EXHIBIT 10.14 FORM OF SUBSCRIPTION AGREEMENT
THE SHARES TO WHICH THIS AGREEMENT RELATES (THE "SHARES") HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR UNDER ANY STATE SECURITIES LAWS ("STATE LAWS") OR ANY SECURITIES LAWS OF
JURISDICTIONS OUTSIDE OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED IN THE UNITED STATES OR TO A "U.S. PERSON" (AS
DEFINED HEREIN) EXCEPT (1) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED
UNDER THE SECURITIES ACT COVERING THE SHARES, (2) UPON DELIVERY TO THE COMPANY
OF AN OPINION OF U.S. COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT THE
SHARES MAY BE TRANSFERRED WITHOUT REGISTRATION PURSUANT TO (A) RULE 144, RULE
144A, OR RULE 904 OF REGULATION S PROMULGATED UNDER THE SECURITIES ACT OR (B)
ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF THE SECURITIES ACT, OR (3) AS OTHERWISE PERMITTED UNDER THE
TERMS OF SUBSECTION 10.2 OF THIS AGREEMENT.
SUBSCRIPTION AGREEMENT
Dated for reference purposes December 4, 1996
TO: ORYX TECHNOLOGY CORP. ......... Personal & Confidential
00000 Xxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
1. Subscription for Shares. The undersigned (the "Subscriber") hereby
irrevocably subscribes for and agrees to purchase from Oryx Technology Corp.
(the "Company"), subject to the terms and conditions set forth in this
Subscription Agreement, shares (the "Shares") of the $.001 par value common
stock of the Company (the "Common Stock") for the total purchase price set forth
next to the Subscriber's name on page 14 hereof (the "Total Purchase Price").
All dollar amounts set forth herein refer to U.S. dollars, unless otherwise
indicated. The Shares form part of a larger private placement (the "Private
Placement") of Shares for an aggregate minimum offering price of $2,000,000 and
an aggregate maximum offering price of $4,000,000. The Shares are being sold by
the Company pursuant to an agency agreement dated as of December 4, 1996 (the
"Agency Agreement") between Yorkton Securities Inc. (the "Agent") and the
Company pursuant to which the Agent has agreed to act as the sole and exclusive
agent of the Company to solicit offers to purchase the Shares on a best efforts
basis. Subject to the terms hereof, this subscription will be effective upon its
acceptance by the Company.
2. Number of Shares. The number of Shares subscribed for herein shall
be determined by dividing the Total Purchase Price by the Price Per Share as
defined in Section 3 hereof.
3. Price Per Share. The price per Share ("Price Per Share") shall be
calculated as 90% of the average closing bid price of the Company's Common Stock
as it trades on the Nasdaq SmallCap Market for the 10 trading days immediately
preceding the date of contracting under this subscription agreement, provided,
however, that in no event will the Price Per Share based on this calculation be
less than $1.80.
4. Subscription. The Subscriber must deliver to the Agent a fully
completed and executed copy of this Subscription Agreement, including completed
registration and delivery instructions appearing after the Subscriber's
signature hereto.
5. Payment. Together with this Subscription Agreement, the Subscriber
must deliver to the Agent the Total Purchase Price of the Shares subscribed for
hereunder, paid by certified check or bank draft payable to the Agent or payable
in such other manner as may be specified by the Agent.
6. Terms of Closing.
6.1......Closing. Provided that the Agent has received Private
Placement subscriptions equaling or exceeding the aggregate minimum offering
price of $2,000,000 and all other terms and conditions of this Subscription
Agreement have been satisfied, the closing of the Private Placement (the
"Closing") shall take place on December 16, 1996 at 10:00 a.m. (Pacific Time)
and/or on such other date or at such other time as the Company and the Agent
shall mutually agree (the "Closing Date"). The Closing shall be held at the
place or places provided for in the Agency Agreement. At the Closing, the
proceeds of the Private Placement will be delivered to the Company (net of
amounts due to the Agent under the terms of the Agency Agreement) and a
certificate (the "Certificate") representing the Shares (which shall contain all
legends required under the terms of this Subscription Agreement) will be
delivered to the Agent for the benefit of the Subscriber.
6.2......Failure to Close. In the event that the Agent does
not receive the aggregate minimum offering price required to close the Private
Placement, or any other condition to the Closing is not satisfied or waived in
accordance with the terms of this Subscription Agreement, the Total Purchase
Price of the Shares, exclusive of any interest thereon, shall promptly be
returned by the Agent to the Subscriber.
7. Subscriber's Representations, Warranties and Covenants. The
Subscriber hereby represents, warrants and covenants to the Company and the
Agent as of the date of this Subscription Agreement and at the Closing that:
7.1......Investment Intent. The Subscriber's acquisition of
the Shares is solely for the Subscriber's own account, for investment, and not
with a view to, or to offer or sell for an issuer in connection with, any
distribution thereof, and the Subscriber has no present intention of selling or
distributing any of the Shares. The Subscriber has no contract, arrangement or
understanding with the Company, the Agent, or any other person to participate in
a distribution of the Shares, is not an affiliate of a person which has such a
contract, arrangement or understanding, and will not act on behalf of any of the
foregoing persons in any offer or sale of the Shares. The Subscriber is
acquiring the Shares in the ordinary course of its business.
7.2......Access to Information. The Subscriber has received a
copy of each of the Exhibits to this Subscription Agreement, including (i) the
Company's Annual Report on Form 10-KSB for the fiscal year ended February 29,
1996 (Exhibit A), (ii) the Proxy Statement for the Company's Annual Meeting of
Stockholders held on September 20, 1996 (Exhibit B), (iii) the Company's
Quarterly Report on Form 10-QSB for the quarterly period ended August 31, 1996
(Exhibit C), and (iv) the Company's Post-Effective Amendment No. 3 to Form SB-2
Registration Statement filed with the Securities and Exchange Commission on
November 14, 1996 with respect to an unrelated offering of securities (Exhibit
D) (collectively referred to in this Subscription Agreement as the "Offering
Documents"), and, if desired, has sought and obtained from management of the
Company such additional information concerning the business, management and
financial affairs of the Company as the Subscriber has deemed necessary or
appropriate in determining whether or not to purchase the Shares. The Subscriber
understands and acknowledges that the Agent has been engaged solely to act as
placement agent for the offering of the Shares and has not independently
verified any of the information contained in the Offering Documents and assumes
no responsibility for the accuracy or completeness thereof. The Subscriber
acknowledges that it has not relied on the Agent or any person affiliated or
associated with the Agent in connection with its investigation of the
information in the Offering Documents or in connection with its investment
decision.
7.3......Accredited Investor; Knowledge and Experience. The
Subscriber is an "accredited investor," as that term is defined in Rule 501(a)
under the Securities Act, a copy of which the undersigned has read and
understands. The Subscriber has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of an
investment in the Shares, and it is able to bear the economic risk of losing up
to the entire amount of its investment therein. Further, the individual
executing this Subscription Agreement has such knowledge and experience in
financial and business matters that he is capable of utilizing the information
made available to him in connection with the offering of the Shares, of
evaluating the merits and risks of an investment in the Shares, and of making an
informed investment decision with respect to the Shares, including assessment of
the risk factors set forth in the Offering Documents.
7.4......Suitability. The Subscriber has carefully considered,
and has, to the extent the Subscriber deems it necessary, discussed with the
Subscriber's own professional legal, tax and financial advisers the suitability
of an investment in the Shares for the Subscriber's particular tax and financial
situation, and the Subscriber has determined that the Shares are a suitable
investment.
7.5......Private Offering. The offer to sell the Shares was
directly communicated to the Subscriber by the Agent. At no time was the
Subscriber presented with or solicited by any leaflet, newspaper or magazine
article, radio or television advertisement, or any other form of general
advertising or solicited or invited to attend a promotional meeting otherwise
than in connection and concurrently with such communicated offer.
7.6......Compliance with Regulation S. The Subscriber
acknowledges that a condition to the sale of the Shares to the Subscriber is
that the Company and the Agent must be satisfied that registration under the
Securities Act is not required by virtue of compliance with Regulation S
thereunder.
7.7......No Directed Selling Efforts. The Subscriber is not
aware of any Directed Selling Efforts (as hereinafter defined) having been made
in the United States with respect to the Shares by the Company, the Agent, their
respective affiliates, or any person acting on behalf of any of the foregoing.
In addition, the Subscriber, its affiliates, and persons acting on behalf of the
foregoing have not made and will not make, any Directed Selling Efforts in the
United States with respect to the Shares. For purposes of this Subscription
Agreement, "Directed Selling Efforts" include any activity undertaken for the
purpose of, or that could reasonably be expected to have the effect of,
conditioning the market in the United States for the Shares, including, but not
limited to, the placement of an advertisement in a publication with a general
circulation in the United States that refers to the offering of the Shares, the
mailing of promotional materials to persons located in the United States or the
holding of promotional meetings or seminars in the United States.
7.8......Offshore Transaction. The offer and sale of the
Shares to the Subscriber qualifies as an Offshore Transaction. For purposes of
this Subscription Agreement, the term "Offshore Transaction" means that:
(1) The Subscriber was outside the United States at
the time the Shares were offered for sale to the Subscriber; and
(2) The Subscriber was outside the United States at
the time the Subscriber originated the buy order for the Shares,
including, but not limited to, the time when the Subscriber signed
and delivered this Subscription Agreement and otherwise subscribed
for or agreed to purchase the Shares.
In this Subscription Agreement, the term "United States" means the United States
of America, its territories and possessions, any State of the United States, and
the District of Columbia. Notwithstanding the foregoing definition of "Offshore
Transaction," the offer and sale of the Shares to the Subscriber shall not
constitute an "Offshore Transaction" if the Subscriber is acquiring the Shares
for the account or benefit of any specifically targeted, identifiable group of
U.S. citizens abroad, such as members of the U.S. armed forces serving overseas,
but shall constitute an "Offshore Transaction" if the Subscriber is a person
excluded from the definition of "U.S. Person" pursuant to Section 7.9(2)(f) of
this Subscription Agreement or is a person holding an account excluded from the
definition of "U.S. Person" pursuant to Section 7.9(2)(a) of this Subscription
Agreement, solely in its capacity as a holder of such an account.
7.9......Non-U.S. Person. The Subscriber is not a U.S.
Person, as such term is defined below, and
----------------
is not acquiring the Shares for the account or benefit of any U.S. Person.
(1) Definition of U.S. Person. For purposes of this
Subscription Agreement, the term "U.S. Person" means:
(a) Any natural person resident in the
United States;
(b) Any partnership or corporation
organized or incorporated under the laws of the United
States;
(c) Any estate of which any executor or
administrator is a U.S. Person;
(d) Any trust of which any trustee is a
U.S. Person;
(e) Any agency or branch of a foreign
entity located in the United States;
(f) Any non-discretionary account or
similar account (other than an estate or trust) held by a
dealer or other fiduciary for the benefit or account of a
U.S. Person;
(g) Any discretionary account or similar
account (other than an estate or trust) held by a dealer or
other fiduciary organized, incorporated, or (if an individual)
resident in the United States; and
(h) Any partnership or corporation if
organized or incorporated under the laws of any foreign
jurisdiction, and formed by a U.S. Person principally for the
purpose of investing in securities not registered under the
Securities Act, unless it is organized or incorporated, and
owned, by accredited investors (as defined in Rule 501(a)
under the Securities Act), who are not natural persons,
estates or trusts.
(2) Exclusions from Definition. Notwithstanding the
foregoing definition of "U.S. Person":
(a) Any discretionary account or similar
account (other than an estate or trust) held for the benefit
or account of a non-U.S. Person by a dealer or other
professional fiduciary organized, incorporated, or (if an
individual) resident in the United States shall not be deemed
a U.S. Person.
(b) Any estate of which any professional
fiduciary acting as executor or administrator is a U.S. Person
shall not be deemed a U.S. person if an executor or
administrator of the estate who is not a U.S. Person has sole
or shared investment discretion with respect to the assets of
the estate, and the estate is governed by foreign law.
(c) Any trust of which any professional
fiduciary acting as trustee is a U.S. Person shall not be
deemed a U.S. Person if a trustee who is not a U.S. Person
has sole or shared investment discretion with respect to the
trust assets, and no beneficiary of the trust (and no settlor
if the trust is revocable) is a U.S. Person.
(d) An employee benefit plan established
and administered in accordance with the law of a country
other than the United States and customary practices and
documentation of such country shall not be deemed a U.S.
Person.
(e) Any agency or branch of a U.S. Person
located outside the United States shall not be deemed a U.S.
Person if the agency or branch operates for valid business
reasons, and the agency or branch is engaged in the business
of insurance or banking and is subject to substantive
insurance or banking regulation, respectively, in the
jurisdiction where located.
(f) The International Monetary Fund, the
International Bank for Reconstruction and Development, the
Inter-American Development Bank, the Asian Development Bank,
the African Development Bank, the United Nations, and their
agencies, affiliates and pension plans, and any other similar
international organizations, their agencies, affiliates and
pension plans shall not be deemed U.S. Persons.
7.10.....No Fairness Determination. The Subscriber understands
that no governmental or other agency has reviewed or approved the terms of the
Subscriber's investment in the Shares or the accuracy or adequacy of the
Offering Documents, nor has any such agency made any finding or determination as
to the fairness of an investment in the Shares or made any recommendation or
endorsement of the Shares.
7.11.....Truth and Accuracy. All representations and
warranties made by the Subscriber in this Subscription Agreement are true and
accurate as of the effective date of this Subscription Agreement and shall be
true and accurate as of the Closing Date. If such representations and warranties
shall not be true and accurate in any respect, the Subscriber will, prior to the
Closing, give written notice of such fact to the Company specifying which
representations and warranties are not true and accurate and the reasons
therefor.
7.12.....Authority. The individual executing and delivering
this Subscription Agreement on behalf of the Subscriber has been duly authorized
and is duly qualified to execute and deliver this Subscription Agreement on
behalf of the Subscriber in connection with the purchase of the Shares; the
signature of such individual is binding upon the Subscriber; the Subscriber is
duly organized and subsisting under the laws of the jurisdiction in which is was
organized; and the Subscriber was not formed for the specific purpose of
acquiring the Shares.
7.13.....No Violation. The execution and delivery of this
Subscription Agreement and the consummation of the transactions or performance
of the obligations contemplated by this Subscription Agreement do not and will
not result in a breach of any term of, or constitute a default under, the
Subscriber's charter or bylaws or any statute, indenture, mortgage, other
agreement or instrument to which the Subscriber is a party or by which it is
bound, or any order, writ, judgment or decree.
7.14.....Enforceability. The Subscriber has duly executed and
delivered this Subscription Agreement and (subject to acceptance by the Company)
it constitutes a valid and binding agreement of the Subscriber enforceable in
accordance with its terms against the Subscriber, except as such enforceability
may be limited by principles of public policy, and 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.
7.15.....Acceptance by Company Required. The Subscriber
acknowledges that this Subscription Agreement is not enforceable by the
Subscriber unless it has been accepted by the Company.
7.16.....Notice of Company's Acceptance Waived. The Subscriber
waives any requirement for the Company to communicate its acceptance of this
Subscription Agreement to the Subscriber.
7.17.....Reliance on Own Advisers. In connection with the
Subscriber's investment in the Shares, the Subscriber has not relied upon the
Company or the Agent or their respective legal and tax advisers for legal or tax
advice, and has, if desired, in all cases sought the advice of the Subscriber's
own personal legal counsel and tax advisers.
7.18.....Confidentiality of Information. The Subscriber
acknowledges and understands that the information given in Schedule A to this
Subscription Agreement has not yet been disclosed to the public, and the
Subscriber agrees not to disclose such information or to trade in the securities
of the Company until such information has been publicly disclosed by the
Company.
8. Company's Representations, Warranties and Covenants. The Company hereby
represents, warrants and covenants as of the date of this Subscription Agreement
and at the Closing that, except as otherwise disclosed in the Offering
Documents:
8.1 Organization. The Company has been duly incorporated
and organized and is validly existing in good standing under the
laws of the State of Delaware.
8.2......Good Standing. The Company and its subsidiaries are
duly qualified to do business as foreign corporations in good standing in those
jurisdictions which require such qualification except to the extent that failure
to so qualify would not have a material adverse effect on the Company.
8.3......Authority. The Company has corporate power and
authority to enter into and perform this Subscription Agreement, to own its own
properties and assets, and to carry on its business as it is currently being
conducted. All corporate action on the part of the Company, its directors and
stockholders necessary for the authorization, execution, delivery and
performance of this Subscription Agreement by the Company and the performance of
all of the Company's obligations hereunder has been duly taken.
8.4......Enforceability. This Subscription Agreement, when
executed and delivered by the Company and duly authorized, executed and
delivered by the Subscriber, will be a binding obligation on the Company,
enforceable in accordance with its terms, except as may be limited by principles
of public policy, and 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.
8.5......No Violation. The execution and delivery of this
Subscription Agreement and the consummation of the transactions or performance
of the obligations contemplated by this Subscription Agreement do not and will
not result in a breach of any term of, or constitute a default under, the
Company's charter or bylaws, any statute, any indenture, mortgage, or other
agreement or instrument to which the Company or any of its subsidiaries is or
are a party or by which any of them is or are bound, or any order, writ,
judgment or decree.
8.6......Actions and Claims. To the best of the Company's
knowledge, there are no actions or proceedings of any kind whatsoever
outstanding, pending, contemplated or threatened relating to the bankruptcy or
insolvency of the Company or any of its subsidiaries. To the best of its
knowledge, there are no other claims, actions, suits, judgments, investigations
or proceedings of any kind whatsoever outstanding, pending or threatened against
or affecting the Company, its subsidiaries, or the Company's directors, officers
or promoters, at law or in equity or before or by any federal, state, municipal
or other governmental department, commission, board, bureau or agency of any
kind whatsoever which could materially affect its business or financial
condition and, to the best of its knowledge, there is no basis therefor.
8.7......Disclosure. The Company's Offering Documents do not,
as of the respective dates thereof, contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
made therein, in light of the circumstances under which they have been made, not
misleading.
8.8......Authorized and Validly Issued Shares. The authorized
and issued capital stock of the Company as of the dates set forth in the
Offering Documents is as disclosed in the Offering Documents, and the issued and
outstanding shares of Common Stock of the Company are fully paid and
non-assessable. The Company has sufficient authorized and unissued shares of
Common Stock to provide for the issuance and delivery of the Shares. The Shares,
when issued in the manner contemplated by the provisions of this Subscription
Agreement, will be duly authorized and validly issued and will be fully paid and
non-assessable.
8.9......Convertible Securities. No securities convertible or
exchangeable into Common Stock of the Company or agreements, warrants, options,
rights or privileges for the purchase or other acquisition of any unissued
securities of the Company are outstanding.
8.10.....Intellectual Property Rights. The Company or its
subsidiaries own, possess or have access to adequate rights to use all material
patents, patent rights, inventions, trademarks, service marks, trade names,
copyrights and proprietary rights necessary for the conduct of its business as
described in the Offering Documents; and the Company has no knowledge of any
infringement of or conflict with rights of others, or any claims thereof, with
respect to any patents, patent rights, inventions, trademarks, service marks,
trade names, copyrights or other proprietary rights, the effect of which
infringement, conflict or claims would be materially adverse to the Company.
8.11.....Financial Statements. The financial statements
included in the Offering Documents (the "Financial Statements") are true and
correct in all material respects and present fairly and accurately the financial
position and results of the operations of the Company and its subsidiaries for
the periods shown therein, and the Financial Statements have been prepared in
accordance with accounting principles generally accepted in the United States
applied on a consistent basis except for normal year-end adjustments.
8.12.....Change in Circumstances. Except as disclosed on
Schedule A to this Subscription Agreement, since August 31, 1996 there has not
been any adverse material change of any kind whatsoever in the financial
position or condition of the Company or of any of its subsidiaries, or any
damage, loss or other change of circumstances of any kind whatsoever materially
affecting the business or assets of the Company or of any subsidiaries or the
right or capacity of the Company or of any subsidiaries to carry on their
business.
8.13.....Defaults. Since April 30, 1996, neither the Company
nor any of its subsidiaries has defaulted, or is currently in default (i) with
respect to the payment of interest or principal on any material indebtedness of
the Company or its subsidiaries, or (ii) under any material contract to which
the Company or any of its subsidiaries is a party.
8.14.....Stop Orders. No order prohibiting the sale of the
Company's securities has been issued against the Company or, to Company's
knowledge, its directors, officers or promoters, and no proceedings for this
purpose have been instituted, are pending, or, to its knowledge, contemplated or
threatened.
8.15.....Transfer Agent. North American Transfer Co., having
its principal office in Freeport, New York, has been duly appointed as the
transfer agent for the Company's Common Stock.
8.16.....Domestic Reporting Company. The Company is a
"domestic issuer," as such term is defined in Rule 902 of Regulation S, and has
a class of securities registered pursuant to Section 12(b) or 12(g) of the
United States Securities Exchange Act of 1934, as amended (the "Exchange Act")
or is required to file reports pursuant to Section 15(d) of the Exchange Act.
8.17.....Exchange Act Reports. At the time of commencement of
the Offering, the Company had filed all the material required to be filed
pursuant to Section 13(a) or 15(d) of the Exchange Act for a period of at least
the twelve months immediately prior thereto, and the Company has since remained,
and continues to remain, current in satisfying such filing obligations.
8.18.....No Directed Selling Efforts. The Company, its
affiliates, and persons acting on behalf of the foregoing have not made and will
not make any Directed Selling Efforts in the United States with respect to the
Shares.
8.19.....Use of Proceeds. The Company intends to use
approximately $500,000 of the net proceeds of the Private Placement to
repurchase outstanding Underwriter's Units (which, if fully exercised, would
have constituted ownership of a total of 900,000 shares of Common Stock), and to
use the remaining net proceeds for working capital purposes, primarily to assist
the Company in the marketing and distribution of its surge protection and
materials analysis products.
8.20.....No Stockholder Approval. The Company is not required
under the National Association of Securities Dealers Bylaws to obtain
stockholder approval prior to offering or selling the Shares in the Private
Placement.
9. Registration Rights. The Company agrees, on the following terms and
subject to the following conditions, to register under the Securities Act the
resale of all of the Shares purchased by the Subscriber in the Private
Placement, and, additionally, any securities issued or issuable by way of stock
dividend or any other distribution with respect to or in exchange for, or in
replacement of, such Shares, by stock split, or in connection with a combination
of shares, recapitalization, merger, consolidation, amalgamation or other
reorganization (collectively, the "Registrable Securities"), at the Company's
own expense, with the exception of any legal and advisory fees or expenses
incurred by the Subscriber in connection with the registration.
9.1......Filing of Registration Statement. The Company shall
prepare and file with the United States Securities and Exchange Commission
("SEC") not later than 90 days after the Closing Date a registration statement
on an appropriate form (the "Registration Statement") for registration under the
Securities Act of the resale of the Registrable Securities. In the event that
(i) the Company does not file the Registration Statement within 90 days after
the Closing Date, or (ii) the Registration Statement is not declared effective
under the Securities Act within 180 days after the Closing Date, as herein
provided, then the restrictive legend required to be placed on the Share
Certificate pursuant to Subsection 10.2 shall thereafter be of no further force
or effect and shall promptly be removed by the Company's transfer agent upon
request of the Subscriber without further authorization from the Company. Prior
to the Closing, the Company shall irrevocably instruct its transfer agent to
remove such legend from the Share Certificate in accordance with the terms
stated in the previous sentence without any further authorization from the
Company.
9.2......Information. In connection with the preparation of
the Registration Statement:
(1) The Subscriber shall furnish to the Company all
information reasonably requested by the Company (including, for
example, information regarding the Subscriber's intended method of
disposition of the Registrable Securities) for inclusion in the
Registration Statement and response to SEC comments and questions.
(2) As the Subscriber may be deemed a statutory
underwriter of any Shares sold by the Subscriber under the Registration
Statement, the Company shall give the Subscriber and its legal counsel
and accountants such access to copies of the Company's records and
documents and such opportunities to discuss the business of the Company
with its officers and the independent public accountants who have
certified its financial statements as shall be reasonably necessary, in
the opinion of the Subscriber or its legal counsel, to conduct a
reasonable investigation within the meaning of the Securities Act.
9.3......Effectiveness of Registration Statement. The Company
shall use its best efforts to cause the Registration Statement to become
effective within 180 days after the Closing Date (but if not effective within
such period, the Company shall continue to use its best efforts to cause the
Registration Statement to become effective as soon as possible thereafter) and
to keep the Registration Statement effective thereafter until the earlier of (i)
the date on which all Registrable Securities sold in the Private Placement have
been resold pursuant to the Registration Statement or otherwise resold without
restriction under the Securities Act, or (ii) the date on which is ended the
three-year period referenced in Rule 144(k) (or such shorter period set forth in
any amendment to Rule 144(k)) under the Securities Act or any successor rule or
subsection relating to the resale of "restricted securities" by "non-affiliates"
of an issuer, as such terms are defined in the Securities Act and the rules and
regulations promulgated thereunder.
9.4......Amendments and Supplements. The Company shall prepare
and file with the SEC such amendments and supplements to the Registration
Statement and the prospectus used in connection with the Registration Statement
as may be necessary to comply with the provisions of the Securities Act with
respect to the disposition of the Registrable Securities.
9.5......Copies of Prospectuses. The Company shall furnish to
the Subscriber such numbers of copies of prospectuses or prospectus documents
conforming with the requirements of the Securities Act as the Subscriber may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by the Subscriber.
9.6......Blue Sky Registrations. The Company shall use its
best efforts to register and qualify the Registrable Securities under the state
securities or Blue Sky laws ("State Laws") of such jurisdictions as the
Subscriber reasonably requests; provided, however, that the Company shall not be
required to take any action to register or qualify the Registrable Securities in
any jurisdiction in which the Company would be required to execute a general
consent to service of process in effecting such registration or qualification
unless the Company has previously executed such a general consent in such
jurisdiction.
9.7......Quiet Periods. The Subscriber agrees that, upon its
receipt of any notice from the Company of the happening of any event which makes
any statement made in the Registration Statement, the prospectus or any document
incorporated therein by reference, untrue in any material respect or which
requires the making of any changes in the Registration Statement, the prospectus
or any document incorporated therein by reference, in order to make the
statements therein not misleading in any material respect, the Subscriber will
forthwith discontinue disposition of Registrable Securities under the prospectus
related to the Registration Statement until the Company provides the Subscriber
with copies of the supplemented or amended prospectus or prospectus documents,
or until the Subscriber is advised in writing by the Company that the use of the
prospectus may be resumed. The Company agrees to provide the Subscriber with
such copies of the supplemented or amended prospectus or prospectus documents,
or notice that use of the prospectus may be resumed, as soon as reasonably
practicable.
9.8......Trading Market. The Company covenants to use its best
efforts to maintain a continuous trading market for its Common Stock on the
Nasdaq SmallCap Market or National Market System or a United States national
securities exchange throughout the period that the registration rights afforded
by this Section 9 remain in effect.
9.9......Compliance with Anti-Manipulation Rules. The
Subscriber agrees that, with respect to the offering for resale of the
Registrable Securities, the Subscriber will comply with Rules 10b-6 and 10b-7
promulgated under the Exchange Act and such other or additional
anti-manipulation rules then in effect (the "Anti-Manipulation Rules") until
such offering has been completed. The Company also agrees to comply with the
Anti-Manipulation Rules with respect to the offering for resale of the
Registrable Securities until such offering has been completed.
9.10.....Indemnification. To the extent permitted by law, the
Company agrees to indemnify and hold harmless the Subscriber and its affiliates
and agents, and the Subscriber agrees to indemnify and hold harmless the Company
and its affiliates and agents:
(1) against any losses, claims, damages and
liabilities and any legal or other costs and expenses reasonably
incurred by such indemnified parties in connection with investigating
or defending any such loss, claim, damage liability, or action to which
such parties may become subject under the Securities Act or other
federal or state law, insofar as such losses, claims, damages,
liabilities, costs or expenses (or actions in respect thereof) did not
arise out of and were not based upon written information furnished by
such parties expressly for use in the Registration Statement; and
(2) for amounts paid in settlement of any such loss,
claim, damage, liability, or action if such settlement is effected by
the indemnifying party without the prior written consent of the other
party to this Subscription Agreement, which consent shall not be
unreasonably withheld.
9.11.....Enforcement. In the event of a material breach of the
terms of this Section 9 by the Company, the Subscriber will be entitled to
enforce its rights under this Section 9 specifically (without posting a bond or
other security), to recover damages by reason of any breach of any provision
hereof, and to exercise all other rights existing in its favor. The parties
hereto agree and acknowledge that money damages may not be an adequate remedy
for any breach by the Company of the provisions hereof, and that the Subscriber
may in its sole discretion apply to a court of competent jurisdiction for
specific performance and/or injunctive relief in order to enforce or prevent any
violation of the provisions hereof. In addition, upon the occurrence of a
material breach by the Company or by the Subscriber of this Section 9, the
breaching party shall pay all costs and expenses (including the prevailing
party's attorney's fees and expenses) reasonably incurred in connection with the
preservation and enforcement of such party's rights hereunder.
9.12.....Subsequent Holders. Any person who acquires
Registrable Securities from the Subscriber in a transaction that is permitted
under Section 10 of this Subscription Agreement and that does not result in such
person receiving securities which are free of restrictions on transfer in the
United States and to U.S. Persons, such person shall be entitled to the benefit
of all of the rights and privileges set forth in this Section 9, provided that
such person agrees in a writing to the Company to undertake all of the
obligations of the Subscriber under this Section 9.
10. Restrictions on Transfer.
10.1.....Securities Act Restrictions and Legend. The
Subscriber acknowledges and agrees that:
(1) The offer and sale of the Shares to the
Subscriber have not been registered under the Securities Act or under
any State Laws, and therefore may not be transferred without
registration under the Securities Act unless an exemption from such
registration requirements is available or registration is not required
pursuant to Regulation S under the Securities Act.
(2) Subject to the provisions of Subsection 10.2
which govern the imposition of a restrictive legend on the Certificate
representing the Shares, removal of such legend under certain
circumstances, and resales made by the Subscriber after the removal of
such legend, the Subscriber will not offer, sell or otherwise transfer
any of the Shares directly or indirectly except:
(a) pursuant to an effective registration
statement filed under the Securities Act, as contemplated by
Section 9 of this Subscription Agreement; or
(b) upon delivery to the Company of an
opinion of U.S. counsel reasonably satisfactory to the Company
that the Shares may be transferred without registration
pursuant to (i) Rule 144, Rule 144A, or Rule 904 of Regulation
S promulgated under the Securities Act or (ii) any other
available exemption from the registration and prospectus
delivery requirements of the Securities Act.
10.2.....Restrictive Legends.
(1) The Subscriber understands and agrees that,
although Regulation S does not expressly require the placement of a
restrictive legend on the certificate representing the Shares, a legend
will be placed on the Certificate noting the restrictions on transfer
set forth in Subsection 10.1 of this Subscription Agreement in order to
help ensure compliance with certain requirements of Regulation S that
continue to apply during the applicable restricted period following the
Closing. Such legend shall read substantially as follows:
"THE SHARES REPRESENTED BY THIS CERTIFICATE (THE "SHARES") HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR UNDER ANY STATE SECURITIES LAWS ("STATE LAWS") OR
ANY SECURITIES LAWS OF JURISDICTIONS OUTSIDE OF THE UNITED STATES, AND
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE
UNITED STATES OR TO A "U.S. PERSON," AS THAT TERM IS DEFINED IN
REGULATION S UNDER THE SECURITIES ACT, EXCEPT (1) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT FILED UNDER THE SECURITIES ACT
COVERING THE SHARES, OR (2) UPON DELIVERY TO THE COMPANY OF AN OPINION
OF U.S. COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT THE SHARES
MAY BE TRANSFERRED WITHOUT REGISTRATION PURSUANT TO (A) RULE 144, RULE
144A, OR RULE 904 OF REGULATION S PROMULGATED UNDER THE SECURITIES ACT
OR (B) ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF THE SECURITIES ACT. NOTWITHSTANDING
THE FOREGOING, IF (i) THE COMPANY HAS NOT FILED A REGISTRATION
STATEMENT UNDER THE SECURITIES ACT ON OR BEFORE ___________, 1997
[insert the date which is 90 days after the Closing Date] WHICH COVERS
THE SHARES, OR (ii) SUCH A REGISTRATION STATEMENT IS NOT DECLARED
EFFECTIVE UNDER THE SECURITIES ACT ON OR BEFORE __________, 1997
[insert the date which is 180 days after the Closing Date], THIS LEGEND
SHALL THEREAFTER BE OF NO FURTHER FORCE OR EFFECT AND SHALL PROMPTLY BE
REMOVED BY THE COMPANY'S TRANSFER AGENT UPON REQUEST OF THE HOLDER
WITHOUT FURTHER AUTHORIZATION FROM THE COMPANY."
(2) In the event that such legend has not previously
been removed from the Certificate representing the Shares pursuant to
the provisions of paragraph (1) of this Subsection 10.2, the Company
covenants that it will use its best efforts to have such legend removed
promptly upon the Subscriber's request (if necessary, by obtaining an
opinion of counsel acceptable to the Company's transfer agent to the
effect that the legend is not required and may be removed in that the
offer and sale of the Shares to the Subscriber were made in compliance
with provisions of Regulation S, including Rule 903(c)(2) thereof) in
the event that, after the Registration Statement has become effective,
there is any period of 15 or more consecutive calendar days, or 30
total nonconsecutive calendar days, during which the Subscriber,
through no fault of its own, would not be permitted by Section 9 to
resell its Registrable Securities under the Registration Statement.
(3) The Subscriber represents and warrants that it
has no present intention or view toward disposing of or distributing
the Shares upon any such removal of the legend. The Subscriber
acknowledges and agrees that, even after removal of the legend, if such
removal occurs, it may not transfer the Shares without registration
under the Securities Act and applicable State Laws unless an exemption
from such registration is available or registration is not required
pursuant to Regulation S under the Securities Act. After removal of the
legend, if at any time the Subscriber becomes entitled to sell the
Shares into the United States or to a U.S. Person pursuant to an
available exemption from registration (as determined in the sole
discretion of the Subscriber and its own legal counsel), the Subscriber
will not, individually or as part of a group, directly or indirectly
sell any of the Shares into the United States or to a U.S. Person in a
manner which would disrupt the market for the Shares in the United
States. The Subscriber acknowledges that no representation, warranty or
guaranty, express or implied, has been given to the Subscriber by any
officer, director, agent, or employee of, legal counsel to, or any
other person connected with, the Company, the Agent, or any other party
regarding the availability at any time of an exemption from
registration under the Securities Act or State Laws for any offer, sale
or other transfer or disposition of the Shares by the Subscriber; and
the Subscriber further understands and agrees that the availability of
any such exemption from registration must be determined solely by the
Subscriber and the Subscriber's own legal counsel based on the
particular facts and circumstances existing at the time of the proposed
transaction.
11. Reliance. The Subscriber understands and agrees that the Company
and the Agent and their respective officers, directors, employees and
professional advisers may, and will, rely on the accuracy of the Subscriber's
representations and warranties in this Subscription Agreement to establish
compliance with applicable securities laws. The Subscriber agrees to indemnify
and hold harmless all such parties against all losses, claims, costs, expenses
and damages or liabilities which they may suffer or incur caused or arising from
their reliance on such representations and warranties.
12. Appointment of the Agent.
12.1.....Related Agreements. The Subscriber hereby irrevocably
authorizes the Agent to negotiate and settle the form of any other document or
agreement to be entered into in connection with this transaction.
12.2.....Agency Agreement. The Subscriber hereby acknowledges
and agrees that the Agent and the Company may vary, amend, alter or waive, in
whole or in part, one or more of the conditions set forth in the Agency
Agreement in such manner and on such terms and conditions as they may determine,
acting reasonably, without affecting in any way the Subscriber's obligations
hereunder; provided, however, that the Agent shall not vary, amend, alter or
waive any such condition where to do so would result in a material change to any
of the material terms of the Private Placement.
12.3..... Closing; Termination. The Subscriber hereby
acknowledges and agrees that the Agent may waive, in whole or in part, or extend
the time for compliance with, any of the conditions for Closing in such manner
and on such terms and conditions as the Agent may determine, acting reasonably,
without in any way affecting the Subscriber's obligations, and may terminate
this Subscription Agreement on behalf of the Subscriber in the event that any
condition for Closing has not been satisfied.
13. Miscellaneous.
13.1.....Survival. The representations, warranties, covenants
and agreements made in this Subscription Agreement shall survive the Closing and
shall continue in full force and effect notwithstanding the completion of the
issuance of the Shares to the Subscriber and notwithstanding any subsequent
disposition by the Subscriber of any of the Shares.
13.2.....Assignment. This Subscription Agreement is not
transferable or assignable.
13.3.....Execution and Delivery of Subscription Agreement. The
Company and the Agent shall be entitled to rely on delivery by facsimile machine
of an executed copy of this Subscription Agreement, and acceptance by the
Company of such facsimile copy shall be equally effective to create a valid and
binding agreement between the Subscriber and the Company in accordance with the
terms hereof.
13.4.....Execution and Delivery of Other Documents. The
Subscriber agrees that it will execute and deliver such other documents as may
be necessary or desirable to complete the transactions contemplated hereby.
13.5.....Titles and Subtitles. The titles and subtitles of the
sections and subsections of this Subscription Agreement are for the convenience
of reference only and are not to be considered in construing this Subscription
Agreement.
13.6.....Severability. The invalidity or unenforceability of
any particular provision of this Subscription Agreement shall not affect or
limit the validity or enforceability of the remaining provisions of this
Subscription Agreement.
13.7.....Termination. If, prior to Closing, the Agent
exercises its right of termination as contained in the Agency Agreement, this
Subscription Agreement and the obligations of the parties hereto (other than the
terms of Subsection 6.2 governing the return to the Subscriber of subscription
funds, exclusive of interest) are deemed to have terminated as at the effective
date of such termination.
13.8.....Entire Agreement. This Subscription Agreement
constitutes the entire agreement and understanding between the parties with
respect to the subject matters herein, and supersedes and replaces any prior
agreements and understandings, whether oral or written, between them with
respect to such matters. Except as otherwise provided herein, the provisions of
this Subscription Agreement may be waived, altered, amended or repealed, in
whole or in part, only upon the mutual written agreement of the Company and the
Subscriber.
13.9.....Counterparts. This Subscription Agreement may be
executed in any number of counterparts, each of which shall be an original, but
all of which together shall constitute one and the same instrument.
13.10....Governing Law. This Subscription Agreement is
governed by and shall be construed in accordance with the laws of the State of
California, except that the authority to award damages (including punitive
damages) shall be interpreted under New York law. The Subscriber agrees that it
shall not be entitled to claim punitive damages as a result of any dispute
arising under or in connection with this Subscription Agreement, and the
Subscriber has been advised to seek counsel concerning the possible waiver by
the Subscriber of certain rights otherwise available to the Subscriber as a
consequence of such agreement.
13.11....Revised Minimum Offering Amount. The parties
acknowledge that the original $3,000,000 aggregate minimum offering price needed
to close the Placement has been reduced to $2,000,000.
IN WITNESS WHEREOF, the Subscriber has duly executed this Subscription
Agreement as of the date first above mentioned.
Total Purchase Price:
$
.........
Name of Subscriber (please type or print)
.........
Signature and, if applicable, office
.........
Street address of Subscriber
.........
City, state/province, country and postal code of Subscriber
REGISTRATION AND DELIVERY INSTRUCTIONS
(TO BE COMPLETED BY SUBSCRIBER)
1. Registration. Please register the Subscriber's Share Certificate as
follows:
Name:
Address:
2. Delivery. Please deliver the Subscriber's Share Certificate to the
following address:
ACCEPTANCE
The above subscription is hereby accepted by ORYX TECHNOLOGY CORP. at
Fremont, California on the day of , 1996.
......... .........ORYX TECHNOLOGY CORP.
......... .........By:
......... .........Authorized signing officer
SCHEDULE A
In November 1996, Xxxxxx-Xxxxx Corp., the Company's largest customer,
informed the Company that it does not intend to renew one of the three contracts
it has with the Company when that contract expires on December 31, 1996. The
Company expects that sales to Xxxxxx-Xxxxx under that contract will represent
approximately 25% of the consolidated revenues of the Company for the 1996
calendar year.
Oryx Power Products Corporation ("Power Products"), a wholly-owned
subsidiary of the Company, is currently negotiating to acquire the assets of a
DC to DC power supply company in exchange for approximately 600,000 shares of
common stock of Power Products and the assumption by Power Products of certain
associated liabilities. If this acquisition is completed, as to which no
assurances can be given, the Company expects that the increase in revenues
attributable to such acquisition will approximately offset the loss of revenues
due to the expiration of the Xxxxxx-Xxxxx contract.
EXHIBIT INDEX
Exhibit A Annual Report on Form 10-KSB for the fiscal year ended February 29,
1996
Exhibit B Proxy Statement for the Annual Meeting of Stockholders held on
September 20, 1996
Exhibit C Quarterly Report on Form 10-QSB for the period
ended August 31, 1996
Exhibit D Post-Effective Amendment No. 3 to Form SB-2
Registration Statement filed with the Securities and Exchange Commission on
November 14, 1996 with respect to an unrelated offering of securities
