SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS UNDER THE 1934 ACT
Premier Brands, Inc.
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(Name of Small Business Issuer in Its Charter)
Utah 33-0489616
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
268 West 400 South, Suite 300 Salt Lake City, Utah 84101
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(Address of Principal Executive Offices) (Zip Code)
(801) 575-8073
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(Issuer's Telephone Number, Including Area Code)
Securities to be registered under Section 12(b) of the Exchange Act: None
Securities to be registered under Section 12(g) of the Exchange Act:
Title of Each Class to be so registered: Common Stock ($0.001 Par Value)
Name of Each Exchange on Which Each Class is to be Registered: N/A
This form is being filed with the Securities and Exchange Commission in order to
become a reporting company under the Exchange Act of 1934 and to maintain the
Company's quotation on the OTC Bulletin Board(R) in compliance with National
Association of Securities Dealers, Inc. (NASD(R)) Rules 6530 and 6540, which
limit quotations on the OTC Bulletin Board(R) (OTCBB) to the securities of
companies that report their current financial information to the SEC, banking,
or insurance regulators.
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TABLE OF CONTENTS
Page No.
PART I
Item 1. Description of Business .........................................1
Item 2. Management's Discussion and Analysis or Plan of Operation .......7
Item 3. Description of Property .........................................8
Item 4. Security Ownership of Certain Beneficial Owners and Management ..9
Item 5. Directors, Executive Officers, Promoters and Control Persons ....9
Item 6. Executive Compensation .........................................10
Item 7. Certain Relationships and Related Transactions .................11
Item 8. Description of Securities ......................................12
PART II
Item 1. Market for Common Equity and Related Stockholder Matters .......16
Item 2. Legal Proceedings ..............................................18
Item 3. Changes in and Disagreements with Accountants ..................18
Item 4. Recent Sales of Unregistered Securities ........................18
Item 5. Indemnification of Directors and Officers ......................24
PART F/S
Consolidated Financial Statements - December 31, 1999 and 1998........F-1 - F-16
PART III
Item 1. Index to Exhibits ..............................................25
Item 2. Description of Exhibits ........................................27
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
History
Premier Brands, Inc. (the "Company") is currently a shell corporation whose
purpose is to identify and acquire a favorable business opportunity with
long-term growth potential. The Company was incorporated in the State of Utah on
August 6, 1984, under the name North American Clothing Company, Inc. Since its
incorporation, the Company has had several names: North American Clothing
Company (Aug. 1984 - Sept. 1992); K. Randolph Corporation (Sept. 1992 - Feb.
1995); and Premier Brands, Inc. (Feb. 1995 - Present). Its initial
capitalization was 100,000,000 shares of $.001 par value Common Stock. After its
incorporation and until August of 1992, the Company was largely inactive and
sought opportunities to acquire an existing business.
In September 1992, the Company completed a reorganization (the "Reorganization)
with K. Randolph Corporation ("K. Randolph"), a Delaware corporation, owned
entirely by the Company's then-President, Keith R. Lipscomb, and organized for
the purpose of operating retail stores for children's clothing and toys. As a
result of the Reorganization, K. Randolph became a wholly-owned subsidiary of
the Company, and the Company changed its name to K. Randolph International, Inc.
Following the Reorganization, the Company owned and operated a retail children's
clothing and toy store under the name "The Kids Club" in Fountain Valley,
California. However, the Company suffered severe losses and, as a result, closed
the retail store in 1993.
Later in 1993, after closing The Kids Club, the Company became involved in
marketing animation, as well as in providing financing and refinancing in the
real estate mortgage brokerage industry. By the last quarter of 1993, the
Company had discontinued these ventures as well to concentrate on the marketing
and sales of sports cards and collectibles to the public through direct mail
orders.
In 1994, the Company entered into an agreement with The Trading Card Company, a
Pennsylvania corporation ("TTCC"), whereby the Company paid TTCC $125,000 cash
and issued 559,200 shares of its Common Stock to acquire a sports collectibles
customer list of approximately 200,000 customers. Thereafter, on February 27,
1995, the Company's shareholders approved a second name change to Premier
Brands, Inc.
On September 25, 1995, the Company entered into an agreement and plan of
reorganization with TTCC, whereby the Company acquired the remaining assets of
TTCC consisting of approximately $1.5 million in physical inventory of baseball,
football and basketball cards as well as the brand name "Front Row." In exchange
for these assets, the Company issued TTCC 3,000,000 shares of its Common Stock.
Approximately one year later, on August 27, 1996, the Company effected a 1 for
40 reverse stock split. On November 8, 1996, the Company's shareholders approved
an Amendment to the Articles of Incorporation which authorized 5,000,000 shares
of Preferred Stock with a par value of $.001 per share.
The Company discontinued operations on or about March 27, 1998, when it
certified to the IRS that final wages were paid. For the past two years, the
Company has had no independent operations or business
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plan, except those related to the negotiations with and acquisition of F D
Import, which are described in the next following paragraphs. The Company is now
a shell corporation seeking to acquire a business with long-term growth
potential which would contribute value to the Company and its shareholders.
From May to August, 1998, the Company's business plan was to negotiate an
acquisition of F D Import & Export Corporation, a New York corporation ("F D
Import") which exported Nestle products abroad, particularly to the former
Soviet republic of Ukraine. In connection with its plan to acquire F D Import,
the Company on June 22, 1998 issued a total of 669,890 shares of its Common
Stock at a price of $0.10 per share to a total of 7 investors, 6 of whom were
foreign entities, pursuant to Rule 504 of Regulation D.
On September 1, 1998, the Company finalized its Acquisition Agreement with F D
Import. According to the Acquisition Agreement, the Company acquired all shares
of F D Import in exchange for issuing 10,000,000 shares of Company Common Stock,
restricted under Rule 144, to F D Import shareholders.
At a special meeting on September 16, 1998, the Company's shareholders approved
the F D Import acquisition and also approved a 60:1 reverse split of the
Company's Common Stock, which had been declared by Board resolution to be
effective as of August 26, 1998, as part of the F D Import acquisition.
In connection with this acquisition, on September 17, the Company authorized an
offering for 4,000,000 shares of Common Stock under Rule 504 of Regulation D.
The shares were offered at Ten Cents ($.10) per share so as to raise $400,000,
and a Form D to that effect was filed with the SEC on or about September 24,
1998. Proceeds were used to pay additional expenses related to the acquisition
of F D Import and to pay off certain Company debts, including a debt to the IRS
for unpaid payroll taxes of approximately $87,000. By September 29, 1998, the
Company had issued all 4,000,000 shares to six investors, all foreign nationals
residing in the Ukraine.
On September 21, 1998, as part of the acquisition of F D Import, the Company
paid 150,000 shares of stock, restricted under Rule 144, to Hudson Consulting
Group, Inc., for consulting services related to the reverse split of the
Company's stock and the Company's preparations for the F D Import acquisition.
After the acquisition of F D Import, the operations of the Company were only
those of F D Import. Since the acquisition and the stock issuances related to
it, the Company has issued only 2,442 shares of Common Stock to three creditors
in settlement of minor debts. However, F D Import's main purpose in agreeing to
the acquisition, namely the potential for attracting capital investment into a
publicly trading entity, was not fulfilled, as sources of capital did not look
favorably on investments in Ukrainian enterprise at the time.
Because the acquisition did not fulfill F D Import's purposes, the Acquisition
Agreement of September 1998 was rescinded in a formal Rescission Agreement
executed on or about December 2, 1999. As a result of the Rescission Agreement,
F D Import returned all 10,000,000 shares of Common Stock to the Company, and
those shares were canceled effective December 15, 1999.
General
During the past two years, the Company has attempted to identify and acquire a
favorable business opportunity. The Company has reviewed and evaluated a number
of business ventures for possible acquisition. The Company has not entered into
any agreement, nor does it have any commitment or understanding to enter into or
become engaged in a transaction, as of the date of this filing. The Company
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continues to investigate, review, and evaluate business opportunities as they
become available and will seek to acquire or become engaged in business
opportunities when specific opportunities warrant.
To date, opportunities have been made available to the Company through its
officers, directors and professional advisors (including securities
broker-dealers) as well as members of the financial community. It is anticipated
that business opportunities will continue to be available primarily from these
sources.
To a large extent, a decision to participate in a specific business opportunity
may be made upon management's analysis regarding the quality of the other firm's
management and personnel, the asset base of such firm or enterprise, the
anticipated acceptability of new products or marketing concepts, the merit of
the firm's business plan, and numerous other factors which are difficult, if not
impossible, to analyze through the application of any objective criteria.
For the past two years, the Company has had no independent business operations,
although at the time of its 504 offerings in June and September 1998 it had a
specific business plan to acquire F D Import. Despite such plans, the
acquisition was rescinded in December 1999, and now the Company is again seeking
to acquire an interest in a business with long-term growth potential. The
Company currently has no commitment or arrangement to participate in a business
and cannot now predict what type of business it may enter into or acquire. It is
emphasized that the business objectives discussed herein are extremely general
and are not intended to be restrictive on the discretion of the Company's
management.
There are no plans or arrangements proposed or under consideration for the
issuance or sale of additional securities by the Company prior to the
identification of an acquisition candidate. Consequently, management anticipates
that it may be able to participate in only one potential business venture, due
primarily to the Company's limited capital. This lack of diversification should
be considered a substantial risk, because it will not permit the Company to
offset potential losses from one venture against gains from another.
Selection of a Business
The Company anticipates that businesses for possible acquisition will be
referred by various sources, including its officers and directors, professional
advisors, securities broker-dealers, venture capitalists, members of the
financial community, and others who may present unsolicited proposals. The
Company will not engage in any general solicitation or advertising for a
business opportunity, and will rely on personal contacts of its officers and
directors and their affiliates, as well as indirect associations between them
and other business and professional people. By relying on "word of mouth," the
Company may be limited in the number of potential acquisitions it can identify.
While it is not presently anticipated that the Company will engage unaffiliated
professional firms specializing in business acquisitions or reorganizations,
such firms may be retained if management deems it in the best interest of the
Company.
Compensation to a finder or business acquisition firm may take various forms,
including one-time cash payments, payments based on a percentage of revenues or
sales volume, payments involving issuance of securities (including those of the
Company), or any combination of these or other compensation arrangements.
Consequently, the Company is currently unable to predict the cost of using such
services.
The Company will not restrict its search to any particular business, industry,
or geographical location, and management reserves the right to evaluate and
enter into any type of business in any location. The
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Company may participate in a newly organized business venture or a more
established company entering a new phase of growth or in need of additional
capital to overcome existing financial problems. Participation in a new business
venture entails greater risks since in many instances management of such a
venture will not have proved its ability; the eventual market of such venture's
product or services will likely not be established; and the profitability of the
venture will be unproved and cannot be predicted accurately. If the Company
participates in a more established firm with existing financial problems, it may
be subjected to risk because the financial resources of the Company may not be
adequate to eliminate or reverse the circumstances leading to such financial
problems.
In seeking a business venture, the decision of management will not be controlled
by an attempt to take advantage of any anticipated or perceived appeal of a
specific industry, management group, product, or industry, but will be based on
the business objective of seeking long-term capital appreciation in the real
value of the Company.
The analysis of new businesses will be undertaken by or under the supervision of
the officers and directors. In analyzing prospective businesses, management will
consider, to the extent applicable, the business's available technical,
financial, and managerial resources; working capital and other prospects for the
future; the nature of present and expected competition; the quality and
experience of management services which may be available and the involvement of
that management; the potential for further research, development, or
exploration; the potential for growth and expansion; the potential for profit;
the perceived public recognition or acceptance of products, services, or trade
or service marks; name identification; and other relevant factors. It is
anticipated that the results of operations of a specific firm may not
necessarily be indicative of the potential for the future because of the
requirement to substantially shift marketing approaches, expand significantly,
change product emphasis, change or substantially augment management, and other
factors.
The Company will analyze all available factors and make a determination based on
a composite of available facts, without reliance on any single factor. The
period within which the Company may participate in a business cannot be
predicted and will depend on circumstances beyond the Company's control,
including the availability of businesses, the time required for the Company to
complete its investigation and analysis of prospective businesses, the time
required to prepare appropriate documents and agreements providing for the
Company's participation, and other circumstances.
Acquisition of a Business
In implementing a plan for a particular business acquisition, the Company may
become a party to a merger, consolidation, or other reorganization with another
corporation or entity; joint venture; license; purchase and sale of assets; or
purchase and sale of stock; the exact nature of which cannot now be predicted.
Notwithstanding the above, the Company does not intend to participate in a
business through the purchase of minority stock positions. On the consummation
of a transaction, it is likely that the present management and shareholders of
the Company will not be in control of the Company. In addition, a majority or
all of the Company's directors may, as part of the terms of the acquisition
transaction, resign and be replaced by new directors without a vote of the
Company's shareholders.
In connection with the Company's acquisition of a business, the present
shareholders of the Company, including officers and directors, may, as a
negotiated element of the acquisition, sell a portion or all of the Company's
Common Stock held by them at a significant premium over their original
investment in the
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Company. As a result of such sales, affiliates of the entity participating in
the business reorganization with the Company would acquire a higher percentage
of equity ownership in the Company. Management does not intend to actively
negotiate for or otherwise require the purchase of all or any portion of its
stock as a condition to or in connection with any proposed merger or
acquisition. Although the Company's present shareholders did not acquire their
shares of Common Stock with a view towards any subsequent sale in connection
with a business reorganization, it is not unusual for affiliates of the entity
participating in the reorganization to negotiate to purchase shares held by the
present shareholders in order to reduce the amount of shares held by persons no
longer affiliated with the Company and thereby reduce the potential adverse
impact on the public market in the Company's Common Stock that could result from
substantial sales of such shares after the business reorganization. Public
investors will not receive any portion of the premium that may be paid in the
foregoing circumstances. Furthermore, the Company's shareholders may not be
afforded an opportunity to approve or consent to any particular stock buy-out
transaction.
In the event sales of shares by present shareholders of the Company, including
officers and directors, is a negotiated element of a future acquisition, a
conflict of interest may arise because directors will be negotiating for the
acquisition on behalf of the Company and for sale of their shares for their own
respective accounts. Where a business opportunity is well suited for acquisition
by the Company, but affiliates of the business opportunity impose a condition
that management sell their shares at a price which is unacceptable to them,
management may not sacrifice their financial interest for the Company to
complete the transaction. Where the business opportunity is not well suited, but
the price offered management for their shares is high, management will be
tempted to effect the acquisition to realize a substantial gain on their shares
in the Company. Management has not adopted any policy for resolving the
foregoing potential conflicts, should they arise, and does not intend to obtain
an independent appraisal to determine whether any price that may be offered for
their shares is fair. Stockholders must rely, instead, on the obligation of
management to fulfill its fiduciary duty under state law to act in the best
interests of the Company and its stockholders.
It is anticipated that any securities issued in any such reorganization would be
issued in reliance on exemptions from registration under applicable federal and
state securities laws. In some circumstances, however, as a negotiated element
of the transaction, the Company may agree to register such securities either at
the time the transaction is consummated, under certain conditions, or at
specified times thereafter. Although the terms of such registration rights and
the number of securities, if any, which may be registered cannot be predicted,
it may be expected that registration of securities by the Company in these
circumstances would entail substantial expense to the Company.
The issuance of substantial additional securities and their potential sale into
any trading market which may develop in the Company's securities may have a
depressive effect on such market.
While the actual terms of a transaction to which the Company may be a party
cannot be predicted, it may be expected that the parties to the transaction will
find it desirable to structure the acquisition as a so- called "tax-free" event
under sections 351 or 368(a) of the Internal Revenue Code of 1986 (the "Code").
Under section 351 of the Code, it would be necessary for the owners of the
acquired business to own 80% or more of the voting stock of the surviving
entity. In such event, the shareholders of the Company would retain less than
20% of the issued and outstanding shares of the surviving entity. Under section
368(a)(1) of the Code, certain business reorganizations between corporate
entities where one corporation merges with or acquires the securities of another
corporation are given tax-free treatment. Generally, the Company will be the
acquiring corporation in such a reorganization, and the tax-free status of the
transaction will not
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depend on the issuance of any specific amount of the Company's voting
securities. It is not uncommon, however, that as a negotiated element of a
transaction completed in reliance on section 368, the acquiring corporation will
issue securities in such an amount that the shareholders of the acquired
corporation will hold 50% or more of the voting stock of the surviving entity.
Consequently, there is a substantial possibility that the shareholders of the
Company immediately prior to the transaction would retain less than 50% of the
issued and outstanding shares of the surviving entity. Therefore, regardless of
the form of the business acquisition, it may be anticipated that stockholders
immediately prior to the transaction will experience a significant reduction in
their percentage of ownership in the Company.
Notwithstanding the fact that the Company is technically the acquiring entity in
the foregoing circumstances, generally accepted accounting principles will
ordinarily require that such transaction be accounted for as if the Company had
been acquired by the other entity owning the business and, therefore, will not
permit a write-up in the carrying value of the assets of the other company.
The manner in which the Company participates in a business will depend on the
nature of the business, the respective needs and desires of the Company and
other parties, the management of the business, and the relative negotiating
strength of the Company and such other management.
The Company will participate in a business only after the negotiation and
execution of appropriate written agreements. Although the terms of such
agreements cannot be predicted, generally such agreements will require specific
representations and warranties by all of the parties thereto, will specify
certain events of default, will detail the terms of closing and the conditions
which must be satisfied by each of the parties prior to such closing, will
outline the manner of bearing costs if the transaction is not closed, will set
forth remedies on default, and will include miscellaneous other terms.
Operation of Business After Acquisition
The Company's operation following its acquisition of a business will be
dependent on the nature of the business and the interest acquired. The Company
is unable to predict whether the Company will be in control of the business or
whether present management will be in control of the Company following the
acquisition. It may be expected that the business will present various risks,
which cannot be predicted at the present time.
Governmental Regulation
It is impossible to predict the government regulation, if any, to which the
Company may be subject until it has acquired an interest in a business. The use
of assets and/or conduct of businesses which the Company may acquire could
subject it to environmental, public health and safety, land use, trade, or other
governmental regulations and state or local taxation. In selecting a business in
which to acquire an interest, management will endeavor to ascertain, to the
extent of the limited resources of the Company, the effects of such government
regulation on the prospective business of the Company. In certain circumstances,
however, such as the acquisition of an interest in a new or start-up business
activity, it may not be possible to predict with any degree of accuracy the
impact of government regulation. The inability to ascertain the effect of
government regulation on a prospective business activity will make the
acquisition of an interest in such business a higher risk.
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Competition
The Company will be involved in intense competition with other business
entities, many of which will have a competitive edge over the Company by virtue
of their stronger financial resources and prior experience in business. There is
no assurance that the Company will be successful in obtaining suitable business
opportunities, or in competing with these more established entities.
Employees
The Company is a development stage company and currently has no employees.
Executive officers will devote only such time to the affairs of the Company as
they deem appropriate, which is estimated to be approximately 20 hours per month
per person. Management of the Company expects to use consultants, attorneys, and
accountants as necessary, and does not anticipate a need to engage any full-time
employees so long as it is seeking and evaluating businesses. The need for
employees and their availability will be addressed in connection with a decision
whether or not to acquire or participate in a specific business opportunity.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Plan of Operations
The Company's plan of operations for the coming year, as discussed above, is to
identify and acquire a favorable business opportunity. The Company does not plan
to limit its options to any particular industry, but will evaluate each
opportunity on its merits. The Company anticipates that its current resources,
and its owners, affiliates, and consultants will provide it with enough capital
to continue operations until the end of the fourth quarter of 2000, but there
can be no assurance that this expectation will be fully realized.
Results of Operations
Fiscal Years ending December 31, 1999 and 1998
The Company had no revenue from continuing operations for the period ended
December 31, 1999, compared to $101,500 in revenues from net sales for the year
ended December 31, 1998.
Selling, general and administrative expenses for the period ended December 31,
1999 were $206,375, compared to $293,018 for the year ended December 31, 1998.
The Company had a net loss of $193,494 for the period ended December 31, 1999,
and a net loss of $191,518 for the year ended December 31, 1998. The Company's
net losses for fiscal 1999 and 1998 were attributable to the general and
administrative expenses set forth above, and were in large part attributable to
the expenses surrounding the rescinded acquisition of F D Import.
The Company does not expect to generate any meaningful revenue or incur
operating expenses unless and until it acquires an interest in an operating
company.
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Liquidity and Capital Resources
At December 31, 1999 the Company had one major asset, namely a bank account in
the amount of $104,000. The Company is currently authorized to issue 100,000,000
shares of $.001 par value Common Stock and 5,000,000 shares of Preferred Stock.
Of these authorized amounts, there were 4,208,319 shares of Common Stock deemed
to be issued and outstanding as of December 31, 1999. This amount includes 1,100
shares of common stock which represents the conversion of 22,000 shares of
Preferred Stock during 1999. These 22,000 shares of Preferred Stock
automatically converted during 1999 into 66,000 shares of Common Stock (at a 1:3
conversion ratio) and were adjusted down to 1,100 shares to reflect a 1:60
reverse split. The conversion of this Preferred Stock has been accounted for in
the Common Stock account in the Company's financial statements, since the
conversion accrued in 1999. On September 1, 1998, the Company issued 150,000
shares of Common Stock, restricted pursuant to Rule 144, to Hudson Consulting
Group, Inc. in order to pay the costs of the F D Import acquisition and to
assist it with becoming a reporting company under the Securities Exchange Act of
1934. Management anticipates that becoming a reporting company will increase the
number of prospective business ventures that may be available to the Company.
Management believes that the Company has sufficient resources to meet the
anticipated needs of the Company's operations through at least the fourth
calendar quarter of 2000, but there can be no assurances to that effect, as the
Company has no revenues and the Company's need for capital may change
dramatically if it acquires an interest in a business opportunity during that
period.
The Company's current operating plan is to (i) take care of the administrative
and reporting requirements of a public company; and (ii) search for potential
businesses, products, technologies and companies for acquisition. At present,
the Company has no understandings, commitments or agreements with respect to the
acquisition of any business, product, technology or company, and there can be no
assurance that the Company will identify any such business, product, technology
or company suitable for acquisition in the future. Further, there can be no
assurance that the Company would be successful in consummating any acquisition
on favorable terms or that it will be able to profitably manage the business,
product, technology or company it acquires. If the Company is unable to
participate in a business venture by the end of the fourth calendar quarter of
2000, it may require additional capital to continue its search for a business
venture and avoid dissolution. There is no assurance additional capital will be
available to the Company on acceptable terms.
Impact of Year 2000
The Company currently owns no computer equipment and is not dependent on
computers for its internal operations. Other than payroll and banking
relationships, the Company has no other significant direct interfaces with third
party vendors. The Company currently has no operations, and thus is not reliant
on any key vendors who may or may not be Year 2000 compliant. Morever, since the
passing of the Year 2000, few computer problems have been reported nationally,
thus suggesting that the potential for problems into the future is substantially
less than expected.
ITEM 3. DESCRIPTION OF PROPERTY
The Company owns no real property. The Company currently has an oral arrangement
with Canton's Commercial Carpet Corporation ("CCCC") of Salt Lake City, Utah (at
the address appearing at the front of this registration statement) that its
records will be kept at CCCC's offices at no charge, and that the Company's
current President will also be permitted to occupy an office and to receive mail
at that address
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with no charge during the next year. The Company does not have any policy with
respect to real estate investment, as it has no plans to engage in the business
of real estate investment. The Company has no plans to invest in other pieces of
real property except as integral to the operations of a business it acquires.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth, as of December 31, 1999, the number and
percentage of outstanding shares of Common Stock which, according to the
information supplied to the Company, were beneficially owned by (i) each current
director of the Company, (ii) each current executive officer of the Company,
(iii) all current directors and executive officers of the Company as a group,
and (iv) each person who, to the knowledge of the Company, is the beneficial
owner of more than 5% of the Company's outstanding Common Stock. Percentages are
based on 4,208,319 shares of Common Stock deemed to be issued and outstanding as
of December 31, 1999. Except as otherwise indicated, the persons named in the
table below have sole voting and dispositive power with respect to all shares
beneficially owned, subject to community property laws (if applicable).
<TABLE>
<CAPTION>
Title of Class Name and Address of Beneficial Amount and nature of Percent of Class
Ownership Beneficial Ownership
<S> <C> <C> <C>
Common Bruce M. Pritchett 0 0%
Stock (President & Director)
268 West 400 South, Ste. 300
Salt Lake City, UT 84101
Common BonnieJean C. Tippetts 7,000(1) 0.2%
Stock (Secretary, Treasurer & Director)
268 West 400 South, Ste. 300
Salt Lake City, UT 84101
Common David M. Wolfson 9,800(2) 0.2%
Stock (Director)
268 West 400 South, Ste. 300
Salt Lake City, UT 84101
Common All Executive Officers and 16,800 0.4%
Stock Directors as a Group
(Pritchett, Tippetts, Wolfson)
</TABLE>
(1) None owned in her name personally; all shares owned by A Z Professional
Consulting, Inc., of which Ms. Tippetts is the President.
(2) None owned in his name personally; all shares owned by the David Michael
Irrevocable Trust, of which Mr. Wolfson is sole beneficiary.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS
The following persons constitute all of the Company's Executive Officers and
Directors as of 12/31/99:
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Name Age Position
Bruce M. Pritchett 34 President/CEO and Director
BonnieJean C. Tippetts 59 Secretary/Treasurer and Director
David M. Wolfson 20 Director
All directors and executive officers are elected by the Board and hold office
until the next Annual Meeting of stockholders and until their successors are
elected and qualify.
Bruce M. Pritchett was appointed President, CEO, and Director of the
Company on December 16, 1999. Mr. Pritchett is an attorney whose practice
emphasizes securities and corporate law. He is presently corporate counsel for
Hudson Consulting Group, Inc., and is listed in Who's Who in American Law. He
owned his own private law practice from 1996 to 1998, was an associate attorney
at the law firm of Hanson, Epperson & Smith from 1994 to 1996, and was a
judicial law clerk to Chief Judge George Shields of the Washington State Court
of Appeals from 1992 to 1993. Mr. Pritchett has 8 years of experience in the
legal field. Mr. Pritchett studied at Stanford University in Palo Alto,
California in 1990 under a full-tuition FLAS Fellowship; obtained a Juris Doctor
degree in 1992 from the University of Washington in Seattle, where he was
Managing Editor of the Pacific Rim Law & Policy Journal; and earned a Bachelor
of Arts degree, cum laude, in 1989 from Brigham Young University in Provo, Utah.
BonnieJean C. Tippetts was appointed Secretary, Treasurer and Director of
the Company on December 16, 1999. Ms. Tippetts has over 30 years of experience
in the business field. Her experience includes starting, purchasing, operating
and selling various businesses. She has been President or Director of more than
a dozen corporations over the past 30 years. She is currently the President of A
Z Professional Consulting, Inc., a management and corporate consulting firm. Ms.
Tippetts earned a Bachelor of Arts degree from Lewis & Clark College in
Portland, Oregon in 1960; obtained a Bachelor of Science degree from Brigham
Young University in Provo, Utah in 1965; and was awarded a Master of Arts degree
from the University of Northern Colorado in Greeley, Colorado in 1970.
David M. Wolfson was appointed a Director of the Company on December 16,
1999. Mr. Wolfson is currently the owner and Managing Member of David Michael,
LLC, a business consulting firm based in Salt Lake City, Utah. Mr. Wolfson is
also a Director of Kelly's Coffee Group, Inc., a publicly traded company
currently quoted on the NASDAQ OTC-BB. Mr. Wolfson earned a Bachelor of Arts
degree from Emory University in Atlanta, Georgia in 1999.
ITEM 6. EXECUTIVE COMPENSATION
No cash compensation was paid to any of the Company's executive officers during
the fiscal years ended December 31, 1998 or 1999.
The Company has no agreement or understanding, express or implied, with any
officer, director, or principal stockholder, or their affiliates or associates,
regarding employment with the Company or compensation for services. The Company
has no plan, agreement, or understanding, express or implied, with any officer,
director, or principal stockholder, or their affiliates or associates, regarding
the issuance to such persons of any shares of the Company's authorized and
unissued Common Stock. There is no
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understanding between the Company and any of its present stockholders regarding
the sale of a portion or all of the Common Stock currently held by them in
connection with any future participation by the Company in a business. There are
no other plans, understandings, or arrangements whereby any of the Company's
officers, directors, or principal stockholders, or any of their affiliates or
associates, would receive funds, stock, or other assets in connection with the
Company's participation in a business. The Company made no advances to any of
its officers, directors, or principal stockholders, or any of their affiliates
or associates.
There is no policy that prevents management from adopting a plan or agreement in
the future that would provide for cash or stock based compensation for services
rendered to the Company.
On acquisition of a business, it is possible that current management will resign
and be replaced by persons associated with the business acquired, particularly
if the Company effects a stock exchange, merger, or consolidation as discussed
under the "BUSINESS" heading above. If any member of current management remains
after a business acquisition, that member's time commitment and compensation
will likely change due to the nature and location of such business and the
services required, which cannot now be foreseen.
Compensation of Directors
The Company's directors are not compensated for their services as directors of
the Company.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On August 19, 1998, the Company entered into a Stock Repurchase Agreement with
Keith R. Lipscomb, the Company's former president. Mr. Lipscomb had resigned as
Director, President, and CEO of the Company on May 12, 1998, so that at the time
of the transaction, he was no longer an officer or director of the Company,
though before the transaction he still owned a majority of the Company's Common
Stock. According to the terms of the agreement, the Company acquired 733,060
shares (prior to the 1:60 reverse stock split of August 26, 1998) owned by Mr.
Lipscomb in exchange for granting to Mr. Lipscomb possession of the Company's
sports trading cards inventory and the two parcels of land on the island of
Hawaii in the State of Hawaii, which the Company had previously held as
investment real estate.
On September 1, 1998, the Company authorized issuance of 150,000 shares of
Common Stock to Hudson Consulting Group, Inc., a Nevada corporation ("Hudson")
pursuant to a Consulting Agreement of the same date (the "September Agreement").
Originally, the Company's prior officers and directors entered into a Stock
Acquisition Agreement on April 21, 1998, to pay 913,080 shares to Hudson, but
that Agreement was rescinded and superceded by the September agreement. The
Company's Board acknowledged that it might have a conflict of interest based on
their employment arrangement with Hudson's sibling corporation Canton Financial
Services Corporation and further acknowledged that the president and one
director of the Company were also-in September 1998-the president and one
director of Hudson. However, due to the Company's status as a shell entity, with
no assets, no revenues, and no means (other than issuing Common Stock) to pay
for services, the board concluded that 150,000 shares of Common Stock was fair
consideration for the services performed under the Consulting Agreement. The
board also indicated that they had not received any compensation from the
Company in light of the Consulting Agreement with Hudson.
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ITEM 8. DESCRIPTION OF SECURITIES
Common Stock
The Company is authorized to issue 100,000,000 shares of Common Stock, par value
$0.001 per share, of which 4,208,319 shares are validly issued and outstanding,
effective as of December 31, 1999. All outstanding shares of Common Stock are
duly authorized, fully paid, and nonassessable.
Dividends. Holders of the Common Stock are entitled to receive ratably such
dividends as the board of directors may from time to time declare out of funds
legally available for the payment of dividends. The Company has not paid
dividends on its Common Stock, and it does not anticipate that it will pay
dividends in the foreseeable future. For more information on the Company's
dividend policy, see "Part II. Item 1. Market Price of and Dividends on the
Registrant's Common Equity and Other Shareholder Matters."
Voting. Holders of the Common Stock are entitled to one vote per share on all
matters submitted to a vote at any meeting of stockholders. The holders of
Common Stock are not entitled to cumulative voting rights. (However, if the
California law is applicable, cumulative voting must be permitted; see
"Application of Quasi-California Corporation Statute" below.)
Preemptive Rights. Holders of the Company's Common Stock have no pre-emptive
rights to acquire additional shares of stock.
Additional Information. The Company's board of directors has authority, without
action by the Company's stockholders, to issue all or any portion of the
authorized but unissued shares of Common Stock, which would reduce the
percentage ownership in the Company of its stockholders and which may dilute the
book value of the Common Stock. The Common Stock is not subject to redemption
and carries no subscription or conversion rights. In the event of liquidation of
the Company, the shares of Common Stock are entitled to share equally in
corporate assets after satisfaction of all liabilities and after the
satisfaction of the liquidation rights of any issued and outstanding Preferred
Stock.
Preferred Stock
The Company is authorized to issue 5,000,000 shares of Preferred Stock, par
value $0.001 per share. Of these authorized shares, the Board of Directors has
designated 200,000 of such shares as Series A 12% Cumulative Convertible
Preferred Stock (the "Preferred Shares" or "Preferred Stock"). 22,000 shares of
this Preferred Stock were validly issued and outstanding in 1999, but according
to their designation by the Board, these 22,000 shares of Preferred Stock
automatically converted into 1,100 shares of Common Stock (a 1:3 conversion
ratio yielding 66,000 shares and adjusted down to 1,100 shares due to 1:60
reverse split of the common stock) effective May 6, 1999. These were the only
shares of Preferred Stock designated, or validly issued and outstanding, as of
December 31, 1999. All outstanding shares of Preferred Stock were duly
authorized, fully paid, and nonassessable.
Dividends. Each Preferred Share has a face value of $5.00 per share (the "Face
Value"). Subject to the automatic conversion of the Preferred Stock (as
described below) and subject to the Company's right to redeem the Preferred
Stock (or any number of them) (as described below), each holder of the Preferred
Shares was, for a 2-year period after the stock was issued, entitled to receive
an annual dividend, payable in shares of the Company's Common Stock (with each
share of Common Stock assigned a face value of
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$5.00) and equal to twelve percent (12.00 %) of the Face Value of each share
(the "Dividend Yield"). Dividends were to be payable in four equal quarterly
payments on March 31, June 30, September 30, and December 31 (the "Dividend
Dates") of each year from and after issuance.
The number of shares of the Company's Common Stock payable to any Holder as a
dividend on the Preferred Stock were to be the Dividend Yield (computed using
the Face Value of the shares held by any Holder on the Dividend Date) so that
the Holder would receive, on an annual basis and payable on the Dividend Dates,
an amount of shares of the Company's Common Stock (valued at $5.00 per share)
equal to the Dividend Yield multiplied by the Face Value of the Preferred Shares
held by the Holder on the Dividend Dates. In the event of any factional Share
Dividends, the amount of any such fraction was to be rounded up to the next
whole share.
Any dividends not paid have accumulated until paid. In the event that any or all
dividends payable to any Holder remain unpaid, no additional rights or
privileges shall accrue to any Holder.
To date, the Company has not paid dividends on its Preferred Stock. However, the
Company now plans to pay the accumulated dividends on such Preferred Stock as
was outstanding up to the date of this filing, in shares of the Company's common
stock, within 60 days from this filing. Since all of the outstanding Preferred
Stock was issued on May 6, 1997, the conversion into common shares will be
adjusted to take into account the 1:60 reverse split of the common shares
effective August 26, 1998.
Voting. Holders of Preferred Stock have no voting rights for any purpose.
Preemptive Rights. Holders of the Company's Preferred Stock do not have any
preemptive or other subscription rights to acquire additional shares of stock.
Conversion. Subject to the Company's Right of Redemption as provided below, each
Preferred Share automatically converts into three shares of the Company's Common
Stock on the second anniversary after issuance (the "Second Anniversary"). The
Preferred Stock is also convertible at any time before or after the Second
Anniversary if the "Bid" price of the Company's Common Stock closes at or above
$5.00 during any five continuous trading days on the OTC-BB.
At present, all shares of Preferred Stock which the company issued were issued
on May 6, 1997, and therefore were automatically converted into shares of Common
Stock on May 6, 1999. Some shareholders still retain their certificates for the
shares of Preferred Stock, but the Company is currently in the process of
recovering these certificates and replacing them with new certificates for
shares of Common Stock.
In addition and subject to the Company's Right of Redemption, any holder of the
Preferred Stock may elect conversion (the "Conversion Right") of any number of
the Shares so held by remitting the certificate evidencing ownership of the
shares together with a signed irrevocable stock transfer power, with signature
guaranteed, to the Company requesting and specifying the number of shares that
the Holder seeks to convert into the Company's Common Stock (the "Conversion
Request").
In the event that the Company exercises its Right of Redemption for all or any
portion of the issued and outstanding Preferred Shares, any Holder seeking to
exercise his or her Conversion Right for all or any portion of the Preferred
Shares so held, must deliver the Conversion Request, no later than 5:00 p.m.,
Huntington Beach, California time, to the Company at the Company's then existing
address together with
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the certificate evidencing the Holder's ownership of the Preferred Shares and a
request, with the signature of the Holder guaranteed, requesting that the
Preferred Shares so delivered, be converted into the Company's Common Stock. The
Conversion Right may be exercised at any time prior to 5:00 p.m., Huntington
Beach, California time on the Redemption Date. Any rights to convert the shares
of the Preferred Shares into the Common Stock of the Company shall expire to the
extent that the Conversion Right is not exercised prior to the Redemption Date.
Liquidation. Upon liquidation, the Preferred Stock of each Series shall be
entitled, before any distribution shall be made to the Common Stock or to any
other class of stock junior to the Preferred Stock, to be paid the amount fixed
and determined by the board of directors for such Series as herein provided,
plus accrued and unpaid dividends thereon to the date of distribution, but the
Preferred Stock shall not be entitled to any further payment, and any remaining
net assets shall be distributed ratably to the outstanding Common Stock.
Redemption and Sinking Fund Provisions. The Company has the right to redeem the
Preferred Shares (the "Right of Redemption"). The Preferred Shares shall be
redeemable and callable, in whole or in part, by the Company, at any time, and
from time to time, after issuance and upon thirty (30) calendar days written
notice (the "Redemption Notice") to each Holder at a redemption price of Seven
Dollars and Fifty Cents ($7.50) per Share on the date fixed for redemption (the
"Redemption Date").
For purposes of establishing the date of the Redemption Notice, the date of the
Redemption Notice shall be deemed the date of the post-mark, by first class U.S.
Mail, of the Company's notice of its intention to redeem the Preferred Shares as
addressed to the Holder, at the Holder's last know address. The Redemption
Notice shall inform the Holder of the Redemption Date and any reasonable
procedures the Company establishes in connection with the redemption.
No provisions shall be made for any sinking fund for the Preferred Shares, and
the Company is not obligated or required to repurchase or redeem any of the
Preferred Shares.
Additional Information. The Company's board of directors has authority, without
action by the holders of Preferred Stock, to issue all or any portion of the
authorized but unissued shares of Preferred Stock so long as such shares are on
a parity with or junior to the rights of the Preferred Stock, which would reduce
the percentage ownership of the Preferred Stock holders and which may dilute the
book value of the stock. The Company has not issued any Preferred Shares since
May 6, 1997, and does not have any current plans to issue any more Preferred
Shares in the foreseeable future.
Application of Quasi-California Corporation Statute
The Company is a Utah corporation. Under Section 2115 of the California General
Corporation Law, foreign corporations which have holders of fifty percent or
more of their outstanding voting securities with addresses in California and
fifty percent or more of their business operations in California (as calculated
pursuant to that section) are subject to certain significant aspects of
California corporate law regardless of the fact that such corporations are not
incorporated in California. The California Corporations Code provisions which
will govern the Company's affairs are both procedurally and substantively
different from parallel Utah provisions, including (among others) provisions
covering cumulative voting and indemnification of officers and directors. Those
provisions which are similar may be subject to varying judicial interpretation.
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In general, corporations with 800 or more stockholders and listed on a national
securities exchange certified by the Commissioner of Corporations (presently,
the New York and American Stock Exchanges) or qualified for trading as national
market securities on the National Association of Securities Dealers Automated
Quotation System (NASDAQ-NMS) are exempt from the requirements of Section 2115.
On November 15, 1996, the Company determined that a majority of the Company's
shares of Common Stock were held by stockholders of record with California
addresses, and that the majority of its business operations occurred in
California. However, it appears that such a situation ceased to exist when the
prior management of the Company sold its shares as part of the F D Import
acquisition in September 1998. As of December 31, 1999, fewer than 50 of the
Company's 154 shareholders of record had addresses in California, and their
combined holdings of outstanding Common Stock amounted to less than One Percent
(1%) of the total issued and outstanding shares of the Company's Common Stock.
As a result of this situation, it is possible that for some periods of time, the
Company may have met the shareholder residence and business operation tests, and
that it may not have been eligible for any exception provided under Section
2115(e). Therefore, for certain periods of time (more likely before September
1998 than after), numerous provisions of the California General Corporation Law
may apply to the exclusion of the provisions in the Utah Revised Business
Corporation Act. These may include, but not be limited to, provisions requiring
an annual meeting of shareholders, mandatory cumulative voting rights in
electing directors, limitations on the sale of assets, limitations on mergers,
dissenters' rights, and other provisions.
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PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON
EQUITY AND OTHER SHAREHOLDER MATTERS
The Company's Common Stock is traded on the OTC Bulletin Board under the symbol
"PRMB." The Company's Common Stock trades only sporadically during any monthly
period, and the number of potential buyers for the Company's Common Stock as
well as the liquidity of the Common Stock is limited accordingly.
The table below sets forth the high and low sales prices for the Company's
Common Stock for each quarter of fiscal 1998 and fiscal 1999 (for fiscal years
ended December 31, 1998 and 1999). The quote given for the third quarter of 1998
reflects a 1 for 60 reverse split which the Company made effective on or about
August 26, 1998. The quotations below reflect inter-dealer prices, without
retail mark-up, mark-down or commission and may not represent actual
transactions:
Quarter High Low
------- ---- ---
1997 First $2.06 $1.50
Second $5.00 $3.00
Third $6.00 $0.16
Fourth $0.06 $0.01
Quarter High Low
------- ---- ---
1998 First N/A(1) N/A
Second $0.50 $0.01
Third $0.04 $0.04
Fourth $6.002 $4.00
Quarter High Low
------- ---- ---
1999 First $6.13 $5.44
Second $5.00 $4.00
Third $4.50 $2.00
Fourth $5.00 $1.13
- --------
(1) Data for first quarter 1998 not available despite inquiry to NASDAQ
historical research. 2Prices reflect a 1 for 60 reverse split effective August
26, 1998.
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Record Holders
Effective December 31, 1999 there were 170 shareholders of record (151 regular
holders of Common Stock and 19 holders of Preferred Stock which had been
automatically converted into Common Stock) holding 4,208,319 shares of Common
Stock. Holders of Common Stock are entitled to one vote for each share held on
all matters submitted to a vote of stockholders. Holders of Common Stock have no
preemptive rights and no right to convert Common Stock into any other security.
No redemption or sinking fund provisions apply to the Common Stock.
Dividends
Common Stock. The Company has not declared any dividends on its Common Stock
since inception and does not anticipate paying any dividends on its Common Stock
in the foreseeable future. The payment of dividends is within the discretion of
the Board of Directors and will depend on the Company's earnings, capital
requirements, financial condition, and other relevant factors. There are no
restrictions that currently limit the Company's ability to pay dividends on its
Common Stock other than those generally imposed by applicable state law.
Preferred Stock. Each Preferred Share has a face value of $5.00 per share (the
"Face Value"). Subject to the automatic conversion of the Preferred Stock
(described in Part I, Item 8 "Description of Securities," above) and subject to
the Company's right to redeem the Preferred Stock (or any number of them) (as
described in Part I, Item 8 "Description of Securities," above), each holder of
the Preferred Shares was, for a 2-year period after the stock was issued,
entitled to receive an annual dividend, payable in shares of the Company's
Common Stock (with each share of Common Stock assigned a face value of $5.00)
and equal to twelve percent (12.00 %) of the Face Value of each share (the
"Dividend Yield"). Dividends were to be payable in four equal quarterly payments
on March 31, June 30, September 30, and December 31 (the "Dividend Dates") of
each year from and after issuance.
The number of shares of the Company's Common Stock payable to any Holder as a
dividend on the Preferred Stock were to be the Dividend Yield (computed using
the Face Value of the shares held by any Holder on the Dividend Date) so that
the Holder would receive, on an annual basis and payable on the Dividend Dates,
an amount of shares of the Company's Common Stock (valued at $5.00 per share)
equal to the Dividend Yield multiplied by the Face Value of the Preferred Shares
held by the Holder on the Dividend Dates. In the event of any factional Share
Dividends, the amount of any such fraction was to be rounded up to the next
whole share.
Any dividends not paid have accumulated until paid. In the event that any or all
dividends payable to any Holder remain unpaid, no additional rights or
privileges shall accrue to any Holder.
To date, the Company has not paid dividends on its Preferred Stock. However, the
Company now plans to pay the accumulated dividends on such Preferred Stock as
was outstanding up to the date of this filing, in shares of the Company's stock,
within 60 days from this filing. Since all of the outstanding Preferred Stock
was issued on May 6, 1997, the Preferred Stock's conversion into Common Stock,
as well as the dividends of Common Stock payable to the holders of Preferred
Stock, will be adjusted to take into account the 1:60 reverse split of the
Common Stock effective August 26, 1998.
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ITEM 2. LEGAL PROCEEDINGS
On September 15, 1999, the Company entered into a Release in Full of All Claims
with Tim Flatt. The Release was a negotiated settlement of proceedings brought
in the District Court of Oklahoma County, State of Oklahoma, Case No. CJ
99-3630. Mr. Flatt released all claims, and agreed to file a Dismissal With
Prejudice, in exchange for a payment of $14,000. The claim was based on
allegations that a marketing contract between the Company and Mr. Flatt had been
breached.
On March 9, 1998 the Company entered into a Stipulation for Entry of Judgment
with Volpone Stamp Company, Inc., d/b/a Sports Stamps Collectors Association
("Volpone"). The Stipulation was a negotiated settlement of proceedings brought
by Volpone in the United States District Court for the Central District of
California, Case No. CV 97-6697-SVW. The case was originally brought in the
United States District Court for the Eastern District of New York, but the
Company challenged the jurisdiction of the New York federal court. The Company
agreed that Volpone may enter a judgment in its favor against the Company for
the sum of $25,000, but the parties agreed that there shall be a stay of entry
of judgment so long as the Company pays Volpone in monthly installments of
$2,500 per month commencing March 15, 1998. The lawsuit arose from Volpone's
claim that the Company wrongfully returned sports products manufactured by
Volpone, and the original amount of the claim was for $107,000 plus interest,
costs and disbursements.
On October 28, 1997, the United States Bankruptcy Court for the Western District
of Oklahoma entered a default judgment against the Company for the sum of
$13,500, in the case of In re Sports Heroes, Inc., Case No. 96-14111-BH. The
Company had not declared bankruptcy nor was it a debtor in the bankruptcy;
rather, the proceedings were in regard to the Chapter 7 bankruptcy of a
completely unaffiliated entity, Sports Heroes, Inc., which claimed in an adverse
proceeding that the $13,500 amount was an asset of its bankruptcy estate. This
judgment was assigned to Tim Flatt by the bankruptcy trustee on November 8,
1999. The Company has not yet settled this claim, and is currently considering
whether or not to file a motion to set aside the default judgment in order to
resolve the claim on its merits.
The Company also settled a lawsuit filed by Enviromint, another vendor of the
Company's products, at some time before May 5, 1997. Enviromint sought payment
for goods shipped to the Company. The case was settled for $12,000 upon the
Company's agreement to pay $2,000 per month. As of May 5, 1997, there remained a
balance due of $10,000.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
In its two most recent fiscal years or any later interim period, the Company has
had no disagreements with its independent accountants.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
The following is a list of unregistered securities sold by the Company within
the last three years including the date sold, the title of the securities, the
amount sold, the identity of the person who purchased the securities, the price
or other consideration paid for the securities, and the section of the
Securities Act of 1933 under which the sale was exempt from registration as well
as the factual basis for claiming such exemption.
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On April 1, 1997, the Company issued a total of 9,750 shares of its Common Stock
to 4 individuals (1,250 shares to Donald Beers; 3,000 shares to Lynn Keller,
trustee of the Western River Expedition Profit Sharing Trust; 500 shares to
Herman O. Jones; and 5,000 shares to Paul M. Bordas), exempt pursuant to section
4(2) of the Securities Act of 1933, based on the facts that the issuance was an
isolated private transaction by the Company which did not involve a public
offering, there were only four offerees, the offerees did not resell the stock
but continue to hold the stock to this day, there was no subsequent or
contemporaneous public offering of the Common Stock, the stock was not broken
down into small denominations, and the negotiations for the sale took place
directly between the offerees and the Company.
On April 21, 1997, the Company issued a total of 430,788 shares of its Common
Stock to Keith Lipscomb, its then-president, in exchange for a total of $31,008,
paid in full according to the terms of two warrant agreements he had with the
Company. According a warrant agreement dated August 28, 1996, he exercised
248,968 warrants to purchase 1 share of Common Stock per warrant at an exercise
price of $.015 per share. According to a warrant agreement dated December 1,
1996, he exercised 181,820 warrants to purchase 1 share of Common Stock per
warrant at an exercise price of $.15 per share. The issuance was exempt pursuant
to section 4(2) of the Securities Act of 1933, based on the facts that the
issuance was an isolated private transaction by the Company which did not
involve a public offering; there was only one offeree; the offeree had a special
status as officer or director of the acquired company; the offeree did not
resell the stock but continued to hold the stock until August 19, 1998, when the
Company repurchased the stock pursuant to the Stock Repurchase Agreement of that
date; there was no subsequent or contemporaneous public offering of the Common
Stock; the stock was not broken down into small denominations; and the
negotiations for the sale took place directly between the offeree and the
Company;
On May 6, 1997, the Company issued a total of 26,000 shares of its Series A 12%
Cumulative Convertible Callable Preferred Stock to 19 shareholders, pursuant to
the terms of a First Amended Private Offering Memorandum dated November 27,
1996. No underwriters were involved, and no underwriting commissions were paid
in connection with the offering. The consideration paid for these shares was a
total of $130,000 cash, or $5.00 per share. The identities of the persons to
whom the stock was sold are as follows: Donald & Janet Beers (1,000 shares);
Regan Chun (1,000 shares); Harold De Graff (4,000 shares); Joseph Dudley (1,000
shares); Eileen Gwynn (600 shares); Russell Harrison (1,000 shares); Harold
Heller, trustee (1,000 shares); Russell Huber (1,000 shares); Dan Kimble (1,000
shares); William Lynch (1,000 shares); John Mazur (2,000 shares); Roy Niles
(2,000 shares); John Odinga (1,000 shares); George Orlowitz IRA (1,400 shares);
John Schofield (1,000 shares); Max Slater (2,000 shares); Scott Strout (1,000
shares); Raymond & Marion Taft (2,000 shares); Carolyn Whitley (1,000 shares).
Each purchaser paid cash for their shares at $5.00 per share, as set forth in
the First Amended Private Offering Memorandum. The issuance was exempt from
registration pursuant to Section 3(b) of the Securities Act of 1933 and Rule 504
of Regulation D promulgated thereunder. The Company relied on the following
facts in determining that Rule 504 of Regulation D was available: (a) the
Company was not subject to the reporting requirements of Section 13 or 15(d) of
the Exchange Act; (b) the Company had a specific business plan at the time to
market sports-related collectibles and memorabilia; and (c) the aggregate
offering price of all shares offered under Rule 504 in the preceding 12 months
did not exceed $1,000,000.
On May 20, 1997, the Company issued a total of 333,156 shares of its Common
Stock to Brian Hayes, in exchange for Mr. Hayes' exercising a warrant agreement
for that number of shares of Common Stock. The warrant was issued to Hans
Anderegg by the Company on August 28, 1996, and assigned to Mr. Hayes on May 10,
1997. According to the terms of the warrant, Mr. Hayes was entitled to require
the Company to convert the warrant into shares of Common Stock without payment
of any stock purchase price upon the
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condition that he only exercise his rights under the warrant in full, and not in
part, which he did. The issuance was exempt pursuant to 4(2) of the Securities
Act of 1933, based on the facts that the issuance was an isolated private
transaction by the Company which did not involve a public offering; there was
only one offeree; there was no subsequent or contemporaneous public offering of
the Common Stock; the stock was not broken down into small denominations; and
the negotiations for the sale took place directly between the offeree and the
Company.
On May 22, 1997, the Company issued a total of 25,000 shares of its Common Stock
to Steve Avakian, who was at the time an officer and director of the Company, in
exchange for valuable services rendered to the Company. This issuance was exempt
pursuant to section 4(2) of the Securities Act of 1933, based on the facts that
the issuance was an isolated private transaction by the Company which did not
involve a public offering, there was only one offeree, the offeree had a special
status as officer and director of the Company, the offeree did not resell the
stock but continues to hold the stock to this day, there was no subsequent or
contemporaneous public offering of the Common Stock, the stock was not broken
down into small denominations, and the negotiations for the sale took place
directly between the offeree and the Company.
On June 30, 1997, the Company issued a total of 12,000 shares of its Common
Stock for a total, aggregate offering price of Nine Thousand Six Hundred dollars
($9,600). The offering was made in 12 investment units at $800 per unit, each
unit consisting of 1,000 shares of Common Stock and 67,500 warrants to purchase
additional shares of Common Stock at an exercise price of $1.00 per share, such
warrants set to expire 120 days from the termination of the offering, which was
dated May 1, 1997. The issuance was exempt from registration pursuant to Section
3(b) of the Securities Act of 1933 and Rule 504 of Regulation D promulgated
thereunder. No underwriters were involved, and no underwriting commissions were
paid in connection with the offering. This issuance was made to 12 persons, each
of whom purchased one investment unit; each of whom paid $800 for their
investment unit, and each of whom was a foreign entity. The identities of these
12 purchasers are as follows: Alliance Capital Management Group, Ltd. (Bahamas),
Balmoral Partners, Ltd. (Isle of Man), Bayport International, Ltd. (Bahamas),
Crocker Management Group, Inc. (Bahamas), First London Capital, Ltd. (British
Virgin Islands), Laioning Enterprises, Ltd. (Hong Kong), Mid-City Holdings, Ltd.
(England), Trafalgar Investments Ltd. (St. Helier, Jersey), Thunder Bay
Holdings, Ltd. (British Virgin Islands), Venus Siben Capital Group, Inc. (Hong
Kong), Catawba, Ltd. (Switzerland), and F.C.S., Inc. (Switzerland). The Company
relied on the following facts in determining that Rule 504 of Regulation D was
available: (a) an opinion letter from counsel dated June 25, 1997 to the effect
that the stock was exempt from registration under Section 3(b) of the Securities
Act of 1933 and Rule 504 of Regulation D promulgated thereunder; (b) the Company
was not subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act; (c) the Company had a specific business plan at the time to market
sports-related collectibles and memorabilia; (d) the aggregate offering price of
all shares offered under Rule 504 in the preceding 12 months did not exceed
$1,000,000 and (e) the Company filed a Form D within 15 days of the first sale
of the shares subject to the offering.
On August 20, 1997, the Company issued a total of 56,000 shares of its Common
Stock to Pacific International Securities, Inc., a corporation located in
Canada, pursuant to the partial exercise of a warrant to purchase Common Stock
at $1.00 per share. Accordingly, Pacific paid $56,000 cash in exchange for the
56,000 shares of Common Stock. Pacific received the warrant for 67,500 shares
from Thunder Bay Holdings, Ltd., one of the purchasers under the 504 offering
dated June 30, 1997, and Pacific exercised 56,000 of the warrants and asked for
return of 11,500 warrants. This issuance of the shares upon exercise of the
warrants was exempt from registration under Section 3(b) of the Securities Act
of 1933 and Rule
20
<PAGE>
504 promulgated thereunder. No underwriters were involved, and no underwriting
commissions were paid in connection with the offering. This issuance was made to
1 person, Pacific International Securities, Inc. The Company relied on the
following facts in determining that Rule 504 of Regulation D was available: (a)
an opinion letter dated June 25, 1997 from counsel to the effect that the
issuance of stock pursuant to exercise of the warrants was exempt from
registration under Section 3(b) of the Securities Act of 1933 and Rule 504 of
Regulation D promulgated thereunder; (b) the Company was not subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act; (c) the
Company had a specific business plan at the time to market sports-related
collectibles and memorabilia; (d) the aggregate offering price of all shares
offered under Rule 504 in the preceding 12 months did not exceed $1,000,000 and
(e) the Company filed a Form D within 15 days of the first sale of the shares
and warrants subject to the offering.
On September 5, 1997, the Company issued a total of 5,000 shares of its Common
Stock to Marjorie Heiselt in exchange for a loan to the Company in the amount of
$25,000. This issuance was exempt pursuant to section 4(2) of the Securities Act
of 1933, based on the facts that the issuance was an isolated private
transaction by the Company which did not involve a public offering, there was
only one offeree, there was no subsequent or contemporaneous public offering of
the Common Stock, the stock was not broken down into small denominations, and
the negotiations for the sale took place directly between the offeree and the
Company.
On September 24, 1997, the Company issued a total of 20,000 shares of its Common
Stock to 3 persons (5,000 shares to Peter M. Kruse; 10,000 shares to Philip G.
Edwards; and 5,000 shares to W. Stewart Buchanan) in exchange for a total of
$20,000 in cash ($5,000 from Mr. Kruse; $10,000 from Mr. Edwards; and $5,000
from Mr. Buchanan), exempt from registration pursuant to section 4(2) of the
Securities Act of 1933, based on the facts that the issuance was an isolated
private transaction by the Company which did not involve a public offering,
there were only three offerees, none of the offerees resold their stock and all
three of them continue to hold the stock to this day, there was no subsequent or
contemporaneous public offering of the Common Stock, the stock was not broken
down into small denominations, and the negotiations for the sale took place
directly between the offeree and the Company.
On October 7, 1997, the Company issued a total of 100,000 shares of its Common
Stock to Keith Lipscomb, its then president, in exchange for exercising a
warrant agreement for 100,000 shares of Common Stock. The warrant was issued to
him by the Company on August 25, 1997. According to the terms of the warrant,
Mr. Lipscomb was entitled to require the Company to convert the warrant into
shares of Common Stock without payment of any stock purchase price upon the
condition that he only exercise the warrant in full, and not in part, which he
did. This issuance was exempt pursuant to section 4(2) of the Securities Act of
1933, based on the facts that the issuance was an isolated private transaction
by the Company which did not involve a public offering, there was only one
offeree, the offeree had a special status as officer and director of the
Company, the offeree continued to hold the stock until August 19, 1998, when the
Company repurchased the stock pursuant to the Stock Repurchase Agreement of that
date , there was no subsequent or contemporaneous public offering of the Common
Stock, the stock was not broken down into small denominations, and the
negotiations for the sale took place directly between the offeree and the
Company.
On October 9, 1997, the Company issued a total of 10,000 shares of Common Stock
to Roland Berame in exchange for services rendered to the Company. This issuance
was exempt pursuant to section 4(2) of the Securities Act of 1933, based on the
facts that the issuance was an isolated private transaction by the Company which
did not involve a public offering, there was only one offeree, the offeree did
not resell the
21
<PAGE>
stock but continues to hold the stock to this day, there was no subsequent or
contemporaneous public offering of the Common Stock, the stock was not broken
down into small denominations, and the negotiations for the sale took place
directly between the offeree and the Company.
On March 17, 1998, the Company issued a total of 10,000 shares of Common Stock
to Ken Smith in exchange for services rendered to the Company. This issuance was
exempt pursuant to section 4(2) of the Securities Act of 1933, based on the
facts that the issuance was an isolated private transaction by the Company which
did not involve a public offering, there was only one offeree, the offeree did
not resell the stock but continues to hold the stock to this day, there was no
subsequent or contemporaneous public offering of the Common Stock, the stock was
not broken down into small denominations, and the negotiations for the sale took
place directly between the offeree and the Company.
On June 22, 1998, the Company issued a total of 669,890 shares of its Common
Stock at a price of $0.10 per share-an aggregate offering price of $66,989-to a
total of 7 investors, 6 of whom were foreign entities. The identities of these 6
foreign entities are as follows: The China Connection (Isle of Man); East-West
Trading Corporation (Nevis, West Indies); Karston Electronics Ltd. (British
Virgin Islands); Lexington Sales Corporation Ltd. (Isle of Man); Oriental
Investments Limited (Mauritius); Sequoia International (Mauritius). Each foreign
entity paid $11,000 and received 110,000 shares of stock. The 7th entity was
Hudson Consulting Group, Inc., a Nevada corporation with principal offices in
Utah, which received 9,890 shares in exchange for paying a $989 debt on behalf
of the Company. Subsequently, on or about September 17, 1998, the Company placed
a restrictive legend pursuant to Rule 144 on the 660,000 shares of this stock
issued to the 6 foreign entities. The issuance to the 6 foreign entities was
exempt from registration pursuant to Section 3(b) of the Securities Act of 1933
and Regulation S promulgated thereunder. The Company relied on the following
facts in determining that Regulation S was available: the offer or sale to the 6
foreign entities was made in an offshore transaction; each of the 6 foreign
entities was not a U.S. person; no directed selling efforts were made in the
United States; and none of the 6 foreign entities have resold their stock, but
all 6 of them continue to hold their stock to the present day. The issuance to
Hudson Consulting was exempt from registration pursuant to Section 3(b) of the
Securities Act of 1933 and Rule 504 of Regulation D promulgated thereunder. No
underwriters were involved, and no underwriting commissions were paid in
connection with the offering. The Company relied on the following facts in
determining that Rule 504 was available: (a) an opinion letter from counsel to
the effect that the stock was exempt under Rule 504; (b) the Company was not
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act; (c) the Company had a specific business plan at the time to acquire F D
Import & Export, whose main, established business was exporting Nestle brand
products to the Ukraine and abroad; (d) the aggregate offering price of all
shares offered under Rule 504 in the preceding 12 months did not exceed
$1,000,000; and (e) the Company filed a Form D within 15 days of the first sale
of the shares subject to the offering.
On September 21, 1998, the Company issued a total of 150,000 shares of its
Common Stock to Hudson Consulting Group, Inc. in exchange for consulting
services rendered in connection with the F D Import acquisition. This issuance
was exempt pursuant to section 4(2) of the Securities Act of 1933, based on the
facts that the issuance was an isolated private transaction by the Company which
did not involve a public offering, there was only one offeree, the offeree had a
special status as a corporate consultant to the Company and had access to all
the Company's records, there was no subsequent or contemporaneous public
offering of the Common Stock, and the negotiations for the sale took place
directly between the offeree and the Company.
22
<PAGE>
On September 24, 1998, the Company issued a total of 10,000,000 shares of its
Common Stock to 3 individuals, Igor Fruman (1,000,000 shares), Vyacheslav Fruman
(5,000,000 shares), and Vladislav Dyablo (4 million shares), whereby the Company
acquired 100% ownership of F D Import & Export Corporation, exempt pursuant to
section 4(2) of the Securities Act of 1933, based on the facts that the issuance
was an isolated private transaction by the Company which did not involve a
public offering, there were only 3 offerees, there was no subsequent or
contemporaneous public offering of the Common Stock, the stock was not broken
down into small denominations, negotiations for the sale took place directly
between the offerees and the Company, the offerees had a special status as
officers or directors of the acquired company, and the offerees never resold
their stock but continued to hold it until December of 1999, when it was
returned to the Company and canceled pursuant to the Rescission Agreement dated
December 2, 1999.
On September 29, 1998, the Company issued a total of 4,015,002 shares of its
Common Stock. 4,000,002 of these shares were issued at a price of $0.10 per
share-an aggregate offering price of $400,000-to a total of 6 investors, all of
whom were foreign entities. The identities of these 6 foreign entities are as
follows: Betoeva Tatyana Dmitrieva (Ukraine); Sereda Andrey Nikolaevich
(Ukraine); Alexnovich Alexander Viktorovich (Ukraine); Zveryansky Vasily
Trofimovich (Ukraine); Filatov Grigory Genadievich (Ukraine); Abramov Yury
Alekseevich (Ukraine). Each of these 6 Ukrainian persons paid $66,667 and
received 666,667 shares of stock. Another 15,000 shares of Common Stock were
also issued on this date to a seventh entity, Leeward Consulting Group, LLC, a
Nevis, West Indies limited liability company, which received 15,000 shares in
exchange for valuable services rendered to the Company. The issuance to all 7
foreign entities was exempt from registration pursuant to Section 3(b) of the
Securities Act of 1933 and Rule 504 of Regulation D promulgated thereunder. No
underwriters were involved, and no underwriting commissions were paid in
connection with the offering. The Company relied on the following facts in
determining that Rule 504 of Regulation D was available: (a) an opinion letter
from counsel to the effect that the stock was exempt from registration under
Section 3(b) of the Securities Act of 1933 and Rule 504 of Regulation D
promulgated thereunder; (b) the Company was not subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act; (c) the Company had a
specific business plan at the time to merge with F D Import & Export, whose
main, established business was exporting Nestle brand products to the Ukraine
and abroad; (d) the aggregate offering price of all shares offered under Rule
504 in the preceding 12 months did not exceed $1,000,000 and (e) the Company
filed a Form D within 15 days of the first sale of the shares subject to the
offering.
On September 30, 1998, the Company issued a total of 2,442 shares of its Common
Stock to 3 individuals (Louis de Michele, 242 shares; Peter M. Kruse, 1,400
shares; and Jerome P. Kraft, 800 shares) in exchange for settlement agreements
and releases of preexisting debt in the total amount of $15,000 ($5,000 per
individual). This issuance was exempt pursuant to section 4(2) of the Securities
Act of 1933, based on the facts that the issuance was an isolated private
transaction by the Company which did not involve a public offering, there were
only three offerees, the offerees had a special status a members of a
well-defined group who held pre-existing debts of the Company, there was no
subsequent or contemporaneous public offering of the Common Stock, the stock was
not broken down into small denominations, and the negotiations for the sale took
place directly between the offeree and the Company.
Effective May 6, 1999, 22,000 shares of the Company's issued and outstanding
Preferred Stock was automatically converted into 66,000 shares of Common stock,
pursuant to the terms of Preferred Stock. This issuance was exempt from
registration pursuant to Section 3(b) of the Securities Act of 1933 and Rule 504
of Regulation D promulgated thereunder. No underwriters were used and no
underwriters
23
<PAGE>
commissions were paid in connection with the issuance. The Company relied on the
following facts in determining that Rule 504 of Regulation D was available: (a)
the Company was not subject to the reporting requirements of Section 13 or 15(d)
of the Exchange Act; (b) the Company had a specific business plan at the time of
issuing the convertible Preferred Stock that it would market sports-related
collectibles and memorabilia; and (c) the aggregate offering price of all shares
offered under Rule 504 in the preceding 12 months did not exceed $1,000,000.
On May 11, 1999, the Company issued a total of 200 shares of its Common Stock to
Harold F. De Graff according to the terms of its Series A 12 % Cumulative
Convertible Callable Preferred Stock. Mr. De Graff had held 4,000 shares of the
convertible Preferred Stock and elected to convert the shares into Common Stock
(each share was converted into 3 pre-reverse shares of Common Stock, and then
divided by a factor of 60 to account for the 1:60 reverse stock split effected
between the time the shareholder bought the shares and when he converted them).
This issuance was exempt pursuant to section 4(2) of the Securities Act of 1933,
based on the facts that the issuance was an isolated private transaction by the
Company which did not involve a public offering, there was only one offeree, the
offeree was part of a special, well-defined class of previous Preferred Stock
holders, the offeree did not resell the stock but continues to hold the stock to
this day, there was no subsequent or contemporaneous public offering of the
Common Stock, the stock was not broken down into small denominations, and the
negotiations for the sale took place directly between the offeree and the
Company.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Bylaws offer indemnification from personal liability to any person
who was or is a party, or is threatened to be made a party, to any threatened,
pending, or completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative, by reason of the fact that such person is or
was a director, officer, employee, or agent of the corporation. Indemnification
is available for both corporate and third-party actions. The foregoing right of
indemnification is not exclusive of any other rights to which any officer,
director, consultant or employee may be entitled in the event any such person is
named in a lawsuit involving the Company's operations or activities.
The Company does not currently carry Directors and Officers' liability insurance
("D & O Insurance"). In the event the Company's officers or directors become
entitled to indemnification, the costs of such indemnification would be a direct
financial liability of the Company.
Sections 16-10a-901 through 16-10a-909 of the Utah Revised Business Corporation
Act also provide for indemnification of the Company's officers and directors in
certain situations where they might otherwise personally incur liability,
judgments, penalties, fines and expenses in connection with a proceeding or
lawsuit to which they might become parties because of their position with the
Company.
To the extent that indemnification may be related to liability arising under the
Securities Act, the Securities and Exchange Commission takes the position that
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
PART F/S
The Company's audited financial statements for the fiscal years ended December
31, 1999 and 1998 are attached hereto as F-1 through F-16.
24
<PAGE>
1
================================================================================
--------
AUDITED FINANCIAL STATEMENTS
Premier Brands, Inc.
DECEMBER 31, 1999 and 1998
--------
F-1
<PAGE>
CONTENTS
================================================================================
INDEPENDENT AUDITOR'S REPORT................................................F-3
BALANCE SHEET
ASSETS, LIABILITIES AND STOCKHOLDERS' DEFICIT......................F-4
STATEMENTS OF OPERATIONS ...................................................F-5
STATEMENT OF STOCKHOLDERS'
EQUITY
(DEFICIT)..............................................................F-6, F-7
STATEMENTS OF CASH
FLOWS..................................................................F-8, F-9
NOTES TO FINANCIAL
STATEMENTS..............................................................F-10-16
================================================================================
F-2
<PAGE>
Michael J. Bongiovanni, P.A., C.P.A.
1000 West McNab Road, Ste 107
Pompano Beach, Florida 33069
================================================================================
Business (954) 783-7266
Facsimile (954) 782-8298
Voice Mail (954) 528-1899
To the Board of Directors
Premier Brands, Inc.
268 West 400 South, Suite 300
Salt Lake City, Utah 84101
We have audited the accompanying balance sheet of Premier Brands, Inc. (a
Utah corporation) as of December 31, 1999 and the related statements of
operations, stockholders' equity (deficit), and cash flows for the years ended
December 31, 1999 and 1998. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free from
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Premier Brands, Inc. as of
December 31, 1999 and the results of its operations and its cash flows for the
years ended December 31, 1999 and 1998 in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note K to the
financial statements, the Company has suffered recurring losses from operations
and other circumstances which raise substantial doubt about its ability to
continue as a going concern. Management's plans regarding those matters are also
described in Note K.
/s/ Michael J. Bongiovanni, C.P.A.
Pompano Beach, Florida
March 1, 2000
F-3
<PAGE>
BALANCE SHEET
Premier Brands, Inc.
December 31, 1999
================================================================================
ASSETS
CURRENT ASSETS:
Cash $ 104,000
-----------
TOTAL ASSETS $ 104,000
===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts Payable $ 33,375
Settlements Payable (Note C) 49,000
Accrued Expenses (Note D) 27,607
Income Taxes Payable 800
-----------
TOTAL CURRENT LIABILITIES 110,782
-----------
STOCKHOLDERS' DEFICIT:
Common Stock ($.001 par value,
100,000,000 shares
authorized; 4,208,319
shares issued and outstanding
at December 31, 1999) 4,208
Convertible Preferred Stock
($.001 par value, 5,000,000
Authorized, none issued and
outstanding at December 31, 1999) -
Additional Paid-in-Capital 3,584,933
Treasury Stock, at cost (20,000)
Retained Deficit (3,575,923)
----------
TOTAL STOCKHOLDERS' DEFICIT (6,782)
----------
$ 104,000
==========
See notes to audited financial statements and auditor's report.
F-4
<PAGE>
STATEMENTS OF OPERATIONS
Premier Brands, Inc.
For the Years Ended December 31, 1999 and 1998
================================================================================
1998 1999
REVENUE:
Net Sales $ 101,500 $ --
---------- -----------
OPERATING EXPENSES:
Selling, General, and Administrative
Expenses $ 293,018 $ 206,375
---------- -----------
TOTAL EXPENSES 293,018 206,375
---------- -----------
OPERATING LOSS (191,518) (206,375)
OTHER INCOME:
Forgiveness of Debt (Note C) $ - $ 12,881
----------- -----------
TOTAL OTHER INCOME - 12,881
----------- -----------
LOSS BEFORE TAXES $ (191,518)$ (193,494)
INCOME TAXES (Note I) - -
----------- -----------
NET LOSS $ (191,518)$ (193,494)
=========== ===========
NET LOSS PER COMMON SHARE
BASIC & FULLY DILUTED $ (.07 $ (.05)
=========== ===========
WEIGHTED AVERAGE COMMON 2,760,600 4,207,850
SHARE OUTSTANDING =========== ===========
See notes to audited financial statements and auditor's report.
F-5
<PAGE>
<TABLE>
STATEMENT OF
STOCKHOLDERS' EQUITY (DEFICIT)
Premier Brands, Inc.
For the Years Ended December 31, 1999 and 1998
===============================================================================================================================
<CAPTION>
Common Stock Preferred Stock Additional
--------------------- ------------------- Paid-in Treasury Accumulated
Shares Amount Shares Amount Capital Stock Deficit Total
------ ------ ------ ------ ------- ----- ------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balances, December 31, 1997 1,671,361 $ 1,671 24,000 $ 24 $ 3,097,880 $(20,000) $(3,190,911) $ (111,336)
Common stock issued
for services (Note F) 10,000 10 - - 990 - - 1,000
Sale of common stock
under Reg D Offering (Note F) 660,000 660 - - 65,340 - - 66,000
Common stock issued to
settle notes payable (Note F) 9,980 10 - - 979 - - 989
Reverse common stock split
(Note F)(1 for 60) Equity effects (2,311) 2,311
Post-Split balances* 39,571 40 24,000 24 3,167,500 (20,000) (3,190,911) (43,347)
------- ------- --------- ------ ----------- -------- ----------- --------
Common stock issued
for services (Note F) 165,000 165 - - 6,435 - - 6,600
</TABLE>
* Post-split common stock `Shares' amount adjusted for rounding of fractional
shares.
See notes to audited financial statements and auditor's report.
F-6
<PAGE>
<TABLE>
STATEMENT OF
STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)
Premier Brands, Inc.
For the Years Ended December 31, 1999 and 1998
===================================================================================================================================
<CAPTION>
Common Stock Preferred Stock Additional
-------------------------- ---------------------- Paid-in Treasury Accumulated
Shares Amount Shares Amount Capital Stock Deficit Total
------ ------ ------ ------ ------- ----- ------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Stock issued for merger (Note E) 10,000,000 10,000 - - - - - 10,000
Merger stock rescinded (Note E) (10,000,000) (10,000) - - - - - (10,000)
Sale of common stock
under Reg D Offering (Note F) 4,000,002 4,000 - - 396,000 - - 400,000
Common stock issued to
settle notes payable (Note F) 2,442 2 - - 14,998 - - 15,000
Rounding Difference 4 - - - - - - -
Net Loss - - - - - - (191,518) (191,518)
Balances, December 31, 1998 4,207,019 4,207 24,000 24 3,584,933 (20,000) (3,382,429) 186,735
========== ========== ========== ====== ============ ========= ============ ==========
Conversion of redeemable
preferred stock Series A (Note F) 1,300 1 (24,000) (24) - - - (23)
Net Loss - - - - - - (193,494) (193,494)
----------------------- ----------- ------ ------------ --------- ------------- ----------
Balances, December 31, 1999 4,208,319 $ 4,208 - - $ 3,584,933 $(20,000) $(3,575,923) $ (6,782)
========== ========= =========== ====== ============ ========= ============ ==========
</TABLE>
See notes to audited financial statements and auditor's report.
F-7
<PAGE>
<TABLE>
STATEMENTS OF CASH FLOWS
Premier Brands, Inc.
For the Years Ended December 31, 1999 and 1998
==============================================================================================================
<CAPTION>
1998 1999
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net Loss $ (191,518) $ (193,494)
Adjustments to reconcile net loss to net cash
used in operating activities:
Common stock issued for services (Note F) 7,600 -
Worthless investments write down (Note J) 23,257 -
Uncollectable deposit writeoff 875 -
Real estate held for investment exchanged
for services (Note B) 8,600 -
Investment exchanged for services (Note J) 1,000 -
Forgiveness of payroll taxes payable (Note C) - (12,881)
Conversion of redeemable Series A
preferred stock - (23)
Common stock issued to retire debt (Note F) 15,989 -
Retirement of notes payable - (5,000)
Increase (decrease) in current operating liabilities:
Accounts payable - 10,000
Settlements payable (Note C) 24,000 -
Payroll taxes payable (Note C) - (74,291)
Accrued expenses (Note D) - 15,000
----------------- --------------
NET CASH USED IN
OPERATING ACTIVITIES (110,197) (260,689)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from common stock issuances 466,000 -
Decrease (Increase) in subscriptions receivable (175,000) 175,000
NET CASH PROVIDED BY
FINANCING ACTIVITIES $ 291,000 $ 175,000
----------------- --------------
NET INCREASE (DECREASE)
IN CASH $ 180,803 $ (85,689)
Cash, beginning of period $ 8,886 $ -
------------------ ---------------
189,689
CASH, END OF PERIOD $ 189,689 $ 104,000
================== ==============
</TABLE>
See notes to audited financial statements and auditor's report.
F-8
<PAGE>
STATEMENTS OF CASH FLOWS (CONT.)
Premier Brands, Inc.
For the Years Ended December 31, 1999 and 1998
================================================================================
1998 1999
---- ----
Supplemental Disclosures of
Non-Cash Financing Activities:
Common stock issued in payment
of notes payable (Note F) $ 15,989 $ -
========= ========
See notes to audited financial statements and auditor's report.
F-9
<PAGE>
NOTES TO AUDITED FINANCIAL STATEMENTS
Premier Brands, Inc.
For the Years Ended December 31, 1999 and 1998
================================================================================
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business Activity - Premier Brands, Inc. (the "Company") is currently a shell
corporation whose purpose is to identify and acquire a favorable business
opportunity with long-term growth potential. The Company was incorporated in the
State of Utah on August 6, 1984, under the name North America Clothing Company,
Inc. Since inception, the Company has had several names: North America Clothing
Company (Aug. 1984- Sept. 1992); K. Randolph Corporation (Sept. 1992- Feb.
1995); and Premier Brands, Inc. (Feb. 1995- Present).
The Company had previously operated a sports collectible enterprise which
offered various types of baseball, football, and basketball cards as well as the
brand name "Front Row." The Company then discontinued operations on or about
March 27, 1998. After this time, the Company has had no operations or business
plan, except those related to the negotiations with and acquisition of FD
Imports, Inc., which are described in Note E. The Company now functions only as
a public shell seeking to acquire a business that would contribute to the value
of the Company and its shareholders.
Basis of Presentation - The financial statements are presented on the accrual
basis of accounting.
Cash and Cash Equivalents - For purposes of the Statements of Cash Flows, the
Company considers liquid investments with an original maturity of three months
or less to be cash equivalents.
Uninsured Deposits - At various times during the years, the Company maintained
bank accounts which exceeded federally-insured limits.
Management's Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that effect the reported amounts of assets and
liabilities, disclosures of contingent assets and liabilities at the date of
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
Revenue Recognition - Revenue is recognized when goods are shipped and earned or
when services are performed, provided collection of the resulting receivable is
probable. If any material contingencies are present, revenue recognition is
delayed until all material contingencies are eliminated. Further, no revenue is
recognized unless collection of the applicable consideration is probable.
F-10
<PAGE>
NOTES TO AUDITED FINANCIAL STATEMENTS
Premier Brands, Inc.
For the Years Ended December 31, 1999 and 1998
================================================================================
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
Net Loss per Common Share - Net loss per common share has been calculated by
divided the net loss for each period presented by the weighted average number of
common shares for the respective period. Common stock equivalents, such as the
Series A preferred stock outstanding, have not been considered in the
calculation since their effect would be anti-dilutive.
Income Taxes - Income taxes are provided in accordance with Statement of
Financial Accounting Standards No. 109 (SFAS No. 109), "Accounting for Income
Taxes." A deferred tax asset or liability is recorded for all temporary
differences between financial and tax reporting and net operating
loss-carryforwards.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of the deferred
tax asset will not be realized. Deferred tax assets and liabilities are adjusted
for the effect of changes in tax laws and rates on the date of enactment.
Advertising Costs - Advertising costs are expensed as incurred. The Company does
not incur any direct-response advertising costs. Advertising expense totaled
$6,112 and $-0- for the years ended December 31, 1999 and 1998, respectively.
Comprehensive Income (Loss) - As of January 1, 1998, the Company adopted
Financial Accounting Standards Board Statement of Financial Accounting Standards
No. 130, "Reporting Comprehensive Income", which establishes standards for the
reporting and display of comprehensive income and its components in the
financial statements. There were no material items of comprehensive income
(loss) applicable to the Company during the periods covered in the financial
statements.
NOTE B - RELATED PARTY TRANSACTIONS
On May 12, 1998, the Company's Board of Directors approved a resignation of all
board members, including the Company's president. This was done in anticipation
of the transfer of all outstanding shares of the Company's common stock to new
investors of the Company. The Company's president surrendered 733,060 common
shares, which had been held in his name, and 180,156 shares held by the Company,
to a related party. Along with the surrender of shares, all of the outstanding
purchase warrants for common stock of the Company were canceled. The transfer of
the shares is in consideration of services performed on behalf of the Company
during 1998 to locate investors and to satisfy all liabilities of the Company
outstanding at the time of transfer. The effects of this transaction are
included in the accompanying `Statements of Operation' for 1998. On this date,
new officers and directors were appointed to the Company, including a new
F-11
<PAGE>
NOTES TO AUDITED FINANCIAL STATEMENTS
Premier Brands, Inc.
For the Years Ended December 31, 1999 and 1998
================================================================================
NOTE B - RELATED PARTY TRANSACTIONS (CONT.)
President.
According to the terms of his resignation agreement, the Company's president
received real estate in 1998 that had previously been held by the Company for
investment. The real estate, which had a carrying value of $8,600 as of December
31, 1997, was written off during 1998 due to the Company's inability to locate a
third party buyer to effect a sale of the property and related exchange above.
NOTE C - SETTLEMENTS PAYABLE
In 1997, the Company was involved in litigation from a previous supplier for the
purchase of sports trading cards for which the Company had not made payment. The
case was settled on March 9, 1998 with the Company agreeing to make payments
totaling $25,000. However, the Company has not made any payments to date
relating to the settlement. Therefore, this amount is included `Settlements
Payable' in the accompanying Balance Sheet.
The Company was delinquent in their payment of pre-1998 payroll taxes to the
Internal Revenue Service. In 1999, the Internal Revenue Service agreed to
release the claim against the Company for unpaid payroll taxes in exchange for a
payment of $74,291. The payment in full, which occurred in June of 1999,
represented a debt forgiveness of $12,881.
On September 15, 1999 the Company entered into a release of claims with an
individual who claimed the Company had breached a pre-1999 marketing agreement.
The settlement provided for a release of all claims in exchange for a payment of
$14,000. The Company has not yet made any payments towards the settlement. The
payable is included in `Settlements Payable' in the accompanying Balance Sheet.
The Company was involved in litigation from another vendor of the Company's
products at some time before May 5, 1997. The case was settled in 1998 for
$12,000 upon the Company's agreement to pay $2,000 per month. As of December 31,
1999, there remained a balance of $10,000. The payable is included in
`Settlements Payable' in the accompanying Balance Sheet.
F-12
<PAGE>
NOTES TO AUDITED FINANCIAL STATEMENTS
Premier Brands, Inc.
For the Years Ended December 31, 1999 and 1998
================================================================================
NOTE D - COMMITMENTS AND CONTINGENCIES
On November 8, 1999 a judgement was awarded to an individual, who claimed that
$13,500 was an asset of Sports Heroes, Inc. (a bankrupt estate). The Company has
not yet settled the claim, and is currently considering whether or not to set
aside the default judgement in order to resolve the claim on its merits.
Management has provided for the contingency under SFAS No. 5 with an accrual of
the $13,500 plus an estimated $1,500 for related costs. These amounts are
included in `Accrued Expenses' in the accompanying Balance Sheet.
NOTE E - MERGER WITH FD IMPORTS, INC.
On September 24, 1998, the Company issued a total of 10,000,000 common shares to
the principals of FD Imports, Inc. in order to acquire an 100% ownership
interest of FD Imports, Inc., an import and export company whose principle
operations consisted of sales of Nestle products to the Ukraine and abroad. The
stock was returned to the Company and cancelled on December 2, 1999 pursuant to
the Rescission Agreement when the merger was rescinded. The Company incurred
substantial expenses totaling $106,672 relating to the proposed merger for the
year ended December 31, 1999.
NOTE F - SHAREHOLDERS' EQUITY
During 1998, the Company undertook a private placement offering to sell shares
of its common stock. A total of 4,660,002 shares were offered to investors at a
price of $.10 per share, generating $466,000 in additional capital.
In August of 1998, the Company enacted a 1 for 60 reverse stock split for its
shareholders.
During 1999, all 24,000 shares of the Company's Series A preferred shares were
converted into common shares pursuant to their terms provided at issuance.
Accordingly, 1,300 post-split shares of the Company's common stock were issued
to its preferred shareholders.
In June of 1998, the Company issued 9,980 shares of common stock to a related
party for payment of an outstanding debt. In addition, on September 30, 1999 the
Company issued 2,442 post-split shares for payment of three $5,000 notes
payable.
During 1998, the Company issued 10,000 pre-split common shares and 165,000
post-spilt common shares in return for various services, primarily consulting,
valued at various prices by the Company's management based on the quoted closing
value of the common shares at the time of issuance. The closing values of the
common shares approximated values of the services received.
F-13
<PAGE>
NOTES TO AUDITED FINANCIAL STATEMENTS
Premier Brands, Inc.
For the Years Ended December 31, 1999 and 1998
================================================================================
NOTE G - RECENT ACCOUNTING PRONOUNCEMENTS
In June of 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which the Company has not been required to
adopt. The Statement, which is effective for fiscal years beginning after June
15, 2000, establishes standards for accounting and reporting for derivative
instruments and hedging activities. The Company does not expect that the
adoption of Statement of Financial Accounting Standards No.133 will have a
material impact on its financial statements because the Company does not
currently hold any derivative instruments.
In March, 1998, the American Institute of Certified Public Accountants (AICPA)
issued Statement of Position (SOP) No. 98-1 "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use", which established
guidelines for the accounting for the costs of all computer software developed
or obtained for internal use. The Company adopted this SOP effective for the
year ended December 31, 1998. The adoption of the SOP did not make a material
impact on the Company's financial statements.
In April, 1998, the AICPA issued SOP 98-5, "Reporting on the Costs of Start-Up
Activities". The SOP is effective for fiscal years beginning after December 15,
1998. The SOP requires costs of start-up activities and organization costs to be
expensed as incurred. The Company adopted SOP 98-5 for the year ended December
31, 1999. The adoption of SOP 98-5 did not have a material impact on the
Company's financial statements.
The FASB has issued SFAS No. 134, "Accounting for Mortgage-Backed Securities
Retained after the Securitization of Mortgage Loans Held for Sale by a Mortgage
Banking Enterprise," an amendment of FASB Statement No. 65, which the Company
has not been required to adopt as of December 31, 1999. Statement No. 65, as
amended by FASB Statements No. 115, "Accounting for Certain Investments in Debt
and Equity Securities", and No. 125, "Accounting for Transfer and Servicing of
Financial Assets and Extinguishments of Liabilities", require that after the
securitization of a mortgage loan held for sale, an entity engaged in mortgage
banking activities classify the resulting mortgage-backed security as a trading
security. This statement further amends Statement No. 65 to require that after
the securitization of mortgage banking activities classify the resulting
mortgage-backed securities or other retained interests based on its ability and
intent to sell or hold those investments. This Statement is effective for fiscal
years after December 15, 1998 and is not expected to have a material impact on
the Company.
F-14
<PAGE>
NOTES TO AUDITED FINANCIAL STATEMENTS
Premier Brands, Inc.
For the Years Ended December 31, 1999 and 1998
================================================================================
NOTE H - SUPPLEMENTAL CASH FLOW INFORMATION
Supplemental disclosures of cash flow information for the years ended December
31, 1999 and 1998 are summarized as follows:
Cash paid during the years for interest and income taxes:
1999 1998
---- ----
Income Taxes $ - $ -
Interest $ - $ -
NOTE I - INCOME TAXES
The Company's total deferred tax asset as of December 31, 1999 is as follows:
Net operating loss carryforwards $ 502,650
Valuation allowance (502,650)
-----------
Net deferred tax asset $ -
===========
As of December 31, 1999 the Company had federal net operating loss carryforwards
which expire as follows:
Years Ended
December 31, Federal
------------------ --------------------
2007 $ 237,000
2008 143,000
2009 200,000
2010 75,000
2011 704,000
2012 1,607,000
2013 192,000
2014 193,000
---------
$ 3,351,000
=============
F-15
<PAGE>
NOTES TO AUDITED FINANCIAL STATEMENTS
Premier Brands, Inc.
For the Years Ended December 31, 1999 and 1998
================================================================================
NOTE J - INVESTMENTS
The Company acquired 1,020,000 shares of common stock of Homefinders Holdings,
Inc. during 1997 for $24,500. During 1998, the Company deemed the investment
worthless and returned all of the stock of Homefinders Holdings, Inc. in
exchange for miscellaneous consulting services performed by the company's former
president. Consulting fees performed by the former president of Homefinders
Holdings, Inc. were estimated to be valued at $1,000.
NOTE K - GOING CONCERN
As shown in the accompanying financial statements, the Company has incurred
significant losses from operations and other circumstances which has placed
substantial doubt as to whether the Company can continue as a going concern. The
company ceased normal operation on March 27, 1998 and has not since reported
revenues. The ability of the Company to continue as a going concern is dependent
on locating a merger candidate and obtaining new capital. Management has enacted
a plan of seeking out merger candidates that may add value to the Company and
its shareholders.
F-16
<PAGE>
PART III
ITEM 1. EXHIBITS
(a) Exhibits. Exhibits required to be attached are listed in the Index to
Exhibits beginning on page 33 of this form 10-SB under "Item 2. Description
of Exhibits."
[THIS SPACE HAS BEEN LEFT BLANK INTENTIONALLY]
25
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, this 7th day of March, 2000.
Premier Brands, Inc.
/s/ Bruce M. Pritchett
---------------------------
Name: Bruce M. Pritchett
Title: CEO, President and Director
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
Signature Title Date
/s/ Bruce M. Pritchett
- ----------------------------
Bruce M. Pritchett CEO, President and Director 7 March, 2000
/s/ BonnieJean C. Tippetts
- ----------------------------
BonnieJean C. Tippetts Secretary, Treasurer
and Director 7 March, 2000
/s/ David Wolfson
- -----------------------------
David Wolfson Director 7 March, 2000
26
<PAGE>
ITEM 2. DESCRIPTION OF EXHIBITS.
INDEX TO EXHIBITS
Exhib. Page
No. No. Description
Charter and By-laws
3(i) 28 Articles of Incorporation of North American
Clothing, Inc.
3(ii) 31 Amendment to Articles, Changing name to K. Randolph
International, Inc.
3(iii) 33 Amendment to Articles, Changing name to Premier
Brands, Inc.
3(iv) 35 Amendment to Articles, Authorizing 5,000,000
Shares of Preferred Stock
3(v) 41 By-laws of K. Randolph International, Inc.
Material Contracts
10(i) 58 Stock Repurchase Agreement, dated August 19, 1998,
with Keith Lipscomb
10(ii) 62 Consulting Agreement, dated September 1, 1998,
with Hudson Consulting
10(iii) 93 Subscription Agreement, dated September 1, 1998,
with Grigory Filatov
10(iv) 104 Subscription Agreement, dated September 1, 1998,
with Vasily Zveryansky
10(v) 115 Subscription Agreement, dated September 1, 1998,
with Alexander Alexnovich
10(vi) 126 Subscription Agreement, dated September 1, 1998,
with Andrey Sereda
10(vii) 137 Subscription Agreement, dated September 1, 1998,
with Tatyana Betoeva
10(viii) 148 Subscription Agreement, dated September 1, 1998,
with Yury Abramov
10(ix) 159 Release in Full of All Claims, dated September 15,
1999, from Tim Flatt
Plans of Acquisition
2(i) 161 Acquisition Agreement, dated September 1, 1998,
with F D Import.
2(ii) 173 Rescission Agreement, dated December 2, 1999,
with F D Import. .
27 180 Financial Data Schedule "CE"
27
ARTICLES OF INCORPORATION
OF
NORTH AMERICAN CLOTHING COMPANY INC.
We, the undersigned, natural persons over the age of twenty-one (21)
years, acting as incorporators of a corporation under the Utah Business
Corporation Act, adopt the following Articles of Incorporation for such
corporation.
ARTICLE I
CORPORATE NAME
The name of the corporation is North American Clothing Company Inc.
ARTICLE II
DURATION
The duration of the corporation shall be perpetual.
ARTICLE III
GENERAL PURPOSES
This corporation is organized to develop, produce, distribute, market
and engage in the business of all aspects of seeking investment opportunities in
high technology, medical or natural resource fields, and any and all matters
related or ancillary thereto and to do all things and engage in all lawful
transactions which a corporation organized under the laws of the State of Utah
might do or engage in even though not expressly stated herein.
ARTICLE IV
AUTHORIZED SHARES
The aggregate number of shares the corporation shall have authority to
issue is one hundred million (100,000,000) shares with a par value of ONE MILL
($0.001) per share.
ARTICLE V
COMMENCEMENT OF BUSINESS
The corporation will not commence business until at least ONE THOUSAND
AND NO/1OO DOLLARS ($1,000.00) in cash or property has been received by it as
consideration for the issuance of its shares.
ARTICLE VI
REGISTERED OFFICE AND AGENT
The post office address of the corporation's initial registered office
is 749 Elizabeth Street 84102 and the name of its initial registered agent at
such address is Audrey Anderson.
28
<PAGE>
ARTICLE VII
PREEMPTIVE RIGHTS
No shareholder of this corporation is entitled to any pre-emptive
rights, as such rights have been heretofore defined in common law, to purchase
and/or subscribe for his proportionate part of any shares which may be issued at
any time by this corporation.
ARTICLE VIII
DIRECTORS
The number of directors constituting the initial Board of Directors of
the Corporation is three (3), and the names and addresses of the persons who are
to serve as directors until their successors are elected and shall qualify are:
Audrey Anderson
749 Elizabeth Street
Salt Lake City, Utah 84102
Susan Kent
742 South ll00 East
Salt Lake City, Utah 84102
Todd Anderson
4163 South Highland Drive
Salt Lake City, Utah 84108
ARTICLE IX
INCORPORATORS
The names and addresses of the incorporators are:
Audrey Anderson
749 Elizabeth Street
Salt Lake City, Utah 84102
Susan Kent
742 South 1100 East
Salt Lake City, Utah 84162
Todd Anderson
4163 South Highland Drive
Salt Lake City, Utah 84108
ARTICLE X
NON-ASSESSABILITY
Shares of the corporation shall not be subject to assessment for
payment of the debts of the corporation.
29
<PAGE>
ARTICLE XI
EXEMPTION FROM CORPORATE DEBTS
The private property of the shareholders shall not be subject to the
payment of any corporate debts to any extent whatsoever.
ARTICLE XII
CLASSES OF COMMON STOCK
There shall be only one (1) class of common stock.
DATED this 6th day of August, 1984
/s/ Audrey Anderson
---------------------
Audrey Anderson
/s/ Susan Kent
---------------------
Susan Kent
/s/ Todd Anderson
---------------------
Todd Anderson
STATE OF UTAH )
:ss.
COUNTY OF )
On the 6th day of August, 1984, personally appeared before me Audrey
Anderson, Susan Kent, and Todd Anderson, who being by me first duly sworn,
severally declared that they are the persons who signed the foregoing document
as incorporators and that the statements therein contained are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 6th day
of August, 1984.
/s/ Deanna L. Spillman
----------------------
NOTARY PUBLIC
Residing at Salt Lake City, Utah
My Commission Expires:
8/12/96
30
AMENDMENT
TO ARTICLES OF INCORPORATION
OF
NORTH AMERICAN CLOTHING COMPANY, INC.
(changed herein to "K RANDOLPH INTERNATIONAL, INC.")
In accordance with Section 16-10a-1003, et.seq. of the revised Utah
Business Act, as amended, North American Clothing Company, Inc. (the
"Corporation"), a Utah corporation, does hereby adopt the following amendments
(the "Amendments") to the Articles of Incorporation.
1. The Articles of Incorporation of the Corporation
are hereby amended by deleting Article I in its entirety and inserting the
following in lieu thereof:
ARTICLE I
NAME
The name of the Corporation hereby created shall be:
K RANDOLPH INTERNATIONAL, INC.
2. Except as specifically provided herein, the provisions of the
Corporation's Articles of Incorporation shall remain unamended and shall
continue in full force and effect.
3. By execution of these Articles of Amendment to the Articles of
Incorporation, the president and secretary of the Corporation do hereby certify
that the foregoing Amendments to the Articles of Incorporation were adopted as
Amendments to the original Articles of Incorporation of the Corporation by the
shareholders of said Corporation at a special meeting of the shareholders of the
Corporation held on August 18, 1992. As of August 4 1992, the record date for
such meeting, there was a total of 5,495,000 shares of the Corporation's common
stock issued and outstanding, of which 3,645,000 shares voted for the adoption
of the foregoing Amendments to the Articles of Incorporation, and no shares were
voted against the Amendments.
IN WITNESS WHEREOF, the foregoing Articles of Amendment to the Articles
of Incorporation of North American Clothing Company, Inc., have been excluded
this 25th day of September, 1992.
NORTH AMERICAN CLOTHING COMPANY, INC.
ATTEST:
/s/Brenda Anderson-Lipscomb By /s/ Keith Lipscomb
- ----------------------------- ----------------------------
Brenda Anderson-Lipscomb, Secretary Keith Lipscomb, President
31
<PAGE>
STATE OF CALIFORNIA }
:ss.
COUNTY OF ORANGE }
On this 25TH day of Sept., 1992, personally appeared before me Keith
Lipscomb and Brenda Anderson-Lipscomb who being by my duly sworn did say, each
for themselves, that he, the said Keith Lipscomb, is the president, and she, the
said Brenda Anderson-Lipscomb, is the secretary, respectively, of North American
Clothing Company, Inc., and that they are the persons who executed the foregoing
Articles of Amendment to the Articles of Incorporation for and on behalf of
North American Clothing Company, Inc., and that the statements contained therein
are true.
WITNESS MY HAND AND OFFICIAL SEAL.
/s/Anita G. Carswell
-----------------------
NOTARY PUBLIC
Residing in Huntington Beach, CA 92646
My Commission Expires:
July 12,1993
32
AMENDMENT
TO ARTICLES OF INCORPORATION
OF
K RANDOLPH INTERNATIONAL, INC.
(changed herein to "PREMIER BRANDS, INC.")
In accordance with Sections 16-10a-1003 and 16-10a-1006 of the Utah
Revised Business Corporation Act, K Randolph International, Inc. (the
"Corporation"), a Utah corporation, does hereby adopt the following amendment
(the "Amendment') to the Articles of Incorporation.
1. The Articles of Incorporation of the Corporation are hereby amended by
deleting Article I in its entirety and inserting the following in lieu thereof:
ARTICLE I
NAME
The name of the Corporation created shall be:
PREMIER BRANDS, INC.
2. Except as specifically provided herein, the provisions of the
Corporation's Articles of Incorporation shall remain unamended and shall
continue in full force and effect.
3. By execution of this Amendment to the Articles of Incorporation, the
president and secretary of the Corporation do hereby certify that the foregoing
Amendment to the Articles of Incorporation was adopted as an Amendment to the
original Articles of Incorporation of the Corporation by the shareholders of
said Corporation at a special meeting of the shareholders of the Corporation
held on February 27, 1995. As of February 13, 1995, the record date for such
meeting, there was a total of 8,140,750 shares of the Corporation's common stock
issued and outstanding, of which 5,273,216 shares voted for the adoption of the
foregoing Amendment to the Articles of Incorporation, and no shares were voted
against the Amendment.
DATED as of the 23 day of March, 1995.
K RANDOLPH INTERNATIONAL, INC.
ATTEST:
/s/Steve A Avakian By /s/Keith Lipscomb
--------------------- -------------------------
Steve A. Avakian, Vice President Keith Lipscomb, President
33
<PAGE>
STATE OF California )
COUNTY OF Orange )ss.
On this 23rd day of March, 1995, personally appeared before me, Keith
Lipscomb and Steve A. Avakian, who being by me duly sworn did say that they, the
said Keith Lipscomb and Steve A. Avakina, are the president and vice president,
respectively, of K Randolph International, Inc., and that they are the persons
who executed the foregoing Amendment to the Articles of Incorporation for and on
behalf of K Randolph International, Inc., by authority of resolutions of its
board of directors and shareholders, and they duly acknowledged to me that said
Corporation executed the same.
WITNESS MY HAND AND OFFICIAL SEAL.
/s/ Jeanie J. Ware
-------------------------
Notary Public
Residing at: Huntington Beach, CA
My Commission Expires: 10/23/95
34
AMENDMENT
TO ARTICLES OF INCORPORATION
OF
PREMIER BRANDS, INC.
In accordance with Sections 16-10a-1003 and 16-10a-1006 of the Utah
Revised Business Corporation Act, Premier Brands, Inc., a Utah corporation (the
"Corporation"), does hereby adopt the following amendment (the "Amendment") to
the Articles of Incorporation.
1. Article IV of the Corporation's Articles of Incorporation are
hereby amended so that as amended, Article IV shall be and read as
follows:
"ARTICLE IV
1. The Corporation shall have the authority to issue One Hundred
Million (100,000,000) shares of Common Stock with a par value of One
Mill ($0.001)per share.
2. The Corporation shall also have the authority to issue 5,000,000
Shares of Preferred Stock with a par value of One Mill ($0.001) per
share. The description of the Preferred Stock with the preferences,
conversion and other rights, voting powers, restrictions, limitations
as to dividends, and qualifications and rights thereof are as follows:
(A) Preferred Stock may be issued, from time to time, in one
or more Series, each of such Series to have such terms as are
stated and expressed herein and in the resolutions providing for
the issue of such Series adopted by the Board of Directors as
hereinafter provided.
(B) The Board of Directors, subject to the provisions
hereof, may classify or reclassify any unissued Shares of
Preferred Stock into one or more Series of Preferred Stock by
fixing or altering in any one or more respects, from time, to
time, before issuance of such unissued Shares:
(i) The distinctive designation of such Series and the
number of Shares to constitute such Series;
(ii) The annual dividend rate on the Shares of such
Series, the time of payment, whether or not dividends
thereon shall be cumulative, and, if cumulative, the date or
dates from which such dividends shall be cumulative;
(iii) The price at and any terms and conditions on
which Shares may be redeemed;
35
<PAGE>
(iv) The sinking fund provisions for the redemption or
purchase of Shares;
(v) The amount payable on the Shares of such Series in
the event of voluntary liquidation, dissolution, or winding
up of the Corporation;
(vi) The amount payable on the Shares of such Series in
the event of involuntary liquidation;
(vii) Whether or not the Shares of such Series shall be
convertible into Shares of stock of any other class or
classes, and if so convertible, the terms and conditions of
such conversion;
(viii)The limitations and restrictions, if any, to be
effective while any Shares of such Series are outstanding,
upon the payment of dividends or making of other
distributions on the Common Stock or any other class or
classes of stock of the Corporation ranking junior to the
Shares of such Series;
(ix) The conditions or restrictions, if any, upon the
creation of indebtedness of the Corporation or any
subsidiary and the conditions or restrictions, if any, upon
the issuance of any additional stock (including additional
Shares of such Series or of any other Series) ranking on a
parity with or prior to the Shares of such Series as to
dividends or upon liquidation;
(x) Any right to vote with holders of Shares of any
other Series or class and any right to vote as a class,
either generally or as a condition to specified corporate
action; and
(xi) Such other preferences, rights, restrictions, and
qualifications as shall not be inconsistent herewith.
(C) The Shares of the Corporation's Common Stock may be issued as
a share dividend in respect to payment of a dividend on any Shares of
the Corporation's Preferred Stock or any series or class thereof.
(D) All Shares of any Series of Preferred Stock shall be
identical with each other in all respects, except that Shares of any
one Series issued at different times may differ as to the dates from
which dividends thereon shall be cumulative, if cumulative dividends
have been designated for such Series, and all Series shall rank
equally and be identical in all respects, except as permitted by the
foregoing provisions of Section (2) hereof.
(E) The Preferred Stock is senior to the Common Stock, and the
Common Stock is subject to the rights and preferences of the Preferred
Stock as herein set forth.
(F)(i) The holders of Preferred Stock of each
36
<PAGE>
series shall be entitled to receive, and the Corporation shall be
bound to pay, out of any funds legally available for such purpose,
when and as declared by the Board of Directors, cash dividends thereon
at such rate and payable at such times as shall be fixed and
determined for such Series as herein set forth. Dividends with respect
to each Series of Preferred Stock shall be cumulative or
non-cumulative, as determined by the Board of Directors, and shall
accrue from such date or dates as shall have been fixed and determined
with respect to such Series by the Board of Directors as herein
provided.
(ii) In no event, so long as any Preferred Stock shall
remain outstanding, shall any dividend whatsoever be declared or
paid upon, or any distribution be made or ordered in respect of,
the Common Stock or any other class of stock ranking junior to
the Preferred Stock, or any moneys be set aside for or applied to
the purchase or redemption (through a sinking fund or otherwise)
of Shares of Common Stock or of any other such junior class of
stock, unless:
(a) Full cumulative dividends on the Preferred Stock of
all Series for all past dividend periods shall have been
paid with respect to any outstanding Preferred Shares having
cumulative dividend rights, and the full dividend on all
outstanding Shares of Preferred Stock of all Series for the
then current dividend period, if any, shall have been paid
or declared and set apart for payment; and
(b) The Corporation shall have set aside all amounts,
if any, theretofore required to be set aside as and for
sinking funds, if any, for the Preferred Stock of all Series
for the then current year, and all defaults, if any, in
complying with any such sinking fund requirements in respect
of previous years shall have been made good.
(iii) Subject to the foregoing provisions respecting the
Preferred Stock, and not otherwise, dividends, payable in cash,
stock, or otherwise, as may be determined by the Board of
Directors, may be declared and paid upon the Common Stock, from
time to time, out of any funds legally available therefor, and no
holder of any Shares of any Series of Preferred Stock, as such,
shall be entitled to participate in any such dividend.
(G) The Corporation, at the option of the Board of
Directors, may, at any time permitted by the resolution or
resolutions adopted by the Board of Directors providing for the
issuance of any Series of Preferred Stock, and at the redemption
price per Share fixed and determined for such Series, redeem the
whole or any part of the Shares of such Series at the time
outstanding (the total sum so payable on any such redemption
being herein referred to as the "redemption price").
Notice of every such redemption shall be mailed to the holders of
record of the Shares of such Series so to be redeemed at their
respective addresses as the same shall appear on the books of the
Corporation. Such notice shall be mailed at least 30 days in
advance of the date designated for such redemption to the holders
of record of Shares so to be redeemed. In case of the redemption
of a part only of any Series at the time outstanding, the Shares
of such Series so to be redeemed shall be selected by lot or pro
rate in such manner as the Board of Directors may determine.
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(H) If, on the redemption date specified in such notice, the
funds necessary for such redemption shall have been set aside by
the Corporation, separate and apart from its other funds, in
trust for the pro rata benefit of the holders of the Shares so
called for redemption, then, notwithstanding that any
certificates for Shares of Preferred Stock so called for
redemption shall not have been surrendered for cancellation, the
Shares represented thereby shall no longer be deemed outstanding,
the right to receive dividends thereon shall cease to accrue from
and after the date of redemption so designated, and all rights of
holders of the Shares of Preferred Stock so called for redemption
shall forthwith, after such redemption date, cease and terminate,
excepting only the right of the holders thereof to receive the
redemption price therefor but without interest. Any moneys so set
aside by the Corporation and unclaimed at the end of six years
from the date designated for such redemption shall revert to the
general funds of the Corporation; after which reversion, the
holders of such Shares so called for redemption shall look only
to the Corporation for payment of the redemption price, and such
Shares shall not still be deemed to be outstanding.
(I) Upon any liquidation, dissolution, or winding up of the
Corporation, whether voluntary or involuntary, the Preferred
Stock of each Series shall be entitled, before any distribution
shall be made to the Common Stock or to any other class of stock
junior to the Preferred Stock, to be paid the amount fixed and
determined by the board of Directors for such Series as herein
provided, plus accrued and unpaid dividends thereon to the date
of distribution, but the Preferred Stock shall not be entitled to
any further payment, and any remaining net assets shall be
distributed ratably to the outstanding Common Stock.
If, upon such liquidation, dissolution, or winding up of the
Corporation, whether voluntary or involuntary, the net assets of
the Corporation shall be insufficient to permit the payment to
all outstanding Shares of Preferred Stock of all Series of the
full preferential amounts to which they are respectively
entitled, then the entire net assets of the Corporation shall be
distributed ratably to all outstanding Shares of Preferred Stock
of all Series in proportion to the full preferential amount to
which each Share is entitled. Neither a consolidation nor a
merger of the Corporation with or into any other corporation or
corporations, nor the sale of all or substantially all of the
assets of the Corporation, shall be deemed to be a liquidation,
dissolution, or winding up within the meaning of this section.
(J) The Preferred Stock shall not be convertible, except to
the extent that any one or more Series thereof may be issued with
the privilege of conversion as may be determined by the Board of
Directors prior to issuance of any Shares of such Series as
herein set forth. If the Shares of any Series are so issued with
the privilege of conversion, then, at the option of the
respective holders thereof, the Preferred Stock of such Series
shall be convertible into a number of fully paid and
non-assessable Shares of the Common Stock or any other class of
stock of the Corporation at the conversion rate, or upon payment
to the Corporation of the conversion price, which is in effect
for the Preferred Stock of such Series at the time of such
conversion. The initial conversion rate or conversion price
(including, in the latter case, the number of Shares of Common
Stock or other class of stock issuable upon conversion), and the
terms and conditions of conversion for each Series issued with
the privilege of conversion shall be fixed and determined by the
Board of Directors as hereinafter provided. Such conversion price
or conversion rate, with respect to any such Series, may be
subject, from time to time, to adjustment by virtue of issuance
of securities or rights to purchase securities of the
Corporation, or upon any capital
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reorganization or reclassification of the Common Stock of the
Corporation, or the consolidation or merger of the Corporation,
or the sale, conveyance, lease, of other transfer by the
Corporation of all or substantially all of its property, or in
other circumstances, all to the extent and in the manner fixed
and determined by the Board of Directors as herein set forth.
(K) Shares of any Series of Preferred Stock which have been
issued and reacquired in any manner by the Corporation (including
Shares redeemed, Shares purchased and retired, and Shares which,
if convertible or exchangeable, have been converted into or
exchanged for Shares of stock of any other class, classes, or
Series) shall have the status of authorized and unissued Shares
of Preferred Stock and may be reissued as a part of the Series of
which they were originally a part, or may be reclassified and
reissued as part of a new Series of Preferred Stock to be created
by resolution or resolutions of the Board of Directors, or as
part of any other Series of Preferred Stock, all subject to the
conditions or restrictions on issuance set forth in any
resolution or resolutions adopted by the Board of Directors
provided for the issue of any Series of Preferred Stock.
(L) None of the holders of Preferred Stock of any Series
shall have any voting powers for any purpose, except as may be
specifically required by law, or except as any such right to vote
may be fixed and determined by the Board of Directors prior to
issuance of any Shares of such Series as herein provided.
(M) In order the Board of Directors to establish a Series of
Preferred Stock, the Board of Directors shall adopt a resolution
or resolutions setting forth the designation and the number of
Shares of such Series and the relative rights and preferences
thereof in respect of the foregoing particulars. The Board of
Directors may redesignate any Shares of any Series theretofore
established that have not been issued, or that have been issued
and retired, as Shares of some other Series, or change the
designation of outstanding Shares where desired to prevent
confusion.
(N) For the purposes hereof and of any resolution of the
Board of Directors providing for the classification or
reclassification of any Shares of Preferred Stock:
(i) The term "outstanding," when used in reference to
Shares of stock, shall mean issued Shares, excluding Shares
held by the Corporation or a subsidiary, and Shares called
for redemption; funds for the redemption of which shall have
been deposited in trust;
Subject to the foregoing provisions, dividends may be
declared on the Common Stock, and each Share of Common Stock
shall entitle the holder thereof to one vote in all
proceedings in which action shall be taken by stockholders
of the Corporation."
2. Except as specifically provided herein, the provisions of the
Corporation's Articles of Incorporation shall remain unamended and shall
continue in full force and effect.
3. By execution of this Amendment to the Articles of Incorporation, the
President and Secretary of the Corporation do hereby certify that the foregoing
Amendment to the Articles of Incorporation was adopted as an Amendment to the
original Articles of Incorporation of the Corporation by the shareholders of the
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Corporation on November 8, 1996. As of November 8, 1996, the record date for the
Shareholder action, there were 671,480 shares of the Corporation's Common Stock
issued and outstanding, of which 412,731 shares of the Company's Common Stock
voted for the adoption of the foregoing Amendment to the Articles of
Incorporation, and no shares were voted against the Amendment.
Dated: as of the 8th day of November 1996.
PREMIER BRANDS, INC.
/s/ Keith R. Lipscomb
-----------------------------
Keith R. Lipscomb, President
ATTEST:
/s/ Brenda Anderson-Lipscomb
- -------------------------------
Brenda Anderson-Lipscomb
40
BYLAWS
OF
K RANDOLPH INTERNATIONAL, INC.
A UTAH CORPORATION
41
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TABLE OF CONTENTS
Page
ARTICLE I OFFICES
Section 1.01 Registered Office...........................................1
Section 1.02 Locations of Offices........................................1
ARTICLE II SHAREHOLDERS
Section 2.01 Annual Meeting..............................................1
Section 2.02 Special Meeting.............................................1
Section 2.03 Place of Meetings...........................................1
Section 2.04 Notice of Meetings..........................................2
Section 2.05 Waiver of Notice............................................2
Section 2.06 Fixing Record Date..........................................2
Section 2.07 Voting Lists................................................2
Section 2.08 Quorum......................................................3
Section 2.09 Vote Required...............................................3
Section 2.10 Voting of Stock.............................................3
Section 2.11 Proxies.....................................................3
Section 2.12 Written Consent to Action by Stockholders...................4
ARTICLE III DIRECTORS
Section 3.01 Number, Term, and Qualifications............................4
Section 3.02 Vacancies and Newly Created Directorships...................4
Section 3.03 General Powers..............................................4
Section 3.04 Regular Meetings............................................4
Section 3.05 Special Meetings............................................5
Section 3.06 Meetings by Telephone Conference Call.......................5
Section 3.07 Notice......................................................5
Section 3.08 Quorum......................................................5
Section 3.09 Manner of Acting............................................5
Section 3.10 Compensation................................................5
Section 3.11 Presumption of Assent.......................................5
Section 3.12 Resignations................................................6
Section 3.13 Written Consent to Action by Directors......................6
Section 3.14 Removal.....................................................6
ARTICLE IV OFFICERS
Section 4.01 Number......................................................6
Section 4.02 Election, Term of Office, and Qualification.................6
Section 4.03 Subordinate Officers, Etc...................................7
Section 4.04 Resignation.................................................7
Section 4.05 Removal.....................................................7
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Section 4.06 Vacancies and Newly Created Offices..........................7
Section 4.07 The Chairman of the Board....................................7
Section 4.08 The President................................................7
Section 4.09 The Vice Presidents..........................................8
Section 4.10 The Secretary................................................8
Section 4.11 The Treasurer................................................9
Section 4.12 General Manager.............................................10
Section 4.13 Salaries....................................................10
Section 4.14 Surety Bonds................................................10
ARTICLE V EXECUTION OF INSTRUMENTS, BORROWING OF MONEY,
AND DEPOSIT OF CORPORATE FUNDS
Section 5.01 Execution Instruments.......................................10
Section 5.02 Loans.......................................................11
Section 5.03 Deposits....................................................11
Section 5.04 Checks, Drafts, Etc.........................................11
Section 5.05 Bonds and Debentures........................................11
Section 5.06 Sale, Transfer, Etc. of Securities..........................11
Section 5.07 Proxies.....................................................12
ARTICLE VI CAPITAL SHARES
Section 6.01 Stock Certificates..........................................12
Section 6.02 Transfer of Stock...........................................12
Section 6.03 Regulations.................................................13
Section 6.04 Maintenance of Stock Ledger at Principal
Place of Business...........................................13
Section 6.05 Transfer Agents and Registrars..............................13
Section 6.06 Closing of Transfer Books and Fixing of Record Date.........13
Section 6.07 Lost or Destroyed Certificates..............................14
ARTICLE VII EXECUTIVE COMMITTEE AND OTHER COMMITTEES
Section 7.01 How Constituted.............................................14
Section 7.02 Powers......................................................14
Section 7.03 Proceedings.................................................14
Section 7.04 Quorum and Manner of Acting.................................14
Section 7.05 Resignations................................................15
Section 7.06 Removal.....................................................15
Section 7.07 Vacancies...................................................15
Section 7.08 Compensation................................................15
ARTICLE VIII INDEMNIFICATION, INSURANCE, AND OFFICER
AND DIRECTOR CONTRACTS
Section 8.01 Indemnification: Third Party Actions .......................15
Section 8.02 Indemnification: Corporate Actions..........................16
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Section 8.03 Determination...............................................16
Section 8.04 Advances....................................................16
Section 8.05 Scope of Indemnification....................................17
Section 8.06 Insurance...................................................17
Section 8.07 Officer and Director Contracts..............................17
ARTICLE IX FISCAL YEAR.................................................17
ARTICLE X DIVIDENDS...................................................18
ARTICLE XI AMENDMENTS..................................................18
CERTIFICATE OF SECRETARY......................................................18
44
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BYLAWS
OF
K RANDOLPH INTERNATIONAL, INC.
ARTICLE I
OFFICES
Section 1.01 Registered Office. The registered office shall be in the
city of Salt Lake, County of Salt Lake, state of Utah.
Section 1.02 Locations of Offices. The corporation may also have
offices at such other places both within and without the state of Utah as the
board of directors may from time to time determine or the business of the
corporation may require.
ARTICLE II
STOCKHOLDERS
Section 2.01 Annual Meeting. The annual meeting of the stockholders
shall be held on the second Tuesday of the third month following the anniversary
of incorporation or at such other time designated by the board of directors and
as is provided for in the notice of the meeting, provided that whenever such
date falls on a legal holiday, the meeting shall be held on the next succeeding
business day, beginning with the year following the filing of the articles of
incorporation, for the purpose of electing directors and for the transaction of
such other business as may come before the meeting. If the election of directors
shall not be held on the day designated herein for the annual meeting of the
stockholders, or at any adjournment thereof, the board of directors shall cause
the election to be held at a special meeting of the stockholders as soon
thereafter as may be convenient.
Section 2.02 Special Meetings. Special meetings of the stockholders may
be called at any time by the chairman of the board, the president, or by the
board of directors, or in their absence or disability, by a vice president, or
by the secretary, upon the written request of the holders of not less than
one-tenth of all the shares entitled to vote at the meeting, such written
request to state the purpose or purposes of the meeting and to be delivered to
the president or secretary. In case of failure to call such meeting within 90
days after such request, the stockholder requesting stock may call the same.
Section 2.03 Place of Meetings. The board of directors may designate
any place, either within or without the state of incorporation, as the place of
meeting for any annual meeting or for any special meeting called by the board of
directors. A waiver of notice signed by all stockholders entitled to vote at a
meeting may designate any place, either within or without the state of
incorporation, as the place for the holding of such meeting. If no designation
is made, the place of meeting shall be at the principal office of the
corporation.
Section 2.04 Notice of Meetings. The secretary or assistant secretary,
if any, shall cause notice of the time, place and purpose or purposes of all
meetings of the stockholders (whether annual or special) to be mailed at least
ten days, but not more than fifty days, prior to the meeting, to each
stockholder of record entitled to vote.
Section 2.05 Waiver of Notice. Any stockholder may waive notice of any
meeting of stockholders
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(however called or noticed, whether or not called or noticed and whether before,
during, or after the meeting), by signing a written waiver of notice or a
consent to the holding of such meeting, or an approval of the minutes thereof.
Attendance at a meeting, in person or by proxy, shall constitute waiver of all
defects of notice regardless of whether waiver, consent, or approval is signed
or any objections are made, unless attendance is solely for the purpose of
objecting, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. All such waivers,
consents, or approvals shall be made a part of the minutes of the meeting.
Section 2.06 Fixing Record Date. For the purpose of determining
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or stockholders entitled to receive payment of any dividend
or other distribution or allotment of any rights or entitled to exercise any
rights in respect to any change, conversion, or exchange of stock, or for the
purpose of any other lawful action, the board of directors may fix in advance a
date as the record date for any such determination of stockholders, such date in
any case to be not more than fifty days and, in case of a meeting of
stockholders, not less than ten days prior to the date on which the particular
action requiring such determination of stockholders is to be taken. If no record
date is fixed for the determination of stockholders entitled to notice of or to
vote at a meeting, the day preceding the date on which notice of the meeting is
mailed shall be the record date. For any other purpose, the record date shall be
the close of business on the date on which The resolution of the board of
directors pertaining thereto is adopted. When a determination of stockholders
entitled to vote at any meeting of stockholders has been made as provided in
this section, such determination shall apply to any adjournment thereof Failure
to comply with this section shall not affect the validity of any action taken at
a meting of stockholders.
Section 2.07 Voting Lists. The officers of the corporation shall cause
to be prepared from the stock ledger at least ten days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at such
meeting or any adjournment thereof, arranged in alphabetical order, and showing
the address of each stockholder and the number of shares registered in the name
of each stockholder. Such list shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary business
hours, for a period of at least ten days prior to the meeting, either at a place
within the city where the meeting is to be held, which place shall be specified
in the notice of the meeting, or, if not specified, at the place where the
meeting is to be held. The list shall also be produced and kept at the time and
place of the viewing during the whole time thereof, and may be inspected by any
stockholder who is present. The original stock ledger shall be the only evidence
as to who are the stockholders entitled to examine the stock ledger, the list
required by this section, or the books of the corporation, or to vote in person
or by proxy at any meeting of stockholders.
Section 2.08 Quorum. Stock representing one-half of the voting power of
all outstanding stock of the corporation entitled to vote, present in person or
represented by proxy, shall constitute quorum at all meetings of the
stockholders for the transaction of business, except as otherwise provided by
statute or by the articles of incorporation. If, however, such quorum shall not
be present or represented at any meeting of the stockholders, the stockholders
entitled to vote thereat, present in person or represented by proxy, shall have
power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented. At
such adjourned meeting at which a quorum shall be present or represented any
business may be transacted which might have been transacted at the meeting as
originally notified. If the adjournment is for more than 30 days, or if after
the adjournment a new record date is fixed for the adjourned meeting, a notice
of the adjourned meeting shall be given to each stockholder or record entitled
to vote at the meeting.
Section 2.09 Vote Required. When a quorum is present at an y meeting,
the vote of the holders of stock having a majority of the voting power present
in person or represented by proxy shall decide any question brought before such
meeting, unless the question is one on which by express provision of the
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statutes of the State of Utah or of the articles of incorporation a different
vote is required, in which case such express provision shall govern and control
the decision of such question.
Section 2.10 Voting of Stock. Unless otherwise provided in the articles
of incorporation, each stockholder shall at every meeting of the stockholders be
entitled to one vote in person or by proxy for each share of the capital stock
having voting power held by such stockholder, subject to the modification of
such voting rights of any class or classes of the corporation's capital stock by
the articles of incorporation.
Section 2.11 Proxies. At each meeting of the stockholders, each
shareholder entitled to vote shall be entitled to vote in person or by proxy,
provided, however, that the right to vote by proxy shall exist only in case the
instrument authorizing such proxy to act shall have been executed in writing by
the registered holder or holders of such stock, as the case may be, as shown on
the stock ledger of the corporation or by his attorney thereunto duly authorized
in writing. Such instrument authorizing a proxy to act shall be delivered at the
beginning of such meeting to the secretary of the corporation or to such other
officer or person who may, in the absence of the secretary, be acting as
secretary of the meeting. In the event that any such instrument shall designate
two or more persons to act as proxy, a majority of such persons present at the
meeting, or, if only one be present, that one shall (unless the instillment
shall otherwise provide) have all of the powers confirm by the instrument upon
all persons so designated. Persons holding stock in a fiduciary capacity shall
be entitled to vote the stock so held, and the persons whose shares are pledged
shall be entitled to vote, unless in the transfer by the pledgor on the books of
the corporation he shall have expressly empowered the pledgee to vote therein,
in which case the pledgee, or his proxy, may represent such stock and vote
thereon. No proxy shall be voted or acted on after 11 months from its date,
unless the proxy provides for a longer period.
Section 2.12 Written Consent to Action by Stockholders. Unless
otherwise provided in the articles of incorporation, any action required to be
taken at any annual or special meeting of stockholders of the corporation, or
any action which may be taken at any annual or special meeting of such
stockholders, may be taken without, a meeting, without prior notice and without
a vote, if a consent in writing setting forth the action so taken, shall be
signed by all of the holders of outstanding stock entitled to vote with respect
to the subject matter thereof.
ARTICLE III
DIRECTORS
Section 3.01 Number, Term, and Qualifications. The number of directors
which shall constitute the whole board shall be not less than three nor more
than nine. Within the limits above specified, the number of directors shall be
determined by resolution of the board of directors or by the stockholders at the
annual meeting of the stockholders or a special meeting called for such purpose,
except as provided in section 3.02 of this article, and each director elected
shall hold office until his successor is elected and qualified. Directors need
not be residents of the state of incorporation or stockholders of the
corporation.
Section 3.02 Vacancies and Newly Created Directorships. Vacancies and
newly created directorships resulting from any increase in the authorized number
of directors may be filled by a majority of the Directors then in office, though
less than a quorum, or by a sole remaining director, and the directors so chosen
shall hold office until the next annual election and until their successors are
duly elected and shall qualify. If there are no directors in office, then an
election of directors may be held in the manner provided by statute.
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Section 3.03 General Powers. The business of the corporation shall be
managed under the direction of its board of directors which may exercise all
such powers of the corporation and do all such lawful acts and things as are not
by statute, the articles of incorporation, or bylaws directed or required to be
exercised or done by the stockholder.
Section 3.04 Regular Meetings. A regular meeting of the board of
directors shall be held without other notice than this bylaw immediately
following, and at the same place as, the annual meeting of shareholders. The
board of directors may provide by resolution, the time and place either within
or without the state of incorporation, for the holding of additional regular
meetings without other notice than such resolution.
Section 3.05 Special Meetings. Special meetings of the board of
directors may be called by or at the request of the chairman of the board,
president, vice president or any two directors. The person or persons authorized
to call special meetings of the board of directors may fix any place, either
within or without the state of incorporation, as the place for holding any
special meeting of the board of directors called by them.
Section 3.06 Meetings by Telephone Conference Call. Members of the
board of directors may participate in a meeting of the board of directors or a
committee of the board of directors by means of conference telephone or similar
communication equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this
section shall constitute presence in person at such meeting.
Section 3.07 Notice. Notice of any special meeting shall be given at
least five days prior thereto by written notice delivered personally or mailed
to each director at his regular business address or residence, or by telegram.
If mailed, such notice shall be deemed to be delivered when deposited in United
States Mail so addressed, with postage thereon prepaid. If notice be given by
telegram, such notice shall be deemed to be delivered when the telegram is
delivered to the telegraph company. Any director may waive notice of any
meeting. Attendance of a director at a meeting shall constitute a waiver of
notice of such meeting except where a director attends a meeting solely for the
express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened.
Section 3.08 Quorum. A majority of the number of directors shall
constitute a quorum for the transaction of business at any meeting of the board
of directors, but if less thin a majority is present at a meeting, a majority of
the director present may adjourn the meeting from time to time without further
notice.
Section 3.09 Manner of Acting. The act of a majority of the directors
Present at a meeting at which a quorum is present shall be the act of the board
of directors, and individual directors shall have no power as such.
Section 3.10 Compensation. By resolution of the board of directors, the
directors may be paid their expenses, if any, of attendance at each meeting of
the board of directors, and may be paid a fixed sum for attendance at each
meeting of the board of directors or a stated salary as director. No such
payment shall preclude any director from serving the corporation in any other
capacity and receiving compensation therefor.
Section 3.11 Presumption of Assent. A director of the corporation who
is present at a meeting of the board of directors at which action on any
corporate matter is taken shall be presumed to have assented to
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the action taken unless his dissent shall be entered in the minutes of the
meeting, unless he shall file his written dissent to such action with The person
acting as the secretary of the meeting before the adjournment thereof, or shall
forward such dissent by registered or certified mail to the secretary of the
corporation immediately after the adjournment of the meeting. Such right to
dissent shall not apply to a director who voted in favor of such action.
Section 3.12 Resignations. A director may resign at any time by
delivering a written resignation to either the president, a vice president, the
secretary or assistant secretary, if any. The resignation shall become effective
on its acceptance by the board of directors provided that if the board has not
acted thereon within ten days from the date presented, the resignation shall be
deemed accepted.
Section 3.13 Written Consent to Action by Directors. Any action
required to be taken at a meeting of the directors of the corporation or any
other action which May be taken at a meeting of the directors or of a committee,
may be taken without a meeting, if a consent in writing, setting forth the
action so taken, shall be signed by all of the directors, or all of the members
of the committee, as the case may be. Such consent shall have the same legal
effect as a unanimous vote of all the directors or members of the committee.
Section 3.14 Removal. At a meeting expressly caused for that purpose,
one or more directors may be removed by a vote of a majority of the shares of
outstanding stock of the corporation entitled to vote at in election of
directors.
ARTICLE IV
OFFICERS
Section 4.01 Number. The officers of the corporation shall be a
president, a secretary, a treasurer and such other officers as may be appointed
by the board of directors, including a chairman of the board, one or more vice
presidents, an assistant secretary, an assistant treasurer, or a general
manager.
Section 4.02 Election, Term of Office and Qualifications. The officers
shall be chosen by the board of directors annually at its annual meeting. In the
event of failure to choose officers at an annual meeting of the board of
directors, officers may be chosen at any regular or special meeting of the board
of directors. Each such officer (whether chosen at an annual meeting of the
board of directors to fill a vacancy or otherwise) shall hold his office until
the next ensuing annual meeting of the board of directors and until his
successor shall have been chosen and qualified, or until his death or until his
resignation or removal in the manner provided in these bylaws. Any one person
may hold any two or more of such offices except that the president shall not
also be the secretary. No person holding two or more offices shall act in or
execute any instrument in the capacity of more than one office. The chairman of
the board, if any, shall be and remain director of the corporation during the
term of his office. No other officer need be a director.
Section 4.03 Subordinate Officers, Etc. The board of directors from
time to time may appoint such other officers or agents as it may deem advisable,
each of whom shall have such title, hold office for such period, have such
authority and perform such duties as the board of directors from time to time
may determine. The board of directors from time to time may delegate to any
officer or agent the power to appoint any such subordinate officer or agents and
to prescribe their respective titles, terms of office, authorities and duties.
Subordinate officers need not be stockholders or directors.
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Section 4.04 Resignations. Any officer may resign at any time by
delivering a written resignation to the board of directors, the president, or
the secretary. Officers otherwise specified therein, such resignation shall take
effect upon delivery.
Section 4.05 Removal. Any officer may be removed from office at any
special meeting of the board of directors called for that purpose or at a
regular meeting, by the vote of a majority of the directors, with or without
cause. Any officer or agent appointed in accordance with the provisions of
section 4.03 hereof may also be removed, either with or without cause, by any
officer upon whom such power of removal shall have been conferred by the board
of directors.
Section 4.06 Vacancies and Newly Created Offices. If any vacancy shall
occur in any office by reason of death, resignation, removal, disqualification
or any other cause, or If a now office shall be created, then such vacancies or
newly created offices may be filled by the board of directors at any regular at
special meeting.
Section 4.07 The Chairman of the Board. The chairman of the board, if
there by such an officer, shall have the following powers and duties:
(a) He shall preside at all stockholders meetings;
(b) He shall preside at all meetings of the board of directors and
(c) He shall be a member of the executive committee, if any.
Section 4.08 The President. The president shall have the following
powers and duties:
(a) If no general manager has been appointed, he shall be the chief
executive officer of the corporation, and, subject to the direction of
the board of directors, shall have general charge of the business
affairs and property of the corporation and general supervision over
its officers, employees and agents;
(b) If no chairman of the board has been chosen, or if such officer is
absent or disabled, he shall preside at meetings of dm stockholders and
board of directors;
(c) He shall be a member of the executive committee, if any;
(d) He shall be empowered to sign certificates representing stock of
the corporation, the issuance of which shall have been authorized by
the board of directors; and
(e) He shall have all power and perform all duties normally incident to
the office of a president of a corporation and shall exercise such
other powers and perform such other duties as from time to time may be
assigned to him by the board of directors.
Section 4.09 The Vice President. The board of directors may, from time
to time, designate and elect one or more vice presidents, one of whom may be
designated to serve as executive vice president. Each vice president shall have
such powers and perform such duties as from time to time may be assigned to him
by the board of directors or the president. At the request or in the absence or
disability of the president, the executive vice president or, in the absence or
disability of the executive vice president, the vice president
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designated by the board of directors or (in the absence of such designation by
the board of directors) by the president, as senior vice president, shall
perform all the dudes of the president and when so acting, shall have all the
powers of, and be subject to all the restrictions on, the president.
Section 4.10 The Secretary. The secretary shall have the following
powers and duties:
(a) He shall keep or cause to be kept a record of all of the
proceedings of the meetings of the stockholders and of the board of
directors in books provided for that purpose;
(b) He shall cause all notices to be duly given in accordance with the
provisions of than bylaws and as required by statute;
(c) He shall be the custodian of the records and of the seal of the
corporation, and shall cause such seal (or a facsimile thereof) to be
affixed to all certificates representing stock of the corporation
prior to the issuance thereof and to all instruments, the execution of
which on behalf of the corporation under its seal shall have been duly
authorized in accordance with these bylaws, and when so affixed he may
attest the same;
(d) He shall see that the books, reports, statements, certificates and
other documents and records required by statute arc properly kept and
filed;
(e) He shall have charge of the stock ledger of the corporation and
cause the such books to be kept in such manner as to show at any time
the amount of the shares of the corporation of each class issued and
outstanding, the manner in which and the time when such stock was paid
for, the names alphabetically arranged and the addresses of the
holders of record thereof, the number of shares held by each holder
and time when each became such holder of record; and he she exhibit at
all reasonable times to any director, on application, the original or
duplicate stock ledger. He shall cause the stock ledger referred to in
section 6.04 hereof to be kept and exhibited at the principal office
of the corporation, or at such other place as the board of directors
shall determine, in the manner and for the purpose provided in such
section;
(f) He shall be empowered to sign certificates representing stock of
the corporation, the issuance of which shall have been authorized by
the board of directors; and
(g) He shall perform in general all duties incident to the office of
secretary and such other duties as are given to him by these bylaws or
as from time to time may be assigned to him by the board of directors
or the president.
Section 4.11 The Treasurer. The Treasurer shall have the following
powers and duties:
(a) He shall have charge and supervision over and be responsible for
the monies, securities, receipts and disbursements of the corporation;
(b) He shall cause the monies and other valuable effects of the
corporation to be deposited in the name and to the credit of the
corporation in such banks or trust companies or with such banks or
other depositories as shall be selected in accordance with section
5.03 hereof.
(c) He shall cause the monies of the corporation to be disbursed by
checks or drafts (signed as
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provided in section 5.04 hereof) drawn upon the authorized
depositories of the corporation, and cause to be taken and preserved
property vouchers for all monies disbursed;
(d) He shall render to the board of directors or the president,
whenever requested, a statement of the financial condition of the
corporation and of all of his transactions as treasurer, and render a
full financial report at the annual meeting of the stockholders, if
called on to do so,
(e) He shall cause to be kept correct books. of account of all the
business and transactions of the corporation and exhibit such books to
any directors on request during business hours;
(f) He shall be empowered from time to time to require from all
officers or agents of the corporation reports or statements giving
such information as he may desire with respect to any and all
financial transactions of the corporation; and
(g) He shall perform in general all duties incidental to the office of
treasurer and such other duties as are given to him by these bylaws or
as from time to time may be assigned to him by the board of directors
or the president.
Section 4.12 General Manager. The board of directors may employ and
appoint a general manager who may, or may not be one of the officers or
directors of the corporation. The general manager, if any, shall have the
following powers and duties:
(a) He shall be the chief executive officer of the corporation and,
subject to the directions of the board of directors, shall have
general charge of the business affairs and property of the corporation
and general supervision over its officers, employees and agents;
(b) He shall have the exclusive management of the business of the
corporation and of all of its dealings, but at all times subject to
the control of the board of directors;
(c) Subject to the approval of the board of directors or the executive
committee, If any, he shall employ all employees of the corporation,
or delegate such employment to subordinate officer or such division
chiefs, and shall have authority to discharge any person so employed;
and
(d) He shall make a report to the president and directors quarterly,
or more often if required to do so, setting forth the result of the
operations under his charge, together with suggestions looking to the
improvement and betterment of the condition of the corporation, and
shall perform such other duties as the board of directors shall
require.
Section 4.13 Salaries. The salaries or other compensation of the
officers of the corporation shall be fixed from time to time by the board of
directors except that the board of directors may delegate to any person or group
of persons the power to fix the salaries or other compensation of any
subordinate officers or the agents appointed in accordance with the provision of
Section 4.03 hereof. No officer shall be prevented from receiving any such
salary or compensation by reason of the fact that he is also a director of the
corporation.
Section 4.14 Surety Bonds. In case the board of directors shall so
require, any officer or agent of the corporation shall execute to the
corporation a bond in such sums and with such surety or sureties as the board of
directors may direct, conditioned upon the faithful performance of his duties to
the corporation, including responsibility for negligence and for the accounting
of all property, monies or securities of the corporation which may come into his
hands.
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ARTICLE V
EXECUTION OF INSTRUMENTS, BORROWING OF MONEY
AND DEPOSIT OF CORPORATE FUNDS
Section 5.01 Execution of Instruments. Subject to any limitation
contained in the articles of incorporation or the bylaws, the president or any
vice president or the general manager, if any, may, in the name and on behalf of
the corporation, execute and deliver any contract or other instrument authorized
in writing by the board of directors. The board of directors may, subject to any
limitation contained in the articles of incorporation or in these bylaws,
authorize in writing any officer or agent to execute and deliver any contract or
other instrument in the name and on behalf of the corporation; any such
authorization may be general or confined to specific instruments.
Section 5.02 Loans. No loan or advance shall be contracted on behalf of
the corporation, no negotiable paper or other evidence of its obligation under
any loan or advance shall be issued in its name, and no property of the
corporation shall be mortgaged, pledged, hypothecated, transferred or conveyed
as security for the payment of any loan, advance, indebtedness or liability of
the corporation unless and except as authorized by the board of directors. Any
such authorization may be general or confined to specific instances.
Section 5.03 Deposits. All monies of the corporation not otherwise
employed shall be deposited from time to time to its credit in such banks or
trust companies or with such bankers or other depositories as the board of
directors may select, or as from time to time may be selected by any officer or
agent authorized to do so by the board of directors.
Section 5.04 Checks, Drafts, Etc. All notes, drafts, acceptances,
checks, endorsements, and, subject to the provisions of these bylaws, evidences
of indebtedness of the corporation shall be signed by such officer or officer or
such agent or agents of the corporation and in such manner as the board of
directors from time to time may determine. Endorsements for deposit to the
credit of the corporation in any of its duly authorized depositories shall be in
such manner as the board of directors from time to time may determine.
Section 5.05 Bonds and Debentures. Every bond and debenture issued by
the corporation shall be evidenced by an appropriate instrument which shall be
signed by the president or a vice president and by the secretary and sealed with
the seal of the corporation. The seal may be a facsimile, engraved or printed.
Where such bond or debenture is authenticated with the manual signature of an
authorized officer of the corporation or other trustee designated by the
indenture of trust or other agreement under which such security is issued, the
signature of any of the corporation's officers named thereon may be a facsimile.
In case any officer who signed, or whose facsimile signature has been used on
any such bond or debenture, shall cease to be an officer of the corporation for
any reason before the same has been delivered by the corporation, such bond or
debenture may nevertheless be adopted by the corporation and issued and
delivered as though the person who signed it or whose facsimile signature has
been used hereon had not ceased to be such officer.
Section 5.06 Sale, Transfer Etc. of Securities. Sales, transfers,
endorsements and assignments of shares, bonds and other securities owned by or
standing in the name of the corporation, and the execution and delivery on
behalf of the corporation of any and all instruments in writing incident to any
such sale,
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transfer, endorsement or assignment, shall be effected by the president, or by
any vice president, together with the secretary, or by any officer or agent
thereunto authorized by the board of directors.
Section 5.07 Proxies. Proxies to vote with respect to shares of other
corporations owned by or standing in the name of the corporation shall be
executed and delivered on behalf of the corporation by the president or any vice
president and the secretary or assistant secretary of the corporation, or by any
officer or agent thereunder authorized by the board of directors.
ARTICLE VI
CAPITAL SHARES
Section 6.01 Share Certificates. Every holder of stock in the
corporation shall be entitled to have a certificate, signed by the president or
any vice president and the secretary or assistant secretary, and sealed with the
seal (which may be a facsimile, engraved or printed) of the corporation,
certifying the number and kind, class or series of stock owned by him in the
corporation; provided however, that where such a certificate is countersigned by
(a) a transfer agent or any assistant transfer agent, or (b) registered by a
registrar, the signature of any may be a facsimile. In case any officer who
shall have signed, or whose facsimile signature or signatures shall have been
used on any such certificate, shall cease to be such officer of the corporation,
for any reason, before the delivery of such certificate by the corporation, such
certificate may nevertheless be adopted by the corporation and be issued and
delivered as though the person who signed it, or whose facsimile signature or
signatures shall have been used thereon, has not sued to be such officer.
Certificates representing stock of the corporation still be in such form as
provided by the statutes of the state of incorporation. There shall be entered
upon the stock books of the corporation at the time of issuance of each stock,
the number of the certificate issued, the name and address of the person owning
the stock represented thereby, the number and kind, class or series of such
stock and the date of issuance thereof. Every certificate exchanged or returned
to the corporation shall be marked "canceled" with the date of cancellation.
Section 6.02 Transfer of Stock. Transfers of stock of the corporation
shall be made on the books of the corporation by the holder of record thereof,
or by his attorney thereunto duly authorized by a power of attorney duly
executed in writing and filed with the secretary of the corporation or any of
its transfer agents, and upon surrender of the certificate or certificates,
properly endorsed or accompanied by proper instruments of transfer, representing
such stock. Except as provided by law, the corporation and transfer agents and
registers, if any, shall be entitled to treat the holder of record of any stock
as the absolute owner thereof for all purposes, and accordingly shall not be
bound to recognize any legal, equitable or other claim to or interest in such
stock on the part of any other person whether or not it or they shall have
express or other notice thereof
Section 6.03 Regulations. Subject to the provisions of this section and
of the articles of incorporation, the board of directors may make such rules and
regulations as they may deem expedient concerning the issuance, transfer,
redemption and registration of certificates for stock of the corporations
Section 6.04 Maintenance of Stock Ledger at Principal Place of
Business. A stock ledger (or books where more than one kind, class or series of
stock is outstanding) shall be kept at the principal place of business of the
corporation. or at such other place as the board of directors shall determine,
containing the names alphabetically arranged of original stockholders of the
corporation, their addresses, their interest, the amount paid on their shares,
and all transfers thereof and the number and class of stock held by each. Such
stock ledgers shall at all reasonable hours be subject to inspection by persons
entitled by law to inspect
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the same.
Section 6.05 Transfer Agents and Registrars. The board of directors may
appoint one or more transfer agents and one or more registrars with respect to
the certificates representing stock of the corporation, and may require all such
certificates to bear the signature of either or both the board of directors may
from time to time define the respective duties of such transfer agents and
registrars. No certificate for stock shall be valid until countersigned by a
transfer agent, if at the date appearing thereon.
ARTICLE VII
EXECUTIVE COMMITTEE AND OTHER COMMITTEES
Section 7.01 How Constituted. The board of directors may designate an
executive committee and such other committees as the board of directors may deem
appropriate, each of which committee shall consist of one or more directors.
Members of the executive committee and of any such other committee shall be
designated annually at the annual meeting of the board of directors, provided,
however, that at any time the board of directors may abolish or reconstitute the
executive committee and of any such other committee shall hold office until his
successor shall have been designated or until his resignation or removal in the
manner provided in these bylaws.
Section 7.02 Powers. During the intervals between meetings of the board
of directors, the executive committee shall have and may exercise all powers of
the board of directors in the management of the business and affairs of the
corporation, except for the power to fill vacancies in the board of directors or
to amend than bylaws, and except for such powers as by law may not be delegated
by the board of directors to an executive committee.
Section 7.03 Proceedings. The executive committee, and such other
committees as may be designated hereunder by the board of directors, may fix its
own presiding and recording officer or officers, and may meet at such place or
places, at such time or times and upon such notice (or without notice) as it
shall determine from time to time. It will keep a record of its proceedings and
shall report such proceedings to the board of directors at the meeting of the
board of directors next following.
Section 7.04 Quorum and Manner of Acting. Al all meetings of the
executive committee, and of such other committees as may be designated hereunder
by the board of directors, the presence of members constituting a majority of
the total authorized membership of the committee shall be necessary and
sufficient to constitute a quorum for the transaction of business, and the act
of a majority of the members present at any meeting at which a quorum is present
shall be the act of such committee. The members of the executive committee, and
of such other committees as may be designated hereunder by the board of
directors, shall act only as a committee and the individual members thereof
shall have no powers as such.
Section 7.05 Resignations. Any member of the executive committee, and
of such other committee as may be designated hereunder by the board of
directors, may resign at any time by delivering a written resignation to either
the president the secretary, or assistant secretary, or to the presiding officer
of the committee of which he is a member, if any shall have been appointed and
shall be in office. Unless otherwise specified therein, such resignation shall
take effect upon delivery.
Section 7.06 Removal. No board of directors may at any time remove any
member of the executive committee or of any other committee designated by it
hereunder either for or without cause.
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Section 7.07 Vacancies. If any vacancy shall occur in the executive
committee or of any other committee designated by the board of directors
hereunder, by reason of disqualification, death, resignation. removal or
otherwise, the remaining members shall, until the filling of such vacancy,
constitute the then total authorized membership of the committee and continued
to act, unless such committee consisted of more than one member prior to the
vacancy or vacancies and is left with only one member as a result thereof. Such
vacancy may be failed at any meeting of the board or directors.
Section 7.08 Compensation. The board of directors may allow a fixed sum
and expenses of attendance to any member of the executive committee, or of any
other committee designated by it hereunder, who is not an active salaried
employee of the corporation for attendance at each meeting of the said
committee.
ARTICLE VIII
INDEMNIFICATION, INSURANCE, AND OFFICER AND DIRECTOR CONTRACTS
Section 8.01 Indemnification: Third Party Actions. The corporation
shall have the power to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed action,
suit, or proceedings, whether civil, criminal, administrative, or investigative,
except an action by or in the right of the corporation, by reason of the fact
that he is or was a director, officer, employee, or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee, or agent of another corporation, partnership, joint venture, trust, or
other enterprise, against expenses including attorney's fees, judgments, fines,
and amounts paid in settlement actually and reasonably incurred by him in
connection with the action, suit, or proceeding, if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best interests
of the corporation, and, with respect to any criminal action or proceeding, had
no reasonable cause to believe his conduct was unlawful. The termination of any
action, suit, or proceeding by judgment, order, settlement, conviction, or on a
plea of nolo contendere or its equivalent, does not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding, he had
reasonable cause to believe that his conduct was unlawful.
Section 8.02 Indemnification: Corporate Actions. The corporation shall
have the power to indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending, or completed action or suit by or in
the right of the corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, employee, or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise, against expenses, including attorney's
fees, actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and except that no indemnification shall be made in respect of any,
claim, issue, or matter as to which such person shall have been adjudged to be
liable to the corporation, unless and only to the extent that the court in which
the action or suit was brought shall determine on application that, despite the
adjudication of liability but in view of all circumstances of the case, the
person is fairly and reasonably entitled to indemnity for such expenses as the
court deems proper.
Section 8.03 Determination. To the extent that a director, officer,
employee, or agent of the corporation has been successful on the merits or
otherwise in defense of any action, suit, or proceeding referred to in Sections
8.01 and 8.02 hereof, or in defense of any claim, issue, or matter therein, he
shall be
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indemnified against expenses, including attorney's fees, actually and reasonably
incurred by him in connection the defense. Any indemnification under sections
8.01 and 8.02, unless ordered by a court, shall be made by the corporation only
as authorized in the specific case on a determination that indemnification of
the director, officer, employee, or agent is proper in the circumstances because
he has met the applicable standard of conduct set forth in sections 8.01 or
8.02. The determination must be made by the
ARTICLE X
DIVIDENDS
The board of directors may from time to time declare, and the
corporation may pay, dividends on its outstanding stock in the manner and upon
the terms and conditions provided by the articles of incorporation and by law.
ARTICLE XI
AMENDMENTS
All bylaws of the corporation, whether adopted by the board of
directors or the stockholders, shall be subject to amendment, alteration or
repeal, and new bylaws may be made, except that no bylaw adopted or amended by
the stockholders shall be altered or repealed by the board of directors.
CERTIFICATE OF SECRETARY
The undersigned does hereby certify that she is the secretary of K
Randolph International, Inc., a corporation duly organized under and by virtue
of the laws of the State of Utah; that the above and foregoing bylaws of said
corporation were duly and regularly adopted as such by the board of directors of
said corporation by unanimous consent dated August 18, 1992, and that the above
and foregoing bylaws are now in full force and effect and supercede and replace
any prior bylaws of the corporation..
DATED this 25th day of September, 1992
/s/ Brenda Anderson-Lipscomb
-------------------------------------
Brenda Anderson-Lipscomb, Secretary
57
STOCK REPURCHASE AGREEMENT
THIS STOCK REPURCHASE AGREEMENT (this "Agreement") is made effective as of
August 19,1998, by and between Premier Brands, Inc., a Utah corporation
("Premier"), with its principal place of business at 268 West 400 South, Suite
300, Salt Lake City, Utah 84 1 01 and Keith R. Lipscomb ("Keith"), residing at
9571 Onset Circle, Huntington Beach, California 92646.
PREMISES
A. Keith owns seven hundred thirty three thousand sixty (733,060)
pre-reverse split shares of common stock of Premier (the "Shares").
B. Premier is interested in reacquiring the Shares from Keith in
exchange for retention by Keith of ownership of a certain quantity of
sports trading cards and of two (2) parcels of land situated on the
Island of Hawaii in the State of Hawaii.
AGREEMENT
BASED on the above Premises, which are hereby incorporated by this
reference and in consideration of the mutual promises contained herein, the
benefits to be derived by each party hereunder and other good and valuable
consideration, the sufficiency of which is hereby expressly acknowledged, Keith
and Premier agree as follows:
1. PURPOSE
On the basis of the representations contained herein and subject to the
terms and conditions set forth herein, Premier agrees to repurchase the Shares
from Keith in exchange for retention by Keith of the aforementioned sports
trading cards and two (2) parcels of land.
2. DELIVERY OF THE SHARES
A. Keith shall deliver the certificates representing the Shares to
Premier with his execution of this agreement, along with signed stock
powers bearing Medallion stamped signature guaranties .
B. Premier, by execution of this agreement, grants to Keith possession
of both the sports trading cards and the two (2) parcels of land on
the Island of Hawaii.
3. REPRESENTATIONS AND WARRANTIES OF KEITH
Keith hereby represents and warrants to Premier that:
A. Authority. This Agreement has been duly executed by Keith. The
execution and performance of this Agreement will not violate or result
in a breach of, or constitute a default in any agreement, instrument,
judgement, order or decree to which Keith is a party or to which he is
subject.
B. Transfer. Keith transfers the title to the Shares to Premier.
C. Information. No representation or warranty contained herein, nor
statement in any document, certificate or schedule furnished or to be
furnished pursuant to this Agreement by Keith
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in connection with the transaction contemplated hereby, contains or
contained any untrue statement of a material fact, nor does or will
omit to state a material fact necessary to make any statement of fact
contained herein not misleading.
4. REPRESENTATIONS AND WARRANTIES OF PREMIER
Premier hereby represents and warrants to Keith that: A. Authority. This
Agreement has been duly executed by Premier. The execution and performance of
this Agreement will not violate, or result in a breach of, or constitute a
default in any agreement, instrument, judgement, order or decree to which
Premier is a party or to which Premier is subject nor will such execution and
performance constitute a violation of or conflict with any fiduciary duty to
which Premier is subject.
B. Security Compliance. Premier hereby represents to Keith that:
(i) Premier is acquiring the Shares in a private
transaction.
(ii) Premier will not sell, transfer or otherwise dispose of
the Shares except in compliance with the Securities Act of
1933, as amended (the "Securities Act").
5. TERMINATION
Either party may terminate this Agreement at anytime prior to the date of
Closing if there is any actual or threatened action or proceeding by or before
any court or any other governmental body which seeks to restrain, prohibit, or
invalidate the transactions which this Agreement contemplates and which, in the
judgment of the party giving notice to terminate and based upon the advice of
legal counsel, makes it inadvisable to proceed with the transactions which this
Agreement contemplates.
6. MISCELLANEOUS
A. Notices. Any notice under this Agreement shall be deemed to have
been sufficiently given if sent by registered or certified mail,
postage prepaid, addressed as follows:
Premier Brands, Inc.
268 West 400, Suite 300
Salt Lake City, Utah 84101
Attention: Richard D. Surber
Keith R. Lipscomb
9571 Onset Circle
Huntington Beach, California 92646
or to any other address which the parties may hereafter designate by
notice. All notices shall be deemed to have been given as of the date
of receipt.
B. Entire Agreement. This instrument sets forth the entire agreement
between the parties hereto and no prior written or oral statement or
agreement shall be recognized or enforced.
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C. Severability. If a court of competent jurisdiction determines that
any clause or provision of this Agreement is invalid, illegal or
unenforceable, the other clauses and provisions of the Agreement shall
remain in full force and effect. The clauses and provisions which the
Court determines are void, illegal o r unenforceable shall be limited
so that they remain in effect to the extent permissible by law.
D. Assignment. Neither party may assign this Agreement without the
express prior written consent of the other party. However, if the
other party consents to the assignment such assignment will bind and
inure to the benefit of the assignee.
E. Applicable Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Utah, the state in which this
Agreement will be performed.
F. Venue. To the extent permitted by law, the parties agree that the
federal and local courts in Utah shall have exclusive personal and
subject matter jurisdiction and venue for any claim or dispute between
the parties, irrespective of the nature or source of the claim or
dispute. The parties made this arrangement because: the parties
mutually desire to remove uncertainty as to such matters; one or more
of the parties and their property are located in Utah; and this
Agreement has been negotiated and executed and will be performed in
Utah.
G. Waiver of Jury Trial. To the extent permitted by law, the parties
hereby irrevocably waive a jury trial in the event of litigation. The
parties included this provision because of the cost and delay of a
jury trial and because the parties believe that a jury trial would not
be necessary to resolve any dispute or claim between them.
H. Attorney's Fees. If either party institutes legal action or other
proceeding (including, but not limited to, arbitration to enforce or
to declare any right or obligation under this Agreement or as a result
of a breach, default or misrepresentation in connection with any of
the provisions of this Agreement, or otherwise because of a dispute
between the parties, the successful or prevailing party will be
entitled to recover reasonable attorneys fees. Attorney's fees shall
include fees for appeals, collections and other expenses incurred in
such action or proceeding. Legal fees shall be awarded in addition to
any other relief to which the prevailing party may be entitled.
I. No Third Party Beneficiary. Nothing in this Agreement, expressed or
implied, is intended to confer, any rights or remedies upon any person
other than the parties hereto and their successors.
J. Counterparts. The parties understand and agree that they may
execute this Agreement in any number of identical counterparts, via
facsimile or mail, Each counterpart shall be deemed an original for
all purposes.
K. Further Assurances. At any time and from time to time, after the
date of this Agreement, each party will execute such additional
instruments and take such actions as are reasonably necessary to
confirm or perfect title to the Shares or otherwise to carry out the
intent and purposes of this Agreement.
L. Amendment or Waiver. Every right and remedy provided herein shall
be cumulative with every other right or remedy at law, or in equity,
and may be enforced concurrently herewith. No waiver by any party of
the performance of any obligation by the other shall be construed as a
waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. At
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any time prior to the Closing Date, this Agreement may be amended by a
writing signed by both parties. Any term or condition of this
Agreement may be waived or the time for performance hereof may be
extended by a writing signed by the party or parties for whose benefit
the provision is intended.
M. Headings. The section and subsection headings in this Agreement are
inserted for convenience only. In the event of a conflict between a
heading and the text of this Agreement, the text shall control the
meaning and interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Stock
Repurchase Agreement. EXECUTED AS OF THIS 19th day of August, 1998.
"Premier Brands"
/s/ Richard Surber
----------------------
Richard D. Surber
/s/ Keith R. Lipscomb
----------------------
Keith R. Lipscomb
61
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT ("Agreeiment") is made this 1st day of September,
1998 and shall be effective the first day the Services (as defined below) were
first rendered by and between Hudson Consulting Group Inc., a Nevada corporation
("Consultant") and Premier Brands, Inc., a Utah corporation and FD Import &
Export Corp., a New York corporation (collectively "Client").
WHEREAS, Consultant and Consultant's personnel have substantial experience
'in locating merger or acquisition candidates, effecting reorganizations, and
settling creditors; and
WHEREAS, Client desires to retain Consultant, and Consultant desires to
provide the Services (as defined below) for Client on the terms and conditions
set forth below.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of Which is hereby acknowledged, Client and Consultant
agree as follows:
1. Engagement
Client hereby engages Consultant to provide Client the Services, and Consultant
accepts such engagement.
2. Scope of Services to be Provided
Consultant, subject to the control, direction and supervision of Client's
Board of Directors, shall use its best efforts to provide the following
services ("Services"):
(A) Consultant shall assist Client in the specific acquisition
contemplated by the Client (see "Exhibit A, Acquisition Agreement"),
wherein FD Import & Export Corp. shall be required by Preim'er Brands,
Inc. Consultant shall assist effecting this reorganization and use its
best efforts to settle Premier Brands' creditors (see "Exhibit B,
Billing Invoice")
It is mutually understood and agreed that the advice and services shall
expressly exclude all legal or other advise or services which require
licenses or certification which Consultant does not have.
3. Term
This Agreement shall have an initial term of one (1) year (the "Initial
Advisory Period"), with an effective date of August 1, 1998. At the
conclusion of the Initial Advisory Period, this Agreement can be extended
on a month to month basis (the "Extension Period") if the Client serves
written notice on the Consultant; provided, however, that Consultant and
Client shall agree in writing as to Consultant's continuing compensation
dui-hig any Extension Period.
This Agreement shall fully replace and supercede any and all iiisttmnelits
which may have been contemplated or were previously negotiated, and to
specifically apply to the Agreement dated April 21, 1998 between Consultant
and Premier Brands, Inc.(see "Exhibit C, Stock Acquisition Agreement").
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4. Time and Effort of Consultant
Consultant shall cause Consultant's personnel to devote that amount of time
necessary, on a weekly basis, to fulfilling Consultant's obligations under
this Agreement. The particular amount of time may vary from day to day or
week to week. Consultant unconditionally agrees that Consultant's
personnel, or his replacement, will at all times, faithfully and to the
best of his experience, ability, and talents, perform all the duties
required of Consultant under this Agreement.
5. Compensation
Client agrees to pay Consultant the following (collectively, the
"Consideration") for the Services rendered hereunder
(A) The Services. The Client shall pay to the Consultant, as compensation
for the Services rendered, 150,000 post-reverse shares of Premier
Brands, Inc. common stock, issued pursuant to Section 4(2) and exempt
from registration pursuant to Rule 144 of the Securities Act of 1933
upon Client signing a Definitive Acquisition or Merger Agreement.
(B) Expenses . Costs related to facilities famished by, expenses paid by,
and any additional out of pocket expenses advanced by the Consultant
shall be 100 % reimbursed by the Client upon execution of this
Agreement.. At the execution of this Agreement, Client shall also
deliver to Consultant 50% of any and all funds representing amounts
preserved to the Client by the Consultant with respect to any
reduction in the amount actually paid to creditors on outstanding
debts of the Client as reflected in Client's most current Balance
Sheet.
The parties acknowledge that the consideration for Clients shares to be
delivered to Consultant shall consist of the Services rendered to
Client, and that Consultant is accepting payment ill shares as ail
accommodation to Client. Client shall pay consultant within 5 days of
consummating any merger, acquisition, or other business combination.
6. Role of Consultant
The Consultant, and any person controlled by or under common control with
the Consultant, shall be free to render similar services to others and
engage in other activities, so long as the Services rendered to the Client
are not impaired.
Except as otherwise required by the Investment Company Act of 1940 ( the
"1940 Act"), any of the shareholders, directors, officers and employees of
the Client may be a shareholder, trustee, director, officer or employee of,
or be otherwise interested in, the Consultant, and in any person controlled
by or under common control with the Consultant, and the Consultant and any
person controlled by or under common control with the Consultants may have
an interest in the Client.
Except as otherwise agreed, in the absence of willful misfeasance, bad
faults negligence or 2
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reckless disregard of obligations or duties hereunder on the part of the
Consultant or Consultant's personnel, Consultant shall not be subject to
liability to the Client, or to any shareholder of the Clients for any act
or omission in the course of, or connected with, rendering set-vices
hereunder or for any losses that may be sustained in the purchase,
management, holding or sale of ,any asset of or security issued by Client.
8. Client's Shares
No later than ten (10) days following the date of an event giving use to
the obligation by Client to issue additional Fee Shares, Client will file a
Form D with the Securities and Exchange Commission.
9. Costs and Expenses
All third party and out-of-pocket expenses, filing fees, copy, and mailing
expenses incurred by Consultant in the performance of the Services under
this Agreement are the responsibility of Client and shall be paid by
Client, or reimbursed to Consultant, within ten (10) days, of receipt of
written notice by Consultant.
10. Place of Services
The Services provided by Consultant hereunder will be performed primarily
at Consultant's offices except as otherwise mutually agreed by Consultant
and Client. It is understood and expected that Consultant may make contacts
with persons and entities and perform the Services 'in other locations as
deemed appropriate by Consultant,
11. Independent Contractor
Consultant and Consultant's personnel will act as an independent contractor
in the performance of its duties under this Agreement. Accordingly,
Consultant will be responsible for payment of all federal, state, and local
taxes on compensation paid under this Agreement, including income and
social security taxes, unemployment insurance, and any other taxes due
relative to Consultant's personnel, and any and all business license fees
as may be required.
12. No Agency Express or Implied
This Agreement creates neither an expressed nor implied relationship of
principal and agent between Client and Consultant, or Employee and Employer
as between Consultant's personnel and Client. Neither Consultant's
personnel nor Consultant are authorized to enter into any agreements on
behalf of Client. Consultant expressly retains the right to approve, in its
sole discretion, each and every transaction introduced to Client and to
make all rural decisions with respect to activities undertaken by
Consultant or Consultant's personnel related to this Agreement.
13. Termination
(A) Termination for Disability. If during the Initial Consulting Period,
Consultant or Consultant's personnel shall be unable to provide the
Services as set forth under this Agreement for 120 consecutive
business days because of illness, accident or other incapacity, Client
shall have the
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(C) Termination for Cause. The Client may, at its option, terminate this
Agreement by giving written notice of termination to Consultant
without prejudice to any other remedy to which the Client may be
entitled either at law, in equity, or under this Agreement, if
Consultant:
(i) Willfully breaches or neglects the duties that Consultant is
required to perform under the terms of its Agreement;
(ii) Fails to promptly comply with and carr out all directives of
Client's Board of Directors;
(iii)Commits any dishonest or unlawful act, in the judgement of
Clients Board of Directors;
(iv) Engages 'in any conduct which disrupts the business of Client or
any entity affiliated with Client; or
(D) Termination Other Than For Cause. This Agreement shall terminate
immediately on the occurrence of any one of the following events:
(i) The occurrence of circumstances, in th judgment of Clients Board
of Directors, that make it impracticable for Client to continue
its present line(s) of business;
(ii) The decision of and upon notice by Consultant to voluntarily
terminate this Agreement;
(iii)If Client files a petition in a court of bankruptcy or is
adjudicated a bankrupt;
(iv) If Client institutes, or has institute against it any bankruptcy
proceeding for reorganization for rearrangement of its financial
affairs;
(v) If Client has a receiver of its assets or property appointed
because of insolvency;
(vi) If Client makes a general assignment for the benefit of
creditors; or
(vii)If either party otherwise becomes insolvent or unable to timely
satisfy its obligations in the ordinary course of business.
(E) Effect of Termination on Compensation, In the event of the Termination
Other Than For Cause prior to the completion of the Initial Consulting
Period, Consultant shall be, entitled to the full Compensation and any
unpaid portion of the Consideration and expenses which remains
outstanding.
14. Representations and Warranties of Client Client represents and warrants to
Consultant that:
(A) Corporate Existence. Clients are both corporation duly organized,
validly existing, and in good standing under the laws of the State of
New York and the State of Utah, respectively, with the corporate power
to own property and carry on its business as it is now being
conducted.
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(B) Financial Information. Client has or will caus to be delivered
concurrently with the execution of this Agreement, copies of the
Disclosure Documents which accurately set forth the financial
condition of Client as of the respective dates of such documents.
(C) No Conflict. This Agreement has been duly executed by Client and the
execution and performance of this Agreement will not violate, or
result in a breach of, or constitute a default in any agreement,
instrument, judgement, decree or order to which Client is a party or
to which Client is subject, nor will such execution and performance
constitute a violation or conflict of any fiduciary duty to Which
Client is subject.
(D) Full Disclosure. The information concerning
Client provided to Consultant pursuant to
this Agreement is, to the best of Clients knowledge and belief,
complete and accurate in all material respects and does not
contain any untrue statement of a material fact or omit to state
a material fact required to make the statements made, in light
of the circumstances under which they were made, not misleading.
(E) Date of Representations and Warranties. Each o the representations and
warranties of Client set forth in this Agreement is true and correct
at and as of the date of execution of this Agreement.
15. Indemnification
Client and Consultant agree to indemnify, defen and hold each other
harmless from and against all demands, claims, actions, losses,
damages, liabilities, costs and expenses, including without
limitation, interest penalties and attorneys' fees and expenses
asserted against or imposed or incurred by either party by reason of
or resulting from a breach of any representation, warranty, covenant,
condition, or agreement of the other party to this Agreement.
16. Specific Performance
Consultant and Client acknowledge that in the event of a breach of this
Agreement by either party, money damages would be 'inadequate and the
non-breaching party would have no adequate remedy at law. Accordingly,
in the event of any controversy concerning the rights or obligations
under this Agreement, such rights or obligations shall be enforceable
in a court of equity by a decree of specific performance. Such remedy,
however, shall be cumulative, and non-exclusive and shall be in
addition to any other remedy to which the parties may be entitled.
17. Miscellaneous
(A) Subsequent Events. Consultant and Client each agree to notify the
other party if, subsequent to the date of this Agreement, either party
incurs obligations which could compromise its efforts and obligations
under this Agreement.
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(B) Amendment. This Agreement may be amended or modified at any time and
in any manner only by an instrument in writing executed by the parties
hereto.
(C) Further Actions and Assurances. At anytime and from time to time, each
patty agrees, at its or their expense, to take actions and to execute
and deliver documents a may be reasonably necessary to effectuate the
purposes of this Agreement.
(D) Waiver. Any failure of any party to this Agreement to comply with any
of its obligations, agreements, or conditions hereunder may be waived
in writing by the party to whom such compliance is owed. The failure
of any patty to this Agreement to enforce at any time any of the
provisions of this Agreement shall in no way be construed to be a
waiver of any such provision or a waiver of the night of such party
thereafter to enforce each mid every such provision. No waiver of any
breach of or noncompliance with this Agreement shall be held to be a
waiver of any other or subsequent breach or noncompliance.
(E) Assignment. Neither this entire Agreement nor any right created by it
shall be assignable by either party without the prior written consent
of the other.
(F) Notices. Any notice or other communication required or permitted by
this Agreement must be in writing and shall be deemed to be properly
given when delivered in person to an officer of the other patty, when
deposited in the United States mails for transmittal by certified or
registered mail, postage prepaid, or when deposited with a public
telegraph company for transmitting, or when sent by facsimile
transmission charges prepared, provided that the communication is
addressed:
(i) in the case of Client:
Premier Brands, Inc.
268 West 400 South, Suite 300
Salt Lake City, UT 84101
Telephone: (801) 575-8073
Facsimile: (801) 575\8092
FD Import & Export Corp.
56 Pine Street, Suite 2001
New York, NY 10005
(ii) in the case of Consultant and Consultant's personnel, to
Hudson Consulting Group Inc.
268 West 400 South, Suite 300
Salt Lake City, Utah 84101
Telephone: (801) 575-8073
Telefax: (801) 575-8092
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or to such other person or address designated by Client or Consultant to receive
notice.
(G) Headings. The section and subsection headings in this agreement are
inserted for convenience only and shall not affect 'in miy way the
meaning or interpretation of this Agreement.
(H) Counterparts. This Agreement may be executed simultaneously in two or
more counterparts each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
(I) Governing Law. This Agreement was negotiated and is being contracted
for in the State of Utah, and shall be governed by the laws of the
State of Nevada, notwithstanding any conflict-of-law provision to the
contrary.
(J) Binding Effect. This Agreement shall be binding upon th parties hereto
and inure to the benefit of the parties, their respective heirs,
administrators, executors, successors, and assigns.
(K) Entire Agreement. This Agreement contains tile entire agreement
between the parties hereto and supersedes ally and all prior
agreements, arrangements, or understandings between the parties
relating to the subject matter of this Agreement. No oral
understandings, statements, promises, or inducements contrary to the
terms of this Agreement exist. No representations, warranties,
covenants, or conditions, express or implied, other than as set forth
herein, have been made by any party.
(L) Severability. If any part of this Agreement is deemed t be
unenforceable the balance of the Agreement shall remain in full force
and effect.
(M) Facsimile Counterparts. A facsimile, telecopy, or other reproduction
of this Agreement may be executed by one or more parties hereto and
such executed copy may be delivered by facsimile of similar
instantaneous electronic transn3ission device pursuant to",Ilich the
signature of or on behalf of such party car be seen, and such
execution and delivery shall be considered valid, binding and
effective for all purposes. At the request of any party hereto, all
parses agree to execute an original of this Agreement as well as any
facsimile, telecopy or other reproduction hereof
(N) Termination of Any Prior Agreements. Effective the date hereof, all
prior rights of Consultant relating to tile accrual or payment of any
form of compensation or other benefits from Client based upon any
agreements other than this Agreement, whether written or oral, entered
into prior to the date hereof, are hereby terminated.
(0) Consolidation or Merger. Subject to the provisions of Paragraph 7
hereof, in the event of a sale of the stock, or substantially all of
the stock, of Client, or consolidation or merger of Client with or
into another corporation or entity, or the sale of substantially all
of the operating assets of the Client to another corporation, entity
or individual, Client may assign its rights and obligations under this
Agreement to its successor-in-interest and such successor-in-interest
shall be deemed to have acquired all rights and assumed au obligations
of Client hereunder; provided, however, that in no event shall the
duties and
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Services of Consultant provided for in Paragraph 2 hereof, or the
responsibilities, authority or powers commensurate therewith, change
in any material respect as a result of such sale of stock,
consolidation, merger or sale of assets.
(P) Time is of the Essence. Time is of the essence of this Agreement and
of each and every provision hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date above written.
"Consultant"
Hudson Consulting Group Inc., a Nevada corporation
By:
Name: Richard Surber
Title: President
FD Import-Export
By:
Name:
Title:
Premier Brands, Inc.
By:
Name:
Title: President
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INDEX TO EXHIBITS
Exhibit No. Description
A Acquisition agreement
B Invoice
C Stock Acquisition Agreement
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[EXHIBIT A]
ACQUISITION AGREEMENT
BETWEEN
PREMIER BRANDS, INC.
AND
FD IMPORT & EXPORT CORP.
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ACQUISITION AGREEMENT
TABLE OF CONTENTS
Purchase and Sale..............................................................2
Purchase Price.................................................................2
Warranties and Representations of FD and Sellers...............................2
Warranties and Representations of PBI..........................................5
Term...........................................................................9
The PBI Shares.................................................................9
Conditions Precedent to Closing................................................9
Termination...................................................................10
Exhibits......................................................................10
Miscellaneous Provisions......................................................10
Closing.......................................................................10
Post-Closing: Form 10 or Form 10-SB...........................................10
Governing Law.................................................................11
Counterparts..................................................................11
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ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT dated September 1, 1998, by, between and
among Premier Brands, Inc., a Utah corporation ("PBI"), and FD Import & Export
Corp., a New York Corporation ("FD") and the persons listed on Exhibit "A"
attached hereto and made a part hereof, being all of FD's stockholders now and
as of the closing date of this Agreement (the "Sellers").
WHEREAS, the Sellers own a total of 200 shares of common stock, with no
par value, of FD Common Stock, said shares being one hundred (100%) percent of
the issued and outstanding common stock of FD; and
WHEREAS, the Sellers desire to sell and PBI desires to purchase one
hundred (100%) percent of such shares;
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties herein contained, the parties hereby agree as
follows:
I. Purchase and Sale. The Sellers hereby agree to sell, transfer, assign
and convey to PBI and PBI hereby agrees to purchase and acquire from
the Sellers, one hundred (100%) percent of FD's issued and outstanding
common stock (the "FD Common Shares"), in a reorganization pursuant to
Section 368 (a)(1)(B) of the Internal Revenue Code.
II. Purchase Price. The aggregate purchase price to be paid by PBI for the
FD Common Shares shall be 10,000,000 (post-reverse split) shares of PBI
$ .001 par value voting common stock, (the "PBI Common Shares"). The
PBI Common Shares will be issued to the individual Sellers in
accordance with Exhibit "A" attached hereto. No fractional shares of
PBI Common Stock will be issued; in lieu thereof, the number of shares
of PBI Common Stock to be issued to each Seller will be rounded up to
the next whole share. Each of the Sellers hereby agree to the terms of
this Agreement (the "Agreement").
III. Warranties and Representations of FD and Sellers. In order to induce
PBI to enter into the Agreement and to complete the transaction
contemplated hereby, FD and Sellers warrant and represent to PBI that:
A. Organization and Standing. FD is a corporation duly organized,
validly existing and in good standing under the laws of the State
of New York, is qualified to do business with a foreign
corporation in every other state or jurisdiction in which it
operates to the extent required by the laws of such states and
jurisdictions, and has full power and authority to carry on its
business as now conducted and to own and operate its assets,
properties and business. Attached hereto as Exhibit "B" are true
and correct copies of FD's Certificate of Incorporation,
amendments thereto and all current By laws of FD. No changes
thereto will be made in any of the Exhibit "B" documents before
the Closing.
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B. Capitalization. As of the Closing Date, FD's entire authorized
equity capital consists of 200 shares of Common Stock, of which
200 shares of Common Stock will be outstanding as of the Closing.
As of the Closing Date, there will be no other voting or equity
securities authorized or issued, nor any authorized or issued
securities convertible into voting stock, and no outstanding
subscriptions, warrants, calls, options, rights, commitments or
agreements by which any of the Sellers are bound, calling for the
issuance of any additional shares of common stock of any other
voting or equity security. The FD Common Shares constitute one
hundred (100%) percent of the equity capital of FD, which
includes, inter alia, one hundred (100%) percent of FD's voting
power, right to receive dividends, when, as and if declared and
paid, and the right to receive the proceeds of liquidation
attributable to common stock, if any.
C. Ownership of the FD Shares As of the Date hereof, the Sellers are
the sole owners of the FD Common Shares, free and clear of all
liens, encumbrances and restrictions of any nature whatsoever,
except by reason of the fact that the FD Common Shares will not
have been registered under the "33 Act, or and applicable State
Securities laws.
D. Taxes. FD has filed all federal, state and local income or other
tax returns and reports that it is required to file with all
governmental agencies, wherever situate, and has paid or accrued
for payment all taxes as shown on such returns, such that a
failure to file, pay or accrue will not have a material adverse
effect on FD.
E. Pending Actions. There are no material legal actions, lawsuits,
proceedings of investigations, either administrative of judicial,
pending of threatened, against or affecting FD, or against the
Sellers that arise out of their operation of FD, except as
described in Exhibit "C" attached hereto. FD is not in violation
of any law, material ordinance or regulation of any kind
whatever, including, but not limited to laws, rules and
regulations governing the sale of its products, the '33 Act, the
Securities Exchange Act of 1934, as amended (the "34 Act") the
Rules and Regulations of the U.S. Securities and Exchange
Commission ("SEC"), or the Securities Laws and Regulations of any
state.
F. Governmental Regulation. FD holds the licenses and registrations
set forth on Exhibit "D" hereto from the jurisdictions set forth
therein, which licenses and registrations are all of the licenses
and registrations necessary to permit FD to conduct its current
business. All of such licenses and registrations are in full
force and effect, and there are no proceedings, hearings or other
actions pending that may affect the validity of continuation of
any of them. No approval of any other trade or professional
association or agency of government other than as set forth on
Exhibit "D" is required for any of the transactions effected by
this Agreement, and the completion of the transactions
contemplated by the Agreement will not, in and of themselves,
affect or jeopardize the validity or continuation of any of them.
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G. Ownership of Assets. Except as set forth in Exhibit "E", FD has
good, marketable title, without any liens or encumbrances of any
nature whatever, to all of the following, if any: its assets,
properties and rights of every type and description, including,
without limitation, all cash on hand and in banks, certificates
of deposit, stocks, bonds, and other securities, good will,
customer lists, its corporate name and all variants thereof,
trademarks and trade names, copyrights and interests thereunder,
licenses and registrations, pending licenses and permits and
applications therefore, inventions, processes, know-how, trade
secrets, real estate and interests therein and improvements
thereto, machinery, equipment, vehicles, notes and accounts
receivable, fixtures, rights under agreements and leases,
franchises, all rights and claims under insurance policies and
other contracts of whatever nature, rights in funds of whatever
nature, books and records and all other property and rights of
every kind and nature owned or held by FD as of this date, and
will continue to hold such title on and after the completion of
the transactions contemplated by the Agreement; nor, except in
the ordinary course of its business, has FD disposed of any such
asset since the date of the most recent balance sheet described
in Section III (O) of this agreement.
H. No Interest in Suppliers, Customers, Landlords or Competitors.
Neither the Sellers nor any member of their families have any
interest of any nature whatever in any supplier, customer,
landlord or competitor of FD.
I. No Debt Owed by FD to Sellers. Except as set forth in Exhibit "F"
FD does not owe any money, securities, or property to either the
Sellers or any member of the families or to any company
controlled by such a person, directly or indirectly. To the
extent that FD may have any undisclosed liability to pay any sum
or property to any such person or entity or any member of their
families such liability is hereby forever irrevocably released
and discharged.
J. Corporate Records. All of FD's books and records, including,
without limitation, its books of account, corporate records,
minute book, stock certificate books and other records of FD are
up-to-date, complete and reflect accurately and fairly the
conduct of its business in all material respects since its date
of incorporation.
K. No Misleading Statements of Omissions. Neither the Agreement nor
any financial statement, exhibit, schedule or document attached
hereto or presented to PBI in connection herewith, contains any
materially misleading statement, or omits any fact of statement
necessary to make the other statements or facts therein set forth
not materially misleading.
L. Validity of the Agreement. All corporate and other proceedings
required to be taken by the Sellers and by FD in order to enter
into and to carry out the Agreement have been duly and properly
taken. The Agreement has been duly executed by the Sellers and by
FD, and constitutes the valid and binding obligation of each of
them, except to the extent limited by applicable bankruptcy,
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reorganization, insolvency, moratorium or other laws relating to
or effecting generally the enforcement of creditors rights. The
execution and delivery of the Agreement and the carrying out of
its purposes will not result in the breach of any of the terms or
conditions of, or constitute a default under or violate FD's
Certificate of Incorporation or document of undertaking, oral or
written, to which FD of the Sellers is a party or is bound or may
be affected, nor will such execution, delivery and carrying out
violate any order, writ, injunction, decree, law, rule or
regulation of any court, regulatory agency or other governmental
body; and the business now conducted by FD can continue to be so
conducted after completion of the transaction contemplated
hereby, with FD as a wholly- owned subsidiary of PBI.
M. Enforceability of the Agreement. When duly executed and
delivered, the Agreement and the Exhibits hereto which are
incorporated herein and made a part hereof are legal, valid, and
enforceable by PBI according to their terms, except to the extent
limited by applicable bankruptcy, reorganization, insolvency,
moratorium or other laws relating to or effecting generally the
enforcement of creditors rights and that at the time of such
execution and delivery, PBI will have acquired title in and to
the FD Common Shares free and clear of all claims, liens and
encumbrances.
N. Access to Books and Records. PBI will have full and free access
to FD's books during the course of this transaction prior to
Closing, during regular business hours.
O. FD's Financial Statements. FD's Balance Sheet and Profit and Loss
statement for the quarter ended June 30, 1998, attached hereto as
Exhibit "G", accurately describe FD's financial position as of
the dates thereof. Within 90 days after the Closing. FD will
provide PBI with certified financial statements for the necessary
periods to file a Form 10 or Form 10SB, if required. These
financial statements shall be prepared in accordance with
generally accepted accounting principles in the United States
("GAAP") (or as permitted by regulation S-X, S-B and/or the rules
promulgated under the '33' act and the 34' act and certified by
independent certified public accountants with substantial SEC
experience.)
P. F &D's Corporate Summary, attached hereto as Exhibit "H",
accurately describes FD's business, assets, proposed operations
and management as of the date thereof; since the date of the
Corporate Summary, there has been no material change in the
Business Plan.
IV. Warranties and Representations of PBI. In order to induce the Sellers and
FD to enter into the Agreement and to complete the transaction contemplated
hereby, PBI warrants and represents to FD and Sellers that:
A. Organization and Standing. PBI is a corporation duly organized,
validly existing
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and in good standing under the laws of the State of Utah, is
qualified to do business as a foreign corporation in every other
state in which it operates to the extent required by the laws of
such states, and has full power and authority to carry on its
business as now conducted and to own and operate its assets,
properties and business.
B. Capitalization PBI's entire authorized equity capital consists of
2,374,314 shares of voting common stock, $.001 par value and
24,000 shares of preferred stock, $.001 par value. As of the
Closing, after giving effect to the proposed reverse split of
PBI's remaining outstanding shares, PBI will have 100,000,000
shares Common Stock, $.001 par value, authorized, of which 39,572
shares of voting common stock of PBI will be issued and
outstanding, which does not include the 10,000,000 shares being
issued to Sellers hereunder pursuant to Section 4(2) of the '33
Act of the issuance at closing. Upon issuance, all of the PBI
Common Stock will be validly issued fully paid and
non-assessable. The relative rights and preferences of PBI's
equity securities are set forth in the Articles of Incorporation,
as amended and PBI's By-Laws (Exhibit "I" hereto). Except as set
forth above, there are no voting or equity securities convertible
into voting stock, and no outstanding subscriptions, warrants,
calls, options, rights, commitments or agreements by which PBI is
bound, calling for the issuance of any additional shares of
common stock or any other voting or equity security. The By-Laws
of PBI provide that a simple majority of the shares voting at a
stockholders' meeting at which a quorum is present may elect all
of the directors of PBI. Cumulative voting is not provided for by
the By-Laws or Articles of Incorporation of PBI. Accordingly, as
of the Closing the 10,000,000 shares being issued to and acquired
by the Sellers will constitute approximately (99%) percent of the
Common Shares of PBI which will then be issued and outstanding,
which includes inter alia, that same percentage of PBI's voting
power, right to receive dividends, when, as and if declared and
paid, and the right to receive the proceeds of liquidation
attributable to common stock, if any.
C. Ownership of Shares. By PBI's issuance of the PBI Common Shares
to the Sellers pursuant to the Agreement, the Sellers will
thereby acquire good absolute marketable title thereto, free and
clear of all liens, encumbrances and restrictions of any nature
whatsoever, except by reason of the fact that such PBI shares
will not have been registered under the '33 Act.
D. Significant Agreements. PBI is not and will not at Closing be
bound by any of the following, unless specifically listed in
Exhibit "J" hereto:
1. Employment advisory or consulting contract;
2. Plan providing for employee benefits of any nature;
3. Lease with respect to any property or equipment;
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4. Contract of commitment for any future expenditure in
excess of $100.
5. Contract or commitment pursuant to which it has
assumed, guaranteed, endorsed, or otherwise become
liable for any obligation of any other person, firm or
organization;
6. Contract, agreement, understanding, commitment or
arrangement, other than in the normal course of
business, not fully disclosed or set forth in the
Agreement;
7. Agreement with any person relating to the dividend,
purchase or sale of securities, that has not; been
settled by the delivery of payment of securities when
due, and which remains unsettled upon the date of the
Agreement.
E. Sale of Business. PBI will have sold its existing business prior
to closing.
F. Taxes. PBI has filed all federal, state and local income or other
tax returns and reports that it is required to file with all
governmental agencies, wherever situate, and has approximately
$87,172 in taxes as shown on such returns. All of such returns
are true and complete.
G. Liabilities. At and as of the Closing Date, PBI will have a total
of approximately $148,954 in liabilities, exclusive of the costs,
including legal and accounting fees and other expenses, in
connection with this transaction.
H. No Pending Actions. There are no legal actions, lawsuits,
proceedings of investigations, either administrative or judicial,
pending or threatened, against affecting PBI, or against any of
PBI's officers or directors and arising out of their operation of
PBI. PBI has been in compliance with, and has not received notice
of violation of any law, ordinance of regulation to any kind
whatever, including, but not limited to, the '33 Act, the '34
Act, the Rules and Regulations of the SEC or the Securities Laws
and Regulations of any state. PBI is not now and never has been
required to file reports under the '33 Act or the '34 Act.
I. Corporate Records. All of PBI's books and records, including
without limitation, its book of account, corporate records,
minute book, stock certificate books and other records are
up-to-date, complete and reflect accurately and fairly the
conduct of its business in all respects since its date of
incorporation: all of said books and records will be delivered to
PBI's new management at the Closing.
J. No Misleading Statements or Omissions. Neither the Agreement nor
any financial statement, exhibit, schedule or document attached
hereto or presented to FD's counsel in connection herewith
contains any materially misleading statement, or
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omits any fact or statement necessary to make the other stats of
facts therein set forth not materially misleading.
K. Validity of the Agreement. All corporate and the proceedings
required to be taken by PBI in order to enter into and to carry
out the Agreement have been duly and properly taken. The
Agreement has been duly executed by PBI, and constitutes a valid
and binding obligation of PBI. The execution and delivery of the
Agreement and the carrying out of its purposes will not result in
the breach of any of the terms or conditions of, or constitute a
default under or violate, PBI's Certificate of Incorporation or
By-Laws, or any agreement, lease, mortgage, bond, indenture,
license or other document or undertaking, oral or written, to
which PBI is a party or is bound or may be affected, nor will
such execution, delivery and carrying out violate any order,
writ, injunction, decree, law, rule or regulation of any court
regulatory agency or other governmental body.
L. Enforceability of the Agreement. When duly executed and
delivered, the Agreement and the Exhibits hereto which are
incorporated herein and made a part hereof are legal, valid, and
enforceable by FD and the Sellers according to their terms, and
that at the time of such execution and delivery, the Sellers will
have acquired good, marketable title in and to the PBI Common
Shares acquired pursuant hereto, free and clear of all liens and
encumbrances.
M. Access to Books and Records. FD and Sellers will have full and
free access to PBI's books and records during the course of this
transaction prior to and at the Closing.
N. PBI Financial Stats. At or before the Closing, PBI will provide
FD with recent audited financial statements, which will be
certified in accordance with GAAP by independent certified public
accountants with substantial SEC experience.
O. PBI Financial Condition. As of the Closing, PBI will have no
assets and $148,954 liabilities.
P. Stockholder Approval. Immediately upon the signing of the
Agreement, PBI will submit to its stockholders by meeting or
consent the matters described in section VII(B)(1) herein, if
required to do so under Utah Corporate Law. Hudson Consulting
Group, Inc. agrees that it will vote all of its PBI shares in
favor of all items submitted to PBI stockholders in accordance
with the Agreement.
V. Term. All representations, warranties, covenants and agreements made herein
and in the exhibits attached hereto shall survive the execution and
delivery of the Agreement and payment pursuant thereto.
VI. The PBI Shares. All o f the PBI Common Shares shall be validly issued,
fully-paid and non-assessable shares of PBI Common Stock, with full voting
rights, dividend rights, and
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the right to receive the proceeds of liquidation, if any, as set forth in
the respective Articles of Incorporation.
VII. Conditions Precedent to Closing.
A. The obligations of FD and Sellers under the Agreement shall be
and are subject to fulfillment, prior to or at the Closing of
each of the following conditions:
1. That PBI and its management representations and
warranties contained herein shall be true and correct
at the time of closing date as if such representations
and warranties were made at such time;
2. That PBI and its management shall have performed or
complied with all agreements, terms and conditions
required by the Agreement to be performed or complied
with by them prior to or at the time of Closing;
3. That PBI's stockholders, by proper and sufficient vote,
shall have properly approved all of the matters
described in Section VII(B)(1) herein, if required to
do so under Utah Corporate Law; and
B. The obligations of PBI under the Agreement shall be and are
subject to fulfillment, prior to, at the Closing or subsequent to
the Closing of each of the following conditions:
1. That PBI stockholders, if necessary by proper and
sufficient vote of its stockholders, shall have
approved the Agreement and the transactions
contemplated hereby and will have approved such other
changes as are consistent with the Agreement for
submission to PBI stockholders, if required to do so
under Utah Corporate Law;
2. That FD's and Sellers' representations and warranties
contained herein shall be true and correct at the time
of Closing as if such representations and warranties
were made at such time; and
3. That FD and Sellers shall have performed or complied
with all agreements, terms and conditions required by
the Agreement to be performed or complied with by them
prior to or at the time of Closing.
4. That Sellers, individually, and PBI, jointly and
severally indemnify and hold harmless PBI's former
officers, directors, agents and affiliates against any
claims or liabilities, including reasonable attorney's
fees and other reasonable defense costs incurred in
defending such claims or liabilities, resulting from
any claims or liabilities asserted against them to any
material misrepresentation or omissions in the
Agreement made by PBI or Sellers.
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VIII. Termination. The Agreement may be terminated at any time before or; at
Closing, by:
A. The mutual agreement of the parties;
B. Any party if:
1. Any provision of the Agreement applicable to a party
shall be materially untrue or fail to be accomplished.
2. Any legal proceeding shall have been instituted or
shall be imminently threatening to delay, restrain or
prevent the consummation of the Agreement.
Upon termination of the Agreement for any reason, in accordance with the terms
and conditions set forth in this paragraph, each said party shall bear all costs
and expenses as each party has incurred and no party shall be liable to the
other.
IX. Exhibits. All Exhibits attached hereto are incorporated herein by this
reference as it they were set forth in entirety.
X. Miscellaneous Provisions. This Agreement is the entire agreement between
the parties in respect of the subject matter hereof, and there are no other
agreements, written or oral, nor may the Agreement be modified except in
writing and executed by all of the parties hereto. The failure to insist
upon strict compliance with any of the terms, covenants or conditions of
the Agreement shall not be deemed a waiver or relinquishment of such right
or power at any other time or times.
XI. Closing. The Closing of the transactions contemplated by the Agreement
("Closing") place at 1:00 P.M. on the first business day after the
stockholders of PBI approve this transaction, if approval is required or on
September 8, 1998, whichever is sooner, if shareholder approval is not
required or can be obtained subsequent to closing by shareholder
ratification. The Closing shall occur at the offices of
__________________________________ or such other date and place as the
parties hereto shall agree upon. At the Closing, all of the documents and
items referred to herein shall be exchanged.
XII. Post-Closing: Form 10 or Form 10-SB. As soon as practical after Closing and
after PBI meets the initial listing requirements for the NASDAQ Small Caps
market, PBI will prepare, file and use its best efforts to have declared
effective a Form 10 or Form 10-SB Registration Statement with the
Securities and Exchange Commission.
XIII.Governing Law. The Agreement shall be governed by and construed in
accordance with the internal laws of the State of Utah.
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XIV. Counterparts. The Agreement may be executed in duplicate facsimile
counterparts, each of which shall be deemed an original and together shall
constitute on and the same binding Agreement, with one counterpart being
delivered to each party hereto.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals
as of the date and year above first written.
Premier Brands, Inc.
By: /s/ Richard D. Surber
- -------------------------
Richard D. Surber
Its: President
FD Import & Export Corp.
By: /s/ Igor Fruman
- ------------------------
Igor Fruman
Its: President
SELLERS:
/s/ Igor Fruman
- -----------------------
Igor Fruman
/s/ Vladislav V. Dyablo
- -----------------------
Vladislav V. Dyablo
/s/ Vyacheslav Fruman
- -----------------------
Vyacheslav Fruman
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[EXHIBIT B]
[INVOICE]
FD Import & Export Corp.
Invoice submitted to:
Premier Brands, Inc.
September 1, 1998
TOTAL CASH DUE TO HUDSON $199,672
SEE SCHEDULE BELOW FOR BREAK DOWN OF TOTAL AMOUNT
TOTAL STOCK DUE TO HUDSON 150,000 SHARES
Administrative and Reimbursable Expenses
Hudson Consulting Group, Inc. ("Hudson") $12,225
Hudson for payments made to stock transfer agent $1,139
Hudson for expedited listing in Standard & Poor's $ 5,000
Hudson for printing and issuance of stock certificates $1,000
(Estimated)
Hudson for obtaining new CUSIP Number $ 100
Hudson for overnight delivery service (11 @ $14.00) $ 154
--------
Total Administrative and Reimbursable Expenses $19,618
Professional Services Rendered
Consummation of Acquisition/Merger between Premier
Brands, Inc. and FD Import & Export Corp. 150,000 shares
--------
Total Restricted Common Stock 150,000
Professional Consulting Fees Reimbursable to Hudson
Hans Anderegg $2,800
--------
(netted down from $5,000 for payment of indemnity bond
premium)
Total $2,800
Jon Williams $7,500
------
Total $7,500
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Statement of Current Liabilities
Name Amount
------
Harlan & Boettger, Auditor $20,800
Current Liabilities
Accounts payable, including Notes owing to
Peter Kruse and Dr. Jerome P. Kraft for
$5,000 each $23,375
Settlement payable $25,000
Payroll taxes payable $87,172
Accrued expenses $12,607
Income taxes payable 1,800
---------
Total Current Liabilities $169,754 Hudson will receive 50%
of any savings effected on the current liabilities
and the remaining 50% will be re turned to the
company.
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[EXHIBIT C]
STOCK ACQUISITION AGREEMENT
This Stock Acquisition Agreement ("Agreement") is made effective this
21st day of April, 1998 by and between, Hudson Consulting Group, Inc.
("Hudson"), a Nevada corporation, and Premier Brands, Inc. a Utah Corporation,
the Client ("Client"), with respect to the following:
RECITALS
WHEREAS, Hudson is in the business of providing general business
consulting services to privately held and publicly held corporations; and
WHEREAS, Client desires to transfer 913,060 shares of common stock in
Premier Brands to Hudson to obtain advice relative to corporate and seek to
resolve various corporate obligations through utilizing Hudson's business
consulting services.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises, covenants, and
agreements contained herein, and for other good and valuable consideration, the
receipt and adequacy of which is expressly acknowledged, Client and Hudson agree
as follows:
15. Engagement of Hudson
Hudson agrees to use its best efforts to assist Client in:
a. achieving the techniques and preparing the documents for raising
capital through a placement of Premier's stock or investment
units under the rules and regulations of the Securities and
Exchange Commission (SEC) promulgated pursuant to the Securities
Act of 1933, as amended (the "Act"), including but not limited to
strategy and logistics or preparation of necessary documentation
to complete a offering in compliance with the applicable federal
and state rules and regulations, preparation of a due diligence
file, and delivery of the necessary forms to the SEC with the
requisite number of copies, funds to be raised are to be not less
than $65,000 nor more than $200,000;
b. The parties agree that any shares offered or transferred under
paragraph (a) above shall be at the price of $0.10 per share.
c. notifying market makers in order to develop a market for Clients'
stock;
d. notifying appropriate public relations and investor relations
services;.
All of the foregoing services collectively are referred to herein as
the "Consulting Services."
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16. Compensation
Client shall compensate Hudson for consulting services ("Consulting
Services") rendered pursuant to this Agreement as follows:
a. Upon completion of the initial offering and generation of not
less than $65,000, that shall be used to pay tax obligations of
Premier, Client shall transfer 913,060 shares of common stock of
Premier to Hudson or its designees, at the option of Hudson.
b. In addition to the above, client shall pay Hudson a fee of ten
percent of the amount raised from the date of the Agreement and
during the term hereof under any subsequent private offering in
excess of $65,000 up to $200,000.
c. Any shares issued pursuant to this Agreement shall be issued in
compliance with the rules and regulations of the Act, as amended.
If Hudson receives restricted shares under the Act, such shares
shall have "piggy back" registration rights with any registration
statement, such statement filed at such time as Client, in its
sole discretion, deems advisable.
d. Client shall at Hudson's request appoint new officers and
directors of Premier as designated by Hudson.
e. Within 20 days of the execution hereof, Client shall deliver the
stated number of shares, with all signatures and documents
necessary to complete the transfer thereof, to a mutually agreed
upon third party to hold in trust until funds of not less than
$60,000 have been delivered to the same party, upon receipt of
the funds, the shares shall be delivered to Hudson and the funds
used to satisfy the tax obligation of Premier, up to that amount.
17. Expenses.
--------
a. Hudson agrees to assume and promptly pay all costs associated
with the completion of the services contemplated herein.
18. Nondisclosure of Confidential Information
a. In consideration for entering into this Agreement, the parties
herein mutually agree that the following items used in the
parties' respective businesses are secret, confidential, unique,
and valuable, and were developed by the parties at great cost and
over a long period of time, and disclosure of any of the items to
anyone other than officers, agents, or authorized employees of
the Client and Hudson which may result in irreparable injury:
i. non-public financial information, accounting information,
plans of operations, possible mergers, or acquisitions prior
to the public announcement;
ii. customer lists, call lists, and other confidential customer
data;
iii. memoranda, notes, records concerning technical processes
conducted by either party;
iv. sketches, plans, drawings, and other confidential research
and development data; v. manufacturing processes, chemical
formula, and/or the composition of products; or
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vi. any and all technology and/or computer generated programs,
including, but not limited to, hardware or software.
b. Hudson shall have no liability to Client with respect to the use or
disclosure to others not party to this Agreement, of such information
as Hudson can establish to:
i. have been publicly known;
ii. have become known, without fault on the part of Hudson,
subsequent to disclosure by Client of such information to
Hudson;
iii. have been otherwise known by Hudson prior to communication
by the Client to Hudson of such information; or
iv. have been received by Hudson at any time from a source other
than Client lawfully having possession of such information.
19. Term of Agreement
Hudson and client agree that the transfers contemplated herein shall
take place within 60 days of the execution of this Agreement. Extensions hereof
shall be by the mutual consent of the parties and shall be in writing.
20. Non-Circumvention
Client agrees that they will not enter into any transaction involving a
business opportunity or asset introduced to the Client by Hudson, without
compensating Hudson pursuant to this Agreement. Nor will the Client terminate
this Agreement solely as a means to avoid paying Hudson compensation earned or
to be earned, or in any other way attempt to circumvent Hudson or this Stock
Acquisition Agreement.
21. Due Diligence
Client shall supply and deliver to Hudson all information as may be
reasonably requested, including business plans, officer questionnaires and due
diligence questionnaires to enable Hudson to make an investigation of the Client
and its business prospects, and they shall make available to Hudson names,
addresses, and telephone numbers as Hudson may need to verify or substantiate
any such information provided.
22. Clients' Representations
Client represents, warrants, and covenants to Hudson that each of the
following are true and complete as of the date of this Agreement:
a. Corporate Existence. Client is a corporation duly organized,
validly existing, and in good standing under the laws of the
state of its incorporation, with full corporate power and
authority and all necessary governmental authorization to own,
lease and operate property, and carry on its business as it is
now being conducted. Client is duly qualified to do business in
and is in good standing in every jurisdiction in which the nature
of its business or the property owned or leased by it makes such
qualifications necessary.
b. Clients' Authority for Agreement. The execution and delivery of
this Agreement and the consummation of the transactions
contemplated herein have been duly authorized by the Client. This
Agreement has been duly executed and delivered by Client, and
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constitutes the valid and legally binding obligation of Client
enforceable in accordance with its terms, except to the extent
that enforceability may be subject to or limited by bankruptcy,
insolvency, reorganization, moratorium, or other similar laws
affecting creditor rights generally. The execution and delivery
of this Agreement and the consummation of the transactions
contemplated herein will not conflict with or result in any
violation of any provision of Clients' Articles of Incorporation
or Bylaws. To the best of Clients' knowledge, after due inquiry,
the execution and delivery of this Agreement and the consummation
of the transactions contemplated herein will not conflict with
any mortgage, indenture, lease, contract, commitment, agreement,
or other instrument, permit, concession, grant, franchise,
license, judgement, order, decree, statute, law, ordinance, rule,
or regulation applicable to Client or any of its properties or
assets.
c. Consents and Authorizations. Any consent, approval, order or
authorization of, or registration, declaration, compliance with
or filing with any governmental or regulatory authority required
in connection with the execution and delivery of this Agreement
to permit the consummation by Client and Hudson of the
transactions contemplated herein shall be accomplished in a
timely manner and in accordance with federal and/or state laws
where applicable.
d. Litigation There are no judicial or administrative actions,
suits, proceedings or investigations pending, or to the knowledge
of the Client, threatened which may result in any liability on
the part of the Client other than what has already been disclosed
to Hudson.
e. Involvement in Proceedings or Investigations by Securities
Regulatory Authorities The Client, its officers, 10%
shareholders, and any entity which Client or its affiliates or
officers control, has not been previously involved in any
litigation, investigations or proceedings with the SEC or any
other State or Foreign Securities Regulatory organization, and is
not presently indicted and/or was never convicted of fraud or any
similar crime involving any allegation of dishonesty or theft,
nor found guilty or is currently involved in legal proceedings of
such conduct in a civil context, other than as disclosed and with
full and complete details attached hereto.
f. Minute Books. The minute books of Client contain full and
complete minutes of all annual, special and other meetings (or
written consents in lieu thereof) of the directors and committees
of directors and shareholders of Client; the signatures on such
minutes and written consents are the true signatures of the
persons purporting to have signed them; and the stock ledger of
Client with respect to shares of Client' common stock issued or
transferred is complete and no documentary stamp taxes are
required to be affixed and canceled in connection with the
transfer or issuance of the shares.
g. Disclosure Documents. Client has or will cause to be delivered,
concurrent with the execution of this Agreement, copies of its
entity records as requested to effectuate any transaction
contemplated herein. Documents which Client agrees to provide to
Hudson shall include but not be limited to audited financial
statements for the past three years of Clients' operations or as
long as the Client has been in operation, whichever is less,
which have been audited by a SEC peer approved financial auditor,
any entity resolutions and any and all other documents which may
in any way relate to the transactions contemplated in this
Agreement.
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h. Nature of Representations. No representation or warranty made by
Client in this Agreement, nor any document or information
furnished or to be furnished by Client to Hudson in connection
with this Agreement, contains or will contain any untrue
statement of material fact, or omits or will omit to state any
material fact necessary to make the statements contained therein
not misleading, or omits to state any material fact relevant to
the transactions contemplated by this Agreement.
23. Independent Legal and Financial Advice
Hudson is not a law firm; neither is it an accounting firm. Hudson
does, however, employ professionals in those capacities for its sole benefit.
Client represent that they have not nor will they construe any of Hudson's
representations to be statements of law. Each entity has and will continue to
seek the independent advice of legal and financial counsel regarding all
material aspects of the transactions contemplated by this Agreement, including
the review of all documents provided by Hudson to Client and all opportunities
Hudson introduces to Client. Further, Hudson is not a broker/dealer, and does
not represent itself to be such. All advice given, all filings and all other
services provided to Client by Hudson shall be complete, timely and in
compliance with current applicable Federal and State laws, rules and
regulations.
24. All Prior Agreements Terminated
This Agreement comprises the entire agreement and understanding between
the parties hereto at the date of this Agreement as to the subject matter hereof
and supersedes and replaces all proposals, prior negotiations and agreements,
whether oral or written, between the parties hereto in connection with the
subject matter hereof. None of the parties hereto shall be bound by any
conditions, definitions, warranties or representations with respect to the
subject matter of this Agreement other than as expressly provided in this
Agreement unless the parties hereto subsequently agree to vary this Agreement in
writing, duly signed by authorized representatives of the parties hereto.
25. Hudson is not an Agent or Employee of Client.
Obligations of Hudson under this Agreement consist solely of the
Services described herein. In no event shall Hudson be considered to act as an
employee or agent of Client or otherwise represent or bind Client. For the
purposes of this Agreement, Hudson is an independent contractor. All final
decisions with respect to acts of Client whether or not made pursuant to or in
reliance on information or advice furnished by Hudson hereunder, shall be those
of Client or its affiliates and Hudson, its employees or agents shall under no
circumstances be liable for any expense incurred or loss suffered by Client as a
consequence of such action or decisions.
26. Miscellaneous
a. Authority. The execution and performance of this Agreement have
been duly authorized by all requisite corporate action. This
Agreement constitutes a valid and binding obligation of the
parties hereto.
b. Amendment. This Agreement may be amended or modified only by an
instrument in writing executed by the parties hereto.
c. Waiver. No term of this Agreement shall be considered waived and
no breach excused by either party unless made in writing. No
consent waiver or excuse by either party, express or implied
shall constitute a subsequent consent, waiver or excuse.
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e. Assignment.
i. The rights and obligations of Hudson under this
Agreement shall inure to the benefit of and shall be
binding upon its successors and assigns. There shall
be no rights of transfer or assignment of this
Agreement by Client except with the prior written
consent of Hudson.
ii. Nothing in this Agreement, expressed or implied, is
intended to confer upon any person other than the
parties and their successors, any rights or remedies
under this Agreement.
d. Notices. Any notice or other communication required or permitted
by this Agreement must be in writing and shall be deemed to be
properly given when delivered in person to an officer of the
other party, when deposited in the United States mails for
transmittal by certified or registered mail, postage prepaid, or
when deposited with a public telegraph Corporation for
transmittal or when sent by facsimile transmission, charges
prepaid provided that the communication is addressed:
i. In the case of Hudson to:
Hudson Consulting Group, Inc.
268 West 400 South, Suite 300
Salt Lake City, Utah 84101
(801) 575-8073
(801) 575-8092 (fax)
Attention: Richard Surber, President
In the case of Client to:
Premier Brands, Inc.
714 Adams, Suite 108
Huntington Beach, California 92646
FAX (714) 374-2634
Attention: Keith Lipscomb
or to such other person or address designated by the parties in
writing to receive notice.
f. Headings and Captions. The headings of paragraphs are included
solely for convenience. If a conflict exists between any heading
and the text of this Agreement, the text shall control.
g. Entire Agreement. This instrument and the exhibits to this
instrument contain the ----------------- entire agreement between
the parties with respect to the transaction contemplated by the
Agreement. It may be executed in any number of counterparts but
the aggregate of the counterparts together constitute only one
and the same instrument.
h. Effect of Partial Invalidity. In the event that any one or more
of the provisions contained in this Agreement shall for any
reason be held to be invalid, illegal, or unenforceable in any
respect, such invalidity, illegality or unenforceability shall
not affect any other provisions of this Agreement, but this
Agreement shall be constructed as if it never contained any such
invalid, illegal or unenforceable provisions.
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i. Controlling Law. The validity, interpretation, and performance of
this Agreement shall be governed by the laws of the State of Utah
without regard to its law on the conflict of laws. Any dispute
arising out of this Agreement shall be brought in a court of
competent jurisdiction. The parties exclude any and all statutes,
law and treaties which would allow or require any dispute to be
decided in another forum or by other rules of decision than
provided in this Agreement.
j. Attorney Fees. If any action at law or in equity, including an
action for declaratory -------------- relief, is brought to
enforce or interpret the provisions of this Agreement, the
prevailing party shall be entitled to recover reasonable attorney
fees, court costs, and other costs incurred in proceeding with
the action from the other party. The attorney fees, court costs
or other costs, may be ordered by the court in its decision of
any action described in this paragraph or may be enforced in a
separate action brought for determining attorney fees, court
costs, or other costs. Should either party be represented by
in-house counsel all parties agree that party may recover
attorney fees incurred by that in-house counsel in an amount
equal to that attorney's reasonable fees for similar matters, or,
should that attorney not normally charge a fee, by the reasonable
rate charged by attorneys with similar background in that legal
community, considering all relevant factors including but not
limited to the specialty or specializations, if any, of the legal
subjects required.
k. Time is of the Essence. Time is of the essence of this Agreement
and of each and every provision hereof.
l. Mutual Cooperation. The parties hereto shall cooperate with each
other to achieve the purpose of this Agreement, and shall execute
such other and further documents and take such other and further
actions as may be necessary or convenient to effect the
transactions described herein.
m. Indemnification. Client and Hudson agree to indemnify, hold
harmless and defend the other from and against all demands,
claims, actions, losses, damages, liabilities, costs and
expenses, including without limitation, interest, penalties,
court fees, and attorney fees and expenses asserted against or
imposed or incurred by either party by reason of or resulting
from a breach of any representation, warranty, covenant condition
or agreement of the other party to this Agreement. Neither party
shall be responsible to the other party for any consequential or
punitive damages.
n. No Third Party Beneficiary. Nothing in this Agreement, expressed
or implied, is intended to confer upon any person, other than the
parties hereto and their successors, any rights or remedies under
or by reason of this Agreement, unless this Agreement
specifically states such intent.
o. Facsimile Counterparts. If a party signs this Agreement and
transmits an electronic facsimile of the signature page to the
other party, the party who receives the transmission may rely
upon the electronic facsimile as a signed original of this
Agreement. Further, this Agreement may be executed in
counterparts.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
dates indicated below.
Hudson Consulting Group, Inc.
_____________________________ Date: ______________________
By:
Client
Premier Brands, Inc.
Date:
- -------------------------------------------------------------------------------
By:
92
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 Filatov Grigory Genadievich, 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.
268 West 400 South
Salt Lake City, Utah 84101
Attn.: Mr. Richard Surber, President
Phone No.: (801) 575-8073
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Fax No.: (801) 575-8092
If to the Subscriber, to:
Filatov Grigory Genadievich
22 Troitskaya Street, Apt. 26
Odessa, Ukraine 270000
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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<PAGE>
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.
Filatov Grigory Genadievich
22 Troitskaya Street, Apt. 26
Odessa, Ukraine 270000
/s/ Grigory Filatov
-------------------------------
Premier Brands, Inc.
268 West 400 South
Salt Lake City, Utah 84101
Attn.: Mr. Richard Surber, President
Phone No.: (801) 575-8073
Fax No.: (801) 575-8092
By: _/s/Richard Surber______________
Richard Surber
President
99
<PAGE>
EXHIBIT A
OFFEREE QUESTIONNAIRE
To: Premier Brands, Inc.
268 West 400 South, Suite 300
Salt Lake City, UT 84101
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
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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/ Grigory Filatov
- ----------------------------------------
Filatov Grigory Genadievich
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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/ Grigory Filatov
- ----------------------------------------
Filatov Grigory Genadievich
103
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 Zveryansky Vasily Trofimovich, 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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<PAGE>
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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<PAGE>
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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<PAGE>
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.
268 West 400 South
Salt Lake City, Utah 84101
Attn.: Mr. Richard Surber, President
Phone No.: (801) 575-8073
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<PAGE>
Fax No.: (801) 575-8092
If to the Subscriber, to:
Zveryansky Vasily Trofimovich
18 Chernehovskogo Street, Apt. 10
Odessa, Ukraine 270000
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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<PAGE>
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.
Zveryansky Vasily Trofimovich
18 Chernehovskogo Street, Apt. 10
Odessa, Ukraine 270000
/s/
-------------------------------
Premier Brands, Inc.
268 West 400 South
Salt Lake City, Utah 84101
Attn.: Mr. Richard Surber, President
Phone No.: (801) 575-8073
Fax No.: (801) 575-8092
By: /s/ Richard Surber
----------------------------
Richard Surber
President
110
<PAGE>
EXHIBIT A
OFFEREE QUESTIONNAIRE
To: Premier Brands, Inc.
268 West 400 South, Suite 300
Salt Lake City, UT 84101
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
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<PAGE>
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/
- ----------------------------------------
Zveryansky Vasily Trofimovich
112
<PAGE>
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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<PAGE>
(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/
- ----------------------------------------
Zveryansky Vasily Trofimovich
114
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 Alexnovich Alexander Viktorovich, 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
115
<PAGE>
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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<PAGE>
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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<PAGE>
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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<PAGE>
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.
268 West 400 South
Salt Lake City, Utah 84101
Attn.: Mr. Richard Surber, President
Phone No.: (801) 575-8073
119
<PAGE>
Fax No.: (801) 575-8092
If to the Subscriber, to:
Alexnovich Alexander Viktorovich
35 Ak Filatova Street, Apt. 6
Odessa, Ukraine 270000
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]
120
<PAGE>
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.
Alexnovich Alexander Viktorovich
35 Ak Filatova Street, Apt. 6
Odessa, Ukraine 270000
/s/
-------------------------------
Premier Brands, Inc.
268 West 400 South
Salt Lake City, Utah 84101
Attn.: Mr. Richard Surber, President
Phone No.: (801) 575-8073
Fax No.: (801) 575-8092
By: /s/ Richard Surber
----------------------------
Richard Surber
President
121
<PAGE>
EXHIBIT A
OFFEREE QUESTIONNAIRE
To: Premier Brands, Inc.
268 West 400 South, Suite 300
Salt Lake City, UT 84101
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
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<PAGE>
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/
- ----------------------------------------
Alexnovich Alexander Viktorovich
123
<PAGE>
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/
- ----------------------------------------
Alexnovich Alexander Viktorovich
125
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 Sereda Andrey 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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<PAGE>
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.
268 West 400 South
Salt Lake City, Utah 84101
Attn.: Mr. Richard Surber, President
Phone No.: (801) 575-8073
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<PAGE>
Fax No.: (801) 575-8092
If to the Subscriber, to:
Sereda Andrey Nikolaevich
1 Srednya Street Apt. 35
Odessa, Ukraine 270000
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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<PAGE>
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.
Sereda Andrey Nikolaevich
1 Srednya Street Apt. 35
Odessa, Ukraine 270000
/s/
-------------------------------
Premier Brands, Inc.
268 West 400 South
Salt Lake City, Utah 84101
Attn.: Mr. Richard Surber, President
Phone No.: (801) 575-8073
Fax No.: (801) 575-8092
By: /s/ Richard Surber
----------------------------
Richard Surber
President
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<PAGE>
EXHIBIT A
OFFEREE QUESTIONNAIRE
To: Premier Brands, Inc.
268 West 400 South, Suite 300
Salt Lake City, UT 84101
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
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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/
- ----------------------------------------
Sereda Andrey Nikolaevich
134
<PAGE>
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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<PAGE>
(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/
- ----------------------------------------
Sereda Andrey Nikolaevich
136
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 Betoeva Tatyana Dmitrievna, 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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<PAGE>
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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<PAGE>
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.
268 West 400 South
Salt Lake City, Utah 84101
Attn.: Mr. Richard Surber, President
Phone No.: (801) 575-8073
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Fax No.: (801) 575-8092
If to the Subscriber, to:
Betoeva Tatyana Dmitrievna
3 Fontanskaya Dor., Apt 15
Odessa, Ukraine 270000
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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<PAGE>
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.
Betoeva Tatyana Dmitrievna
3 Fontanskaya Dor., Apt 15
Odessa, Ukraine 270000
/s/ Betoeva T
-------------------------------
Premier Brands, Inc.
268 West 400 South
Salt Lake City, Utah 84101
Attn.: Mr. Richard Surber, President
Phone No.: (801) 575-8073
Fax No.: (801) 575-8092
By: /s/ Richard Surber
----------------------------
Richard Surber
President
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<PAGE>
EXHIBIT A
OFFEREE QUESTIONNAIRE
To: Premier Brands, Inc.
268 West 400 South, Suite 300
Salt Lake City, UT 84101
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
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<PAGE>
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 Betoeva T
- ----------------------------------------
Betoeva Tatyana Dmitrievna
145
<PAGE>
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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<PAGE>
(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/ Betoeva T
- ----------------------------------------
Betoeva Tatyana Dmitrievna
147
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 Abramov Yury Alekssevich, 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
148
<PAGE>
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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<PAGE>
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
150
<PAGE>
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
151
<PAGE>
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.
268 West 400 South
Salt Lake City, Utah 84101
Attn.: Mr. Richard Surber, President
Phone No.: (801) 575-8073
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<PAGE>
Fax No.: (801) 575-8092
If to the Subscriber, to:
Abramov Yury Alekseevich
55 Ak Koroleva Street Apt 65
Odessa, Ukraine 270000
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]
153
<PAGE>
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.
Abramov Yury Alekseevich
55 Ak Koroleva Street Apt 65
Odessa, Ukraine 270000
/s/ Abromov Alekseevich
-------------------------------
Premier Brands, Inc.
268 West 400 South
Salt Lake City, Utah 84101
Attn.: Mr. Richard Surber, President
Phone No.: (801) 575-8073
Fax No.: (801) 575-8092
By: /s/ Richard Surber
----------------------------
Richard Surber
President
154
<PAGE>
EXHIBIT A
OFFEREE QUESTIONNAIRE
To: Premier Brands, Inc.
268 West 400 South, Suite 300
Salt Lake City, UT 84101
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
155
<PAGE>
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/ Abramov Alekseevich
- ----------------------------------------
Abramov Yury Alekseevich
156
<PAGE>
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/ Abramov Alekseevich
- ----------------------------------------
Abramov Yury Alekseevich
158
RELEASE IN FULL OF ALL CLAIMS
FOR AND IN CONSIDERATION of the payment to Tim Flatt of the sum of
Fourteen Thousand Dollars and No Cents ($14,000-00) Tim Flatt does hereby
release, acquit and forever discharge Premier Brands, Inc., a Utah Corporation
from any and all actions, causes of action, claims, demands, damages, costs,
losses, expenses and all other damages of any kind or nature, arising on account
of, or in any way growing out of or resulting from the March 1, 1997 Marketing
agreement attached hereto all as more specifically described in but not limited
to the pleadings filed In The District Court of Oklahoma County, State Of
Oklahoma, case # Ci 99- 3630 and further agrees to File a Dismissal With
Prejudice in said case.
IT IS FURTHER SPECIFICALLY UNDERSTOOD AND AGREED that this Release in
Full of All
Claims is executed by the undersigned, Tim Flatt, and for and on behalf of all
other persons or entities entitled by law to maintain or share in the proceeds
of any action arising out of the aforementioned transaction and this Release in
Full of All Claims and all provisions herein contained shall be binding upon and
enforceable against all heirs, executors, administrators, shareholders,
officers, employees, agents, successors and next of kin of the said Premier
Brands, Inc.
IT IS FURTHER SPECIFICALLY UNDERSTOOD AND AGREED that this Release in
Full of All
Claims and the payment and other consideration here acknowledged shall be held
in confidence and that, from the date of his signature on this document and
thereafter, the undersigned will not publicize, publish, disclose, talk about or
promote the publication or disclosure of the fact or terms of this Release in
Full of All Claims or the payment here acknowledged to any person not a party to
this Release in Full of All Claims. Notwithstanding the foregoing, the
undersigned shall be free to disclose any relevant information regarding this
Release in Full of All Claims and the amounts paid to him hereunder to his legal
counsel or advisors, tax preparers or advisors, financial advisors and family
members.
IT IS FURTHER SPECIFICALLY UNDERSTOOD AND AGREED that the undersigned
will indemnify Premier Brands, Inc. against any action, claim or demand,
including any costs, attorney fees, loss or judgment, which action, claim or
demand is brought by, through or under the undersigned and which arises from the
claims or transactions covered by this Release in Full of All Claims.
The terms and provisions of this agreement and the agreement attached
hereto as Exhibit "All contain the entire agreement between the parties hereto
and the terms of this Release are contractual and not a mere recital.
I FURTHER STATE THAT I HAVE CAREFULLY READ THE FOREGOING RELEASE IN
FULL OF ALL CLAIMS, KNOW THE CONTENTS THEREOF AND SIGN THE SAME AS MY OWN FREE
ACT.
WITNESS MY HAND this 15th day of September, 1999.
/s/ Tim Flatt
---------------------
Tim Flatt
159
<PAGE>
3/1/97
Marketing Contract
------------------
This is an agreement between Tim Flatt and Premier Brands, Inc. This agreement
is to provide an understanding of what is expected of each party and their
obligations.
It is understood that Tim Flatt is to provide customer names, addresses, phone
aumbers, credit card numbers and products purchased to Premier Brands, Inc.
Premier Brands is to solicit the customers provided by Tim Flatt, by telephone
and direct mail. Premier Brands, Inc. is to pay Tim Flatt a cash override on
sales volume of 10%.
The commission will be paid monthly and will be sent to Tim Flatt, along with an
accounting statement before the 10th day of the following month.
The terms of this agreement shall be for one year at which time, any customers
sold from Premier Brands, Inc. will become the property of Premier Brands, Inc.
/s/ /s/ Tim Flatt
- ------------------------ -------------------
Premier Brands, Inc. Tim Flatt
160
ACQUISITION AGREEMENT
BETWEEN
PREMIER BRANDS, INC.
AND
FD IMPORT & EXPORT CORP.
161
<PAGE>
ACQUISITION AGREEMENT
TABLE OF CONTENTS
Purchase and Sale..............................................................2
Purchase Price.................................................................2
Warranties and Representations of FD and Sellers...............................2
Warranties and Representations of PBI..........................................5
Term...........................................................................9
The PBI Shares.................................................................9
Conditions Precedent to Closing................................................9
Termination...................................................................10
Exhibits......................................................................10
Miscellaneous Provisions......................................................10
Closing.......................................................................10
Post-Closing: Form 10 or Form 10-SB...........................................10
Governing Law.................................................................11
Counterparts..................................................................11
162
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ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT dated September 1, 1998, by, between and
among Premier Brands, Inc., a Utah corporation ("PBI"), and FD Import & Export
Corp., a New York Corporation ("FD") and the persons listed on Exhibit "A"
attached hereto and made a part hereof, being all of FD's stockholders now and
as of the closing date of this Agreement (the "Sellers").
WHEREAS, the Sellers own a total of 200 shares of common stock, with no
par value, of FD Common Stock, said shares being one hundred (100%) percent of
the issued and outstanding common stock of FD; and
WHEREAS, the Sellers desire to sell and PBI desires to purchase one
hundred (100%) percent of such shares;
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties herein contained, the parties hereby agree as
follows:
I. Purchase and Sale. The Sellers hereby agree to sell, transfer, assign
and convey to PBI and PBI hereby agrees to purchase and acquire from
the Sellers, one hundred (100%) percent of FD's issued and outstanding
common stock (the "FD Common Shares"), in a reorganization pursuant to
Section 368 (a)(1)(B) of the Internal Revenue Code.
II. Purchase Price. The aggregate purchase price to be paid by PBI for the
FD Common Shares shall be 10,000,000 (post-reverse split) shares of PBI
$ .001 par value voting common stock, (the "PBI Common Shares"). The
PBI Common Shares will be issued to the individual Sellers in
accordance with Exhibit "A" attached hereto. No fractional shares of
PBI Common Stock will be issued; in lieu thereof, the number of shares
of PBI Common Stock to be issued to each Seller will be rounded up to
the next whole share. Each of the Sellers hereby agree to the terms of
this Agreement (the "Agreement").
III. Warranties and Representations of FD and Sellers. In order to induce
PBI to enter into the Agreement and to complete the transaction
contemplated hereby, FD and Sellers warrant and represent to PBI that:
A. Organization and Standing. FD is a corporation duly organized,
validly existing and in good standing under the laws of the State
of New York, is qualified to do business with a foreign
corporation in every other state or jurisdiction in which it
operates to the extent required by the laws of such states and
jurisdictions, and has full power and authority to carry on its
business as now conducted and to own and operate its assets,
properties and business. Attached hereto as Exhibit "B" are true
and correct copies of FD's Certificate of Incorporation,
amendments thereto and all current By laws of FD. No changes
thereto will be made in any of the Exhibit "B" documents before
the Closing.
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B. Capitalization. As of the Closing Date, FD's entire authorized
equity capital consists of 200 shares of Common Stock, of which
200 shares of Common Stock will be outstanding as of the Closing.
As of the Closing Date, there will be no other voting or equity
securities authorized or issued, nor any authorized or issued
securities convertible into voting stock, and no outstanding
subscriptions, warrants, calls, options, rights, commitments or
agreements by which any of the Sellers are bound, calling for the
issuance of any additional shares of common stock of any other
voting or equity security. The FD Common Shares constitute one
hundred (100%) percent of the equity capital of FD, which
includes, inter alia, one hundred (100%) percent of FD's voting
power, right to receive dividends, when, as and if declared and
paid, and the right to receive the proceeds of liquidation
attributable to common stock, if any.
C. Ownership of the FD Shares As of the Date hereof, the Sellers are
the sole owners of the FD Common Shares, free and clear of all
liens, encumbrances and restrictions of any nature whatsoever,
except by reason of the fact that the FD Common Shares will not
have been registered under the "33 Act, or and applicable State
Securities laws.
D. Taxes. FD has filed all federal, state and local income or other
tax returns and reports that it is required to file with all
governmental agencies, wherever situate, and has paid or accrued
for payment all taxes as shown on such returns, such that a
failure to file, pay or accrue will not have a material adverse
effect on FD.
E. Pending Actions. There are no material legal actions, lawsuits,
proceedings of investigations, either administrative of judicial,
pending of threatened, against or affecting FD, or against the
Sellers that arise out of their operation of FD, except as
described in Exhibit "C" attached hereto. FD is not in violation
of any law, material ordinance or regulation of any kind
whatever, including, but not limited to laws, rules and
regulations governing the sale of its products, the '33 Act, the
Securities Exchange Act of 1934, as amended (the "34 Act") the
Rules and Regulations of the U.S. Securities and Exchange
Commission ("SEC"), or the Securities Laws and Regulations of any
state.
F. Governmental Regulation. FD holds the licenses and registrations
set forth on Exhibit "D" hereto from the jurisdictions set forth
therein, which licenses and registrations are all of the licenses
and registrations necessary to permit FD to conduct its current
business. All of such licenses and registrations are in full
force and effect, and there are no proceedings, hearings or other
actions pending that may affect the validity of continuation of
any of them. No approval of any other trade or professional
association or agency of government other than as set forth on
Exhibit "D" is required for any of the transactions effected by
this Agreement, and the completion of the transactions
contemplated by the Agreement will not, in and of themselves,
affect or jeopardize the validity or continuation of any of them.
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G. Ownership of Assets. Except as set forth in Exhibit "E", FD has
good, marketable title, without any liens or encumbrances of any
nature whatever, to all of the following, if any: its assets,
properties and rights of every type and description, including,
without limitation, all cash on hand and in banks, certificates
of deposit, stocks, bonds, and other securities, good will,
customer lists, its corporate name and all variants thereof,
trademarks and trade names, copyrights and interests thereunder,
licenses and registrations, pending licenses and permits and
applications therefore, inventions, processes, know-how, trade
secrets, real estate and interests therein and improvements
thereto, machinery, equipment, vehicles, notes and accounts
receivable, fixtures, rights under agreements and leases,
franchises, all rights and claims under insurance policies and
other contracts of whatever nature, rights in funds of whatever
nature, books and records and all other property and rights of
every kind and nature owned or held by FD as of this date, and
will continue to hold such title on and after the completion of
the transactions contemplated by the Agreement; nor, except in
the ordinary course of its business, has FD disposed of any such
asset since the date of the most recent balance sheet described
in Section III (O) of this agreement.
H. No Interest in Suppliers, Customers, Landlords or Competitors.
Neither the Sellers nor any member of their families have any
interest of any nature whatever in any supplier, customer,
landlord or competitor of FD.
I. No Debt Owed by FD to Sellers. Except as set forth in Exhibit "F"
FD does not owe any money, securities, or property to either the
Sellers or any member of the families or to any company
controlled by such a person, directly or indirectly. To the
extent that FD may have any undisclosed liability to pay any sum
or property to any such person or entity or any member of their
families such liability is hereby forever irrevocably released
and discharged.
J. Corporate Records. All of FD's books and records, including,
without limitation, its books of account, corporate records,
minute book, stock certificate books and other records of FD are
up-to-date, complete and reflect accurately and fairly the
conduct of its business in all material respects since its date
of incorporation.
K. No Misleading Statements of Omissions. Neither the Agreement nor
any financial statement, exhibit, schedule or document attached
hereto or presented to PBI in connection herewith, contains any
materially misleading statement, or omits any fact of statement
necessary to make the other statements or facts therein set forth
not materially misleading.
L. Validity of the Agreement. All corporate and other proceedings
required to be taken by the Sellers and by FD in order to enter
into and to carry out the Agreement have been duly and properly
taken. The Agreement has been duly executed by the Sellers and by
FD, and constitutes the valid and binding obligation of each of
them, except to the extent limited by applicable bankruptcy,
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reorganization, insolvency, moratorium or other laws relating to
or effecting generally the enforcement of creditors rights. The
execution and delivery of the Agreement and the carrying out of
its purposes will not result in the breach of any of the terms or
conditions of, or constitute a default under or violate FD's
Certificate of Incorporation or document of undertaking, oral or
written, to which FD of the Sellers is a party or is bound or may
be affected, nor will such execution, delivery and carrying out
violate any order, writ, injunction, decree, law, rule or
regulation of any court, regulatory agency or other governmental
body; and the business now conducted by FD can continue to be so
conducted after completion of the transaction contemplated
hereby, with FD as a wholly- owned subsidiary of PBI.
M. Enforceability of the Agreement. When duly executed and
delivered, the Agreement and the Exhibits hereto which are
incorporated herein and made a part hereof are legal, valid, and
enforceable by PBI according to their terms, except to the extent
limited by applicable bankruptcy, reorganization, insolvency,
moratorium or other laws relating to or effecting generally the
enforcement of creditors rights and that at the time of such
execution and delivery, PBI will have acquired title in and to
the FD Common Shares free and clear of all claims, liens and
encumbrances.
N. Access to Books and Records. PBI will have full and free access
to FD's books during the course of this transaction prior to
Closing, during regular business hours.
O. FD's Financial Statements. FD's Balance Sheet and Profit and Loss
statement for the quarter ended June 30, 1998, attached hereto as
Exhibit "G", accurately describe FD's financial position as of
the dates thereof. Within 90 days after the Closing. FD will
provide PBI with certified financial statements for the necessary
periods to file a Form 10 or Form 10SB, if required. These
financial statements shall be prepared in accordance with
generally accepted accounting principles in the United States
("GAAP") (or as permitted by regulation S-X, S-B and/or the rules
promulgated under the '33' act and the 34' act and certified by
independent certified public accountants with substantial SEC
experience.)
P. F &D's Corporate Summary, attached hereto as Exhibit "H",
accurately describes FD's business, assets, proposed operations
and management as of the date thereof; since the date of the
Corporate Summary, there has been no material change in the
Business Plan.
IV. Warranties and Representations of PBI. In order to induce the Sellers and
FD to enter into the Agreement and to complete the transaction contemplated
hereby, PBI warrants and represents to FD and Sellers that:
A. Organization and Standing. PBI is a corporation duly organized,
validly existing
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and in good standing under the laws of the State of Utah, is
qualified to do business as a foreign corporation in every other
state in which it operates to the extent required by the laws of
such states, and has full power and authority to carry on its
business as now conducted and to own and operate its assets,
properties and business.
B. Capitalization PBI's entire authorized equity capital consists of
2,374,314 shares of voting common stock, $.001 par value and
24,000 shares of preferred stock, $.001 par value. As of the
Closing, after giving effect to the proposed reverse split of
PBI's remaining outstanding shares, PBI will have 100,000,000
shares Common Stock, $.001 par value, authorized, of which 39,572
shares of voting common stock of PBI will be issued and
outstanding, which does not include the 10,000,000 shares being
issued to Sellers hereunder pursuant to Section 4(2) of the '33
Act of the issuance at closing. Upon issuance, all of the PBI
Common Stock will be validly issued fully paid and
non-assessable. The relative rights and preferences of PBI's
equity securities are set forth in the Articles of Incorporation,
as amended and PBI's By-Laws (Exhibit "I" hereto). Except as set
forth above, there are no voting or equity securities convertible
into voting stock, and no outstanding subscriptions, warrants,
calls, options, rights, commitments or agreements by which PBI is
bound, calling for the issuance of any additional shares of
common stock or any other voting or equity security. The By-Laws
of PBI provide that a simple majority of the shares voting at a
stockholders' meeting at which a quorum is present may elect all
of the directors of PBI. Cumulative voting is not provided for by
the By-Laws or Articles of Incorporation of PBI. Accordingly, as
of the Closing the 10,000,000 shares being issued to and acquired
by the Sellers will constitute approximately (99%) percent of the
Common Shares of PBI which will then be issued and outstanding,
which includes inter alia, that same percentage of PBI's voting
power, right to receive dividends, when, as and if declared and
paid, and the right to receive the proceeds of liquidation
attributable to common stock, if any.
C. Ownership of Shares. By PBI's issuance of the PBI Common Shares
to the Sellers pursuant to the Agreement, the Sellers will
thereby acquire good absolute marketable title thereto, free and
clear of all liens, encumbrances and restrictions of any nature
whatsoever, except by reason of the fact that such PBI shares
will not have been registered under the '33 Act.
D. Significant Agreements. PBI is not and will not at Closing be
bound by any of the following, unless specifically listed in
Exhibit "J" hereto:
1. Employment advisory or consulting contract;
2. Plan providing for employee benefits of any nature;
3. Lease with respect to any property or equipment;
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4. Contract of commitment for any future expenditure in
excess of $100.
5. Contract or commitment pursuant to which it has
assumed, guaranteed, endorsed, or otherwise become
liable for any obligation of any other person, firm or
organization;
6. Contract, agreement, understanding, commitment or
arrangement, other than in the normal course of
business, not fully disclosed or set forth in the
Agreement;
7. Agreement with any person relating to the dividend,
purchase or sale of securities, that has not; been
settled by the delivery of payment of securities when
due, and which remains unsettled upon the date of the
Agreement.
E. Sale of Business. PBI will have sold its existing business prior
to closing.
F. Taxes. PBI has filed all federal, state and local income or other
tax returns and reports that it is required to file with all
governmental agencies, wherever situate, and has approximately
$87,172 in taxes as shown on such returns. All of such returns
are true and complete.
G. Liabilities. At and as of the Closing Date, PBI will have a total
of approximately $148,954 in liabilities, exclusive of the costs,
including legal and accounting fees and other expenses, in
connection with this transaction.
H. No Pending Actions. There are no legal actions, lawsuits,
proceedings of investigations, either administrative or judicial,
pending or threatened, against affecting PBI, or against any of
PBI's officers or directors and arising out of their operation of
PBI. PBI has been in compliance with, and has not received notice
of violation of any law, ordinance of regulation to any kind
whatever, including, but not limited to, the '33 Act, the '34
Act, the Rules and Regulations of the SEC or the Securities Laws
and Regulations of any state. PBI is not now and never has been
required to file reports under the '33 Act or the '34 Act.
I. Corporate Records. All of PBI's books and records, including
without limitation, its book of account, corporate records,
minute book, stock certificate books and other records are
up-to-date, complete and reflect accurately and fairly the
conduct of its business in all respects since its date of
incorporation: all of said books and records will be delivered to
PBI's new management at the Closing.
J. No Misleading Statements or Omissions. Neither the Agreement nor
any financial statement, exhibit, schedule or document attached
hereto or presented to FD's counsel in connection herewith
contains any materially misleading statement, or
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omits any fact or statement necessary to make the other stats of
facts therein set forth not materially misleading.
K. Validity of the Agreement. All corporate and the proceedings
required to be taken by PBI in order to enter into and to carry
out the Agreement have been duly and properly taken. The
Agreement has been duly executed by PBI, and constitutes a valid
and binding obligation of PBI. The execution and delivery of the
Agreement and the carrying out of its purposes will not result in
the breach of any of the terms or conditions of, or constitute a
default under or violate, PBI's Certificate of Incorporation or
By-Laws, or any agreement, lease, mortgage, bond, indenture,
license or other document or undertaking, oral or written, to
which PBI is a party or is bound or may be affected, nor will
such execution, delivery and carrying out violate any order,
writ, injunction, decree, law, rule or regulation of any court
regulatory agency or other governmental body.
L. Enforceability of the Agreement. When duly executed and
delivered, the Agreement and the Exhibits hereto which are
incorporated herein and made a part hereof are legal, valid, and
enforceable by FD and the Sellers according to their terms, and
that at the time of such execution and delivery, the Sellers will
have acquired good, marketable title in and to the PBI Common
Shares acquired pursuant hereto, free and clear of all liens and
encumbrances.
M. Access to Books and Records. FD and Sellers will have full and
free access to PBI's books and records during the course of this
transaction prior to and at the Closing.
N. PBI Financial Stats. At or before the Closing, PBI will provide
FD with recent audited financial statements, which will be
certified in accordance with GAAP by independent certified public
accountants with substantial SEC experience.
O. PBI Financial Condition. As of the Closing, PBI will have no
assets and $148,954 liabilities.
P. Stockholder Approval. Immediately upon the signing of the
Agreement, PBI will submit to its stockholders by meeting or
consent the matters described in section VII(B)(1) herein, if
required to do so under Utah Corporate Law. Hudson Consulting
Group, Inc. agrees that it will vote all of its PBI shares in
favor of all items submitted to PBI stockholders in accordance
with the Agreement.
V. Term. All representations, warranties, covenants and agreements made herein
and in the exhibits attached hereto shall survive the execution and
delivery of the Agreement and payment pursuant thereto.
VI. The PBI Shares. All o f the PBI Common Shares shall be validly issued,
fully-paid and non-assessable shares of PBI Common Stock, with full voting
rights, dividend rights, and
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the right to receive the proceeds of liquidation, if any, as set forth in
the respective Articles of Incorporation.
VII. Conditions Precedent to Closing.
A. The obligations of FD and Sellers under the Agreement shall be
and are subject to fulfillment, prior to or at the Closing of
each of the following conditions:
1. That PBI and its management representations and
warranties contained herein shall be true and correct
at the time of closing date as if such representations
and warranties were made at such time;
2. That PBI and its management shall have performed or
complied with all agreements, terms and conditions
required by the Agreement to be performed or complied
with by them prior to or at the time of Closing;
3. That PBI's stockholders, by proper and sufficient vote,
shall have properly approved all of the matters
described in Section VII(B)(1) herein, if required to
do so under Utah Corporate Law; and
B. The obligations of PBI under the Agreement shall be and are
subject to fulfillment, prior to, at the Closing or subsequent to
the Closing of each of the following conditions:
1. That PBI stockholders, if necessary by proper and
sufficient vote of its stockholders, shall have
approved the Agreement and the transactions
contemplated hereby and will have approved such other
changes as are consistent with the Agreement for
submission to PBI stockholders, if required to do so
under Utah Corporate Law;
2. That FD's and Sellers' representations and warranties
contained herein shall be true and correct at the time
of Closing as if such representations and warranties
were made at such time; and
3. That FD and Sellers shall have performed or complied
with all agreements, terms and conditions required by
the Agreement to be performed or complied with by them
prior to or at the time of Closing.
4. That Sellers, individually, and PBI, jointly and
severally indemnify and hold harmless PBI's former
officers, directors, agents and affiliates against any
claims or liabilities, including reasonable attorney's
fees and other reasonable defense costs incurred in
defending such claims or liabilities, resulting from
any claims or liabilities asserted against them to any
material misrepresentation or omissions in the
Agreement made by PBI or Sellers.
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VIII. Termination. The Agreement may be terminated at any time before or; at
Closing, by:
A. The mutual agreement of the parties;
B. Any party if:
1. Any provision of the Agreement applicable to a party
shall be materially untrue or fail to be accomplished.
2. Any legal proceeding shall have been instituted or
shall be imminently threatening to delay, restrain or
prevent the consummation of the Agreement.
Upon termination of the Agreement for any reason, in accordance with the terms
and conditions set forth in this paragraph, each said party shall bear all costs
and expenses as each party has incurred and no party shall be liable to the
other.
IX. Exhibits. All Exhibits attached hereto are incorporated herein by this
reference as it they were set forth in entirety.
X. Miscellaneous Provisions. This Agreement is the entire agreement between
the parties in respect of the subject matter hereof, and there are no other
agreements, written or oral, nor may the Agreement be modified except in
writing and executed by all of the parties hereto. The failure to insist
upon strict compliance with any of the terms, covenants or conditions of
the Agreement shall not be deemed a waiver or relinquishment of such right
or power at any other time or times.
XI. Closing. The Closing of the transactions contemplated by the Agreement
("Closing") place at 1:00 P.M. on the first business day after the
stockholders of PBI approve this transaction, if approval is required or on
September 8, 1998, whichever is sooner, if shareholder approval is not
required or can be obtained subsequent to closing by shareholder
ratification. The Closing shall occur at the offices of
__________________________________ or such other date and place as the
parties hereto shall agree upon. At the Closing, all of the documents and
items referred to herein shall be exchanged.
XII. Post-Closing: Form 10 or Form 10-SB. As soon as practical after Closing and
after PBI meets the initial listing requirements for the NASDAQ Small Caps
market, PBI will prepare, file and use its best efforts to have declared
effective a Form 10 or Form 10-SB Registration Statement with the
Securities and Exchange Commission.
XIII.Governing Law. The Agreement shall be governed by and construed in
accordance with the internal laws of the State of Utah.
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XIV. Counterparts. The Agreement may be executed in duplicate facsimile
counterparts, each of which shall be deemed an original and together shall
constitute on and the same binding Agreement, with one counterpart being
delivered to each party hereto.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals
as of the date and year above first written.
Premier Brands, Inc.
By: /s/ Richard D. Surber
- -------------------------
Richard D. Surber
Its: President
FD Import & Export Corp.
By: /s/ Igor Fruman
- ------------------------
Igor Fruman
Its: President
SELLERS:
/s/ Igor Fruman
- -----------------------
Igor Fruman
/s/ Vladislav V. Dyablo
- -----------------------
Vladislav V. Dyablo
/s/ Vyacheslav Fruman
- -----------------------
Vyacheslav Fruman
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INDEX TO EXHIBITS
Exhibit No. Description
A Lilst of FD's stockholders
B FD's Certidicate of Incorporation, as amended and By-laws
C Pending Actions
D Licenses and registrations of FD
E Liens and encumbrances on FD's asssets or property
F FD's liabilities
G FD's unaudited Fiancial Statements
H FD's Corporate Summary
I PBI's By-Laws
J Significant Agreements
173
RESCISSION AGREEMENT AND GENERAL RELEASE
This Rescission Agreement and General Release ("Agreement") is made
this 2nd day of December, 1999 by Premier Brands, Inc., a Utah corporation,
("PBI") and F D Import & Export, Inc., a New York corporation ("FD"), and the
persons listed on Exhibit A attached hereto and made a part hereof, being all of
FD's stockholders as of the closing date of the parties' previous Acquisition
Agreement dated September 1, 1998 (the "Sellers").
PREMISES
WHEREAS, PBI, FD, and Sellers mutually desire to rescind their previous
Acquisition Agreement dated September 1, 1998 (the "September 1998 Acquisition")
and to replace the September 1998 Acquisition with an agreement whereby each
party will return the stock it obtained by such agreement, bear its own costs,
and release all claims against every other party.
WHEREAS, the parties mutually desire this agreement to create a
novation which replaces the September 1998 Acquisition.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained herein, and for other good and valuable
consideration, the adequacy of which is expressly acknowledged, the parties
hereby agree as follows:
1. Novation of September 1998 Acquisition
PBI, FD, and the Sellers, and each of them, unanimously agree to cancel
and rescind the September 1998 Acquisition, and to replace the September 1998
Acquisition with a novation--namely, this Agreement.
2. Term of Agreement and Effective Date
The term of this Agreement ("Term") shall be perpetual from this day
forward, and will continue in duration until the parties unanimously agree in
writing otherwise. The effective date of this agreement shall be 10 days after a
sufficient number of PBI's shareholders sign consents and waivers approving of
this action.
3. Return of PBI Stock to PBI
The Sellers hereby agree to return to PBI, and PBI hereby agrees to
accept from Sellers, the 10,000,000 (post-reverse split) shares of PBI's $ .001
par value voting common stock, (the "PBI Common Shares"), which they had
previously received in the September 1998 Acquisition.
4. Return of FD Stock to Sellers
PBI hereby agrees to return to the Sellers, and the Sellers agree to
accept, the two hundred shares of FD's issued and outstanding common stock (the
"FD Common Shares") which they had previously received in the September 1998
Acquisition. The FD Common Shares will be delivered to the individual Sellers in
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accordance with Exhibit "A" attached hereto. Each of the Sellers hereby agrees
to the terms of this Agreement (the "Agreement").
5. Warranties and Representations of FD and Sellers
In order to induce PBI to enter into the Agreement and to complete the
transaction contemplated hereby, FD and Sellers warrant and represent to PBI
that:
A. Organization and Standing. FD is a corporation duly organized,
validly existing and in good standing under the laws of the State
of New York, is qualified to do business as a foreign corporation
in every other state or jurisdiction in which it operates to the
extent required by the laws of such states and jurisdictions, and
has full power and authority to carry on its business as now
conducted and to own and operate its assets, properties and
business.
B. Ownership of the PBI Shares As of the Date hereof, the Sellers
are the sole owners of the PBI Common Shares, free and clear of
all liens, encumbrances and restrictions of any nature
whatsoever, except due to the fact that the PBI Common Shares
have not been registered under the Securities Act of 1933 (the
"'33 Act"), or any applicable state securities laws.
C. No Misleading Statements or Omissions. Neither the Agreement nor
any exhibit attached hereto or presented to PBI in connection
herewith, contains any materially misleading statement, or omits
any fact or statement necessary to make the other statements or
facts therein set forth not materially misleading.
D. Validity of the Agreement. All corporate and other proceedings
required to be taken by the Sellers and by FD in order to enter
into and to carry out the Agreement have been duly and properly
taken. The Agreement has been duly executed by the Sellers and by
FD, and constitutes the valid and binding obligation of each of
them. The execution and delivery of the Agreement and the
carrying out of its purposes will not result in the breach of any
terms or conditions of, nor constitute a default under, nor
violate, FD's Certificate of Incorporation or By-Laws, or any
agreement, lease, mortgage, bond, indenture, license or other
document or undertaking, oral or written, to which the Sellers or
FD is a party or is bound or may be affected, nor will such
execution, delivery and carrying out violate any order, writ,
injunction, decree, law, rule or regulation of any court,
regulatory agency or other governmental body.
E. Enforceability of the Agreement. When duly executed and
delivered, the Agreement and the Exhibits hereto, which are
incorporated herein and made a part hereof, are legal, valid, and
enforceable by PBI according to their terms, except to the extent
limited by applicable bankruptcy, reorganization, insolvency,
moratorium or other laws relating to or effecting generally the
enforcement of creditor rights and that at the time of such
execution and delivery, PBI will have acquired title in and to
the PBI Common Shares free and clear of all claims, liens and
encumbrances.
6. Warranties and Representations of PBI
In order to induce the Sellers and FD to enter into the Agreement and
to complete the transaction contemplated hereby, PBI warrants and represents to
FD and Sellers that:
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a. Organization and Standing. PBI is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Utah, is qualified to do business as a foreign corporation in
every other state in which it operates to the extent required by
the laws of such states, and has full power and authority to
carry on its business as now conducted and to own and operate its
assets, properties and business.
b. Ownership of Shares. By PBI's delivery of the FD Common Shares to
the Sellers pursuant to the Agreement, the Sellers will thereby
acquire good, absolute, marketable title thereto, free and clear
of all liens, encumbrances and restrictions of any nature
whatsoever, except by reason of the fact that such FD shares will
not have been registered under the '33 Act.
c. Validity of the Agreement. All corporate and other proceedings
required to be taken by PBI in order to enter into and to carry
out the Agreement have been duly and properly taken. The
Agreement has been duly executed by PBI, and constitutes a valid
and binding obligation of PBI. The execution and delivery of the
Agreement and the carrying out of its purposes will not result in
the breach of any of the terms or conditions of, nor constitute a
default under, nor violate, PBI's Certificate of Incorporation or
By-Laws, or any agreement, lease, mortgage, bond, indenture,
license or other document or undertaking, oral or written, to
which PBI is a party or is bound or may be affected, nor will
such execution, delivery and carrying out violate any order,
writ, injunction, decree, law, rule or regulation of any court
regulatory agency or other governmental body.
d. Enforceability of the Agreement. When duly executed and
delivered, the Agreement and the Exhibits hereto which are
incorporated herein and made a part hereof are legal, valid, and
enforceable by FD and the Sellers according to their terms, and
that at the time of such execution and delivery, the Sellers will
have acquired good, marketable title in and to the FD Common
Shares acquired pursuant hereto, free and clear of all liens and
encumbrances.
7. General Mutual Release of All Claims
PBI, FD, the Sellers, and each of them, hereby agree and covenant that
they do hereby forever release and hold harmless every other party to this
contract from any and all liabilities, claims, damages (including but not
limited to attorney's fees) and other obligations arising from or connected with
the September 1998 Acquisition, or arising from or connected with the
Acquisition Agreement between the parties dated September 1, 1998. This release
is intended by all parties to be a general release of all claims of any nature
whatsoever.
8. Mutual Agreement for Each Party to Bear Its Own Costs
PBI, FD, the Sellers, and each of them, hereby agree and covenant that
each party to this contract shall bear its own costs and expenses related to the
September 1998 Acquisition, and each party hereby holds every other party to
this agreement harmless from same.
9. All Prior Agreements Terminated
This Agreement comprises the entire agreement and understanding between
the parties hereto at the date of this Agreement as to the subject matter hereof
and supersedes and replaces all agreements, proposals, and negotiations, whether
oral or written, between the parties hereto in connection with the subject
matter
176
<PAGE>
hereof. None of the parties hereto shall be bound by any conditions,
definitions, warranties or representations with respect to the subject matter of
this Agreement other than as expressly provided in this Agreement unless the
parties hereto subsequently agree to vary this Agreement in writing, duly signed
by authorized representatives of the parties hereto.
10. Miscellaneous
A. Authority. The execution and performance of this Agreement have
been duly authorized by all requisite corporate action. This
Agreement constitutes a valid and binding obligation of the
parties hereto.
B. Amendment. This Agreement may be amended or modified at any time
and in any manner only by an instrument in writing executed by
all the parties hereto.
C. Waiver. No term of this Agreement shall be considered waived and
no breach excused by either party unless made in writing. No
consent, waiver or excuse by either party, express or implied,
shall constitute a subsequent consent, waiver or excuse.
D. Assignment:
(i) The rights and obligations of the Consultant under
this Agreement shall inure to the benefit of and
shall be binding upon its successors and assigns.
There shall be no rights of transfer or assignment of
this Agreement by Client except with the prior
written consent of the Consultant.
(ii) Nothing in this Agreement, expressed or implied, is
intended to confer upon any person, other than the
parties and their successors, any rights or remedies
under this Agreement.
E. Headings and Captions. The headings of paragraphs are included
solely for convenience. If a conflict exists between any heading
and the text of this Agreement, the text shall control.
F. Entire Agreement. This instrument and the exhibits to this
instrument contain the entire Agreement between the parties with
respect to the transaction contemplated by the Agreement. It may
be executed in any number of counterparts but the aggregate of
the counterparts together constitute only one and the same
instrument.
G. Effect of Partial Invalidity. In the event that any one or more
of the provisions contained in this Agreement shall for any
reason be held to be invalid, illegal, or unenforceable in any
respect, such invalidity, illegality or unenforceability shall
not affect any other provisions of this Agreement, but this
Agreement shall be constructed as if it never contained any such
invalid, illegal or unenforceable provisions.
H. Controlling Law. The validity, interpretation, and performance of
this Agreement shall be governed by the laws of the State of
Utah, without regard to its law on the conflict of laws. Any
dispute arising out of this Agreement shall be brought in a court
of competent jurisdiction in Salt Lake County, Utah. The parties
exclude any and all statutes, laws and treaties which
177
<PAGE>
would allow or require any dispute to be decided in another forum
or by other rules of decision than provided in this Agreement.
I. Attorney's Fees. If any action at law or in equity, including an
action for declaratory relief, is brought to enforce or interpret
the provisions of this Agreement, the prevailing party shall be
entitled to recover actual attorney's fees, court costs, and
other costs incurred in proceeding with the action from the other
party. The attorney's fees, court costs or other costs, may be
ordered by the court in its decision of any action described in
this paragraph or may be enforced in a separate action brought
for determining attorney's fees, court costs, or other costs.
Should either party be represented by in-house counsel, all
parties agree that party may recover attorney's fees incurred by
that in-house counsel in an amount equal to that attorney's
normal fees for similar matters, or, should that attorney not
normally charge a fee, by the prevailing rate charged by
attorneys with similar background in that legal community.
J. Time is of the Essence. Time is of the essence of this Agreement
and of each and every provision hereof.
K. Mutual Cooperation. The parties hereto shall cooperate with each
other to achieve the purpose of this Agreement, and shall execute
such other and further documents and take such other and further
actions as may be necessary or convenient to effect the
transactions described herein.
L. No Third Party Beneficiary. Nothing in this Agreement, expressed
or implied, is intended to confer upon any person, other than the
parties hereto and their successors, any rights or remedies under
or by reason of this Agreement, unless this Agreement
specifically states such intent.
M. Facsimile Counterparts. If a party signs this Agreement and
transmits an electronic facsimile of the signature page to the
other party, the party who receives the transmission may rely
upon the electronic facsimile as a signed original of this
Agreement.
EXECUTED by all parties on the date first above written.
Premier Brands, Inc. FD Import & Export Corp.
By: By:
----------------------- -------------------
Igor Fruman Igor Fruman
Its: Current President Its: President
SELLERS:
------------------------
Igor Fruman
Vladislav V. Dyablo
------------------------
Vyacheslav Fruman
178
<PAGE>
EXHIBIT A
LIST OF SELLERS (FORMER SHAREHOLDERS OF FD)
1. Igor Fruman 20 shares of FD common stock
2. Vladislav V. Dyablo 80 shares of FD common stock
3. Vyacheslav Fruman 100 shares of FD common stock
179
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
CONSOLIDATED UNAUDITED CONDENSED FINANCIAL STATEMENTS FILED WITH THE
COMPANY'S DECEMBER 31, 1999 ANNUAL REPORT ON FORM 10-SB AND IS QUALIFIED IN
ITS ENTIRELTY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0001071355
<NAME> Premier Brands, Inc.
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> Dec-31-1999
<PERIOD-START> Jan-1-1999
<PERIOD-END> Dec-31-1999
<EXCHANGE-RATE> 1
<CASH> 104,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 104,000
<PP&E> 0
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<TOTAL-ASSETS> 104,000
<CURRENT-LIABILITIES> 110,782
<BONDS> 0
0
0
<COMMON> 4,209
<OTHER-SE> (10,990)
<TOTAL-LIABILITY-AND-EQUITY> 104,000
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 206,375
<OTHER-EXPENSES> (12,881)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (193,494)
<INCOME-TAX> 0
<INCOME-CONTINUING> (193,494)
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<CHANGES> 0
<NET-INCOME> 193,494
<EPS-BASIC> (.05)
<EPS-DILUTED> (.05)
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