OFFSHORE STOCK SUBSCRIPTION AGREEMENT
This Stock Subscription Agreement (the "Agreement"), dated September
16, 1996, is entered into by and between XxxxxXxx Technologies, Inc., a Delaware
corporation (the "Issuer"), and ______________ acting in its capacity as agent
for certain non-U.S. persons (such non-U.S. persons, collectively, the
"Purchaser").
The Issuer has offered for sale outside the United States (as that term
is defined in regulation S ("Regulation S" under the United States Securities
Act of 1933, as amended (the "Act")) to the purchaser _______ shares of its
common stock, $0.01 par value. Capitalized terms used herein and not defined
herein shall have the meanings given to them in Regulation S.
The parties hereto agree as follows:
1. Purchase and Sale of Shares: Upon the basis of the representations
and warranties, and subject to the terms and conditions, set forth in this
Agreement, the Issuer covenants and agrees to sell the Purchaser on the Closing
Date (as herein defined), _______ shares of its common stock, $0.01 par value
(the "Shares"), at a price equal to $1.51 per share (the "Purchase Price"), and
upon the basis of representations and warranties and subject to the terms and
conditions, set forth in this Agreement, the Purchaser covenants and agrees to
purchase from the Issuer on the Closing Date the Shares at the Purchase Price.
2. Closing The closing of the purchase and sale of the Shares pursuant
to Section 1 hereof shall take place on September 21, 1996, at the office of
Morse, Zelnick, Rose & Lander LLP (the "Escrow Agent"), located at 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx, or at such other date, time and place as the
Purchaser the Issuer may agree upon in writing (such time and date for the
closing, the "Closing Date"). The legended (see Annex A) certificates
representing the shares to be purchased by the Purchaser shall be delivered by,
or on behalf of, the Issuer at the above-mentioned office of the Escrow Agent.
The Purchase Price shall be delivered in immediately available funds by, or on
behalf of the Purchaser to the Escrow Agent's account (No: 967 086 639 -Attorney
Trust Account) at CHEMICAL BANK, NY. The Escrow Agent shall be instructed by the
Purchaser and the Issuer to deliver the such Shares against payment therefor in
accordance with the instructions of the purchaser, subject to customary
settlement procedures.
3. Representations and Warranties of the Purchaser. The Purchaser
understands, and represents and warrants to, and agrees with, the Issuer, that:
(a) The Purchaser understands that no federal or state agency
has passed on or made any recommendation or endorsement of the Shares.
(b) The Purchaser acknowledges that, in making to decision to
purchase the Shares, it has relied solely upon independent investigators made by
it and not upon any representations made by the Issuer with respect to the
Issuer of r the Shares.
(c) The Purchaser understands that the Shares are being
offered and sold to it in reliance on specific exemptions or non-application
from the registration requirements of federal and state securities laws and that
the Issuer is relying upon the truth and accuracy of the representation,
warranties, agreements acknowledgments and understandings of the Purchaser set
forth herein in order to determine the applicability of such exemptions and the
suitability of the Purchaser to acquire the Shares.
(d) The Purchaser is not a U.S. Person (as defined in
Regulation S) and is not an affiliate of the Issuer.
(e) No offer of the Shares was made to the Purchaser in the
United States
(f) At the time the buy order for the Shares was originated
the Purchaser was located outside the United States.
(g) None of the Purchasers, its affiliates or any person
acting on behalf of the Purchaser or any such affiliate has engaged, or will
engage, in any Directed Selling Efforts with respect to the Shares; and the
Purchaser and its affiliates have complied, and will comply, with the Offering
Restrictions, and any other requirements, of Regulation S.
(h) The Purchaser is aware that the Shares have not been and
will not be registered under the Act and may only be offered or sold pursuant to
registration under the Act or an available exemption therefrom.
(i) The Purchaser:
(i) will not, during the period commencing on the
Closing Date and ending on the day 40 days after the Closing Date (the
"Restricted Period"), offer or sell the Shares in the United States, to a U.S.
Person or for the account or benefit of a U.S. Person or other than in
accordance with Rule 903 or Rule 904 of Regulation S; and
(ii) will, after the expiration of the Restricted
Period, offer, sell, pledge or otherwise transfer the Shares only pursuant to
registration under the Act or an available exemption therefrom and, in any case,
in accordance with applicable state securities laws.
(j) If the Purchaser offers and sells the Shares during the
Restricted Period, then it will do so only: in accordance with the provisions of
Regulation S; pursuant to registration of the Shares under the Act; or pursuant
to an available exemption from the registration requirements of the Act.
(k) The transactions contemplated by this Agreement:
(i) have not been pre-arranged with a purchaser
located in the United States or who is a U.S. Person; and
(ii) are not part of a plan or scheme to evade the
registration provisions of the Act.
(l) The Purchaser is purchasing the Shares for its own account
for the purpose of investment and not (i) with a view to , or for sale in
connection with, any distribution thereof or (ii) for the account or on behalf
of any U.S. Person.
(m) The Purchaser has consulted with the Issuer with respect
to the transactions pursuant to this Agreement, and no objection has been raised
by the Issuer.
4. Representations and Warranties of the Issuer. The Issuer represents
and warrants to, and agrees with, the Purchaser that:
(a) The Issuer has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Delaware.
(b) This Agreement has been duly authorized, executed and
delivered by the Issuer and is a valid and binding agreement enforceable in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
livability relating to or affecting creditors' rights generally and to general
principles of equity; and the Issuer has full corporate power and authority
necessary to enter into this Agreement and to perform its obligations hereunder.
(c) No consent, approval, authorization or order of any court,
governmental agency or body or arbitrator having jurisdiction over the Issuer or
any of its affiliates is required for execution of this Agreement, including,
without limitations the issuance and sale of the Shares, or the performance of
its obligations hereunder.
(d) Neither the sale of the Shares pursuant to, nor the
performance of its obligations under, this Agreement by the Issuer will:
(i) violate, conflict with, result in a breach of, or
Constitute a default (or an event which with the giving of notice or the lapse
of time or both would be reasonably likely to constitute default) under (A) the
articles of incorporation, charter or by-laws of the Issuer or any of its
affiliates, (B) any decree, judgment, order, law, treaty, rule, regulation or
determination applicable to the Issuer or any of its affiliates of any Court,
governmental agency or body, or arbitrator having jurisdiction over the Issuer
or any of its affiliates or over the properties or assets of the Issuer or any
of its affiliates, (C) the terms of any bond, debenture, lease, mortgage, deed
of trust or other instrument to which the Issuer or any of its affiliates is a
party, by which the Issuer or any of its affiliates subject, or (D) the terms of
any "lock-up" or similar provision of an underwriting or similar agreement to
which the Issuer or any of its affiliates a party; or
(ii) result in the creation or imposition of any
lien, charge or encumbrance upon the Shares or any of the assets of the Issuer
or any of its affiliates.
(e) The Shares:
(i) are free and clear of any security interests,
liens, claims or other encumbrances;
(ii) have been duly and validly authorized and on the
Closing Date will be duly and validly issued, fully paid and nonassessable;
(iii) will not have been, individually collectively,
issued or sold in violation of any preemptive or other similar rights of the
holders of the securities of the Issuer;
(iv) will not subject the holders thereof to personal
liability by reason of being such holders; and
(v) are [quoted/listed] on, and will be, following
the completion of the Restricted Period (if sold in accordance with the
provisions of this Agreement) eligible for trading on, [the National Association
of Securities Dealers Automated Quotations system ("NASDAQ") / other exchange].
(f) The Issuer is a Reporting Issuer and has filed all reports
required to be filed by Section 13(a) or 15(d) of the Securities and Exchange
Act of 1934 (the "Exchange Act") during the preceding 12 months and has been
subject to such filing requirements for the past 90 days.
(g) Where is no pending or, to the best knowledge of the
Issuer, threatened action, suit, proceeding or investigation before any court,
governmental agency or body, or arbitrator having jurisdiction over the Issuer
or any of its affiliates that would materially affect the execution by the
Issuer of, or the performance by the Issuer of its obligations under, this
Agreement.
(h) The Issuer, any person representing the Issuer, and, the
best knowledge of the Issuer, any other person selling or offering to sell the
Shares in connection with the transaction contemplated by this Agreement, have
not made, any oral communication in connection with the offer or sale of the
Shares which contained any untrue statement of a material fact or omitted to the
state any material fact necessary in order to make statements, in the light of
the circumstances under which they were made, not misleading.
(i) The Issuer is not in possession of any material non-public
information that, if disclosed, would, or could reasonably be expected to have,
a material adverse effect on the price of the Shares.
(j) The sale of the Shares pursuant to this Agreement will be
made in accordance with the provisions and requirements of Regulation S and any
applicable state law.
(k) No offer to buy the Shares was made to the Issuer by any
person in the Unites States.
(l) None of the Issuer, any affiliate of the Issuer, or any
person acting on behalf of the Issuer or any such affiliate has engaged, or will
engage, in any Direct Selling Efforts with respect to the Shares.
(m) The transaction contemplated by this Agreement:
(i) have not been pre-arranged with a purchaser who
is in the United States or is a U.S. person; and
(ii) are not part of a plan or scheme to evade the
registration provisions of the Act.
(n) The Issuer has not issued, and after the Closing Date will
not issue, any stop transfer order or other order impeding the sale and delivery
of the Shares except for a stop order restricting the sale of the Shares into
the United States or to, or for the account or benefit of, U.S.
persons during the Restricted Period, which expires on __________, 1996.
(o) The Issuer has not offered to sell or sold any warrants
convertible into its common stock in a transaction involving Regulation S in the
past year; and there are no outstanding warrants convertible into its common
stock which have been sold in a transaction involving Regulation S.
5. Covenants of the Issuer. The Issuer covenants and agrees with the
Purchaser to:
(a) continue to comply with all applicable reporting
requirements of the Exchange Act;
(b) refrain from publishing or disseminating any material in
connection with the offering of the Shares;
(c) ensure that all Offering Restrictions applicable to the
sale of the Shares pursuant to this Agreement are thoroughly complied with and
satisfied;
(d) refrain from engaging, and insure that none of its
affiliates will engage, in any Direct Selling Efforts with respect to the
Shares; and
(e) notify the Purchaser promptly if at any time during the
period beginning on the date of this Agreement and ending on the Closing Date
(i) any even shall have occurred as a result of which any oral communication
made by the Issuer, any person representing the Issuer, or, to the best
knowledge of the Issuer, by any other person in connection with the transactions
contemplated by this Agreement would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or (ii) there is any public disclosure of material
information regarding the Issuer or its financial condition or results of
operation;
(f) refrain from offering to sell or selling any shares of
common stock, or warrants or other securities convertible into its common stock,
in a transaction involving Regulation S for a period of 180 days following the
date hereof:
6. Conditions Precedent to the Purchaser's Obligations. The obligations
of the Purchaser hereunder are subject to the performance by the Issuer of its
obligations hereunder and to the satisfaction of the following additional
conditions precedent:
(a) The representations and warranties made by the Issue in
this Agreement shall, unless waived by the Purchaser, be true and corrects as of
the dates hereof and at the Closing Date, with the same force and effect as if
they had been made on and as of the Closing Date.
(b) The Company will provide an opinion of counsel confirming
in substance the representations and warranties set out in paragraphs(a), (b),
(c), (d), (e) and (f) of Section 4. Such counsel will not opine as to the laws
of foreign countries.
7. Conditions Precedent to the Issuer's Obligations. The obligations to
the Issuer hereunder are subject to the performance by the Purchaser of its
obligations and to the satisfaction of the following additional precedent:
(a) The representations and warranties made by the Purchaser
in this Agreement shall, unless waived by the Issuer, be true and correct as of
the date hereof and at the Closing Date, with the same force and effect as if
they had been made on the Closing Date.
(b) The delivery into escrow of the immediately available
funds in the amount of purchase price for the Shares.
8. Fees and Expenses. Each of the Purchaser and the Issuer agrees to
pay its own expenses incident to the performance of its obligations hereunder,
including but not limited to, the fees, expenses and disbursements of such
party's counsel.
9. Non-Delivery of the Shares. If, on the Closing Date, the Issuer
shall fail to deliver the Shares to the Purchaser pursuant to this Agreement for
any reason other than the failure by the purchaser to comply with its
obligations hereunder, the Issuer shall:
(I) hold the purchaser harmless against any loss, claim or
damage arising from or as a result of such failure by the Issuer (including,
without limitation, any such loss, claim or damage resulting from an obligation
to resell the shares); and
(ii) reimburse the Purchaser for all of its out-of-pocket
expenses, including fees and disbursements of its counsel, incurred by the
Purchaser in connection with this Agreement and the
transactions contemplated herein provided, however that the Issuer shall then be
under no further liability to the Purchaser except as provided in this Section 3
and Section 10 hereof.
10. Indemnification
(a) In the event the purchaser becomes involved in any
capacity in any action, proceeding or investigation in connection with any
matter referred to in or relating to this Agreement (except as expressly
provided for in paragraph (c) of this Section 10), the Issuer will reimburse the
Purchaser for its reasonable legal and other expenses (including the cost of any
investigation and preparation) incurred in connection therewith, as such
expenses are incurred, and will indemnify and hold the Purchaser harmless from
and against any losses, claims, damages or liabilities to which it may become
subject in connection with any such action, proceeding, investigation or matter,
unless such loss, claim, damage or liability results primarily from the
Purchaser's gross negligence, recklessness or bad faith in performing the
services which are the subject of this Agreement.
(b) In the event that the Issuer becomes involved in any
capacity in any action, proceeding or investigation in connection with any
matter referred to in or relating to this Agreement (except as expressly
provided for in paragraph (c) of this Section 10), the Purchaser will reimburse
the Purchaser for its reasonable legal and other expenses (including the cost of
any investigation and preparation) incurred in connection therewith, as such
expenses are incurred, and will indemnify and hold the Purchaser harmless from
and against any losses, claims, damages or liabilities to which it may become
subject in connection with any such action, proceeding, investigation or matter,
unless such loss, claim, damage or liability results primarily from the
Purchaser's gross negligence, recklessness or bad faith in performing the
services which are the subject of this Agreement.
(c) Promptly after receipt by an indemnified party under this
Section 10 of notice of the commencement of any action, such indemnified party
shall notify the indemnifying party in writing of the commencement thereof, but
the omission so to notify the indemnifying party shall not relieve the
indemnifying party from any liability which it may have pursuant to this Section
10 unless, due to the failure to be so notified, the indemnifying party is
unable to contest the losses or claims indemnified against, and such omission
shall in no event relieve the indemnifying party from any liability which it may
have to any indemnified party otherwise than under this Section 10. In case any
such action shall be brought against any indemnified party and it shall notify
the indemnifying party of the commencement thereof, the indemnifying party shall
be entitled to participate therein and, to the extent that it may elect by
written notice delivered to such indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense thereof with
counsel reasonably satisfactory to such indemnified party, (who shall not,
except with the consent of the indemnified party, which consent shall not be
unreasonably withheld, be counsel to the indemnifying party)' provided, however
that if the defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available too it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assert such legal defenses and otherwise to
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party of its election so
to assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party
under this Section 10 for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in connection with the
assertion of legal defenses in accordance with the proviso to the next preceding
sentence (it being understood, however, that the indemnifying shall not be
liable for the expenses of more than one separate counsel for each indemnified
party). (Ii) the indemnifying party shall not have employer counsel reasonably
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party; provided
further, however, that if clause (i) or (iii) is applicable, such liability
shall be only in respect of the counsel referred to its such clauses clause (i)
or (iii). No indemnifying party shall consent to entry of any judgment or enter
into any settlement without the consent of the indemnified party which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such indemnified party of a release
from all liability in respect to such claim or litigation. No indemnifying party
shall be subject to any liability for any settlement made without its consent,
which consent shall not be unreasonably withheld.
11. Survival of the Representations, Warranties Etc. The respective
agreements, representations, warranties, indemnities and other statements made
by or on behalf of the Issuer and the Purchaser, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation made by or on behalf of the other party to this Agreement or any
officer, director or employee of, or person controlling or under common control
with, such party and will survive delivery of any payment for the Shares.
12. Notices. All communications hereunder shall be in writing, and, if
sent to the Purchaser shall be sufficient in all respects if delivered, sent by
registered mail, or by telecopy and confirmed to the Purchaser at:
Name:
Address:
Attention:
or if sent to the Issuer, shall be delivered, sent by registered mail or by
telecopy and confirmed to the Issuer at:
Name: XxxxxXxx Technologies, Inc.
Address: 0 Xxxxxxx Xxxx, Xxxxxxxx X
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx - CEO
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
13. Miscellaneous.
(a) This Agreement may be executed in one or more counterparts
and it is not necessary that signatures of all parties appear on the same
counterpart but such counterparts together shall constitute but one and the same
agreement.
(b) This Agreement shall inure to the benefit of and be
binding upon the parties hereto, their respective successors and, with respect
to Section 10 hereof, the officers, directors and controlling persons thereof
and each person under common control therewith, and no other person shall have
any right or obligation hereunder.
(c) This agreement shall be governed by, and construed in
accordance with, the laws of the State of New York (without giving effect to
conflicts of laws principles).
(d) Facsimile signatures of this Agreement shall be binding on
all parties hereto.
(e) The headings of the section of this document have been
inserted for convenience of reference only and shall not be deemed to be a part
of this Agreement.
14. Time of Essence. Time shall be of the essence in this Agreement
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement, al as of the day and year first above written.
XXXXXXXX TECHNOLOGIES, INC.
/s/ Xxxxxx X. Xxxxxxxx
----------------------
BY:
NAME: XXXXXX X. XXXXXXXX
TITLE: CHIEF FINANCIAL OFFICER
ACTING IN ITS CAPACITY AS AGENT FOR CERTAIN
NON-U.S. PERSONS
/s/
--------------------
BY:
NAME:
TITLE:
ANNEX A
(a) The Purchasers acknowledges that the certificates evidencing the
Shares will bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT",
AND HAVE BEEN SOLD IN RELIANCE ON THE EXEMPTION FROM REGISTRATION PROVIDED BY
REGULATION S UNDER THE SECURITIES ACT "("REGULATION S"), DURING THE PERIOD PRIOR
TO THE FORTY-FIRST DAY AFTER THE DATE OF THIS CERTIFICATE, (THE "RESTRICTED
PERIOD"), THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED OR
SOLD DIRECTLY OR INDIRECTLY, WITHIN THE UNITED STATES (AS DEFINED IN REGULATION
S), TO A U.S. PERSON (AS DEFINED IN REGULATION S) OR FOR THE ACCOUNT OR BENEFIT
OF A U.S. PERSON. THE PRECEDING SENTENCE SHALL HAVE NO FURTHER EFFECT SUBSEQUENT
TO THE EXPIRATION OF THE RESTRICTED PERIOD AND THEREAFTER THIS LEGEND MAY BE
REMOVED UPON PRESENTATION OF THIS CERTIFICATE TO THE TRANSFER AGENT FOR XXXXXXXX
TECHNOLOGIES, INC."
The Issuer covenants and agrees that following the expiration of the
restricted Period it will advise the transfer agent for the Common Stock, upon
the request of a record holder of the Shares, that the foregoing can be removed
from the certificate of Shares.
(b) The Purchaser represents and warrants to the Issuer that, as of
date hereof and as of the Closing Date, neither it nor any of its affiliates,
and covenants the during the Restricted Period neither it nor any of its
affiliates will establish or maintain, any short position (including any short
call position or any long put position) with respect to the Common Stock of the
Issuer, and that no such person or entity is a party to, nor shall it enter into
during the Restricted Period, any contract or arrangement having the effect of
eliminating or substantially diminishing the risk of ownership of the Shares.
