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EXHIBIT NO. 10.28
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OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT
THIS OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT is executed in reliance
upon the transaction exemption afforded by Regulation S ("Regulation S") as
promulgated by the Securities and Exchange Commission ("SEC"), under the
Securities Act of 1933, as amended ("1993 Act").
THIS AGREEMENT has been executed by the undersigned in connection with
the private placement of shares of Common Stock (hereinafter referred to as the
"Shares") of AVITAR, INC. (hereinafter referred to as "AVIT") located at 65 Dan
Road, Canton, Massachusetts 02021; a corporation organized under the laws of
Delaware, United States of America (hereinafter referred to as "Seller" or
"Company"). The undersigned, _____________________, a corporation organized
under the laws of _______________ jurisdiction (hereinafter referred to as
"Purchaser"), hereby represents and warrants to, and agrees with Seller as
follows:
1. AGREEMENT TO SUBSCRIBE; PURCHASE PRICE
a. The undersigned hereby subscribes for ________ Shares of the Common
Stock of AVIT for an aggregate amount of $________ (US).
b. Form of Payment. Purchaser shall pay the purchase price by
delivering immediately available funds in United States Dollars to Levy & Levy,
P.A., Attn: William N. Levy, Esq., Plaza 1000, Suite 309, Voorhees, New Jersey
08043 as Escrow Agent, by delivery of securities versus payment.
2. ACCEPTANCE OF SUBSCRIPTION
a. This subscription may be accepted or rejected by the Company at its
sole discretion.
b. This subscription shall be deemed accepted only when this Agreement
is signed by the Company in the space provided on the signature page hereof.
c. If the Company receives subscriptions from multiple subscribers, it
has no obligation to accept subscriptions in the order received.
3. PURCHASER REPRESENTATIONS AND WARRANTIES
a. Offshore Transaction. Purchaser hereby represents and warrants to
Seller as of the date hereof and as of the Closing Date as follows:
(i) If the Purchaser is a corporation, it is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, and if the Purchaser is a partnership or other organization, it
is duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization.
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(ii) (a) If the Purchaser is a corporation, the execution, delivery
and performance of this Agreement have been duly authorized by
all necessary corporate action, (b) if the Purchaser is a
partnership or other organization, the other governing
documents to enter into this Agreement and to consummate the
transactions contemplated hereby and all necessary consents and
approvals required by the partnership agreement or other
governing documents have been obtained, and (c) this Agreement
constitutes a legal, valid and binding obligation of the
Purchaser, enforceable against the Purchaser in accordance with
its terms, except to the extent that enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors' rights
generally.
(iii) The Purchaser did not receive any offer to purchase the Shares
in the United States. This Agreement has not been executed by
the Purchaser in the United States.
(iv) The Purchaser is not a "U.S. person," as defined in Rule
902(o) of Regulation S (a "U.S. Person"), promulgated under the
Securities Act of 1933, as amended (the "1933 Act") and as set
forth in Schedule A attached hereto, and is not acquiring the
Shares, directly or indirectly, for the account or benefit of
any U.S. Person.
(v) The Purchaser (a) has received a copy of the Disclosure
Documents (as hereinafter defined) and has carefully reviewed
and understands the Disclosure Documents and this Agreement and
(b) understands that, except as set forth in the Disclosure
Documents and in this Agreement, no representations or
warranties have been made to the Purchaser by the Company or by
any distributor, or by any of their officers, directors,
employees, agents or affiliates, and (c) agrees that, in
connection with the purchase of the Shares, it is not relying
upon any information concerning the Company, other than (i)
that contained in the Disclosure Documents and in this
Agreement and (ii) on the results of its own independent
investigations. The term "Disclosure Documents" shall mean (a)
the Company's latest Annual Report to Shareholders on Form 10-K
(without exhibits), (b) the Company's Quarterly Reports on Form
10-Q and Form 8-K thereafter, and (c) copies of the Company's
significant press releases issued after said Annual Report.
(vi) The Purchaser understands that (a) no governmental authority
has passed upon the accuracy or completeness of the Disclosure
Documents or has made any finding or determination concerning
the appropriateness or suitability of an investment in the
Shares and (b) no governmental authority has recommended or
endorsed, or will recommend or endorse, the investment in the
Shares.
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(vii) The Purchaser is acquiring the Shares for investment and not
purchasing the Shares with a view to the distribution thereof
within the meaning of the 1933 Act.
(viii) The Purchaser will not engage in any transaction or series of
transactions that, although in technical compliance with
Regulation S, is part of a plan or scheme to evade the
registration requirements of the 1933 Act with respect to the
Shares.
(ix) All subsequent offers and sales of the Shares by Purchaser shall
be made in compliance with Regulation S under the Securities
Act, pursuant to registration under the Securities Act or
pursuant to an exemption from such registration. In any case,
the Shares shall not be resold to U.S. persons or within the
United States during the period of forty (40) days commencing on
the date of Closing of the purchase of the Shares.
(x) Purchaser understands that the Shares are being offered and sold
to it in reliance on specific exemptions from the registration
requirements of Federal and State securities laws and that the
Seller is relying upon the truth and accuracy of the
representations, warranties, agreements acknowledgements and
understandings of Purchaser set forth herein in order to
determine the applicability of such exemptions and the
suitability of Purchaser to acquire the Shares.
(xi) Purchaser agrees to indemnify and hold the Company, the
Distributor, their respective officers, directors and
shareholders or any other person who may be deemed to control
the Company or the Distributor harmless from any loss,
liability, claim, damage or expense, arising out of the
inaccuracy of any of Purchaser's representations, warranties
or statements or the breach of any of the agreements contained
herein.
4. LIMITATIONS ON TRANSFER AND CERTAIN COVENANTS.
a. The Purchaser acknowledges that (i) the Shares have not been
registered under the 1933 Act in reliance on provisions of Rule 903 or Rule 904
of Regulation S, nor have the Shares been registered or qualified for sale
under the laws of any other jurisdiction (either within or outside of the
United States) and (ii) the Company has no obligations hereunder or any current
intention to effect any such registration or qualification.
b. The Purchaser covenants and agrees that it will not sell the Shares
to a U.S. Person, or for the account or benefit of a U.S. Person, prior to the
expiration of a period of 40 days following the Closing Date ("Restricted
Period").
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c. The Purchaser acknowledges that the certificates evidencing the
Shares will bear the following legend:
"These shares have been issued pursuant to Regulation S as an
exemption to the registration provisions under the Securities Act of
1933, as amended. These shares cannot be transferred, offered or sold
in the U.S. or to U.S. persons (as defined in Regulation S) until after
____________________, 1996 (Forty-one days after issuance)."
The Company covenants and agrees that following the expiration of the
Restricted Period it will advise the transfer agent for the Common Stock, upon
the request of a recordholder of the Shares, that the foregoing legend can be
removed from the certificate for the Shares.
d. The Purchaser represents and warrants to the Company that, as of the
date hereof and as of the Closing Date, neither it nor any of its affiliates
has, and covenants that during the Restricted Period neither it nor any of its
affiliates will establish or maintain, any short position (including any short
call position or any long put position) with respect to the Common Stock of the
Company, and that no such person or entity is a party to, nor shall it enter
into during the Restricted Period, any contract or arrangement having the effect
of eliminating or substantially diminishing the risk of ownership of the Shares.
5. REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents and warrants to the Purchaser, as of the date
hereof and as of the Closing Date, that:
a. The Company is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation.
b. The execution, delivery and performance of this Agreement has
been duly authorized by all necessary corporate action and this
Agreement constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except to
the extent that enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting
creditors' rights generally.
c. The execution, delivery and performance of this Agreement does
and will not (i) violate any provision of the Company's Certificate of
Incorporation or By-laws, (ii) violate or breach any material contract
or agreement to which the Company is a party, (iii) result in the
creation of any lien, security interest, charge or encumbrance on any
property or assets of the Company, or (iv) require the authorization,
consent or approval of any court or any administrative or governmental
body pursuant to any law, statute, rule or regulation to which the
Company is subject to any order, judgment or decree by which the
Company is bound.
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d. When issued in accordance with the terms of this Agreement, the
Shares:
(i) except for the Regulation S legend provided in this
Agreement, will be free and clear of any restrictions, liens,
claims or other encumbrances by the Company (other than those
that may arise by reason of any action or inaction of the
Purchaser);
(ii) will be duly authorized, validly issued, fully paid and
nonassessable;
(iii) will not have been issued or sold in violation of any
preemptive or other similar rights of the holders of any
securities of the Company; and
(iv) will not subject the holders thereof to personal liability
to the Company solely by reason of their ownership of such
Shares.
e. The Company is a "Reporting Issuer" as defined by Rule 902(I) of
Regulation S. The Company is in full compliance, to the extent
applicable, with all reporting obligations under either Section 12(b),
12(g) or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). The Common Stock trades on NASDAQ Small Cap and its
trading symbol is "AVII".
f. Seller has not offered the securities which are the subject of
this transaction to any person in the United States, any identifiable
groups of U.S. citizens abroad, or to any U.S. person as that term is
defined in Regulation S.
g. At the time the buy order was originated, Seller and/or its
agents reasonably believed Purchaser was outside of the United States
and was not a U.S. person.
h. Seller and/or its agents reasonably believe that the
transaction has not been pre-arranged with a buyer in the United States.
i. In regard to this transaction, Seller has not conducted any
"directed selling efforts" as that term is defined in Rule 902 of
Regulation S nor has Seller conducted any general solicitation relating
to the offer and sale of the securities which are the subject of this
transaction to persons resident within the United States or elsewhere.
Each of the foregoing representations and warranties shall survive the
Closing.
6. REMEDIES.
In the event of a breach by the Purchaser of any of the
representations, warranties or covenants contained in this Agreement, and
without limitation of any other remedy available to the Company at law or in
equity, the Company shall have the right and the option to rescind the sale of
the Shares to the Purchaser. In such case, the amount payable to the Purchaser
upon rescission will be the aggregate Purchase Price, less all expenses, costs
and damages incurred by the Company, and
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whereupon the Company shall have no further liability or obligation to the
Purchaser under this Agreement or otherwise.
7. ASSIGNABILITY.
Neither this Agreement, nor the rights or obligations of either party
hereunder, may be transferred or assigned without the prior written consent of
the other party (which may be withheld for any reason in the sole discretion of
the party required to provide such consent) and any purported transfer or
assignment not so consented to shall be void. This Agreement shall be binding
on and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
8. ENTIRE AGREEMENT.
This Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof, and there are no
representations, warranties, covenants or other agreements of either party
except as stated herein.
9. AMENDMENTS.
No provision of this Agreement shall be waived, discharged or amended,
except by an instrument in writing signed by the party against whom any such
waiver, modification, discharge or amendment is sought.
10. WAIVERS.
No waiver by either party of any default with respect to any provision,
condition or requirements of this Agreement shall be deemed to be a waiver of
any future default with respect to the same provision, condition or
requirement, or a waiver of any other provision, condition or requirement
hereof. No delay or omission of either party to exercise any right hereunder
shall in any manner impair the exercise of such right at any future time.
11. APPLICABLE LAW.
This Agreement shall be construed in accordance with and governed by
the laws of the State of New York without regard to the conflicts of laws
principles thereof.
12. SEVERABILITY.
Each provision of this Agreement shall be considered severable and if
for any reason any provision which is not essential to the effectuation of the
basic purposes of this Agreement is determined by a court of competent
jurisdiction to be invalid or unenforceable, or contrary to existing or
future applicable law, such invalidity shall not impair the operation of or
affect those provisions of this Agreement which are valid. In such case, this
Agreement shall be construed so as to limit any term or provision so as to make
it enforceable or valid within the requirements of any applicable
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law, and in the event such term or provision cannot be so limited, this
Agreement shall be construed to omit such invalid or unenforceable provision.
13. FAX SIGNATURES AND COUNTERPARTS.
This Agreement may be executed in any number of counterparts, including
counterparts transmitted by telecopier or FAX, any one of which shall
constitute an original of this Agreement. When counterparts of facsimile copies
have been executed by all parties, they shall have the same effect as if the
signature to each counterpart or copy were upon the same document and copies of
such documents shall be deemed valid as originals. The parties agree that all
such signatures may be transferred to a single document upon the request of any
party.
14. NOTICES.
Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be effective (a) upon hand delivery or
delivery by telecopy or facsimile at the address or number designated below (if
delivery on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the close of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be:
If to the Company: Peter Phildius
Avitar, Inc.
65 Dan Road
Canton, Massachusetts 02021
If to the Purchaser, as set forth on the signature page hereof.
Either party hereto may from time to time change its address for
notices under this Section 14 by giving at least 10 days written notice of such
changed address to the other party hereto.
15. HEADINGS.
The headings herein are for convenience of reference only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
the interpretation of any of the provisions hereof.
16. NO THIRD PARTY BENEFICIARIES.
This Agreement is intended for the benefit of the parties hereto and
their respective successors and permitted assigns, and is not for the benefit
of, nor may any provision hereof be enforced by, any other person.
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SCHEDULE A
CATEGORIES OF U.S. PERSONS
1.) Any natural person resident in the United States;
2.) Any partnership or corporation organized or incorporated under the laws
of the United States;
3.) Any estate of which any executor or administrator is a U.S. person;
4.) Any trust of which any trustee is a U.S. person;
5.) Any agency or branch of a foreign entity located in the U.S.;
6.) Any non-discretionary account or similar account (other than estate or
trust) held by a dealer or other fiduciary for the benefit or account of
a U.S. person;
7.) Any partnership or corporation if: (A) organized or incorporated under
the laws of any foreign jurisdiction; and (B) formed by a U.S. person
principally for the purpose of investment in securities not registered
under the Act, unless it is organized or incorporated, and owned, by
accredited investors (as defined in Rule 501[a]) who are not natural
persons, estates or trusts.
8.) Any 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.
9.) 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.
10.) 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 States,
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. person."
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17. FEES AND EXPENSES
Each party shall pay for the fees and expenses of its own advisers,
counsel, accountants and other experts, if any, and all other expenses incurred
by such party incident to the negotiation, preparation, execution and delivery
and performance of this Agreement.
18. CONSENT OF JURISDICTION
Each of the Company and the Purchaser (i) hereby irrevocably submits to
the nonexclusive jurisdiction of the United States District Court for the
Southern District of New York or any New York State Court arising in New York
and New York County for the purposes of any New York State Court arising in New
York City and New York County for the purposes of any suit, action or proceeding
arising out of or relating to this Agreement and (ii) hereby waives, and agrees
not to assert in any such suit, action or proceeding, any claim that is not
personally subject to the jurisdiction of such court, that the suit, action or
proceeding is brought in an inconvenient forum or that the venue of the suit,
action or proceeding is improper. Each of the Company and the Purchaser commits
to process being served in any such suit, action or proceeding by mailing a copy
thereof to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing in this paragraph shall affect or
limit any right to serve process in any other manner permitted by law.
IN WITNESS WHEREOF, the undersigned has caused this Offshore Securities
Subscription Agreement to be executed by a duly authorized officer.
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Name of Purchaser (Please Print or Type)
By:
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NAME:
TITLE:
Date:
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Broker Address
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Telephone Number Facsimile Number
ACCEPTED:
AVITAR, INC.
By:
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NAME: Peter Phildius
TITLE: Chief Executive Officer