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EXHIBIT 10(b)
Name of Subscriber Varna Management, Ltd, and/or its assigns
Xxxxxxxxxx Xxxxx
Xxxx Xxxx Xxxxxx
X.X. Xxx X-0000
Nassau, Bahamas
SUBSCRIPTION AGREEMENT AND INVESTMENT REPRESENTATION
THE SECURITIES BEING SUBSCRIBED TO HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER APPLICABLE STATE SECURITIES
LAWS DUE TO THE APPLICATION OF REGULATION S PROMULAGED BY THE U.S. SECURITIES
AND EXCHANGE COMMISSION UNDER THE PROVISIONS OF THE SECURITIES ACT OF 1933, AS
AMENDED.
FURTHER, THE SECURITIES BEING SUBSCRIBED TO MAY NOT BE TRANSFERRED EXCEPT
PURSUANT TO TRANSACTIONS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS, OR
COMPLIANCE THEREWITH.
Board of Directors
Marinex Multimedia Corp
The Soho Building
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Gentlemen:
1. SUBSCRIPTION AND CONSIDERATION FOR PURCHASE. The undersigned and/or
its assigns or designees (collectively the "Purchaser") hereby elects to
purchase a minimum total of 507,246 shares of Common Stock (the "Shares"), par
value $.001, of Marinex Multimedia Corp. ("Marinex"), a Nevada corporation
(the "Company") set forth above at a purchase price per share of $1.00; as
indicated below, however, after the Purchaser has concluded the initial
purchase of 525,000 share, the Purchaser may in its sole discretion, elect not
to purchase all or any part thereof, of the remaining shares to be purchased.
If the Purchaser elects to purchase less than the Minimum Number of Shares
remaining to be purchased, the Company may, upon five days written notice,
rescind the agreement, but only with respect to the remaining shares to be
purchased. The Purchaser, upon receipt of the written notice, shall have five
days in which to cure any default hereunder.
The purchase of Shares shall occur in the following stages:
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Date of Purchase Minimum Number of Shares Purchase Price
---------------- ------------------------ --------------
02/09/96 525,000 $ 525,000.00
03/01/96 500,000 $ 500,000.00
03/22/96 500,000 $ 500,000.00
04/12/96 500,000 $ 500,000.00
05/03/96 500,000 $ 500,000.00
2. PAYMENT. Purchaser shall pay the purchase price for the Shares, at or
before the date of purchase, by delivering good funds in United States dollars
in the form of a wire transfer into the designated trust account maintained by
the Company's outside counsel.
3. UNDERSTANDING OF THE PURCHASER. The Purchaser and/or its assigns
acknowledge, understand and agree that:
(a) TRANSFER AGENT INSTRUCTIONS. The Company's transfer agent will be
instructed to issue one or more share certificates evidencing the Shares,
leaving a customary Regulation S legend on the reverse side thereof, in the
name of the Purchaser or its assign. The transfer agent will be given stop
transfer instructions restricting the transfer of the Shares, to any "U.S.
person" as such term is defined in Regulation S. for a period of twelve (12)
months, (the "Restricted Period") (see paragraph below). The Shares are subject
to the restrictions on transfer provided in Regulation S, the terms and
conditions of which are incorporated herein by reference, plus any additional
time periods necessary to complete the Restricted Period. The Company warrants
that no other instructions have been or will be given to the transfer agent,
and that the Shares shall be otherwise freely tradeable on the Company's books
and records.
At the close of the Restricted Period the Company shall provide to its
transfer agent a legal opinion prepared by the Company's outside counsel
opining that the restricted legend may appropriately be removed from the
Shares, should such a legal opinion be required by the transfer agent in order
to lift the restricted legend, and provided that such a legal opinion is
permissible under the laws and circumstances in existence at that time. In no
event shall such legal opinion be unduly withheld by the Company. The
responsibility for removal of the restrictive legend shall be solely the
Company's. All fees related to transfer of the Shares to Purchaser, including
but not limited to the cost of obtaining a legal opinion, shall be borne by the
Company. The Shares shall be issued in that name set forth under the signature
line below. Nothing in
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this section shall affect in any way Purchaser's obligation and agreement to
comply with all applicable securities laws upon resale of the Shares.
(b) SHARES NOT REGISTERED. The Shares have not been registered under the
Securities Act of 1933 (the "Act"), as amended, or any applicable State Law.
The Shares may not be sold, offered for sale, transferred, pledged,
hypothecated, or otherwise disposed of except in compliance with the Act. The
Company has no obligation, and does not intend, to cause any of the Shares sold
in this offering, to be registered under the Act, or to comply with any
exemption under the Act that would permit a sale or sales of the Shares. The
Purchaser must bear the economic risk of the investment in the Shares in the
Restricted Period. Purchaser acknowledges that he is subject to the
restrictions on transfer described herein Company will issue stock transfer
orders with the stock transfer orders with the Company's transfer agent to
enforce such restrictions.
(c) No Federal or State (U.S.A.) agency has made any findings or
determination as to the fairness of an investment in the Company, or any
recommendation or endorsement of this investment.
4. Delivery of Share Certificates. A certificate in the form specified in
Section 3 above evidencing the Shares subscribed shall be delivered to the
Purchaser outside the United States (or to a law firm, brokerage firm, or other
professional fiduciary for delivery to the Purchaser outside the United States)
on a delivery versus payment basis at such place as shall be mutually agreed at
closing; provided that such certificates shall be made available for inspection
by the purchaser or its agents at such reasonable time as the Purchaser may
request prior to closing.
5. Representation and Warranties of the Purchaser. The Purchaser hereby
represents and warrants to the Company as follows:
(a) Purchaser is not organized under the laws of any jurisdiction within
the United States and was not formed for the purpose of investing in securities
sold under Regulation S. Purchaser is not a subsidiary of a corporation
organized in the United States, and is not otherwise a "U.S. Person" as that
term is defined in Section 902 of Regulation S.
(b) At the time the buy order for the Shares was originated, Purchaser was
outside the United States and was outside the United States as of the date of
the execution and delivery of this agreement to the Company.
(c) Purchaser is buying the Shares for its own account or for the account
of persons each of whom have entered into offshore subscription agreements in a
form substantially identical to this agreement, and is not purchasing the
shares for the account or benefit of any U.S. Person
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(d) Purchaser's commitment to investments that are not readily marketable
is not disproportionate to his Net Worth, and his investment in the Shares will
not cause such overall commitment to become excessive.
(e) Purchaser has the financial ability to bear the economic risk of this
investment, has adequate means for providing for his current needs and personal
contingencies, and has no need for liquidity in this investment.
(f) Purchaser has evaluated the high risk of investing in the Shares and
has such knowledge and experience in financial and business matters in general
and in particular with respect to this type of investment that he is capable of
evaluating the merits and risks of an investment in the Shares.
(g) Purchaser has been given the opportunity to ask questions of and
receive answers from the company concerning the terms and conditions of this
investment, and to obtain additional information necessary to verify the
accuracy of the information desire in order to evaluate this investment, and in
evaluating the suitability of an investment in the Shares. Purchaser has not
relied upon any representations or any information (whether oral or written)
other than that furnished by the company or its representatives.
(h) Purchaser has had the opportunity to discuss with professional legal,
tax and financial advisers the suitability of an investment of the Shares for
its particular tax and financial situation, and all information that has been
provided to the company concerning Purchaser and his financial position is
correct and complete as of the date set forth below, and if there should be any
material change in such information prior to his admission as a shareholder of
the Company, will immediately provide such information to the Company.
(i) The residents set forth below is the true and correct residence, and
purchaser has no present intention of becoming a resident or domicilary of any
other country.
(j) In making the decision to purchase the Shares, Purchaser has relied
solely upon independent investigations made by him or on his behalf.
(k) If the Purchaser is acting in this transaction as a distributor, as
defined under Regulation S, then he will be reselling the shares only in an
offshore transaction and will advise the ultimate Purchaser, or any other
distributor to whom he sells the Shares, that they will be subject to the same
restrictions on resale to which he is subject under said Regulation S.
Otherwise, as the ultimate Purchaser in this offering, Purchaser is acquiring
the Shares solely for his own personal account, for invesment purpose only, and
is not purchasing with a view to, or for, the resale, distribution,
subdivision, or fractionalization thereof.
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(l) Purchaser is neither a member of nor is affiliated with or employed by
a member of the National Association of Securities Dealers, Inc. nor is
employed by or affiliated with a broker-dealer registered with the U.S.
Securities and Exchange Commission (the "SEC") nor with any similar agency of
any state.
(m) The offer leading to the sale and the sale evidenced hereby were made
in "offshore transaction" for purposes of Regulation S. "Offshore transaction"
as defined under Regulation S is any offer or sale of securities if (A) the
offer is not made to a person in the United States, or the Company and any
person acting on its behalf reasonably believes that the Purchaser is outside
the United States: or (B) the transaction is executed in, on or through the
facilities of "designated offshore securities market", and neither the Company
nor any person acting on its behalf knows that the transaction has been
prearranged with the Purchaser in the United States. "Designated offshore
securities market" is defined under Regulation S to be the Eurobond Market, as
regulated by the Association of International Bond Dealers; the Amsterdam Stock
Exchange; the Australian Stock Exchange Ltd.; the Beurse de Bruxelles; the
Frankfurt Stock Exchange; the Stock Exchange of Hong Kong Limited; the
International Stock Exchange; the Bourse de Luxembourg; the Borsa Calori di
Milan; the Montreal Stock Exchange; the Toronto Stock Exchange; The Vancouver
Stock Exchange; the Zurich Stock Exchange. In regards of this representation
and warranty, and notwithstanding the above, offers and sales of securities to
persons excluded from the definition of "U.S. Person" are offshore
transactions.
A "U.S. Person" for purposes of Regulation S is (I) any natural person
resident in the United States; (ii) any partnership or corporation organized or
incorporated under the laws of the United States; (iii) any estate of which any
executor or administrator is a U.S. person; (iv) any trust of which any
trustee is a U.S. person; (v) any agency or branch of a foreign entity located
in the United States; (vi) any non-discretionary or similar account other than
an estate or trust held by a dealer or other fiduciary organized, incorporated,
or if an individual, resident in the United States; (vii) any discretionary or
similar account (other than in a state of trust) held a dealer or other
fiduciary organized, incorporation, or if an individual, resident in the United
States; (viii) any partnership or corporation if (A) organized or incorporated
under the laws of any foreign jurisdiction; and (B) formed by a U.S. person
principally for the purpose of investing in securities not registered under the
Securities Act unless it is organized or incorporated and owned by accredited
investors who are not natural persons, estates or trusts.
(n) Neither the Purchaser nor any affiliate, nor any person acting on
their behalf, has made any "directed selling efforts" in the United States as
defined in Regulation S as "any activity taken for the purpose of or that could
be reasonably expected to have the effect of conditioning the market in the
United States for any of the securities being purchased hereby.
(o) The Purchaser understands that the Company is the issuer of the
securities which are the subject of this Agreement and that, for purposes of
Regulation S, a
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"distributor" is any underwriter, dealer or other person who participates
pursuant to a contractual arrangement, in the distribution of securities
offered or sold in reliance on Regulation S and that the "affiliate" is any
partner, officer, or director of any person, directly or indirectly, controlled
by or under common control with the person in question. In this regard, the
Purchaser shall not, during the Restricted Period, act as a distributor,
either directly or through an affiliate, nor shall the Purchaser sell,
transfer, hypothecate, or otherwise convey the Shares or any interest therein
other than to a non-U.S. person (and in such case shall provide evidence to
the satisfaction of the Company and its Transfer Agent that such resale was
made in a bona-fide offshore).
(p) Purchaser acknowledges that the Shares have not been registered under
the Act and are being offered and sold to Purchaser in reliance upon the
exemption provided by Regulation S from the registration requirements of the
Act, and Purchaser acknowledges, for a period of at least forty (40) days, or
for any greater period as required by this agreement, following the completion
of the Company's acquisition of Shares under this agreement, Purchaser must not
and will not allowed to resell the Shares in the United States or to a U.S.
Person.
(q) Purchaser is not an "affiliate" of the Company as defined in Rule
144(a) of the SEC and, following purchase of the Shares, neither Purchaser nor
any affiliate of Purchaser will be an affiliate of the Company.
The foregoing representations, warranties, agreements, undertakings and
acknowledgments are made by the undersigned with the intent that they be relied
upon in determining its suitability as a Purchaser of the Shares. In addition,
the undersigned agrees to notify the Company immediately of any change in any
representations, or other information. If the Purchaser is other than a natural
person, the foregoing and following representations and warranties are being
made by and refer to such entity and the individual or individuals executing
this Subscription Agreement and Investor Representations have due authority to
bind and obligate such entity hereby. If more than one person is signing this
Agreement, each representation, warranty and undertaking herein shall be a
joint and several representation, warranty and undertaking of each such person.
If the Purchaser is a partnership, corporation, trust or other entity, the
Purchaser further represents and warrants that (I) there has been enclosed with
this Agreement appropriate evidence of the authority of the individual
executing this Agreement to act on the behalf of the Purchaser, (ii) the entity
was not specifically formed to acquire the Shares, (iii) the entity was not
organized, nor resides, nor do the persons owning or controlling such entity
reside in, the United States. If the Purchaser is a partnership, the Purchaser
further represents that the funds to make this investment were not derived from
additional capital contributions of the partners of such partnerships.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY TO THE PURCHASER. The
Company hereby represents and warrants to the Purchaser that it is being
acquired by a "reporting issuer" as defined by Rule 902 of Regulation S. The
Company further represents and warrants that: (I) it is a corporation in good
standing in all Jurisdictions in
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which it conducts its business; (ii) its is current in all of its required
filings with the SEC and all other regulatory bodies, both states and federal
in which regard the Company will furnish to the Purchaser letters from the
Company's attorney and the Company's independent public accountant confirming
these facts as true; (iii) it will take all steps necessary to register to sell
its Common Stock under the Blue Sky statutes in the states of California and
Florida as quickly as practicable; (iv) upon financial requirements being met
the Company make application for listing on NASDAQ, (v) it has sufficient
authorized stock to issue the shares being subscribed by the Purchaser
hereunder; and (vi) upon proper payment and receipt of the purchase price,
acceptance of the Purchaser's subscription therefor and issuance and delivery
to the Shares being subscribed to hereunder to Purchaser, such Shares shall be
deemed fully paid, validly issued, and non-assessable.
The Company represents to Purchaser that it will have in place, at the
time this agreement is executed and for a period of at least two years after
execution of the agreement, key man insurance policies on the Company's
President, Chief Executive Officer and Chief Operating Officer.
The Company further represents and warrants to the Purchaser that it has
the authority under its corporate charter as amended, and under applicable
state and federal corporate and securities laws to enter into the contemplated
transaction, and that the signatories hereto have been duly authorized in
accordance with its corporate charter and by laws, which authority has not been
suspended, modified or revoked as of the date hereof.
Neither the Company nor any person acting on its behalf, has made any
"directed selling efforts" in the United States, as defined in Regulation S to
be: any activity undertaken for the purpose of, or that could reasonable be
expected to have the effect of, conditioning the market in the United States
for any of the securities being purchased hereby.
7. INDEMNITY BY PURCHASER. The Purchaser understands and acknowledges
that the Company, its officers, directors, attorneys and agents are relying
upon the representations, warranties and agreements made by the Purchaser to
and with the Company herein and, thus hereby agrees to indemnify the Company,
its officers and directors, agents, attorneys, and employees, and agrees to
hold each of them harmless against any and all loss, damage, liability or
exposure, including reasonable attorneys fee, that it or any of them may
suffer, sustain, or incur by reason of or in connection with any
misrepresentation or breach of warranty or agreement made by the Purchaser
under this Agreement, or in connection with the sale or distribution by the
Purchaser of the Shares in violation of the Act or any other applicable law.
8. RESTRICTED PERIOD/CLOSING
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(a) As set forth in Regulation S, the "Restricted Period" means a
period that commences on the later of the date upon which the securities were
first offered to persons other than distributors in reliance upon Regulation S
or each Date of Purchase (pursuant to paragraph 1 of this agreement), and in
this case, expires six (6) months thereafter, provided, further, that in a
continuous offering, the restricted period shall commence upon completion of
the distribution, as determined and certified by the managing underwriter or
person performing similar functions.
(b) The closing of this offering shall occur on the date of execution
of the Agreement or the date of acceptance of this offer by the Company,
whichever is later. Notwithstanding the foregoing, the Company shall have the
right to make a determination based upon the advice of its counsel as to
matters relating to the restricted period and the closing of the offering for
purposes of Company in respect of removal of transfer restrictions.
9. LIMITATION ON PERCENTAGE HELD BY PURCHASER. Upon the Purchaser's
request, the Company shall provide to the Purchaser, its agents, assigns or
designees, a statement as to the number of the Company's outstanding shares of
Common Stock.
10. CONDITIONS TO COMPANY'S OBLIGATION TO SELL. Seller's obligation to
sell the Shares is conditioned upon Purchaser's receipt and acceptance of this
agreement covering the purchase of the Shares duly executed by an authorized
representative of the Company, and accepted by the Company's Board of
Directors, if such acceptance is required, and delivery of good funds as
payment in full for the purchaser of the Shares to the Purchaser's closing
depository.
11. CONDITIONS TO PURCHASER'S OBLIGATION TO PURCHASE. The Purchaser's
obligation to purchase the Shares is conditioned upon:
(a) Purchaser's receipt and acceptance of this agreement for all the
Shares, as evidenced by execution of this agreement by the Purchaser, and
delivery to Purchaser of certificates evidencing the Shares, bearing no legend
except the Regulation S legend as described herein; and
(b) The absence of any event or circumstance that could reasonably be
expected to have a material adverse effect on the Company or on the market
price of the Company's Common Stock. The Purchaser shall have the right to
rescind the agreement should any such event come to pass during the pendency of
this agreement.
12. MISCELLANEOUS PROVISIONS.
(a) INVESTOR RELATIONS MATERIALS. The Company shall provide investor
relations materials including, but not limited to, brochures, press releases
and copies of the Company's SEC filings, to the Purchaser at the Purchaser's
request.
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(b) NEWSLETTER. The Company shall provide its monthly newsletter to the
Purchaser. Such newsletter shall contain current information concerning the
business of the Company and shall be approved for shareholder distribution.
(c) FURTHER ASSURANCES. At any time and from time to time after the date
of this Agreement, each party shall execute such additional instruments and
take such other and further action as may be reasonably be requested by any
other party to confirm or perfect title to any property transferred hereunder
or otherwise to carry out the intent and purpose of this Agreement.
(d) WAIVER. Any failure on the part of any party hereunder to comply with
any of their obligations, agreement or conditions hereunder may be waived in
writing by the party to whom such compliance is owed; however, waiver on one
occasion does not operated to effectuate a waiver on any other occasion.
(e) BROKERS. The Purchaser represents to the Company that no broker has
acted in their behalf in connection with this agreement. Each party agrees to
indemnify, save, defend, and hold the other party harmless from and against any
fee, loss or expense arising out of claims by brokers and shall obtain the
release of any and all claims which they may have or which may accrue against
the non-employing parties.
(f) ENTIRE AGREEMENT. This Agreement and all exhibits, schedules and
written memoranda attached hereto or otherwise referred to xxxxx, constitutes
the entire agreement between the parties and supersedes and cancels any other
agreement, representation or communication, whether oral or written, between
the parties hereto relating to the transactions evidenced hereby and the
subject matter hereof.
(g) HEADINGS. The article and paragraph headings in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(h) GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Nevada.
(i) COUNTERPARTS. This agreement may be executed simultaneously in two or
more counterpart, each of which shall be deemed an original, but all of which
together shall constitute on and the same instrument.
(j) NO ORAL MODIFICATION. The Agreement may be modified solely in
writing, and only after the mutual agreement of the parties affected thereby.
(k) SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations, warranties, covenants contained herein shall survive the date
and execution of this Agreement.
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(l) APPOINTMENT OF TRANSFER AGENT AND AUDITOR. The Company may appoint a
new transfer agent and independent auditor, of its own choosing, as soon as
practicable after the first Date of Purchaser under this agreement.
INDIVIDUAL SUBSCRIBERS
Name as you want it on the
Certificate for Share Name of Subscriber (typed or printed)
-------------------------------------
Date: Signature of Subscriber
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