Regulation S Offshore Subscription Agreement
Solar-Mates, Inc.
0000 00xx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx, President
Dear Xx. Xxxxxx:
This Subscription Agreement (the "Agreement") is being executed and
delivered by the prospective purchaser identified on the signature page to this
Agreement (the "Purchaser") in connection with the $22,500,000 offering (the
"Offering") by Solar- Mates, Inc., a New York corporation (the "Company"), and
the related materials described in Schedule 1 hereto (collectively, the "Related
Materials") and any subsequent amendments or supplements thereto, of shares of
the Company's Series A 6.5% Convertible Preferred Stock (the "Series A Shares"),
shares of the Company's Series B 6% Convertible Preferred Stock (the "Series B
Shares") and shares of the Company's Series C 6% Convertible Preferred Stock
(the "Series C Shares"; together with the Series A Shares and the Series B
Shares, the "Shares") as set forth in the Certificate of Amendment of the
Certificate of Incorporation of the Company (the "Amendment") attached hereto
and made a part hereof as Exhibit A. The Offering is being conducted in reliance
on Regulation S ("Regulation S"), promulgated by the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Securities Act").
1. Subscription and Payment for Shares; Delivery of Shares. Subject to the
terms and conditions of this Agreement, the Purchaser hereby subscribes for and
agrees to purchase from the Company the number of Shares (the "Purchased
Shares") set out on the signature page to this Agreement. The price for the
Purchased Shares will be the price per share set forth on such signature page.
(a) The closing of the purchase of the Series A Shares (the "First
Closing") shall take place on the second business day following the date on
which this Agreement is accepted by the Company.
(b) The closing of the purchase of the Series B Shares and the Series C
Shares (the "Second Closing"; together with the First Closing, the "Closings";
and the dates of such Closings being the "Closing Dates") shall take place
concurrently with the closing of the purchase by the Company of all or
substantially all of the assets of the Serengeti Eyewear division of Corning
Incorporated (the "Serengeti Acquisition"). The parties agree that the Second
Closing shall in no event take place prior to the fifth business
day following the date of approval by the Company's shareholders of the issuance
of the Underlying Shares (as hereinafter defined), by means of a majority of the
total votes cast in person or by proxy at a meeting of the Company's
shareholders held for such purpose. The Company shall use its commercially
reasonable efforts to cause the closing of the Serengeti Acquisition to occur at
least 10 business days after such shareholder approval.
(c) The Purchaser shall make payment of the purchase price for the
Purchased Shares on the respective Closing Dates as follows:
(i) Purchaser shall cause U.S. funds in the amount of such purchase
price to be sent by wire transfer in accordance with the instructions of
the Company;
or
(ii) Purchaser shall cause a bank, brokerage firm or other financial
institution with offices in New York City, as Purchaser's agent, to make
payment of such purchase price in U.S. dollars to the Company by certified
or bank check in immediately available funds.
(d) The Company shall deliver the certificate or certificates evidencing
the Purchased Shares on the respective Closing Dates, pursuant to delivery
instructions provided by the Purchaser to the Company, against payment of the
purchase price pursuant to the provisions of sub-sections (c)(i) or (ii) of this
Section 1.
2. Representations, Warranties and Covenants of Purchaser. Purchaser
hereby acknowledges that the Company is offering the Shares in reliance upon the
representations, warranties, and other information set forth by the Purchaser
herein. Purchaser hereby undertakes to notify the Company immediately of any
changes in any of the representations, warranties and other information
contained herein. In order to induce the Company to accept the subscription made
hereby, the Purchaser hereby represents, warrants and acknowledges to the
Company as follows:
2.1 Compliance with United States Securities Laws. Purchaser
understands that the Shares are being offered and sold to it in reliance upon
specific exemptions from the registration requirements of federal and state
securities laws pursuant to Regulation S 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 Shares. The Purchaser
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understands and acknowledges that the Shares and the shares of Common Stock into
which the Shares are convertible (the "Underlying Shares") have not been
registered under the Securities Act, and such Shares and Underlying Shares may
not be offered or sold in the United States or to any "U.S. Person" (as defined
in Rule 902(o) of Regulation S, which definition is set forth in Schedule 2
hereto and is hereby incorporated by reference) for a period of 40 days
following (i) with respect to the Series A Shares and the related Underlying
Shares, the date of the First Closing (the "First Restricted Period"), and (ii)
with respect to the Series B Shares and Series C Shares and the related
Underlying Shares, the date of the Second Closing (the "Second Restricted
Period"), and thereafter unless such Shares or Underlying Shares are registered
under the Securities Act and any applicable state securities law in the United
States or such offer or sale is made pursuant to exemptions from those
registration requirements. The Shares are being offered and sold pursuant to the
terms of Regulation S, which permits the Shares to be sold by the Company solely
to non-U.S. Persons in transactions outside of the United States, subject to
certain terms and conditions. The Purchaser further acknowledges that neither
the Securities and Exchange Commission nor any other United States or foreign
federal or state agency or authority has passed on or endorsed the merits of
this Offering. The Purchaser understands that in the view of the Securities and
Exchange Commission the statutory basis for the exemption claimed for the
Offering would not be present if the subscription contemplated hereby, although
in technical compliance with Regulation S, is part of a plan or scheme to evade
the registration provisions of the Securities Act.
2.2 Purchaser Not a U.S. Person; Investment Intent. Purchaser is
purchasing the Shares, for its own account or for persons or accounts as to
which it exercises investment discretion. PURCHASER AND EACH SUCH PERSON OR
ACCOUNT ARE NOT U.S. PERSONS. THE SECURITIES WERE NOT OFFERED TO THE PURCHASER
IN THE UNITED STATES, AND THE PURCHASER HAS EXECUTED THIS AGREEMENT OUTSIDE THE
UNITED STATES. The Purchaser is acquiring the Shares for investment only and not
with a view to the resale or distribution of any part thereof, and there is no
present intention of selling, transferring or granting participations in, or
otherwise distributing, the same or of changing the Purchaser's residence or
domicile to any jurisdiction or country. The Purchaser is not purchasing the
Shares as nominee or agent and not on behalf of any U.S. Person, and the
Purchaser, upon completion of the Offering contemplated hereby will become the
sole beneficial owner of the Shares, and has not pre-arranged any sale with
purchasers in the United States. The Purchaser is not an underwriter of, or
dealer in, the Shares, and is not participating, pursuant to any contractual or
other arrangement, in the distribution of the Shares. The Purchaser understands
that if the Purchaser is deemed a "statutory underwriter" with respect to the
Shares, despite the technical compliance of the subscription hereby with the
provisions of Regulation S, the Shares would be deemed "restricted" and could
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not be offered or sold in the Unites States or elsewhere unless registered under
the Securities Act or an exemption from the registration requirements of the
Securities Act is available.
2.3 Investment Experience of Purchaser. Either alone or together
with a "purchaser representative" (as defined in Rule 501(h) under the
Securities Act), the Purchaser is knowledgeable, sophisticated and experienced
in making, and is qualified to make, decisions with respect to investments in
securities such as the Shares and has requested, received, reviewed and
considered the Related Materials (set forth in Schedule 1 attached hereto) and
all other information it deems relevant in making a decision to execute this
Agreement and to purchase the Purchased Shares. The Purchaser has had the
opportunity to request additional information from and to ask questions of the
officers and directors of the Company. The Purchaser understands the risks
associated with investment in the Company, and the Purchaser, or the person or
account for which it is acting, is able to bear indefinitely the economic risk
of acquiring the Shares, has other adequate means of providing for current needs
and contingencies, has no need for liquidity with respect to such investment and
could afford the complete loss thereof.
2.4 Restrictions on Resale. Purchaser shall not engage in any
activity for the purpose of, or which may reasonably be expected to have the
effect of, conditioning the market in the United States for the Shares or the
Company's Common Stock, $.001 par value ("Common Stock"), or, during the First
Restricted Period or the Second Restricted Period, as the case may be, offer or
sell any of the Shares or any Underlying Shares in the United States to or for
the benefit or account of a U.S. Person. Purchaser understands that the Shares
and Underlying Shares are only transferable on the books and records of the
Company and its transfer agent and that the Company and the transfer agent will
not register any transfer of Shares or Underlying Shares which the Company in
good faith believes violates applicable federal or state securities law in the
United States or the restrictions set forth herein. All subsequent offers and
sales of the Shares and Underlying Shares by Purchaser shall be made in
compliance with Regulation S under the Securities Act, pursuant to registration
under the Securities Act or an exemption from such registration. In any case,
the Series A Shares and related Underlying Shares shall not be resold to U.S.
persons or within the United States during the First Restricted Period, and the
Series B Shares and the Series C Shares and related Underlying Shares shall not
be resold to U.S. persons or within the United States during the Second
Restricted Period, and in each case as otherwise restricted herein with respect
to the limitations on converting the Shares to the Underlying Shares, as set
forth in Section 2.5 below. Any proposed offer, sale or transfer of any of the
Shares or Underlying Shares during the applicable Restricted Period shall be
subject to the condition that Purchaser deliver to the Company (i) a written
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certification of the proposed transferee, acceptable in form and substance to
the Company's counsel, that such transferee is not a U.S. Person and is
acquiring the Shares or Underlying Shares for such transferee's own account and
(ii) a written opinion of counsel to the Purchaser, acceptable in form and
substance to the Company's counsel, to the effect that the offer, sale and
transfer of such Shares or Underlying Shares is permissible under the provisions
of Regulation S. The Purchaser understands that this resale restriction will
continue to apply to the Shares and Underlying Shares if disposed of by the
Purchaser during the Restricted Period and consents to the issuance of the
appropriate stop transfer instructions to the Company's transfer agent with
respect to the Shares and Underlying Shares.
2.5 Restrictions on Conversion. Purchaser understands and
acknowledges that (i) none of the Shares may be converted, in whole or in part,
for shares of Common Stock prior to the date of approval by the Company's
shareholders of the issuance of the Underlying Shares, by means of a majority of
the total votes cast in person or by proxy at a meeting of the Company's
shareholders held for such purpose, (ii) the Series B Shares cannot be
converted, in whole or in part, for shares of Common Stock until January 1,
1997, and (iii) the Series C Shares cannot be converted, in whole or in part,
for shares of Common Stock until July 1, 1997
2.6 Legends. Purchaser agrees that the certificates representing the
Purchased Shares and the Underlying Shares shall bear legends substantially in
the form set forth below, and understands that the first legend may be removed
(i) with respect to the Series A Shares and related Underlying Shares, at the
end of the First Restricted Period, and (ii) with respect to the Series B Shares
and the Series C Shares and related Underlying Shares, at the end of the Second
Restricted Period:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"), of the United States of America and have been issued
in reliance upon the exemption from such registration
contained in Regulation S under the Act. They may not be
offered, sold or transferred in the United States or to any
"U.S. Person" (as defined in Regulation S)."
"Transfers, voting and other matters in respect of the
securities represented by this certificate are subject to the
terms and conditions of a certain Regulation S Offshore
Subscription Agreement between Solar-Mates, Inc. and the
holder hereof, dated September 26, 1996."
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Following any holding period imposed by Regulation S or other
applicable securities laws, the Company, upon the receipt of any opinion of
counsel to the Purchaser, satisfactory in form and substance to the Company's
Counsel, shall request the transfer agent to remove the second legend and
reissue the Shares or Underlying Shares, as the case may be, represented by the
certificate.
2.7 Due Execution, Delivery and Performance of this Agreement and
Other Obligations. Purchaser has full right, power, authority and capacity to
enter into this Agreement and to consummate the transactions contemplated
hereby; and, if Purchaser is a company or corporation, the execution, delivery
and performance of this Agreement by Purchaser have been duly authorized by all
requisite corporate and shareholder action of Purchaser. Upon the execution and
delivery of this Agreement and its acceptance by the Company, this Agreement
shall constitute the legal, valid and binding obligations of Purchaser,
enforceable against Purchaser in accordance with its terms (except insofar as
the enforcement thereof may be limited by any applicable laws relating to or
affecting the enforcement of creditors' rights generally or by general equitable
principles). The Purchaser has complied and will comply with all applicable
local laws and customary practices and documentation with respect to the
subscription contemplated hereby, at the Purchaser's own expense.
2.8 Binding Effect of Subscription Agreement. This Agreement shall
not be binding on the Company until such Agreement is accepted by the Company.
The Purchaser hereby acknowledges and agrees, subject to any applicable
securities law, that the subscription hereunder is irrevocable, that the
Purchaser is not entitled to cancel, terminate or revoke this Agreement or any
agreements of the Purchaser hereunder and that this Agreement and such other
agreements shall survive the death or disability of the undersigned and shall be
binding upon and inure to the benefit of the parties and their heirs, executors,
administrators, successors, legal representatives and assigns. If the Purchaser
is more than one person, the obligations of the undersigned hereunder shall be
joint and several, and the agreements, representations, warranties and
acknowledgements herein contained shall be deemed to be made by and be binding
upon each such person and his heirs, executors, administrators, successors,
legal representatives and assigns.
2.9 Decision to Invest. The investor is aware that the Company is a
public company subject to the reporting requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and the Purchaser has obtained or
has had the opportunity to obtain copies of the Company's filings made pursuant
to the Exchange Act. In making the decision to purchase the Shares herein
subscribed for, the Purchaser has relied solely upon the information about the
Company contained in the Related Materials provided to him and in the other
filings made pursuant to the
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Exchange Act, and upon independent investigations made by him or his legal
counsel or investment advisor. He is not relying on any representations or
warranties from the Company or any of its officers, directors, affiliates,
employees or agents, other than the information provided by the Company to him
in this Offering.
2.10 Purchaser's residence. The Purchaser is a resident and
domiciliary (not a temporary or transient resident) of the state (or province),
county and country set forth below, has no present intention to become a
resident of any other jurisdiction, and all communications, written or oral,
concerning the Shares have been directed to the Purchaser in, and received by
the Purchaser in, such jurisdiction.
2.11 Purchaser as Representative. If the Purchaser is executing this
Agreement in a representative or fiduciary capacity, the Purchaser has full
power and authority to execute and deliver the Agreement on behalf of the
subscribing corporation, partnership, trust or other entity for whom the
Purchaser is executing this Agreement, and such corporation, partnership, trust
or other entity has full right and power to enter into and perform this
Agreement.
2.12 Purchaser as Agent. The Purchaser may purchase Shares as agent
for various principals to be designated, in which case it shall hereby make the
above representations and warranties on behalf of such principals.
2.13 No Protection of Purchaser's Interests. The Purchaser has been
advised that the Company has not retained any independent professionals to
review or comment on this Offering or otherwise protect the interests of the
Purchaser. Although the Company has retained its own counsel, neither such firm
nor any other firm has acted on behalf of the Purchaser, and any purchaser of
the Shares offered hereby should not rely on the firm so retained by the Company
with respect to any matters herein described.
2.14 No Short Position. Neither Purchaser nor any of its affiliates
will directly or indirectly maintain any short position in any securities of the
Company during the First Restricted Period and the Second Restricted Period.
2.15 Valuation of the Common Stock. The Purchaser has
independently evaluated the fairness of the offering price for the
Shares.
3. Voting and Transfer Matters. During the period beginning on the date of
First Closing and ending on the fourth anniversary thereof, Purchaser shall vote
all of the Underlying Shares, in connection with any vote of shareholders of the
Company relating to the election of directors, for the election of directors
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constituting a majority of the directors nominated for such election in
accordance with the directions of Xxxxxxx Xxxxxx or his successor or designee.
Any transfer of Shares or Underlying Shares during such four-year period which
is permitted pursuant to the terms hereof and the terms of the Amendment shall
require, as a condition precedent thereto, the execution and delivery to the
Company of an instrument confirming that such transferee agrees to be bound by
the terms of this Agreement, including without limitation the terms of this
Section 3; provided, however, that no such instrument shall be required with
respect to any such transfers effected pursuant to "brokers' transactions"
within the meaning of Section 4(4) of the Securities Act.
4. Issuance of Warrants. At the First Closing, the Company shall issue to
the Purchaser, for nominal consideration, a Warrant in the form attached hereto
as Schedule 3. At the Second Closing, the Company shall issue to the Purchaser,
for nominal consideration, a Warrant in the form attached hereto as Schedule 4
and a Warrant in the form attached hereto as Schedule 5.
5. Legal Expenses for Enforcement In the event that any party hereto must
resort to legal process in order to enforce the other party's obligations under
this Agreement, such other party agrees to reimburse such party for all
reasonable attorney's fees incurred in such enforcement, provided that such
enforcement action by such party is successful.
6. Notices. All notices, demands, consents or similar communications under
this Agreement shall be given or made in writing and shall be delivered
personally, or sent by registered or certified airmail, postage prepaid or by
overnight courier services, and shall be deemed given when so delivered or three
(3) business days after so mailed, as the case may be:
(a) if to the Company, at its address as set out at the head of this
Agreement, or at such address or address as may have been furnished to Purchaser
in writing by the Company;
(b) if to Purchaser, at its address as set out following Purchaser's
signature on the signature page to this Agreement, or at such other address or
addresses as may have been furnished to the Company in writing; or
(c) if to any permitted transferee or transferees of Purchaser, at
such address or addresses as shall have been furnished to the Company or its
transfer agent at the time of the transfer or transfers, or at such other
address or addresses as may have been furnished by such transferee or
transferees to the Company or its transfer agent in writing.
7. Amendments. No amendment, interpretation or waiver of any of the
provisions of this Agreement shall be effective unless
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in writing and signed by the Company and at least a majority of the Purchasers
hereunder.
8. Headings. The headings of the sections of this Agreement are used for
convenience only and shall not affect the meaning or interpretation of the
contents of this Agreement.
9. Waiver. The failure to enforce or to require the performance at any
time of any of the provisions of this Agreement shall in no way be construed to
be a waiver of such provisions, and shall not affect either the validity of this
Agreement or any part hereof or the right of any party thereafter to enforce
every provision in accordance with the terms of this Agreement.
10. Governing Law. This Agreement and the relationships of the parties in
connection with the subject matter of this Agreement shall be governed by and
determined in accordance with the internal laws of the State of New York, in the
United States of America, without regard to the principles of choice or conflict
of law thereof. Venue for any dispute relating to the provisions of this
Agreement shall be within New York County, New York.
11. Submission to Jurisdiction. Each of the parties submits to the
jurisdiction of any state or federal court sitting in the New York County, New
York, in any action or proceeding arising out of or relating to this Agreement
or the Offering and agrees that all claims in respect of the action or
proceeding may be heard and determined in any such court. Each party also agrees
not to bring any action or proceeding arising out of or relating to this
Agreement or the Offering in any other court. Each of the parties waives any
defense of inconvenient forum to the maintenance of any action or proceeding so
brought and waives any bond, surety or other security that might be required of
any other party with respect thereto.
12. Indemnification. The Purchaser agrees to indemnify and hold harmless
the Company, its affiliates and their respective officers, directors and
employees from and against any and all loss, damage, liability, cost or expense,
including reasonable attorneys' and accountants' fees, which the Company or any
one of them may incur by reason of or in connection with any misrepresentation
made by the Purchaser, any breach of any representation or warranty of the
Purchaser, the failure to fulfill any covenants or agreements under this
Agreement, or the sale or distribution of the Shares by the Purchaser in
violation of the Securities Act (including Regulation S) or any other applicable
law or regulation.
13. Severability. If any severable provision of this Agreement, or the
application thereof to any person or circumstance, is held to be void, invalid
or unenforceable by any judgment of a tribunal of competent jurisdiction, the
remainder of
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this Agreement shall not be affected by such judgment, and the remainder of this
Agreement shall be enforced as nearly as possible according to its original
terms and intent.
14. Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes any prior understanding or agreements
concerning the subject matter hereof.
15. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective legal representatives,
successors and permitted assigns.
16. Unenforceability. If any provision of this Agreement is or becomes or
is deemed invalid, illegal or unenforceable in any jurisdiction, to the maximum
extent permissible, such provision shall be deemed amended to conform to
applicable laws so as to be materially altering the intention of the parties, it
shall be stricken and the remainder of this Agreement shall remain in full force
and effect.
17. Termination. If the First Closing shall have occurred but the Second
Closing shall not have occurred by March 31, 1996, the Purchaser shall not be
required to purchase and the Company shall not be required to sell the Series B
Shares and the Series C Shares, but the failure of the Second Closing to occur
shall have no affect upon the transactions consummated pursuant to the First
Closing and all of the provisions hereof other than those relating to the Series
B Shares and the Series C Shares shall survive.
18. Counterparts. This Agreement may be executed in counterparts, all of
which shall constitute one agreement, and each such counterpart shall be deemed
to have been made, executed and delivered on the date of execution of this
Agreement by the Purchaser, without regard to the dates or times when such
counterparts may actually have been made, executed or delivered.
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IN WITNESS WHEREOF, the Purchaser has caused this Agreement to be executed
as of the 26th day of September, 1996, at the location stated below.
Purchaser: (if an Individual) Purchaser: (other than an
Individual purchasing for his
own account)
RBB Bank Aktiengesellschaft
___________________________________ -----------------------------------
(Signature) (Printed Name of Purchaser)
___________________________________ By:________________________________
(Signature of Joint (Signature of Authorized
Holder, if Applicable) Officer or Other
Representative)
___________________________________
(Printed Name of Joint Holder,
if Applicable)
Purchaser's Permanent Address:
Burgring 16 Xxxxxxx XxxxxX, Headtrader
----------------------------------- -----------------------------------
(Printed Name and Title of
Signatory)
8010 Graz
-----------------------------------
Austria AUSTRIA
----------------------------------- -----------------------------------
(Purchaser's Country or (Purchaser's Jurisdiction
Jurisdiction of Citizenship) of Organization)
If this Agreement is being executed If this Agreement is being executed
in a jurisdiction other than the in a jurisdiction other than the
jurisdiction set forth above, jurisdiction set forth above,
indicate such location:____________ indicate such location:____________
___________________________________ ___________________________________
Purchaser's Telephone Number: Purchaser's Telephone Number:
000-00-000/0000-000
___________________________________ -----------------------------------
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Number of Series A Shares:
7,500
-----------------------------------
Price per Share: Aggregate Purchase Price:
$1,000 $7,500,000
----------------------------------- -----------------------------------
Stock certificates should be made out as follows:_______________________________
Stock certificates and Subscription Agreement should be returned as follows:____
________________________________________________________________________________
Number of Series B Shares:
7,500
-----------------------------------
Price per Share: Aggregate Purchase Price:
$1,000 $7,500,000
----------------------------------- -----------------------------------
Stock certificates should be made out as follows:_______________________________
Stock certificates and Subscription Agreement should be returned as follows:____
________________________________________________________________________________
Number of Series C Shares:
7,500
-----------------------------------
Price per Share: Aggregate Purchase Price:
$1,000 $7,500,000
----------------------------------- -----------------------------------
Stock certificates should be made out as follows:_______________________________
Stock certificates and Subscription Agreement should be returned as follows:____
________________________________________________________________________________
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The foregoing Subscription Agreement, executed by RBB Bank
Aktiengesellschaft as Purchaser, is hereby accepted and agreed to by
Solar-Mates, Inc., as of the 26th day of September, 1996, as to $7,500,000 and
7,500 Series A Shares, $7,500,000 and 7,500 Series B Shares, and $7,500,000 and
7,500 Series C Shares.
SOLAR-MATES, INC.
By:______________________________
Xxxxxxx Xxxxxx, President
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