EXHIBIT 4.13
OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT
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.
THIS OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT dated as of
October , 1996 (the "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 ___________________
as "Purchaser" in connection with the offshore offering of 10.0% Cumulative
Convertible Debentures of SYSTEMS COMMUNICATIONS, INC. ("SCMI"), a
corporation organized under the laws of the State of Florida, with its
principal executive offices located at Xxxxxxxx Xxxx, Xxxxx 000,
Xxxxxxxxxx, XX. (herein-after referred to as "Seller" or "Company").
Purchaser hereby represents and warrants to, and agrees with Seller:
1. Agreement To Subscribe: Purchase Price.
(a) Subscription. The undersigned Purchaser hereby
subscribes for and agrees to purchase the Sellers 10.0%
Cumulative Convertible Debentures in the principal amount of
U.S. $______________ (singly, a Debenture", and
collectively, the "Debentures").
(b) Form of Payment. Purchaser shall pay the total
consideration by delivering good funds by wire transfer in United
States Dollars to the Escrow Agent, Xxxxxx X. XxXxxxx, Esq. on or
before November , 1996 into the escrow account as follows:
First Union Bank of Connecticut
Executive Xxxxxx
000 Xxxx Xxxxxx, X.X. Xxx 000
Xxxxxxxx, XX 00000-0000
ABA #: 000000000 First Union Bank
Swift #: XXXXXX00
Account #: 00000-0000000-0
Xxxx.Xxxx: Xxxxxx X. XxXxxxx, Esq. Trustee Account
2
(c) Closing. Subject to the satisfaction of the conditions
set forth in Sections 8 and 9 hereof, the closing of the
transactions contemplated by this Agreement shall occur from time
to time on or before November , 1996.
2. Purchaser Representations Access to Information.
(a) Offshore Transaction. In connection with the
purchase and sale of the Debentures, Purchaser represents and
warrants to, and covenants and agrees with Seller as follows:
(i) Purchaser 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) for the
purpose of investing in Regulation S securities and is
not otherwise a U.S. Person. Purchaser is not, and on
the closing date will not be, an affiliate of Seller;
(ii) At the time the buy order was
originated, Purchaser 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 Debentures or
the common stock of Seller issuable upon conversion of
the Debentures (collectively, the "Securities"), was
made by Purchaser in the United States;
(iv) Purchaser is purchasing the Securities
for its own account and Purchaser 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 Purchaser 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 securities under the 1933
Act or pursuant to an exemption from registration. In
any case, none of the Securities have been or will be
offered or sold by Purchaser 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 date of closing of the offering of
the Securities or (the "Restricted Period"), which in
no event shall be later than _____________, 1996, when
this offering shall be closed to all Purchasers;
3
(vi) The transactions contemplated by this
Agreement (a) have not been and will not be pre-
arranged by Purchaser 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 Purchaser, to evade the registration
provisions of the 1933 Act;
(vii) Purchaser understands that the Securities
are not registered under the 1933 Act and are being
offered and sold to it in reliance on specific
exemptions 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 Purchaser set
forth herein in order to determine the applicability of
such exemptions and the suitability of Purchaser to
acquire these Securities;
(viii) Purchaser shall take all reasonable
steps to ensure its compliance with Regulation S and
shall promptly send to each purchaser who acts as a
distributor, dealer or a person receiving a selling
concession, fee or other remuneration in respect of any
of the Securities, 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
Purchaser pursuant to Section 904(c)(2)(iv) of
Regulation S;
(ix) Purchaser has not conducted and shall
not conduct any "directed selling efforts" as that term
is defined in Rule 902(b) of Regulation S; nor has
Purchaser conducted any general solicitation relating
to the offer and sale of any of the Securities in the
United State or elsewhere;
(x) This Agreement has been duly authorized,
validly executed and delivered on behalf of Purchaser
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;
4
(xi) The execution and delivery of this Agreement
and the consummation of the purchase of the Securities,
and the transactions contemplated by the Agreement do
not and will not conflict with or result in a breach by
the Purchaser 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 the Purchaser, or any indenture,
mortgage, deed of trust, or other material agreement or
instrument to which Purchaser 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
decrees, judgment, or order of any Federal or State
court, Federal or State regulatory body, administrative
agency or other governmental body having jurisdiction
over the Purchaser or any of its properties or assets
(xii) All invitations, offers and sales of or in
respect of any of the Securities, by Purchaser and any
distribution by Purchaser 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 subdivision of any country;
(xiii) Purchaser will not make any offer or
sale of the Securities by any means which would not
comply with the laws and regulation(s) 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 Purchaser nor any of
its affiliates, agents or any other person or entities
at the direction of the Purchaser (collectively
referred to as "Purchaser and its Affiliates") has
entered, has the intention of entering, or will during
the Restricted Period or 30 days prior to 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 or common shares of the
Company.
5
Furthermore, Purchaser and its Affiliates
will not, during the period they own the Debentures,
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 or common shares of the Company.
(XV) PURCHASER represents and warrants that it is an
"accredited investor" as that term is defined in
Regulation D.
(b) No Government Recommendation or Approval.
Purchaser 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. Purchaser acknowledges
that it and its advisors, if any, have had access to or 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
Purchaser. Purchaser further acknowledges that it and its
advisors, if any, have received complete and satisfactory answers
to such inquiries.
(d) Purchaser's Sophistication. Purchaser acknowledges
that the purchase of the Securities involves a high degree of
risk, including the total loss of Purchaser's investment.
Purchaser 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. Purchaser 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.
(a) Reporting Company Status. Seller is a
"Reporting Issuer" as defined by Rule 902 of Regulation S.
Seller has registered its Common Stock, $0.001 par 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 the Nasdaq OTC
Electronic Bulletin Board ("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).
6
(b) Current Public Information. Seller has either
furnished Purchaser with copies of its most recent reports filed
under the Exchange Act referred to in Section 2(c) above, and
other publicly available documents or Purchaser has had access
thereto.
(c) Offshore Transaction. Seller has not offered
any of the Securities to any person in the United States, any
identifiable groups of U.S. Citizens abroad, or to 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
believed the Purchaser was outside of the United States
and was not a U.S. person, based on the representations
of Purchaser.
(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 Purchaser.
(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 sale of the Securities by Seller
pursuant to this Agreement will be made in accordance
with the provisions and requirements of Regulation S
provided that the representations and warranties of
Purchaser in Section 2(a) hereof are true and correct.
(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 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 any of the Securities in the
United States or elsewhere.
7
(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 and enforceable in accordance with
their terms, subject to the laws of bankruptcy and creditors'
rights generally. A sufficient number of shares of Common Stock
issuable upon conversion of the Debentures 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
preemptive rights of any shareholder of Seller, other than has
been disclosed in the Company's annual report(s).
(f) Authority to Enter Agreement. This 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 Agreement and the consummation of the issuance of the
Securities, 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 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. Person, as contemplated by this Agreement.
(i) Prior Shares Issued Under Regulation S. Seller has
not issued any shares of stock under Regulation S since
_____________.
8
(j) Use of Proceeds. Seller represents that the
intended use of the proceeds from this offering is for working
capital.
(k) Filings. ISSUER undertakes and agrees pursuant to
the sale of its securities under Reguation S to make all
necessary filings in connection with the Sale of its securities
as required by the laws and regulations of the United States,
including Form 8-K and mandatory NASDAQ notification. ISSUER
further agrees, with respect to the filing of Form 8-K, that it
will only identify PURCHASER as an "accredited investor" as that
term is defined in Regulation D and will not disclose PURCHASER'S
name in Form 8-K or otherwise unless such disclosure is required
by law.
4. Exemption: Reliance on Representations. Purchaser
understands that the offer and sale of the Securities are not
being registered under the 1933 Act. Seller and Purchaser are
relying on the rules governing offers and sales made outside the
United States pursuant to Regulation S.
5. Transfer Agent Instructions.
(a) Debentures. Upon the conversion of the
Debentures, the holder thereof shall submit such Debentures to
Seller, and Seller shall, within three (3) business days of
receipt of such Debentures, instruct Seller's transfer agent to
issue one or more Certificates representing that number of shares
of Common Stock into which the Debenture or Debentures are
convertible in accordance with the provisions regarding
conversion set forth in Exhibit A hereto. The Seller's transfer
agent or attorney 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. Upon the conversion of any Debentures and upon receipt
by the Company or its attorney of a facsimile or original of
Purchaser's signed Notice of Conversion and Purchaser
Representation Letter (See Exhibits A and B attached hereto)
Seller shall instruct Seller's transfer agent to issue Stock
Certificates without restrictive legend or stop transfer
instructions in the name of Purchaser (or its nominee (being a
non-U.S. Person) or such non-U.S. Persons as may be designated by
Purchaser 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.
Seller warrants that no instructions, other than these
instructions, 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
9
Section 5, however, shall affect in any way Purchaser's or such
nominee's obligations and agreements to comply with all
applicable securities laws upon resale of the Securities.
(c) The holder of the Debenture ("Holder") is
entitled, at its option, at any time commencing 45 days after
issue hereof to convert the original principal amount of the
Debenture into shares of Common Stock , $0.001 par value per
share, of the Company (the "Common Stock"), at a conversion price
for each share of Common Stock equal to the lesser of (a) seventy
percent (70%) of the five day average closing bid price of the
Company's Common Stock for the five (5) trading days immediately
preceding the Conversion Date (as defined below) or (b) 80% of
the five day average closing bid price for the Company's Common
Stock for the five days immediately preceding the Closing Date
(as defined below). The closing shall be deemed to have occurred
on the date the funds are received by the Company (the "Closing
Date"). Such conversion shall be effectuated by surrendering to
the Company, or its attorney, the original Debenture to be
converted together with a facsimile or original of the signed
Notice of Conversion and a facsimile or original of the signed
Purchaser Representation Letter, see Exhibits A and B attached
hereto, which evidences such Holder's intention to convert the
Debenture or a specified portion thereof, and accompanied by
proper assignment, if applicable. No fractional shares or scrip
representing fractions of shares will be issued on conversion,
but the number of shares issuable shall be rounded up or down, as
the case may be, to the nearest whole share. The date on which
Notice of Conversion is effective ("Conversion Date") shall be
deemed to be the date on which the Holder has delivered to the
Company the original Debenture, a facsimile or original of the
signed Notice of Conversion and a facsimile or original of the
signed Purchaser Representation Letter. The Debentures are
subject to a mandatory, 12 month conversion feature at the end of
which all Debentures outstanding will be automatically converted,
upon the terms set forth in this paragraph ("Mandatory Conversion
Date").
(d) Nothing contained in the Debenture or paragraph
(f) hereof, shall be deemed to establish or require the payment
of interest to the Purchaser at a rate in excess of the maximum
rate permitted by governing law. In the event that the rate of
interest required to be paid under the Debenture exceeds the
maximum rate permitted by governing law, the rate of interest
required to be paid thereunder shall be automatically reduced to
the maximum rate permitted under the governing law and any
amounts collected in excess of the permissible amount shall be
deemed a payment of principal. To the extent that such excess
amount exceeds the aggregate principal amount of the Debenture,
such excess shall be returned with reasonable promptness by the
holder to the Company.
10
(e) Within five (5) business days after receipt of the
documentation referred to above in Section 5(c), the Company
shall deliver a certificate, without stop transfer instructions,
representing the number of shares of Common Stock issuable upon
the conversion. It shall be the Company's responsibility to take
all necessary actions and to bear all such costs to issue the
Certificate of Common Stock as provided herein, including the
responsibility and cost for delivery of an opinion letter to the
transfer agent, if so required. The person in whose name the
certificate of Common Stock is to be registered shall be treated
as a shareholder of record on and after the conversion date. No
payment or adjustment shall be made for accrued and unpaid
interest until the earlier of the Conversion Date or the
Mandatory Conversion Date. Upon surrender of any Debentures that
are to be converted in part, the Company shall issue to the
Purchaser a new Debenture equal to the unconverted amount, if so
requested by Purchaser.
(f) In the event the Company does not make delivery of
the Certificate of Common Stock, as instructed by Purchaser,
within 6 business days after the Conversion Date, then in such
event the Company shall pay to Purchaser an amount, in
immediately available funds in accordance with the following
schedule, wherein "No. Business Days Late" is defined as the
number of business days beyond the 6 business days after the
Conversion Date.
Late Payment for Each
$10,000 of Debenture
Principal Amount Being
No. Business Days Late Converted
1 $100
2 $200
3 $300
4 $400
5 $500
6 $600
7 $700
8 $800
9 $900
10 $1,000
>10 $1,000 + $200 for each
Business Days Late Beyond 10 Days
11
To the extent that the failure of the Company to issue the
Certificate of Common Stock pursuant to this Section 5(f) is due
to the unavailability of authorized but unissued shares of Common
Stock, the provisions of this Section 5(f) shall not apply but
instead the provisions of Section 5(g) shall apply.
The Company shall pay any payments incurred under this
Section 5(f) in immediately available funds within three (3)
business days from the date of issuance of the applicable
Certificates of Common Stock. Nothing herein shall limit a
Purchaser's right to pursue actual damages for the Company's
failure to issue and deliver the applicable Certificate of Common
Stock to the Holder within 6 business days after the Conversion
Date.
The Company recognizes the right of Purchaser to assign any
portion of the Debentures to another non-U.S. Person during the
40 day restricted period and to assign any portion of the
Debentures to another non-U.S. Person or U.S. person or entity
after the 40 day restricted period.
(g) If, at any time Purchaser submits a Notice of
Conversion and the Company does not have sufficient authorized
but unissued shares of Common Stock available to effect, in full,
a conversion of the Debentures (a "Conversion Default", the date
of such default being referred to herein as the "Conversion
Default Date"), the Company shall issue to the Purchaser a
certificate representing all of the shares of Common Stock which
are available, and the Notice of Conversion as to any Debentures
requested to be converted but not converted (the "Unconverted
Debentures") shall become null and void. The Company shall
provide notice of such Conversion Default ("Notice of Conversion
Default") to all existing Purchasers of outstanding Debentures,
by facsimile, within one (1) business day of such default (with
the original delivered by overnight or two day courier). No
Holder may submit a Notice of Conversion after receipt of a
Notice of Conversion Default until the date additional shares of
Common Stock are authorized by the Company. The Company agrees
to pay to all Purchasers of outstanding Debentures payments for a
Conversion Default ("Conversion Default Payments") in the amount
of (N/365) x (.24) x the initial issuance price of the
outstanding Debentures held by each Purchaser where N = the
number of days from the Conversion Default Date to the date (the
"Authorization Date") that the Company authorizes a sufficient
number of shares of Common Stock to affect conversion of all
remaining Debentures. The Company shall send notice
("Authorization Notice") to each Purchaser of outstanding
Debentures that additional shares of Common Stock have been
authorized, the Authorization Date and the amount of Holder's
accrued Conversion Default Payments. The accrued Conversion
Default shall be paid in cash or shall be convertible into Common
Stock at the Conversion Rate, at the Purchaser's option, payable
as follows: (i) in the event Purchaser elects to take such
payment in cash, cash payments shall be made to such Purchaser of
12
outstanding Debentures by the fifth day of the following calendar
month, or (ii) in the event Purchaser elects to take such payment
in stock, the Purchaser may convert such payment amount into
common stock at the Conversion Rate at anytime after the 5th day
of the calendar month following the month in which the
Authorization Notice was received, until the expiration of the
mandatory 36 month conversion period.
Nothing herein shall limit the Purchaser's right to pursue actual
damages for the Company's failure to maintain a sufficient number
of authorized shares of common stock.
6. Closing Date and Escrow Agent. Closing shall
be affected through delivery of funds and Debentures to the
Escrow Agent. Purchaser shall forthwith deliver the necessary
funds as indicated in Paragraph 1 to the Escrow Agent. A
Debenture(s) will be delivered at the instructions of the Company
to the Escrow Agent: Xxxxxx X. XxXxxxx, Esquire, 0000 Xxxxxxxxxx
Xxxxxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000. Purchaser and the Company
agree that the Escrow Agent, in his capacity as Escrow Agent, has
no liability as a result of any fraudulent or unlawful conduct of
any party other than the Escrow Agent and agree to hold the
Escrow Agent harmless in such event. In the event the
Debenture(s) are not received by the Escrow Agent from the
Company within Five (5) Business Days of the date of receipt of
the Escrowed Funds, the Escrow Agent shall return the Escrowed
funds without interest to the Purchaser by wire transfer pursuant
to written instructions.
7. Delivery Instructions. The Debenture being
purchased hereunder shall be delivered to Xxxxxx X. XxXxxxx,
Esq. as Escrow Agent, who will hold the Debenture in escrow until
funds have been wired to the Company less, placement fees, at
which time the Escrow attorney shall then have the Debenture
delivered to the Purchaser outside the United States.
8. Conditions To Seller's Obligation to Sell. Seller's
obligation to sell the Debentures is conditioned upon:
(a) The receipt and acceptance by Purchaser of this
Agreement as evidenced by execution of this Agreement by
Purchaser.
(b) Delivery to the Escrow Agent, pursuant to
Paragraph 6 herein, of good funds by Purchaser as payment in full
of the purchase price of the Debentures.
9. Conditions To Purchaser's Obligation To Purchase.
Purchaser's obligation to purchase the Debentures is conditioned
upon:
13
(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 the Debentures to the Escrow Agent as
described in Paragraph 6 herein.
10. Offering Materials. All offering materials and
documents used in 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
Purchaser, nor any direct or indirect purchaser of the Securities
from Purchaser, may directly or indirectly offer or sell the
Securities in the United States or to 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, Purchaser, any
other distributor,
any of their respective affiliates, or any person acting on
behalf of any of the foregoing.
11. No Shareholder Approval. Seller hereby agrees that
after the Closing Date it will take all appropriate action to
authorize the issuance of the Certificate of Common Stock upon
the conversion of the Debentures and that no shareholder approval
is required for such action. If an opinion of counsel is
required, Company shall arrange for such an opinion to be
provided at Company's sole cost and expense.
12. Lock-up/Right of First Refusal. During the three (3)
month period following the Closing Date, the Company agrees not
to conduct any further Regulation S offerings, unless such
offerings are conducted with Purchaser.
13. Change in Regulation S. During the twelve month period
following issuance of the Debentures, if there is any change in
Regulation S that would restrict the conversion of the Debentures
into Common Stock according to the terms and conditions set forth
in this Agreement, then in such event the Company shall
immediately seek registration by way of a Form S-3 filing. All
such action required by the Company to complete the registration
shall be done as soon as possible at the Company's sole cost and
expense.
14
14. Independent Counsel. The undersigned acknowledge that
they have been advised to consult with their own attorneys and
financial advisors regarding this Agreement.
15. Arbitration. The parties shall resolve any dispute
arising hereunder before a panel of three arbitrators selected
pursuant to and run in accordance with the rules of the American
Arbitration Association. The arbitration shall be held in New
York, New York. The winning party shall be entitled to an award
of reasonable attorney's fees and costs. Disputes under this
Agreement as well as all of the terms and conditions of this
Agreement shall be governed in accordance with and by the laws of
the State of Florida.
16. Miscellaneous.
(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, expressed 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 Agreements, except as
expressly provided herein.
(b) Purchaser is an independent contractor, and is not
the agent of Seller. Purchaser 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. Seller 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 Agreement by Seller and Purchaser shall survive the closing
the transactions contemplated by this Agreement.
15
(e) This Agreement shall be construed in accordance
with the internal laws of the State of Florida, 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
Agreement shall be effective as an original. Wherever used, the
singular number shall include the plural, and the plural the
singular, and the use of any gender shall be applicable to all
genders.
IN WITNESS WHEREOF, the undersigned have executed this Agreement
as of the date first set forth above.
Official Signatory of Seller:
SYSTEMS COMMUNICATIONS, INC.
By: ______________________________
Xxxxxxx Xxxxxxxx
Title: CEO
Official Signatory of Purchaser: ________________________
By: ___________________________
Title: __________________________
______________________________
Country of Execution
Address of Purchaser: ________________________________
Phone ________________________________
Fax ________________________________
