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EXHIBIT-7(d)
OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT
MBf USA, INC.
WEMBLEY RUBBER PRODUCTS (M) SDN. BHD.
This Offshore Securities Subscription Agreement (the "Agreement") is dated
as of May 20, 1997 and is executed in reliance upon the transaction exemption
afforded by Regulation S ("Regulation S") under the Securities Act of 1933, as
amended (the "Securities Act"), as promulgated by the Securities and Exchange
Commission (the "SEC").
This Agreement has been executed by the undersigned in connection with the
private placement of shares of Common Stock (the "Common Stock") of MBf USA,
Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, a
corporation organized under the laws of Maryland, United States of America (the
"Issuer").
The shares of Common Stock of Issuer subscribed for hereunder are
sometimes referred to herein as the "Shares".
The undersigned subscriber is Wembley Rubber Products (M) Sdn. Bhd., 28th
Floor Wisma Denmark, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ (the
"Purchaser").
WHEREAS, Issuer, through its American Health Products Corporation
subsidiary ("AHPC") is in the business of the purchase and sale of latex
gloves, among other things;
WHEREAS, Purchaser is in the business of manufacture and sale of latex
gloves and is a major supplier of powder-free latex gloves to Issuer;
WHEREAS, Purchaser's purchase of the Shares is contingent upon the due
execution and delivery of the registration rights agreement appended hereto as
Appendix B and the due execution and delivery of the Sale & Purchase Agreement
between the MBf International Ltd, a Hong Kong Corporation and Purchaser (the
"Sale and Purchase Agreement") appended hereto as Appendix C.
WHEREAS, Issuer's Common Stock is traded on the NASDAQ Small Cap Market;
WHEREAS, Issuer has provided Purchaser with detailed financial and
operating information as referenced herein, and has provided Purchaser an
opportunity to ask questions of Issuer with respect to all aspects of Issuer's
business.
NOW, THEREFORE, in consideration of the premises and covenants contained
herein, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
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1. Purchase of Common Stock. Purchaser hereby purchases from Issuer
and Issuer hereby sells to Purchaser two-million five-hundred thousand
(2,500,000) shares of Common Stock (the "Shares") at the subscription price of
US$2.70 per share, in consideration of six-million seven-hundred fifty thousand
dollars (US$6,750,000). Purchaser shall pay 5% of the total consideration upon
signing and the remaining amount to be paid simultaneously with the closing of
the transaction under the Sale and Purchase Agreement referred to in paragraph
7 but which payment shall be made no later than August 8, 1997 subject to the
closing of the transaction under the Sale and Purchase Agreement.
2. Subscriber Representations; Access to Information; Independent
Investigation.
a. Offshore Transaction. Purchaser represents and warrants to
Issuer as follows:
(i) Neither Purchaser or any person or entity for whom Purchaser
is acting as fiduciary is a U.S. person. A U.S. person means any one of the
following:
(1) any natural person resident in the United States of
America;
(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
United States;
(6) 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;
(7) 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
(8) 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 investing in securities not registered under the
Securities Act, unless it is organized or incorporated,
and owned, by accredited investors (as
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defined in Rule 501(a) under the Securities Act) who are
not natural persons, estates or trusts.
(ii) At the time the agreement to purchase was originated,
Purchaser was outside the United States and is outside of the United States as
of the date of the execution and delivery of this Agreement. No offer to
purchase Shares was made in the United States.
(iii) Purchaser is purchasing the Shares for its own account or for
the account of beneficiaries for whom Purchaser has full investment discretion
with respect to the Shares and from whom Purchaser has full authority to bind
so that each such beneficiary is bound hereby as if such beneficiary were a
direct Purchaser hereunder and all representations, warranties and agreements
herein were made directly by such beneficiary. Purchaser is not purchasing
the Shares on behalf of any U.S. person and the sale has not been prearranged
with a purchaser in the United States.
(iv) All subsequent offers and sales of the Shares will be made
(a) outside the United States in compliance with Rule 903 or Rule 904 of
Regulation S, (b) pursuant to registration of the Shares under the Securities
Act, or (c) pursuant to an exemption from such registration. Purchaser
understands the conditions of the exemption from registration afforded by
Section 4(1) of the Securities Act and acknowledges that there can be no
assurance that it will be able to rely on such exemption. In any case,
Purchaser will not resell the Shares to U.S. Persons or within the United
States until after the end of the forty day period commencing on the date of
issuance of the Shares to Purchaser (the "Restriction Period").
(v) Purchaser has no existing short position with respect to the
Common Stock of Issuer and agrees not to enter into any short sales or other
hedging transactions either directly or indirectly with respect to the Common
Stock of Issuer at any time after the execution of this Agreement by Purchaser.
(vi) Purchaser understands that the Shares have not been
registered under the Securities Act and may not be offered or sold in the
United States, to U.S. persons or for the account or benefit of a U.S. person
(other than distributors as defined in Regulation S) unless the Shares are
registered under the Securities Act or an exemption from the registration
requirements is available.
(vii) Purchaser acknowledges that the purchase of the Shares
involves a high degree of risk and acknowledges further that it can bear the
economic risk of the purchase of such Shares, including the total loss of its
investment. Purchaser acknowledges that it has obtained the advise of
competent legal counsel in its domicile jurisdiction that it is qualified under
the laws of its domicile to purchase the Shares and that the offer and sale of
such Shares will not violate the laws of its domicile jurisdiction.
(viii) Purchaser understands that the Shares are being offered and
sold to it in reliance on a specific exemption from the registration
requirements of Federal and state securities laws and that Issuer is relying
upon the truth and accuracy of the representations, warranties, agreements,
acknowledgments and understandings of Purchaser set forth herein to determine
the applicability of such exemptions and the suitability of Purchaser to
acquire the Shares.
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(ix) Purchaser is sufficiently experienced in financial and
business matters to be capable of evaluating the merits and risks of its
investments and to make an informed decision relating thereto.
(x) In evaluating its investment, Purchaser has consulted its own
investment and/or legal and/or tax advisors.
(xi) Purchaser understands that, in the view of the SEC, the
statutory basis for the exemption claimed for this transaction would not be
present if the offering of the Shares, although in technical compliance with
Regulation S, is part of a plan or scheme to evade the registration provisions
of the Securities Act. Purchaser has no present intention to sell such Shares
in the United States, to a U.S. person or for the account or benefit of a U.S.
person other than in compliance with the federal securities laws. In the event
that Purchaser transfers the Shares, it acknowledges that the transferee
thereof will be required to sign a Purchaser Representation Letter in the form
set forth in Appendix A hereto.
(xii) Purchaser is not an underwriter of, or dealer in, the Shares.
Purchaser is not participating, pursuant to a contractual agreement, in the
distribution of the Shares.
If Purchaser is purchasing the Shares subscribed for hereby in
representative or fiduciary capacity, the representations and warranties in
this Agreement shall be deemed to have been made on behalf of the person or
persons for whom Purchaser is so purchasing.
The foregoing representations and warranties are true and accurate
as of the date hereof, shall be true and accurate as of the date of the
acceptance by Issuer of Purchaser's subscription and shall survive thereafter.
If Purchaser has knowledge, prior to the acceptance of this Agreement by
Issuer, that any such representation and warranty shall not be true and
accurate in any respect then Purchaser, prior to such acceptance, will give
written notice of such fact to Issuer specifying which representation and
warranty is not true and accurate and the reasons therefor.
b. Current Public Information. Purchaser acknowledges that
Purchaser has been furnished with or has acquired copies of Issuer's most
recent Annual Report on Form 10-K and any Quarterly Report on Form 10-Q filed
thereafter (collectively, the "SEC Filing") and other publicly available
documents. Purchaser acknowledges that Issuer has not prepared a Confidential
Private Placement Memorandum or other offering document in connection with
Purchaser's purchase of the Shares. Purchaser further acknowledges that the
following risk factors among others exist with respect to Issuer:
(i) Sourcing of Products. AHPC presently purchases its latex
examination gloves from a restricted few manufacturers based in Asia. Issuer's
business could be adversely impacted should any such supplier for any reason
fail to supply the gloves on a regular, high quality basis and at competitive
terms.
(ii) Customers. Issuer's several largest customers constitute a
substantial portion of its business, and loss of any one such customer could
severely, adversely impact Issuer's business.
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(iii) Financing. Issuer requires significant financing of its
purchase orders, inventory and accounts receivable, which financing is backed
by the guarantee of Issuer's Malaysian affiliates. Should such guarantees be
withdrawn or should Issuer's lender(s) require increased financial stability of
Issuer irrespective of such guarantees, there can be no assurances that Issuer
will be able to maintain adequate financing to support its operations.
(iv) Market for Common Stock. The Common Stock of Issuer is
traded on the NASDAQ small cap market. Due to continued losses over the years,
trading volume has decreased and there has been a reduction in the volume of
shares traded and in price. Should Purchaser choose to sell a large block of
Shares, the market may be unable to absorb the same, with a potential resultant
decline in price. In addition, continued listing on NASDAQ is contingent upon
maintenance of a per share price of at least $1.00, and a net worth of at least
$1,000,000. Should Issuer continue to generate losses, there is a risk that
its Common Stock could be delisted, which would reduce liquidity for the Common
Stock.
c. Independent Investigation: Access. Purchaser acknowledges
that, in making the decision to purchase the Shares subscribed for, Purchaser
has relied upon independent investigations made by it and its purchaser
representatives, if any, and Purchaser and such representatives, if any, have,
prior to any sale to Purchaser, been given access and the opportunity to
examine all material books and records of Issuer, all material contracts and
documents relating to this offering and an opportunity to ask questions of, and
to receive answers from, Issuer or any person acting on its behalf concerning
the terms and conditions of this offering. Purchaser and its advisors, if any,
have been furnished with access to all publicly available materials relating to
the business, finances and operation of Issuer and materials relating to the
offer and sale of the Shares which have been requested. Purchaser and its
advisors, if any, have received complete and satisfactory answers to any such
inquiries.
d. No Government Recommendation or Approval. Purchaser
understands that no Federal or state agency has made or will make any finding
or determination relating to the fairness for public investment in the Shares
or has passed or made, or will pass on or make, any recommendation or
endorsement of the Shares.
e. Entity Purchases. If Purchaser is a partnership, corporation
or trust, the person executing this Agreement on its behalf represents and
warrants that:
(i) He or she has made due inquiry to determine the truthfulness
of the representations and warranties made pursuant to this Agreement;
(ii) He or she is duly authorized (if the undersigned is a trust,
by the trust agreement) to make this investment and to enter into and execute
this Agreement on behalf of such entity.
f. Confidentiality. Purchaser agrees to maintain in confidence
the information provided by Issuer in this Agreement, to the extent such
information is not presently contained in the public domain.
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3. Issuer Representations.
Issuer represents and warrants to Purchaser as follows:
a. Reporting Company Status. Issuer is a reporting issuer as
defined by Rule 902 of Regulation S. Issuer is in full compliance with all
reporting obligations under Sections 13 or 15(d) of the Securities Exchange Act
of 1934, as amended.
b. Offshore Transaction. Issuer has not offered these securities
to any person in the United States or to any U.S. person or for the account or
benefit of any U.S. person. At the time the buy order was originated, Issuer
and/or its agent reasonably believed that Purchaser was outside of the United
States and was not a U.S. Person. Issuer and/or its agent reasonably believe
that the transaction has not been pre-arranged with a Purchaser in the United
States.
c. No Directed Selling Efforts. In regard to this transaction,
Issuer has not conducted any "directed selling efforts" as that term is defined
in Rule 902 of Regulation S nor has Issuer conducted any general solicitation
relating to the offer and sale of the Shares to U.S. persons residing within
the United States or elsewhere.
d. The Shares. The Shares, when issued and delivered, will be
duly and validly authorized and issued, fully paid and non-assessable and will
not subject the holders thereof to any liability solely by reason of being such
holders.
e. Subscription Agreement. This Agreement, when acknowledged by
the signature of an officer of Issuer, has been duly authorized, validly
executed and delivered on behalf of Issuer and is a valid and binding agreement
in accordance with its terms.
f. Non-contravention. The execution and delivery of this
Agreement, the consummation of the issuance of the Shares and the transactions
contemplated hereunder do not and will not conflict with or result in a breach
by Issuer of any of the terms or provisions of, or constitute a default under,
the certificate of incorporation or by-laws of Issuer or any indenture,
mortgage, deed of trust or other material agreement or instrument to which
Issuer is a party or by which it or any of its properties or assets are bound
or any existing applicable law, rule or regulation or any applicable decrees,
judgment or order of any court, Federal or State regulatory body,
administrative agency or other governmental body having jurisdiction over
Issuer or any of its properties or assets.
g. Prior Issuances Under Regulation S. Issuer has not issued
any shares of stock under Regulation S subsequent to the SEC Filings.
Securities Law Compliance. With respect to the Issuer's actions, the
offer and the sale of Shares shall conform in all respects with the
requirements of Regulation S and with the requirements of all other published
rules and regulations of the SEC currently in effect relating to "private
offerings" to non-residents of the United States of the type contemplated
herein. Neither the offer,
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sale or delivery of the Shares in conformity with the terms hereof will violate
Section 5 of the Securities Act, as presently in effect.
h. Authorization and Validity of the Agreement. This Agreement
has been duly authorized and when validly executed and delivered on behalf of
Issuer, will be a valid and binding agreement of the Issuer in accordance with
its terms, except as may be limited by bankruptcy, insolvency, reorganization
or similar laws affecting the enforcement of creditors' rights generally and to
the extent such document contains indemnification or contribution provisions
for violations of federal securities laws, as enforceability of such provisions
may be limited under federal securities laws.
4. Expiration of Restricted Period. The transaction restriction in
connection with this offshore offer and sale restricts the Purchaser from
offering and selling to U.S. persons or for the account or benefit of a U.S.
person for a forty-day period following issuance of the Shares. Title to the
Shares may be transferred by Purchaser to other non United States persons or
entities in accordance with Regulation S.
5. Exemption: Reliance on Representations. Purchaser understands that
the offer and sale of the Shares is not being registered under the Securities
Act. Issuer is relying on the rules governing offers and sales made outside
the United States pursuant to Regulation S. Rules 901 through 903 of
Regulation S govern this transaction.
6. Transfer Agent Instructions.
a. Legends on Certificates. The transaction restriction in
connection with this offshore offer and sale restricts Purchaser from offering
and selling to U.S. persons, or for the account or benefit of a U.S. person,
for a forty-day period. A restrictive legend will be placed on Purchaser's
Share certificates, which legend shall read substantially as follows:
The shares of the Issuer represented by this certificate have
been issued pursuant to Regulation S promulgated under the
Securities Act of 1933, as amended ("Act"), and have not been
registered under the Act. These shares are subject to certain
terms and conditions set forth in a Stock Subscription Agreement
between the Holder and Issuer and may not be offered or sold
within the United States or to or for the account of a "U.S.
Person" (as that term is defined in Regulation S) until after
the forty-day period following completion of the Regulation S
offering of the Issuer pursuant to which these shares have been
issued. The Issuer will notify the transfer agent of the date of
completion of such offering and of the expiration of such forty
day restricted period.
Purchaser Representation Letter. Issuer agrees to accept a Purchaser
Representation Letter signed by the transferee, in connection with any resale
of the Shares by Purchaser, in the form of Appendix A hereto, as sole and
sufficient evidence that Purchaser has complied with applicable securities laws
and, upon receipt of such a letter, shall promptly instruct its transfer agent
to transfer the Shares if so requested by Purchaser, as expeditiously as
practical after receipt of the certificates and the Purchaser Representation
Letter; provided Issuer shall not be required to deliver such
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instructions if it knows, or reasonably believes, any of the representations
made in the Purchaser Representation Letter are false.
7. Conditions to Issuer's Obligation to Sell. Issuer reserves the
right, in its complete discretion, to reject this Agreement. Purchaser
understands that Issuer's obligation to sell the Shares subscribed for
hereunder is conditioned (i) upon the counterpart execution of this Agreement
by both parties, whether by delivery of originals, facsimile or photocopy
signature and (ii) the execution and delivery of the Sale and Purchase
Agreement. Provided that Issuer and Purchaser have complied with the
conditions set forth in this Paragraph 7, immediately upon delivery of
counterpart executed copies hereof and acceptance of payment therefor by issue,
the Shares shall be deemed issued to Purchaser and fully paid for.
8. Return of Deposit to Purchaser. The Issuer shall refund to the
Purchaser the 5% deposit referred to in paragraph 1 herein free of interest, in
the event closing of the transaction under the Sale and Purchase Agreement does
not take place by the date referred to in paragraph 1 by reason of
non-fulfillment of the conditions precedent set forth in Section 4.1 of the
Sale and Purchase Agreement, or in the event of other lawful termination of the
Sale and Purchase Agreement by the Purchaser. Issuer shall be entitled to
forfeit the 5% deposit in the event that Purchaser fails to pay the balance
purchase consideration of USD6,412,500 under this Agreement by the closing date
of the transaction under the Sale and Purchase Agreement referred to in
paragraph 1 for reasons other than those set forth in this Paragraph 8.
9. Registration Rights. Issuer hereby agrees to grant to Purchaser the
registration rights set forth in Appendix B attached hereto and made a part
hereof; Issuer agrees to execute said agreement.
10. Governing Law. This Agreement shall be governed by and construed
under the laws of the State of Illinois without regard to its choice of law
principles.
11. Entire Agreement. This Agreement constitutes the entire agreement
among the parties hereof with respect to the subject matter hereof and
supersedes any and all prior or contemporaneous representations, warranties,
agreements and understandings in connection therewith. This Agreement may be
amended only by a writing executed by all parties hereto.
12. Full Name and Address of Purchaser for Stock Certificate and
Delivery Purposes:
NAME: Wembley Rubber Products (M) Sdn. Bhd.
ADDRESS: As set forth in preamble to this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first set forth above.
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MBf USA, Inc. Wembley Rubber Products (M) Sdn. Bhd.
By: /s/ ▇▇▇ ▇▇▇▇ Sewn By: /s/
------------------------------ ------------------------------
▇▇▇ ▇▇▇▇ Sewn, Chairman Its: Chief Executive Officer
Date of Execution: May 20, 1997 Date of Execution: May 20, 1997
--------------- ---------------
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APPENDIX "A"
PURCHASER REPRESENTATIONS LETTER
Dear Sirs:
The undersigned ________________ has purchased on _______________ two
million-five-hundred thousand (2,500,000) shares of Common Stock, par value
$.01 per share (the "Shares"), of MBf USA, Inc. (the "Company") and, in
connection with such purchase, has executed and delivered a transfer form
("Transfer Form"). As the forty day transaction restriction period has expired,
the purchaser hereby requests that the Shares be transferred to ____________.
The undersigned represents and warrants as follows:
(1) The offer to purchase the Shares was made to it outside of the United
States and the undersigned was, at the time the subscription form was
executed and delivered, and is now, outside the United States.
(2) It is not a U.S. Person (as such term is defined in Section 902(a) of
Regulation S ("Regulation S") promulgated under the United States
Securities Act of 1933, as amended (the "Securities Act"), and it has
purchased the Shares for its own account and not for the account or
benefit of any other person.
(3) All offers and sales by the undersigned of the Shares shall be made
pursuant to an effective registration statement under the Securities
Act or pursuant to an exemption from, or in a transaction not subject
to the registration requirements of the Securities Act.
(4) It is familiar with and understands the terms, conditions and
requirements contained in Regulation S and definitions of U.S. persons
contained in Regulation S.
(5) The undersigned has not engaged in any "directed selling efforts" (as
such term is defined in Regulation S) with respect to the Shares.
Dated this ______ day of the month of _______________, 199 _____.
By:
_________________________________
Official Signature of Transferee
Title: ______________________________ Country of Execution: ____________
▇▇
▇▇▇▇▇▇▇▇ "▇"
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and entered
into as of the 20th day of May, 1997, by and between MBf USA, INC., a Maryland
corporation (the "Company"), and Wembley Rubber Products (M) Sdn. Bhd., a
Malaysia corporation (the "Holder").
WITNESSETH:
WHEREAS, Holder has agreed to purchase shares (the "Shares") of common
stock, par value $.01 per share (the "Common Stock"), of the Company pursuant
to an Offshore Securities Subscription Agreement (the "Subscription
Agreement"), between the Company and Holder in connection with a private
placement of the Shares by the Company (the "Offering") pursuant to Regulation
S promulgated under the Securities Act of 1933, as amended (the "Securities
Act").
WHEREAS, as additional consideration for the purchase of the Shares by the
Holder and as required in the Subscription Agreement, the Company desires to
grant to Holder registration rights with respect to the Shares;
NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the parties hereto agree as follows:
1. a. Piggyback Registration. If, at any time during the five-year
period commencing forty-five days from the initial closing of the Offering, the
Company shall file a registration statement (other than a registration
statement on Form ▇-▇, ▇▇▇▇ ▇-▇, or on any other form which does not include
substantially the same information as would be required to be included in a
registration statement covering the sale of Registrable Securities (as
hereinafter defined) with the Securities and Exchange Commission (the
"Commission") while any Registrable Securities are outstanding, the Company
shall give the Holder at least 30 days' prior written notice of the filing of
such registration statement. If requested by the Holder in writing within 20
days after receipt of any such notice, the Company shall, at the Company's sole
expense (other than the fees and disbursements of counsel for the Holder, and
the underwriting discounts, if any, payable in respect of the Registrable
Securities sold by the Holder), register all or, at the Holder's option, any
portion of the Registrable Securities concurrently with the registration of
such other securities, all to the extent requisite to permit the public
offering and sale of the Registrable Securities through the facilities of all
appropriate securities exchanges, if any, on which the Company's Common Stock
is being sold or on the over-the-counter market, and will use its best efforts
through its officers, directors, auditors, and counsel to cause such
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registration statement to become effective as promptly as practicable.
Notwithstanding the foregoing, if such offering is underwritten and if the
managing underwriter of any such offering shall advise the Company in writing
that, in its opinion, the distribution of all or a portion of the Registrable
Securities requested to be included in the registration concurrently with the
securities being registered by the Company would materially adversely affect
the distribution of such securities by the Company for its own account, then
the Holder shall delay the offering and sale of the Registrable Securities (or
the portions thereof so designated by such managing underwriter) for such
period, not to exceed 120 days (the "Delay Period"), as the managing
underwriter shall request, provided that no such delay shall be required as to
any Registrable Securities if any securities of the Company are included in
such registration statement and eligible for sale during the Delay Period for
the account of any person other than the Company and the Holder unless the
securities included in such registration statement and eligible for sale during
the Delay Period for such other person shall have been reduced pro rata to the
reduction of the Registrable Securities which were requested to be included and
eligible for sale during the Delay Period in such registration. As used
herein, "Registrable Securities" shall mean the shares of Common Stock acquired
by the Holder pursuant to the Offering which have not been previously sold
pursuant to a registration statement or Rule 144 promulgated under the
Securities Act.
a. Demand Registration. If, at any time after the closing of the
Offering, the Company shall receive a written request from the Holder of
Registrable Securities (as hereinafter defined), to register the sale of all or
part of such Registrable Securities, the Company shall, as promptly as
practicable, at the Company's sole cost and expense (other than the fees and
disbursements of counsel for the Holder, and the underwriting discounts, if
any, payable in respect of the Registrable Securities sold by the Holder, and
the underwriting discounts, if any, payble in respect of the Registrable
Securities sold by the Holder), prepare and file with the U.S. Securities and
Exchange Commission (the "Commission") a registration statement sufficient to
permit the public offering and sale of the Registrable Securities through the
facilities of all appropriate securities exchanges, if any, on which the
Company's Common Stock is being sold or on the over-the-counter market, and
will use its best efforts through its officers, directors, auditors, and
counsel to cause such registration statement to become effective as promptly as
practicable; provided, however, that the Company shall only be obligated to
file one such registration statement. The registration statement filed by the
Company pursuant to this Section 1(1) may include securities sold by the
Company or on behalf of persons other than the Holder. The Company does not
presently contemplate that any Registrable Securities registered pursuant to
this Section 1(a) will be underwritten.
b. In the event of a registration pursuant to the provisions of
this Section 1, the Company shall use its best efforts to cause the Registrable
Securities so registered to be registered or qualified for sale under the
securities or blue sky laws of such jurisdictions as the Holder may reasonably
request; provided, however, that the Company shall not be required to qualify
to do business in any state by reason of this Section 1(c) in which it is not
otherwise required to qualify to do business.
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c. The Company shall keep effective any registration or
qualification contemplated by this Section 1 and shall from time to time amend
or supplement each applicable registration statement, preliminary prospectus,
final prospectus, application, document and communication for such period of
time as shall be required to permit the Holder to complete the offer and sale
of the Registrable Securities covered thereby. The Company shall in no event
be required to keep any such registration or qualification in effect for a
period in excess of 24 months from the date on which the Holder is first free
to sell all such Registrable Securities; provided, however, that, if the
Company is required to keep any such registration or qualification in effect
with respect to securities other than the Registrable Securities beyond such
period, the Company shall keep such registration or qualification in effect as
it relates to the Registrable Securities for so long as such registration or
qualification remains or is required to remain in effect in respect of such
other securities.
d. In the event of a registration pursuant to the provisions of
this Section 1, the Company shall furnish to the Holder such number of copies
of the registration statement and of each amendment and supplement thereto (in
each case, including all exhibits), such reasonable number of copies of each
prospectus contained in such registration statement and each supplement or
amendment thereto (including each preliminary prospectus), all of which shall
conform to the requirements of the Securities Act and the rules and regulations
thereunder, and such other documents, as the Holder may reasonably request to
facilitate the disposition of the Registrable Securities included in such
registration.
e. In the event of a registration pursuant to the provisions of
this Section 1, the Company shall furnish the Holder with an opinion of its
counsel (reasonably acceptable to the Holder) to the effect that (i) the
registration statement has become effective under the Securities Act and no
order suspending the effectiveness of the registration statement, preventing or
suspending the use of the registration statement, any preliminary prospectus,
any final prospectus, or any amendment or supplement thereto has been issued,
nor has the Commission or any securities or blue sky authority of any
jurisdiction instituted or threatened to institute any proceedings with respect
to such an order, (ii) the registration statement and each prospectus forming a
part thereof (including each preliminary prospectus), and any amendment or
supplement thereto, comply as to form with the Securities Act and the rules and
regulations thereunder, and (iii) such counsel has no knowledge of any material
misstatement or omission in such registration statement or any prospectus, as
amended or supplemented. Such opinion shall also state the jurisdictions in
which the Registrable Securities have been registered or qualified for sale
pursuant to the provisions of Section 1(c).
f. The Company agrees that until all the Registrable Securities
have been sold under a registration statement or pursuant to Rule 144 under the
Securities Act, it shall use its best efforts to keep current in filing all
reports, statements and other materials required to be filed with the
Commission to permit the Holder to sell such securities under Rule 144.
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g. The Company shall notify the Holder promptly when such
registration statement has become effective or a supplement to any prospectus
forming a part of such registration statement has been filed.
h. The Company shall promptly notify the Holder at any time when
a prospectus relating thereto is required to be delivered under the Securities
Act of the happening of any event as a result of which the prospectus included
in such registration statement, as then in effect, would include an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading in
the light of the circumstances then existing, and at the reasonable request of
the Holder prepare and furnish to it such number of copies of a supplement to
or an amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Registrable Securities or securities, such
prospectus shall not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under which
they were made.
i. If requested by the underwriter for any underwritten offering
of Registrable Securities on behalf of the Holder, the Company and the Holder
will enter into an underwriting agreement with such underwriter for such
offering, which shall be reasonably satisfactory in substance and form to the
Company and the Company's counsel, the Holder and the underwriter, and such
agreement shall contain such representations and warranties by the Company and
the Holder and such other terms and provisions as are customarily contained in
an underwriting agreement with respect to secondary distributions solely by
selling stockholders, including, without limitation, indemnities substantially
to the effect and to the extent provided in Section 2 hereof.
▇. ▇▇▇▇▇▇ rights under this Agreement are assignable to
subsequent purchasers of the Shares.
2. Indemnification. a. Subject to the conditions set forth below, the
Company agrees to indemnify and hold harmless the Holder, its officers,
directors, partners, employees, agents, and counsel, and each person, if any,
who controls any such person within the meaning of Section 15 of the Act or
Section 20(a) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), from and against any and all loss, liability, charge, claim, damage, and
expense whatsoever (which shall include, for all purposes of this Section 2,
but not be limited to, attorneys' fees and any and all reasonable expenses
whatsoever incurred in investigating, preparing, or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation), as and when incurred,
arising out of, based upon, or in connection with (i) any untrue statement or
alleged untrue statement of a material fact contained (A) in any registration
statement, preliminary prospectus, or final prospectus (as from time to time
amended and supplemented), or any amendment or supplement thereto, relating to
the sale of any of the Registrable Securities or (B) in any application or
other document or communication (in this Section 2 collectively called an
"application") executed by or on behalf of the Company or based upon written
information
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15
furnished by or on behalf of the Company filed in any jurisdiction in order to
register or qualify any of the Registrable Securities under the securities or
blue sky laws thereof or filed with the Commission or any securities exchange;
or any omission or alleged omission to state a material fact required to be
stated therein or necessary to make the statements made therein not misleading,
unless (x) such statement or omission was made in reliance upon and in
conformity with written information furnished to the Company with respect to
the Holder by or on behalf of such person expressly for inclusion in any
registration statement, preliminary prospectus, or final prospectus, or any
amendment or supplement thereto, or in any application, as the case may be, or
(y) such loss, liability, charge, claim, damage or expense arises out of the
Holder's failure to comply with the terms and provisions of this Agreement, or
(ii) any breach of any representation, warranty, covenant, or agreement of
the Company contained in this Agreement. The foregoing agreement to indemnify
shall be in addition to any liability the Company may otherwise have, including
liabilities arising under this Agreement.
If any action is brought against the Holder or any of its officers,
directors, partners, employees, agents, or counsel, or any controlling persons,
of such person (an "indemnified party") in respect of which indemnity may be
sought against the Company pursuant to the foregoing paragraph, such
indemnified party or parties shall promptly notify the Company in writing of
the institution of such action (but the failure so to notify shall not relieve
the Company from any liability other than pursuant to this Section 2(a)) and
the Company shall promptly assume the defense of such action, including the
employment of counsel (reasonably satisfactory to such indemnified party or
parties), provided that the indemnified party shall have the right to employ
its or their own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of such indemnified party of parties unless the
employment of such counsel shall have been authorized in writing by the Company
in connection with the defense of such action or the Company shall not have
promptly employed counsel reasonably satisfactory to such indemnified party or
parties shall have reasonably concluded that there may be one or more legal
defenses available to it or them or to other indemnified parties which are
different from or additional to those available to the Company, in any of which
events such fees and expenses shall be borne by the Company and the Company
shall not have the right to direct the defense of such action on behalf of the
indemnified party or parties. Anything in this Section 2 to the contrary
notwithstanding, the Company shall not be liable for any settlement of any such
claim or action effected without its written consent, which shall not be
unreasonably withheld. The Company shall not, without the prior written consent
of each indemnified party that is not released as described in this sentence,
settle or compromise any action, or permit a default or consent to the entry of
judgment in or otherwise seek to terminate any pending or threatened action, in
respective of which indemnity may be sought hereunder (whether or not any
indemnified party is a party thereto), unless such settlement compromise,
consent, or termination includes an unconditional release of each indemnified
party from all liability in respect of such action. The Company agrees promptly
to notify the Holder of the commencement of any litigation or proceedings
against the Company or any of it officers or directors in connection with the
sale of any Registrable Securities or any preliminary prospectus, prospectus,
registration statement, or amendment or supplement thereto, or any application
relating to any sale of any Registrable Securities.
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a. The Holder agrees to indemnify and hold harmless the Company, each
director of the Company, each officer of the Company who shall have signed any
registration statement covering Registrable Securities held by the Holder, each
other person, if any, who controls the Company within the meaning of Section 15
of the Act or Section 20(a) of the Exchange Act, and its or their respective
counsel, to the same extent as the foregoing indemnify from the Company to the
Holder in Section 2(a), but only with respect to statements or omissions, if
any, made in any registration statement, preliminary prospectus, or final
prospectus (as from time to time amended and supplemented), or any amendment or
supplement thereto, or in any application, in reliance upon and in conformity
with written information furnished to the Company with respect to the Holder by
or on behalf of the Holder, expressly for inclusion in any such registration
statement, prelimianry prospectus, or final prospectus, or any amendment or
supplement thereto, or in any application, as the case may be. If any action
shall be brought against the Company or any other person so indemnified based
on any such registration statement, preliminary prospectus, or final prospectus
or any amendment or supplement thereto, or in any application, and in respect
of which indemnity may be sought against the Holder pursuant to this Section
2(b), the Holder shall have the rights and duties given to the Company, and the
Company and each other person so indemnified shall have the rights and duties
given to the indemnified parties, by the provisions of Section 2(a).
b. To provide for just and equitable contribution, if (i) an idemnified
party makes a claim for indemnification pursuant to Section 2(a) or 2(b)
(subject to the limitations thereof) but it is found in a final judicial
determination, not subject to further appeal, that such indemnification may not
be enforced in such case, even though this Agreement expressly provides for
indemnification in such cases, or (ii) any indemnified or indemnifying party
seeks contribution under the Securities Act, the Exchange Act or otherwise,
then the Company (including for this purpose any contribution made by or on
behalf of any director of the Company, any officer of the Company who signed
any such registration statement, any controlling person of the Company, and its
or their respective counsel), as one entity, and the Holder, included in such
registration in the aggregate (including for this purpose any contribution by
or on behalf of an indemnified party), as a second entity, shall contribute to
the losses, liabilities, claims, damages, and expenses whatsoever to which any
of them may be subject, on the basis of relevant equitable considerations such
as the relative fault of the Company and the Holder in connection with the
facts which resulted in such losses, liabilities, claims, damages, and
expenses. The relative fault, in the case of an untrue statement, alleged
untrue statement, omission, or alleged omission shall be determined by, among
other things, whether such statement, alleged statement, omission, or alleged
omission relates to information supplied by the Company or by the Holder, and
the parties' or alleged intent, knowledge, access to information, and
opportunity to correct or prevent such statement, alleged statement, omission,
or alleged omission. The Company and the Holder agree that is would be unjust
and inequitable if the respective obligations of the Company and the Holder for
contribution were determined by pro rata or per capita allocation of the
aggregate losses, liabilities, claims, damages, and expenses (even if the
Holder and the other indemnified parties were treated as one entity for such
purpose) or by any method of allocation that does not reflect the equitable
considerations referred to in this Section 2(c). No person guilty of a
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any
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person who is not guilty of such fraudulent misrepresentation. For purposes of
this Section 2(c), each person, if any, who controls the Holder within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act and each officer, director, partner, employee, agent, and counsel of the
Holder or control person shall have the same rights to contribution as the
Holder or control person and each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20(a) of the
Exchange Act, each officer of the Company who shall have signed any such
registration statement, each director of the Company, and its or their
respective counsel shall have the same rights to contribution as the Company,
subject in each case to the provisions of this Section 2(c). Anything in this
Section 2(c) to the contrary notwithstanding, no party shall be liable for
contribution with respect to the settlement of any claim or action effected
without its written consent. This Section 2(c) is intended to supersede any
right to contribution under the Securities Act, the Exchange Act or otherwise.
3. Termination of Registration Rights. The Company's obligations pursuant
to this Agreement (other than pursuant to paragraph 2) shall terminate as to
the Holder on the earlier of (i) when the Holder can remove the restrictive
legend on the Holder's shares pursuant to Rule 144(k) under the 1933 Act (or
any successor) or (ii) five years and forty-five days from the closing of the
Offering.
4. Miscellaneous.
a. Remedies. In the event of a breach by the Company of its
obligations under this Agreement, the Holder, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement.
b. Agreements and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified of supplemented,
unless such amendment, modification or supplement is in writing and signed by
the parties hereto.
c. Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, or telecopies, initially to the address set forth
below, and thereafter at such other address, notice of which is given in
accordance with the provisions of this of this Section 4(c):
(i) if to the Company:
MBf USA, Inc.
Attn: Chairman
▇▇▇ ▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
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(ii) if to the Holder:
Wembley Rubber Products (M) Sdn. Bhd.
29th Floor, Wisma Denmark
▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
All such notices and communications shall be deemed to have been duly given:
when delivered by hand, if personally delivered; two business days after being
deposited in the mail, postage prepaid, if mailed; when answered back, if
telexed; and when receipt is acknowledged, if telecopied.
d. Successors and Assigns. This Agreement shall insure to the
benefit of and be binding upon the successors and assigns of each of the
parties.
e. Counterparts. This Agreement may be executed in any number of
counterparts, via original, photocopy or facsimile signature and by the parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the
same agreement.
f. Headings. The headings in this Agreement are for convenience of
references only and shall not limit or otherwise affect the meaning hereof.
g. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Illinois without reference to its
conflicts of law provisions. Any dispute regarding this Agreement will be
litigated in the state or federal courts situated in ▇▇▇▇ County, Illinois, to
which jurisdiction all parties consent.
h. Severability. In the event that any one or more of the
provisions contained herein, or the application hereof in any circumstance is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provisions contained herein shall not be affected or
impaired thereby.
i. Entire Agreement. This Agreement is intended by the parties as
a final expression of their agreement and intended to be a complete and
exclusive statement of this agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are not restrictions,
promises warranties or undertakings, other than those set forth or referred to
herein, concerning the registration rights granted by the Company pursuant to
this Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first written above.
MBf USA, Inc.
By: /s/ ▇▇▇ ▇▇▇▇ Sewn
------------------------------
▇▇▇ ▇▇▇▇ Sewn, Chairman
Wembley Rubber Products (M) Sdn. Bhd.
By: /s/
------------------------------
Its: Chief Executive Officer
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