Exhibit 10.2 Stock Subscription Agreement with Xxxxx Xxxxxx
EX-10.2
Stock Subscription Agreement with Xxxxx Xxxxxx
THE SECURITIES SUBSCRIBED FOR BY THIS AGREEMENT ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMIUED UNDER THE SECURITIES ACT OF 1993, AS AMENDED, AND APPLICABLE STATE
SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS
SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS
INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
THE SECURITIES SUBSCRIBED FOR BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF CERTAIN STATES
AND ARE BEING OFFERED AND SOLD IN RELIANCE ON THE EXEMPTION FROM THE
REGISTRATION PROVIDED IN REGULATION "S" OF SAID ACT AND SUCH LAWS. IN ACCORDANCE
WITHREGULATION "S", THESE SECURITIES MAY NOT BE OFFERED OR SOLD TO CITIZENS OR
RESIDENTS OF THE SHAREED STATES. THE SECURITIES SUBSCRIBED FOR BY THIS AGREEMENT
HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION,
ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF
THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THE SECURITIES
OFFERED BY THE COMPANY.ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
SUBSCRIPTION AGREEMENT
ALL FIGURES IN UNITED STATES DOLLARS
-----------------------
THIS SUBSCRIPTION AGREEMENT (this "Agreement") has been executed by the
undersigned in connection with the private placement of a minimum of $1,000,000
(US) and up to a maximum of $5,000,000 (US) of convertible subordinated
debentures (the "Debentures") with. a minimum face value of $50,000.00 (US), of
STRATCOMM MEDIA LTD., a corporation organized under the laws of the jurisdiction
of the Yukon, Canada (NASD Bulletin Board symbol "SMMM") (hereinafter referred
to as the "Company"). The Subordinated Debentures being sold pursuant to this
Agreement have not been registered under the Securities Act, but are being
offered to non-residents and non-citizens of the Shareed States pursuant to an
exemption provided by Regulation S of the Securities Act of 1933. In addition to
such other terms as are set forth in this Agreement, the terms on which the
Subordinated Debentures may be converted into shares of Common stock, $.01 par
value, of the Company (the "Common Stock") and the other terms of the
Subordinated Debentures are set forth in the "STRATCOMM MEDIA LIMITED 14%
SUBORDINATED DEBENTURE" attached hereto as Exhibit I (the "Debentures"). The
offer of the Subordinated Debentures and, if this Subscription Agreement is
accepted by the Company, the sale of Subordinated Debentures are being made in
reliance upon Regulation 3, Rule 902(k) of the
The undersigned Purchaser
NAME: Xxxxx Xxxxxx
ADDRESS: 52 Chantefleur
CH-1234 Vessy GE
if applicable, a [Corporate] [Partnership] [Trust] organized under the laws of
_____________, hereinafter referred to as "Purchaser")
hereby represents and warrants to, and agrees with the Company as follows:
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1. Agreement to Subscribe
a. Subscription. The undersigned Purchaser hereby subscribes to purchase 10
shares of Subordinated Debentures, each having a face value of $5,000.00
per share, at an aggregate purchase price of $ 54,000.00.
b. Form of Payment. Purchaser shall pay the purchase price for the
Subordinated Debentures by delivering good funds in United States Dollars
in accordance with Paragraph 1(c) below, to escrow agent, the Delaware
Escrow Company (the "Escrow Agent") identified in the Escrow Instructions
attached hereto as Exhibit II (the "Escrow Agreement"). The Company shall
deliver one or more executed Subordinated Debentures to the Escrow Agent,
and upon payment by the Purchaser of the purchase price for the
Subordinated Debentures and the compliance with all of the terms of the
Escrow Agreement, the Escrow Agent shall cause the Subordinated Debentures
purchased thereby by the Purchaser to be delivered to the Purchaser as set
forth in paragraph 1(c) below. By signing this Agreement, the Purchaser and
the Company each agrees to all of the terms and conditions of, and becomes
a part to, the Escrow Instructions attached hereto, all of the provisions
of which are incorporated herein by this reference as if set forth in full.
c. Method of Payment. Payment of the purchase price for the Subordinated
Debentures shall be made by wire transfer of funds to:
Northern Trust Bank
000 Xxxxxx Xxxx
Xxxx Xxxxx, Xxxxxxx 00000
ABA #000000000
For the Account of: The Delaware Escrow Company
Account #5111010982
No later than three business days after the Company accepts
this Agreement and all other terms and conditions of this
Agreement and the Escrow Agreement have been complied with,
funds deposited with the Escrow Agent shall be disbursed to
the Company.
2. Purchaser Representations: Access to Information: Independent Investigation
a. Purchaser Representations and Warranties. Purchaser represents and
warrants to the Company as follows:
(i) Purchaser is neither a US citizen or Resident Alien,
as such terms are defined in Rule 902, promulgated
under the Securities Act.
(ii) Purchaser is sufficiently experienced in financial
and business matters to be capable of evaluating the
merits and risks of its investments, and to make an
informed decision relating thereto, and to protect
its own interests in connection with the transaction.
(iii) Purchaser is purchasing the Subordinated Debentures
for its own account or for the account of
beneficiaries for whom the Purchaser has full
investment discretion, each of which beneficiaries is
bound to all of the terms and provisions hereof
including all representations and warranties herein.
Purchaser is purchasing the Subordinated Debentures
for investment purposes only and not with an intent
towards further sale or distribution thereof, and has
not pre-arranged any sale with any other purchaser.
(iv) The Subordinated Debentures have not been registered
under the Securities Act, but are being offered in
reliance upon an exemption therefrom; Regulation S,
Rule 902. Additionally, the underlying securities,
for which these Subordinated Debentures may be
converted into, will be issued in place of, and in
lieu of payment on the Subordinated Debentures, and
(v) Purchaser acknowledges that the purchase of the Securities involves a
high degree of risk, is aware of the risks and further acknowledges that
it can bear the economic risk of the Securities, including the total loss
of its investment.
(vi) Purchaser understands that the Securities are being offered and sold
to it in reliance on an exemption from the registration requirements of
the Securities Act, and that the Company is relying upon the truth and
accuracy of the representations, warranties, agreements, acknowledgments
and understandings of Purchaser set forth herein in order to determine the
applicability of such safe harbor and the suitability of Purchaser to
acquire the Securities.
(vii) Purchaser is purchasing the Securities for its own account or for
the account of beneficiaries for whom Purchaser has full investment
discretion and not with a view to, or for sale in connection with, any
"distribution" (as such term is used in Section 2(11) of the Securities
Act) thereof.
(viii) In evaluating its investment, Purchaser has consulted its own
investment and/or legal and/or tax advisors.
(ix) Purchaser is not an underwriter or, or dealer in, the Securities, and
Purchaser is not participating, pursuant to a contractual agreement, in
the distribution of the Securities.
b. Current Information. Purchaser acknowledges that Purchaser has been
furnished with or has acquired copies of all request information
concerning the Company, including the most recent financials of the
Company.
c. Independent Investigation; Access. Purchaser acknowledges that
Purchaser, in making the decision to purchase the Subordinated
Debentures subscribed for, has relied upon independent investigations
made by it and its purchaser representatives, if any, and Purchaser and
such representatives, if any, have prior to any sale to it, been given
access and the opportunity to examine all material contracts and
documents relating to this offering and an opportunity to ask questions
of, and to receive answers from, the Company or any person acting on
its behalf concerning the terms and conditions of this offering.
Purchaser and its advisors, if any, have been furnished with access to
all
publicly available materials relating to the business,
finances and operation of the Company and materials relating
to the offer and sale of the Securities which have been
requested. Purchaser and its advisors, if any, have received
complete and satisfactory answers to any such inquiries.
d. No Government Recommendation or Approval. Purchaser understands that no
federal or state agency has passed on or made any recommendation or
endorsement of the Subordinated Debentures.
e. Entity Purchasers. If Purchaser is a partnership, corporation
or trust, the person executing this Agreement on its behalf
represents and warrants that:
(i) He or she made due inquiry to determine the truthfulness of the
representations and warranties made pursuant to this
Agreement.
(ii) He or she is duly authorized (if the undersigned is a trust, by
the trust agreement) to make this investment and to enter into
and execute this Agreement on behalf of such entity.
f. Non-Affiliate. Purchaser and any affiliate of Purchaser
represent, warrant and covenant that they are not an
affiliate of the Company.
3. Issuer Representations.
a. Listed Company Status. The Company's Common Stock is
listed on the NASD "Bulletin Board" Trading System,
and the Company has received no notice, either oral
or written, with respect to its continued eligibility
for such listing.
b. Terms of Subordinated Debentures. The terms of the
Subordinated Debentures shall be as set forth in the form of
"STRATCOMM MEDIA LIMITED 14% SUBORDINATED DEBENTURE" attached
hereto as Exhibit I (the "Debentures")
c. Legality. The Company has the requisite corporate power and authority to
enter into this Agreement and to issue, sell and deliver the Securities;
this Agreement and the issuance, sale and delivery of the Securities
hereunder and the transactions contemplated hereby have been duly and
validly authorized by all necessary corporate action by the Company; this
Agreement and the Securities have been duly ad validly executed and
delivered by and on behalf of the Company, and are valid and binding
agreements of the company, enforceable in accordance with their respective
terms, except as enforceability may be limited by general equitable
principles,
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium, or other laws affecting creditors' rights generally. The
Subordinated Debentures and the Common Stock issuable upon conversion
of the Subordinated Debentures will not subject the holders thereof to
personal liability by reason of being such holders.
d. Proper Organization. The Company is a corporation duly organized,
validly existing and in good standing under the laws of its
jurisdiction of incorporation and is duly qualified as a foreign
corporation in all jurisdictions where the failure to be so qualified
would have a materially adverse effect on its business, taken as whole.
e. No Legal Proceedings. There is no action, Suit or proceeding before
or by any court or any 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 or assets,
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, except as described
in the Memorandum.
f. Non-Default. The Company, except as described in the Memorandum, 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.
g. No Misleading Statements. The Memorandum does not contain, and as of
their respective dates, none of the Company's other filings with the
SEC, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they
were made, not misleading.
h. No Adverse Change. There has been no material adverse
change in the financial condition, earnings, business affairs or
business prospects of the Company since the date of the Company's
offering memorandum, dated January 13, 1999, which is on file at the
company's offices, and is available for inspection by any prospective
subscriber.
i. Absence of Non-Disclosed Facts. 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 Purchaser 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 reasonably be expected to materially and adversely
affect the ability of the Company to perform its obligations
pursuant to this Agreement and the Subordinated Debentures.
j Non-Contravention. The execution and delivery of this Agreement and
the consummation of the issuance of the Securities and the transactions
contemplated by this Agreement do 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 part or by which it or any of its properties or assets
are bound, or any existing applicable Federal or State law, rule, or regulation
or any applicable decrees, judgment or order of any court. Federal or State
regulatory body, administrative agency or other domestic governmental body
having jurisdiction over the Company or any of its properties or assets.
4. Covenants of the Company.
a. For so long as any Subordinated Debentures held by the Purchaser
shall remain outstanding, the Company covenants and agrees with the Purchaser
that it will at all times fully reserve from its authorized but unissued shares
of Common Stock such sufficient number of shares of Common Stock to permit the
conversion in full of the outstanding Subordinated Debentures.
b. The Company, as a part of the issuance of the series of 14%
Subordinated Debentures pursuant to this Offering, shall enter into and keep in
full force and effect, for so long as an obligation pursuant to this Offering
remains outstanding, a Trust Indenture Agreement ("Trust Agreement"), thereby
creating a security interest in all property of the Company, subject only to any
senior indebtedness as set forth in the STRATCOMM MEDIA LIMITED 14% SUBORDINATED
DEBENTURE. As a term of the Trust Agreement, the Company shall file with all
appropriate agencies, evidence of the Trust Agreement, thereby creating a
perfected security interest on behalf of holders of securities issued pursuant
to this Offering.
5. Registration. The Purchaser acknowledges that the Company is under
no obligation to register the Subordinated Debentures or the Common
Stock issuable except as provided in the terms of the "STRATCOMM MEDIA
LIMITED 14% SUBORDINATED DEBENTURE" attached hereto as Exhibit I (the
"Debentures"). 6. Exemption: Reliance on Regulation S. Rule 902.
Purchaser understands that the offer and sale of the Subordinated
Debentures is not being registered under the Securities Act. The
Company is relying on an exemption from registration provided by
Regulation S, Rule 902 of the Securities Act.
7. Closing Date and Escrow Agent. Closing shall be effected through
delivery of funds to the Company by the Escrow Agent, and delivery of
certificates evidencing the Subordinated Debentures to the Purchaser by
the Escrow Agent. Each of the Company and the Purchaser agrees that the
Escrow Agent has no liability as a result of any fraudulent or unlawful
conduct of any other party, and agrees to hold the Escrow Agent
harmless.
8. Conditions to the Company's Obligation to Sell. Purchaser
understands that the Company's obligation to sell the Subordinated
Debentures is conditioned upon:
a. The receipt and acceptance by the Company of this Agreement. as
evidence by execution of this Agreement by the President or any Vice President
or the Chief Financial Officer of the Company; and
b. Delivery to the Escrow Agent by Purchaser of goods funds as payment
in full for the purchase of the Subordinated Debentures; and
c. The accuracy as of the Closing Date of the representations and
warranties of the Purchaser contained in this Agreement, and performance by the
Purchaser of all covenants and agreements of the Purchaser required to be
performed on or before the Closing Date.
9. Conditions to Purchaser's Obligation to Purchase. The Company
understands that Purchaser's obligation to purchase the Subordinated
Debentures is conditioned upon:
a. Execution by Purchaser of this Agreement and the receipt of the
Company's acceptance of this Agreement as provided in Paragraph 8(a) above; and
b. Delivery of certificates evidencing the Subordinated Debentures to
the Escrow Agent, as heretofore set forth, and by the Escrow Agent to Purchaser;
and
c. Acceptance by the Company of subscriptions from the Purchaser and
other subscribers of Subordinated Debentures; and
d. The execution, and filing by the Company, of Trust Indenture
Agreement, Pursuant to Section 4(b) of this Agreement, and the
"STRATCOMM MEDLA LIMITED 14% SUBORDINATED DEBENTURE"; and
e. The accuracy as of the Closing Date of the representations and
warranties of the Company contained in this Agreement and the performance
by the
Company on or before the Closing Date of all covenants and
agreements of the Company required to be performed on or
before the Closing Date.
10. Governing Law. This Agreement shall be governed by and
construed under the law of the State of Florida without regard to its
choice of law provision. A facsimile transmission of this signed
Agreement shall be legal and binding on all parties hereto.
11. Arbitration. Subscriber represents, warrants and covenants
that any controversy or claim brought directly, derivatively or in a
representative capacity by him in his capacity as a present or former
security holder, whether against the Company, in the name of the
Company or otherwise, arising out of or relating to any acts or
omissions of the Company, or any security holder or any of their
officers, directors, agents, affiliates, associates, employees or
controlling persons (including without limitation any controversy or
claim relating to a purchase or sale of the Note) shall be settled by
arbitration under the Federal Arbitration Act in accordance with the
commercial arbitration rules of the American Arbitration Association
(AAA) and judgment upon the award rendered by the arbitrators may be
entered in any court having jurisdiction thereof. Any controversy or
claim brought by the Company against the Subscriber, whether in his
capacity as present or former security holder of the Company in or
against any of the Subscriber's officers, directors, agents,
affiliates, associates, employees or controlling persons shall also be
settled by arbitration under the Federal Arbitration Act in accordance
with the commercial arbitration rules of the AAA and judgment rendered
by the arbitrators may be entered in any court having jurisdiction
thereof. In arbitration proceedings under this Paragraph 11, the
parties shall be entitled to any and all remedies that would be
available in the absence of this Paragraph 11 and the arbitrators, in
rendering their decision, shall follow the substantive laws that would
otherwise be applicable. This Paragraph 5 shall apply, without
limitation, to actions arising in connection with the offer and sale of
the Notes contemplated by this Agreement under any Federal or state
securities laws.
11.2 The arbitration of any dispute pursuant to this Paragraph
11 shall be held in Florida, in the county where the principal business
of the Company is located.
11.3 Notwithstanding the foregoing in order to preserve the
status quo pending the resolution by arbitration of a claim seeking
relief of an injunctive or equitable nature, any party, upon submitting
a matter to arbitration as required by this Paragraph 5, may
simultaneously or thereafter seek a temporary restraining order or
preliminary injunction from a court of competent jurisdiction pending
the outcome of the
11.4 This Paragraph 11 is intended to benefit the security holders,
agents, affiliates, associates, employees and controlling persons of the
Company, each of whom shall be deemed to be a third party beneficiary of this
Paragraph 11, and each of whom may enforce this Paragraph 11 to the full extent
that the Company could do so if a controversy or claim were brought against it.
11.5 Subscriber acknowledges that this Paragraph 11 limits a number of
Subscriber's rights, including without limitation (i) the right to have claims
resolved in a court of law and before a jury; (ii) certain discovery rights; and
(iii) the right to appeal any decision.
12. Survival of Representations. Warranties. and Covenants. Each of the
Company's and Purchaser's representations, warranties, and covenants shall
survive the execution and delivery of this Agreement and the delivery of the
certificates representing the Securities.
13. Successors and Assigns. This Agreement shall inure to the benefit
of and be binding on the respective successors and assigns of the parties
hereto.
SIGNATURE PAGE FOR INDIVIDUAL SUBSCRIBER
IN WITNESS WHEREOF, the undersigned represents that the
foregoing statements are true and that he. she, or
they have executed this Subscription Agreement on
this 22nd day of March, 1999.
Andre' Xxxxxx Xxxxx' Xxxxxx (Signature)_______
Printed Name Signature
-------------------------- -----------------------------
Printed Name Signature
Accepted this 5th day of April, 1999:
STRATCOMM MEDIA, LTD.
By: Xxxxxxx X. Xxxxxx (Signature)
Title: CEO - Stratcomm Media
SIGNATURE PAGE FOR ENTITIES
NAME: Andre' Dumont_______________________________________
ADDRESS: 52 Chantefleur CH 1234 Vessy GE____________________
TEL. NO.: 000 000 00 00_____________________________________
FAX NO.: 000 000 00 00______________________________________
CONTACT NAME: _________________________________________
Delivery Instructions (if different from Registration Name):
NAME: ___________________________________________________
ADDRESS: ________________________________________________
TEL. NO.: _________________________________________________
FAX NO.: _________________________________________________
CONTACT NAME: _________________________________________
SPECIAL
INSTRUCTIONS: __________________________________________
Case posta!e 8 CH- 1234 Vessy
M. Andre' XXXXXX: Please find enclosed the Subscription Agreement duly executed.
I wish to receive a copy of the Agreement and the investment memorandum
Tel: 000 000 00 00
000 000 00 00
Fax: 000 000 00 00
Natel: 079 202 17 60
Case postale 8
CH-1234 Vessy
