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EXHIBIT 10.27 PAGE 1 OF 6
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
_______ day of __________, 1996, by and between ______________________________
(the "Purchaser") and Advanced Media, Inc. (the "Company").
WHEREAS, subject to the terms and conditions herein contained,
Purchaser desires to purchase shares of Class A Convertible Preferred Stock
("Preferred Stock") of the Company, with the terms set forth in Exhibit A
hereto, 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 __________________
shares of Preferred Stock (the "Shares") at a purchase price equal to $1.00 per
share. The total consideration for the Shares shall be _____________________.
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 period ended March 31, 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.
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EXHIBIT 10.27 PAGE 2 OF 6
(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 40 days thereafter shall only be made 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 40-day
period 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 period referred to in
paragraph (f) above, the Shares may not be held in the United States unless held
by a dealer or other professional
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EXHIBIT 10.27 PAGE 3 OF 6
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 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
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EXHIBIT 10.27 PAGE 4 OF 6
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
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EXHIBIT 10.27 PAGE 5 OF 6
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.
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.
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EXHIBIT 10.27 PAGE 6 OF 6
IN WITNESS WHEREOF, the Purchaser has executed this Subscription
Agreement as of this ___ day of __________________, 1996.
By:_________________________________
Name:_______________________________
Title:______________________________
Address
____________________________________
____________________________________
____________________________________
Accepted this ___ day of __________________, 1996
ADVANCED MEDIA, INC.
By: /s/ Xxxx X. Kaemmlein
_______________________
Name: Xxxx X. Kaemmlein
Title: Chairman
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