EXHIBIT 99.3
FORM OF OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT
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THIS OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT dated as of October 13, 1997
(this "Agreement") is executed in reliance upon the transaction exemption
afforded by Regulation S ("Regulation S") as promulgated by the Securities and
Exchange Commission ("SEC"), under the Securities Act of 1933 as amended.
Capitalized terms used herein and not defined shall have the meanings given to
them in Regulation S.
This Seller of Shares of Common Stock of Saf-T-Lok Inc., a Corporation
organized under the laws of the state of Delaware, with executive offices
located at 00000 X.X. Xxxxxxx Xxxxxxx, Xxxxxxxx, Xxxxxxx 00000, and Firstimpex,
Inc., Mercacorp Inc. and Dafico Investment Corp. (collectively the "Buyer")
hereby represent, warrant, and agree as follows.
THE COMMON STOCK OFFERED HEREBY HAS NOT 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 l933 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 Buyer (and each of them) represent that it qualifies
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under Regulation S to purchases shares of Common Stock of Seller and agrees to
purchase the numbers of shares of Seller's Common Stock as set forth on
Schedule A annexed hereto.
(b) Purchase Price. The purchase price for the Shares of Common Stock shall be
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per share or for the purchase of shares to be paid at
a Closing to be held no later than October 30, 1997. Each Buyer shall also
receive two (2) Common Stock Purchase Warrants for each share of Common Stock
purchased. Each Warrant entitles the holder to purchase one share of Common
Stock at per share for a period of twenty-four months from October 13,
1997.
(c) Payment. The aggregate purchase price for the Shares shall be payable at
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closing by delivering immediately available funds in United States Dollars by
wire transfer to the designated depository for closing by delivery of Securities
versus payment.
(d) Closing. Subject to the satisfaction of the conditions set forth in
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Sections 8 and 9 hereof, the closing of the transactions contemplated by this
Agreement shall occur on October 15, 1997 or such earlier or later date as is
mutually agreed to in writing by Buyer and Seller.
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2. SUBSCRIBER REPRESENTATIONS: ACCESS TO INFORMATION.
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(a) Offshore Transaction. In connection with the sale of the shares, Buyer
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represents and warrants to Seller as follows:
(i) Buyer is not organized under the laws of any jurisdiction within the
United States was not formed for the purpose of investing in Regulation S
securities and is not otherwise a U.S. Person, as that term is defined in
Section 902(o) of Regulation S. 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 Agreement;
(iii) No offer to purchase the Shares was made in the United States;
(iv) Buyer is purchasing the Shares for its own account or for the account
of persons (who are not U.S. Persons), each of whom has entered into an offshore
securities subscription agreement in a form substantially similar to this
Agreement, and Buyer and each such person is qualified to purchase the Shares
under the laws of its residence and the offer and sale of the Shares will not
violate the securities or other laws of such jurisdiction;
(v) All subsequent offers and sales of the Shares by buyer shall be made in
compliance with any applicable Securities laws of any applicable jurisdiction
and with Regulation S or pursuant to registration of securities under the 1933
Act or pursuant to an exemption from registration. In any case, the Shares will
not he resold by Buyer to a U.S. Person or within the United States until after
the end of the forty (40) day period commencing on the later of the date of
closing of the purchase of the Shares by Buyer or the date of the first offer of
the Shares to persons other than a distributor (the "Restricted Period");
(vi) The transactions contemplated by this 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 Shares are not registered under the 1933
Act and are being offered and sold to it in reliance on specific exemption 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 exemptions and the
suitability of Buyer to acquire the Shares;
(viii) Buyer shall take all reasonable steps to ensure its compliance with
Regulation S and shall promptly send to each purchaser who acts as a distributor
of the Shares, 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 903(c)(2)(iv) of Regulation S;
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(ix) Buyer has not conducted 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 the securities which are the
subject of this transaction in the United States or elsewhere;
(x) This 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 principles of equity and to bankruptcy or other laws
affecting the enforcement of creditors" rights generally;
(xi) The execution and delivery of this Agreement and the consummation of
the purchase of the Shares and the transactions contemplated by this Agreement
do not and will not conflict with or result in a breach by Buyer of any of the
terms or 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 invitations, offers and sales of or in respect of, the Shares by
Buyer and any distribution by Buyer of any documents relating to any offer by it
of the Shares will be in compliance with applicable laws and regulations and
will be made in such a manner that no prospectus need be 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 Shares 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 obliged to do any act; and
(xiv) Neither Buyer nor any of its affiliates has entered, has the intention
of entering, or will during the Restricted Period enter or into any put option,
short position or other similar instrument or position with respect to the
Shares or securities of the same class as the Shares.
(b) No Government Recommendation or Approval. Buyer understands that no
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Federal or State agency has passed on or made any recommendation or endorsement
of the Shares.
(c) Current Public Information. Buyer acknowledges that it and its advisors,
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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 Shares 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. Without limiting the generality of the
foregoing, Buyer has received Seller's (1) Annual Report on Form 10-K for the
fiscal year ended December 31, 1996, (2) Quarterly Report on Form 10-Q for the
fiscal quarter ended June 30, 1997, (3) Form 8-K, reporting event dated June 27,
1997, and (4) Form 8-K, reporting event dated August 27, 1997. (Items 3 and 4
are attached to this Agreement.)
(d) Buyer's Sophistication. Buyer acknowledges that the purchase of the
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Shares
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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
Shares.
3. SELLER REPRESENTATION.
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(a) Reporting Company Status. Seller is a "Reporting Issuer" as defined by
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Rule 902 of Regulation S. Seller has registered its Common Stock pursuant to
Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the Common Stock is listed and trades on the Nasdaq Small Cap Market
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
Shares (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
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its most recent reports filed under the Exchange Act referred to in Section 2(c)
above, and other public available documents.
(c) Offshore Transaction. Seller has not offered the Shares to any person in
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the United States, any identifiable groups of U.S. citizens abroad, or to any
U.S. Person.
(i) At the time the buy order was originated, Seller and/or its agents
reasonably believe Buyer was outside of the United States and was not a U.S.
person, based solely on the representations of Buyer in Section 2(a) hereof.
(ii) Seller and/or its agents reasonably believe that the transaction has
not been pre-arranged with a buyer in the United States, based solely on the
representations of Buyer in Section 2(a) hereof.
(iii) No offer to buy or sell the shares was or will be made by Seller to
any person in the United States.
(iv) The sale of the Shares by Seller pursuant to this Agreement will be
made in accordance with the provisions and requirements of Regulation S.
(v) The transactions contemplated by this 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, Seller has
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not 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 the securities which are the subject of this transaction
in the United States or elsewhere.
(e) Concerning the Shares. The Shares when issued and delivered will be duly
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and validly authorized and issued, fully paid and non-assessable 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 the Company.
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(f) Subscription Agreement. This Agreement has been duly authorized, validly
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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.
(g) Non-Contravention. The execution and delivery of this Agreement and the
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consummation of the issuance of the Shares 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
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
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of any governmental body which is legally required for the issuance and sale of
the Shares as contemplated by this Agreement.
4. EXEMPTION: RELIANCE ON REPRESENTATIONS. Buyer understands that the
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offer and sale of the Shares 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. Seller acknowledges that Buyer may
resell the Shares outside the United States to non-U.S. Persons in reliance on
Regulation S at the same or a different price than the purchase price hereunder,
and that Buyer is under no obligation to purchase or retain any of the Shares
for its own account; provided, all offers and sales by Buyer are made in
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accordance with Regulation S and this Agreement.
5. TRANSFER AGENT INSTRUCTIONS. Seller's transfer agent will be
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instructed to issue one or more share certificates representing the Shares sold
hereunder 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 prior to closing.
Seller further 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 to the
transfer agent and that the Shares shall otherwise be freely transferable on the
books and records of Seller. Nothing in this section, however, shall affect in
any way Buyer's obligations and agreement to comply with all applicable
securities laws upon resale of the Share.
6. STOCK DELIVERY INSTRUCTIONS. The Share certificates in the form
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required to be delivered by Section 5 above shall be delivered to the Buyer on a
delivery versus payment basis at such time and place as shall be mutually agreed
by Seller and Buyer; provided that such certificates shall be made available for
inspection at such reasonable time as Buyer may request prior to closing.
7. USE OF PROCEEDS. Seller intends to use the proceeds of the sale of
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the Shares to Buyer for working capital, acquisitions and general corporate
purposes.
8. CONDITIONS TO SELLER'S OBLIGATION TO SELL. Seller's Obligation to
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sell the Shares is conditioned upon:
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(a) The receipt and acceptance by Buyer of this Agreement as evidenced by
execution of this Agreement by the Chairman of the Board or President of Buyer.
(b) Delivery into the closing depository of good funds by Buyer as payment in
full of the aggregate Purchase Price of the Shares.
(c) The receipt by Seller of a certificate from an authorized officer of Buyer
certifying that the representations and warranties contained in Section 2 hereof
are true and correct as of the closing date.
9. CONDITIONS TO BUYER'S OBLIGATION TO PURCHASE. Buyer's obligation to
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purchase the Shares is conditioned on:
(a) The receipt and acceptance by Seller of this Agreement as evidenced by
execution of this Agreement by the duly authorized officer of Seller.
(b) Delivery of certificates representing the Shares as described in Section 5
hereof.
(c) Delivery of an opinion of counsel to Seller substantially in the form of
Exhibit A hereto.
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(d) The absence of any event or circumstance that could reasonably be expected
to have a material adverse effect on the financial condition of Seller, or the
market price of Seller's stock on the Nasdaq Small Cap Market, in any such event
as determined by Buyer in its reasonable discretion.
(e) The receipt by Buyer of a certificate from an authorized officer of Seller
certifying that the representations and warranties Contained in Section 3
thereof are true and correct as of the closing date and that, to the knowledge
of Seller, the conditions set forth in subsection (d) above have been complied
with.
10. OFFERING MATERIALS. All offering materials and documents used in
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connection with offers and sales of the Shares prior to the expiration of the
Restricted Period referred to in Section 2(a)(v) hereof shall include statements
to the effect that the Shares have not been registered under the 1933 Act and
that neither Buyer, nor any direct or indirect purchaser of the Shares from
Buyer, may directly or indirectly offer or sell the Shares in tile United States
or to U.S. Persons (other than distributors) unless the Shares are registered
under the 1933 Act, or an exception from the registration requirements of the
1933 Act 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
Shares (2) in the underwriting section of any prospectus or offering circular
used in connection with the offer or sale of the Shares, 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.
11. Until the end of the ninety (90) day period immediately following
the closing of the purchase and sale of the Shares hereunder, and except for any
agreement between Buyer and Seller concerning distribution of securities of
Seller by Buyer pursuant to Regulation S, Seller shall not issue or enter into
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any agreement to issue any shares of its capital stock or other equity
securities, or options, warrants, rights, or debt instruments exercisable or
exchangeable for or convertible into shares of its capital stock or other equity
securities, except for (i) the issuance of stock pursuant to outstanding stock
options, (ii) the grant of stock options to officers and employees.
12. MISCELLANEOUS.
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(a) Except as specifically referenced herein, this 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 among the
parties related to the transactions described herein is superseded hereby. The
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties hereto.
Nothing in this 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 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 representation or warranty with respect to Seller, its
finances, assets, business prospects or otherwise, except as expressly set forth
herein. Buyer will advise each purchaser and potential purhaser of the Shares 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 it may reasonably
require for such investigation.
(d) All representations and warranties contained in this Agreement by Seller
and Buyer shall survive the closing of the transactions contemplated by this
Agreement.
(e) This Agreement shall be construed in accordance with the internal laws of
Bermuda and shall be binding upon the successors and assigns of each party
hereto. This Agreement may be executed in counterparts, and the facsimile
transmission of an executed counterpart to this Agreenient shall be effective as
an original.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first set forth above.
Official Signatory of Seller:
SAF-T-LOK INC.
By: /s/ Xxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxx
Title: President
Official Signatory of Buyer:
FIRSTIMPEX, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
Title: As Attorney, POA
MERCACORP INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
Title: As Attorney, POA
DAFICO INVESTMENT CORP.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
Title: As Attorney, POA
Title:
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ADDENDUM TO OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT
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Receipt of all filings with the SEC since January 1, 1997.
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Buyers acknowledge receipt of all filings made by the Company with the
Securities and Exchange Commission since January 1, 1997, including the Form 8-K
filing made on October 28, 1997, disclosing the number of shares of Common Stock
outstanding as a result of the conversion of convertible debentures and shares
issued to service providers and stock options recently granted.
Agreement to submit information to The Nasdaq Market, Inc.
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The Buyers and the Company agree to submit to The Nasdaq Market, Inc., all
documents and agreements relating to this transaction to The Nasdaq Market,
Inc., including all information requested by Nasdaq as set forth in the letter
dated October 21, 1997 from The Nasdaq Market, Inc., attached hereto as an
exhibit, immediately upon the execution of this Agreement.
Closing Held In Escrow Pending Action by The Nasdaq Market.
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The Company and the Buyers agree that upon closing, the Closing shall be held in
escrow by Xxxxx & Xxxxx, 000 Xxxx Xxx., Xxx Xxxx, Xxx Xxxx, 00000 (the "Escrow
Agent") under the supervision of Xxxxx X. Xxxxx, Esq. Pursuant to the terms set
forth in this Addendum.
All documents, stock certificates, legal opinions, stock purchase warrants and
cash pertaining to the Closing shall be held in escrow by the Escrow Agent.
In the event the Company is notified by Nasdaq that the Company's common stock
will not be delisted from the Nasdaq SmallCap Market after Nasdaq has reviewed
the Information (the "Nasdaq Notification"), the Company will immediately notify
the Escrow Agent by fax letter with a copy of the determination letter by
Nasdaq. Upon receipt of such notification, the Escrow Agent will deliver all of
the documents, stock certificates, legal opinions, stock purchase warrants and
cash to the respective parties and the Placement Agent as required by this
Agreement and the Placement Agreement between the Company and State Street
Securities dated .
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In the event that the Company has not received the Nasdaq Notification by 5:00
P.M. November 4, 1997, the Closing shall be deemed not to have occurred, all
agreements relating to this transaction shall be void and the Escrow Agent shall
promptly return all documents, stock certificates, legal opinions, stock
purchase warrants and cash to the respective parties as if the Closing had not
occurred.
This Addendum shall be initialed by the parties to indicate the attachment of
this Addendum to the Agreement.
Buyers:
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As attorney in fact for the Buyers
Saf T Lok, Incorporated
By:
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President
