Exhibit 10.6 Stock Subscription Agreement with Aren Foundation
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Ex - 10.6
Stock Subscription Agreement with Aren Foundation 12
TH XXX
VERWALTUNGS GMBH MANAGEMENT S.A.R.L
MESSAGE
TO :STRATCOMM
MEDIA, LTD
ATT :XXXX XXXXXXX
1947 XXX ROAD
WINTER PARK
FLORIDA 32789
DATE :23rd MARCH 1999
PAGE :1
DEAR XX. XXXXXXX
PLEASE SIGN THE CONV. XXXXX AND RETURN THEM TO US AS SOON AS
POSSIBLE BY A VERY FAST MAIL.
THEWA VERWALTUNGS-GMBH.
POSTFACH 4851
6002 LUZERN
KIND REGARDS
THEWA Verwaltungs-GmbH
/S/
Xxxxxx Xxxxxxx
5
THE SECURITIES SUBSCRIBED FOR BY THIS AGREEMENT ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED 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 IJNDER
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
WITH 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 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
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The undersigned Purchaser
NAME: AREN Foundation________________
ADDRESS: ___FL-9491 Ruggell______________
-------------------------------
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 100
shares of Subordinated Debentures, each having a face value of $5,000.00
per share, at an aggregate purchase price of $ 500,000.--.
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
arid 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.
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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
Boca Raton, Florida 33431
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.
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(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
"STRA TCOMM 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 parry 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, nile, 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 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
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
_____ day of ___________, 1999.
----------------------------- -----------------------------
Printed Name Signature
----------------------------- -----------------------------
Printed Name Signature
Accepted this _____ day of , 1999:
STRATCOMM MEDIA, LTD.
By:_________________________
Title:________________________
SIGNATURE PAGE FOR ENTITIES
IN WITNESS WHEREOF, the undersigned
represents that the foregoing statements are true this
Subscription Agreement to be duly executed on its
behalf on this _____ day of 23.03._, 1999.
AREN Foundation________
Printed Name of Subscriber
12
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(Signature of Authorized Person)
Xxxxxx Xxxxxxx________
(Printed Name and Title)
Accepted this _____ day of ___________, 1999;
STRATCOMM MEDIA, LTD.
By: Xxxxxxx X. Xxxxxx /s/______
Title: ________________________
Full Name and Address of Purchaser for Registration Purposes:
NAME: AREN Foundation________________________________________________
ADDRESS: FL-9491 Ruggell_____________________________________________
TEL. NO.: 0000 00 000 0000_______________________________________________
FAX NO. 0000 00 000 0000_______________________________________________
CONTACT NAME: Lopag Herrn Xxxxx Xxxxx______________________________
Delivery Instructions (if different from Registration Name:
NAME: UBS AG_________________________________________________________
ADDRESS: Xxxxxxxxxxxxx 00x____________0000 Zug____________________________
TEL. NO.: 000 000 00 00__________________________________________________
FAX NO.: 000 000 00 00__________________________________________________
CONTACT NAME: Herrn Xxxxxx Xxxxxxx____________________________________
SPECIAL
INSTRUCTIONS: _________________________________________________________
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