EXHIBIT 10.26
THIS SUBSCRIPTION AGREEMENT AND THE CONVERTIBLE SUBORDINATED NOTES SOLD
HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 AS AMENDED
(THE SECURITIES ACT"), BUT IS SOLD PURSUANT TO AN EXEMPTION FROM THE
REQUIREMENTS OF SAID ACT. NEITHER SUCH NOTES NOR ANY INTEREST OF PARTICIPATION
HEREIN OR THEREIN MAY BE SOLD, ASSIGNED, PLEDGED OR DISPOSED OF IN THE UNITED
STATES OR TO A "U.S. PERSON" AS DEFINED IN REGULATION S PROMULGATED UNDER SUCH
ACT ("REGULATION S") EXCEPT IN COMPLIANCE WITH REGULATION S.
SUBSCRIPTION AGREEMENT
Mr. Xxxx Xxxxx, CFO
ARC Capital
0000 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxx 00000
Gentlemen:
THIS OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT (this "Agreement") is
executed in reliance upon the transactional exemption afforded by Regulation S
("Regulation S") as promulgated by the Securities and Exchange Commission
("SEC") under the Securities Act of 1933, as amended ("1933 Act").
THIS AGREEMENT has been executed by the undersigned in connection with the
placement of Subordinated Convertible Notes pursuant to section 903 (c) (2) of
Regulation S (hereinafter referred to as the "Notes") of ARC Capital, a
corporation under the laws of the State of California, U.S.A., NASDAQ symbol
"ARCCA" (hereinafter referred to as the "Seller" or the "Company"). The Notes
being sold pursuant to this Agreement have not been registered under the 1933
Act and may not be offered to sold in the United States or to U.S. Persons,
other than distributors (as such terms are defined in Regulation S), unless the
Notes are registered under the 1933 Act, or an exemption from the registration
requirement of the 1933 Act is available. The terms on which the Notes can be
converted into Common Stock (such common stock underlying the Notes being
referred to herein as "Shares") and the other terms of the Notes are set forth
therein. The offer and sale of Notes and the Shares (collectively the
"Securities"), are being made in reliance upon the provision of Regulation S
("Regulation S") under the United States Securities Act of 1933, as amended (the
"Act").
The undersigned, Swiss American Securities Inc. as agent for Credit
Suisse(herein referred to as Buyer or "Purchaser"), in order to induce the
Company to enter into the transaction contemplated hereby and acknowledging that
the Company will rely thereon, represents and warrants and agrees as follows:
1. Subject to the terms and conditions set forth in this Agreement, the
undersigned hereby subscribes for $1,600,000 in principal amount of 6.75%
Subordinated Convertible (Sales of Notes are made only in $100,000 increments).
Upon execution of this Subscription Agreement by the Company, Purchaser
will wire transfer available funds in U.S. dollars payable to the Company via
escrow account as follows:
The Notes shall be delivered to the Purchaser c/o Swiss American
Securities, as escrow agent, on a delivery versus payment basis and funds shall
be wired by Purchaser as follows:
Bank: United National Bank of Oregon
000 XX Xxxxx Xxxxxx
ABA# 123 000 220
FBO: ARC Capital
Acct # 1260015896
2. Representation and Warranties: The Purchaser hereby acknowledges,
represents and warrants to and agrees with the Company as follows:
(a) The Purchaser has been furnished with the Company's press releases,
current Annual Report on Form 10-K for year ending December 31, 1994, and
Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30 and
September 30, 1995, and the Form 8K dated March 6, 1996, and the Form 8-K-A
dated May 13, 1996 (the "Disclosure Documents"). The Purchaser acknowledges that
the Company will, upon written request made by the Purchaser, provide without
charge, copies of all documents identified in the Disclosure Documents.
(b) The Purchaser represents and warrants that it is not a U.S. person (as
defined in Rule 902(0) of Regulation S.
(c) The Purchaser acknowledges that the offer and sale of the Notes are not
taking place within the United States, but rather in an offshore transaction.
"United States" means the United States, its territories and possessions, and
any state of the United States, and the District of Columbia. No "direct selling
efforts" (as defined in Regulation S) may be made in United States by the
Company, and distributor of the Notes, any of their affliates or any person
acting on behalf of any of the foregoing.
(d) The Purchaser acknowledges its understanding that the offer and sale of
the Notes is intended to be exempt from registration under the 1993 Act by
virtue of Regulation S.
(e) The Purchaser acknowledges that the Securities have not been registered
under the 1933 Act and, therefore, cannot be offered or sold in the United
States or to U.S. persons for a period of a minimum of 40 days from the sale of
Notes, unless the Notes are registered under the 1933 Act, or an exemption from
the registration requirements of the Act is available.
(f) The Purchaser acknowledges that this Agreement and any certificate
representing the Notes or Notes issued under this Agreement shall bear the
restrictive legend set forth on the Notes. The purchaser further acknowledges
that the Company will affect a conveyance only in accordance with Regulation S.
(g) All offers and sales of these Securities prior to the expiration of 40
days from the later of the date when these Notes were first offered to persons
other than distributors or the date of closing of this offering shall be made
only in accordance with Rule 903 or Rule 904 of Regulation S or pursuant to an
available exemption from the registration requirements of the 1933 Act.
(h) Purchaser is purchasing the Notes as an agent for Credit Suisse on
behalf of "non-U.S." investors and not on behalf of any U.S. person, and no sale
has been prearranged with a purchaser in the United States.
(i) The Purchaser acknowledges that Purchaser in making the decision to
purchase the Notes subscribed for, has relied upon independent investigations
made by it and its Purchaser representatives, if any, of material books and
records of the Company, all materials contracts and documents relating to this
offering and have had an opportunity to ask questions of, and to receive answers
from, Company or any person acting on its behalf concerning the terms and
conditions of this offering. Purchaser and its representatives, if any, have
been provided with access to all publicly available materials relating to the
offer and sale of the Notes which have been requested. Purchaser and its
representatives, if any, have received complete and satisfactory answers to any
such inquiries.
3. Representations and Warranties: The Company hereby acknowledges,
represents and warrants to and agrees with the Purchaser as follows:
(a) The Company is a "Reporting Issuer." The Company has filed all reports
required to be filed by Section 13 or 15(d) of the Securities and Exchange Act
of 1934 during the proceeding 12 months and has been subject to such filing
requirements for the past 90 days.
(b) The Offering is being made pursuant to SEC Regulation 230.903 (c)(2).
(c) The Company will issue Notes in the form of Exhibit "A" attached
hereto.
(d) The Company has the requisite corporate power and authority to enter
into this Agreement and to sell and deliver the Securities. This Agreement and
the issuance of the Securities have been duly and validly authorized by all
necessary corporate action by the Company. This Agreement and the Notes have
been duly and validly executed and delivered by and on behalf of the Company,
and are valid and binding obligations of the Company, enforceable in accordance
with their respective terms, except as enforceability may be limited by general
equitable principles, bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other laws affecting creditors rights generally.
(e) The Shares issued upon conversion of the Notes (after the 40-day
holding period) will contain no restrictive legend and will not be the subject
of any stop transfer direction or order.
5. Miscellaneous:
(a) All notices or other communications given or made hereunder shall be in
writing and shall be delivered or mailed by registered or certified mail, return
receipt requested, postage prepaid, to the undersigned at the Purchaser's
address set forth on the signature page below.
(b) This Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof and may be amended only by a
writing executed by all parties.
(c) All pronouns contained herein and any variations thereof shall be
deemed to refer to the masculine, feminine, or neuter, singular or plural, as
the identify of the parties hereto require.
(d) This Agreement may be executed in several counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
(e) Upon execution of this Agreement by the Company, Purchaser shall wire
funds to the Escrow Agent to be distributed in accordance with the Private
Placement and Distribution Agreement.
IN WITNESS WHEREOF, the Purchaser has executed this Subscription Agreement
on this 14th day of May, 1996.
PURCHASER
Name: Swiss American Securities Inc.
As Agent for Credit Suisse
Address: 000 Xxxx Xxxxxx, X.X., X.X. 00000
Signature: /s/ S. R. XxXxxxx
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ACCEPTED BY: S. R. XxXxxxx
Executive Vice President
ARC CAPITAL
/s/ Xxxx Xxxxx /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx, V.P.
