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EXHIBIT C
OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT
February 10, 1997
THIS OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT (hereinafter
the "Agreement") has been executed by the undersigned in connection with the
sale of such number of shares of Common Stock, $0.01 par value per share
("Common Stock") and options ("Options") to purchase Common Stock of Tech
Electro Industries, Inc. (the "Seller" or the "Company") (NASDAQ symbol:
"TELE"), a corporation organized under the laws of the State of Texas, to the
Buyer whose name and address are set forth on the signature page hereof
(hereinafter "Buyer"). As used in this Agreement, the term "Unit" means the
Common Stock and the Options, and, where the context requires, the Common Stock
underlying the Units. Seller and Buyer (hereinafter collectively, the "parties")
each hereby represents, warrants and agrees as follows:
1. AGREEMENT TO SUBSCRIBE; PURCHASE PRICE
(i) Buyer hereby subscribes for the number of shares of Common
Stock and Options at a subscription price of $1.70 U.S. per share of Common
Stock, with no additional consideration payable with respect to Options, payable
in United States Dollars, shown below its signature on page 7 hereof.
(ii) Buyer shall pay the purchase price by delivering same day
funds in United States Dollars to an agent or as otherwise agreed between the
parties, to be delivered to the order of Seller upon delivery of the Common
Stock and Options.
(iii) This Agreement has been executed in connection with an
offering by Seller of its Common Stock and Options pursuant to Regulation S (the
"Offering"). Buyer will be notified of the date of the completion of the
Offering (the "Closing Date").
2. BUYER'S REPRESENTATIONS
Buyer represents and warrants to Seller as follows:
(i) Buyer is not a "U.S. person" as defined in Rule 902 of
Regulation S promulgated under the Securities Act of 1933, as amended (the
"Securities Act"), was not organized under the laws of any U.S. jurisdiction,
and was not formed for the purpose of investing in securities not registered
under the Securities Act;
(ii) At the time the buy order for this transaction was
originated, Buyer was outside the United States;
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(iii) No offer to purchase the Units was made in the United
States nor were any "directed selling efforts," as defined in Rule 902 of
Regulation S, made to it in the United States;
(iv) Buyer is purchasing the Units for its own account for
investment purposes and not with a view towards distribution. Buyer does not
have a contract, understanding, or arrangement with any person to sell,
transfer, or grant a participation to such person or a third party with respect
to the Units;
(v) All subsequent offers and sales of the Units and the
underlying Common Stock will be made outside the United States in compliance
with Rule 903 or Rule 904 of Regulation S, pursuant to registration of the Units
under the Securities Act, or pursuant to an exemption from such registration.
Buyer understands the conditions of the exemption from registration afforded by
Section 4(1) of the Securities Act and acknowledges that there can be no
assurance that it will be able to rely on such exemption. In any case, Buyer
will not resell the Units to or for the account or benefit of U.S. Persons or
within the United States until after the end of the forty (40) day period
commencing on the date of completion of the Offering (as defined above) (the
"Restricted Period"). During the Restricted Period Buyer will not within the
United States with regard to Seller's Common Stock engage in any short-selling
or other hedging transactions, such as equity swaps or other types of derivative
transactions, designed to transfer the burdens of ownership of the Shares back
to the United States market.
(vi) Buyer understands that the Units are being offered and
sold to it in reliance on specific provisions of federal and state securities
laws and that Seller is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgements and understandings of
Buyer set forth herein in order to determine the applicability of such
provisions. Accordingly, Buyer agrees to notify Seller of any events which would
cause the representations and warranties of Buyer to be untrue or breached at
any time after the execution of this Agreement by Buyer and prior to the
expiration of the Restricted Period;
(vii) This Agreement has been duly authorized, validly
executed, and delivered on behalf of Buyer and is a valid and binding agreement
enforceable in accordance with its terms, subject to general principles of
equity and to bankruptcy or other laws affecting the enforcement of creditors'
rights generally;
(viii) Any offering documents received by Buyer include
statements to the effect that the Units have not been registered under the
Securities Act and may not be offered or sold in the United States or to U.S.
persons during the Restricted Period, unless the Units are registered or unless
such resale is exempt from or not subject to the registration requirements of
the Securities Act;
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(ix) Buyer, in making the decision to purchase the Units
subscribed for, has relied upon solely upon the Offering Circular and the
Exchange Act documents attached thereto and relating to the Offering prepared by
Seller;
(x) In the event of resale of the Units during the Restricted
Period, Buyer shall provide a written confirmation or other written notice to
any distributor, dealer, or person receiving a selling concession, fee, or other
remuneration in respect of the Units stating that such purchaser is subject to
the same restrictions on offers and sales that apply to Buyer, and shall require
that any such purchaser shall provide such written confirmation or other notice
upon resale during the Restricted Period;
(xi) Buyer has not taken any action that would cause Seller to
be subject to any claim for commission or other fee or remuneration by any
broker, finder, or other person and Buyer hereby indemnifies Seller against any
such claim caused by the actions of Buyer or any of its employees or agents;
(xii) Buyer acknowledges that he is familiar with Regulation S
and represents and warrants that he will comply with the terms thereof.
3. SELLER'S REPRESENTATIONS
Seller represents and warrants to Buyer as follows:
(i) Seller is a "domestic issuer" and a "reporting issuer", as
such terms are defined in Rule 902 of Regulation S. Seller has registered its
common stock pursuant to Section 12(g) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), is in full compliance with all reporting
requirements of Section 13(a) of the Exchange Act for at least the last 12
months, and Seller's Common Stock trades on the Nasdaq Small Cap Market;
(ii) Seller has furnished Buyer with copies of Seller's most
recent annual report on Form 10-K and the most recent quarterly report on Form
10-Q (the "SEC Filings");
(iii) Since the date of the Company's SEC Filings, except as
otherwise stated in the Offering Circular, there has been no material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company, whether or not arising in the
ordinary course of business.
(iv) Seller has not offered the Units to any person in the
United States, any identifiable group of U.S. citizens abroad, nor to any U.S.
Person;
(v) At the time the buy order was originated, Seller and/or
agents reasonably believed Buyer was outside the United States and was not a
U.S. Person;
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(vi) Seller and/or its agents believe that the sale of the
Units has not been prearranged with a buyer in the United States or for the
account or benefit of such a buyer;
(vii) Seller has not conducted any "directed selling efforts"
with respect to the Units nor has Seller conducted any general solicitation (as
that term is used in Regulation D under the Securities Act) with respect to the
Units;
(viii) The Units when issued and delivered will be duly and
validly authorized and issued, fully-paid and nonassessable and will not subject
the holders thereof to personal liability by reason of being such holders. There
are no preemptive rights of any shareholder of Seller with respect to the Units;
(ix) This Agreement has been duly authorized and validly
executed and delivered on behalf of Seller and is a valid and binding agreement
in accordance with its terms, subject to general principles of equity and to
bankruptcy or other laws affecting the enforcement of creditors' rights
generally;
(x) The execution and delivery of this Agreement and the
consummation of the issuance of the Units and the transactions contemplated by
this Agreement do not and will not conflict with or result in a breach by Seller
of any of the terms or provisions of, or constitute a default under, the
certificate of incorporation (or charter) or bylaws of the Seller, or any
indenture, mortgage, deed of trust or other material agreement or instrument to
which Seller is a party or by which it or any of its properties or assets are
bound, or any existing applicable decree, judgment order of any court, Federal
or State regulatory body, administrative agency or other governmental body
having jurisdiction over Seller or any of its properties or assets;
(xi) Seller is not aware of any authorization, approval or
consent of any governmental body which is legally required for the issuance and
sale of the Units as contemplated by the Agreement;
(xii) Seller will issue one or more share certificates
representing the Units without restrictive legend in the name of Buyer. Seller
further warrants that no instructions other than these instructions, and
instructions for a "stop transfer" until the end of the Restricted Period, have
been given to the transfer agent and also warrants that the Units and the Common
Stock underlying the Units shall otherwise be freely transferable on the books
and records of Seller. Seller will notify the transfer agent of the date of
completion of the Offering, a date not later than the Closing Date, and of the
date of expiration of the Restricted Period, a date not later than forty (40)
days from the Closing Date. Nothing in this section shall affect in any way
Buyer's obligations and agreement to comply with all applicable securities laws
upon resale of the Units and the underlying Common Stock, including the
restrictions provided for in section 2(v) hereof;
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(xiii) Seller has taken and will take no action that will
affect in any way the running of the Restricted Period or the ability of Buyer
to resell the Units and the Common Stock underlying the Units, in accordance
with applicable securities laws and this Agreement;
(xiv) Seller will comply with all applicable securities laws
with respect to the sale of the Units, 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 stock market or any
other regulatory authority.
4. COVENANTS
The Company hereby agrees that, upon demand of holders of the
Units or the underlying Common Stock, as a result of a regulatory development
including, but not limited to, an amendment of Regulation S, or any "no-action"
or written interpretive guidance from the Securities and Exchange Commission,
which call into question the ability of Buyer to resell the Units or the
underlying Common Stock without registration, the Company will file, and use its
reasonable best efforts to cause to become effective, a registration statement
on Form S-3 (or any other available form) under the Securities Act covering the
resale of the Common Stock issuable upon conversion of the Options. Any such
registration statement shall remain effective for up to twelve (12) months, or
until all of the shares of Common Stock are sold, whichever is earlier. The
Company shall provide the Buyer with such number of copies of the prospectus as
shall be reasonably requested to facilitate the sale of the Common Stock
issuable upon conversion of the Options. The Company shall bear all expenses
incurred in connection with any such registration, excluding discounts and
commissions and other expenses of the Buyer (including, but not limited to
Buyer's counsel's fees).
5. CLOSING
Share certificates for the Common Stock and Options shall be
delivered to Buyer and the funds therefor shall be delivered to Seller on
February 10, 1997 or at such other time as the parties hereto may mutually
agree.
6. CONDITIONS TO CLOSING
(i) Buyer understands that Seller's obligations to sell the
Units is conditioned upon delivery into escrow or otherwise as agreed between
Buyer and Seller by Buyer of the aggregate purchase price set forth in Section 1
hereof.
(ii) Seller understands that Buyer's obligation to purchase
the Units is conditioned upon delivery of certificate(s) representing shares of
Units without restrictive legend as described herein and provision of an opinion
of counsel confirming that Seller is a "domestic issuer" and a "reporting
issuer," and that Seller has registered its Common Stock pursuant to Section
12(g) of the Exchange Act, as set forth in Section 3(i) above, as well as the
matters set out in Section 3(vii), (viii), (ix), (x) and (xi) above.
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7. GOVERNING LAW; INTERPRETATION
This Agreement shall be governed by an interpreted in
accordance with the laws of the State of Texas. Facsimile signatures of this
Agreement shall be binding on the parties hereto. All terms used herein that are
defined in Regulation S under the Securities Act shall have the meanings set
forth therein.
IN WITNESS WHEREOF, this Agreement was duly executed on the date first
written above.
Tech Electro Industries, Inc.
By /s/ Xxxxx X. La Taste
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Xxxxx X. La Taste, President
Name of Purchaser (Individual or Institution):
PLACEMENT & ACCEPTANCE, INC.
Name of Individual representing Purchaser (if an Institution):
XXX XXX TAN
Title of Individual representing Purchaser (if an Institution):
Managing Director
Signature by: Individual Purchaser or Individual representing Purchaser
/s/ Xxx Xxx Tan
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Xxx Xxx Tan
Address:
Telephone:____________________
Telecopier:___________________
NUMBER OF UNITS 75,000 shares; 100,000 options
AGGREGATE PURCHASE PRICE: $127,500
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