FORM OF SUBSCRIPTION AGREEMENT
Exhibit
10.1
SUBSCRIPTION AGREEMENT made as
of this ___ day of _____, 2010, between Rvue Holdings, Inc, a Nevada corporation
(the “Company”), and the
undersigned (the “Subscriber”)
WHEREAS, pursuant to
the Confidential Private Placement Memorandum dated March 23, 2010 as
supplement by that certain Supplement No. 1 to Private Placement Memorandum
dated May 3, 2010 (the “PPM”), the Company is offering
in a private placement (the “Offering”) to accredited
investors a minimum of 40 Units, with each Unit (the “Units”) consisting of 125,000
shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) at a
price of $25,000 per Unit; and
WHEREAS, the Subscriber
desires to subscribe for the number of Units set forth on the signature page
hereof, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, for and in
consideration of the premises and the mutual covenants hereinafter set forth,
the parties hereto do hereby agree as follows:
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I.
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SUBSCRIPTION
FOR AND REPRESENTATIONS AND COVENANTS OF
SUBSCRIBER
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1.1 Subject
to the terms and conditions hereinafter set forth, the Subscriber hereby
subscribes for and agrees to purchase from the Company such number of Units set
forth upon the signature page hereof, at a price equal to $25,000 per Unit, and
the Company agrees to sell such to the Subscriber for said purchase price,
subject to the Company’s right to sell to the Subscriber such lesser number of
(or no) Units as the Company may, in its sole discretion, deem necessary or
desirable. The purchase price is payable by wire transfer of
immediately available funds, pursuant to the wire instructions attached as Exhibit E to the PPM
or by check payable to “Signature Bank as Escrow Agent for rVue,
Inc.”
1.2 The
Subscriber recognizes that the purchase of Units involves a high degree of risk
in that (i) an investment in the Company is highly speculative and only
investors who can afford the loss of their entire investment should consider
investing in the Company and the Units; (ii) the Units are not registered under
the Securities Act of 1933, as amended (the “Act”), or any state securities
law; (iii) there is no trading market for the Units, none is likely ever to
develop, and the Subscriber may not be able to liquidate his, her or its
investment; (iv) transferability of the Units is extremely limited; and (v) an
investor could suffer the loss of his, her or its entire
investment.
1.3 The
Subscriber is an “accredited investor,” as such term in defined in Rule 501 of
Regulation D promulgated under the Act, and the Subscriber is able to bear the
economic risk of an investment in the Units.
1.4 The
Subscriber has prior investment experience (including investment in non-listed
and non-registered securities), and has read and evaluated, or has employed the
services of an investment advisor, attorney or accountant to read and evaluate,
all of the documents furnished or made available by the Company to the
Subscriber and to all other prospective investors in the Units, including the
PPM, as well as the merits and risks of such an investment by the
Subscriber. The Subscriber’s overall commitment to investments which
are not readily marketable is not disproportionate to the Subscriber’s net
worth, and the Subscriber’s investment in the Units will not cause such overall
commitment to become excessive. The Subscriber, if an individual, has
adequate means of providing for his or her current needs and personal and family
contingencies and has no need for liquidity in his or her investment in the
Units. The Subscriber is financially able to bear the economic risk
of this investment, including the ability to afford holding the Units for an
indefinite period or a complete loss of this investment.
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1.5 The
Subscriber acknowledges receipt and careful review of the PPM, all supplements
to the PPM, and all other documents furnished in connection with this
transaction by the Company (collectively, the “Offering Documents”) and has
been furnished by the Company during the course of this transaction with all
information regarding the Company which the Subscriber has requested or desires
to know; and the Subscriber has been afforded the opportunity to ask questions
of and receive answers from duly authorized officers or other representatives of
the Company concerning the terms and conditions of the Offering, and any
additional information which the Subscriber has requested.
1.6 The
Subscriber acknowledges that the purchase of the Units may involve tax
consequences to the Subscriber and that the contents of the Offering Documents
do not contain tax advice. The Subscriber acknowledges that the
Subscriber must retain his, her or its own professional advisors to evaluate the
tax and other consequences to the Subscriber of an investment in the Units. The
Subscriber acknowledges that it is the responsibility of the Subscriber to
determine the appropriateness and the merits of a corporate entity to own the
Subscriber’s Units and the corporate structure of such entity.
1.7 The
Subscriber acknowledges that this Offering has not been reviewed by the
Securities and Exchange Commission (the “SEC”) or any state securities
commission, and that no federal or state agency has made any finding or
determination regarding the fairness or merits of the Offering. The
Subscriber represents that the Units are being purchased for his, her or its own
account, for investment only, and not with a view toward distribution or resale
to others. The Subscriber agrees that he, she or it will not sell or
otherwise transfer the Units unless they are registered under the Act or unless
an exemption from such registration is available.
1.8 The
Subscriber understands that the provisions of Rule 144 under the Act are not
available for at least one (1) year to permit resales of the Common Stock
comprising the Units and there can be no assurance that the conditions necessary
to permit such sales under Rule 144 will ever be satisfied. The
Subscriber understands that the Company is under no obligation to comply with
the conditions of Rule 144 or take any other action necessary in order to make
available any exemption from registration for the sale of the Common Stock
comprising the Units.
1.9 The
Subscriber understands that the Units have not been registered under the Act by
reason of a claimed exemption under the provisions of the Act which depends, in
part, upon his, her or its investment intention. In this connection,
the Subscriber understands that it is the position of the SEC that the statutory
basis for such exemption would not be present if his, her or its representation
merely meant that his, her or its present intention was to hold such securities
for a short period, such as the capital gains period of tax statutes, for a
deferred sale, for a market rise, assuming that a market develops, or for any
other fixed period. The Subscriber realizes that, in the view of the
SEC, a purchase now with an intent to resell would represent a purchase with an
intent inconsistent with his, her or its representation to the Company and the
SEC might regard such a sale or disposition as a deferred sale, for which such
exemption is not available.
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1.10 The
Subscriber agrees to indemnify and hold the Company, its directors, officers and
controlling persons and their respective heirs, representatives, successors and
assigns harmless against all liabilities, costs and expenses incurred by them as
a result of any misrepresentation made by the Subscriber contained herein or any
sale or distribution by the Subscriber in violation of the Act (including,
without limitation, the rules promulgated thereunder), any state securities
laws, or the Company’s Certificate of Incorporation or By-laws, as amended from
time to time.
1.11 The
Subscriber consents to the placement of a legend on any certificate or other
document evidencing the Common Stock stating that such securities have not been
registered under the Act and setting forth or referring to the restrictions on
transferability and sale thereof.
1.12 The
Subscriber understands that the Company will review and rely on this
Subscription Agreement without making any independent investigation; and it is
agreed that the Company reserves the unrestricted right to reject or limit any
subscription and to withdraw the Offering at any time.
1.13 The
Subscriber hereby represents that the address of the Subscriber furnished at the
end of this Subscription Agreement is the undersigned’s principal residence, if
the Subscriber is an individual, or its principal business address if it is a
corporation or other entity.
1.14 The
Subscriber acknowledges that if the Subscriber is a Registered Representative of
a Financial Industry Regulatory Authority, Inc. (“FINRA”) member firm, the
Subscriber must give such firm the notice required by the FINRA’s Conduct Rules,
receipt of which must be acknowledged by such firm on the signature page
hereof.
1.15 The
Subscriber hereby acknowledges that neither the Company nor any persons
associated with the Company who may provide assistance or advice in connection
with the Offering (other than a placement agent, if engaged by the Company) are
or are expected to be members or associated persons of members of the FINRA or
registered broker-dealers under any federal or state securities
laws.
1.16 The
Subscriber understands that, pursuant to the terms of the Offering as set forth
in the PPM, the Company must receive subscriptions for 40 Units for an aggregate
purchase price of $1,000,000 in order to close on the sale of any Units and that
persons affiliated with the Company or its consultants, advisors, or placement
agents may subscribe for Common Stock, in which case the Company may accept
subscriptions from such affiliated parties in order to reach the Minimum
Offering; and that, accordingly, no investor should conclude that achieving the
Minimum Offering is the result of any independent assessment of the merits or
advantages of the Offering or the Company made by Subscribers in the
Offering.
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1.17 The
Subscriber hereby represents that, except as expressly set forth in the Offering
Documents, no representations or warranties have been made to the Subscriber by
the Company or any agent, employee or affiliate of the Company and, in entering
into this transaction, the Subscriber is not relying on any information other
than that contained in the Offering Documents and the results of independent
investigation by the Subscriber.
1.18 All
information provided by the Subscriber in the Investor Questionnaire attached as
Exhibit B to
the PPM is true and accurate in all respects, and the Subscriber acknowledges
that the Company will be relying on such information to its possible detriment
in deciding whether the Company can sell these securities to the Subscriber
without giving rise to the loss of the exemption from registration under
applicable securities laws.
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II.
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REPRESENTATIONS
BY THE COMPANY
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2.1 The
Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Nevada and has the corporate power to
conduct the business which it conducts and proposes to conduct.
2.2 The
execution, delivery and performance of this Subscription Agreement by the
Company have been duly authorized by the Company and all other corporate action
required to authorize and consummate the offer and sale of the Units has been
duly taken and approved.
2.3 The Units
and the underlying Common Stock have been duly and validly authorized and
issued.
2.4 The
Company has obtained, or is in the process of obtaining, all licenses, permits
and other governmental authorizations necessary for the conduct of its business,
except where the failure to so obtain such licenses, permits and authorizations
would not have a material adverse effect on the Company. Such licenses, permits
and other governmental authorizations which have been obtained are in full force
and effect, except where the failure to be so would not have a material adverse
effect on the Company, and the Company is in all material respects complying
therewith.
2.5 The
Company knows of no pending or threatened legal or governmental proceedings to
which the Company is a party which would materially adversely affect the
business, financial condition or operations of the Company.
2.6 The
Company is not in violation of or default under, nor will the execution and
delivery of this Subscription Agreement or the issuance of the Common Stock, or
the consummation of the transactions herein contemplated, result in a violation
of, or constitute a default under, the Company’s Certificate of Incorporation or
By-laws, any material obligations, agreements, covenants or conditions contained
in any bond, debenture, note or other evidence of indebtedness or in any
material contract, indenture, mortgage, loan agreement, lease, joint venture or
other agreement or instrument to which the Company is a party or by which it or
any of its properties may be bound or any material order, rule, regulation,
writ, injunction, or decree of any government, governmental instrumentality or
court, domestic or foreign.
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III.
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COVENANTS
BY THE COMPANY
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3.1 Covenants of the
Company. The Company covenants and agrees with the Subscribers
as follows:
a. For a
period of twelve (12) months from the later of the Final Closing Date or the
Termination Date (as defined in the PPM), in the event that the Company issues
or sells any shares of Common Stock or any Common Stock Equivalents (as defined
below) pursuant to which shares of Common Stock may be acquired at a price less
than $0.20 per share, then the Company shall promptly issue additional shares of
Common Stock to the Subscriber in an amount sufficient that the subscription
price paid hereunder, when divided by the total number of shares issued will
result in an actual price paid per share of Common Stock hereunder equal to such
lower price (this is intended to be a “full ratchet” adjustment). Such
adjustment shall be made successively whenever such an issuance is made.
Notwithstanding the foregoing, this Section 3.1 shall not apply in respect of an
Exempt Issuance (as defined below).
For
purposes of this Agreement, (i) “Common Stock Equivalents”
means any securities of the Company or any of its subsidiaries which would
entitle the holder thereof to acquire at any time Common Stock, including,
without limitation, any debt, preferred stock, rights, options, warrants or
other instrument that is at any time convertible into or exercisable or
exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock and (ii) “Exempt
Issuance” means the issuance of (a) shares of Common Stock or options to
employees, officers, directors, or consultants of the Company pursuant to any
stock or option plan duly adopted for such purpose by a majority of the
non-employee members of the Board of Directors of the Company or a majority of
the members of a committee of non-employee directors established, (b) securities
upon the exercise or exchange of or conversion of any securities issued
hereunder and/or other securities exercisable or exchangeable for or convertible
into shares of Common Stock issued and outstanding on the date of this
Agreement, provided that such securities have not been amended since the date of
this Agreement to increase the number of such securities or to decrease the
exercise, exchange or conversion price of such securities; and (c) securities
issued pursuant to acquisitions or strategic transactions approved by a majority
of the disinterested directors of the Company, provided that any such issuance
shall only be to a person which is either an owner of, or an entity that is,
itself or through its subsidiaries, an operating company in a business
synergistic with the business of the Company and in which the Company receives
benefits in addition to the investment of funds, but shall not include a
transaction in which the Company is issuing securities primarily for the purpose
of raising capital or to an entity whose primary business is investing in
securities.
b. For a
period of 12 months following the later of the Final Closing Date or the
Termination Date (as defined in the PPM), the Company shall not (i) issue or
grant more than an aggregate of 3,750,000 options, warrants or shares of common
stock (subject to appropriate adjustments for any stock dividend, stock split,
stock combination, reclassification or similar transaction) to any employees,
officers, directors, or consultants of the Company or (ii) issue any options
having an exercise price that is less than $0.20 per share and subject to
appropriate adjustments for any stock dividend, stock split, stock combination,
reclassification or similar transaction).
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c. Stop
Orders. Subject to the prior notice requirement described in
Section 3.1(p), the Company will advise the Subscribers, within twenty-four
hours after it receives notice of issuance by the Commission, any state
securities commission or any other regulatory authority of any stop order or of
any order preventing or suspending any offering of any securities of the
Company, or of the suspension of the qualification of the Common Stock of the
Company for offering or sale in any jurisdiction, or the initiation of any
proceeding for any such purpose. The Company will not issue any stop
transfer order or other order impeding the sale, resale or delivery of any of
the Securities, except as may be required by any applicable federal or state
securities laws and unless contemporaneous notice of such instruction is given
to the Subscribers.
d. Listing/Quotation. The
Company will maintain the quotation of its Common Stock on the Over The Counter
Bulletin Board (the “Principal
Market”), and will comply in all respects with the Company's reporting,
filing and other obligations under the bylaws or rules of the Principal Market,
as applicable. The Company will provide Subscribers with copies of all notices
it receives notifying the Company of the threatened and actual delisting of the
Common Stock from any Principal Market. As of the date of this
Agreement and the Closing Date, the Bulletin Board is and will be the Principal
Market.
e. Market
Regulations. If required, the Company shall notify the
Commission, the Principal Market and applicable state authorities, in accordance
with their requirements, of the transactions contemplated by this Agreement, and
shall take all other necessary action and proceedings as may be required and
permitted by applicable law, rule and regulation, for the legal and valid
issuance of the Securities to the Subscribers and promptly provide copies
thereof to the Subscribers.
f. Filing
Requirements. From the date of this Agreement and until the
Common Stock has been resold or transferred by the Subscribers pursuant to a
registration statement or pursuant to Rule 144(b)(1)(i) (the “End Date”), the Company will
(A) comply in all respects with its reporting and filing obligations under the
1934 Act, (B) voluntarily comply with all reporting requirements that are
applicable to an issuer with a class of shares registered pursuant to Section
12(g) of the 1934 Act, if the Company is not subject to such reporting
requirements, and (C) comply with all requirements related to any registration
statement filed pursuant to this Agreement. The Company will use its
best efforts not to take any action or file any document (whether or not
permitted by the 1933 Act or the 1934 Act or the rules thereunder) to terminate
or suspend such registration or to terminate or suspend its reporting and filing
obligations under said acts until the End Date. Until the End Date,
the Company will continue the listing or quotation of the Common Stock on a
Principal Market and will comply in all respects with the Company’s reporting,
filing and other obligations under the bylaws or rules of the Principal
Market. The Company agrees to timely file a Form D with respect to
the Securities if required under Regulation D and to provide a copy thereof to
Subscribers promptly after such filing.
g. Use of
Proceeds. The proceeds of the Offering will be
substantially employed by the Company for the purposes set forth in the
PPM.
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h. DTC
Program. At all times, the Company will employ a transfer
agent for the Common Stock who is a participant in the Depository Trust Company
Automated Securities Transfer Program.
i. Taxes. From
the date of this Agreement and until the End Date, the Company will promptly pay
and discharge, or cause to be paid and discharged, when due and payable, all
lawful taxes, assessments and governmental charges or levies imposed upon the
income, profits, property or business of the Company; provided, however, that
any such tax, assessment, charge or levy need not be paid if the validity
thereof shall currently be contested in good faith by appropriate proceedings
and if the Company shall have set aside on its books adequate reserves with
respect thereto, and provided, further, that the Company will pay all such
taxes, assessments, charges or levies forthwith upon the commencement of
proceedings to foreclose any lien which may have attached as security
therefore.
j. Insurance. From
the date of this Agreement and until the End Date, the Company will keep its
assets which are of an insurable character insured by financially sound and
reputable insurers against loss or damage by fire, explosion and other risks
customarily insured against by companies in the Company’s line of business and
location, in amounts and to the extent and in the manner customary for companies
in similar businesses similarly situated and located and to the extent available
on commercially reasonable terms.
k. Books and
Records. From the date of this Agreement and until the End
Date, the Company will keep true records and books of account in which full,
true and correct entries will be made of all dealings or transactions in
relation to its business and affairs in accordance with generally accepted
accounting principles applied on a consistent basis.
l. Governmental
Authorities. From the date of this Agreement and until
the End Date, the Company shall duly observe and conform in all material
respects to all valid requirements of governmental authorities relating to the
conduct of its business or to its properties or assets.
m. Intellectual
Property. From the date of this Agreement and until the End
Date, the Company shall maintain in full force and effect its corporate
existence, rights and franchises and all licenses and other rights to use
intellectual property owned or possessed by it and reasonably deemed to be
necessary to the conduct of its business, unless it is sold for
value.
n. Properties. From
the date of this Agreement and until the End Date, the Company will keep its
properties in good repair, working order and condition, reasonable wear and tear
excepted, and from time to time make all necessary and proper repairs, renewals,
replacements, additions and improvements thereto; and the Company will at all
times comply with each provision of all leases and claims to which it is a party
or under which it occupies or has rights to property if the breach of such
provision could reasonably be expected to have a Material Adverse
Effect. The Company will not abandon any of its assets except for
those assets which have negligible or marginal value or for which it is prudent
to do so under the circumstances.
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o. Confidentiality/Public
Announcement. From the date of this Agreement and until
the End Date, the Company agrees that except in connection with a Form 8-K, Form
10-Q, Form 10-K and the registration statement or statements regarding the
Subscribers’ Securities or in correspondence with the Commission regarding same,
it will not disclose publicly or privately the identity of the Subscribers
unless expressly agreed to in writing by Subscribers or only to the extent
required by law and then only upon not less than three days prior notice to
Subscribers. In any event and subject to the foregoing, the Company
undertakes to file a Form 8-K describing the Offering not later than the fourth
(4th)
business day after the Closing Date. Prior to the filing date of such
Form 8-K, a draft in the final form will be provided to Subscribers for
Subscribers’ review and approval. In the Form 8-K, the Company will
specifically disclose the amount of Common Stock outstanding immediately after
the Closing. Upon delivery by the Company to the Subscribers after
the Closing Date of any notice or information, in writing, electronically or
otherwise, and while any shares of Common Stock are held by Subscribers, unless
the Company has in good faith determined that the matters relating to
such notice do not constitute material, nonpublic information relating
to the Company or Subsidiaries, the Company shall within
one business day after any such delivery publicly disclose such
material, nonpublic information on a
Report on Form 8-K. In the event that
the Company believes that a notice or communication to
Subscribers contains material, nonpublic information relating to the Company or
Subsidiaries, the Company shall so indicate to Subscribers prior to delivery of
such notice or information. Subscribers will be granted sufficient
time to notify the Company that Subscribers elects not to receive such
information. In such case, the Company will not deliver such
information to Subscribers. In the absence of any such
indication, Subscribers shall be allowed to presume that all matters
relating to such notice and information do not constitute material,
nonpublic information relating to the Company or
Subsidiaries.
p. Non-Public
Information. The Company covenants and agrees that except for
the Reports, Other Written Information and schedules and exhibits to this
Agreement and the Offering Documents, which information the Company undertakes
to publicly disclose on the Form 8-K described above, neither it nor any other
person acting on its behalf will at any time provide Subscribers or its agents
or counsel with any information that the Company believes constitutes material
non-public information, unless prior thereto Subscribers shall have agreed in
writing to accept such information. The Company understands and
confirms that Subscribers shall be relying on the foregoing representations in
effecting transactions in securities of the Company.
3.2 Negative
Covenants.
a. For a
period of twelve months from the later of the Final Closing Date or the
Termination Date (as defined in the PPM), except as otherwise provided in
Section 3.2(b) hereof, without the consent of the Subscribers, the Company will
not and will not permit any of its Subsidiaries to directly or indirectly engage
in any transactions with any officer, director, employee or any affiliate of the
Company, including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner, in each case in excess of $100,000
other than (i) for payment of salary, or fees for services rendered, (ii)
reimbursement for expenses incurred on behalf of the Company, (iii) for other
employee benefits, including stock option agreements under any stock option plan
of the Company, and (iv) as described in the PPM.
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b. The
Company may not pay any bonus under any employee agreement or other compensatory
arrangement with Xxxxx Xxxxx during the twelve month period following the later
of the Final Closing Date or the Termination Date (as defined in the PPM) other
than bonuses based on the Net Profit from revenues generated from performance of
services under the contracts assigned by Argo Digital Solutions, Inc. to the
Company with Accenture, Autonation and Mattress Firm (the “Contracts”). For
purposes of this Section 3.2(b), “Net Profit” shall mean actual collections for
bona fide services performed and invoiced pursuant to the Contracts, minus actual direct
costs for providing such services, and minus any credits or
refunds for payments made during such period.
3.3 Further Registration
Statements. The Company will not, without the consent of
the Subscribers, file with the Commission or with state regulatory authorities
any registration statement or amend any already filed registration statement to
increase the amount of Common Stock registered therein, or reduce the price of
which such company securities are registered therein, until the expiration of
the “Exclusion Period,”
which shall be for a period of eleven (11) months after the Closing
Date. The Exclusion Period will be tolled or reinstated, as the case
may be, during the pendency of any Event of Default or breach of the Company's
obligations to any Subscribers under any of the Offering Documents.
3.4 Notices. For
so long as the Subscribers hold any Securities, the Company will maintain a
United States address and United States fax number for notice purposes under the
Offering Documents.
3.5 Covenants of the Company
Regarding Indemnification. The Company agrees to indemnify, hold
harmless, reimburse and defend the Subscribers, the Subscribers’ officers,
directors, agents, counsel, affiliates, members, managers, control persons, and
principal shareholders, against any claim, cost, expense, liability, obligation,
loss or damage (including reasonable legal fees) of any nature, incurred by or
imposed upon the Subscribers or any such person which results, arises out of or
is based upon (i) any material misrepresentation by Company or breach of any
representation or warranty by Company in this Agreement or in any Exhibits or
Schedules attached hereto in any Offering Document, or other agreement delivered
pursuant hereto or in connection herewith, now or after the date hereof; or (ii)
after any applicable notice and/or cure periods, any breach or default in
performance by the Company of any covenant or undertaking to be performed by the
Company hereunder, or any other agreement entered into by the Company and
Subscribers relating hereto.
3.6 Offering
Restrictions. For a period of twelve months from the
later of the Final Closing Date or the Termination Date (as defined in the PPM),
the Company will not enter into any Equity Line of Credit or similar agreement,
nor issue nor agree to issue any floating or Variable Priced Equity Linked
Instruments nor any of the foregoing or equity with price reset rights
(collectively, the “Variable Rate Restrictions”). For purposes
hereof, “Equity Line of Credit” shall include any transaction involving a
written agreement between the Company and an investor or underwriter whereby the
Company has the right to “put” its securities to the investor or underwriter
over an agreed period of time and at an agreed price or price formula, and
“Variable Priced Equity Linked Instruments” shall include: (A) any debt or
equity securities which are convertible into, exercisable or exchangeable for,
or carry the right to receive additional shares of Common Stock either (1) at
any conversion, exercise or exchange rate or other price that is based upon
and/or varies with the trading prices of or quotations for Common Stock at any
time after the initial issuance of such debt or equity security, or (2) with a
fixed conversion, exercise or exchange price that is subject to being reset at
some future date at any time after the initial issuance of such debt or equity
security due to a change in the market price of the Company’s Common Stock since
date of initial issuance, and (B) any amortizing convertible security which
amortizes prior to its maturity date, where the Company is required or has the
option to (or any investor in such transaction has the option to require the
Company to) make such amortization payments in shares of Common Stock which are
valued at a price that is based upon and/or varies with the trading prices of or
quotations for Common Stock at any time after the initial issuance of such debt
or equity security (whether or not such payments in stock are subject to certain
equity conditions). For a period of twelve months from the date of
the later of the Final Closing Date or the Termination Date(as defined in the
PPM), except as contemplated by the Offering Documents, the Company will not
enter into an agreement to issue nor issue any equity, convertible debt or other
securities convertible into Common Stock or equity of the Company nor modify any
of the foregoing which may be outstanding at anytime, without the prior written
consent of the Subscribers which consent may be withheld for any reason, if such
Common Stock is issued or may be purchased for less than the greater of (i)
$0.20 per share of Common Stock or (ii) 50% of the closing price of the Common
Stock as reported for the Principal Market on the day such Common Stock is
issued and/or purchased.
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3.7 Covenants of the Company
Regarding Indemnification. The Company agrees to indemnify,
hold harmless, reimburse and defend the Subscribers, the Subscribers’ officers,
directors, agents, counsel, affiliates, members, managers, control persons, and
principal shareholders, against any claim, cost, expense, liability, obligation,
loss or damage (including reasonable legal fees) of any nature, incurred by or
imposed upon the Subscribers or any such person which results, arises out of or
is based upon (i) any material misrepresentation by Company or breach of any
representation or warranty by Company in this Agreement or in any Exhibits or
Schedules attached hereto in any Offering Document, or other agreement delivered
pursuant hereto or in connection herewith, now or after the date hereof; or (ii)
after any applicable notice and/or cure periods, any breach or default in
performance by the Company of any covenant or undertaking to be performed by the
Company hereunder, or any other agreement entered into by the Company and
Subscribers relating hereto.
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IV.
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TERMS
OF SUBSCRIPTION
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4.1 Subject
to Section 4.2 hereof, the subscription period will begin as of the date of the
PPM and will terminate at 11:59 PM Eastern Time, on the earlier of the date on
which the Offering is completed or the Offering is terminated by the Company
(the “Termination
Date”). The minimum subscription amount is $25,000, although the Company
may, in its discretion, accept subscriptions for less than $25,000.
10
4.2 The
Subscriber shall effect a wire transfer in the full amount of the purchase price
for the Units to the Company’s escrow account in accordance with the wire
instructions attached as Exhibit E to the PPM
or shall deliver a check in payment of the purchase price for the
Units.
4.3 Pending
the sale of the Units, all funds paid hereunder shall be deposited by the
Company in escrow with the Company’s escrow agent. If the Company
shall not have obtained subscriptions (including this subscription) for the
Offering on or before the Termination Date (as such date may be extended by the
Company), then this subscription shall be void and all funds paid hereunder by
the Subscriber shall be promptly returned without interest to the Subscriber, to
the same account from which the funds were drawn. If subscriptions
are received and accepted and payment tendered for the Offering on or prior to
the Termination Date, then all subscription proceeds (less fees and expenses)
shall be paid over to the Company within ten (10) days thereafter or such
earlier date that is one business day after the amount of good funds in escrow
equals or exceeds $1,000,000, less any amount of bridge notes of the Company
that elect to convert into Common Stock sold in the Offering. In such
event, sales of the Units may continue thereafter until the Termination Date,
with subsequent releases of funds from time to time at the discretion of the
Company.
4.4 The
Subscriber hereby authorizes and directs the Company and its escrow agent to
deliver any certificates or other written instruments representing the Units to
be issued to such Subscriber pursuant to this Subscription Agreement to the
address indicated on the signature page hereof.
4.5 The
Subscriber hereby authorizes and directs the Company and its escrow agent to
return any funds, without interest, for unaccepted subscriptions to the same
account from which the funds were drawn.
4.6 If the
Subscriber is not a United States person, such Subscriber shall immediately
notify the Company and the Subscriber hereby represents that the Subscriber is
satisfied as to the full observance of the laws of its jurisdiction in
connection with any invitation to subscribe for the Units or any use of this
Subscription Agreement, including (i) the legal requirements within its
jurisdiction for the purchase of the Units, (ii) any foreign exchange
restrictions applicable to such purchase, (iii) any governmental or other
consents that may need to be obtained, and (iv) the income tax and other tax
consequences, if any, that may be relevant to the purchase, holding, redemption,
sale or transfer of the Units. Such Subscriber’s subscription and
payment for, and continued beneficial ownership of, the Units will not violate
any applicable securities or other laws of the Subscriber’s jurisdiction or the
United States of America.
|
V.
|
MISCELLANEOUS
|
5.1 Any
notice or other communication given hereunder shall be deemed sufficient if in
writing and sent by reputable overnight courier, facsimile (with receipt of
confirmation) or registered or certified mail, return receipt requested,
addressed to the Company, at the address set forth in the first paragraph
hereof, Attention: Chief Executive Officer, facsimile: (000) 000-0000, and to
the Subscriber at the address or facsimile number indicated on the signature
page hereof. Notices shall be deemed to have been given on the date
when mailed or sent by facsimile transmission or overnight courier, except
notices of change of address, which shall be deemed to have been given when
received.
11
5.2 This
Subscription Agreement shall not be changed, modified or amended, including
without limitation the modification of any covenant herein, except by a writing
signed by (a) the Company, (b) subscribers in the Offering holding a majority of
the Units issued in and (c) holders representing a majority in principal amount
of the unconverted Bridge Notes.
5.3 This
Subscription Agreement shall be binding upon and inure to the benefit of the
parties hereto and to their respective heirs, legal representatives, successors
and assigns. This Subscription Agreement sets forth the entire
agreement and understanding between the parties as to the subject matter hereof
and merges and supersedes all prior discussions, agreements and understandings
of any and every nature among them.
5.4 Notwithstanding
the place where this Subscription Agreement may be executed by any of the
parties hereto, the parties expressly agree that all the terms and provisions
hereof shall be construed in accordance with and governed by the laws of the
State of New York. The parties hereby agree that any dispute which
may arise between them arising out of or in connection with this Subscription
Agreement shall be adjudicated only before a Federal court located in New York,
New York and they hereby submit to the exclusive jurisdiction of the federal
courts located in New York, New York with respect to any action or legal
proceeding commenced by any party, and irrevocably waive any objection they now
or hereafter may have respecting the venue of any such action or proceeding
brought in such a court or respecting the fact that such court is an
inconvenient forum, relating to or arising out of this Subscription Agreement or
any acts or omissions relating to the sale of the securities hereunder, and
consent to the service of process in any such action or legal proceeding by
means of registered or certified mail, return receipt requested, in care of the
address set forth below or such other address as the undersigned shall furnish
in writing to the other. The parties further agree that in the event
of any dispute, action, suit or other proceeding arising out of or in connection
with this Subscription Agreement, the PPM or other matters related to this
subscription brought by a Subscriber (or transferee), the Company (and each
other defendant) shall recover all of such party’s attorneys’ fees and costs
incurred in each and every action, suit or other proceeding, including any and
all appeals or petitions therefrom. As used herein, attorney’s fees shall be
deemed to mean the full and actual costs of any investigation and of legal
services actually performed in connection with the matters involved, calculated
on the basis of the usual fee charged by the attorneys performing such
services.
5.5 This
Subscription Agreement may be executed in counterparts. Upon the
execution and delivery of this Subscription Agreement by the Subscriber, this
Subscription Agreement shall become a binding obligation of the Subscriber with
respect to the purchase of Units as herein provided; subject, however, to the
right hereby reserved by the Company to (i) enter into the same agreements with
other subscribers, (ii) add and/or delete other persons as subscribers and (iii)
reduce the amount of or reject any subscription.
5.6 The
holding of any provision of this Subscription Agreement to be invalid or
unenforceable by a court of competent jurisdiction shall not affect any other
provision of this Subscription Agreement, which shall remain in full force and
effect.
12
5.7 It is
agreed that a waiver by either party of a breach of any provision of this
Subscription Agreement shall not operate or be construed as a waiver of any
subsequent breach by that same party.
5.8 The
parties agree to execute and deliver all such further documents, agreements and
instruments and take such other and further actions as may be necessary or
appropriate to carry out the purposes and intent of this Subscription
Agreement.
[Signature
Pages Follow]
13
IN WITNESS WHEREOF, the
parties have executed this Subscription Agreement as of the day and year first
written above.
|
__________________________
|
X
$25,000for each Unit
|
=
$_____________________.
|
|
Number
of Units subscribed for
|
Aggregate
Purchase Price
|
Manner
in which Title is to be held (Please Check One):
|
1.
|
___
|
Individual
|
7.
|
___
|
Trust/Estate/Pension
or Profit Sharing Plan
Date
Opened:______________
|
|
2.
|
___
|
Joint
Tenants with Right of Survivorship
|
8.
|
___
|
As
a Custodian for
________________________________
Under
the Uniform Gift to Minors Act of the State of
________________________________
|
|
3.
|
___
|
Community
Property
|
9.
|
___
|
Married
with Separate Property
|
|
4.
|
___
|
Tenants
in Common
|
10.
|
___
|
Xxxxx
|
|
5.
|
___
|
Corporation/Partnership/
Limited Liability Company
|
11.
|
___
|
Tenants
by the Entirety
|
|
6.
|
___
|
XXX
|
12.
|
___
|
Foundation
described in Section 501(c)(3) of the Internal Revenue Code of 1986, as
amended.
|
IF
MORE THAN ONE SUBSCRIBER, EACH SUBSCRIBER MUST SIGN:
INDIVIDUAL
SUBSCRIBERS MUST COMPLETE PAGE A-15
SUBSCRIBERS
WHICH ARE ENTITIES MUST COMPLETE PAGE A-16
14
EXECUTION BY NATURAL
PERSONS
|
Exact
Name in Which Title is to be Held
|
||
|
|
||
|
Name
(Please Print)
|
Name
of Additional Subscriber
|
|
|
|
||
|
Residence:
Number and Street
|
Address
of Additional Subscriber
|
|
|
|
||
|
City,
State and Zip Code
|
City,
State and Zip Code
|
|
|
|
||
|
Social
Security Number
|
Social
Security Number
|
|
|
|
||
|
Telephone
Number
|
Telephone
Number
|
|
|
|
||
|
Fax
Number (if available)
|
Fax
Number (if available)
|
|
|
|
||
|
E-Mail
(if available)
|
E-Mail
(if available)
|
|
|
|
||
|
(Signature)
|
(Signature
of Additional Subscriber)
|
|
|
ACCEPTED
this ___ day of _________ 2010, on behalf of RVUE HOLDINGS,
INC.
|
||
| By: | ||
| Name: | ||
| Title: | ||
15
EXECUTION BY SUBSCRIBER
WHICH IS AN ENTITY
(Corporation,
Partnership, Trust, Etc.)
|
Name
of Entity (Please Print)
|
|
|
Date
of Incorporation or Organization:
|
|
|
State
of Principal Office:
|
|
| Federal Taxpayer Identification Number: | |
|
|
|
| Office Address | |
| City, State and Zip Code | |
| Telephone Number | |
| Fax Number (if available) | |
| E-Mail (if available) | |
|
[seal]
Attest:
(If
Entity is a Corporation)
|
By:
Name:
Title:
|
|
*If
Subscriber is a Registered Representative with a FINRA member firm, have
the following acknowledgement signed by the appropriate
party:
|
|
|
The
undersigned FINRA member firm acknowledges receipt of the notice required
by Rule 3050 of the FINRA Conduct Rules
|
|
|
Name
of FINRA Firm
|
ACCEPTED
this ____ day of __________ 2010, on behalf of RVUE HOLDINGS,
INC.
|
|
By:
Name:
Title:
|
By:
Name:
Title:
|
16
