As filed with the Securities and Exchange Commission on August 18, 1997
Commission File No. 33-97770
SECURITIES AND EXCHANGE COMMISSION
Washington D. C. 20549
FORM 8K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 7, 1997
LEVEL BEST GOLF, INC.
(Exact name of registrant as specified in its charter)
FLORIDA 59-3205644
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
14561 58th Street North, Clearwater, Florida 34620 (813) 535-7770
(Address, including zip code, and telephone number, including area code, or
registrant's principal executive offices)
APPLICABLE
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements-None
(b) Pro forma financial information-None
(c) Exhibits-
10.1 Form of Series A 10% Convertible Debenture due June 1. 2000
10.2 Letter Agreement with Distributors
10.3 Offshore Securities Subscription Agreement
10.4 Amendment No. 1 to Series A 10% Convertible Debenture
Item 8. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S.
On July 7, 1997, the Registrant sold $250,000 principal amount of Series A
10% Convertible Debenture due June 1, 2000. The principal amount of this
security plus, at the Registrant's option, accrued and unpaid interest is
convertible into shares of the Registrant's common stock beginning August
21, 1997, forty five days after the date of sale. The number of shares
into which the security is convertible is determined by a formula set forth
in the debenture, at a conversion price, as follows: The lesser of (a) the
market price (as defined) on the date of sale, $1.325 or (b) seventy-five
percent of the market price (as defined) on the date of conversion. Market
price is defined as the average closing bid price of the common stock on
the five trading days immediately preceding the date of sale or the date of
conversion, as applicable. In the event the market price on the date of
sale controls the conversion, the number of shares of the Registrant's
common stock issuable upon conversion of the principal amount would be
188,679.
Thomson Kernaghan & Co. Inc. of Toronto, Ontario, Canada acted as
distributors for the Registrant in the placement of the securities.
The securities were sold to institutional investors. The securities were
sold for cash at the aggregate face amount, $250,000, and the Registrant
paid the fee of the distributors' counsel in the amount of $5,000. The
distributors were paid a placement fee equal to five percent of the face
amount of the securities. In addition, the distributors received
transferable divisible warrants for shares of the Registrant's common stock
equal to 10% of the number of shares of common stock into which the
Debentures would be convertible as at such Closing Date, 18,867 shares.
The Warrants have an exercise price per share of common stock equal to 120%
of the Market Price, as defined in the Debentures, on the Closing Date, $
1.59 and are exercisable for a period of five years and contain (i)
piggyback registration rights, and (ii) demand registration rights
commencing twenty four months from date of issue. The distributor also has
a right of first refusal covering sales of common stock and securities
convertible into common stock for a period of 1 year following the closing
date of July 7, 1997
The securities were sold in reliance upon Regulation S promulgated pursuant
the Securities Act of 1933. The facts relied upon by the Registrant are
set forth as representations of the Registrant and of the purchasers in the
Offshore Securities Subscription Agreement. See, Exhibit 10.1.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Level Best Golf, Inc.
/s/ Fred L. Solomon
By: Fred L. Solomon, President
(Chief Executive Officer)
July 7, 1997
Exhibit Index-
10.1 Form of Series A 1O% Convertible Debenture due June 1, 2000
10.2 Letter Agreement with Distributors
10.3 Offshore Securities Subscription Agreement
10.4 Amendment No. 1 to Series A 10% Convertible Debenture
Exhibit 10.1 Form of Series A 10% Convertible Debenture due June 1, 2000
NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON CONVERSION HEREOF
HAVE BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE OR UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES ARE RESTRICTED AND MAY
NOT BE OFFERED, RESOLD, PLEDGED OR TRANSFERRED EXCEPT IN ACCORDANCE WITH
REGULATION S UNDER THE ACT, OR AS PERMITTED UNDER THE ACT PURSUANT TO
REGISTRATION OR EXEMPTION OR SAFE HARBOR THEREFROM.
No. US $250,000.00
LEVEL BEST GOLF, INC.
Series A 10% Convertible Debenture Due June 1, 2000
THIS DEBENTURE is one of a duly authorized issue of $250,,OOO in Debentures
of Level Best Golf, Inc., a corporation duly organized and existing under
the laws of the State of Florida (the "Company") designated as its Series A
10% Convertible Debenture Due June 1, 2000.
FOR VALUE RECEIVED, the Company promises to pay to ________________________
the registered holder hereof (the "Holder"), the principal sum of
________________________ United States Dollars (US $ ) on June
1, 2000 (the "Maturity Date") and to pay interest on the principal sum
outstanding from time to time in arrears on June 1, 2000 at the rate of 10%
per annum accruing from the date of initial issuance. Accrual of interest
shall commence on the first such business day to occur after the date
hereof until payment in full of the principal sum has been made or duly
provided for. Subject to the provisions of Section 4 below, the principal
of and interest on this Debenture are payable at the option of the Company,
in shares of Common Stock of the Company or in such coin or currency of the
United States of America as at the time of payment is legal tender for
payment of public and private debts, at the address last appearing on the
Debenture Register of the Company as designated in writing by the Holder
from time to time. The Company will pay the principal of and interest upon
this Debenture on the Maturity Date, less any amounts required by law to be
deducted, to the registered holder of this Debenture as of the tenth day
prior to the Maturity Date and addressed to such holder as the last address
appearing on the Debenture Register. The forwarding of such check shall
constitute a payment of interest hereunder and shall satisfy and discharge
the liability for principal and interest on this Debenture to the extent of
the sum represented by such check plus any amounts so deducted. This
Debenture is subject to the following additional provisions:
1. The Debentures are issuable in denominations of Ten Thousand Dollars
(US $10,000) and integral multiples thereof. The Debentures are
exchangeable for an equal aggregate principal amount of Debentures of
different authorized denominations, as requested by the Holders
surrendering the same. No service charge will be made for such
registration or transfer or exchange.
2 . The Company shall be entitled to withhold from all payments of
principal of, and interest on, this Debenture any amounts required to be
withheld under the applicable provisions of the United States income tax
laws or other applicable laws at the time of such payments, and Holder
shall execute and deliver all required documentation in connection
therewith.
3. This Debenture has been issued subject to investment representations
of the original purchaser hereof and may be transferred or exchanged only
in compliance with the Securities Act of 1933, as amended (the "Act"), and
other applicable state and foreign securities laws. In the event of any
proposed transfer of this Debenture, the Company may require, prior to
issuance of a new Debenture in the name of such other person, that it
receive reasonable transfer documentation including opinions that the
issuance of the Debenture in such other name does not and will not cause a
violation of the Act or any applicable state or foreign securities laws.
Prior to due presentment for transfer of this Debenture, the Company and
any agent of the Company may treat the person in whose name this Debenture
is duly registered on the Company's Debenture Register as the owner hereof
for the purpose of receiving payment as herein provided and for all other
purposes, whether or not this Debenture be overdue, and neither the Company
nor any such agent shall be affected by notice to the contrary.
4. The Holder of this Debenture is entitled, at its option, to convert
at any time (a) one-half (2) of the principal amount of the Debenture, plus
accrued interest, commencing forty-five (45) days after the closing of sale
of the Debenture (the "Closing"), and (b) all of the principal amount of
the Debenture, plus accrued interest, commencing seventy-five (75) days
after the closing of the sale of the is at least US $10,000 (unless the
aggregate principal amount less than Ten Thousand Dollars into shares of
Common Stock of share of Common Stock equal to Debenture, provided that the
principal amount if at the time of such election to convert of all
Debentures registered to the Holder is [US $10,0001, then the whole amount
thereof the Company at a conversion price for each the lesser of (a) the
Market Price on the Closing, or (b) 75% of the Market Price on the
Conversion Date. For purposes of this Section 4, the Market Price shall be
the average closing bid price of the Common Stock on the five (5) trading
days immediately preceding the Closing or Conversion Date, as may be
applicable, as reported by the National Association of Securities Dealers
for companies trading the over-the-counter market or, in the event the
Common Stock is listed on a stock exchange, the Market Price shall be the
average closing bid price of the Common Stock on such stock exchange on the
five (5) trading days immediately preceding the Closing or Conversion Date,
as reported in the Wall Street Journal. Conversion shall be effectuated by
surrendering the Debentures to be converted to the Company with the form of
conversion notice attached as Exhibit AA, executed by the Holder of the
Debenture evidencing such Holder's intention to convert this Debenture or a
specified portion (as above provided) hereof, and accompanied, if required
by the Company, by proper assignment hereof in blank. Interest accrued or
accruing from the date of issuance to the date of conversion shall, at the
option of the Company, be paid in cash or Common Stock upon conversion. No
fraction of Shares or scrip representing fractions of shares will be issued
on conversion, but the number of shares issuable shall be rounded to the
nearest whole share. The date on which notice of conversion is given (the
"Conversion Date") shall be deemed to be the date on which the Holder has
delivered this Debenture, with the conversion notice duly executed to the
Company or if earlier, the date set forth in such notice of conversion if
the Debenture is received by the Company within three (3) business days
therefrom. Facsimile delivery of the conversion notice shall be accepted
by the Company at telephone number (813) 535-0077. Certificates
representing Common Stock upon conversion will be delivered within two (2)
business days from the date the notice of conversion is delivered to the
Company.
5. No provision of this Debenture shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the principal
of and interest on, this Debenture at the time, place and rate, and in the
coin or currency herein prescribed. This Debenture and all other
Debentures now or hereafter issued of similar terms are direct obligations
of the Company.
6 . No recourse shall be had for the payment of the principal of, or the
interest on, this Debenture or for any claim based hereon, or otherwise in
respect hereof, against any incorporator, shareholder, officer or director,
as such, past, present or future, of the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law,
or by the enforcement of any assessment or penalty or otherwise, all such
liability being, but the acceptance hereof and as part of the consideration
for the issue hereof, expressly waived and released.
7. If the Company merges or consolidates with another corporation or
sells. or transfers all or substantially all of its assets to another
person and the holders of the Common Stock are entitled to receive stock,
securities or property in respect of or in exchange for Common Stock, then
as a condition of such merger, consolidation, sale or transfer, the Company
and any such successor, purchaser or transferee shall amend this Debenture
to provide that it may thereafter be converted on the terms and subject to
the conditions set forth above into the kind an amount of stock, securities
or property receivable upon such merger, consolidation, sale or transfer by
a holder of the number of shares of Common Stock into which this Debenture
might have been converted immediately before such merger, consolidation,
sale or transfer, subject to adjustments which shall be a nearly equivalent
as may be practicable. In the event of any proposed merger, consolidation
or sale or transfer of all or substantially all of the assets of the
Company (a "Sale"), the Holder hereof shall have the right to convert by
delivering a Notice of Conversion to the Company within fifteen (15) days
of receipt of notice of such Sale from the Company. In the event the
Holder hereof shall elect not to convert, the Company may prepay all
outstanding principal and accrued interest on this Debenture, less all
amounts required by law to be deducted, upon which tender of payment
following such notice, the right of conversion shall terminate.
8. The Holder of the Debenture, by acceptance hereof, agrees that this
Debenture is being acquired for investment and that such Holder will not
offer, sell or otherwise dispose of this Debenture or the Shares of Common
Stock issuable upon conversion thereof except under circumstances which
will not result in a violation of the Act or any applicable state Blue Sky
or foreign laws or similar laws relating to the sale of securities.
9. This Debenture shall be governed by and construed in accordance with
the laws of Canada; provided however, that if any provision of this
Debenture is unenforceable under the laws of Canada but is enforceable
under the laws of the State of Florida, then that provision shall be
governed by and construed in accordance with the laws of Florida. Any
controversy or claim arising out of or relating to this Debenture (whether
in contract or tort, or both) shall be determined by binding arbitration at
Toronto, Canada, in accordance with the commercial arbitration rules of the
International Chamber of Commerce. The prevailing party in any arbitration
proceeding shall be awarded reasonable attorneys fees and costs of the
proceeding. The arbitration award shall be final, and may be entered in any
court having jurisdiction.
10. The following constitute an "Event of Default":
a. The Company shall default in the payment of principal or interest on
this Debenture; or
b. Any of the representations or warranties made by the Company herein, in
the Subscription Agreement, or in any certificate or financial or other
written statements heretofore or hereafter furnished by the Company in
connection with the execution and delivery of this debenture or the
Subscription Agreement shall be false or misleading in any material
respect at the time made; or
c. The Company shall fail to perform or observe, in any material respect,
any other covenant, term, provision, condition, agreement or obligation
of the Company under this Debenture and such failure shall continue
uncured for a period of thirty (30) days after written notice from the
Holder of such failure;
d. The Company shall (1) admit in writing its inability to pay its debts
generally as they mature; (2) make an assignment for the benefit of
creditors or commence proceedings for its dissolution; or (3) apply for
or consent to the appointment of a trustee, liquidator or receiver for
it or a for a substantial part of its property or business; or
e. A trustee, liquidator or receiver shall be appointed for the Company or
for a substantial part of its property or business without its consent
and shall not be discharged within sixty (60) days after such
appointment;
f. Any governmental agency or any court of competent jurisdiction at the
instance of any governmental agency shall assume custody or control of
the whole or any substantial portion of the properties or assets of the
Company and shall not be dismissed within sixty(60) days
thereafter;
g. Any money judgment, writ or warrant of attachment, or similar process in
excess of Two Hundred Thousand Dollars ($200,000) in the aggregate shall
be entered or filed against the Company or any of its properties or
other assets, and shall remain unpaid, unvacated, unbonded or unstayed
for a period of sixty (60) days in or in any event later than five (5)
days prior to the date of any proposed sale thereunder; or
h. Bankruptcy, reorganization, insolvency or liquidation proceedings or
other proceedings for relief under any bankruptcy law or any law for
the relief of debtors shall be instituted by or against the Company
and, if instituted against the Company, shall not be dismissed within
one hundred twenty (120) days after such institution or the Company
shall by any action or answer approve of, consent to, or acquiesce in
any such proceedings or admit the material allegations of, or default
in answering a petition filed in any such proceeding; or
i. The Company shall have its Common Stock suspended or delisted from an
exchange or over-the-counter market from trading. Then, or at any time
thereafter,, and in each and every case, unless such Event of Default
shall have been waived in writing by the Holder (which waiver shall not
be deemed to be a waiver of any subsequent default) at the option of
the Holder and in the Holder's sole discretion, the Holder may consider
this Debenture immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which are hereby
expressly waived, anything herein or in any note or other instruments
contained to the contrary notwithstanding, and the Holder may
immediately enforce any and all of the Holder's rights and remedies
provided herein or any other rights or remedies afforded by law.
11. Nothing contained in this Debenture shall be construed as conferring
upon the Holder the right to vote or to receive dividends or to consent or
receive notice as a shareholder in respect of any meeting of shareholders
or any rights whatsoever as a shareholder of the Company, unless and to the
extent converted in accordance with the terms hereof.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by an officer thereunto duly authorized.
Dated.
Level Best Golf, Inc.
By:
(Print Name)
(Title)
ATTEST:
EXHIBIT AA
NOTICE OF CONVERSION
(To be executed by the Registered Holder in order to Convert the Debenture)
The undersigned hereby irrevocably elects to convert $ of
the principal amount of the above Debenture No. into Shares of Common
Stock of Level Best Golf, Inc. (the "Company") according to the conditions
hereof, as of the date written above.
The undersigned represents that it is not a U.S. Person as defined in
Regulation S promulgated under the Securities Act of 1933 and is not converting
the Debentures on behalf of any U.S. Person.
Date of Conversion:
Applicable Conversion Price:
Signature:
(Name)
Address:
Exhibit 10.2 Letter Agreement with Distributors June 13, 1997
Level Best Golf, Inc.
14561 - 58th Street North
Clearwater, Florida 34620
Ladies and gentlemen:
This letter will confirm our mutual agreement with respect to our
engagement as exclusive distributors ("Distributors") to act on behalf of
Level Best Golf, Inc. (the "Company") in connection with the offer and sale
on a best efforts basis of US$250,000 aggregate principal amount of Series
A 10% Convertible Debentures of the Company (the "Debentures") pursuant to
Regulation S promulgated under the Securities Act of 1933, as amended (the
"Act").
1. (a) our engagement shall be for a period of 60 days. You represent
that no other public or non-public offering under Regulation S is
presently in progress by the Company that has not been disclosed to
US.
(b) You have represented to us that the Company will have no other
indebtedness senior in priority to the Debentures.
2. (a) You agree to pay the Distributors a placement fee of 5% of the
principal amount of the Debentures sold, which you authorize us to
withhold from the proceeds from the sale of the Debentures. Other
than this placement fee, and the warrant described in paragraph 11
below, the Distributors shall not be entitled to any additional
compensation from the Company. The Company shall pay the legal
fees of the Distributors' legal counsel in the amount of US$5,000,
payable upon funding the Debentures.
(b) Each purchaser of Debentures ( a "Purchaser") will, simultaneously with
the execution of an Offshore Securities Subscription Agreement (the
"Agreement") in the form annexed hereto as Exhibit A, pay the purchase
price for the Debentures to the Distributors, as Escrow Agent. The
Distributors, as Escrow Agent, are authorized to release the funds of
each Purchaser after both (i) the Company approvessuch purchase and
subscription documents (in the form of an exhibit hereto) that have
been submitted and signed by the purchaser, and (ii) the Company has
caused to be delivered to the Distributors or its designee, the
Debenture or Debentures purchased by that Purchaser, and the opinion of
counsel attached as Annex III to the Agreement.
(c) The restricted period set forth in SEC Rule 903 (the "Restricted
Period") for each Purchaser shall begin on the date (the "Closing
Date") that the purchase funds are delivered to the Company.
(d) The Distributors (i) represent and warrant, and will provide
confirmatory documentation, that each Purchaser is either purchasing
the Debentures for its own account, or is a fiduciary that has full,
exclusive and irrevocable investment discretion with respect to the
Debentures, which investment discretion cannot be revoked prior to the
180th day after the Closing Date, and
(ii) represent and warrant that no Purchaser is a affiliate of the
Distributors. To the Distributors' knowledge, all representations and
warranties made by Purchasers are true and correct.
(e) The Company shall have the right in its sole discretion to disapprove
any person or entity that is proposed by the Distributors to be a
Purchaser
3. The Company will cause the Debentures to be delivered to the
Distributors, as Escrow Agent, pursuant to the terms of the Joint Escrow
Instructions attached as Annex II to this Agreement.
4. (a) The Distributors represent, warrant and agree that (i) each
Purchaser will be qualified to purchase the Debentures under the
laws of the jurisdiction in which such Purchaser resides and that
the offer and sale of the Debentures will not violate the securities
or other laws of such jurisdiction, and (ii) each Purchaser will
agree that neither it nor any of its affiliates presently have or
will, directly or indirectly, maintain any short position in
securities of the Company during the Restricted Period.
(b) The Distributors understand that the Debentures have not been
registered under the Act and may not be offered or sold within the
United States or to, or for the account or benefit of, United
States persons, except pursuant to an exemption from the
registration requirements of the Act.
S. (a) The Distributors further agree that (i) no offer or sale of the
Debentures will be made by the Distributors to, or accepted by the
Distributors from, any U.S. person or for the account or benefit of
a U.S. person; (ii) ail offers and sales of the Debentures prior to
the expiration of the applicable Restricted Period made by the
Distributors shall be made only in accordance with the provisions of
Rule 903 or 904 of Regulation S, pursuant to registration of the
Debentures under the Act, or pursuant to an available exemption from
the registration requirements of the Act; (iii) all offering
materials and documents used in connection with offers and sales of
the Debentures prior to the expiration of the engagement period
shall be approved in advance by the Company, and shall on the first
page thereof include statements to the effect that the Debentures
have not been registered under the Act but are offered and sold in
reliance on Regulation S under the Securities Act of 1933, and that
neither the Purchaser, nor any direct or indirect purchaser of
Debentures from the Purchaser, may directly or indirectly offer or
sell the Debentures in the United States or to U.S. persons unless
the Debentures are registered under the Act, or an exemption from
the registration requirements of the Act is available; (iv) the
Distributors will not engage in any activity for the purpose of, or
that could reasonably be expected to have the effect of,
conditioning the market in the United States for any of the
securities of the Company, and (v) the Distributors will advise each
Purchaser and potential Purchaser of the matters set forth in this
paragraph 6, and that such Purchaser is relying on its own
investigation with respect to all such matters, and that it will be
given reasonable access to any and all material publicly available
documents and Company personnel it may require for such
investigation.
(b) For the purposes of this letter agreement, a U.S. person means a U.S.
Person as that term is defined in Rule 902(o) of Regulation S.
6. The Distributors are independent contractors, and are not the agent
of the Company. The Distributors are not authorized to bind the Company,
or to make any representations or warranties on behalf of the Company.
7. The Company represents, warrants and agrees that, in addition to the
warranties to be made by the Company to the Purchasers:
(a) The Company is required to file reports pursuant to Section 15(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), the Company has timely filed all the materials required to
be filed for a period of at least 12 months preceding the date of
this letter agreement, and the Company will continue to file all
such materials on a timely basis.
(b) The Company is a reporting issuer as defined by Rule 902 of
Regulation S. The Company is in full compliance, to the extent
applicable, with all reporting obligations under Section 15(d) of
the Exchange Act. The common stock is quoted on the National
Association of Securities Dealers, Inc.'s OTC Bulletin Board, and
the Company has received no notice, either oral or written, with
respect to its continued eligibility for such quoting.
(c) The Company has all requisite corporate power and authority to
execute and perform this letter agreement. All corporate action
necessary for the authorization, execution, delivery and
performance of this letter agreement and the transactions
contemplated hereby have been taken. This agreement constitutes a
valid and binding obligation of the Company.
(d) The execution and performance of this letter agreement by the
Company and the offer and sale of the Debentures will not violate
any provision of the certificate of incorporation or bylaws of the
Company or any material agreement or other instrument to which the
Company is a party or by which it is bound, the violations of which
in each case or in the aggregate, would have a material adverse
effect on the business or financial condition of the Company. Any
material or necessary approvals, U.S. government and private, will
be obtained by the Company prior to the issuance of the Debentures
(e) The Company makes no other representation or warranty with respect
to the Company, its finances, assets, business or prospects, or
otherwise, except as expressly set forth herein or in the
Agreement.
8. The Company will provide the Distributors, as Escrow Agent, with an
opinion of counsel substantially in the form attached as Annex III to the
Agreement.
9. During the time commencing upon completion of this distribution and
ending 120 days thereafter, the Company will not make any further offer or
sale off common stock or securities convertible into common stock in any
non-public offering for cash consideration, without the prior written
approval of the Distributor. Further, during the time period commencing on
the Closing Date of the first tranche and ending one year after the closing
of the second tranche of Debentures hereunder, the Distributors will have
the right of first refusal on any further offer or sale of securities by
the Company in any non-public offering other than offers or sales of
securities to strategic investors or sales pursuant an unsolicited offer to
buy securities. Such right of first refusal must be exercised in writing
within 5 days of the date of notice from the Company of its offer to sell
securities, and the sale must be consummated within 10 days thereafter. If
the right of first refusal is not so exercised or the sale is not
consummated, the Company shall be entitled to offer and sell the securities
to third parties.
10. The Company will not, for a period of 180 days from the date hereof,
list is shares on any additional securities market (other than the NASDAQ
National Market) without the written consent of the Distributors.
11. The Company agrees to issue the Distributor, within 10 days after the
Closing Date, transferable divisible warrants (the "Warrants") under
Regulation S for shares of the Company's common stock equal to 10% of the
number of shares of common stock into which the Debentures would be
convertible as at such Closing Date. The Warrants shall bear an exercise
price per share of common stock equal to 120% of the Market Price, as
defined in the Debentures, on the Closing Date, and shall be exercisable
for a period of 5 years thereafter. The form of the Warrants shall be
reasonably satisfactory to the Distributor and its legal counsel, and shall
contain (i) piggyback registration rights, and (ii) demand registration
rights commencing 24 months from date of issue.
12. As more fully described in Exhibit B hereto, which is incorporated
herein by reference, the Company will indemnify and hold the Distributor
(including its partners, agents, employees, and controlling persons within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act)
harmless from and against certain claims, liabilities, losses, damages and
expenses incurred, including fees and disbursements of counsel, related to
arising out of this engagement. Exhibit B will be executed and delivered
simultaneously with this letter agreement.
13. This letter agreement will be governed and construed under the laws
of Canada. Any controversy or claim arising out of or relating to this
letter agreement (whether in contract or tort, or both) shall be determined
by binding arbitration at Toronto, Canada, in accordance with the
commercial arbitration rules of the International Chamber of Commerce. The
prevailing party in any arbitration proceeding shall be awarded reasonable
attorneys fees and costs of the proceeding. The arbitration award shall be
final, and may be entered in any court having jurisdiction.
14. A facsimile transmission of this signed agreement shall be legal and
binding on the parties hereto. Terms otherwise not defined herein shall
have the meaning ascribed to them in the Agreement.
Very truly yours,
THOMSON KERNAGHAN & CO. INC.
By /s/ Mark E. Valentine
Mark E. Valentine, Vice President
Accepted and agreed.
LEVEL BEST GOLF, INC.
By /s/ Fred L. Solomon
Fred L. Solomon, President
Date signed June 6, 1997
Exhibit 10.3 Form Of Offshore Securities Subscription Agreement OFFSHORE
SECURITIES SUBSCRIPTION AGREEMENT
This Offshore Securities Subscription Agreement ("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 ("1933 Act"). This
Agreement has been executed by the undersigned in connection with the
private placement of up to $250,000 Series A 10% Convertible Debentures
(hereinafter referred to as the "Debentures") of Level Best Golf, Inc., a
corporation organized and existing under the laws of the State of Florida,
U.S.A., trading symbol "LBGF" (hereinafter referred to as the COMPANY).
The Debentures being sold pursuant to this Agreement, and the Shares (as
defined below), have not been registered under the 1933 Act and may not be
offered or sold in the United States or to U.S. Persons, other than
distributors (as such terms are defined in Regulation S), unless the
Debentures or the Shares, as the case may be, are registered under the 1933
Act, or an exemption from the registration provisions of the 1933 Act is
available. The terms on which the Debentures may be converted into common
stock (the "Shares") and the other terms of the Debentures are set forth in
the pro forma Debenture in Annex I annexed hereto. This subscription and,
if accepted by the COMPANY, the offer and sale of Debentures and the Shares
issuable upon conversion thereof (collectively the "Securities"), are being
made in reliance upon the provisions of Regulation S under the 1933 Act.
The undersigned
NAME:
ADDRESS:
if applicable, a [Corporation] [Partnership] [Trust] organized under the
laws of Ireland, a non USA jurisdiction (hereinafter referred to as the
"PURCHASER") hereby represents and warrants to, and agrees with, the
COMPANY as follows:
1. Agreement to Subscribe.
a. Subscription Amount. The undersigned hereby subscribes for
$ in principal amount of Series A 10% Debentures.
b. Form of Payment. The PURCHASER shall pay the purchase price for the
Debentures by delivering immediately available funds in United States
Dollars to the escrow agent identified in the Joint Escrow Instructions
attached hereto as Annex II (the "Escrow Agent"). Deliver of such funds to
the COMPANY by the Escrow Agent shall be made against delivery by the
COMPANY of one or more Debentures in accordance with this Agreement. By
signing this Agreement, the PURCHASER and the COMPANY each agrees to all of
the terms and conditions of, and becomes a party to, the Joint Escrow
Instructions attached hereto as Annex II, all of the provisions of which
are incorporated herein by this reference as if set forth in full.
c. Method of Payment. Payment of the purchase price for the Debentures
shall be made by wire transfer of funds to:
For credit to the account of Thomson Kernaghan & Co. Ltd. Account No.
Not later than three (3) business days after the acceptance and execution
of this Agreement by the COMPANY, the PURCHASER shall deposit with the
Escrow Agent the aggregate subscription price for the Debentures.
2. Subscriber Representations and Covenants; Access to Information;
Independent Investigation.
a. Offshore Transaction. PURCHASER represents, warrants and covenants to
COMPANY as follows:
i. PURCHASER was at the time of the offer and is not a U.S. Person as that
term is defined under Regulation S.
ii. PURCHASER was at the time of the offer and is outside the United States
as of the date of the execution and delivery of this Agreement.
iii. PURCHASER is purchasing the Debentures for its own account and not on
behalf of any U.S. Person, and PURCHASER is the sole beneficial owner of
the Debentures, and has not pre-arranged any sale with any purchaser or
purchasers in the United States.
iv. PURCHASER represents and warrants and hereby agrees that all offers
and sales of the Debentures prior to the expiration of a period commencing
on the date of the receipt of funds by the COMPANY and ending 40 days
thereafter (the "Restricted Period") shall only be made in compliance with
the safe harbor contained in Regulation S, pursuant to the registration
provisions under the 1933 Act or pursuant to an exemption from
registration, and all offers and sales after the expiration of the 40-day
period shall be made only pursuant to such registration or to an exemption
from registration.
V. PURCHASER acknowledges that the purchase of the Debentures involves a
high degree of risk, is aware of the risks and further acknowledges that it
can bear the economic risk of the purchase of the Debentures, including the
total loss of its investment.
vi. PURCHASER understands that the Debentures are being offered and sold
to it in reliance on specific exemptions from the registration requirements
of U.S. securities laws and that the COMPANY is relying upon the truth and
accuracy of the representations, warranties, agreements, acknowledgments
and understandings of PURCHASER set forth herein in order to determine the
applicability of such exemptions and the suitability of PURCHASER to
acquire the Debentures, and the Shares issuable upon conversion thereof.
PURCHASER represents and warrants that the information contained herein is
complete
and accurate. PURCHASER further represents and warrants that it will
notify the COMPANY immediately upon the occurrence of any material change
therein occurring prior to the issuance of Shares upon conversion of the
Debenture.
vii. 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 decisions relating thereto.
viii. In evaluating its investment, PURCHASER has consulted its own
investment and/or legal and/or tax advisors. PURCHASER is not relying on
the COMPANY respecting the legal, tax and other economic considerations of
an investment in the Debentures.
ix. PURCHASER understands that in view of the SEC the statutory basis for
the exemption claimed for this transaction would not be present if the
offering of Debentures, and the Shares issuable upon conversion thereof,
although in technical compliance with Regulation S, is part of a plan or
scheme to evade the registration provisions of the 1933 Act. PURCHASER is
acquiring the Debentures for investment purposes and has no present
intention to sell the Debenture, or the Shares issuable upon conversion
thereof, in the United States or to a U.S. Person or for the account or
benefit of a U.S. Person either now or after the expiration of the
Restricted Period.
X. PURCHASER is not an underwriter for, or dealer in, the Securities,
and PURCHASER is not participating, pursuant to a contractual agreement, in
the distribution of the Securities.
xi. PURCHASER represents, warrants and agrees, that PURCHASER will not,
directly or indirectly, or through one or more intermediaries, maintain any
short position in the Shares of the COMPANY during the Restricted Period.
xii. During the period commencing on the Closing Date (as defined herein)
and ending on the 41st day following such date, PURCHASER will not sell,
commit or agree to sell or pledge any shares of Common Stock of the COMPANY
or any other securities convertible into or exercisable for shares of
Common Stock of the COMPANY.
PURCHASER has taken no action which would give rise to any claim by any
person for brokerage commission, finders' fees or the like relating to this
Agreement or the transaction contemplated hereby.
b. Current Public Information. PURCHASER acknowledges that PURCHASER
has been furnished with or has acquired copies of the COMPANY's Form 10-KSB
for year ending September 30, 1996, and Forms 10 and 8-K filed thereafter
(collectively the "SEC Filings"). PURCHASER is not relying upon any
representatives or other information (whether oral or written) other than
as set forth in the SEC Filings or in Annex V.
c. Independent Investigation; Access. PURCHASER acknowledges that
PURCHASER, in making the decision to purchase the Debentures subscribed
for, has relied upon independent investigations made by it and its
representatives, if any, and PURCHASER and such representatives if any,
have, prior to any sale to it, been given access and the opportunity to
examine all material publicly available, books and records of the COMPANY,
all material contracts and documents relating to this offering and an
opportunity to ask questions of, and to receive answers from the COMPANY 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 the COMPANY and materials relating to the offer
and sale of the Debentures which have been requested. PURCHASER and its
advisors, if any, have received complete and satisfactory answers to any
such inquiries.
d. No Government Recommendations or Approval. PURCHASER understands
that no federal or state agency has passed on or made any recommendations
or endorsement of the Securities.
e. Entity Purchasers. If PURCHASER is a partnership, limited liability
company, limited liability partnership, corporation, trust, or similar
entity, 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 to make this investment and to enter
into and execute this Agreement on behalf of such entity.
f. Individual Purchasers. PURCHASER, if an individual, represents that
he or she has reached the age of 21 and has adequate means for providing
for his or her current and anticipated financial needs and possible
contingencies for emergencies and has no need for liquidity in the proposed
investment.
g. Binding Commitment. This Agreement constitutes a legal, valid and
binding obligation of the PURCHASER. The PURCHASER has full power, right
and authority to enter into and perform this Agreement. The execution and
delivery and performance of this Agreement will not violate or be in
conflict with any order, judgment, injunction, agreement or controlling
document to which the PURCHASER is a party or by which it is bound. If the
PURCHASER is an entity, it was not formed for the specific purpose of
acquiring the Debenture.
h. Foreign Laws. PURCHASER hereby covenants that it will comply with
all laws and regulations in each foreign jurisdiction in which it
purchases, offers, sells or deliver the Securities, or has in its
possession or distributes any offering material.
3. COMPANY Representations.
a. Reporting Company Status. The COMPANY is a corporation duly
organized,validly existing and in good standing under the laws of the
State of Florida and is duly qualified as a foreign corporation in all
jurisdictions in which the failure to so qualify would have a material
adverse effect on the COMPANY and its subsidiaries taken as a whole.
The COMPANY is a "Reporting Issuer" as defined by Rule 902 of
Regulation S. The COMPANY is a reporting issuer under Section 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
The Common Stock is quoted on the National Association of Securities
Dealers, Inc.'s OTC Bulletin Board, and the Company has received no
notice, either oral or written, with respect to its continued
eligibility for such quoting. The COMPANY has filed all material
required to be filed pursuant to all reporting obligations under
Section 15(d) of the Exchange Act for a period of at least twelve (12)
months immediately preceding the offer or sale of the Debentures, or
such shorter period as may be required by law.
b. Offshore Transaction. The COMPANY has not offered or sold the
Debentures to any person in the United States or, to the best knowledge
of the COMPANY, any identifiable groups of U.S. citizens abroad or any
U.S. person as that term is defined in Regulation S. At the time the
offer was made and the buy order for the Debentures was originated, the
COMPANY and/or its agents reasonably believed PURCHASER was outside the
United States and was not a U.S. Person.
c. No Directed Selling Efforts. In regard to this transaction, the
COMPANY has not conducted any "directed selling efforts" as that term
is defined in Rule 902 of Regulation S nor has the COMPANY conducted
any general solicitation relating to the offer and sale of the within
securities to persons resident with the United States or elsewhere.
d. Terms of Debentures. The COMPANY will issue the Debentures in
accordance with the terms of Annex I attached hereto.
e. Legality. The COMPANY has the requisite corporate power and authority
to enter into this Agreement and to sell and deliver the Debentures;
this Agreement and the issuance of the Debentures have been duly and
validly authorized by all necessary corporate action by the COMPANY;
this Agreement has been duly and validly executed and delivered by and
on behalf of the COMPANY, and is a valid and binding agreement of the
COMPANY, enforceable against it in accordance with its terms, except as
enforceability may be limited by general equitable principles,
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other laws affecting creditors rights generally.
f. Non-Contravention. The execution and delivery of this Agreement and
the consummation of the issuance of the Debentures, other than the
conversion provision thereof, and the transactions contemplated by this
Agreement and the Debentures do not and will not conflict with or
result in a breach by the COMPANY of any of the terms or provisions of,
or constitute a default under, the articles of incorporation or by-laws
of the COMPANY, or any indenture, mortgage, deed of trust, or other
material agreement or instrument to which the COMPANY is a party or by
which it or any of its properties or assets are bound, or any existing
applicable law, rule or regulation of the United States of any State
thereof or any applicable decree, judgment or order of any Federal or
State court, Federal or State regulatory body, administrative agency or
other United States governmental body having jurisdiction over the
COMPANY or any of its properties or assets.
g. Filings. The COMPANY undertakes and agrees to make all necessary
filings in connection with the sale of the Debentures as required by
United States laws and regulations or any domestic securities exchange
or trading market.
h. Absence of Certain Changes. Since September 30, 1996, there has been
no material adverse development in the assets, liabilities, business,
properties, operations, financial condition or results of operations of
the COMPANY, except as disclosed in the SEC Filings or in Annex V.
i. The COMPANY has legally available sufficient authorized and unissued
Shares as may be reasonably necessary to effect the conversion of the
Debentures.
j. Litigation. There is no action, suit or preceding before or by any
court or governmental agency or body, domestic or foreign, now pending
or, to the knowledge of the COMPANY, threatened against or affecting
the COMPANY, or any of its properties, which might result in any
material adverse change in the condition (financial or otherwise) or in
the earnings, business affairs or business prospects of the COMPANY, or
which might materially and adversely affect the properties or assets
thereof.
k. No Default. Except as set forth in Annex V, the COMPANY is not in
default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any indenture, mortgage,
deed of trust or other material instrument or agreement to which it is
a party or by which it or its property may be bound, and neither the
execution, nor the delivery by the COMPANY, nor the performance by the
COMPANY of its obligations under this Agreement or the Debentures,
other than the conversion provision thereof, will conflict with or
result in the breach or violation of any of the terms or provision of,
or constitute an default or result in the creation or composition of
any lien or charge on any assets or properties of the COMPANY under any
material indenture, mortgage, deed of trust or other material agreement
or instrument to which the COMPANY is a party or by which it is bound
or any statute or the Certificate of Incorporation or By-Laws of the
COMPANY, or any decree, judgment, order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
COMPANY or its properties.
1. SEC Filings. None of the SEC Filings with the Securities and Exchange
Commission contained, at the time they were filed, any 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 in light of
the circumstances under which they were made, not misleading. The
COMPANY has since before June 1, 1996, timely filed all requisite
forms, reports and exhibits thereto with the Securities and Exchange
Commission.
M. Full Disclosure. There is no fact known to the COMPANY (other than
general economic conditions known to the public generally) that has not
been disclosed in writing to the PURCHASER that (i) could reasonably be
expected to have a material adverse effect on the condition (financial
or otherwise) or in the earnings, business affairs, business prospects,
properties or assets of the COMPANY or (ii) could reasonably be
expected to materially and adversely affect the ability of the COMPANY
to perform its obligations pursuant to this Agreement.
n. Prior Issues. During the twelve (12) months preceding the date hereof,
the Company has not issued any securities pursuant to Regulation S or
Regulation D under the Act, except as set forth in Exhibit 3(n). The
presently outstanding principal amount of each such issuance, if any,
is set forth in ANNEX V.
0. Use of Proceeds. The COMPANY will use the proceeds from the sale of
the Debenture (excluding amounts paid by the COMPANY for legal fees and
finders' fees in connection with the "Sale of the Debenture) as more
fully set forth in AN14EX V.
4. Transfer Agent Instructions.
a. Debentures. The COMPANY shall act as Debenture Registrar and shall
maintain an appropriate ledge containing the necessary information
with respect to each Debenture.
b. Subject to the completeness and accuracy of the PURCHASER's
representations and warranties herein, upon the conversion of any
Debenture by a person who is a non-U.S. Person, the COMPANY shall, at
its expense, take all necessary action (including the issuance of an
opinion of counsel) to assure that the COMPANY's transfer agent shall
issue stock certificates without restrictive legend or stop orders in
the name of PURCHASER (or its nominee [being a non-U.S. Person] or such
non-U.S. Persons as may be designated by PURCHASER) and in such
denominations to be specified at conversion representing the number of
shares of Common Stock issuable upon such conversion, as applicable.
The COMPANY warrants that no instructions other than these
instructions, instructions to impose a "stop transfer" instruction with
respect to the Debenture until the end of the Restricted Period have
been or will be given to the transfer agent and that the Shares will
not be subject to any transfer limitations other than those imposed by
applicable securities law. Nothing in this Section 4, however, shall
affect in any way PURCHASER's or such nominee's obligations and
agreement to comply with all applicable securities laws upon resale of
the Securities.
c. It will permit the PURCHASER to exercise its right to convert the
Debentures by telecopying an executed and completed Notice of
Conversion to the COMPANY and delivering within three business days
thereafter, the original Notice of Conversion and the Debenture
representing the Shares to the COMPANY by express courier. Each date
on which a Notice of Conversion is telecopied to and received by the
COMPANY in accordance with the provisions hereof shall be deemed a
Conversion Date. Within three (3) business days after receipt by the
COMPANY of the original Notice of Conversion and the Debenture
representing the Shares to be converted (the "Notice Date"), the
COMPANY will instruct its transfer agent to issue, on an expedited
basis, the certificates representing the Shares of Common Stock
issuable upon conversion of any Debentures and transmit the
certificates (together with the Debenture representing the Shares not
so converted) to the PURCHASER via express courier, by electronic
transfer or otherwise.
d. The Company understands that a delay in notifying the transfer agent to
issue the Shares of Common Stock beyond the Notice Date could result in
economic loss to the PURCHASER. As compensation to the PURCHASER for
such loss, the Company agrees, in the event the Company interferes with
or obstructs, by means of unsupportable objections, threats or
otherwise, the transfer agent's issuance and delivery of the
certificates, or raises unsupportable objections to the issuance and
delivery or otherwise causes a delay in issuance and delivery without
justifiable cause, to pay late payments to the PURCHASER for late
notice upon Conversion in accordance with the following schedule (where
"No. Business Days Late" is defined as the number of business days
beyond five (5) business days from the Notice Date: Late Payment For
Each $10,000 of Debenture Principal
No. Business Days Late Amount Being Converted
1 $50
2 $100
3 $150
4 $200
5 $250
6 $300
7 $350
8 $400
9 $450
10 $500
more than 10 $550
plus $100 for each Business
Day Late beyond 10 days
The Company shall pay any payments incurred under this Section in
immediately available funds upon demand. Nothing herein shall limit
PURCHASER's right to pursue actual damages for the Company's failure to
issue and deliver Common Stock to the PURCHASER, in the event that the
Company fails for any reason to effect delivery of such shares of Common
Stock within five (5) business days after the Delivery Date, the PURCHASER
will be entitled to revoke the relevant Notice of Conversion by delivering
a notice to such effect to the Company whereupon the Company and the
PURCHASER shall each be restored to their respective positions immediately
prior to delivery of such Notice of Conversion.
5. Exemption; Reliance on Representation.
a. PURCHASER understands that the offer and sale of the Debentures, and
the Shares issuable upon conversion thereof, is not being registered
under the 1933 Act. The COMPANY is relying on the rules of governing
offers and sales made outside the United States pursuant to
Regulation S Rules 901 through 904 of Regulation S govern this
transaction.
b. Notwithstanding the provisions hereof, in no event (except with
respect to an Event of Mandatory Conversion upon the maturity of the
Debenture) shall the holder be entitled to convert any Debenture in
excess of the number of shares upon conversion of which the sum of
(1) the number of shares of Common Stock beneficially owned by the
PURCHASER and its affiliates (other than shares of Common Stock which
may be deemed beneficially owned through the ownership of the
unconverted portion of the Debenture) and (2) the number of shares of
Common Stock issuable upon the conversion of the Debenture with
respect to which the determination of this proviso is being made
would result in beneficial ownership by the PURCHASER and its
affiliates of more than 4.9% of the outstanding shares of Common
Stock. For purposes of the proviso to the immediately preceding
sentence, beneficial ownership shall be determined in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended, and
Regulation 13 D-G thereunder, except as otherwise provided in clause
(1) of such provision.
6. Closing Date and Escrow Agent. The date of the issuance of the
Debentures and the sale of the Debentures as evidenced by receipt of the
COMPANY from the Escrow Agent of Purchaser's purchase funds (the "Closing
Date") shall be no later than two (2) business days after execution hereof
by all parties or such other mutually agreed to time. PURCHASER shall
within three (3) business days after acceptance and execution of this
Agreement by the COMPANY, deliver the necessary funds as indicated in
Paragraph 1 to the Escrow Agent. Debentures will be delivered to the
Escrow Agent at the instructions of the COMPANY. PURCHASER agrees that the
Escrow Agent has no liability as a result of any fraudulent or unlawful
conduct of any other party, and agrees to hold the Escrow Agent harmless.
7. Conditions to the COMPANY's obligation to Sell. PURCHASER
understands that the COMPANY's obligation to sell the Debentures is
conditioned upon:
a. Acceptance by PURCHASER of an Agreement for the sale of
Debentures;
b. Delivery to the Escrow Agent by each PURCHASER of immediately
available funds in United States Dollars as payment in full
for the purchase of the Debentures; and
c. The accuracy on the Closing Date of the representations and
warranties of PURCHASER contained in this Agreement and the
performance by PURCHASER on or before the Closing Date of all
covenants and agreements of PURCHASER required to be performed
on or before the Closing Date.
d. There shall not be in effect any law, rule or regulation
prohibiting or restricting the transactions contemplated
hereby, or requiring any consent or approval which shall not
have been obtained.
8. Conditions to PURCHASER's Obligation to Purchase. The COMPANY
understands that PURCHASER's obligation to purchase the Debentures is
conditioned upon:
a. The receipt and acceptance by the COMPANY of this Agreement as
evidenced by execution of this Agreement by the President or any
Vice President of the COMPANY. The acceptance of funds by the
COMPANY shall be deemed to be construction acceptance of this
Agreement;
b. Delivery of Debentures to Escrow Agent as herein set forth;
C. The accuracy on the Closing Date of the representations and
warranties of the COMPANY contained in this Agreement and the
performance by the COMPANY on or before the Closing Date of all
covenants and agreements of the COMPANY required to be performed
on or before the Closing Date; and
d. Delivery to the Escrow Agent of an opinion of counsel for the
COMPANY, dated the Closing Date and addressed to PURCHASER, in
the form attached hereto as Annex II.
e. Delivery to the Escrow Agent of the Irrevocable Instructions to
Transfer Agent in the form attached hereto as Annex IV.
9. Registration of the Securities. After the expiration of the
Restricted Period, if the COMPANY fails to issue to the PURCHASER or the
PURCHASER's transferees certificates for shares of Common Stock issuable
upon conversion of the Debentures bearing no restrictive legend and free of
stop transfer instructions for any reason other than the COMPANY's
reasonable good faith belief that the representations and warranties made
by the PURCHASER in this Agreement were untrue when made, then the COMPANY
shall be required, at the request of the PURCHASER and at the COMPANY's
expense, to effect the registration of such shares of Common Stock under
the act, and relevant Blue Sky laws as promptly as is practicable. The
COMPANY and the PURCHASER shall cooperate in good faith in connection with
the furnishing of information required for such registration and the taking
of such other actions as may be legally or commercially necessary in order
to effect such registration. The COMPANY shall file a registration
statement within thirty (30) days of PURCHASER's written demand therefor
and shall use its best efforts to cause such registration statement to
become effective as soon as practicable thereafter. Such best efforts
shall include, but not be limited to, promptly responding to all comments
received from the staff of the Securities and Exchange Commission with
respect to such registration
statement and promptly preparing and filing amendments to such registration
statement which are responsive to the comments received from the staff of
the Securities and Exchange Commission. Once declared effective by the
Securities and Exchange Commission, the COMPANY shall cause such
registration statement to remain effective until the earlier of (I) the
sale by the PURCHASER of all shares of Common Stock so registered or (ii)
120 days after the effective date of such registration statement. In the
event that the COMPANY has not effected the registration of such shares of
Common Stock under the Act and relevant Blue Sky laws within 120 days after
the date of the PURCHASER's demand therefor, the COMPANY shall pay to the
PURCHASER by wire transfer, as liquidated damages for such failure and not
as a penalty, an amount in cash equal to $100,000. Such payment shall be
made to the PURCHASER immediately upon expiration of the 120-day period
referenced in the preceding sentence if the registration of such shares of
Common Stock is not effected by such date; provided, however, that the
payment of such liquidated damages shall not relieve the COMPANY from its
obligations to register such shares of Common Stock pursuant to this
Section
10. Certain Agreements. The COMPANY covenants and agrees that it will not
enter into any subsequent or further offer of sale of common stock or
securities convertible into common stock with any third party within a
period of three hundred sixty (360) days from the Closing Date, without
first offering the PURCHASER the opportunity to (which shall remain open
for a period of five business days from the date the PURCHASER receives
notice thereof) to purchase all such additional securities (in the
discretion of terms and provisions on which the Company proposes to
securities to such third party. In the event that the participate in any
such investment, the Company shall with prompt written notice of the
consummating of any a third party, specifying the material terms thereof.
10 will not apply to (x) the issuance of securities in connection with a
merger, consolidation, sale of assets, disposition of a business, produce
or license by the Company, strategic alliance, bank loan or agreement,
public offering, securities issued at the then current market price (as
determined in good faith by the Board of Directors), or the exercise of
options, or (y) the exchange of the capital stock of the Company for
assets, stock or other joint venture interests. This Section 10 may be
waived by the holders of two-thirds of the outstanding principal amount of
the Debentures (whether or not the PURCHASER shall consent thereto).
the PURCHASER) on the offer such additional PURCHASER declines to provide
the PURCHASER such transaction with However, this Section (other than for
cash)
11. Governing Law; Arbitration. This Agreement will be construed and
enforced in accordance with and governed by the laws of the State of
Canada, except for matters arising Under the Act, without reference to
principles of conflicts of law. Any controversy or claim arising out of or
relating to this Agreement (whether in contract or tort, or both) shall be
determined by binding arbitration at Toronto, Canada, in accordance with
the commercial arbitration rules of the International Chamber of Commerce.
The prevailing party in any arbitration proceeding shall be awarded
reasonable attorneys fees and costs of the proceeding. The arbitration
award shall be final, and may be entered in any court having jurisdiction.
12. Notices. All- notices given under this Agreement shall be in
writing, addressed to the parties as set forth below, and shall be
effective on the earliest of (i) the date received, or (ii) if given by
facsimile transmittal on the date given if transmitted before 5:00 p.m. the
recipient's time, otherwise it is effective the next day, or (iii) on the
second business day
after delivery to a major international air delivery or air courier service
(such as Federal Express or Network Couriers):
COMPANY: Level Best Golf, Inc.
14561 58th Street North
Clearwater, Florida 34620
Attention: Mr. Fred L. Solomon, President
Facsimile No. (813) 535-0077
With a copy (that does not constitute notice) to:
Mr. Jackson L. Morris
Attorney at Law
3116 West North A Street
Tampa, Florida 33609
Facsimile No. (813) 873-9628
PURCHASER: At the address set forth on the first page of this Agreement.
ESCROW AGENT: Thomson Kernaghan & Co. Ltd.
365 Bay Street
Toronto, Ontario M5H 2V2 Canada
Attention: Mr. Mark E. Valentine, Vice President
Facsimile No. (416) 860-6140
With a copy (that does not constitute notice) to:
Mr. John M. Mann
Attorney at Law
2200 Post Oak Boulevard, Suite 614
Houston, Texas 77056-4706
Facsimile No. (713) 622-7185
13. Survival of Representations and Warranties. PURCHASER's
representations and warranties shall survive the execution and delivery
hereof of this Agreement and the delivery of the Debenture.
14. Confidentiality. Each of the COMPANY and the PURCHASER agrees to
keep confidential and not to disclose to or use for the benefit of any
third party the terms of this Agreement or any other information which at
any times is communicated by the other party as being confidential without
the prior written approval of the other party; provided, however, that this
provision shall not apply to information which at the time of disclosure is
already part of the public domain (except by breach of this Agreement) and
information which is required to be disclosed by law.
15. Indemnification. Each of the Company and the PURCHASER agrees to
indemnify the other and hold the other harmless from and against any and
all losses, damages, liabilities, costs and expenses (including reasonable
attorneys' fees) which the other may sustain or incur in connection with
the breach of the indemnifying party of any representation, warranty or
covenant made by it in this Agreement.
SIGNATURES FOR ENTITY PURCHASERS
IN WITNESS WHEREOF, the undersigned represents that the foregoing
statements are true and correct, and that it has caused this Offshore
Securities Subscription Agreement to be duly executed on its behalf this
day of 1 1997.
Printed Name of Purchaser
By:
(Signature of Authorized Person)
Printed Name and Title of Authorized Person
SIGNATURE OF INDIVIDUAL PURCHASERS
IN WITNESS WHEREOF, the undersigned represents that the foregoing
statements
are true and correct, and that the has duly executed this Offshore
Securities Subscription Aqreement this day of , 1997.
________________________________
Signature
_________________________________
Printed Name
__________________________________
Signature
Printed Name
Accepted this _____day of the month of ____________________________, 1997.
LEVEL BEST GOLF, INC.
By:
Name:
Title:
All correspondence and delivery of certificates and confirmation should be
addressed to the above-named person and sent by the COMPANY to his business
home address (check one).
Capacity of Subscriber (check one):
Individual
Corporation
Partnership
Other (Please specify)
Ownership of Debentures (check one):
Individual
Joint Tenant, with right of survivorship
Tenants in Common
Tenants in Entirety
Community Property
Country of Citizenship:
Country of Incorporation or Formation:
* If you are purchasing Debentures with only your spouse as co-owner, both
you and your spouse must sign the signature page. If any co-owner is not
your spouse, all co-owners must sign the signature page.
Name of PURCHASER representative, if any:
Address
Telephone
Full Name and Address of PURCHASER for Registration Purposes :
NAME:
ADDRESS:
TEL. NO.
FAX NO.
CONTACT NAME:
Delivery Instructions (if different from Registration Name:
NAME:
ADDRESS:
TEL. NO.
FAX NO.
CONTACT NAME:
SPECIAL INSTRUCTIONS:
Exhibit 10.4 AMENDMENT NO.1 TO LEVEL BEST GOLF, INC.
Series A 10% Convertible Debenture due June 1, 2000
Paragraph No. 4 of the Level Best Golf, Inc. Series A 10% Convertible
Debenture due June 1, 2000, in the principal amount of US $250,000 (the
"Debenture"), is hereby amended to read as follows:
4. The Holder of this Debenture is entitled, at its option, to convert
at any time all of the principal amount of the Debenture, plus accrued
interest, commencing forty-five (45) days after the closing of sale of the
Debenture (the "Closing"), provided that the principal amount is at least
US $10,000 (unless if at the time of such election to convert the aggregate
principal amount of all Debentures registered to the Holder is less than
Ten Thousand Dollars [US $10,000], then the whole amount thereof) into
shares of Common Stock of the Company at a conversion price for each share
of Common Stock equal to the lesser of (a) the Market Price on the Closing,
or (b) 75% of the Market Price on the Conversion Date. For purposes of
this Section 4, the Market Price shall be the average closing bid price of
the Common Stock on the five (5) trading days immediately preceding the
Closing or Conversion Date, as may be applicable, as reported by the
National Association of Securities Dealers for companies trading the over-
the-counter market or, in the event the Common Stock is listed on a stock
exchange, the Market Price shall be the average closing bid price of the
Common Stock on such stock exchange on the five (5) trading days
immediately preceding the Closing or Conversion Date, as reported in the
Wall Street Journal. Conversion shall be effectuated by surrendering the
Debentures to be converted to the Company with the form of conversion
notice attached as Exhibit "A", executed by the Holder of the Debenture
evidencing such Holder's intention to convert this Debenture or a specified
portion (as above provided) hereof, and accompanied, if required by the
Company, by proper assignment hereof in blank. Interest accrued or
accruing from the date of issuance to the date of conversion shall, at the
option of the Company, be paid in cash or Common Stock upon conversion. No
fraction of Shares or scrip representing fractions of shares will be issued
on conversion, but the number of shares issuable shall be rounded to the
nearest whole share. The date on which notice of conversion is given (the
"Conversion Date") shall be deemed to be the date on which the Holder has
delivered this Debenture, with the conversion notice duly executed to the
Company or if earlier, the date set forth in such notice of conversion if
the Debenture is received by the Company within three (3) business days
therefrom. Facsimile delivery of the conversion notice shall be accepted
by the Company at telephone number (813) 535-0077. Certificates
representing Common Stock upon conversion will be delivered within two (2)
business days from the date the notice of conversion is delivered to the
Company.
Dated: July 7, 1997 LEVEL BEST GOLF, INC '
By /s/ Fred L. Solomon, President
