SERIES A PREFERRED STOCK PURCHASE AGREEMENT
THIS SERIES A PREFERRED STOCK PURCHASE AGREEMENT (the "Agreement") is
entered into as of __________ __, 200_, by and between Branded Media
Corporation, a Nevada corporation (the "Company") and __________ ("Purchaser").
RECITALS
WHEREAS, the Company has authorized the sale and issuance of an aggregate
of Six Hundred Thousand (600,000) shares of its Series A Preferred Stock (the
"Shares");
WHEREAS, Purchaser desires to purchase the Shares on the terms and
conditions set forth herein; and
WHEREAS, the Company desires to issue and sell the Shares to Purchaser on
the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises hereinafter set forth, the parties hereto agree as follows:
1. AGREEMENT TO SELL AND PURCHASE.
1.1 AUTHORIZATION OF SHARES. On or prior to the Closing (as defined in Section 2
below), the Company shall have authorized (a) the sale and issuance to Purchaser
of the Shares and (b) the issuance of such shares of Common Stock to be issued
upon conversion of the Shares (the "Conversion Shares"). The Shares and the
Conversion Shares shall have the rights, preferences, privileges and
restrictions set forth in the Certificate of Designation of Series A Preferred
Stock, in the form attached hereto as Exhibit A (the "Certificate of
Designation").
1.2 SALE AND PURCHASE. Subject to the terms and conditions hereof, at the
Closing (as hereinafter defined) the Company hereby agrees to issue and sell to
Purchaser, and Purchaser agrees to purchase from the Company, _____________
(_______) shares at a purchase price of $10.00 per share ($_________).
2. CLOSING, DELIVERY AND PAYMENT.
2.1 CLOSING. The closing of the sale and purchase of the Shares under this
Agreement (the "Closing") shall take place at 10:00 a.m. on the date hereof, at
the offices of the Company or such other time or place as the Company and
Purchaser may mutually agree (such date is hereinafter referred to as the
"Closing Date").
2.2 DELIVERY. At the Closing, subject to the terms and conditions hereof, the
Company will deliver to Purchaser a certificate representing the number of
Shares to be purchased at the Closing by Purchaser, against payment of the
purchase price by certified check or wire transfer made payable to the order of
the Company.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
Except as set forth on a Schedule of Exceptions delivered by the
Company to Purchaser at the Closing specifically identifying the relevant
Section, the Company hereby represents and warrants to Purchaser as of the date
of this Agreement as follows:
3.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Nevada. The Company has all requisite corporate power and authority to
own and operate its properties and assets, to execute and deliver this
Agreement, the Registration Rights Agreement in the form attached hereto as
Exhibit B (the "Registration Rights Agreement") and the Common Stock Purchase
Warrant Agreement, in the form attached hereto as Exhibit C (the "Warrant
Agreement") (collectively, the "Related Agreements"), to issue and sell the
Shares and the Conversion Shares, and to carry out the provisions of this
Agreement and to carry on its business as presently conducted and as presently
proposed to be conducted. The Company is duly qualified and is authorized to do
business and is in good standing as a foreign corporation in all jurisdictions
in which the nature of its activities and of its properties (both owned and
leased) makes such qualification necessary, except for those jurisdictions in
which failure to do so would not have a material adverse effect on the Company
or its business.
3.2 SUBSIDIARIES. The Company does not own or control any equity security or
other interest of any other corporation, limited partnership or other business
entity. The Company is not a participant in any joint venture, partnership or
similar arrangement.
3.3 CAPITALIZATION; VOTING RIGHTS. The authorized capital stock of the Company,
immediately prior to the Closing, will consist of (a) 500,000,000 shares of
Common Stock, par value $.001 per share, 29,748,295 shares of which are issued
and outstanding and (b) 10,000,000 shares of Preferred Stock, par value $.001
per share, 600,000 of which are designated Series A Preferred Stock, which
220,000 are issued and outstanding. All issued and outstanding shares of the
Company's Common Stock (a) have been duly authorized and validly issued to the
persons listed on Exhibit D hereto, (b) are fully paid and nonassessable, and
(c) were issued in compliance with all applicable state and federal laws
concerning the issuance of securities. The rights, preferences, privileges and
restrictions of the Shares are as stated in the Certificate of Designation. Each
share of Series A Preferred Stock is convertible into Common Stock, subject to
adjustment as provided in the Certificate of Designation. The Conversion Shares
have been duly and validly reserved for issuance. When issued in compliance with
the provisions of this Agreement and the Certificate of Designation, the Shares
and the Conversion Shares will be validly issued, fully paid and nonassessable,
and, other than in connection with this Agreement or the Related Agreements,
will be free of any liens or encumbrances; provided, however, that the Shares
and the Conversion Shares may be subject to restrictions on transfer under state
and/or federal securities laws as set forth herein or as otherwise required by
such laws at the time a transfer is proposed.
3.4 AUTHORIZATION; BINDING OBLIGATIONS. All corporate action on the part of the
Company and its officers, directors and shareholders necessary for the
authorization of this Agreement and the Related Agreements, the performance of
all obligations of the Company hereunder and thereunder at the Closing and the
authorization, sale, issuance and delivery of the Shares pursuant hereto and the
Conversion Shares pursuant to the Certificate of Designation has been taken or
will be taken prior to the Closing. This Agreement and the Related Agreements,
when executed and delivered, will be valid and binding obligations of the
Company enforceable in accordance with their terms, except (a) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws of
general application affecting enforcement of creditors' rights, (b) general
principles of equity that restrict the availability of equitable remedies, and
(c) to the extent that the enforceability of the indemnification provisions in
Section 2.9 of the Registration Rights Agreement may be limited by applicable
laws. The sale of the Shares and the subsequent conversion of the Shares into
Conversion Shares are not and will not be subject to any preemptive rights or
rights of first refusal that have not been properly waived or complied with.
3.5 FINANCIAL STATEMENTS. The Company has made available to Purchaser its
audited financial statements as at September 30, 2004 and unaudited financial
statements for the nine month period ending June 30, 2005 (collectively, the
"Financial Statements"). The Financial Statements, together with the notes
thereto, are complete and correct in all material respects, have been prepared
in accordance with generally accepted accounting principles applied on a
consistent basis throughout the periods indicated, except as disclosed therein,
and present fairly the financial condition and position of the Company;
provided, however, that the unaudited financial statements are subject to normal
recurring year-end audit adjustments (which are not expected to be material),
and do not contain all footnotes required under generally accepted accounting
principles.
3.6 LIABILITIES. The Company has no material liabilities and, to the best of its
knowledge, has no material contingent liabilities not disclosed in the Financial
Statements, except current liabilities incurred in the ordinary course of
business subsequent to the Statement Date which have not had, either in any
individual case or in the aggregate, a materially adverse effect on the Company.
3.7 AGREEMENTS; ACTION.
(A) All agreements, understandings or proposed transactions between the Company
and any of its officers, directors, affiliates or any affiliate thereof is set
forth in the attached Exhibit E.
(B) All agreements, understandings, instruments, contracts, proposed
transactions, judgments, orders, writs or decrees to which the Company is a
party or to its knowledge by which it is bound which may involve (i) obligations
(contingent or otherwise) of, or payments to, the Company in excess of $20,000
(other than obligations of, or payments to, the Company arising from purchase or
sale agreements entered into in the ordinary course of business), or (ii) the
transfer or license of any patent, copyright, trade secret or other proprietary
right to or from the Company (other than licenses arising from the purchase of
"off the shelf" or other standard products), or (iii) provisions restricting the
development, manufacture or distribution of the Company's products or services,
or (iv) indemnification by the Company with respect to infringements of
proprietary rights (other than indemnification obligations arising from purchase
or sale or license agreements entered into in the ordinary course of business)
are set forth in the attached Exhibit F.
(C) The Company has not (i) declared or paid any cash dividends, or authorized
or made any distribution upon or with respect to any class or series of its
capital stock, (ii) incurred any indebtedness for money borrowed or any other
liabilities (other than with respect to dividend obligations, distributions,
indebtedness and other obligations incurred in the ordinary course of business
and other than as disclosed in the Financial Statements) in excess of $10,000
individually or in excess of $20,000 in the aggregate, (iii) made any loans or
advances to any person, other than ordinary advances for travel expenses, or
(iv) sold, exchanged or otherwise disposed of any of its assets or rights, other
than the sale of its inventory in the ordinary course of business.
(D) For the purposes of subsections (a) and (b) above, all indebtedness,
liabilities, agreements, understandings, instruments, contracts and proposed
transactions involving the same person or entity (including persons or entities
the Company has reason to believe are affiliated therewith) shall be aggregated
for the purpose of meeting the individual minimum dollar amounts of such
subsections.
3.8 OBLIGATIONS TO RELATED PARTIES. All obligations of the Company to officers,
directors, shareholders, or employees of the Company other than (a) for payment
of salary for services rendered, (b) reimbursement for reasonable expenses
incurred on behalf of the Company and (c) for other standard employee benefits
made generally available to all employees (including stock option agreements
outstanding under any stock option plan approved by the Board of Directors of
the Company) are set forth in Exhibit E. None of the officers, directors or
shareholders of the Company, or any members of their immediate families, are
indebted to the Company or have any direct or indirect ownership interest in any
firm or corporation with which the Company is affiliated or with which the
Company has a business relationship, or any firm or corporation which competes
with the Company, except that officers, directors and/or shareholders of the
Company may own stock in publicly traded companies which may compete with the
Company. No officer, director or shareholder, or any member of their immediate
families, is a party to or, directly or indirectly, interested in any material
contract with the Company (other than such contracts as relate to any such
person's ownership of capital stock or other securities of the Company). Except
as may be disclosed in the Financial Statements, the Company is not a guarantor
or indemnitor of any indebtedness of any other person, firm or corporation.
3.9 CHANGES. Since June 30, 2005 there has not been to the Company's knowledge:
(A) Any change in the assets, liabilities, financial condition or operations of
the Company from that reflected in the Financial Statements, other than changes
in the ordinary course of business, none of which individually or in the
aggregate has had or is expected to have a material adverse effect on such
assets, liabilities, financial condition, operations or prospects of the
Company;
(B) Any resignation or termination of any officer or key employee of the
Company; nor, to the best of its knowledge, is any such resignation or
termination imminent;
(C) Any material change, except in the ordinary course of business, in the
contingent obligations of the Company by way of guaranty, endorsement,
indemnity, warranty or otherwise;
(D) Any damage, destruction or loss, whether or not covered by insurance,
materially and adversely affecting the properties, business or prospects or
financial condition of the Company;
(E) Any waiver by the Company of a valuable right or of a material debt owed to
it;
(F) Any direct or indirect loan made by the Company to any shareholder,
employee, officer or director of the Company, other than advances made in the
ordinary course of business;
(G) Any material change in any compensation arrangement or agreement with any
employee, officer, director or shareholder;
(H) Any declaration or payment of any dividend or other distribution of the
assets of the Company;
(I) Any labor organization activity;
(J) Any debt, obligation or liability incurred, assumed or guaranteed by the
Company, except those for immaterial amounts and for current liabilities
incurred in the ordinary course of business;
(K) Any sale, assignment or transfer of any patents, trademarks, copyrights,
trade secrets or other intangible assets;
(L) Any change in any material agreement to which the Company is a party or by
which it is bound which materially and adversely affects the business, assets,
liabilities, financial condition, operations or prospects of the Company; or
(M) Any other event or condition of any character that, either individually or
cumulatively, has materially and adversely affected the business, assets,
liabilities, financial condition, operations or prospects of the Company.
(N) Any arrangement or commitment by the Company to do any of the acts described
in subsections (a) through (m) above.
3.10 TITLE TO PROPERTIES AND ASSETS; LIENS, ETC. The Company has good title to
its properties and assets, including the properties and assets reflected in the
most recent balance sheet included in the Financial Statements, and good title
to its leasehold estates, in each case subject to no mortgage, pledge, lien,
lease, encumbrance or charge, other than (a) those resulting from taxes which
have not yet become delinquent, (b) minor liens and encumbrances which do not
materially detract from the value of the property subject thereto or materially
impair the operations of the Company, and (c) those that have otherwise arisen
in the ordinary course of business. All facilities, machinery, equipment,
fixtures, vehicles and other properties owned, leased or used by the Company are
in good operating condition and repair and are reasonably fit and usable for the
purposes for which they are being used. The Company is in compliance with all
material terms of each lease to which it is a party or is otherwise bound.
3.11 COPYRIGHTS AND TRADEMARKS. The Company owns or possesses sufficient legal
rights to all trademarks, service marks, trade names, copyrights, trade secrets,
licenses, information and other proprietary rights and processes necessary for
its business as now conducted and as presently proposed to be conducted, without
any known infringement of the rights of others. There are no outstanding
options, licenses or agreements of any kind relating to the foregoing other than
those granted by the Company to resellers, distributors, dealers or customers in
the ordinary course of business, nor is the Company bound by or a party to any
options, licenses or agreements of any kind with respect to the patents,
trademarks, service marks, trade names, copyrights, trade secrets, licenses,
information and other proprietary rights and processes of any other person or
entity. The Company has not received any communications alleging that the
Company has violated or, by conducting its business as presently proposed, would
violate any of the patents, trademarks, service marks, trade names, copyrights
or trade secrets or other proprietary rights of any other person or entity. The
Company is not aware that any of its employees is obligated under any contract
(including licenses, covenants or commitments of any nature) or other agreement,
or subject to any judgment, decree or order of any court or administrative
agency, that would interfere with their duties to the Company or that would
conflict with the Company's business as presently proposed to be conducted.
Neither the execution nor delivery of this Agreement or the Related Agreements,
nor the carrying on of the Company's business by the employees of the Company,
nor the conduct of the Company's business as presently proposed, will, to the
Company's knowledge, conflict with or result in a breach of the terms,
conditions or provisions of, or constitute a default under, any contract,
covenant or instrument under which any employee is now obligated. The Company
does not believe it is or will be necessary to utilize any inventions, trade
secrets or proprietary information of any of its employees made prior to their
employment by the Company, except for inventions, trade secrets or proprietary
information that have been assigned to the Company.
3.12 COMPLIANCE WITH OTHER INSTRUMENTS. The Company is not in violation or
default of any term of its Charter, Certificate of Designation or Bylaws, or of
any provision of any mortgage, indenture, contract, agreement, instrument or
contract to which it is party or by which it is bound or of any judgment,
decree, order, writ. The execution, delivery, performance of and compliance with
this Agreement and the Related Agreements, and the issuance and sale of the
Shares pursuant hereto and of the Conversion Shares pursuant to the Certificate
of Designation, will not, with or without the passage of time or giving of
notice, result in any such material violation, or be in conflict with or
constitute a default under any such term, or result in the creation of any
mortgage, pledge, lien, encumbrance or charge upon any of the properties or
assets of the Company or the suspension, revocation, impairment, forfeiture or
non-renewal of any permit, license, authorization or approval applicable to the
Company, its business or operations or any of its assets or properties.
3.13 LITIGATION. There is no action, suit, proceeding or investigation pending
or to the Company's knowledge currently threatened against the Company that
questions the validity of this Agreement or the Related Agreements or the right
of the Company to enter into any of such agreements, or to consummate the
transactions contemplated hereby or thereby, or which might result, either
individually or in the aggregate, in any material adverse change in the assets,
condition, affairs or prospects of the Company, financially or otherwise, or any
change in the current equity ownership of the Company. The foregoing includes,
without limitation, actions involving the prior employment of any of the
Company's employees, their use in connection with the Company's business of any
information or techniques allegedly proprietary to any of their former
employers, or their obligations under any agreements with prior employers. The
Company is not a party or subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality. There is no action, suit, proceeding or investigation by the
Company currently pending or which the Company intends to initiate.
3.14 EMPLOYEES. The Company has no collective bargaining agreements with any of
its employees. There is no labor union organizing activity pending or, to the
Company's knowledge, threatened with respect to the Company. The Company is not
a party to or bound by any currently effective employment contract, deferred
compensation arrangement, bonus plan, incentive plan, profit sharing plan,
retirement agreement or other employee compensation plan or agreement. To the
Company's knowledge, no employee of the Company, nor any consultant with whom
the Company has contracted, is in violation of any term of any employment
contract, proprietary information agreement or any other agreement relating to
the right of any such individual to be employed by, or to contract with, the
Company because of the nature of the business to be conducted by the Company;
and to the Company's knowledge the continued employment by the Company of its
present employees, and the performance of the Company's contracts with its
independent contractors, will not result in any such violation. The Company has
not received any notice alleging that any such violation has occurred. No
employee of the Company has been granted the right to continued employment by
the Company or to any material compensation following termination of employment
with the Company. The Company is not aware that any officer or key employee, or
that any group of key employees, intends to terminate his, her or their
employment with the Company, nor does the Company have a present intention to
terminate the employment of any officer, key employee or group of key employees.
3.15 OBLIGATIONS OF MANAGEMENT. Each officer of the Company is currently
devoting one hundred percent (100%) of his or her business time to the conduct
of the business of the Company. The Company is not aware that any officer or key
employee of the Company is planning to work less than full time at the Company
in the future. No officer or key employee is currently working or, to the
Company's knowledge, plans to work for a competitive enterprise, whether or not
such officer or key employee is or will be compensated by such enterprise.
3.16 REGISTRATION RIGHTS AND VOTING RIGHTS.
(A) The Company is presently under obligation, and has granted rights, to
register shares of the Company's presently outstanding securities and securities
that may hereafter be issued and are set forth in the attached Exhibit G.
(B) To the Company's knowledge no shareholder of the Company has entered into
any agreement with respect to the voting of equity securities of the Company.
3.17 COMPLIANCE WITH LAWS; PERMITS. The Company is not in violation of any
applicable statute, rule, regulation, order or restriction of any domestic or
foreign government or any instrumentality or agency thereof in respect of the
conduct of its business or the ownership of its properties which violation would
materially and adversely affect the business, assets, liabilities, financial
condition, operations or prospects of the Company. No governmental orders,
permissions, consents, approvals or authorizations are required to be obtained
and no registrations or declarations are required to be filed in connection with
the execution and delivery of this Agreement and the issuance of the Shares or
the Conversion Shares, except such as has been duly and validly obtained or
filed, or with respect to any filings that must be made after the Closing, as
will be filed in a timely manner. The Company has all franchises, permits,
licenses and any similar authority necessary for the conduct of its business as
now being conducted by it, the lack of which could materially and adversely
affect the business, properties, prospects or financial condition of the Company
and believes it can obtain, without undue burden or expense, any similar
authority for the conduct of its business as planned to be conducted.
3.18 ENVIRONMENTAL AND SAFETY LAWS. The Company is not in violation of any
applicable statute, law or regulation relating to the environment or
occupational health and safety, and to its knowledge, no material expenditures
are or will be required in order to comply with any such existing statute, law
or regulation. No Hazardous Materials (as defined below) are used or have been
used, stored, or disposed of by the Company or, to the Company's knowledge after
reasonable investigation, by any other person or entity on any property owned,
leased or used by the Company. For the purposes of the preceding sentence,
"Hazardous Materials" shall mean (a) materials which are listed or otherwise
defined as "hazardous" or "toxic" under any applicable local, state, federal
and/or foreign laws and regulations that govern the existence and/or remedy of
contamination on property, the protection of the environment from contamination,
the control of hazardous wastes, or other activities involving hazardous
substances, including building materials, or (b) any petroleum products or
nuclear materials.
3.19 OFFERING VALID. Assuming the accuracy of the representations and warranties
of the Purchasers contained in Section 4.2 hereof, the offer, sale and issuance
of the Shares and the Conversion Shares will be exempt from the registration
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
and will have been registered or qualified (or are exempt from registration and
qualification) under the registration, permit or qualification requirements of
all applicable state securities laws. Neither the Company nor any agent on its
behalf has solicited or will solicit any offers to sell or has offered to sell
or will offer to sell all or any part of the Shares to any person or persons so
as to bring the sale of such Shares by the Company within the registration
provisions of the Securities Act or any state securities laws.
3.20 FULL DISCLOSURE. The Company has provided Purchaser with all information
requested by Purchaser in connection with its decision to purchase the Shares,
including all information the Company believes is reasonably necessary to make
such investment decision. Neither this Agreement, the Exhibits hereto, the
Related Agreements nor any other document delivered by the Company to Purchaser
or its attorneys or agents in connection herewith or therewith or with the
transactions contemplated hereby or thereby, taken as a whole, contain any
untrue statement of a material fact nor omit to state a material fact necessary
in order to make the statements contained herein or therein not misleading.
Notwithstanding the foregoing, the Business Plan, dated August, 2005 (the
"Business Plan") provided to Purchaser was prepared by the management of the
Company in a good faith effort to describe the Company's presently proposed
business and products and the markets therefore. The assumptions applied in
preparing the Business Plan appeared reasonable to management as of the date
thereof and as of the date hereof; however, there is no assurance that these
assumptions will prove to be valid or that the objectives set forth in the
Business Plan will be achieved.
3.21 MINUTE BOOKS. The minute books of the Company made available to Purchaser
contain a complete summary of all meetings of directors and shareholders since
the time of incorporation.
3.22 REAL PROPERTY HOLDING CORPORATION. The Company is not a real property
holding corporation within the meaning of Code Section 897(c)(2) and any
regulations promulgated thereunder.
3.23 INSURANCE. The Company has fire and casualty insurance policies with
coverage customary for companies similarly situated to the Company.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser hereby represents and warrants to the Company as follows:
4.1 REQUISITE POWER AND AUTHORITY. Purchaser is a corporation, duly organized,
validly existing and in good standing under the laws of Massachusetts. Purchaser
has all necessary power and authority under all applicable provisions of law to
execute and deliver this Agreement and the Related Agreements and to carry out
their provisions. All action on the part of Purchaser and its officers,
directors and shareholders required to authorize the lawful execution and
delivery of, and performance of obligations under, this Agreement and the
Related Agreements by Purchaser have been or will be taken prior to the Closing.
Upon their execution and delivery, this Agreement and the Related Agreements
will be valid and binding obligations of Purchaser, enforceable in accordance
with their terms, except (a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting
enforcement of creditors' rights and (b) general principles of equity that
restrict the availability of equitable remedies, and (c) to the extent that the
enforceability of the indemnification provisions of Section 2.9 of the
Registration Rights Agreement may be limited by applicable laws.
4.2 INVESTMENT REPRESENTATIONS. Purchaser understands that neither the Shares
nor the Conversion Shares have been registered under the Securities Act.
Purchaser also understands that the Shares are being offered and sold pursuant
to an exemption from registration contained in the Securities Act based in part
upon Purchaser's representations contained in the Agreement. Purchaser hereby
represents and warrants as follows:
(A) PURCHASER BEARS ECONOMIC RISK. Purchaser has substantial experience in
evaluating and investing in private placement transactions of securities in
companies similar to the Company so that it is capable of evaluating the merits
and risks of its investment in the Company and has the capacity to protect its
own interests. Purchaser must bear the economic risk of this investment
indefinitely unless the Shares (or the Conversion Shares) are registered
pursuant to the Securities Act, or an exemption from registration is available.
Purchaser understands that the Company has no present intention of registering
the Shares, the Conversion Shares or any shares of its Common Stock. Purchaser
also understands that there is no assurance that any exemption from registration
under the Securities Act will be available and that, even if available, such
exemption may not allow Purchaser to transfer all or any portion of the Shares
or the Conversion Shares under the circumstances, in the amounts or at the times
Purchaser might propose.
(B) ACQUISITION FOR OWN ACCOUNT. Purchaser is acquiring the Shares and the
Conversion Shares for Purchaser's own account for investment only, and not with
a view towards their distribution.
(C) PURCHASER CAN PROTECT ITS INTEREST. Purchaser represents that by reason of
its, or of its management's, business or financial experience, Purchaser has the
capacity to protect its own interests in connection with the transactions
contemplated in this Agreement and the Related Agreements. Further, Purchaser is
aware of no publication of any advertisement in connection with the transactions
contemplated in the Agreement.
(D) ACCREDITED INVESTOR. Purchaser represents that it is an accredited investor
within the meaning of Regulation D under the Securities Act.
(E) COMPANY INFORMATION. Purchaser has received and read the Financial
Statements and Business Plan and has had an opportunity to discuss the Company's
business, management and financial affairs with directors, officers and
management of the Company and has had the opportunity to review the Company's
operations and facilities. Purchaser has also had the opportunity to ask
questions of and receive answers from, the Company and its management regarding
the terms and conditions of this investment.
(F) RULE 144. Purchaser acknowledges and agrees that the Shares, and, if issued,
the Conversion Shares must be held indefinitely unless they are subsequently
registered under the Securities Act or an exemption from such registration is
available. Purchaser has been advised or is aware of the provisions of Rule 144
promulgated under the Securities Act as in effect from time to time, which
permits limited resale of shares purchased in a private placement subject to the
satisfaction of certain conditions, including, among other things: the
availability of certain current public information about the Company, the resale
occurring following the required holding period under Rule 144 and the number of
shares being sold during any three-month period not exceeding specified
limitations.
4.3 TRANSFER RESTRICTIONS. Purchaser acknowledges and agrees that the Shares
and, if issued, the Conversion Shares are subject to restrictions on transfer as
set forth in the Registration Rights Agreement.
5. CONDITIONS TO CLOSING.
5.1 CONDITIONS TO PURCHASER'S OBLIGATIONS AT THE CLOSING. Purchaser's obligation
to purchase the Shares at the Closing are subject to the satisfaction, at or
prior to the Closing Date, of the following conditions:
(A) REPRESENTATIONS AND WARRANTIES TRUE; PERFORMANCE OF OBLIGATIONS. The
representations and warranties made by the Company in Section 3 hereof shall be
true and correct as of the Closing Date with the same force and effect as if
they had been made as of the Closing Date, and the Company shall have performed
all obligations and conditions herein required to be performed or observed by it
on or prior to the Closing.
(B) CONSENTS, PERMITS, AND WAIVERS. The Company shall have obtained any and all
consents, permits and waivers necessary or appropriate for consummation of the
transactions contemplated by the Agreement and the Related Agreements (except
for such as may be properly obtained subsequent to the Closing).
(C) FILING OF CERTIFICATE OF DESIGNATION. The Certificate of Designation shall
have been filed with the Secretary of State of the State of Nevada and shall
continue to be in full force and effect as of the Closing Date.
(D) CORPORATE DOCUMENTS. The Company shall have delivered to Purchaser or its
counsel, copies of all corporate documents of the Company as Purchaser shall
reasonably request.
(E) RESERVATION OF CONVERSION SHARES. The Conversion Shares issuable upon
conversion of the Shares shall have been duly authorized and reserved for
issuance upon such conversion.
(F) COMPLIANCE CERTIFICATE. The Company shall have delivered to Purchaser a
Compliance Certificate, executed by the President of the Company, dated the
Closing Date, to the effect that the conditions specified in subsections (a),
(b), (c) and (e) of this Section 5.1 have been satisfied.
(G) REGISTRATION RIGHTS AGREEMENT. A Registration Rights Agreement substantially
in the form attached hereto as Exhibit B shall have been executed and delivered
by the parties thereto.
(H) BOARD OF DIRECTORS. The size of the Company's Board of Directors shall be at
least seven and no more than ten. The Holders of the Series A Preferred shall be
entitled to elect one member of the Company's Board of Directors.
(I) PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings in connection
with the transactions contemplated at the Closing hereby and all documents and
instruments incident to such transactions shall be reasonably satisfactory in
substance and form to Purchaser and its counsel, and Purchaser and its counsel
shall have received all such counterpart originals or certified or other copies
of such documents as they may reasonably request.
(J) DUE DILIGENCE. Purchaser shall have completed, to its satisfaction, its due
diligence review of the Company.
(K) BOARD APPROVAL. Purchaser shall have obtained the necessary approval from
its Board of Directors.
5.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The Company's obligation to issue
and sell the Shares at the Closing is subject to the satisfaction, on or prior
to the Closing, of the following conditions:
(A) REPRESENTATIONS AND WARRANTIES TRUE. The representations and warranties in
Section 4 made by Purchaser shall be true and correct at the date of Closing,
with the same force and effect as if they had been made on and as of said date.
(B) PERFORMANCE OF OBLIGATIONS. Purchaser shall have performed and complied with
all agreements and conditions herein required to be performed or complied with
by it on or before the Closing.
(C) FILING OF CERTIFICATE OF DESIGNATION. The Certificate of Designation shall
have been filed with the Secretary of State of the State of Delaware.
(D) REGISTRATION RIGHTS AGREEMENT. A Registration Rights Agreement substantially
in the form attached hereto as Exhibit B shall have been executed and delivered
by Purchaser.
(E) CONSENTS, PERMITS, AND WAIVERS. The Company shall have obtained any and all
consents, permits and waivers necessary or appropriate for consummation of the
transactions contemplated by the Agreement and the Related Agreements (except
for such as may be properly obtained subsequent to the Closing).
6. MISCELLANEOUS.
6.1 GOVERNING LAW. This Agreement shall be governed in all respects by the
laws of the State of New York.
6.2 SURVIVAL. The representations, warranties, covenants and agreements made
herein shall survive any investigation made by Purchaser and the closing of the
transactions contemplated hereby. All statements as to factual matters contained
in any certificate or other instrument delivered by or on behalf of the Company
pursuant hereto in connection with the transactions contemplated hereby shall be
deemed to be representations and warranties by the Company hereunder solely as
of the date of such certificate or instrument.
6.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto
and shall inure to the benefit of and be enforceable by each person who shall be
a holder of the Shares from time to time.
6.4 ENTIRE AGREEMENT. This Agreement, the Exhibits and Schedules hereto, the
Related Agreements and the other documents delivered pursuant hereto constitute
the full and entire understanding and agreement between the parties with regard
to the subjects hereof and no party shall be liable or bound to any other in any
manner by any representations, warranties, covenants and agreements except as
specifically set forth herein and therein.
6.5 SEVERABILITY. In case any provision of the Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
6.6 AMENDMENT AND WAIVER.
(A) This Agreement may be amended or modified only upon the written consent of
the Company and holders of at least fifty percent (50%) of the Shares (treated
as if converted and including any Conversion Shares into which the Shares have
been converted that have not been sold to the public).
(B) The obligations of the Company and the rights of the holders of the Shares
and the Conversion Shares under the Agreement may be waived only with the
written consent of the holders of at least fifty percent (50%) of the Shares
(treated as if converted and including any Conversion Shares into which the
Shares have been converted that have not been sold to the public).
6.7 DELAYS OR OMISSIONS. It is agreed that no delay or omission to exercise any
right, power or remedy accruing to any party, upon any breach, default or
noncompliance by another party under this Agreement, the Related Agreements or
the Certificate of Designation, shall impair any such right, power or remedy,
nor shall it be construed to be a waiver of any such breach, default or
noncompliance, or any acquiescence therein, or of or in any similar breach,
default or noncompliance thereafter occurring. It is further agreed that any
waiver, permit, consent or approval of any kind or character on Purchaser's part
of any breach, default or noncompliance under this Agreement, the Related
Agreements or under the Certificate of Designation or any waiver on such party's
part of any provisions or conditions of the Agreement, the Related Agreements,
or the Certificate of Designation must be in writing and shall be effective only
to the extent specifically set forth in such writing. All remedies, either under
this Agreement, the Related Agreements, the Certificate of Designation, by law,
or otherwise afforded to any party, shall be cumulative and not alternative.
6.8 NOTICES. All notices required or permitted hereunder shall be in writing and
shall be deemed effectively given: (a) upon personal delivery to the party to be
notified, (b) when sent by confirmed telex or facsimile if sent during normal
business hours of the recipient, if not, then on the next business day, (c) five
(5) days after having been sent by registered or certified mail, return receipt
requested, postage prepaid, or (d) one (1) day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt. All communications shall be sent to the Company at the
address as set forth below its name on the signature page hereof and to
Purchaser at the address set forth below its name on the signature page hereof
or at such other address as the Company or Purchaser may designate by ten (10)
days advance written notice to the other parties hereto.
6.9 EXPENSES. The Company and Purchaser shall pay all of their own costs and
expenses that it incurs with respect to the negotiation, execution, delivery and
performance of the Agreement.
6.10 ATTORNEYS' FEES. In the event that any suit or action is instituted to
enforce any provision in this Agreement, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.
6.11 TITLES AND SUBTITLES. The titles of the sections and subsections of the
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.
6.12 COUNTERPARTS. This Agreement may be executed in any number of counterparts,
each of which shall be an original, but all of which together shall constitute
one instrument.
6.13 BROKER'S FEES. Except as set forth on the Schedule of Exceptions, each
party hereto represents and warrants that no agent, broker, investment banker,
person or firm acting on behalf of or under the authority of such party hereto
is or will be entitled to any broker's or finder's fee or any other commission
directly or indirectly in connection with the transactions contemplated herein.
Each party hereto further agrees to indemnify each other party for any claims,
losses or expenses incurred by such other party as a result of the
representation in this Section 6.14 being untrue.
6.14 PUBLIC ANNOUNCEMENTS. Neither party shall make any public announcement of
this transaction without the consent of the other party hereto, such consent not
to be unreasonably withheld.
6.15 CONFIDENTIALITY. Each party hereto agrees that, except with the prior
written consent of the other party, it shall at all times keep confidential and
not divulge, furnish or make accessible to anyone any confidential information,
knowledge or data concerning or relating to the business or financial affairs of
the other parties to which such party has been or shall become privy by reason
of this Agreement or the Related Agreements, discussions or negotiations
relating to this Agreement or the Related Agreements, the performance of its
obligations hereunder or the ownership of the Shares purchased hereunder. The
provisions of this Section 6.15 shall be in addition to, and not in substitution
for, the provisions of any separate nondisclosure agreement executed by the
parties hereto.
6.16 PRONOUNS. All pronouns contained herein, and any variations thereof shall
be deemed to refer to the masculine, feminine or neutral, singular or plural, as
to the identity of the parties hereto may require.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed the SERIES A
PREFERRED STOCK PURCHASE AGREEMENT as of the date set forth in the first
paragraph hereof.
COMPANY:
BRANDED MEDIA CORPORATION
By:
---------------------------
Xxxxxx X. Xxxxxx, President
PURCHASER:
By:
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[Insert name]
