EXHIBIT 10(b)
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OFFSHORE SECURITIES PURCHASE AGREEMENT
This Offshore Securities Purchase Agreement (this "Agreement"), dated as of
the 30th day of January, 1998, is entered into by and between EMB Corporation, a
corporation organized under the laws of the state of Hawaii (the "Issuer"), and
the purchaser or purchasers identified in Schedule I hereto, each a separate
purchaser (the "Purchaser").
WHEREAS, the parties desire that, upon the terms and subject to the
conditions contained herein, the Issuer shall issue and sell to the Investor and
the Purchaser shall purchase from the Issuer one or more offshore convertible
notes (the "Notes") convertible from time to time, in accordance with the terms
thereof, into shares of the Common Stock, no par value (the "Common Stock"), of
the Issuer (the "Conversion Shares") together with a warrant to purchase one
share of Common Stock for each Ten Dollars ($10.00) of Notes purchased (the
"Warrant") (collectively the "Securities"); and
WHEREAS, such investment will be made outside the United States in reliance
upon the provisions of Regulation S ("Regulation S") of the United States
Securities Act of 1933, as amended and the regulations promulgated thereunder
(the "Securities Act"), and/or upon such other exemption from the registration
requirements of the Securities Act as may be available with respect to the
investment in the Note and Warrant and the issuance and/or resale of the
Conversion Shares to be made hereunder or under the Note, or the issuance and
resale of the Shares, purchasable upon exercise of any Warrant (the "Warrant
Shares").
NOW, THEREFORE, the parties hereto agree as follows (except as otherwise
provided, capitalized terms used but not otherwise defined herein shall have
their respective meanings set forth in the Note):
1. PURCHASE AND SALE OF THE SECURITIES. On the basis of the
representations and warranties, and subject to the terms and conditions, all as
set forth in this Agreement, the Issuer hereby covenants and agrees to sell to
the Purchaser on the Closing Date (as defined below), at the purchase price set
forth herein (the "Purchase Price"), one or more Notes in registered form and
substantially in the form of Exhibit A hereto (the "Note") together with the
associated Warrants and Purchaser agrees to purchase, pay for and accept the
Note and Warrants from Issuer. Each such Note shall be convertible at the sole
option of the holder thereof into
a number of Conversion Shares determined pursuant to Article 3 of the Note.
2. CLOSING. The closing of the purchase and sale of the Securities
pursuant to Section 1 hereof shall take place on the 30th day of January, 1998,
at the law offices of D. Xxxxx Xxxxx, Esq. located at Xxxxx 000, 000 X.
Xxxxxxxx, Xxxxxxx, Xxx Xxxx 00000, or on such other date and at such other time
and place as the Purchaser and the Issuer may agree upon in writing prior
thereto (such time and date, the "Closing Date").
The duly executed Note and Warrants to be purchased by the Purchaser shall
be delivered by, or on behalf of, the Issuer at the offices of Xxxxx X.
Xxxxxxxxx, Esq., as Escrow Agent against payment of the Purchase Price therefor
in immediately available funds by, or on behalf of, the Purchaser. Delivery of
such Securities shall be in accordance with the instructions of the Purchaser,
and in the Purchaser's name.
The Purchase Price for the Securities shall be One Hundred Percent (100%)
of the face amount of each Note issued hereunder.
3. REPRESENTATIONS AND WARRANTIES OF THE ISSUER. The Issuer represents
and warrants to, and agrees with, the Purchaser that:
(a) The Issuer has been duly incorporated and is validly existing as a
corporation under the laws of the state of Hawaii.
(b) This Agreement has been duly authorized, executed and delivered by the
Issuer and constitute a valid and binding agreement, enforceable in accordance
with its terms, and the Issuer has full corporate power and authority necessary
to enter into such agreements and to perform its obligations thereunder.
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(c) No consent, approval, authorization or order of any court,
governmental agency or body or arbitrator having jurisdiction over the Issuer or
any of its affiliates is required for execution of this Agreement and the
performance of Issuer's obligations under such agreements, including, without
limitation, the issuance and sale of the Note and the Conversion Shares, the
Warrant and the Warrant Shares.
(d) Neither the sale of the Securities pursuant to this Agreement, nor
the performance of its obligations under this Agreement, by the Issuer will (i)
violate, conflict with, result in a breach of, or constitute a default (or an
event which with the giving of notice or the lapse of time or both would be
reasonably likely to constitute a default) under (A) the articles of
incorporation or by-laws of the Issuer, (B) any decree, judgment, order, law
treaty, rule, regulation or determination applicable to the Issuer of any court,
governmental agency or body, or arbitrator having jurisdiction over the Issuer
or over the properties or assets of the Issuer, (C) the terms of any bond,
debenture, note or any other evidence of indebtedness, or any agreement, stock
option or other similar plan, indenture, lease, mortgage, deed of trust or other
instrument to which the Issuer is subject, or (D) the terms of any "lock-up" or
similar provision of any underwriting or similar agreement to which the Issuer
is a party; or (ii) result in the creation or imposition of any lien, claim or
other encumbrance upon the Note, the Conversion Shares, the Warrant, the Warrant
Shares or any of the assets of the Issuer.
(e) The Note and Warrant, when issued and delivered pursuant to this
Agreement, will have been duly authorized, executed, issued and delivered and
will constitute a legal, valid, binding and enforceable obligation of the
Issuer, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights generally and to general principles of equity; and the Issuer
has full corporate power and authority necessary to issue and execute the Note
and to perform its obligations thereunder.
(f) The Conversion Shares, when issued, and Warrant Shares, if issued,
upon exercise of any Warrant (i) will be free and clear of any security
interests, liens, claims or other encumbrances; (ii) will be duly and validly
authorized and issued; (iii) will be fully paid and nonassessable; (iv) will not
have been issued or sold in violation of any preemptive or other similar rights
of the holders of any securities of the Issuer; (v) will not subject the holders
thereof to personal liability by reason of being such holders.
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(g) The Issuer is a Reporting Company within the meaning of the Securities
and Exchange Act of 1934 as among ("Exchange Act") and has filed all reports
required to be filed by in accordance with the Exchange Act during the preceding
12 months, and has been subject to such filing requirements for the past 90
days.
(h) No offer of the Note or Conversion Shares either alone or together
with the Warrant and Warrant Shares was made by the Issuer to a person in the
United States.
(i) The Issuer, any affiliate of the Issuer, and any person acting on
behalf of the Issuer or any such affiliate (i) have not engaged in any Directed
Selling Efforts (as defined in Regulation S, "Directed Selling Efforts") with
respect to the Securities, (ii) have complied with the Offering Restrictions
requirements of Regulation S and (iii) have complied with all other applicable
requirements of Regulation S and state securities laws.
(j) The transactions contemplated by this Agreement (i) have not been pre-
arranged with a purchaser who is in the United States or is a U.S. Person and
(ii) are not part of a plan or scheme to evade the registration provisions of
the Securities Act.
(k) Other than the Securities being sold in this transaction, the Issuer
has not offered to sell, sold or issued any common stock or warrants or other
securities convertible into its common stock in a transaction involving
Regulation S during the twelve months preceding the data hereof, and there are
no outstanding warrants or other securities convertible into its common stock
which have been sold in a transaction involving Regulation S.
(l) There is no pending or, to the best knowledge of the Issuer,
threatened action, suit, proceeding or investigation before any court,
governmental agency or body, or arbitrator having jurisdiction over the Issuer
or any of its affiliates that would materially affect the performance of its
obligations under, this Agreement or the Note.
(m) The Issuer, any person representing the Issuer, and, to the best
knowledge of the Issuer, any other person selling or offering to sell the
Securities in connection with the transaction contemplated by this Agreement,
have not made, at any time, any oral communication in connection with the offer
or sale of the Securities which contained any untrue statement of a material
fact or omitted to state any material fact necessary in order to make the
statements, in the light of the circumstances under which they were made, not
misleading.
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(n) Except as disclosed to the Purchaser or any of its affiliates, the
Issuer is not in possession of any material non-public information that, if
publicly disclosed, would, or could reasonably be expected to, have a material
adverse effect on the price of the Issuer's Securities.
(o) Assuming the accuracy of, and compliance with, the representations,
warranties and covenants of the Purchaser in this Agreement, the sale of the
Note pursuant to this Agreement will have been made in accordance with the
provisions and requirements of Regulation S and any applicable state law and the
conversion of the Note and the issuance of the Conversion Shares, and the
exercise of the Warrant and issuance of the Warrant Shares shall comply with the
provisions and requirements of Regulation S and any applicable state law.
(p) The Issuer has furnished or made available to the Purchaser a full and
complete set of its most recent definitive proxy statement in connection with
its annual meeting of stockholders, its Annual Report on Form 10-K for its most
recently completed fiscal year and any Form 10-Q's and/or 8-K's filed since the
date of its most recent 10-K (collectively, the "SEC Documents").
(q) Except as set forth on Schedule of Exemptions, the Issuer has good
title to all of its assets or property of any kind, real or personal and is the
sole legal owner thereof, free and clear of all security interests, mortgages,
pledges, hypothecations, assignments, deposit arrangements, encumbrances, liens
(statutory or other), or preferences, priority or other security agreements or
preferential arrangements of any kind or nature whatsoever.
(r) Except as set forth on Schedule of Exceptions, the Issuer has filed
all tax returns required to be filed by it. The Issuer has paid all taxes and
other governmental charges due pursuant to such returns or pursuant to any
assessment received by the Issuer. The charges, accruals and reserves on the
books of the Issuer in respect of any taxes or other governmental charges are
adequate in the aggregate to provide for the liabilities in respect thereof.
(s) Except as set forth on Schedule of Exceptions, the Issuer has not
established and does not maintain or contribute to any employee benefit plan
that is covered by Title IV of the Employee Retirement Income Security Act of
1974, as amended.
4. REPRESENTATION, WARRANTIES AND COVENANTS OF THE PURCHASER. The
Purchaser understands, and represents and warrants to, and agrees with, the
Issuer, that:
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(a) The Purchaser is not a U.S. Person and is not an affiliate of the
Issuer.
(b) No offer of the Securities was made to the Purchaser in the United
States; and at the time the buy order for the Securities was originated the
Purchaser was located outside the United States.
(c) The Purchaser, its affiliates and any persons acting on behalf of the
Purchaser or any such affiliates (i) have not engaged in any Directed Selling
Efforts with respect to the Securities, (ii) have complied with the Offering
Restrictions requirements of Regulation S and (iii) have complied with all other
applicable requirements of Regulation S and state law.
(d) The transactions contemplated by this Agreement (i) have not been pre-
arranged with a purchaser who is located in the United States or is a U.S.
Person and (ii) are not part of a plan or scheme to evade the registration
provisions of the Securities Act.
(e) The Purchaser is purchasing the Securities for its own account for the
purpose of investment and not (i) with a view to, or for sale in connection
with, any distribution thereof or (ii) for the account or on behalf of any U.S.
Person.
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(f) The Purchaser is aware that the Securities have not been and will not
be registered under the Securities Act and may only be offered or resold
pursuant to registration under the Securities Act or an available exemption
therefrom.
(g) The Purchaser understands that no federal or state agency has passed
on or made any recommendation or endorsement of the Securities.
(h) The Purchaser understands that the Securities are being offered and
sold to it in reliance on specific exemptions from the registration requirements
of federal and state securities laws and that the Issuer is relying upon the
truth and accuracy of the representations, warranties, agreements,
acknowledgments and understandings of the Purchaser set forth herein in order to
determine the applicability of such exemptions and the suitability of the
Purchaser to acquire the Securities.
(i) The Purchaser has all requisite right, power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. All action on the party of the Purchaser, members or partners necessary
for the authorization, execution, delivery and performance of this Agreement,
and the purchase of the Securities. The Purchaser's signatory has all right,
power, authority and capacity to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. This Agreement has been duly
executed and delivered by the Purchaser and will constitute the legal, valid and
binding obligations of the Purchaser, enforceable in accordance with its terms
subject to laws of general application relating to bankruptcy, insolvency and
the relief of debtors and rules of law governing specific performance,
injunctive relief or other equitable remedies, and to limitations of public
policy as they may apply to the indemnification provisions set forth
hereinafter.
(j) Purchaser is an "accredited investor" as defined in Rule 501(a) of
Regulation D under the Securities Act. Purchaser is aware of the Company's
business affairs and financial condition and has had access to and has acquired
sufficient information about the Company, including but not limited to the
Reports, to reach an informed and knowledgeable decision to acquire the
Securities.
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Purchaser has such business and financial experience as is required to give it
the capacity to protect its own interests in connection with the purchase of the
Note and Conversion Shares.
(k) Without otherwise limiting its ability to resell the Securities,
Purchaser represents that it is purchasing the Securities and for its own
account as principal for investment purposes only, and not with a view to a re-
distribution thereof. Purchaser understands that its acquisition of the
Securities have not been registered under the Securities Act or registered or
qualified under any state securities law in reliance on specific exemptions
therefrom, which exemptions may depend upon, among other things, Purchaser's
representations. Purchaser will not, directly or indirectly, offer, sell,
pledge, transfer or otherwise dispose of (or solicit any offers to buy,
purchaser or otherwise acquire or take a pledge of) any of the Note or
Conversion Shares, Warrants or Warrant Shares except in compliance with the
Securities Act and any applicable state securities laws, and the rules and
regulations promulgated thereunder, including the exemption provided by
Regulation S.
(l) Purchaser understands that nothing in this Agreement or any other
materials presented to Purchaser in connection with the purchase and sale of the
Securities constitutes legal, tax or investment advice. Purchaser has consulted
such legal, tax and investment advisors as it, in its sole discretion, has
deemed necessary or appropriate in connection with its purchase of the Preferred
Stock and the Warrants.
(m) Purchaser hereby represents and warrants that the Purchaser has
carefully examined SEC Documents, and the financial statements contained
therein. The Purchaser acknowledges that the Company has made available to the
Purchaser all documents and information that it has requested relating to the
Issuer and has provided answers to all of its questions concerning the Issuer,
the Securities.
(N) THE PURCHASER RECOGNIZES THAT THE PURCHASE OF THE SECURITIES INVOLVES A
HIGH DEGREE OF RISK IN THAT:
(I) AN INVESTMENT IN THE ISSUER IS SPECULATIVE AND ONLY INVESTORS WHO CAN
AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT SHOULD CONSIDER INVESTING IN THE
ISSUER;
(II) THE PURCHASER WILL NOT BE ABLE TO IMMEDIATELY LIQUIDATE ITS
INVESTMENT;
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(III) TRANSFERABILITY OF THE NOTE IS EXTREMELY LIMITED;
(IV) IN THE EVENT OF ANY DISPOSITION OF THE NOTE PURCHASER COULD SUSTAIN
SUBSTANTIAL LOSSES ON ITS INVESTMENT;
(V) THE HOLDERS OF THE NOTE ARE NOT ENTITLED TO A VOTE IN THE BUSINESS AND
AFFAIRS OF THE COMPANY;
(VI) WHILE THE COMMON STOCK IS PRESENTLY QUOTED AND TRADED ON THE
ELECTRONIC BULLETIN BOARD MARKET, THERE IS NO ASSURANCE THAT THERE WILL BE
A MARKET FOR THE CONVERSION SHARES ON THE BULLETIN BOARD OR ANY ORGANIZED
MARKET OR QUOTATION SYSTEM; AND
(VII) THERE IS NO MARKET FOR THE WARRANTS AND WARRANT SHARES AND EXERCISE
OF THE WARRANTS WILL REQUIRE ADDITIONAL CASH PAYMENT TO THE ISSUER BY THE
HOLDER OF THE WARRANTS.
5. COVENANTS OF THE ISSUER. The Issuer covenants and agrees with the
Purchaser to:
(a) continue to comply with all applicable reporting requirements of the
Exchange Act;
(b) refrain from engaging, and insure that none of its affiliates will
engage, in any Directed Selling Efforts with respect to the Securities;
(c) ensure that all Offering Restrictions applicable to the sale of
Securities, including the issuance of the Conversion Shares, pursuant to this
Agreement are thoroughly complied with and satisfied;
(d) continue to comply, and to cause its affiliates and any person acting
on behalf of the Issuer or any affiliate to comply, with all other applicable
requirements of Regulation S and state law with respect to the offer and sale of
the Securities;
(e) to reserve for issuance, free from preemptive rights, a sufficient
number of shares of Common Stock to satisfy the conversion rights of the
Purchaser pursuant to the terms and conditions of the Note, including issuance
to the holder of any Note, upon conversion to Conversion Shares and written
request of such holder, of additional shares in lieu of interest ("Interest
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Shares") accrued to the date of any such conversion (the term "Conversion
Shares" as used herein includes "Interest Shares");
(f) Upon the conversion of any Debenture up to the total of the
"Conversion Amount" (as defined in the Note) and 40 days after the issuance of
any Interest Shares (as defined in the Note) and/or "Warrant Shares" by a person
who is a non-U.S. Person, Issuer shall instruct Issuer's transfer agent to issue
Stock Certificates up to the total of the "Conversion Amount" (as defined in the
Note) and 40 days after the "Interest Shares" and/or Warrant Shares without
restrictive legend 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 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 and/or
exercise, as applicable, provided, however, that Purchaser acknowledges that no
transfers in the United States or to United States persons may be made during
the Restricted Period. Issuer 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 respective Restricted Period of
the Conversion Shares and Interest Shares and/or Warrant Shares, if any, 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 Issuer.
Nothing in this 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 and the restrictions on resale set forth in
Section 12;
(g) It shall be the Issuer'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, provided Purchaser provides such
certificates and information as may be reasonably required to support that
opinion. 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. The Issuer shall only be required to convert the debenture in
minimum amounts of $10,000. Upon surrender of any Note that are to be converted
in part, the Company shall issue to the Purchaser a new Note equal to the
unconverted amount, if so requested by Purchaser;
(h) to notify the Purchaser promptly if at any time during the period
beginning on the date of this Agreement and ending on the Closing Date (i) any
event shall occur as a result of which any oral communication made by the
Issuer, any person representing the Issuer, or, to the best knowledge of the
Issuer, by any other
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person in connection with the transactions contemplated by this Agreement would
include an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or (ii) there is any
public disclosure of material information regarding the Issuer or its xxxxx cial
condition or results of operation; and
(i) to register, if so requested by the Purchaser or any permitted
Noteholder, the Conversion Shares and/or any Warrant Shares issuable hereunder
for sale, or resale, by the holders thereof, in the United States in accordance
with the Securities Act, including the preparation and filing, at the sole
expense of the Issuer, of a Registration Statement with respect thereto, with
any cost or expense to the Purchaser or any such holders, except for
underwriting costs or discounts with respect to any resale arrangements made by
the Purchaser or any subsequent holder. Any such Registration Statement shall
be processed to effectivity as promptly as practicable.
6. COVENANTS OF THE PURCHASER. The Purchaser covenant sand agrees with
the Issuer to:
(a) refrain from engaging, and cause its affiliates and any person acting
on behalf of the Purchaser or any such affiliate to refrain from engaging, in
any Directed Selling Efforts with respect to the Securities;
(b) comply, and to cause its affiliates or any other person acting on
behalf of the Purchaser or any affiliate to comply, with the Offering
Restrictions, and any other applicable requirements, of Regulation S;
(c) refrain, during the period commencing on the Closing Date and ending
on the fortieth day thereafter (the "Restricted Period"), from offering or
selling the Note in the United States, to a U.S. Person or for the account or
benefit of a U.S. Person other than in accordance with Rule 903 or Rule 904 of
Regulation S; and
(d) not to offer, sell, pledge or otherwise transfer the Securities, or
any part thereof, until after the expiration of the Restricted Period, and
thereafter only in accordance with any available exemption from the Securities
Act, and in accordance with applicable state securities laws, or any effective
registration under the Securities Act in accordance with 5(i) hereof.
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7. CONDITIONS PRECEDENT TO THE PURCHASER'S OBLIGATIONS. The obligations
of the Purchaser hereunder are subject to the performance by the Issuer of its
obligations hereunder and to the satisfaction of the following additional
conditions precedent:
(a) The representations and warranties made by the Issuer in this
Agreement shall, unless waived by the Purchaser, be true and correct in all
material respects as of the date hereof and at the Closing Date, with the same
force and effect as if they had been mad eon and as of the Closing Date.
(b) The Issuer will provide an opinion or opinions of counsel confirming
in substance the representations and warranties set out in paragraphs (a)
through (g) of Section 3 above.
(c) None of the following shall have occurred: (i) any general suspension
of trading in, or limitation on prices listed for the Common Stock on the
NASDAQ, (ii) a declaration of a banking moratorium or any suspension of payments
in respect to banks in the United States, (iii) a commencement of a war, armed
hostilities or other international or national calamity directly or indirectly
involving the United States, (iv) in the case of the foregoing existing at the
date of this Agreement, a material acceleration or worsening thereof.
8. CONDITIONS PRECEDENT TO THE ISSUER'S OBLIGATIONS. The obligations of
the Issuer hereunder are subject to the performance by the Purchaser of its
obligations hereunder and to the satisfaction of the condition that the
representations and warranties made by the Purchaser in this Agreement shall,
unless waived by the Issuer, be true and correct in all material respects as of
the date hereof and at the Closing Date, with the same force and effect as if
they had been made on and as of the Closing Date.
9. FEES AND EXPENSES. Each of the Purchaser and the Issuer agrees to pay
its own expenses incident to the performance of its obligations hereunder,
except that the fees, expenses and disbursements of the Purchaser's counsel, up
to Five Thousand Dollars ($5,000) shall be paid by the Issuer. In addition, the
Issuer shall be solely responsible for any commission and brokerage fees due to:
Vengua Capital Markets, Ltd., who the parties agree arranged this transaction.
Purchaser shall pay for any other representative employed by it with respect
hereto.
10. SURVIVAL OF THE REPRESENTATIONS, WARRANTIES, ETC. The respective
agreements, representations, warranties, indemnities and other statements made
by or on behalf of the Issuer and the Purchaser, respectively, pursuant to this
Agreement, shall remain
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in full force and effect, regardless of any investigation made by or on behalf
of the other party to this Agreement or any officer, director or employee of, or
person controlling or under common control with, such party and will survive
delivery of any payment for the Securities.
11. INDEMNIFICATION. The Issuer agrees to indemnify the Purchaser and its
officers, directors employees, agents and affiliates in respect of, and hold
each of them harmless from and against, any and all damages, fines, fees,
penalties, deficiencies, losses and expenses (including without limitations
interest, court costs, reasonable attorneys fees, accountants and other experts
or other expenses of litigation or other proceedings or of any claim, default or
assessment) ("Losses") suffered, incurred or sustained by any of them or to
which any of them becomes subject, resulting from, arising out of or relating to
any misrepresentations, breach of warranty or nonfulfillment of or failure to
perform any covenant or agreement on the part of Issuer contained in this
Agreement, as such expenses are incurred, unless such Loss results primarily
from the Purchaser's gross negligence, recklessness or bad faith with respect to
the matters which are the subject of this Agreement.
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12. NOTICES. Any notice or other communication in connection with this
Agreement shall be in writing and shall be deemed to be delivered if(i) actually
delivered to the following address, (ii) sent by facsimile to the following
facsimile number and a transaction confirmation is received or (iii) sent by
certified or registered mail, postage prepaid, return receipt requested to the
following address and 6 business days lapse after deposit in the mail:
If to the Purchaser, to:
At the address for such Purchaser as set forth in Schedule I hereto,
with a copy to (which communication shall not constitute notice):
Xxxxx X. Xxxxxxxxx, Esq.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
If to the Issuer, to:
EMB Corporation
0000 Xxxxxxx, 0xx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Telephone: (000)000-0000
Facsimile: (000)000-0000
Attention: Xx. Xxxxxx Xxxxx
with copy to (which communication shall not constitute notice):
D. Xxxxx Xxxxx, Esq.
Jericho Atrium
Xxxxx 0000
000 Xx. Xxxxxxxx
Xxxxxxx, Xxx Xxxx 00000
Telephone: (000)000-0000
Facsimile: (000)000-0000
or to such other name(s) or to such other address(es) or telecopier number(s) as
a party may designate from time to time to the other party by written notice.
13. THIRD PARTY BENEFICIARY. Any permitted transferee of any part of the
principal amount of the Note or the Conversion Shares shall be a third party
beneficiary of the Issuer's obligations under this Agreement, and the Note. Such
person shall have all the rights of a third party beneficiary with respect to
the enforcement
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against the Issuer of any provision of this Agreement, and the Note.
14. DELIVERY OF STOCK. At any time on or after the forty-first (41st) day
following the Closing Date, the Issuer will permit the Purchaser including any
permitted transferee to exercise its right to convert the Note by telecopying an
executed and completed Notice of Conversion to the Issuer and delivering within
six (6) business days thereafter, the original Notice of Conversion and Note by
express courier. Each date on which a Notice of Conversion is telecopied to and
received by the Issuer in accordance with the provisions hereof shall be deemed
a Conversion Date. The Issuer will transmit the certificates representing the
shares of Common Stock of the Issuer Issued at Conversion and the newly issued
Note representing the amount of the Note which remains unconverted to the
Purchaser via express courier within six (6) business days after receipt by the
Issuer of the original Notice of Conversion and the Note, or provide written
instructions to its transfer agent within such time period to so deliver the
shares of Common Stock, with a copy to Purchaser.
15. LIQUIDATED DAMAGES FOR FAILURE TO DELIVER. The Issuer understands and
agrees that a delay beyond the deadline for delivery, specified this Agreement
could result in economic loss to the Purchaser. As compensation to the
Purchaser for such loss, the Issuer agrees to liquidated damages in the form of
late payments to the Purchaser for the late issuance of shares issuable at
conversion where delivery is more than six (6) business days after the
Conversion Date:
Five Hundred ($500.00) Dollars for each such day for each Note (of $10,000 or
more of Principal Amount) being converted.
The Issuer shall pay any payments incurred under this Section 15 in immediately
available funds upon demand. Nothing herein shall limit a Purchaser's right to
pursue actual damages for the Issuer's failure to issue and deliver Common Stock
to the Purchaser.
In addition, Issuer shall
(a) hold the Purchaser harmless against any loss, claim or damage arising
from or as a result of such failure by the Issuer (including, without
limitation, any such loss, claim or damage resulting from an obligation to
resell the Common Stock of the Issuer Issued at Conversion); and
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(b) reimburse the Purchaser for all of its out-of-pocket expenses,
including reasonable fees and disbursements of its counsel, incurred by the
Purchaser.
16. TIME OF ESSENCE. TIME SHALL BE OF THE ESSENCE IN THIS AGREEMENT.
17. RESPONSIBILITY OF ESCROW AGENT.
The Escrow Agent shall not have any responsibility to either party
hereunder, except to transmit funds actually received from Purchaser to Issuer
or to Issuer's attorney, at Issuer's written instruction, in exchange for
physical delivery of the Securities, and to remit the Securities to Purchaser,
at Purchaser's written instruction, and otherwise only for Escrow Agent's
intentional acts of wrongdoing or gross negligence. The parties agree that
Escrow Agent is Broker's counsel and serving as Escrow Agent solely as an
accommodation to the parties.
18. MISCELLANEOUS.
(a) This Agreement may be executed in one or more counterparts and it is
not necessary that signatures of all parties appear on the same counterpart, but
such counterparts together shall constitute but one and the same agreement.
(b) This Agreement shall inure to the benefit of and be binding upon the
parties hereto, their respective successors and permitted assigns.
(c) This agreement shall be governed by, and construed in accordance with,
the laws of the State of New York.
(d) Any claim arising hereunder against the Issuer will be litigated
solely in the courts of the United States of America.
(e) The headings of the sections of this document are solely for
convenience of reference only and shall not be deemed to be a part of this
Agreement.
(f) The provisions of this Agreement are severable, and if any clause or
provision shall be held invalid, illegal or unenforceable in whole or in part in
any jurisdiction, then such invalidity or unenforceability shall affect in that
jurisdiction only such clause or provision, or part thereof, and shall not in
any manner affect such clause or provision in any other jurisdiction or any
other clause or provision of this Agreement in any jurisdiction.
16
(f) This Agreement, including the schedules and exhibits hereto,
constitutes the sole and entire agreement of the parties with respect to the
subject matter hereof, and the same may not be modified or amended otherwise
than by a writing signed by the party to be changed.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officer(s) of each party hereto as of the date first above
written.
EMB CORPORATION
-------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
PURCHASER
Signature on Schedule I
-------------------------
ESCROW AGENT
-------------------------
Xxxxx X. Xxxxxxxxx, Esq.
17
SCHEDULE I
EMB CORPORATION
OFFSHORE SECURITIES PURCHASE AGREEMENT
JANUARY 30, 1998
SUBSCRIPTION
The undersigned Purchaser hereby subscribes to Securities of EMB
Corporation in the principal amount of U.S.$________________
__________________________________________(fill out in numbers and words).
This schedule is annexed to an Offshore Purchase Agreement dated as of the
30th day of January, 1998 (the "Agreement').
The Purchaser is acquiring one or more offshore convertible notes ("Notes")
in the principal amount set forth above, together with Warrants to purchase one
share of EMB Common Stock for each Ten Dollars ($10.00) of Note purchased.
The Purchaser is not a U.S. Person as such term is defined by Regulation S
promulgated under the United States Securities Act of 1933, as amended. The
Purchaser has received and reviewed, or had its counsel review, the terms and
conditions of the Agreement.
Name of Holder:
----------------------------------------------------
Address:
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Signature:
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(Print Name and Title of Signatory)
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