SUBSCRIPTION AGREEMENT
FOR REGULATION S INVESTORS
This Subscription Agreement (the "Agreement") dated as of 29 June,
2005, has been executed by the undersigned (a "Subscriber") in connection with
the offer and sale (the "Offering") of shares (the "Shares") of common stock,
$.001 par value per share (the "Common Stock"), of Advanced Medical Institute
Inc., a Nevada corporation (the "Company"), at a price of AU$1 million (US$0.76
million) in total. The offer and sale of the Common Stock are being made in
reliance upon the provisions of Regulation S ("Regulation S") promulgated by the
Securities and Exchange Commission (the "SEC") under the Securities Act of 1933,
as amended (the "Securities Act"). Upon the terms and subject to the conditions
set forth herein, each Subscriber hereby agrees to purchase, and the Company
hereby agrees to issue and sell the Shares. In consideration of the mutual
promises, representations and warranties set forth herein, the Company and each
Subscriber hereby agree as follows:
1. Agreement to Subscribe; Each Subscriber
1.1 Purchase and Issuance of the Common Stock. Each Subscriber is hereby
subscribing for the number of shares of Common Stock set out in Annex 1 against
their name (being 6,122,450 shares in total) (the "Subscriber's Common Stock").
The aggregate price payable for the Subscriber's Common Stock is AU$1 million
(US$0.76 million) ("Share Consideration"). Concurrently with the execution and
delivery of this Agreement to the Company, the Subscriber is delivering to the
Company at its offices at c/o Advanced Medical Institute Pty Ltd., ▇▇▇▇▇ ▇, ▇▇▇,
-▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ this subscription agreement and
the Purchase Price by bank check, wire transfer or such other form of payment as
shall be acceptable to the Company, in its sole and absolute discretion. Any
such check sent to the Company shall be made payable to the order of "Advanced
Medical Institute Inc." Funds received by the Company shall be held in escrow by
the Company until the first to occur of (i) the closing of the Offering, (ii)
the date on which the Company determines in its sole and absolute discretion to
reject the Subscriber's subscription to purchase the Shares, and (iii) the date
the Company determines to terminate the Offering. The Company will not accept
subscriptions from persons who are not qualified as "accredited investors", as
that term is defined in Rule 501 of Regulation D under the Securities Act. Any
subscriptions for shares of Common Stock made by Subscribers who are not
accredited investors will be returned to such subscriber without interest.
1.2 Closing. The closing for the sale of the Shares to the
Subscriber shall take place at the offices of the Company no later than 30 June,
2005 (the "Closing"), or at such other time and/or such other place as the
Company may determine in its sole and absolute discretion. If the Closing shall
not have occurred by 30 June, 2005, the escrowed Share Consideration, shall be
returned promptly to the Subscriber without deduction therefrom and without
interest thereon.
2. Representations and Warranties of the Subscriber
The Subscriber represents and warrants to the Company that:
2.1 No Government Recommendation or Approval. The 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 or the Offering of the Shares.
2.2 Not a "U.S. Person". The Subscriber is not a "U.S. Person" as
defined in Rule 902 of Regulation S promulgated under the Securities Act, was
not organized under the laws of any United States jurisdiction, and was not
formed for the purpose of investing in securities not registered under the
Securities Act. At the time the purchase order for this transaction was
originated, the Subscriber was outside the United States.
2.3 Intent. The Subscriber is purchasing the Shares solely for
investment purposes, for the Subscriber's own account and not for the account or
benefit of any U.S. person, and not with a view towards the distribution or
dissemination thereof and the Subscriber has no present arrangement to sell the
Shares to or through any person or entity. The Subscriber understands that the
Shares must be held indefinitely unless such Shares are resold in accordance
with the provisions of Regulation S, are subsequently registered under the
Securities Act or an exemption from registration is available.
2.4 Restrictions on Transfer. The Subscriber understands that the
Shares are being offered in a transaction not involving a public offering in the
United States within the meaning of the Securities Act. The Shares have not been
and will not be registered under the Securities Act, and, if in the future the
Subscriber decides to offer, resell, pledge or otherwise transfer the Shares,
such Shares may be offered, resold, pledged or otherwise transferred only (A)
pursuant to an effective registration statement filed under the Securities Act,
(B) to a non-U.S. person in an offshore transaction in accordance with Rule 903
or Rule 904 of Regulation S of the Securities Act, (C) pursuant to the resale
limitations set forth in Rule 905 of Regulation S, (D) pursuant to an exemption
from registration under the Securities Act provided by Rule 144 thereunder (if
available) or (E) pursuant to any other exemption from the registration
requirements of the Securities Act, and in each case in accordance with any
applicable securities laws of any state of the United States or any other
jurisdiction. The Subscriber acknowledges, agrees and covenants that it will not
engage in hedging transactions with regard to the Subscriber's Common Stock
prior to the expiration of the distribution compliance period specified in Rule
903 of Regulation S promulgated under the Act, unless in compliance with the
Securities Act. The Subscriber agrees that if any transfer of its Shares or any
interest therein is proposed to be made, as a condition precedent to any such
transfer, the transferor may be required to deliver to the Company an opinion of
counsel satisfactory to the Company. Absent registration or another exemption
from registration, the Subscriber agrees that it will not resell the securities
constituting the Subscriber's Common Stock to U.S. Persons or within the United
States.
2.5. Accredited and Sophisticated Investor.
(i) The Subscriber is familiar with the term "accredited
investor" as defined in Regulation D promulgated under the Securities Act and is
an "accredited investor" within the meaning of such term in Regulation D. The
Subscriber has completed the Confidential Investor Questionnaire attached
hereto.
(ii) The Subscriber is sophisticated in financial matters and
is able to evaluate the risks and benefits of the investment in the Shares.
(iii) The Subscriber is able to bear the economic risk of his
investment in the Shares for an indefinite period of time because none of the
Shares have been registered under the Securities Act and therefore cannot be
sold unless subsequently registered under the Securities Act or an exemption
from such registration is available.
2.6 Independent Investigation. The Subscriber, in making the
decision to purchase the Shares, has relied upon an independent investigation of
the Company and has not relied upon any information or representations made by
any third parties or upon any oral or written representations or assurances from
the Company, its officers, directors or employees or any other representatives
or agents of the Company, other than as set forth in this Agreement. The
Subscriber is familiar with the business, operations and financial condition of
the Company and has had an opportunity to ask questions of, and receive answers
from, the Company's officers and directors concerning the Company and the terms
and conditions of the offering of the Shares and has had full access to such
other information concerning the Company as the Subscriber has requested.
2.7 Authority. This Agreement has been validly authorized, executed
and delivered by the Subscriber and is a valid and binding agreement enforceable
in accordance with its terms, subject to the general principles of equity and to
bankruptcy or other laws affecting the enforcement of creditors' rights
generally. The execution, delivery and performance of this Agreement by the
Subscriber does not and will not conflict with, violate or cause a breach of any
agreement, contract or instrument to which the Subscriber is a party.
2.8 No Legal Advice from Company. The Subscriber acknowledges that
he, she or it has had the opportunity to review this Agreement and the
transactions contemplated by this Agreement and the other agreements entered
into between the parties hereto with the Subscriber's own legal counsel and
investment and tax advisors. Except for any statements or representations of the
Company made in this Agreement and the other agreements entered into between the
parties hereto, the Subscriber is relying solely on such counsel and advisors
and not on any statements or representations of the Company or any of its
representatives or agents for legal, tax or investment advice with respect to
this investment, the transactions contemplated by this Agreement or the
securities laws of any jurisdiction.
2.9 Reliance on Representations and Warranties. The Subscriber
understands that the Shares are being offered and sold to the Subscriber in
reliance on specific provisions of United States federal and state securities
laws and that the Company is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgments and understandings of
the Subscriber set forth in this Agreement in order to determine the
applicability of such provisions.
2.10 No Advertisements. The undersigned is not subscribing for
Shares as a result of or subsequent to any advertisement, article, notice or
other communication published in any newspaper, magazine, or similar media or
broadcast over television or radio, or presented at any seminar or meeting.
3. Representations and Warranties of the Company
The Company represents and warrants to each Subscriber that:
3.1 Valid Issuance of Capital Stock. The total number of shares of
all classes of capital stock which the Company has authority to issue is
100,000,000 shares of Common Stock. As of the date hereof, the Company has
25,000,000 shares of Common Stock issued and outstanding. All of the issued
shares of capital stock of the Company have been duly authorized, validly
issued, and are fully paid and non-assessable.
3.2 Organization and Qualification. The Company is a corporation
duly incorporated and existing in good standing under the laws of the state of
Nevada and has the requisite corporate power to own its properties and assets
and to carry on its business as now being conducted.
3.3 Authorization; Enforcement. (i) The Company has the requisite
corporate power and authority to enter into and perform its obligations under
this Agreement and to issue the Common Stock in accordance with the terms
hereof, (ii) the execution, delivery and performance of this Agreement by the
Company and the consummation by it of the transactions contemplated hereby have
been duly authorized by all necessary corporate action, and no further consent
or authorization of the Company or its Board of Directors or stockholders is
required, and (iii) this Agreement constitutes valid and binding obligations of
the Company enforceable against the Company in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, moratorium, reorganization, or similar laws relating to,
or affecting generally the enforcement of, creditors' rights and remedies or by
equitable principles of general application and except as enforcement of rights
to indemnity and contribution may be limited by federal and state securities
laws or principles of public policy.
3.4 No Conflicts. To the knowledge of the Company, the execution,
delivery and performance of this Agreement and the consummation by the Company
of the transactions contemplated hereby do not materially (i) result in a
violation of the Company's Articles of Incorporation or By-Laws or (ii) conflict
with, or constitute a default under any agreement, indenture or instrument to
which the Company is a party. Other than any SEC or state securities filings
which may be required to be made by the Company subsequent to the Closing, and
any registration statement which may be filed pursuant thereto, the Company is
not required under federal, state or local law, rule or regulation to obtain any
consent, authorization or order of, or make any filing or registration with, any
court or governmental agency or self-regulatory entity in order for it to
perform any of its obligations under this Agreement or issue the Common Stock in
accordance with the terms hereof.
4. Legends; Denominations
4.1 Legend. The Company will issue the Shares purchased by the
Subscriber in the name of the Subscriber and in such denominations to be
specified by the Subscriber prior to the Closing. The Shares will bear the
following legend (the "Legend"), and appropriate "stop transfer" instructions:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THESE
SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT FILED UNDER THE SECURITIES ACT, (B) TO A NON-U.S. PERSON
IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904
OF REGULATION S UNDER THE SECURITIES ACT, (C) PURSUANT TO THE RESALE
LIMITATIONS SET FORTH IN RULE 905 OF REGULATIONS S UNDER THE
SECURITIES ACT, (D) PURSUANT TO AN EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (E)
PURSUANT TO ANY OTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER JURISDICTION. HEDGING TRANSACTIONS INVOLVING THESE SECURITIES
MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.
4.2 Subscriber's Compliance. Nothing in this Section 4 shall affect
in any way the Subscriber's obligations and agreement to comply with all
applicable securities laws upon resale of the Shares.
4.3 Company's Refusal to Register Transfer of Shares. The Company
shall refuse to register any transfer of the Shares not made in accordance with
the provisions of Regulation S, pursuant to an effective registration statement
filed under the Securities Act, or pursuant to an available exemption from the
registration requirements of the Securities Act.
5. Governing Law; Jurisdiction; Waiver of Jury Trial
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York. The parties hereto hereby waive any right to
a jury trial in connection with any litigation pursuant to this Agreement and
the transactions contemplated hereby.
6. Assignment; Entire Agreement; Amendment
6.1 Assignment. Neither this Agreement nor any rights hereunder may
be assigned by any party to any other person other than by Subscriber to a
person agreeing to be bound by the terms hereof.
6.2 Entire Agreement; Amendment. This Agreement and any other
documents delivered pursuant hereto constitute the full and entire understanding
and agreement between the parties with regard to the subject matter hereof, and
no party shall be liable or bound to any other party in any manner by any
warranties, representations or covenants except as specifically set forth in
this Agreement. Except as expressly provided in this Agreement, neither this
Agreement nor any term hereof may be amended, waived, discharged or terminated
other than by a written instrument signed by the party against whom enforcement
of any such amendment, waiver, discharge, or termination is sought.
7. Notices; Indemnity
7.1 Notices. Unless otherwise provided herein, any notice or other
communication to a party hereunder shall be sufficiently given if in writing and
personally delivered or sent by facsimile with copy sent in another manner
herein provided or sent by courier (which for all purposes of this Agreement
shall include Federal Express, UPS or other recognized overnight courier) or
mailed to said party by certified mail, return receipt requested, at its address
provided for herein or such other address as either may designate for itself in
such notice to the other and communications shall be deemed to have been
received when delivered personally on the scheduled arrival date when sent by
next day or 2-day courier service or if sent by facsimile upon receipt of
confirmation of transmittal or, if sent by mail, then three days after deposit
in the mail.
7.2 Indemnification. Each party shall indemnify the other against
any loss, cost or damages (including reasonable attorney's fees and expenses)
incurred as a result of such party's breach of any representation, warranty,
covenant or agreement in this Agreement.
8. Counterparts
This Agreement may be executed in any number of counterparts, each
of which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument.
9. Survival; Severability
The representations, warranties, covenants and agreements of the
parties hereto shall survive the Closing. In the event that any provision of
this Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision; provided that no such severability shall be
effective if it materially changes the economic benefit of this Agreement to any
party.
10. Titles and Subtitles
The titles and subtitles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
Name of the Subscriber: _________________________
(Please print legibly)
Date of Subscription: ___________________________
Place of Residency and/or Principal Place of Business:
________________________
________________________
Telephone: ____________
Fax: __________________
This subscription is accepted by the Company on the 29th day of June,
2005.
________________________________
By: ___________________________
Name: Jacov (▇▇▇▇) ▇▇▇▇▇▇▇
Title: Chief Executive Officer and President
_______________________________
(Please sign here)
_______________________________
(Please print your name here)
Annex 1
List of Subscribers
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Name Number of Shares
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Aura Trading Limited 1,300,000
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Glenealy International Limited 700,000
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Oriental Holdings Limited 500,000
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▇▇▇▇▇ Holdings Limited 500,000
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Adenium Financial Services Limited 1,530,000
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Heritage Jade Corporation 1,530,000
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▇▇▇▇▇▇▇ ▇▇▇ Montelibano 62,450
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