OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT
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THIS OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT dated as of October 4 1996
(the "Offshore Agreement"), is executed in reliance upon the exemption from
registration afforded by Regulation S ("Regulation S") as promulgated by the
Securities and Exchange Commission ("SEC"), under the Securities Act of 1933, as
amended. Capitalized terms used herein and not defined shall have the meanings
given to them in Regulation S.
This Agreement has been executed by the undersigned "Buyer" in connection
with the private placement of a Series of 6% Convertible Debentures of
Management Technologies, Inc., a corporation organized under the laws of the
State of New York, with its principal executive offices located at 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (hereinafter referred to as "Seller"). Buyer
hereby represents and warrants to, and agrees with Seller:
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, AND THE
RULES AND REGULATIONS PROMULGATED THEREUNDER (THE "1933 ACT"), AND MAY
NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES (AS DEFINED IN
REGULATION S OF THE 1933 ACT) OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,
U.S. PERSONS (AS DEFINED IN REGULATION S OF THE 1933 ACT) EXCEPT
PURSUANT TO REGISTRATION UNDER OR AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE 1933 ACT.
1. Agreement To Subscribe; Purchase Price.
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a) Subscription. The undersigned Buyer hereby subscribes for and agrees
to purchase the Sellers Series Y 6% Convertible Debentures
substantially in the form of the Debentures attached as Exhibit A
hereto and having an aggregate original principal amount of U.S. $
(singly, a "Debenture," and collectively, the "Debentures"), at
a purchase price as set forth in subsection (b) herein.
b) Payment. The Purchase Price for the Series Y Debentures shall be $
(the "Purchase Price"), which shall be payable at closing by
delivering immediately available funds in United States Dollars by
wire transfer to the Seller.
c) Closing. Subject to the satisfaction of the conditions set forth in
Sections 7 and 8 hereof, the closing of the transactions contemplated
by this Offshore Agreement shall occur from time to time as set forth
in the Agreement, or such earlier or later date as is mutually agreed
to in writing by Buyer and Seller (the "Closing Dates").
2. Buyer Representations; Access to Information.
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a) Offshore Transaction. In connection with the purchase and sale of the
Debentures, Buyer represents and warrants to, and covenants and agrees
with Seller as follows:
i) Buyer is not a natural person and is not organized under the laws
of any jurisdiction within the United States, was not formed by
a U.S. Person (as defined in Section 902(o) of Regulation S)
principally for the purpose of investing in securities not
registered under the 1933 Act and is not otherwise a U.S. Person.
Buyer is not, and on the closing date will not be, an affiliate
of Seller;
ii) At the time the buy order was originated, Buyer was outside the
United States and is outside of the United States as of the date
of the execution and delivery of this Offshore Agreement;
iii) No offer to purchase the Debentures or the common stock of Seller
issuable upon conversion of the Debentures (collectively, the
"Securities"), was made by Buyer in the United States;
iv) Buyer is purchasing the Securities for its own account and Buyer
is qualified to purchase the Securities under the laws of its
jurisdiction of residence, and the offer and sale of the
Securities will not violate the securities or other laws of such
jurisdiction;
v) All offers and sales of any of the Securities by Buyer prior to
the end of the Restricted Period (as hereinafter defined) shall
be made in compliance with any applicable securities laws of any
applicable jurisdiction and in accordance with Rule 903 and 904,
as applicable, of Regulation S or pursuant to registration of the
Securities under the 1933 Act or pursuant to an exemption from
registration. In any case, none of the Securities have been and
will be offered or sold by Buyer to, or for the account or
benefit of, a U.S. Person or within the United States until after
the end of the forty (40) day period commencing on the later of
(x) the date of closing of the offering of the Securities or (y)
the date of the first offer of the Securities to persons other
than distributors (the "Restricted Period"), as certified by
Buyer to Seller;
vi) The transactions contemplated by this Offshore Agreement (a) have
not been and will not be pre-arranged by Buyer with a purchaser
located in the United States or a purchaser which is a U.S.
Person, and (b) are not and will not be part of a plan or scheme
by Buyer, to evade the registration provisions of the 1933 Act;
vii) Buyer understands that the Securities are not registered under
the 1933 Act and are being offered and sold to it in reliance on
specific exclusions from the registration requirements of Federal
and State securities laws, and that Seller is relying upon the
truth and accuracy of the representations, warranties,
agreements, acknowledgments and understandings of Buyer set forth
herein in order to determine the applicability of such exclusions
and the suitability of Buyer and any purchaser from Buyer to
acquire the Securities;
viii)Buyer shall take all reasonable steps to ensure its compliance
with Regulation S and shall promptly send to each purchaser (x)
who acts as a distributor, underwriter, dealer or other person
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 referred to in
subparagraph (v) above, a confirmation or other notice to the
purchaser stating that the purchaser is subject to the same
restrictions on offers and sales as Buyer pursuant to Section
109(c)(2)(iv) of Regulation S;
ix) None of Buyer, its affiliates or persons acting on their behalf
have conducted and shall not conduct any "directed selling
efforts" as that term is defined in Rule 902(b) of Regulation S;
nor has Buyer conducted any general solicitation relating to the
offer and sale of any of the Securities in the United States or
elsewhere;
x) This Offshore Agreement has been duly authorized, validly
executed and delivered on behalf of Buyer and is a valid and
binding agreement in accordance with its terms, subject to
general principals of equity and to bankruptcy or other laws
affecting the enforcement of creditors' rights generally;
xi) The execution and delivery of this Offshore Agreement and the
consummation of the purchase of the Securities, and the
transactions contemplated by this Offshore Agreement do not and
will not conflict with or result in a breach by Buyer of any of
the terms of provisions of, or constitute a default under, the
articles of incorporation or by-laws (or similar constitutive
documents) of Buyer or any indenture, mortgage, deed of trust, or
other material agreement or instrument to which Buyer is a party
or by which it or any of its properties or assets are bound, or
any existing applicable law, rule or regulation of the United
States or 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 Buyer or any of its properties or
assets;
xii) All invitation, offers and sales of or in respect of, any of the
Securities, by Buyer and any distribution by Buyer of any
documents relating to any offer by it of any of the Securities
will be in compliance with applicable laws and regulations and
will be made in such a manner that no prospectus need by filed
and no other filing need be made by Seller with any regulatory
authority or stock exchange in any country or any political sub-
division of any country;
xiii)Buyer will not make any offer or sale of the Securities by any
means which would not comply with the laws and regulations of the
territory in which such offer or sale takes place or to which
such offer or sale is subject or which would in connection with
any such offer or sale impose upon Seller any obligation to
satisfy any public filing or registration requirement or provide
or publish any information of any kind whatsoever or otherwise
undertake or become obligated to do any act; and
xiv) Neither the Buyer nor any of its affiliates has entered, has the
intention of entering, or will during the Restricted Period enter
into any put option, short position or other similar instrument
or position with respect to any of the Securities or securities
of the same class as the Securities.
b) No Government Recommendation or Approval. Buyer understands that no
Federal or State or foreign government agency has passed on or made
any recommendation or endorsement of the Securities.
c) Current Public Information. Buyer acknowledges that it and its
advisors, if any, have been furnished with all materials relating to
the business, finances and operations of Seller and all materials
relating to the offer and sale of the Securities which have been
requested by Buyer. Buyer further acknowledges that it and its
advisors, if any, have received complete and satisfactory answers to
such inquiries.
d) Buyer's Sophistication. Buyer acknowledges that the purchase of the
Securities involves a high degree of risk, including the total loss of
Buyer's investment. Buyer has such knowledge and experience in
financial and business matters that it is capable of evaluating the
merits and risks of purchasing the Securities.
e) Tax Status. Buyer is not a "10-percent Shareholder" (as defined in
Section 871(h)(3)(B) of the U.S. Internal Revenue Code) of Seller.
3. Seller Representations.
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a) Reporting Company Status. Seller is a "Reporting Issuer" as defined
by Rule 902 of Regulation S. Seller has registered its Common Stock,
$0.01 per value per share (the "Common Stock"), pursuant to Section 12
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the Common Stock is listed and trades on NASDAQ. Seller
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 Securities (or for such shorter period that
Seller has been required to file such material).
b) Current Public Information. Seller has furnished Buyer with copies of
its most recent reports filed under the Exchange Act referred to in
Section 2(c) above, and other publicly available documents.
c) Offshore Transaction. Seller has not offered or sold any of the
Securities to any person in the United States, any identifiable groups
of U.S. citizens abroad, or to or for any U.S. Person, as such terms
are used in Regulation S.
i) At the time the buy order was originated, Seller and/or its
agents reasonably believe the Buyer was outside of the United
States and was not a U.S. person, based on the representations of
Buyer.
ii) Seller and/or its agents reasonably believe that the transaction
has not been pre-arranged with a buyer in the United States,
based on the representations of Buyer.
iii) No offer to buy or sell the Securities was or will be made by
Seller to any person in the United States.
iv) The offer and sale of the Securities by Seller pursuant to this
Offshore Agreement will be made in accordance with the provisions
and requirements of Regulation S provided that the
representations and warranties of Buyer in Section 2(a) hereof
are true and correct.
v) The transactions contemplated by this Offshore Agreement (a) have
not been and will not be pre-arranged by Seller with a purchaser
located in the United States or a purchaser which is a U.S.
Person, and (b) are not and will not be part of a plan or scheme
by Seller to evade the registration provisions of the 1933 Act.
d) No Directed Selling Efforts. In regard to this transaction, none of
Seller, its affiliates or persons acting on their behalf have
conducted any "directed selling efforts" as that term is defined in
Rule 902 of Regulation S nor has Seller conducted any general
solicitation relating to the offer and sale of any of the Securities
in the United States or elsewhere.
e) Concerning the Securities. The issuance, sale and delivery of the
Debentures have been duly authorized by all required corporate action
on the part of Seller, and when issued, sold and delivered in
accordance with the terms hereof and thereof for the consideration
expressed herein and therein, will be duly and validly issued, fully
paid and non-assessable. The Common Stock issuable upon conversion of
the Debenture has been duly and validly reserved for issuance and,
upon issuance in accordance with the terms of the Debentures, shall be
duly and validly issued, fully paid, and non-assessable and will not
subject the holders thereof, if such persons are non-U.S. persons, to
personal liability by reason of being such holders. There are no pre-
emptive rights of any shareholder of Seller.
f) Subscription Agreement. This Offshore Agreement has been duly
authorized, validly executed and delivered on behalf of Seller and is
a valid and binding agreement in accordance with its terms, subject to
general principals of equity and to bankruptcy or other laws affecting
the enforcement of creditors' rights generally.
g) Non-contravention. The execution and delivery of this Offshore
Agreement and the consummation of the issuance of the Securities and
the transactions contemplated by this Offshore 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 articles of
incorporation or by-laws of 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 law, rule or regulation of the United
States or 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 Seller or any of its properties or assets.
h) Approvals. 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 Debentures and the Common Stock issuable upon
conversion thereof to persons who are non-U.S. Persons, as
contemplated by this Offshore Agreement.
4. Exemption; Reliance on Representations. Buyer understands that the offer
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and sale of the Securities are not being registered under the 1933 Act.
Seller and Buyer are relying on the rules governing offers and sales made
outside the United States pursuant to Regulation S.
5. Transfer Agent Instructions.
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a) Debentures. Upon the conversion of the Debentures, the holder thereof
shall submit such Debenture and Notice of Conversion to the Company
and the Company shall immediately instruct Seller's transfer agent to
issue one or more certificates representing the balance of that number
of shares of Common Stock into which the Debenture are convertible in
accordance with the provisions regarding conversion set forth in
Exhibit A hereto. The Seller shall act as Debenture Registrar and
shall maintain an appropriate ledger containing the necessary
information with respect to each Debenture.
b) Common Stock to be Issued Without Restrictive Legend. After the
expiration of the Restricted Period, upon the conversion of any
Debenture by a person who is a non-U.S. Person, Seller shall instruct
Seller's transfer agent to issue Stock Certificates without
restrictive legend in the name of Buyer (or its nominee (being a non-
U.S. Person) or such non-U.S. Persons as may be designated by Buyer
prior to the closing) and in such denominations to be specified at
conversion representing the number of shares of Common Stock issuable
upon such conversion, as applicable it being understood that on the
day following the expiration of the Restricted Period, the
c) Securities will be held by a non-U.S. person. Seller warrants that no
instructions other than these instructions and instructions to impose
a "stop transfer" instruction with respect to the certificates until
the end of the Restricted Period have been given or will be given to
the transfer agent and that the Common Stock shall otherwise be freely
transferable on the books and records of Seller. Nothing in this
Section 5, however, shall affect in any way Buyer's or such nominee's
obligations and agreements to comply with all applicable securities
laws upon resale of the Securities.
6. Delivery Instructions. The Debentures being purchased hereunder shall be
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delivered to the Buyer at such time and place as shall be mutually agreed
by Seller and Buyer.
7. Conditions To Seller's Obligation To Sell. Seller's obligation to sell the
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Debentures is conditioned upon:
a) The receipt and acceptance by Buyer of this Offshore Agreement as
evidenced by execution of this Offshore Agreement by Buyer.
b) Delivery into the closing depository of good funds by Buyer as payment
in full of the purchase price of the Debentures pursuant to the
Offshore Agreement.
8. Conditions To Buyer's Obligation To Purchase. Buyer's obligation to
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purchase the Debentures is conditioned upon:
a) The receipt and acceptance by Seller of this Offshore Agreement as
evidenced by execution of this Offshore Agreement by the duly
authorized officer of Seller.
b) Delivery of the Debentures as described herein.
c) Satisfaction of the conditions in the Agreement.
d) No default by Seller of any provisions of any Series of Debenture.
9. Offering Materials. All offering materials and documents used in
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connection with offers and sales of the Securities prior to the expiration
of the Restricted Period referred to in Section 2(a)(v) hereof shall
include statements to the effect that the Securities have not been
registered under the 1933 Act or applicable state securities laws, and that
neither Buyer, nor any direct or indirect purchaser of the Securities from
Buyer, may directly or indirectly offer or sell the Securities in the
United States or to or for the account or benefit of U.S. Persons (other
than distributors) unless the Securities are registered under the 1933 Act
any applicable state securities laws, or any exemption from the
registration requirements of the 1933 Act or such state securities laws is
available. Such statements shall appear (1) on the cover of any prospectus
or offering circular used in connection with the offer or sale of the
Securities, (2) in the underwriting section of any prospectus or offering
circular used in connection with the offer or sale of the Securities, and
(3) in any advertisement made or issued by Seller, Buyer, any other
distributor, any of their respective affiliates, or any person acting on
behalf of any of the foregoing.
10. No Shareholder Approval. Seller hereby agrees that from the Closing Date
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until the issuance of Common Stock upon the conversion of the Debentures,
Seller will not take any action which would require Seller to seek
shareholder approval of such issuance.
11. Miscellaneous.
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a) Except as specifically referenced herein, this Offshore Agreement and
the Agreement constitutes the entire contract between the parties, and
neither party shall be liable or bound to the other in any manner by
any warranties, representations or covenants except as specifically
set forth herein. Any previous agreement (other than the Agreement)
among the parties related to the transactions described herein is
superseded hereby. The terms and conditions of this Offshore
Agreement and the Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties
hereto. Nothing in this Offshore Agreement, express or implied, is
intended to confer upon any party, other than the parties hereto, and
their respective successors and assigns, any rights, remedies,
obligations or liabilities under or by reason of this Offshore
Agreement, except as expressly provided herein.
b) Buyer is an independent contractor, and is not the agent of Seller.
Buyer is not authorized to bind Seller, or to make any representations
or warranties on behalf of Seller.
c) Seller makes no representations or warranty with respect to Seller,
its finances, assets, business prospects or otherwise. Buyer will
advise each purchaser, if any, and potential purchaser of the
Securities, of the foregoing sentence, and that such purchaser is
relying on its own investigation with respect to all such matters, and
that such purchaser will be given access to any and all documents and
Seller personnel as it may reasonably request for such investigation.
d) All representations and warranties contained in this Offshore
Agreement by Seller and Buyer shall survive the closing of the
transactions contemplated by this Offshore Agreement.
e) This Offshore Agreement shall be construed in accordance with the
internal laws of the State of New York, and shall be binding upon the
successors and assigns of each party hereto. This Offshore Agreement
may be executed in counterparts, and the facsimile transmission of an
executed counterpart to this Offshore Agreement shall be effective as
an original.
f) Seller and Buyer shall consult with each other in issuing any press
releases or otherwise making public statements with respect to the
transactions contemplated hereby. Neither party shall issue any press
release or otherwise make any public statement without the prior
written consent of the other, which consent shall not be unreasonably
withheld or delayed.
IN WITNESS WHEREOF, the undersigned have executed this Offshore Agreement as of
the date first set forth above.
Date: October 4 1996
Official Signatory of Seller:
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Management Technologies, Inc.
By: Xxxxx Xxxxxx
Title: President & COO
Official Signatory of Buyer:
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By:
Title:
Address of Buyer:
