OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT
Electrosource, Inc./Buyer
October 10, 1995
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 (hereinafter
the "Agreement") has been executed by the undersigned in
connection with the sale of certain shares of common stock
(hereinafter the "Shares") of Electrosource, Inc. (XXXX), 0000 X
Xxxxxxxx Xxxxx, Xxxxxx, Xxxxx, a corporation organized under the
laws of Delaware (hereinafter "Seller") to [Buyer], located
[Address], a corporation organized under the laws of [area of
incorporation] (hereinafter "Buyer"). Seller and Buyer
(hereinafter collectively the "parties") each hereby represents,
warrants and agrees as follows:
Section 1
AGREEMENT TO SUBSCRIBE PURCHASE PRICE
1.1 Buyer hereby subscribes for [written amount of
shares] (#) Shares of (XXXX) common stock at ($___) U.S. per
share for an aggregate purchase price of [written dollar
amount] ($) U.S. payable in United States Dollars.
1.2 Buyer shall pay the purchase price by delivering
same day funds in United States Dollars to an escrow agent
or as otherwise agreed between the parties, to be delivered
to the order of Seller upon Delivery of the Shares.
1.3 This Agreement has been executed in connection
with an offering (the "Offering") by Seller of its common
stock (including the Shares) pursuant to Regulation S
("Regulation S") promulgated under the Securities Act of
1933, as amended (the "Securities Act"). Buyer will be
notified of the date of the conclusion of the Offering.
Section 2
BUYER'S REPRESENTATIONS
Buyer represents and warrants to Seller as follows:
2.1 Buyer is not a "U.S. Person" as defined by Rule
902 of Regulation S, was not organized under the laws of any
U.S. jurisdiction, and was not formed for the purpose of
investing in securities not registered under the Securities
Act;
2.2 At the time the buy order for this transaction was
originated, Buyer was outside the United States;
2.3 No offer to purchase the Shares was made in the
United States;
2.4 Buyer is either (a) purchasing the Shares for its
own account for investment purposes and not with a view
towards distribution, or (b) acting as agent for a principal
that has made the representations contained in Exhibit A
hereto;
2.5 All subsequent offers and sales of the Shares will
be made (a) outside the United States in compliance with
Rule 903 or Rule 904 of Regulation S, (b) pursuant to
registration of the Shares under the Securities Act, or (c)
pursuant to an exemption from such registration. Buyer
understands the conditions of the exemption from
registration afforded by Section 4(1) of the Securities Act
and acknowledges that there can be no assurance that it will
be able to rely on such exemption. In any case, Buyer will
not resell the shares to U.S. Persons or with the United
States until after the end of the forty (40) day period
commencing on the date of completion of the Offering (as
defined above) (the "Restricted Period");
2.6 Buyer agrees that it has not entered into and will
not enter into any short sales with respect to the common
stock of Seller at any time after the execution of this
Agreement by Buyer and prior to the expiration of the
Restricted Period. Buyer further agrees that, at all times
after the Restricted Period, it will keep its purchase of
the Shares confidential, except as required by law and
except as necessary in the ordinary course of Buyer's
business;
2.7 Buyer understands that the Shares are being
offered and sold to it in reliance on specific provisions 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 provisions. Accordingly, Buyer agrees
to notify Seller of any events which would cause the
representations and warranties of Buyer to be untrue or
breached at any time after the execution of this Agreement
by Buyer and prior to the expiration of the Restricted
Period;
2.8 This Agreement has been duly authorized, validly
executed, and delivered on behalf of Buyer and is a valid
and binding agreement enforceable in accordance with its
terms, subject to general principles of equity and to
bankruptcy or other laws affecting the enforcement of
creditors' rights generally;
2.9 Any offering documents received by Buyer include
statements to the effect that the Shares have not been
registered under the Securities Act and may not be offered
or sold in the United States or to U.S. Persons during the
Restricted Period;
2.10 Buyer, in making the decision to purchase the
Shares subscribed for, has relied upon independent
investigations made by it and has not relied on any
information or representations made by third parties;
2.11 In the event of resale of the Shares during the
Restricted Period, Buyer shall provide a written
confirmation or other written notice to any distributor,
dealer, or person receiving a selling concession, fee, or
other remuneration in respect of the Shares stating that
such purchaser is subject to the same restrictions on offers
and sales that apply to the undersigned, and shall require
that any such purchaser shall provide such written
confirmation or other notice upon resale during the
Restricted Period; and
2.12 Buyer has not taken any action that would cause
Seller to be subject to any claim for commission or other
fee or remuneration by any broker, finder, or other person
and Buyer hereby indemnifies Seller against any such claim
caused by the actions of Buyer or any of its employees or
agents.
Section 3
SELLER'S REPRESENTATIONS
Seller represents and warrants to Buyer as follows:
3.1 Seller is a "Domestic Issuer" and a "Reporting
Issuer," as such terms are defined by Rule 902 of Regulation
S. Seller has registered its common stock pursuant to
Section 12(b) or (g) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), is in full compliance with
all reporting requirements of either Section 13(a) or 15(d)
of the Exchange Act, and Seller's common stock trades on the
NASDAQ Small Cap Market;
3.2 Seller has furnished Buyer with copies of Seller's
most recent Annual Report on its Form 10-K filed with the
Securities and Exchange Commission, all Forms 10-Q and 8K
filed thereafter, and the use of process and risk factors,
prepared by Seller, which are attached hereto as Exhibit B;
3.3 Seller has not offered the Shares to any person in
the United States, any identifiable group of U.S. citizens
abroad, or to any U.S. Person;
3.4 At the time the buy order was originated, Seller
and/or its agents reasonably believed Buyer was outside the
United States and was not a U.S. Person;
3.5 Seller and/or its agents reasonably believe that
the sale of the Shares has not been prearranged with a Buyer
in the United States.
3.6 Seller has not conducted any "directed selling
efforts" with respect to the Shares nor has Seller conducted
any general solicitation (as that term is used in Regulation
D under the Securities Act) with respect to any of its
securities;
3.7 The Shares when issued and delivered will be duly
and validly authorized and issued, fully-paid and
nonassessable and will not subject the holders thereof to
personal liability by reason of being such holders. There
are no preemptive rights of any shareholder of Seller with
respect to the Shares;
3.8 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 principles of equity and to bankruptcy or other
laws affecting the enforcement of creditors' rights
generally;
3.9 The execution and delivery of this Agreement and
the consummation of the issuance of the Shares and the
transactions contemplated by this Agreement do not and will
not conflict with or result in a breach by Seller of any of
the terms or provisions of, or constitute a default under,
the articles of incorporation or bylaws 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 decree, judgment or order of any
court, Federal or State regulatory body, administrative
agency or other governmental body having jurisdiction over
Seller or any of its properties or assets;
3.10 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 Shares as
contemplated by this Agreement;
3.11 Seller will instruct its transfer agent to issue
one or more share certificates representing the Shares
without restrictive legend in the name of Buyer and in such
denominations to be specified by Buyer prior to closing.
Seller further warrants that no instructions other than
these instructions, and instructions for a "stop transfer"
until the end of the Restricted Period, have been given to
the transfer agent and also warrants that the Shares shall
otherwise be freely transferable on the books and records of
Seller. Seller will notify the transfer agent of the date
of completion of the Offering and of the date of expiration
of the Restricted Period. Nothing in this section shall
affect in any way Buyer's obligations and agreement to
comply with all applicable securities laws upon resale of
the Shares;
3.12 Seller has taken and will take no action that will
affect in any way the running of the Restricted Period or
the ability of Buyer to freely resell the Shares in
accordance with applicable securities laws and this
Agreement; and
3.13 Seller will comply with all applicable securities
laws with respect to the sale of the Shares, including but
not limited to the filing of all reports required to be
filed in connection therewith with the Securities and
Exchange Commission or any stock exchange or the NASDAQ
stock market or any other regulatory authority.
Section 4
CLOSING
4.1 Share certificates shall be delivered to Buyer and
the funds therefor shall be delivered to Seller on
________________ or at such time to be mutually agreed.
Section 5
CONDITIONS TO CLOSING
5.1 Buyer understands that Seller's obligation to sell
the Shares is conditioned upon delivery into escrow or
otherwise as agreed between Buyer and Seller by Buyer of the
amount set forth in Section 1 hereof.
5.2 Seller understands that Buyer's obligation to
purchase the Shares is conditioned upon delivery of
certificate(s) representing shares of common stock without
restrictive legend as described herein and provision of an
opinion of counsel confirming the matters et out in Section
3.1, 3.7, 3.8, 3.9, and 3.10 above.
Section 6
GOVERNING LAW; INTERPRETATION
6.1 This Agreement shall be governed by and
interpreted in accordance with the laws of the State of New
York. Facsimile signatures of this Agreement shall be
binding on all parties hereto. All terms used herein that
are defined in Regulation S under the Securities Act shall
have the meanings set forth therein.
IN WITNESS WHEREOF, this Agreement was duly executed on the
date first written above.
Official Signatory of Buyer:
Official Signatory of Seller:
Electrosource, Inc.
Xxxxxxx X. Xxxxxxx
President
SUBSCRIPTION REGISTER
Purchaser No. Shares Amount
St. Xxxxxxx Investors Intl. 770,357 $1,000,000.42
Caledonian House X.X.Xxx 1043
Georgetown, Grand Cayman
Cayman Islands
Concord Capital Corporation Ltd. 400,000 519,240.00
Xxxxx 000, 00 Xxx-xx-xxxxx Xxxx
Xxxxxxxx XX 00, Xxxxxxx
