Exhibit 10.6
SUBSCRIPTION AGREEMENT
OBSIDIAN ENTERPRISES, INC.
Subscription for Shares of Series C Convertible Preferred Stock
The undersigned (the "Subscriber"), hereby subscribes for and agrees to
purchase One Hundred Eighty Six Thousand Three Hundred Twenty Four (186,324)
Shares of Series C Convertible Preferred Stock, of OBSIDIAN ENTERPRISES, INC., a
Delaware corporation (the "Corporation"), in consideration of the cancellation
of indebtedness due the Subscriber in the amount of Five Hundred Ninety Six
Thousand Dollars ($596,000).
The Subscriber hereby represents and warrants to the Corporation, with the
intent that the same may be relied upon, as follows:
1. The Subscriber has received all documents and other information
concerning the Corporation that the Subscriber has requested and as a result of
the Subscriber's study of the information and prior overall experience in
financial matters, the Subscriber is properly able to evaluate the capital
structure of the Corporation, the business of the Corporation and the risks
inherent therein; and has been given the full opportunity to obtain any
additional information or document from, and to ask questions of the Corporation
to the extent necessary to evaluate the merits and risks related to his
investment in the Corporation.
2. The Subscriber has had access to all the material facts with respect to
the shares by reason of the Subscriber's active involvement in the organization
or management of the Corporation or by reason of the Subscriber's family
relationship with a person actively involved in the organization or the
management of the Corporation.
3. The Subscriber understands that the Corporation's shares have not been
registered under the Securities Act of 1933, as amended, and have not been
registered under any state securities laws, in each case, in reliance on an
exemption therefrom, based in part upon representations of the Corporation and
the shareholders of the Corporation.
4. The Subscriber is purchasing the Corporation's shares for investment
purposes only and for the Subscriber's own account as principal, and not with a
view to, or for, resale, distribution or granting a participation therein, in
whole or in part.
5. The Subscriber must bear the economic risk of investment in the
Corporation's shares for an indefinite period of time and may not sell or
otherwise transfer any shares unless such shares are first registered under
applicable securities laws or an exemption therefrom is available.
6. The following legend will be placed on each certificate representing the
shares and any other documents evidencing ownership of the shares (except for
any such certificate or other document on which a similar restrictive legend
already appears):
TRANSFER RESTRICTED
The transfer of the securities represented by this certificate has not been
registered under the Securities Act of 1933 or applicable state securities laws.
These securities have been acquired for investment and not with a view to
distribution or resale.
These securities are subject to restrictions on transferability and resale
and may not be transferred or resold except as permitted under the Securities
Act of 1933, as amended, and the applicable state securities laws, pursuant to
registration or exemption therefrom. Investors should be aware that they will be
required to bear the financial risks of this investment for an indefinite period
of time.
By the acceptance hereof, the holder agrees that these securities may not
be made subject to a security interest, pledged, hypothecated or otherwise
transferred without an effective registration statement for such shares under
the Securities Act of 1933 and applicable state securities laws or an opinion of
counsel for the Corporation that registration is not required under the
Securities Act of 1933 and applicable state securities laws.
Dated: April 30, 2002
FAIR HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman
