EXHIBIT 10.6
NELANA HOLDINGS LTD.
SUBSCRIPTION AGREEMENT
To: Xxxxxx Xxxxxxxx
Nelana Holdings Ltd.
Xxxx Xxxxxx Xxx 000
Xxxx Xxxxxx
Xxxx Xxxxxx Building
Providenciales
Turks and Caicos
Attention: Xx. Xxxxxxxx
1. Subscription. Nelana Holdings Ltd., an entity duly formed and organized
under the laws of the Turks and Caicos Islands (the "Purchaser"), hereby offers
to purchase 10,000,000 shares of Series A Convertible Preferred (the
"Securities"), when, as and if issued and which may or may not be evidenced by a
certificate, at a purchase price of One Hundred Thousand Dollars ($100,000.00),
payable pursuant to that certain promissory note (the "Note"), a copy of which
is attached hereto as Exhibit A, of Nannaco, Inc., a Texas corporation (the
"Company"), in the amount set forth below, pursuant to a private offering
("Offering") of securities through the Company.
By execution of this Subscription Agreement, the Purchaser hereby
acknowledges that it understands that the Company is relying upon the accuracy
and completeness of all information it has entered herein and all
representations and warranties it has made hereunder in complying with the
Company's obligations under applicable U.S. federal and state securities laws.
2. General Representations. The Purchaser represents, acknowledges and agrees
that:
(a) it is not a "U.S. person" as that term is defined in Regulation
S1, promulgated under the U.S. Securities Act of 1933, as amended (the
"U.S. Securities Act"); and
-------------------------
1 "U.S. person" is defined under Regulation S as:
(i) Any natural person resident in the United States;
(ii) Any partnership or corporation organized or incorporated under the laws of
the United States;
(iii) Any estate of which any executor or administrator is a U.S. person;
(iv) Any trust of which any trustee is a U.S. person;
(v) Any agency or branch of a foreign entity located in the United States;
(vi) Any non-discretionary account or similar account (other than an estate or
trust) held by a dealer or other fiduciary for the benefit or account of a
U.S. person;
(vii) Any discretionary account or similar account (other than an estate or
trust) held by a dealer or other fiduciary organized, incorporated, or (if
an individual) resident in the United States; and
(b) it will not be purchasing Securities for the account or benefit
of any U.S. Person; the offer was not made to the Purchaser when it was in
the United States; at the time the Purchaser's buy order was delivered to
the Company, the Purchaser was outside the United States; the Subscriber
received and accepted this subscription and entered into this Agreement in
its jurisdiction of residence; and such jurisdiction of residence is as
set out on page 1 of this Agreement.
(c) that the Securities acquired pursuant to this Agreement have not
been registered under the U.S. Securities Act, and are being sold in
reliance upon an exemption from registration afforded by Regulation S; and
that the Securities have not been registered with any state securities
commission or authority. The Purchaser further understands that pursuant
to the requirements of Regulation S, the Securities acquired herein may
not be transferred, sold or otherwise exchanged unless in compliance with
the provisions of Regulation S and/or pursuant to registration under the
U.S. Securities Act, or pursuant to an available exemption under the U.S.
Securities Act.
(d) the Securities are being purchased by the Purchaser for its own
account, for investment only and not with a view toward resale or
distribution thereof to any other person, and it is not participating,
directly or indirectly, in any underwriting or distribution;
(e) none of the Securities purchased by the Purchaser shall be sold
or otherwise transferred contrary to the provisions of this Subscription
Agreement or any federal or state securities law, and the Purchaser
understands that unless the Securities are subsequently registered under
the U.S. Securities Act, they may not in any event be sold or transferred
except by a valid exemption from registration under the U.S. Securities
Act;
(f) any and all certificates representing the Securities purchased
and any and all securities issued in replacement thereof or in exchange
thereof shall bear the following legend or one substantially similar
thereto, which the Purchaser has read and understands:
"THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933 (THE "ACT") OR APPLICABLE STATE SECURITIES LAWS,
AND THE TRANSFER THEREOF IS PROHIBITED EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF REGULATION S UNDER THE ACT, PURSUANT TO REGISTRATION UNDER
THE ACT AND APPLICABLE STATE SECURITIES LAWS, OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM SUCH REGISTRATION. HEDGING TRANSACTIONS INVOLVING THESE
SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT".
---------------
(viii) Any partnership or corporation if:
(A) Organized or incorporated under the laws of any foreign
jurisdiction; and
(B) formed by a U.S. person principally for the purpose of investing any
securities not registered under the Act, unless it is organized or
incorporated, and owned, by accredited investors (as defined in Rule
501(a) under the Act) who are not natural persons, estates or
trusts.
2
(g) the Company shall have the right to issue stop transfer
instructions on its official stock records, and the Purchaser acknowledges
that the Company has informed the Purchaser of its intention to issue such
instructions:
(h) there is currently no trading market in these Securities of the
Company, and the Company presently has no plans to register the
Securities, so that there may never be a public trading market for the
Securities, with consequent possible indefinite illiquidity of the
Securities;
(i) hedging transactions involving the Securities may not be
conducted unless in compliance with the U.S. Securities Act.
(j) at no time has it been explicitly or implicitly represented,
guaranteed or warranted to the Purchaser by the Company, its management,
the agents or employees of the Company or any other person: (i) that the
Purchaser will be able to transfer the Securities on any particular date;
(ii) that if and when the Purchaser may wish to transfer the Securities,
such securities will be validly transferable under federal and applicable
state securities laws; (iii) that the Purchaser will realize any
percentage or amount of profit, gain or other consideration as a result of
any investment it has made or will make in the Company; or (iv) that the
Purchaser or other shareholders will receive any dividends or other
distributions from the Company at any time;
(k) investment in the Securities is a long-term, speculative
investment which involves a substantial risk of loss to the Purchaser of
its entire investment; that the Purchaser takes full cognizance of and
responsibility for the risks related to the purchase of the Securities;
the Purchaser has no need for liquidity with respect to its investment
either now or within the foreseeable future; and the Purchaser can bear a
complete loss of its investment without undue hardship to itself;
(l) the Purchaser and its purchaser representative, if any, has been
afforded an opportunity to examine such documents and obtain such
information, including the Company's financial statements concerning the
Company as it may have requested, and the Purchaser has had the
opportunity to request such other information and ask questions of the
officers and directors of the Company (and all information so requested
has been provided) for the purpose of verifying the information furnished
to it and for answering any question it may have had concerning the
business, prospects and affairs of the Company;
(m) the Purchaser understands and acknowledges that any projections
or financial forecasts of the Company may likely prove to be incorrect in
view of the early stage of the Company's development; and no assurance has
been given to it that actual results will correspond in any meaningful way
with the results contemplated by the various projections, financial
forecasts or predictions; and
3
(n) the Purchaser has been advised to consult with its own
investment adviser, attorney, and accountant regarding the Company's
prospects and legal and tax matters, concerning an investment in the
Company, and has done so, to the extent it consider that to be necessary.
3. Suitability Standards, Representations, and Warranties. The Purchaser
represents and warrants that all of the information which it has furnished in
this Subscription Agreement is correct and complete as of the date of this
Subscription Agreement, and will be correct and complete on the closing of the
sale of the Shares subscribed for, and the representations and warranties and
agreements herein shall survive the closing date and may be relied upon by the
Company in its reliance upon an exemption from registration under the U.S.
Securities Act and state securities laws.
4. Indemnification. The Purchaser understands the meaning and legal
consequences of the representations and warranties contained in this
Subscription Agreement and agrees to indemnify and hold harmless the Company,
its officers and directors, and each agent and employee thereof, from and
against any and all loss, damage, liability or expense including judgments,
fines, amounts paid in settlement, attorney's fees and other legal costs
actually incurred as a result of any such person or entity being made a party or
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative, or investigative,
by reason of or arising from any breach of representation or warranty of it or
any misrepresentation or misstatement of fact or omission to state or represent
facts made by it to the Company, including without limitation, the information
which it has furnished in this Subscription Agreement.
5. Miscellaneous
(a) The disclosure provided in this Subscription Agreement with respect to
certain aspects of resale restrictions which applies to the Securities and
securities laws of the United States is only a summary and is not intended to be
exhaustive and does not refer to resale restrictions which may arise by reason
of securities laws other than those of the United States. THE SUBSCRIBER SHOULD
CONSULT HIS OWN PROFESSIONAL ADVISORS REGARDING THIS AGREEMENT AND RESALE
RESTRICTIONS APPLICABLE TO THE SHARES.
(b) All notices or other communications given or made hereunder shall be
in writing and shall be delivered or mailed by registered or certified mail,
return receipt requested, postage prepaid, to the Company at the address set
forth above and to the undersigned at the address set forth on the signature
page hereof.
4
(b) This Subscription Agreement constitutes the entire agreement among the
parties hereto with respect to the subject matter hereof and supersedes any
prior or contemporaneous representations, warranties, or agreements (whether
oral or written), and may be amended or waived only by a writing executed by the
party to be bound.
Number of Shares of Common Stock Subscribed For: 10,000,000
----------
Total Purchase Price of the Shares Subscribed For: $100,000
Very truly yours,
Xxxxxx Xxxxxxxx
By: /s/ Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
For: Nelana Holdings Ltd.
Address Nelana Holdings Ltd.:
Address: _________________________________________________
-------------------------------------------------
-------------------------------------------------
Phone: _________________________________________________
Facsimile: _________________________________________________
Accepted and agreed to as of the above date.
Nannaco, Inc.
/s/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: Chief Executive Officer
5
