OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT
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THIS OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT dated as of
, 1996 (the "Offshore Agreement"), is executed in
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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 9% Series Z 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.
I. Agreement To Subscribe; Purchase Price.
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(a) Subscription. The undersigned Buyer hereby subscribes for and
agrees to purchase a portion of the Sellers 9% Series Z Convertible Debentures
substantially in the form of the Debentures attached as Exhibit A hereto and
having an aggregate original principal amount of U.S. $3,300,000 (singly, a
"Debenture," and collectively, the "Debentures"), at a purchase price as set
forth in subsection (b) herein.
(b) Payment. The Purchase Price for Buyer's portion of the
Debentures shall be $ (the "Purchase Price"), which shall be payable
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at closing by delivering immediately available funds in United States Dollars by
wire transfer to Xxxxx X. Xxxxxxxxx, Esq., 000 X. 00xx Xxxxxx, Xxx Xxxx, X.X.
00000 for closing by delivery of securities versus payment for each series of
Debentures.
(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").
I. 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 901(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 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 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.
(d) 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.
I. 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 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.
(i) Seller will not engage in other Regulation S Transactions for a
period of 6 months from the closing of the transaction.
I. Exemption; Reliance on Representations. Buyer understands that
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the offer 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.
I. 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 with
a copy to the Escrow Agent and the Company shall immediately advise its Transfer
Agent to issue the appropriate number of Shares and deliver such Shares as
directed by holder. 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 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.
I. Delivery Instructions. The Debentures being purchased hereunder
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shall be delivered to the Buyer at such time and place as shall be mutually
agreed by Seller and Buyer.
I. Conditions To Seller's Obligation To Sell. Seller's obligation
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to sell the 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.
I. Conditions To Buyer's Obligation To Purchase. Buyer's obligation
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to 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 set forth in the Offshore
Agreement.
(d) No default by Seller of any provisions of any Series of
Debenture.
I. 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.
I. No Shareholder Approval. Seller hereby agrees that from the
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Closing Date 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.
I. Miscellaneous.
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(a) Except as specifically referenced herein, this Offshore 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 Offshore 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.
Official Signatory of Seller:
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Management Technologies, Inc.
By:
Title:
Official Signatory of Buyer:
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By:
Title:
Address of Buyer:
