RULE 504 SECURITIES SUBSCRIPTION AGREEMENT
PREMIER BRANDS, INC.
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE BECAUSE THEY ARE
BELIEVED TO BE EXEMPT FROM REGISTRATION UNDER RULE 504 PROMULGATED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THIS SUBSCRIPTION AGREEMENT
SHALL NOT CONSTITUTE AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY THE
SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE
UNLAWFUL.
This Rule 504 Securities Subscription Agreement (the "Agreement") is
executed by the undersigned Xxxxxx Xxxxxx Nikolaevich, a citizen of the
Ukraine (the "Subscriber") in connection with the offer and the subscription of
the undersigned to purchase 666,667 shares of common stock of Premier Brands,
Inc., a Utah corporation (the "Company"), at an aggregate price of $66,666.70
This Agreement and the offer and sale of the Stock contemplated hereby are being
made in reliance upon the provisions of Rule 504 of Regulation D ("Rule 504")
under the Securities Act of 1933, as amended (the "Act"). The Subscriber, in
order to induce the Company to enter into the transaction contemplated hereby
and acknowledging that the Company will rely thereon represents, warrants and
agrees as follows:
1. Offer to Subscribe; Purchase Price. (a) The Subscriber hereby
offers to purchase 666,667 shares and subscribes for an aggregate
price of $66,666.70. The closing of the transactions contemplated
hereby (the "Closing") shall be deemed to occur when this
Agreement has been executed by both Subscriber and Company.
Payment shall be made at the Closing by delivering immediately
available funds in United States dollars by wire transfer for
simultaneous closing by delivery of securities versus payment.
The Company agrees to deliver certificates representing the stock
subscribed for at the Closing. The date on which the Closing
occurs is hereafter referred to as the Closing Date.
2. Subscriber Representations; Access to Information; Independent
Investigation
(a) Offshore Transaction. Subscriber represents and warrants
to the Company that (i) Subscriber is not a "U.S. Person" as that
term is defined in Rule 902(o) of Regulation S; (ii) the
Subscriber is not, and on the Closing Date will not be, an
affiliate of the Company; (iii) at the execution of this
Subscription Agreement, Subscriber was outside the United States
and no offer to purchase the
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666,667 shares was made in the United States; (iv) the Subscriber
agrees that all offers and sales of the 666,667 shares shall not
be made to U.S. Persons unless the 666,667 shares are registered
or a valid exemption can be relied upon at both the appropriate
U.S. state or federal securities laws; (v) Subscriber is not a
distributor or dealer; (vi) the transactions contemplated hereby
(a) have not been and will not be pre-arranged by the Subscriber
with a purchaser located in the United States or a purchaser
which is a U.S. Person, and (b) are not and will not be part of a
plan or scheme by the Subscriber to evade the registration
provisions of the Act.
(b) Accredited Investor. Subscriber is an accredited
investor as that term is defined in Rule 501(a) of Regulation
under the Act. Subscriber further warrants and represents that
the information as disclosed in Exhibit "A" attached hereto is
true and correct.
(c) Beneficial Owner. Subscriber is purchasing stock for its
own account or for the account of beneficiaries for whom
Subscriber has full investment discretion with respect to stock
and whom Subscriber has full authority to bind, so that each such
beneficiary is bound hereby as if such beneficiary were a direct
Subscriber hereunder and all representations, warranties and
agreements herein were made directly by such beneficiary.
(d) Directed Selling Efforts. Subscriber 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 stock sold hereunder. To the best
knowledge of the Subscriber, neither the Company nor any Person
acting for the Company has conducted any "directed selling
efforts" as that term is defined in Rule 902 of Regulation S.
(e) Independent Investigation. Subscriber in electing to
subscribe for stock hereunder, has relied solely upon the
representations and warranties of the Company set forth in this
Agreement and on independent investigation made by it and its
representatives, if any, and Subscriber has been given no oral or
written representations or assurance from the Company or any
representation of the Company other than as set forth in this
Agreement or in a document executed by a duly authorized
representative of the Company making reference to this Agreement.
(f) No Government Recommendation or Approval. Subscriber
understands that no United States federal or state agency, or
similar agency of any other country, has passed upon or made any
recommendation or endorsement of the Company, this transaction or
the purchase of stock.
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3. The Company Represents, Covenants and Warrants the following:
(a) Reporting Status and Stage of the Company. The Company
is a corporation duly organized, validly existing and in good
standing under the laws of the State of Utah 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. (i) The
Company is not subject to the reporting requirements of section
13 or 15(d) of the Act; (ii) The Company is not an investment
company subject to reporting requirements of the Investment
Company Act of 1940; (iii) The Company is not a development stage
company that either has no specific business plan or purpose or
has it indicated that its business is to engage in a merger or
acquisition with an unidentified company or companies, or other
entity or Person.
(b) Concerning the Stock. The issuance, sale and delivery of
the stock are within the Company's corporate powers and have been
duly authorized by all required corporate action on the part of
the Company and its stockholders and when such securities are
issued, sold and delivered in accordance with the terms hereof
for the consideration expressed herein, such securities will be
duly and validly issued, fully paid and nonassessable. There are
no preemptive rights of any shareholders of the Company.
(c) Offshore Transaction. The Company has not offered or
sold the stock 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 buy order for the stock was
originated the Company and/or its agents reasonably believed
Subscriber was outside the United States and was not a U.S.
Person.
(d) Prearranged Sale. The Company and/or its agents believe
that the transaction contemplated hereby has not been
pre-arranged with a buyer in the United States.
(e) No Directed Selling Efforts. The Company has not
conducted any "directed selling efforts" as that term is defined
in Rule 902 of Regulation S nor has Company conducted any general
solicitation relating to the offer and sale of the stock to
Persons resident within the United States or any other U.S.
Person as that term is defined in Rule 902 of Regulation S.
(f) Subscription Agreement. This Agreement has been duly
authorized, validly executed and delivered on behalf of the
Company and is a valid and binding agreement enforceable against
the Company in accordance with its terms, subject to
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general principles of equity and to bankruptcy or other laws
affecting the enforcement of creditors' rights generally.
(g) Non-contravention. The execution and delivery of this
Agreement and the consummation of the issuance of the stock and
the transactions contemplated by this Agreement, the stock does
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.
(h) Litigation. There is no action, suit or proceeding
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.
(i) No Default. 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, will conflict with or result in the breach or
violation of any of the terms or provisions of, or constitute a
default or result in the creation or imposition 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 Bylaws 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.
(j) 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
Subscriber 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
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reasonably be expected to materially and adversely affect the
ability of the Company to perform its obligations pursuant to
this Agreement.
4. Reliance on Representations. The Subscriber understands that the
offer and sale of the stock are not being registered under the
Act. The Company and the Subscriber are relying on Rule 504 of
Regulation D, the rules governing offers and sales made outside
the United States and a legal opinion obtained by the Company
that the offer and sale contemplated under this Agreement is in
compliance with such rules.
5. Resales. Subscriber acknowledges and agrees that the stock may
only be resold (a) in compliance with all state and federal
securities laws, (b) pursuant to a Registration Statement under
the Act or (c) pursuant to an exemption from registration under
the Act under Rule 504 and any applicable U.S. state securities
laws.
6. Confidentiality. The Company and the Subscriber 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 time 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.
7. Indemnification. The Company and the Subscriber agrees to
indemnify the other and to 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 by the
indemnifying party of any representation, warranty or covenant
made by it in this Agreement.
8. Notices. Any notice to be given or to be served upon any party to
this Agreement in connection with this Agreement must be in
writing and will be deemed to have been given and received upon
confirmed receipt, if sent by facsimile, or two (2) days after it
has been submitted for delivery by Federal Express or an
equivalent carrier, charges prepaid and addressed to the
following addresses with a confirmation of delivery:
If to the Company, to:
Premier Brands, Inc.
000 Xxxx 000 Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attn.: Xx. Xxxxxxx Xxxxxx, President
Phone No.: (000) 000-0000
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Fax No.: (000) 000-0000
If to the Subscriber, to:
Xxxxxx Xxxxxx Nikolaevich
0 Xxxxxxx Xxxxxx Xxx. 00
Xxxxxx, Xxxxxxx 000000
Phone No.:
Fax No.:
Any party may, at any time by giving notice to the other party,
designate any other address in substitution of an address
established pursuant to the foregoing to which such notice will
be given.
9. Multiple Counterparts. This Agreement may be executed in several
counterparts, each of which will be deemed to be an original but
all of which will constitute one in the same instrument. However,
in enforcing any party's rights under this Agreement it will be
necessary to produce only one copy of this Agreement signed by
the party to be charged.
10. Governing Law. This Agreement will be construed and enforced in
accordance with and governed by the laws of the State of Utah,
except for matters arising under the Act, without reference to
principles of conflicts of law. Each of the parties consents to
the jurisdiction of the federal courts whose districts encompass
any part of the State of Utah in connection with any dispute
arising under this Agreement and hereby waives, to the maximum
extent permitted by law, any objection, including any objection
based on forum non conveniens, to the bringing of any such
proceeding in such jurisdictions. Each party hereby agrees that
if another party to this Agreement obtains a judgment against it
in such a proceeding, the party which obtained such judgment may
enforce same by summary judgment in the courts of any country
having jurisdiction over the party against whom such judgment was
obtained, and each party hereby waives any defenses available to
it under local law and agrees to the enforcement of such a
judgment. Each party to this Agreement irrevocably consents to
the service of process in any such proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid,
to such party at its address set forth herein. Nothing herein
shall affect the right of any party to serve process in any other
manner permitted by law.
[THIS SPACE HAS BEEN LEFT BLANK INTENTIONALLY]
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The undersigned acknowledges that this Agreement shall not be
effective unless and until accepted by the Company as indicated below.
Dated this______ day of September 1998.
Xxxxxx Xxxxxx Nikolaevich
0 Xxxxxxx Xxxxxx Xxx. 00
Xxxxxx, Xxxxxxx 000000
/s/
-------------------------------
Premier Brands, Inc.
000 Xxxx 000 Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attn.: Xx. Xxxxxxx Xxxxxx, President
Phone No.: (000) 000-0000
Fax No.: (000) 000-0000
By: /s/ Xxxxxxx Xxxxxx
----------------------------
Xxxxxxx Xxxxxx
President
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EXHIBIT A
OFFEREE QUESTIONNAIRE
To: Premier Brands, Inc.
000 Xxxx 000 Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, XX 00000
Dear Sirs:
The information contained herein is being submitted by me for Premier Brands,
Inc. pursuant to Sections 4(2) and/or 4(6) of the Securities Act of 1933 (the
"Act") and Rule 504 of Regulation D promulgated thereunder. I understand that
you will rely upon the information contained herein since the Company's Common
Shares ("Shares") will not be registered under the Act or any State Securities
Act, in reliance upon the exemptions from registration provided by Sections 4(2)
and/or 4(6) of the Act and Rule 504 of Regulation D and corresponding provisions
of relevant State Securities Acts. I understand that (i) you will rely upon the
information contained herein for purposes of such determination, and (ii) this
questionnaire has been requested by you so that you may better assess the
suitability of the undersigned as a prospective purchaser of the Shares.
I hereby provide you with following information and information:
1. I represent that I either:
a) Have such knowledge and experience in financial and business
matters that I am capable of evaluating the merits and risks of an
investment in the Shares. I am not utilizing any other Person to be my
Purchaser Representative in connection with evaluating such merits and
risks. I offer as evidence of my knowledge and experience in these matters
the information requested in this Purchaser Questionnaire. Or
b) Have obtained the services of a Purchaser Representative in
connection herewith who is_____________________________________________. My
Purchaser Representative submits herewith for your files a copy of the
attached Purchaser Representative Information that was furnished to the
undersigned, and I will furnish such Purchaser Representative with a copy
of this Questionnaire as acknowledgment of his serving as my Purchaser
Representative. The undersigned and/or the above named Purchaser
Representative together have such knowledge and experience in financial and
business matters that they are capable of evaluating the merits and risks
of an investment in the Shares.
2. I am a Person who is able to bear the economic risk of an investment in the
Shares in the amount which you intend to offer. In making this statement,
consideration has been given to whether I could afford to hold the Shares for an
indefinite period of time and whether, at this
133
time, I could afford a complete loss. I offer as evidence of my ability to bear
the economic risk, the information in this Purchaser Questionnaire.
3. Except as indicated below, any purchases of the Shares will be solely for my
account, and not for the account of any other Person or with a view to any
resale or distribution thereof.
4. I represent to you that information contained herein is complete and accurate
and may be relied upon by you, and that I will notify you immediately of any
material change in any of such information occurring prior to the closing of the
purchase of the Shares, if any, by me.
Dated: September____, 1998
/s/
----------------------------------------
Xxxxxx Xxxxxx Nikolaevich
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PERSONAL INFORMATION
1. Name: ________________________________________________ Age: ____________
2. Residence Address and Telephone Number: ____________________________________
---------------------------------------------------------------------------
3. Social Security Number: ____________________________________________________
4. Employer and Position: _____________________________________________________
5. Business Address and Telephone Number: _____________________________________
---------------------------------------------------------------------------
6. Business or Professional Degrees: __________________________________________
---------------------------------------------------------------------------
7. Prior Employment (Position, Nature of Duties, Dates of Employment
(Past 5 years):
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
8. Prior Investments (amount cumulative):
Up to $50,000 _______ $50,000-$150,000 ______ Over $150,000 XX
--
9. Financial Information:
(A) In each of your two preceding tax years, did you individually
report for federal tax purposes more than $200,000 of gross
income, or, when combined with the income of your spouse, if any,
$300,000 of gross income? Yes XX No _____
--
(B) If the answer to (A) is Yes, do you presently expect to have more
than $200,000 of gross income, or, when combined with your
spouse, if any, $300,000 of gross income in the current taxable
year? Yes XX No _____
--
(C) Do you have net worth of at least $1,000,000? Yes XX No ____
--
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(D) Net worth (exclusive of home, home furnishings and personal
automobiles):
$250,000-$500,000 _____ $500,000-$1,000,000 _____ Over $1,000,000 XX
--
I hereby certify that the foregoing is true and correct.
Dated: September____, 1998
/s/
----------------------------------------
Xxxxxx Xxxxxx Nikolaevich
136
