OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT
This Offshore Securities Subscription Agreement ("Agreement") is
executed in reliance upon the transaction exemption afforded by Regulation S
("Regulation S") as promulgated by the Securities and Exchange Commission
("SEC"), under the Securities Act of 1933, as amended ("1933 Act").
This Agreement has been executed by the undersigned in connection with
the private placement of up to $1,700,000 6% Convertible Debentures (hereinafter
referred to as the "Debentures") of BIG XXXXX BRANDS, INC., a corporation
organized and existing under the laws of the State of Delaware, U.S.A., NASDAQ
Symbol "BSBI" (hereinafter referred to as the "COMPANY"). The Debentures being
sold pursuant to this Agreement, and the Shares (as defined below), have not
been registered under the 1933 Act and may not be offered or sold in the United
States or to U.S. Persons (as such terms are defined in Regulation S), unless
the Debentures or the Shares, as the case may be, are registered under the 1933
Act, or an exemption from the registration provisions of the 1933 Act is
available. The terms on which the Debentures may be converted into common stock
(the "Shares") and the other terms of the Debentures are set forth in the pro
forma Debenture in ANNEX I annexed hereto. This subscription and, if accepted by
the COMPANY, the offer and sale of Debentures and the Shares issuable upon
conversion thereof (collectively the "Securities"), are being made in reliance
upon the provisions of Regulation S ("Regulation S") under the 0000 Xxx.
The undersigned
NAME: WILLORA COMPANY LIMITED
ADDRESS: Xxxxxxxxxxxx 00
Xxxxxxxx 0000, 00X Xxxxxxxxxxx
if applicable, a Corporation organized under the laws of the British Virgin
Island, a non USA jurisdiction (hereinafter referred to as the "PURCHASER")
hereby represents, covenants and warrants to, and agrees with, SUBSCRIPTION
AMOUNT. The undersigned hereby subscribes for $1,700,000 in principal
amount of 6% Debentures.
b. FORM OF PAYMENT. The PURCHASER shall pay the purchase
price for the Debentures by delivering immediately
available funds in United States Dollars to the escrow
agent identified in the Joint Escrow Instructions
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attached hereto as ANNEX II (the "Escrow Agent"). Delivery of
such funds to the COMPANY by the Escrow Agent shall be made
against delivery by the COMPANY of one or more Debentures in
accordance with this Agreement. By signing this Agreement, the
PURCHASER and the COMPANY each agrees to all of the terms and
conditions of, and becomes a party to, the Joint Escrow
Instructions attached hereto as ANNEX II, all of the
provisions of which are incorporated herein by this reference
as if set forth in full.
c. METHOD OF PAYMENT. Payment of the purchase price for the
Debentures shall be made by wire transfer of funds to:
Bank of New York
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
ABA# 000000000
for credit to the account of Xxxxxxx & Prager,
Attorneys
Escrow Account No. 105-0000000
Not later than one (1) business day after acceptance and
execution of this Agreement by the COMPANY, the PURCHASER shall deposit with the
Escrow Agent the aggregate subscription price for the Debentures.
2. SUBSCRIBER REPRESENTATIONS AND COVENANTS; ACCESS TO
INFORMATION; INDEPENDENT INVESTIGATION.
a. OFFSHORE TRANSACTION. PURCHASER represents,
warrants and covenants to COMPANY as follows:
(i) PURCHASER is not a "U.S. Person" as that term is defined under Regulation
S. PURCHASER is not an affiliate of the Company or of Goodbody
International, Inc.
(ii) PURCHASER is outside the United States as of
the date of the execution and delivery of
this Agreement, and no offer to purchase the
Debentures was made in the United States.
(iii) PURCHASER is purchasing the Debentures for
its own account and not on behalf of any U.S.
Person, and PURCHASER is the sole beneficial
owner of the Debentures, and has not
prearranged any resale with any purchaser or
purchasers in the United States.
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(iv) PURCHASER represents, warrants, covenants and
hereby agrees that all offers and sales of
the Debentures prior to the expiration of a
period commencing on the date of the receipt
of funds by the COMPANY and ending 40 days
thereafter (the "Restricted Period") shall
only be made in compliance with the safe
harbor contained in Regulation S, pursuant to
the registration provisions under the 1933
Act or pursuant to an exemption from
registration, and all offers and sales after
the expiration of the 40-day period shall be
made only pursuant to such registration or to
an exemption from registration.
(v) PURCHASER acknowledges that the purchase of
the Debentures involves a high degree of
risk, is aware of the risks and further
acknowledges that it can bear the economic
risk of the purchase of the Debentures,
including the total loss of its investment.
(vi) PURCHASER understands that the Debentures are
being offered and sold to it in reliance on
specific exemptions from the registration
requirements of U.S. securities laws and that
the COMPANY is relying upon the truth and
accuracy of the representations, warranties,
agreements, acknowledgments and
understandings of PURCHASER set forth herein
in order to determine the applicability of
such exemptions and the suitability of
PURCHASER to acquire the Debentures, and the
Shares issuable upon conversion thereof.
PURCHASER represents and warrants that the
information contained herein is complete and
accurate. PURCHASER further represents and
warrants that it will notify the COMPANY
immediately upon the occurrence of any
material change therein occurring prior to
the issuance of Shares upon conversion of the
Debenture.
(vii) PURCHASER is sufficiently experienced in
financial and business matters to be capable
of evaluating the merits and risks of its
investments, and to make an informed decision
relating thereto.
(viii) In evaluating its investment, PURCHASER has
consulted its own investment and/or legal
and/or tax advisors. PURCHASER is not relying
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on the COMPANY respecting the legal, tax and
other economic considerations of an
investment in the Debentures.
(ix) PURCHASER understands that in the view of the
SEC the statutory basis for the exemption
claimed for this transaction would not be
present if the offering of Debentures, and
the Shares issuable upon conversion thereof,
although in technical compliance with
Regulation S, is part of a plan or scheme to
evade the registration provisions of the 1933
Act. PURCHASER is acquiring the Debentures
for investment purposes and has no present
intention to sell the Debentures, or the
Shares issuable upon conversion thereof, in
the United States or to a U.S. Person or for
the account or benefit of a U.S. Person
either now or after the expiration of the
Restricted Period. PURCHASER is not acquiring
the Securities as part of a plan or scheme to
evade the provisions of the 0000 Xxx.
(x) PURCHASER is not an underwriter or
distributor of, or dealer in (as such terms
are defined in Section 2(12) of the 1933 Act
and Rule 902 under the Act) the Securities,
and PURCHASER is not participating, pursuant
to a contractual agreement, in the
distribution of the Securities, or receiving
selling concession, fee, or other
remuneration in respect of the Debentures
sold.
(xi) PURCHASER represents, warrants and agrees,
that PURCHASER has not in the past forty-five
(45) days, and will not during the Restricted
Period, directly or indirectly, or through
one or more intermediaries, maintain any
short position in the Shares of the COMPANY.
(xii) During the period commencing on the Closing
Date (as defined herein) and ending on the
41st day following such date, PURCHASER will
not sell, commit or agree to sell or pledge,
or otherwise transfer or encumber, any shares
of Common Stock of the COMPANY or any other
securities convertible into or exercisable
for shares of Common Stock of the COMPANY.
(xiii) Except for Goodbody International Ltd.,
PURCHASER has taken no action which would
give
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rise to any claim by any person for brokerage
commission, finders' fees or the like
relating to this Agreement or the
transactions contemplated hereby.
(xiv) PURCHASER is (i) an "accredited investor" as
that term is defined in Rule 501 of the
General Rules and Regulations under the 1933
Act by reason of Rule 501(a)(3), and (ii)
experienced in making investments of the kind
described in this Agreement and the related
documents, (iii) able, by reason of the
business and financial experience of its
officers (if an entity) and professional
advisors (who are not affiliated with or
compensated in any way by the Company or any
of its affiliates or selling agents), to
evaluate an investment in the Securities to
protect its own interests in connection with
the transactions described in this Agreement,
and the related documents, and (iv) able to
afford the entire loss of its investment in
the Securities;
(xv) PURCHASER hereby covenants that it shall take
all necessary 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 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.
(xvi) None of the Purchasers, its affiliates or
persons acting on their behalf have conducted
or will conduct any "directed selling
efforts" as that term is defined in Rule
902(b) of Regulation S, nor have the
Purchasers, its affiliates or persons acting
on their behalf, conducted any general
solicitation relating to the offer and sale
of any of the Securities in the United States
or elsewhere.
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(xvii) PURCHASER is not a "10-percent Shareholder"
(as defined in Section 871(h)(3)(B) of the
Internal Revenue Code of 1986, as amended) of
the COMPANY.
b. CURRENT PUBLIC INFORMATION. PURCHASER acknowledges that
PURCHASER has been furnished with or has acquired
copies of the COMPANY'S Form 10KSB filed with the SEC,
and Forms 10-QSB and 8-K filed thereafter (collectively
the "SEC Filings"). PURCHASER is not relying upon any
representations or other information (whether oral or
written) other than as set forth in the SEC filings or
in Annex V.
c. INDEPENDENT INVESTIGATION; ACCESS. PURCHASER
acknowledges that PURCHASER, in making the decision to
purchase the Debentures subscribed for, has relied upon
independent investigations made by it and its
representatives, if any, and PURCHASER and such
representatives, if any, have, prior to any sale to it,
been given access and the opportunity to examine all
material publicly available, books and records of the
COMPANY, all material contracts and documents relating
to this offering and an opportunity to ask questions
of, and to receive answers from the COMPANY or any
person acting on its behalf concerning the terms and
conditions of this offering. PURCHASER and its
advisors, if any, have been furnished with access to
all publicly available materials relating to the
business, finances and operation of the COMPANY and
materials relating to the offer and sale of the
Debentures which have been requested. PURCHASER and its
advisors, if any, have received complete and
satisfactory answers to any such inquiries.
d. NO GOVERNMENT RECOMMENDATION OR APPROVAL. PURCHASER
understands that no federal or state agency has passed
on or made any recommendation or endorsement of the
Securities.
e. ENTITY PURCHASERS. If PURCHASER is a partnership,
limited liability company, limited liability
partnership, corporation, trust, or similar entity, the
person executing this Agreement on its behalf
represents and warrants that:
(i) He or she has made due inquiry to determine
the truthfulness of the representations and
warranties made pursuant to this Agreement.
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(ii) He or she is duly and validly authorized to
make this investment and to enter into and
execute this Agreement on behalf of such
entity.
f. INDIVIDUAL PURCHASERS. PURCHASER, if an individual,
represents that he or she has reached the age of 21 and
has adequate means for providing for his or her current
and anticipated financial needs and possible
contingencies for emergencies and has no need for
liquidity in the proposed investment.
g. BINDING COMMITMENT. This Agreement constitutes a legal,
valid and binding obligation of the PURCHASER. The
PURCHASER has full power, right and authority to enter
into and perform this Agreement, and is qualified to
purchase the Debentures under the laws of the
jurisdiction of its formation and the offer and sale of
the Debentures to the PURCHASER will not violate the
securities or other laws of such jurisdiction. The
execution and delivery and performance of this
Agreement will not violate or be in conflict with any
order, judgment, injunction, agreement or controlling
document to which the PURCHASER is a party or by which
it is bound. If the PURCHASER is an entity, it was not
formed, directly or indirectly by a U.S. Person, for
the specific purpose of acquiring the Debentures or
investing in Regulation S Securities. This Agreement
has been duly and validly executed and delivered by and
on behalf of the PURCHASER, and is a valid and binding
agreement of the PURCHASER, enforceable against it in
accordance with its terms, except as enforceability may
be limited by general equitable principles, bankruptcy,
insolvency, fraudulent conveyance, reorganization,
moratorium or other laws affecting creditor's rights
generally.
h. FOREIGN LAWS. PURCHASER hereby covenants that it will
comply with all laws and regulations in each foreign
jurisdiction in which it purchases, offers, sells or
deliver the Securities, or has in its possession or
distributes any offering material.
3. COMPANY REPRESENTATIONS.
a. REPORTING COMPANY STATUS. The COMPANY is a corporation
duly organized, validly existing and in good standing
under the laws of the State of
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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
trades on the NASDAQ/Small Cap Market, and has received
no notice, either oral or written, with respect to its
continued eligibility for such listing. The COMPANY has
filed all material required to be filed pursuant 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 Debentures, or such shorter period as may
be required by law.
b. OFFSHORE TRANSACTION. The COMPANY has not offered or
sold the Debentures to any person in the United States,
or, to the best of its knowledge, 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 Debentures was originated, the
COMPANY and/or its agents reasonably believed PURCHASER
was outside the United States and was not a U.S.
Person.
c. NO DIRECTED SELLING EFFORTS. In regard to this
transaction, the COMPANY has not conducted any "direct
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
within securities to persons resident within the United
States or elsewhere.
d. TERMS OF DEBENTURES. The COMPANY will issue the
Debentures in accordance with the terms of ANNEX I
attached hereto.
e. LEGALITY. The COMPANY has the requisite corporate power
and authority to enter into this Agreement and to sell
and deliver the Debentures; this Agreement and the
issuance of the Debentures have been duly and validly
authorized by all necessary corporate action by the
COMPANY; this Agreement has been duly and validly
executed and delivered by and on behalf of the COMPANY,
and is a valid and binding agreement of the COMPANY,
enforceable
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against it in accordance with its terms, except as
enforceability may be limited by general equitable
principles, bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other laws
affecting creditors rights generally.
f. NON-CONTRAVENTION. The execution and delivery of this
Agreement and the consummation of the issuance of the
Debentures, other than the conversion provision
thereof, and the transactions contemplated by this
Agreement and the Debentures 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, except for those
relating to the Company's line of credit agreements
with Merchantile Business Credit, Inc., or assuming the
truth of the representations and warranties of
PURCHASER herein, 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.
g. FILINGS. The COMPANY undertakes and agrees to make all
necessary filings in connection with the sale of the
Debentures as required by United States laws and
regulations or any domestic securities exchange or
trading market.
h. ABSENCE OF CERTAIN CHANGES. Since December 31, 1995,
there has been no material adverse development in the
assets, liabilities, business, properties, operations,
financial condition or results of operations of the
COMPANY, except as disclosed in the SEC Filings or in
Annex V.
i. The COMPANY has legally available sufficient authorized
and unissued Shares as may be reasonably necessary to
effect the conversion of the Debentures.
j. LITIGATION. Except as set forth in ANNEX V, there is no
action, suit or proceeding before or by any
9
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 might result in any
material adverse change in the condition (financial or
otherwise) or in the earnings, business affairs or
business prospects of the COMPANY, or which might
materially and adversely affect the properties or
assets thereof.
k. NO DEFAULT. Except as set forth in Annex V, 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 Debentures,
other than the conversion provision thereof, 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
By-Laws 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.
l. SEC FILINGS. None of the SEC Filings with the
Securities and Exchange Commission since January 1,
1995 contained, at the time they were filed, any untrue
statement of a material fact or omit to state any
material fact required to be stated therein or
necessary to make the state therein in light of the
circumstances under which they were made, not
misleading. The COMPANY has since January 1, subject to
any available extension, 1995 timely filed all
requisite forms, reports and exhibits thereto with the
Securities and Exchange Commission.
m. FULL DISCLOSURE. There is no fact known to the COMPANY
(other than general economic conditions known to the
public generally) that has not been disclosed in
writing to the PURCHASER that (i)
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could reasonably be expected to have a material adverse
effect on the condition (financial or otherwise) or in
the earnings, business affairs, business prospects,
properties or assets of the COMPANY or (ii) could
reasonably be expected to materially and adversely
affect the ability of the COMPANY to perform its
obligations pursuant to this Agreement.
n. PRIOR ISSUES. During the twelve (12) months preceding
the date hereof, the Company has not issued any
securities pursuant to Regulation S or Regulation D
under the 1933 Act.
4. TRANSFER AGENT INSTRUCTIONS.
a. DEBENTURES. Upon the conversion of the Debentures, the
PURCHASER thereof shall submit such Debenture and the
COMPANY's Transfer Agent shall, within five (5)
business days of receipt of such Debenture issue one or
more certificates representing that number of shares of
Common Stock into which the Debenture or Debentures are
converted in accordance with the provisions regarding
conversion set forth in ANNEX I hereto. The COMPANY
shall act as Debenture Registrar and shall maintain an
appropriate ledger containing the necessary information
with respect to each Debenture.
b. Subject to the completeness and accuracy of the
PURCHASER'S representations and warranties herein, upon
the conversion of any Debenture by PURCHASER, the
COMPANY, shall, at its expense, take all necessary
action (including the issuance of an opinion of
counsel) to assure that the COMPANY'S transfer agent
shall issue stock certificates without restrictive
legend or stop order in the name of PURCHASER , or such
non-U.S. Persons as may be designated by PURCHASER) and
in such denominations to be specified at conversion
representing the number of shares of Common Stock
issuable upon such conversion, as applicable. The
COMPANY warrants that no instructions other than these
instructions, and/or instructions to impose a "stop
transfer" instruction with respect to the Debenture
until the end of the Restricted Period have been or
will be given to the transfer agent and that the Shares
will not be subject to any transfer limitations other
than those imposed by applicable securities laws.
Nothing in this Section 4, however, shall affect in any
way
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PURCHASER'S or such nominee's obligations and agreement
to comply with all applicable securities laws upon
resale of the Securities.
c. It will permit the PURCHASER to exercise its right to
convert the Debentures by telecopying an executed and
completed Notice of Conversion to the COMPANY and
delivering within three business days thereafter, the
original Notice of Conversion and the Debenture
representing the Shares to the COMPANY by express
courier. Each date on which a Notice of Conversion is
telecopied to and received by the COMPANY in accordance
with the provisions hereof shall be deemed a Conversion
Date. The COMPANY will transmit the certificates
representing the Shares of Common Stock issuable upon
conversion of any Debenture (together with the
Debentures representing the Shares not so converted) to
the PURCHASER via express courier, by electronic
transfer or otherwise, within three business days after
receipt by the COMPANY of the original Notice of
Conversion and the Debenture representing the Shares to
be converted (the "Delivery Date").
d. The Company understands that a delay in the issuance of
the Shares of Common Stock beyond the Delivery Date
could result in economic loss to the Buyer. As
compensation to the Buyer for such loss, except if the
provisions of Section 9 hereof shall apply to such
Shares, the Company agrees to pay late payments to the
Buyer for late issuance of Shares upon Conversion in
accordance with the following schedule (where "No.
Business Days Late" is defined as the number of
business days beyond five (5) business days from
Delivery Date:
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Late Payment For Each
$10,000 of Debenture
Converted No. Business Days Late Principal Amount Being
--------- ---------------------- ----------------------
1 $50
2 $100
3 $150
4 $200
5 $250
6 $300
7 $350
8 $400
9 $450
10 $500
10+ $500 + $100 for each
Business Day Late
beyond 10 days
The Company shall pay any payments incurred under this Section in
immediately available funds upon demand. n.
(b) Notwithstanding the provisions hereof, in no event (except
upon the maturity of the Debenture) shall the holder be entitled to convert any
Debentures into a number of shares such that upon conversion the sum of (1) the
number of shares of Common Stock beneficially owned by the PURCHASER and its
affiliates (other than shares of Common Stock which may be deemed beneficially
owned through the ownership of the unconverted portion of the Debenture), and
(2) the number of shares of Common Stock issuable upon the conversion of the
Debenture with respect to which the determination of this proviso is being made,
would result in beneficial ownership by the PURCHASER and its affiliates
exceeding 4.9% of the outstanding shares of Common Stock. For purposes of the
proviso to the immediately preceding sentence, beneficial ownership shall be
determined in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended, and Regulation 13 D-G thereunder, except as otherwise provided
in clause (1) of such proviso.
6. CLOSING DATE AND ESCROW AGENT. The date of the issuance of the
Debentures and the sale of the Debentures shall be the date of receipt by the
COMPANY from the Escrow Agent of PURCHASER'S purchase funds (the "Closing
Date"). PURCHASER shall, within one (1) business day after acceptance and
execution of this Agreement by the COMPANY, deliver the necessary funds as
indicated in Paragraph 1 to the Escrow Agent. Debentures will be delivered to
the Escrow Agent at the instructions of the COMPANY. PURCHASER agrees that the
Escrow Agent has no liability as a result of any fraudulent or unlawful conduct
of any other party, and agrees to hold the Escrow Agent harmless.
7. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
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PURCHASER understands that COMPANY'S obligation to sell the Debentures is
conditioned upon:
a. Acceptance by PURCHASER of an Agreement for the sale of
Debentures;
b. Delivery to the Escrow Agent by each PURCHASER of
immediately available funds in United States Dollars as
payment in full for the purchase of the Debentures; and
c. The accuracy on the Closing Date of the representations
and warranties of PURCHASER contained in this Agreement
and the performance by PURCHASER on or before the
Closing Date of all covenants and agreements of
PURCHASER required to be performed on or before the
Closing Date; and
d. Delivery to COMPANY of originally signed Subscription
Agreement, a Manner of Offering Certificate, and
certain additional representations from Goodbody
International Ltd.
e. There shall not be in effect any law, rule or
regulation prohibiting or restricting the transactions
contemplated hereby, or requiring any consent or
approval which shall not have been obtained.
8. CONDITIONS TO PURCHASER'S OBLIGATION TO PURCHASE. The
COMPANY understands that PURCHASER'S obligation to purchase the
Debentures is conditioned upon:
a. The receipt and acceptance by the COMPANY of this
Agreement as evidenced by execution of this Agreement
by the President or any Vice President of the COMPANY.
The acceptance of funds by the COMPANY shall be deemed
to be constructive acceptance of this Agreement;
b. Delivery of Debentures to Escrow Agent as herein set
forth;
c. The accuracy on the Closing Date of the representations
and warranties of the COMPANY contained in this
Agreement and the performance by the COMPANY on or
before the Closing Date of all covenants and agreements
of the COMPANY required to be performed on or before
the Closing Date; and
d. Delivery to the Escrow Agent of an opinion of
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counsel for the COMPANY, dated the Closing Date and
addressed to PURCHASER, in the form attached hereto as
ANNEX III.
9. REGISTRATION OF THE SECURITIES. Following the delivery of a Notice
of Conversion, if the COMPANY fails to issue to the PURCHASER or the PURCHASER's
permitted transferees certificates for shares of Common Stock issuable upon
conversion of the Debentures bearing no restrictive legend and free of stop
transfer instructions for any reason other than the COMPANY's reasonable good
faith belief that the representations and warranties made by the PURCHASER in
this Agreement were untrue when made, or that such issuance would be in
violation of securities laws, then the COMPANY shall be required, at the request
of the PURCHASER and at the COMPANY's expense, to effect the registration of
such shares of Common stock under the act, and relevant Blue Sky laws as
promptly as is practicable. The COMPANY and the PURCHASER shall cooperate in
good faith in connection with the furnishing of information required for such
registration and the taking of such other actions as may be legally or
commercially necessary in order to effect such registration. The COMPANY shall
file a registration statement within forty-five (45) days of PURCHASER's written
demand therefor and shall use its best efforts to cause such registration
statement to become effective as soon as practicable thereafter, provided,
however, that if such forty-five (45) day period terminates at any time from
February 12 through March 30 of any calendar year, the COMPANY shall file the
required registration statement at the earliest to occur of (i) March 31 of such
calendar year or (ii) the fifth business day after audited financial statements
of the COMPANY are available. Such best efforts shall include, but not be
limited to, promptly responding to all comments received from the staff of the
Securities and Exchange Commission with respect to such registration statement
and promptly preparing and filing amendments to such registration statement
which are responsive to the comments received from the staff of the Securities
and Exchange Commission. Once declared effective by the Securities and Exchange
Commission, the COMPANY shall cause such registration statement to remain
effective until the earlier of (i) the sale by the PURCHASER of all shares of
Common Stock so registered or (ii) 120 days after the effective date of such
registration statement. In the event that the COMPANY has not effected the
registration of such shares of Common Stock under the Act and relevant Blue Sky
laws within one hundred forty-five (145) days after the date of the PURCHASER's
demand therefor, the COMPANY shall pay to the PURCHASER by wire transfer, as
liquidated damages for such failure and not as a penalty, an amount in cash
equal to $50,000. Such payment shall be made to the PURCHASER immediately upon
expiration of the 145-day period referenced in the preceding sentence if the
registration of such shares of Common Stock is not effected by such date;
provided, however, that the payment of such liquidated damages shall not relieve
the COMPANY from its obligations to register such shares of
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Common Stock pursuant to this Section 9. Notwithstanding the preceding sentence,
the 145 day period referred to therein shall be tolled during the period from
February 12 through March 30 of any calendar year.
10. CERTAIN AGREEMENTS. The Company covenants and agrees that it will
not (i) enter into any subsequent or further offer or sale of common stock or
securities convertible into common stock with any third party until the
expiration of one hundred eighty (180) days after the Closing Date, and (ii)
enter into any subsequent or further offer or sale of common stock or securities
convertible into common stock with any third party within a period of thirty
(30) days following the period set forth in clause (i) above, without first
offering the Buyer the opportunity (which shall remain open for a period of five
business days from the date the Buyer receives notice thereof) to purchase all
of such additional securities (in the discretion of the Buyer) on the terms and
provisions on which the Company proposes to offer such additional securities to
such third party. In the event that the Buyer declines to participate in any
such investment, the Company shall provide the Buyer with prompt written notice
of the consummation of any such transaction with a third party, specifying the
material terms thereof. However, clauses 10(i) and 10(ii) will not apply to (x)
the issuance of securities (other than for cash) in connection with a merger,
consolidation, sale of assets, disposition of a business, product or license by
the Company, strategic alliance, bank loan or agreement, public offering,
securities issued at the then current market price (as determined in good faith
by the Board of Directors), or the exercise of options, or (y) the exchange of
the capital stock of the Company for assets, stock or other joint venture
interests.
11. GOVERNING LAW. This Agreement will be construed and enforced in
accordance with and governed by the laws of the State of New York, 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 New York or the state courts
of the State of New York 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 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
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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 an other
manner permitted by law.
12. NOTICES. Any notice required or permitted hereunder shall be given
in writing (unless otherwise specified herein) and shall be deemed effectively
given upon personal delivery or three business days after deposit in the United
States Postal Service, by registered or certified mail with postage and fees
prepaid, addressed to each of the other parties thereunto entitled at the
following addresses, or at such other addresses as a party may designate by ten
days advance
ANY: Big Xxxxx Brands, Inc.
0000 Xxxx Xxxxxx Xxxx
Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
ATT: Xxxxx Xxxxx or Xxxxxx Xxxxxxxx
with a copy to:
Kramer, Levin, Naftalis & Xxxxxxx, Esqs.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
ATT: Xxxxxxx X. Xxxxxx, Esq. and Xxxxxxx Xxxxxxxxx, Esq.
PURCHASER: At the address set forth on the first page of this
Agreement.
ESCROW AGENT: Xxxxxxx & Xxxxxx, Esqs.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
13. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. PURCHASER'S
representations and warranties shall survive the execution and delivery hereof
of this Agreement and the delivery of the Debenture.
14. CONFIDENTIALITY. Each of the COMPANY and the PURCHASER 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.
15. INDEMNIFICATION. Each of the COMPANY and the PURCHASER agrees to
indemnify the other and to hold the other harmless from
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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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
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SIGNATURES FOR ENTITIES
IN WITNESS WHEREOF, the undersigned represents that the foregoing
statements are true and correct and that it has caused this Offshore Securities
Subscription Agreement to be duly executed on its behalf this 2nd day of April,
1997.
Willora Company Limited
-----------------------
Printed Name of Subscriber
By: /s/S. Salcmon
-----------------
(Signature of Authorized Person)
S. Salcmon, Vice President
Printed Name and Title
Accepted this 2nd day of the month of April, 1997.
BIG XXXXX BRANDS, INC.
By: /s/S. Xxxxx Xxxxxxxx
------------------------
Title: President
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All correspondence and delivery of certificates and confirmations
should be addressed to the above named person and sent by the COMPANY to his
_____ business _____ home address (check one).
Capacity of Subscriber (check one):
Individual __________
Corporation __________
Partnership __________
Other __________ (please specify)
Ownership of Debentures (check one):
Individual __________
Joint Tenants, with right of
survivorship __________*
Tenants in Common __________*
Tenants in Entirety __________*
Community Property ______ If you are purchasing
Debentures with only your
spouse as co-owner, both you
and your spouse must sign
the signature page. If any
co-owner is not your spouse,
all co-owners must sign the
signature page.
Name of PURCHASER Representative, if any:
-----------------------------------
Address:
-----------------------------------
-----------------------------------
Telephone:
-----------------------------------
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FULL NAME AND ADDRESS OF PURCHASER FOR REGISTRATION PURPOSES:
NAME:
---------------------------------------------------------------
ADDRESS:
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
TEL. NO.
---------------------------------------------------------------
FAX. NO.
---------------------------------------------------------------
CONTACT NAME:
---------------------------------------------------------------
DELIVERY INSTRUCTIONS (IF DIFFERENT FROM REGISTRATION NAME):
NAME:
---------------------------------------------------------------
ADDRESS:
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
TEL. NO.
---------------------------------------------------------------
FAX. NO.
---------------------------------------------------------------
CONTACT NAME:
---------------------------------------------------------------
21
SPECIAL
INSTRUCTIONS:
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
22
