THE SECURITIES TO BE PURCHASED AND SOLD PURSUANT TO THIS SUBSCRIPTION AGREEMENT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"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 REGULATIONS PROMULGATED
BY THE SECURITIES AND EXCHANGE COMMISSION UNDER THE ACT, UNLESS THE SECURITIES
ARE REGISTERED UNDER THE ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENT
OF THE ACT IS AVAILABLE.
SUBSCRIPTION AGREEMENT
This Subscription Agreement (the "Agreement") dated as of the 15th day of
January, 1997, by and between Viking Fund Ltd., a Bahamian company (the
"Purchaser") and Advanced Media, Inc. (the "Company").
WHEREAS, subject to the terms and conditions herein contained, Purchaser
desires to purchase shares of Common Stock, par value $.0001 per share ("Common
Stock") of the Company and the Company desires to sell shares of Common Stock to
the Purchaser.
NOW, THEREFORE, in consideration of the premises and the terms, conditions
and covenants herein contained, the parties hereto do hereby agree as follows:
1. Subscription. Purchaser hereby subscribes for 2,000,000 shares of Common
Stock (the "Shares") at a purchase price equal to $.04 per share. The total
consideration for the Shares shall be $80,000. Purchaser shall pay the purchase
price by delivering good funds in United States Dollars by wire transfer to the
Company for closing by delivery of securities versus payment, the time and place
to be mutually agreed.
2. Representations of Purchaser. In order to induce the Company to accept
this subscription and sell to the Purchaser the Shares, the Purchaser does
hereby represent, warrant and covenant to and agree with the Company, which
representations, warranties, covenants and agreements shall be deemed to be
continuing and shall survive the execution of this Agreement by the Company and
the consummation of the transactions herein contained, as follows:
(a) Receipt of Disclosure Documents; Availability of Documents;
Independent Investigation. The Purchase has been furnished with the Company's
press releases, Annual Report on Form 10-K for the year ended December 31, 1995,
Quarterly Report on Form 10-Q for the periods ended March 31, 1996, June 30,
1996 and September 30, 1996 and most recent proxy statement (the "Disclosure
Documents"). The Purchaser acknowledges that the Company has offered to provide
copies of any documents identified in the Disclosure Documents requested by the
Purchaser. In addition, prior to the sale of the Shares, all documents, records
and books pertaining to an investment in the Company have been made available to
the Purchaser and the Purchaser's advisers for inspection during reasonable
business hours at the office of the Company. In making the decision to purchase
the Shares, the Purchaser has relied upon independent investigations made by
Purchaser and Purchaser's representatives, if any.
(b) Opportunity to Talk With Management. The Purchaser has been given
the opportunity and has been encouraged to discuss with management of the
Company the present and contemplated business, operations and financial
condition of the Company and the estimated expenses of this transaction and the
contemplated use of the net proceeds from this transaction.
(c) Accredited Investor; Knowledge and Experience. The Purchaser is
an "accredited investor" as that term is defined in Regulation D under the
Securities Act of 1933, as amended (the "Securities Act"), and has such
knowledge or experience in financial and business matters that the Purchaser is
capable, either alone or together with the Purchaser's purchaser representative
(if any) of evaluating the merits and risks of investing in the Company.
(d) No U.S. Person. The Purchaser is not a U.S. Person as that term
is defined in Rule 902(o) of Regulation S.
(e) Offshore Transaction. The offer and sale of the Shares is not
taking place in the United States but rather in an offshore transaction. The
Purchaser was outside the United States at the time his buy order originated and
is outside the United States as of the date of the execution and delivery of
this Agreement.
(f) Offering Restrictions. All offers and sales of the Shares prior
to the expiration of a period commencing on the date of this Agreement and
ending 90 days thereafter shall only be made with the consent of the Company in
its sole discretion, provided, that in no event shall any such sale be made
other than in compliance with the safe harbor contained in Regulation S,
pursuant to registration of the Shares under the Securities Act, or pursuant to
an exemption from the registration requirements of the Securities Act. All
offers and sales after the expiration of the 90-day period, or such shorter
period not to be less than 40 days in its sole discretion as is agreed to by the
Company, in the United States or to U.S. Persons shall be made only pursuant to
such a registration or to such exemption from registration.
(g) Statements Concerning Offering Provisions. All offering materials
and documents received by Purchaser include statements to the effect that the
Shares have not been registered under the Securities Act and may not be offered
or sold in the United States or to U.S. Persons prior to the expiration of a
period commencing on the date of this transaction and ending 40 days thereafter
unless the Shares are registered under the Securities Act or an exemption from
the registration requirements of the Securities Act is available.
(h) Risk of Purchase. The Purchaser understands that the purchase of
the Shares is speculative and involves a high degree of risk, and the Purchaser
is able to bear the economic risk of the purchase of the Shares.
(i) Purchase For Own Account. The Purchaser is purchasing the
Shares for its own account and not on behalf of any U.S. Person, and the sale
has not been prearranged with a purchaser in the United States.
(j) U.S. Accounts. During the 40-day safe harbor period of
Regulation S referred to in paragraph (f) above, the Shares may not be held
in the United States unless held by a dealer or other professional
fiduciary organized, incorporated or (if an individual) resident in the
United States pursuant to a discretionary account or similar account (other
than estate or trust) held for the benefit or account of the Purchaser.
(k) Beneficiaries. If the certificate(s) for the Shares is
requested to be issued in the name of a nominee during the 40-day safe harbor
period referred to in paragraph (f) above, each and every beneficiary for which
said certificate(s) is held by the nominee will be a non-U.S. Person.
(l) Reliance by Company on Representations. The Purchaser understands
that the Shares are being offered and sold to Purchaser in reliance on specific
exemptions from the registration requirements of federal and applicable state
securities laws and that the Company is relying upon the truth and accuracy of
the representations, warranties, covenants, agreements and acknowledgments of
Purchaser set forth herein in order to determine the applicability of such
exemptions and the suitability of the Purchaser to acquire the Shares.
(m) Compliance With Regulation S. The Purchaser has no reason to
believe, and does not believe, that the sale of the Shares does not comply with
the requirements of Regulation S.
(n) Compliance By Distributors. Each Distributor (as that term is
defined in Regulation S) participating in the offering of the Shares, if any,
has agreed that all offers and sales of the Shares prior to the expiration
of a period commencing on the date of the closing of the offering of the Shares
and ending 40 days thereafter shall only be made in compliance with the safe
harbor provisions contained in Regulation S, or pursuant to registration of the
Shares under the Securities Act or pursuant to an applicable exemption from
registration under the Act. No Distributor of the Shares of any affiliate
thereof has engaged in any "Directed Selling Efforts" (as defined in Rule 902(b)
of Regulation S).
(o) No Affiliation With Company. The Purchaser is not an officer,
director or "affiliate" (as that term is defined in Rule 405 under the
Securities Act) of the Company.
(p) No Regulatory Endorsement of Approval. The Purchaser understands
that no United States federal or stare agency has made any finding or
determination regarding the fairness of the offering of the Shares for
investment, or any recommendation or endorsement of the offering of the Shares.
(q) No Scheme to Avoid Registration. The Purchaser understands that
in the view of the Securities and Exchange Commission, the statutory basis for
the exemption claimed for the transaction would not be present if the offering
of Shares, although in technical compliance with Regulation S, is part of a plan
or scheme to evade the registration provisions of the Securities Act. The
Purchaser hereby confirms that its purchase is not part of any such plan or
scheme.
(r) No Other Representations to Purchasers. The Purchaser
understands and acknowledges that no other person has made any representations
or warranties as to the accuracy or completeness of the information contained
in the Company reports and filings provided to Purchaser or this Agreement.
(s) Compliance With Applicable Foreign Law. The purchase of the
Shares by the Purchaser is not in violation of any securities law of the
country or territory in which Purchaser is located.
(t) No Short Selling During the 40-Day Period. Purchaser has not sold
short any shares of the Company's Common Stock during the past thirty (30) days
and until the expiration of the 40-day period referred to in paragraph (f)
above, will not sell short or engage in any other hedging transaction with
respect to any shares of the Common Stock of the Company.
3. Representations of the Company. In order to induce the Purchaser to
purchase the Shares, the Company does hereby represent, warrant and
covenant to and agree with the Purchaser, which representations, warranties,
covenants and agreements shall be deemed to be continuing and shall survive the
execution of this Agreement by the Purchaser and the consummation of the
transactions herein contained as follows:
(a) Reporting Company Status. The Company has a class of
securities registered pursuant to Section 12(g) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and has filed all the material
required to be filed pursuant to Section 13(a) or 15(d) of the Exchange Act for
a period of at least twelve (12) months immediately preceding the date of this
Agreement and the date on which the Purchaser was offered an opportunity to
purchase the Shares.
(b) Offshore Transaction. The Company has not knowingly
offered shares of Common Stock or the Shares in this transaction to any persons
in the United States or to any U.S. Persons.
(c) No Directed Selling Efforts. The Company has not conducted
any Directed Selling Efforts as that term is defined in Rule 902(b) of
Regulation S.
(d) Corporate Authority; Validity of the Shares. The Company
has all corporate power and authority to enter into this Agreement and to
perform its obligations hereunder. The Shares, when issued pursuant to the
terms of this Agreement, will be validly issued, fully paid and non-assessable.
(e) No Pre-Arrangement with U.S. Persons. The Company
believes that the purchase of the Shares has not been pre-arranged with a
purchaser in the United States.
(f) One Distributor. The Company believes that Xxxx
Wachmeister is the only distributor (as such term is defined in Rule 902(c) of
Regulation S) of the Shares.
(g) Litigation. Except as disclosed in the Disclosure Documents,
there is no pending or, to the best knowledge of the Company, threatened action,
suit, proceeding or investigation before any court, governmental agency or body,
or arbitrator having jurisdiction over the Company, or any of its affiliates,
that would materially affect the execution by the Company of the performance by
the Company of its obligation under this Agreement.
(h) Additional Issuances. There are no outstanding agreements or
preemptive or similar rights affecting the Company's common stock and no
outstanding rights, warrants or options to acquire, or instruments convertible
into or exchangeable for, or agreements or understandings with respect to the
sale or issuance of, any shares of Common Stock or equity of the Company or
other equity interest in any of the subsidiaries of the Company, except as
described in the Disclosure Documents.
4. Indemnification. The Purchaser does hereby agree to indemnify and
hold harmless the Company and its officers, directors, stockholders, employees,
agents and affiliates from and against any and all loss, damage, liability, cost
and expense (including reasonable attorneys' fees) arising out of or relating to
a breach by the Purchaser of any of the representations, warranties or covenants
herein contained. The Company does hereby agree to indemnify and hold harmless
the Purchaser from and against any and all loss, damage, liability, cost and
expense (including reasonable attorneys' fees) arising out of or relating to a
breach by the Company of any of the representations, warranties or covenants
herein contained.
5. Validity and Binding Nature of Agreement. This Agreement and the
subscription herein contained shall not be binding upon the Company until
accepted by the Company by execution of this Agreement by the Company. This
Agreement and the subscription herein contained shall be valid and binding upon
and irrevocable as to the Purchaser during the period commending on the date
hereof and terminating upon the acceptance or rejection of this subscription by
the Company.
6. Transferability. Neither this Agreement, nor the rights, benefits,
duties or obligations of the Purchaser hereunder can be transferred, sold,
assigned or conveyed by the Purchaser without the express written consent of the
Company in each instance, which consent may be given or withheld in the sole and
absolute discretion of the Company.
7. Closing. The date of the issuance and sale of the Shares shall
be within five (5) business days after the acceptance of this executed
Agreement by the Company. The exact date and place of the closing shall be
determined by the mutual agreement of the parties hereto.
8. Miscellaneous Terms. This Agreement sets forth the entire
agreement between the parties hereto with respect to the subject matter herein
contained and shall be governed and construed in accordance with the laws of the
State of New York applicable to contracts made and to be fully performed
therein, without regard to conflicts of laws, cannot be altered, amended,
modified, terminated, or rescinded except by a writing executed by the Purchaser
and the Company, or as herein otherwise provided; and shall inure to the benefit
of and be binding upon the parties hereto and their respective successors,
transferees, heirs, assigns and beneficiaries. There are no third party
beneficiaries of this Agreement except as expressly provided herein.
IN WITNESS WHEREOF, the Purchaser has executed this Subscription
Agreement as of this 15th day of January, 1997.
VIKING FUND LTD.
By:
Xxxx Xxxxx Xxxxxx
President
Address:
Charlotte House
Charlotte Street
Nassau, Bahamas
Accepted this 15th day of January, 1997
ADVANCED MEDIA, INC.
By: Name: Xxxx X. Kaemmlein
Title: Chairman of the Board
