Exhibit 10.3 Stock Subscrition Agreement with Tech TacTic
EX 10.3
Stock Subscription Agreement with Tech Tac Tic
9
THE SECURITIES SUBSCRIBED FOR BY THIS AGREEMENT ARY~ RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER
THE SEC 1993, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS~ REGISTRATION OR
EXEMPTION THEREFROM. INVESTORS SHOULD f THEY MAY BE REQUIRED TO BEAR THE
FINANCIAL RISKS OF THIS IN AN INDEFINITE PERIOD OF TIME.
Adm~
THE SECURITIES SUBSCRIBED FOR BY THIS AGREEMENT H~ REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AME SECURITIES LAWS OF CERTAIN STATES AND ARE BEING
OFFERE RELIANCE ON THE EXEMPTION FROM THE REGISTRATION REGULATION "S" OF SAID
ACT AND SUCH LAWS. IN ACCC~ REGULATION "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 Shared
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
Securities Act. (All dollar amounts in this Agreement are expressed in U.S.
Dollars.)
The undersigned Purchaser
NAME: (signed by) Xxxxxxxxxx Xxxxxxxxxx
ADDRESS:
Xxxxxxxxx X'Xxxxx 00X
0000 Xxxxx
Xxxxxxx
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:
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 $50,000
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:
[GRAPHIC OMITTED][GRAPHIC OMITTED]
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 unde4ying 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 will be
subject to Regulation S
and the rules thereunder.
(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.
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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 and validly
executed and delivered by and on behalf of the Company, and are valid
wand binding agreements of the company,
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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.
x.Xx 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.
x.Xx 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.
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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").
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6. Exemptiom 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
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d. The execution, and filing by the Company, of Trust Indenture Agreement,
pursuant to Section 4 (b) of this Agreement, and the "STRATCOMM MEDIA 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 arbitration.
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 1 1 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
20 day of JULY ,1999.
Pnnted Name Xxxxxxxxxx Xxxxxxxxxx Signature signed by X. Xxxxxxxxxx
Printed Name Signature
Accepted this 29th Day of July, 1999 Accepted by
Stratcomm Media, LTD
By: ________________________
IN WITNESS WHEREOF, the undersigned represents that foregoing statements are
true and that he, she, or they have executed this Subscription Agreement on this
20th day of July 1999.
Pnnted Name Xxxxxxxxxx Xxxxxxxxxx Signature signed by X. Xxxxxxxxxx
Printed Name Signature
Accepted this 29th Day of July, 1999 Accepted by
Stratcomm Media, LTD
By: ___Robert X. Xxxxxx, President_
Signed by REV
Full name and Address of Purchasser for Registration Purposes
Xxxxxxxxxx Xxxxxxxxxx
Xxxxxxxxx X'Xxxxx 0xX, 0000 Xxxxx, Xxxxxxx
Tel: 00.0.000.0000
Fax: 00.0.000.00.00
