Exhibit 10.5 Stock Subscription Agreement with Concorde Bank, LTD
CONCORDE BANK LIMITED
Ex 10.5 Stock Subscription Agreement with Concorde Bank, Ltd
Xxx Xxxxxxxxx Xxxxxx
Xxxx Xxxx, Xxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx, W.I.
Telephone: (000) 000-0000
Fax: (000) 000-0000
Telex: (0392) 0000 XXXXXXXXXX XX
TELEFAX TRANSMITTAL SHEET
TO: Stratcomm Media
ATTN: Xxxx Xxxxxxx
FAX NO.: 0-000-000-0000
NO. OF PAGES: COVER + 12
SUBJECT: Subscription Agreement
FROM: A. Xxxxxx Xxxxxx DATE: March 23,1999
PLEASE CALL (000) 000-0000 IMMEDIATELY IF ANY PAGES ARE
NOT RECEIVED.
MESSAGE:
Please see following Subscription Agreement duly completed. We confirm having
today transferred USD 50,000 as requested.
Should you require any further information, please do not hesitate to contact
ourselves.
Regards
A. Xxxxxx Xxxxxx /s/
A. Xxxxxx Xxxxxx
Manager
THE SECURITIES SUBSCRIBED XXX.XX THIS AGREEMENT ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER TILE 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
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 tents 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: CONCORDE BANK LIMITED
ADDRESS: X.X. Xxx 0000, Xxx Xxxxxxxxx Xxxxxx
Xxxx Xx00, Xxx Street, St. Michae1, Barbados, W.I.
if applicable, a (Corporate] [xxxxx] [xxxx] organized under the laws
of Barbados , 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 $ 50,000.00.
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 #0660O9650
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 5, 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 fort 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 act 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 sate 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 fedoral or state agency has passed on or made any
recommendaLion or endorsement of the Subordinated Debentures4
e. Entity Purchasers. It Purchaser is a partnership, corporation
or trust, the person executing this Agreement on its behalf
represents and warrarns that:
(1) 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.
t Non~Affr11ate. Purchaser and any affiliate of Purchaser
represent, warrant and covenant that they arc not an.
affiliate of the Company
3' lj~cr Representations.
a. Listed Company Stows. The Company's Common Stock is listed on
the NASO b&sultetin 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 rorm of
"STRATCO?vfM 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 ot' the company, enfotceable 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 at 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 arty 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 4ondition
(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 tong 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, Regjstration. 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. C1osing 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. Condition to the Company's Obligation to Sel1, 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 Purchase 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% SUBORDINA XXX 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 titles 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 art 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 when 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
[GRAPHIC OMITTED][GRAPHIC OMITTED]
1999;
1
IN WITNESS WHEREOF, the undersigned represents that the
foregoing statements are true and that it has caused
this Subscription Agreement to be duly executed on
its behalf on this 22nd day of March, 1999.
CONCORDE BANK LIMITED
Printed Name of Subscriber
by: ______________________
(Signature of Authorized Person)
A. Xxxxxx Xxxxxx, Manager
(Printed Name and Title)
Title: Chief Financial Officer
Full Name and Address of Purchaser for Registration Purposes:
2
NAME: CONCORDE BANK LIMITED_________________________________
ADDRESS: X.X. Xxx 0000, Xxx Xxxxxxxxx Xxxxxx, Xxxx Xxxx, Xxx Street,
St. Xxxxxxx,___
Barbados, W.I.
TEL.: (000) 000-0000______________________________________________
FAX: (000) 000-0000_____________________________________________
CONTACT NAME: A.Marina Corbin__________________________________________
Delivery Instructions (if different from Registration Name):
NAME: ____________________________________________________________
ADDRESS: _________________________________________________________
XXX.XX.: ________________________________________________________
FAX NO.: _________________________________________________________
CONTACT NAME: ____________________________________________________
S PECIAL
INSTRUCTIONS:______________________________________________________________
3
