined by Rule 902 of
Regulation S. The Company has registered its Common Stock
pursuant to Section 12 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and the Common Stock is
listed and trades on the NASDAQ Small Cap Market. The Company
has filed all material required to be filed pursuant
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to all reporting obligations under either Section 13(a) or
15(d) of the Exchange Act for a period of at least twelve (12)
months immediately preceding the offer or sale of the
Securities (or for such shorter period that the Company has
been required to file such material).
(b) Concerning the Securities. The issuance, sale and
delivery of the Securities and the shares of Common Stock
issuable upon the conversion or exercise thereof are within
the Company's corporate powers and have been duly authorized
by all required corporate action on the part of the Company
and its stockholders and when such securities are issued, sold
and delivered in accordance with the terms hereof and the
Securities for the consideration expressed herein and in the
Securities, such securities will be duly and validly issued,
fully paid and nonassessable. There are no preemptive rights
of any shareholders of the Company.
(c) Offshore Transaction. The Company has not offered
or sold the Securities to any person in the United States, or,
to the best knowledge of the Company, any identifiable groups
of U.S. citizens abroad, or any U.S. person as that term is
defined in Regulation S. At the time the buy order for the
Securities was originated the Company and/or its agents
reasonably believed Subscriber was outside the United States
and was not a U.S. person.
(d) Prearranged Sale. The Company and/or its agents
believe that the transaction contemplated hereby has not been
pre-arranged with a buyer in the United States.
(e) No Directed Selling Efforts. The Company has not
conducted any "directed selling efforts" as that term is
defined in Rule 902 of Regulation S nor has Company conducted
any general solicitation relating to the offer and sale of the
Securities to persons resident within the United States or any
other U. S. person as that term is defined in Rule 902 of
Regulation S.
(f) Subscription Agreement. This Agreement has been
duly authorized, validly executed and delivered on behalf of
the Company and is a valid and binding agreement enforceable
against the Company in accordance with its terms, subject to
general principles of equity and to
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bankruptcy or other laws affecting the enforcement of
creditors' rights generally.
(g) Non-contravention. The execution and delivery of
this Agreement and the consummation of the issuance of the
Securities and the transactions contemplated by this Agreement
and the Securities do not and will not conflict with or result
in a breach by the Company of any of the terms or provisions
of, or constitute a default under, the articles of
incorporation or by-laws of the Company, or any indenture,
mortgage, deed of trust, or other material agreement or
instrument to which the Company is a party or by which it or
any of its properties or assets are bound, or any existing
applicable law, rule or regulation of the United States of any
State thereof or any applicable decree, judgment or order of
any Federal or State court, Federal or State regulatory body,
administrative agency or other United States governmental body
having jurisdiction over the Company or any of its properties
or assets.
(h) No Default. The Company is not in default in the
performance or observance of any material obligation,
agreement, covenant or condition contained in any indenture,
mortgage, deed of trust or other material instrument or
agreement to which it is a party or by which it or its
property may be bound; and neither the execution, nor the
delivery by the Company, nor the performance by the Company of
its obligations under this Agreement or the Securities will
conflict with or result in the breach or violation of any of
the terms or provisions of, or constitute a default or result
in the creation or imposition of any lien or charge on any
assets or properties of the Company under, any material
indenture, mortgage, deed of trust or other material agreement
or instrument to which the Company is a party or by which it
is bound or any statute or the Certificate of Incorporation or
Bylaws of the Company, or any decree, judgment, order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or its properties.
(i) SEC Filings. None of the Company's filings with
the Securities and Exchange Commission since January 1, 1995
contains any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make the statement therein in fight of the
circumstances under which they were made, not misleading. The
Company has since January 1, 1995 timely filed all requisite
forms,
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reports and exhibits thereto with the Securities and Exchange
Commission and, as of the date hereof, there are no filings
due to be filed with the Securities and Exchange Commission
which have not been so filed.
4. Reliance on Representations. The Subscriber understands that
the offer and sale of the Securities are not being registered
under the Act. The Company and the Subscriber are relying on
the rules governing offers and sales made outside the United
States pursuant to Regulation S.
5. Covenants of the Company.
(a) The certificate representing the shares of Common
Stock into which the Securities are converted after the
Restricted Period shall not bear a legend. Upon conversion of
the Securities in accordance with their terms, the Company
will issue one or more certificates representing the
appropriate number of shares of Common Stock of the Company
issuable upon such conversion in the name of Subscriber
without a restrictive legend and in such denominations as may
be specified by Subscriber at the time of conversion. The
Company further agrees that no instructions other than these
instructions, and instructions for a "stop transfer" until the
end of the Restricted Period, have been or will be given to
the transfer agent and also agrees that the Common Stock shall
be freely transferable on the books and records of the Company
subject to compliance with Federal and State securities laws
and the terms of the Securities and this Agreement.
(b) The Company shall comply with all applicable
securities laws with respect to the sale of the Securities,
including but not limited to the filing of all reports
required to be filed in connection therewith with the
Securities and Exchange Commission or any stock exchange or
the Nasdaq SmallCap Market or any other regulatory authority
during the time the Securities are outstanding.
6. Right of First Refusal. The Subscriber hereby agrees that, in
the event the Subscriber bona fide intends to sell, assign,
transfer, pledge or hypothecate (any of which being a "sale")
any of the Securities or the shares of Common Stock, par value
$.01 per share, of the Company into which any Securities have
been converted, the Subscriber will first offer to sell such
shares (the "Offered Shares") to the Company on the identical
terms and conditions as those to be offered by the Subscriber.
This offer (the
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"Offering Notice") shall be in writing and shall contain all
of the terms and conditions pertaining to the sale of the
Offered Shares, including, in any case other than an
open-market sale of the Offered Shares, the name and address
of the purchaser. In the case of an open-market sale of the
Common Stock received upon conversion of the Securities by the
Subscriber, the price per Offered Share shall be set at the
average closing bid price of the Company's Common Stock on the
five trading days preceding receipt by the Company of the
Offering Notice. The Offering Notice shall be deemed to be an
offer by the Subscriber to sell the Offered Shares, and the
Company for a period of two business days after receipt of the
Offering Notice shall have a right of first refusal to
purchase the Offered Shares at the price and upon the other
terms stated in the Offering Notice. All acceptances of
Offered Shares shall be effected by notice (an "Acceptance
Notice") given to the Subscriber. The closing of the sale of
the Offered Shares pursuant to the exercise of the first
refusal rights granted by this Section 6 shall occur within
five days after the date of the Acceptance Notice. Any Offered
Shares not purchased pursuant to the above right of first
refusal shall then offered pursuant to the identical terms and
conditions contained in the Offering Notice.
7. Amendment to Regulation S. The Subscriber agrees that,
notwithstanding any other provision of this Agreement, the
Securities, in the event that subsequent to the date of this
Agreement, there becomes effective amendments to or repeal of
Regulation S and such amendments or repeal are effective with
respect to the transactions contemplated hereby or to the
resale of the Common Stock received by the Subscriber upon the
conversion of the Securities, (i) the Company shall take all
actions which in the reasonable opinion of counsel of the
Company are necessary to cause the Company to comply with the
amended provisions of Regulation S, (ii) the Company shall not
be required to take any action pursuant to the terms of this
Agreement and the Securities which may be inconsistent with or
cause the Company to violate the provisions of Regulation S as
amended and (iii) the Company shall not be deemed to have
violated any of the terms or conditions of this Agreement or
the Securities and shall not be liable to the Subscriber for
any actions thereby taken by the Company to render the Company
in compliance with Regulation S, as amended. In furtherance of
and not in limitation of the foregoing, in the event that a
subsequent amendment of Regulation S results in a lengthening
of the restricted period beyond the 40 day period set forth in
Section 903(c)(2) of Regulation S, and
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such amendment is applicable to the sale of the Securities or
the shares of Common Stock receivable upon conversion of the
Securities, the "Restricted Period" set forth in Section 2(a)
hereof shall be deemed to be increased accordingly.
8. Resales. 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
under the Act other than Regulation S.
9. Confidentiality. Each of the Company and the Subscriber agrees
to keep confidential and not to disclose to or use for the
benefit of any third party the terms of this Agreement or any
other information which at any time is communicated by the
other party as being confidential without the prior written
approval of the other party; provided, however, that this
provision shall not apply to information which, at the time of
disclosure, is already part of the public domain (except by
breach of this Agreement) and information which is required to
be disclosed by law.
10. Indemnification. Each of the Company and the Subscriber agrees
to indemnify the other and to hold the other harmless from and
against any and all losses, damages, liabilities, costs and
expenses (including reasonable attorneys' fees) which the
other may sustain or incur in connection with the breach by
the indemnifying party of any representation, warranty or
covenant made by it in this Agreement.
11. Notices. Any notice to be given or to be served upon any party
to this Agreement in connection with this Agreement must be in
writing and will be deemed to have been given and received
upon confirmed receipt, if sent by facsimile, or two (2) days
after it has been submitted for delivery by Federal Express or
an equivalent carrier, charges prepaid and addressed to the
following addresses with a confirmation of delivery:
If to the Company, to:
XXXX/Biophile International Corporation
0000 X.X. 00xx Xxxx
Xxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxx
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With a copy to:
Xxxxxxx Xxxx Murase
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxx, Esq.
If to the Subscriber, to:
Pacific Advisors Ltd.
X.X. Xxx X0000
Nassau, Bahamas
With a copy to:
Atlas Xxxxxxxx Trop & Borkson
000 Xxxx Xxx Xxxx Xxxxxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxxxxx
Any party may, at any time by giving notice to the other
party, designate any other address in substitution of an
address established pursuant to the foregoing to which such
notice will be given.
12. Multiple Counterparts. This Agreement may be executed in
several counterparts, each of which will be deemed to be an
original but all of which will constitute one in the same
instrument. However, in enforcing any party's rights under
this Agreement it will be necessary to produce only one copy
of this Agreement signed by the party to be charged.
13. Governing Law. This Agreement will be construed and enforced
in accordance with and governed by the laws of the State of
Delaware, except for matters arising under the Act, without
reference to principles of conflicts of law. Each of the
parties consents to the jurisdiction of the federal courts
whose districts encompass any part of the State of Delaware or
the state courts of the State of Delaware in connection with
any dispute arising under this Agreement and hereby waives, to
the maximum extent permitted by law, any objection, including
any objection based on forum non conveniens, to the bringing
of any such proceeding in such
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jurisdictions. Each party hereby agrees that if another party
to this Agreement obtains a judgment against it in such a
proceeding, the party which obtained such judgment may enforce
same by summary judgment in the courts of any country having
jurisdiction over the party against whom such judgment was
obtained, and each party hereby waives any defenses available
to it under local law and agrees to the enforcement of such a
judgment. Each party to this Agreement irrevocably consents to
the service of process in any such proceeding by the mailing
of copies thereof by registered or certified mail, postage
prepaid, to such party at its address set forth herein.
Nothing herein shall affect the right of any party to serve
process in any other manner permitted by law.
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The undersigned acknowledges that this Agreement shall not be
effective unless and until accepted by the Company as indicated below.
Dated this 11th day of December, 1997.
PACIFIC ADVISORS LTD.
By: /s/ Xxxxxx Zara
Name: Xxxxxx Zara
Title:Director/President
THIS SUBSCRIPTION IS ACCEPTED BY THE COMPANY ON THE 11th DAY
OF DECEMBER, 1997.
XXXX/BIOPHILE INTERNATIONAL
CORPORATION
By: /s/ Xxxxx Xxxxxx
Xxxxx Xxxxxx
Executive Vice President
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