SUBSCRIPTION AGREEMENT
(REGULATION S - NON-U.S. PERSONS OUTSIDE U.S.)
To: EMPS Corporation (the "Issuer")
Re: Purchase and Sale of Shares of Common Stock of the Issuer
Dates for Reference: December 28, 2004
The undersigned (the "Subscriber") hereby irrevocably subscribes for and agrees
to purchase from the Issuer, subject to the terms and conditions set forth in
Schedules "A" and "B" attached to this subscription and by this reference
incorporated herein, that number of Shares of Common Stock of the Issuer set out
on page 2.
The Subscriber and the Issuer hereby agree that the Shares, and the subsequent
re-offering and resale thereof, have and shall be conducted on the terms and
conditions specified in Schedule "A" hereto. The Subscriber hereby makes, on its
own behalf and, if applicable, on behalf of others for whom it is contracting
hereunder, the acknowledgments, representations and warranties set out in
Schedule "B" hereto, and agrees that the Issuer can rely on such
acknowledgments, representations and warranties should this subscription offer
be accepted.
INSTRUCTIONS FOR COMPLETING THIS SUBSCRIPTION PRIOR TO DELIVERY TO THE
ISSUER
1. All Subscribers must complete the information required on page 2 with
respect to subscription amounts and registration and delivery
particulars.
2. Return this subscription to the Placement Agent ("Aton Securities,
Inc.").
3. Send a US$ wire transfer that will be payable to XXXXX X. XXXXXXXX,
XX., Attorney at Law, as Escrow Agent, in the amount of applicable
subscription funds, according to the following wire instructions:
Beneficiary Bank: Xxxxx Fargo Bank
Foothill North Branch
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
ABA Routing: 000000000
SWIFT: XXXXXX0X
Beneficiary: Xxxxx X. Xxxxxxxx, IOLTA
Account # 1652695584
SUBSCRIPTION AMOUNTS
Number of Shares of Common Stock to be purchased at 100,000
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U.S.$2.85 each
Aggregate Subscription Amount: U.S.$ 285,000
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Placement Agent (check one):
X Aton Securities, Inc.
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Other
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REGISTRATION AND DELIVERY (Complete BOX A. For Broker registration, ALSO complete BOX B):
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BOX A: SUBSCRIBER INFORMATION AND SIGNATURE
Firebird Global Master Fund, Ltd.
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(name of subscriber)
x/x Xxxxx Xxxx Xxxxxxxx (Xxxxxx Xxxxxxx) Ltd., Xxxxxxx Xxxxxx Xxxx,
Xxxx Xxx Xxxx, XX Xxx 00000 SMB, Grand Cayman, Cayman Islands
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(address - include city, province and postal code)
Xxxxx Xxxxxxxxx (212-698-9260) x
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(contact name and telephone number) (signature of subscriber/authorized signatory)
X.Xxxxxxxxx@xxxxx.xxx Xxxxx Xxxxxx, Director
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(contact email address) (if applicable, print name of signatory
and office)
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BOX B: FOR REGISTRATION THROUGH BROKER OR TRUSTEE
in trust for
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(name of the registered holder) (name of beneficial holder)
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(address of registered holder -- include city, province and postal code)
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(registered holder: contact name and telephone number)
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(registered holder: contact email address)
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If the Subscriber is acting as agent and registered holder If the Shares subscribed for are to be delivered to an
for a principal and is not a trust company or portfolio address other than that provided in Box A or Box B above:
manager acting as trustee or agent for fully managed
accounts:
FGS Advisors LLC
---------------------------------------------------------- ----------------------------------------------------------
(name of principal) (name of addressee)
000 X. 00xx Xx., 00xx Xxxxx
---------------------------------------------------------- ----------------------------------------------------------
(address of principal) (address)
Xxx Xxxx, XX 00000
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(address of principal) (address)
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Execution by the Subscriber in Box A hereof shall constitute an irrevocable
offer and agreement by the Subscriber to subscribe for the Shares described
herein on the terms and conditions herein set out. The Issuer shall be entitled
to rely on the delivery of a facsimile copy of this subscription, and acceptance
by the Issuer of such facsimile subscription shall be legally effective to
create a valid and binding agreement between the Subscriber and the Issuer in
accordance with the terms and conditions hereof.
ACCEPTANCE
This subscription is accepted and agreed to by ) EMPS Corporation
the Issuer as of the 26th day of January, 2005: )
)
) -------------------------------------
) BY: XXXXX CHERDABAYEV, SECRETARY
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SCHEDULE A
1. INTERPRETATION
1.1 Unless otherwise stated, all dollar figures herein expressed are
in U.S. Dollars.
1.2 Unless the context otherwise requires, a reference in this
subscription and the Schedules hereto to:
(a) "Closing refers to the delivery of the subscription funds to
EMPS Corporation and delivery of a share certificate(s)
issued as directed in the Subscription Agreement to the
subscriber to an overnight courier addressed to the
subscriber. The delivery of share certificates and funds
will be made simultaneously by the Escrow agent;
(b) "Public Record" refers to all public information which has
been filed by the Issuer with the United States Securities
and Exchange Commission ("SEC");
(c) "Securities Act" refers to the Securities Act or analogous
legislation and all regulatory notices, orders, rules,
regulations, policies and other instruments incidental
thereto in the country of domicile of the Subscriber.
(d) "Securities Commission" refers to the securities commission
or similar regulatory authorities in the Province or Country
that administers the respective Securities Act;
(e) "Shares" means shares of Common Stock of the Issuer,
(f) "1933 Act" means the United States of America Securities Act
of 1933, as amended;
2. SUBSCRIPTION
2.1 The Issuer is offering a maximum of 7,000,000 Shares of its common
stock, $0.001 par value per share (the "Common Stock") at a price
of $3.00 per share of Common Stock (each a "Share" and
collectively the "Shares"), for aggregate proceeds of a maximum of
$21,000,000, in a transaction exempt from registration under the
1933 Act and the regulations promulgated thereunder (the
"Offering").
2.2 The Issuer reserves the right to increase the size of the Offering
at its discretion, to US$23,100,000, should the Offering be
oversubscribed.
3. CLOSING
3.1 All subscription funds will be held in escrow by Xxxxx X.
Xxxxxxxx, Xx., Attorney at Law, acting as Escrow Agent for the
Issuer, pending the acceptance or rejection of the Subscriber's
subscription which will occur on or before five days after receipt
of subscription funds during the Offering Period, which is
February 15, 2005, unless extended by the Issuer to April 30, 2005
(the "Offering Period"). Upon the acceptance of subscriptions
during the Offering Period, the subscription funds will be
released to the Issuer and certificates representing Shares will
be delivered to the subscriber.
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Subscriptions are irrevocable. If the subscription offer is
rejected all related subscription funds will be returned to the
Subscriber without interest, set-off or deduction.
3.2 There is no minimum offering, all subscription funds received by
the escrow Agent will be delivered to the Issuer for its immediate
use upon the acceptance of the subscription by the Issuer.
4. ELIGIBILITY AND SUBSCRIPTION PROCEDURE
4.1 The Offering contemplated herein is being made pursuant to
exemptions (the "Exemptions") from the registration and prospectus
requirements of applicable securities laws. The Issuer will rely
on the representations and warranties contained in this
subscription to determine the applicability of available
Exemptions.
4.2 The Offering contemplated herein is not, and under no
circumstances is to be construed as, a public offering of the
Shares. The Offering is not being made, and this subscription does
not constitute, an offer to sell or the solicitation of an offer
to buy the Shares in any jurisdiction where, or to any person to
whom, it is unlawful to make such offer or solicitation.
4.3 Subscribers must complete and execute this subscription (PLEASE
SEE THE INSTRUCTIONS LISTED ON THE FACE PAGE HEREOF) and return
them to the Placement Agent with a US$ wire transfer that will be
payable to XXXXX X. XXXXXXXX, ATTORNEY AT LAW, AS ESCROW AGENT FOR
EMPS CORPORATION, in the amount of the applicable subscription
funds.
4.4 A subscription will only be effective upon its acceptance by the
Issuer. Subscriptions will only be accepted if the Issuer is
satisfied that, and will be subject to a condition for the benefit
of the Issuer that, the Offering can lawfully be made in the
jurisdiction of residence of the Subscriber pursuant to an
available Exemption and that all other applicable securities laws
have been and will be complied with in connection with the
proposed distribution.
4.5 The Issuer reserves the right to accept or reject any subscription
in whole or in part. The Issuer shall have no liability whatsoever
to any Subscriber in the event that any of the foregoing shall
occur.
5. USE OF OFFERING MEMORANDUM
5.1 Subscriber acknowledges receipt and review of the Confidential
Private Offering Memorandum delivered in connection with the
Offering contemplated herein.
6. CLOSING
6.1 The Offering contemplated herein will be completed at one or more
Closings at such time or times, on such date or dates, and at such
place or places, as required by the Subscription Agreement. At
each Closing, the Issuer will deliver certificates representing
the Shares to those Subscribers whose subscriptions have been
accepted, against delivery or prior receipt of the subscription
funds therefor.
7. RESALE RESTRICTIONS AND SHARE CERTIFICATE LEGENDS
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7.1 The Subscriber hereby acknowledges that the Issuer is a registered
reporting issuer in the United States, but is not a "reporting
issuer" in any foreign jurisdiction.
7.2 The Subscriber is acknowledges that although there are no legal
restrictions on the transferability of the Shares, the subscriber
must register the Shares or have an exemption from registration
before the Subscriber may publicly resell the Shares in the United
States. The Issuer may refuse to register transfer of the Shares
in the absence of compliance with Rule 144 unless the undersigned
furnishes the issuer with a "no-action" or interpretative letter
from the SEC or an opinion of counsel reasonably acceptable to the
issuer stating that the transfer is proper; further, unless such
letter or opinion states that the Shares are free of any
restrictions under the 1933 Act, the issuer may refuse to transfer
the Shares to any transferee who does not furnish in writing to
the issuer the same representations and agree to the same
conditions with respect to such Shares as are set forth herein.
The issuer may also refuse to transfer the Shares if any
circumstances are present reasonably indicating that the
transferee's representations are not accurate.
7.3 The criteria that must be met in order to make public resales of
the Shares within the U.S. are set forth specifically in Rule 144
promulgated under the 1933 Act. After one year from the later of
the date the Shares are acquired from the Issuer or an affiliate
of the Issuer and the full purchase price or other consideration
is paid, all as calculated in accordance with rule 144(d), sales
of the Shares in reliance on rule 144 can only be made in limited
amounts in accordance with the terms and conditions of that rule.
After two years from the date the Shares are fully paid for, as
calculated in accordance with rule 144(d), it can generally be
sold without meeting these conditions provided the holder is not
(and has not been for the preceding three months) an affiliate of
the issuer.
7.4 The Issuer has no obligation to file a prospectus qualifying the
distribution of the Shares in any jurisdiction where the Offering
is made and has no intention to do so, except as it may be
required to file a registration statement covering the public
resale of the Shares within the United States upon the request of
51% of the subscribers to the Offering, under the terms of the
Registration Rights agreement between the Issuer and the Placement
Agents for the benefit of the Subscribers to the Offering.
7.5 The foregoing is a summary only and is not intended to be
exhaustive. Subscribers are advised to consult with their own
advisors concerning the particular nature of the restrictions on
transfer, the extent of the applicable holding period and the
possibilities of utilizing any further Exemptions or the obtaining
of a discretionary order to transfer any Shares. Accordingly,
Subscribers are further advised against attempting to resell or
transfer any Shares until they have determined that any such
resale or transfer is in compliance with the requirements of all
applicable securities laws, including but not limited to the
filing with the appropriate regulatory authority of initial trade
and other reports required upon any resale of Shares.
7.6 The Issuer will place a legend on the certificates representing
the Shares as may be required under applicable securities laws, or
as it may otherwise deem necessary or advisable.
8. COSTS
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8.1 The Subscriber acknowledges and agrees that all costs and expenses
incurred by the Subscriber (including any fees and disbursements
of any special counsel retained by the Subscriber) relating to the
purchase, resale or transfer of the Shares shall be borne by the
Subscriber.
9. MISCELLANEOUS
9.1 Each party to this subscription covenants and agrees that it will,
from time to time both before and after the Closing, at the
request and expense of the requesting party, promptly execute and
deliver all such other instruments, notices, releases, escrow
agreements, undertakings and other documents, and shall do all
such other acts and other things, as may be necessary or desirable
for the purposes of carrying out the provisions of this
subscription.
9.2 Except as expressly provided for in this subscription and in the
agreements, instruments and other documents contemplated or
provided herein, this subscription contains the entire agreement
between the parties with respect to the sale of the Shares and
there are not other terms, conditions, representations,
warranties, acknowledgements and covenants, whether expressed or
implied, whether written or oral, and whether made by statute,
common law, the parties hereto or anyone else. This subscription
may only be amended by instrument in writing signed by both
parties hereto.
9.3 This subscription is governed by the laws of the State of Nevada
and the federal laws of the United States of America applicable
therein. The Subscriber, in his personal or corporate capacity
and, if applicable, on behalf of each beneficial purchaser for
whom he is acting, irrevocably attorns to the jurisdiction of the
courts of the State of Nevada.
9.4 The invalidity or unenforceability of any particular provision of
this subscription shall not affect or limit the validity or
enforceability of the remaining provisions of this subscription.
9.5 This subscription, including without limitation the terms,
conditions, representations, warranties, acknowledgments and
covenants contained herein, shall survive and continue in full
force and effect and be binding upon the Subscriber
notwithstanding the completion of the purchase and sale of the
Shares and any subsequent disposition thereof by the Subscriber.
9.6 This subscription is not transferable or assignable.
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SCHEDULE B
1. ACKNOWLEDGMENTS OF THE SUBSCRIBER
1.1 The Subscriber hereby acknowledges and agrees for the benefit of
the Issuer that:
(a) its decision to execute this subscription and purchase of
the Shares agreed to be purchased hereunder has not been based upon any
oral or written representation or warranty as to fact or otherwise made
by or on behalf of the Issuer, and that its decision is based entirely
upon its review of the Public Record and Confidential Private Offering
Memorandum in connection with the Offering;
(b) no Securities Commission or similar regulatory authority
has reviewed or passed on the merits of the Shares;
(c) the Issuer is a U.S. publicly traded company, but is not a
"reporting issuer" in any foreign jurisdiction;
(d) there is no insurance covering the Shares;
(e) there are restrictions on the Subscriber's ability to
resell the Shares and it is the responsibility of the Subscriber to
find out what those restrictions are and to comply with them before
selling the Shares;
(f) it (or others for whom it is contracting hereunder) has
been advised to consult its own legal advisors with respect to the
merits and risks of an investment in the Shares and the applicable
resale restrictions and it (or others for whom it is contracting
hereunder) is solely responsible, and neither the Issuer, Aton
Securities, Inc. nor Xxxxx X. Xxxxxxxx, Esq. is in any way responsible,
for compliance with applicable resale restrictions;
(g) to the knowledge of the Subscriber, the sale of the Shares
was not accompanied by any advertisement or solicited in any manner in
contravention of applicable 1933 Act or other applicable securities
laws;
(h) the offer made by this subscription is irrevocable and
requires acceptance by the Issuer;
(i) the subscription is not enforceable by the Subscriber
unless it has been accepted by the Issuer and the Subscriber waives any
requirement on the Issuer's behalf to communicate acceptance of this
subscription to the Subscriber;
(j) no agency, governmental authority, regulatory body, stock
exchange or other entity has made any finding or determination as to
the merit for investment of, not have any such agencies or governmental
authorities made any recommendation or endorsement with respect to, the
Shares;
(k) the Shares are speculative investments which involved a
substantial degree of risk;
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(l) the Subscriber has had access to and has received all such
information concerning the Issuer that the Subscriber has considered
necessary in connection with the Subscriber's investment decision;
(m) the Subscriber confirms that he/she/it is not a U.S.
Person or acting or on behalf of a U.S. Person; and
(n) the Issuer will rely on the acknowledgments,
representations and warranties made herein or otherwise provided by the
Subscriber to the Issuer in completing the sale and issue of the Shares
to the Subscriber.
2. REPRESENTATIONS, WARRANTIES, AND COVENANTS OF THE SUBSCRIBER
2.1 If the Subscriber is purchasing the Shares as principal for its
own account, the Subscriber hereby represents, warrants and
covenants to and with the Issuer that it is purchasing such Shares
not for the benefit of any other person and not with a view to the
resale or distribution of all or any of the Shares.
2.2 Each Subscriber hereby represents, warrants and covenants to and
with the Issuer that:
(a) the Subscriber has no knowledge of a "material fact" or
"material changes", as those terms are defined in the Securities Act,
in respect of the affairs of the Issuer that has not been generally
disclosed to the public;
(b) the Subscriber and any beneficial purchaser for whom it is
acting are resident in the jurisdiction set out on the execution page
of this subscription
(c) the Subscriber has the legal capacity and competence to
enter into and execute this subscription and to take all actions
required pursuant hereto and, it the Subscriber is a corporation, it is
duly incorporated and validly subsisting under the laws of its
jurisdiction of incorporation and all necessary approvals by its
directors, shareholders and others have been obtained to authorize
execution of this subscription on behalf of the Subscriber;
(d) the entering into of this subscription and the
transactions contemplated hereby do not result in the violation of any
of the terms and provisions of any law applicable to the subscriber,
and if the subscriber is a corporation or other legal entity, the
constating documents of, the Subscriber or of any agreement, written or
oral, to which the Subscriber may be a party or by which the Subscriber
is or may be bound;
(e) the Subscriber had duly and validly authorized, executed
and delivered this subscription and except as specifically provided
otherwise herein, it constitutes a valid and binding agreement of the
Subscriber enforceable against the Subscriber;
(f) in connection with the Subscriber's investment in the
Shares, the Subscriber has not relied upon the Issuer or the Issuer's
legal counsel or advisors for investment, legal or tax advice, and has,
if desired, in all cases sought the advice of the Subscriber's own
personal investment advisor, legal counsel and tax advisors, and the
Subscriber is either experienced in or knowledgeable with regard to the
affairs of the Issuer or, either alone or with its professional
advisors, is capable by reason of knowledge and experience in financial
and business matters in
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general, and investments in particular, of evaluating the merits and
risks of an investment in the Shares; and it is able to bear the
economic risk of an investment in the Shares, and can otherwise be
reasonably assumer to have the capacity to protect its own interest in
connection with the investment;
(g) Regulation S. The Subscriber understands that the Shares
to be purchased by it pursuant to this Agreement have not been
registered under the 1933 Act in reliance on an exemption contained in
Regulation S promulgated under the 1933 Act ("Regulation S"), and that
the Company is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgments and
understandings of the Subscriber set forth herein in order to determine
the applicability of such exemptions and the Subscriber's suitability
to acquire the Shares.
(h) Non-U.S. Person. The Subscriber is not, and at the time of
the acquisition of the Shares will not be, a "U.S. person" as defined
in Regulation S under the 1933 Act. The Subscriber is not, and at the
time of the acquisition of the Shares will not be, acquiring the Shares
for the benefit of a "U.S. person" as defined in Regulation S under the
1933 Act. Upon consummation of the transactions contemplated by
Agreement, the Subscriber will be the sole beneficial owner of the
Shares issued to it pursuant to this Agreement, and the Subscriber has
not pre-arranged any sales with any purchaser or purchasers in the
United States. For purposes of this Agreement, a "U.S. person"
includes, without limitation, any natural person resident in the United
States, any partnership or corporation organized or incorporated under
the Laws of the United States (other than certain branches of non-U.S.
banks or insurance companies), any estate of which any executor or
administrator is a U.S. person or any trust of which any trustee is a
U.S. person (with certain exceptions) and any agency or branch of a
foreign entity located in the United States, but does not include a
natural person not resident in the United States. The "United States"
means the United States of America, its territories and possessions,
any state of the United States and the District of Columbia.
(i) Outside the U.S. The Subscriber is outside the United
States as of the date of the execution and delivery of this Agreement
and will be outside the United States at the time of the purchase of
Shares as contemplated by this Agreement; provided, that delivery of
the Shares may be effected in the United States through the
Subscriber's agent as long as the Subscriber is outside the United
States through the Subscriber's agent as long as the Subscriber is
outside the United States at the time of such delivery.
(j) Limitation on Transfer. The Subscriber understands that
the Shares cannot be offered for sale, sold or otherwise transferred
unless in accordance with the provisions of Regulation S of the 1933
Act, pursuant to registration under the 1933 Act, or pursuant to an
available exemption from registration under the 933 Act. The Subscriber
has no present intention to sell or otherwise transfer the Shares
except in accordance with the provisions of Regulation S of the 1933
Act, pursuant to registration under the 1933 Act, or pursuant to an
available exemption from registration under the 1933 Act. The
Subscriber understands that the Company is required, under Rule 903 of
Regulation S, to refuse to register the transfer of any of the Shares
to be received by the Subscriber pursuant to this Agreement that are
not transferred pursuant to a registration statement under the 1933
Act, in compliance with Regulation S under the 1933 Act or otherwise
pursuant to an available exemption from registration.
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(k) No Short Position. The Subscriber covenants that the
Subscriber will not directly or indirectly, or through one more
intermediaries, maintain any short position in the Common Stock during
the Distribution Compliance Period, as defined in Regulation S.
(l) No Hedging Transactions. The Subscriber hereby agrees not
to engage in hedging transactions with regard to the Common Stock
unless in compliance with the provisions of Regulation S, pursuant to
registration under the 1933 Act or pursuant to an exemption from the
registration requirements of the 1933 Act.
(m) The Subscriber shall indemnify and hold the Issuer
harmless from all costs and expenses, including reasonable attorney's
fees, incurred by the Issuer as a result of a breach of any term hereof
by the Subscriber. Further, all of the representations and warranties
of the Subscriber contained herein and all information furnished by the
Subscriber to the Issuer are true, correct and complete in all
respects, and the Subscriber agrees to notify the Issuer immediately of
any change in any representation, warranty or other information set
forth herein.
(n) Limitations on Resale. The Subscriber will resell the
Shares only in accordance with the provisions of Regulation S of the
1933 Act, pursuant to registration under the 1933 Act, or pursuant to
an available exemption from registration under the 1933 Act. The
Subscriber will not resell the Shares to U.S. persons or within the
United States for at least a period of one year from the date the
Shares are fully paid for. The Subscriber will only resell the Shares
in compliance with Rule 904 of Regulation S, which Rule requires, among
other things, a purchaser to also comply with Regulation S;
(o) no person has made to the Subscriber any written or oral
representations:
(i) that any person will resell or repurchase the Shares;
(ii) that any person will refund the purchase price for
the Shares;
(iii) as to the future price or value of the Shares; or
(iv) that the Shares will be listed and posted for trading
or any stock exchange other than the common shares of
the Issuer being traded in the United States on the
National Association of Dealers' Over-the Counter
("OTC") Bulletin Board (symbol: EPSC);
(p) the Subscriber will comply with the applicable provisions
of the Securities Act and any other relevant securities laws concerning
the purchase and holding of the Shares and any resale of the Shares;
(q) the Subscriber:
(i) is knowledgeable of, or has been independently
advised as to, the Securities Laws (which is defined
herein to mean, in respect of each and every offer or
sale of the Shares, any Shares laws having
application to the Subscriber and the Offering other
than the laws of the U.S. and all regulatory notices,
orders, rules, regulations, policies and other
instruments incidental thereto) which would apply to
this subscription, if any;
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(ii) is purchasing the Shares pursuant to an applicable
exemption from any prospectus, registration or
similar requirements under the Securities Laws of
that International Jurisdiction, or, if such is not
applicable, the Subscriber is permitted to purchase
the Shares under the Securities Laws of the
International Jurisdiction without the need to rely
on exemptions;
(iii) confirms that Securities Laws do not require the
Issuer to make any filings or seek any approvals of
any kind whatsoever from any regulatory authority of
any kind whatsoever in the International
Jurisdiction; and
(iv) confirms that the Shares are being acquired for
investment purposes only and not with a view to
resale and distribution, and the distribution of the
Shares to the Subscriber by the Issuer complies with
all Securities Laws.
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