SECURITIES ISSUANCE AGREEMENT
Exhibit
10.3
This
Securities Issuance Agreement (the “Agreement”) is made as of March 6, 2006, by
and between The Tube Media Corp., a Delaware corporation (the “Corporation”),
and Tribune Broadcasting Company (“TBC”).
Any
capitalized terms used hereunder which are not separately defined in this
Agreement shall have the meaning ascribed to such terms in the Charter
Affiliation Agreement of even date herewith between The Tube Music Network,
Inc.
and TBC or the Letter Agreement of even date herewith by and among the
Corporation, The Tube Music Network, Inc. and TBC.
The
Corporation and TBC hereby agree as follows:
SECTION
1.
Authorization
and Issuance of the Stock
1.1 Authorization
of the Stock.
The
Corporation has authorized the issuance to TBC of (i) shares of the
Corporation’s common stock, par value $.0001 per share (the “Stock”), in the
amounts set forth in subparagraphs (a) and (b) below and (ii) warrants to
purchase shares of Stock as set forth in subparagraphs (c) and (d) below,
pursuant to the terms of the Charter Affiliation Agreement between The Tube
Music Network, Inc. and TBC of even date herewith (the “Charter Affiliation
Agreement”) and the letter agreement dated of even date herewith between the
Corporation, The Tube Music Network, Inc. and TBC, which is a part of the
Charter Affiliation Agreement (the “Letter Agreement”):
(a) Pursuant
to paragraph 2(a) of the Letter Agreement, within ten (10) days after execution
of this Agreement, the Corporation shall issue and deliver to TBC
[XXXXX]*
shares
of Stock.
(b) From
time
to time upon TBC’s satisfaction of the terms and conditions set forth in
paragraphs 2(b) and 2(c) of the Letter Agreement, the Corporation shall issue
and deliver to TBC up to [XXXXX]* shares of Stock.
(c) Pursuant
to paragraph 1(a) of the Letter Agreement, within ten (10) days after the
execution of this Agreement, the Corporation shall issue and deliver to TBC
a
common stock purchase warrant to acquire [XXXXX]* shares of Stock, at a purchase
price of two dollars and twenty-five cents ($2.25) per share. The warrant will
be in the form attached as an exhibit to the Letter Agreement.
(d) Upon
TBC’s satisfaction of the terms and conditions set forth in paragraph 1(b) of
the Letter Agreement, the Corporation shall issue and deliver to TBC a common
stock purchase warrant to acquire [XXXXX]* shares of Stock, at a purchase price
of two dollars and fifty cents ($2.50) per share. The warrant will be in the
form attached as an exhibit to the Letter Agreement. Each of the warrants issued
pursuant to Sections 1.1(c) and 1.1(d) shall be referred to herein as the
“Warrants” and the related warrant agreements shall be referred to herein as the
“Warrant Agreements.”
______________________________
*
Filed
under an application for confidential treatment.
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1.2 Issuance
of the Stock and the Warrants.
At each
Closing (as defined herein), subject to the terms and conditions hereof and
in
reliance upon the representations, warranties and agreements contained herein,
the Corporation agrees to issue to TBC at such Closing, that number of shares
of
Stock and/or Warrants, in each case, as set forth in Section 1.1
above.
1.3 Registration
Rights Agreement.
On the
date hereof, the Corporation and TBC shall each execute and deliver the
Registration Rights Agreement in the form attached hereto as Exhibit A.
SECTION
2.
Closing
and Delivery
2.1 Closing
Date and Place of Closing.
The
issuances of the Stock and/or Warrants set forth in Section 1.1 shall take
place
at the offices of the Corporation, at the time of the closing of the Charter
Affiliation Agreement or upon the occurrence of the events set forth in
subparagraphs (a), (b), (c), and (d) of Section 1.1, or at such other time
and
place as the Corporation and TBC mutually agree upon orally or in writing (each
such time and place are designated as the “Closing”).
2.2 Delivery.
Promptly after each of the Closings, the Corporation will deliver to TBC, as
applicable, a stock certificate(s) representing the Stock to be issued arising
from such Closing and/or a Warrant Agreement representing the Warrants to be
issued arising from such Closing.
2.3 Covenant
of Best Efforts and Good Faith.
The
Corporation and TBC agree to use their respective best efforts and to act in
good faith to cause to occur all conditions to Closing which are in their
respective control.
SECTION
3.
Representations
and Warranties of the Corporation
The
Corporation hereby represents and warrants to TBC, on the date hereof and at
the
time of each issuance of Stock or Warrants hereunder, that:
3.1 Incorporation.
The
Corporation is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and is qualified to do business
in each jurisdiction in which the character of its properties or the nature
of
its business requires such qualification. Each of the Corporation’s Subsidiaries
is a corporation duly organized, validly existing and in good standing under
the
laws of the jurisdiction of its incorporation and is qualified to do business
in
each jurisdiction in which the character of its properties or the nature of
its
business requires such qualification. The Corporation and each of its
Subsidiaries has all requisite corporate power and authority to carry on their
respective businesses as now conducted. For the purposes of this Agreement,
“Subsidiaries” shall mean The Tube Music Network, Inc., AGU Music, Inc., AGU
Studios Inc., and 0000 Xxxxxxx Xxxx Inc.
3.2 Authorization.
All
corporate action on the part of the Corporation and the Subsidiaries and their
respective officers, directors and stockholders necessary for the authorization,
execution, delivery and performance of this Agreement and the Letter Agreement,
the Registration Rights Agreement and the Warrant Agreements (collectively,
the
“Transaction
Documents”
)
and
the consummation of the transactions contemplated herein and therein has been
taken, including the issuance and delivery of the shares of Stock and the
Warrants. When executed and delivered by the Corporation, this Agreement and
the
Transaction Agreements shall constitute the legal, valid and binding obligations
of the Corporation, enforceable against the Corporation in accordance with
their
respective terms, except (i) as limited by bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally and (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other
equitable remedies. The Corporation has all requisite corporate power to enter
into this Agreement and the Transaction Agreements and to carry out and perform
its obligations under the terms of this Agreement and the Transaction
Agreements.
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3.3 Valid
Issuance of the Stock and Warrants.
The
Stock being issued to TBC hereunder, and the Warrants and the shares of Stock
that may be purchased upon exercise of the Warrants (the “Warrant Shares”) will,
upon issuance pursuant to the terms hereof, be duly authorized and validly
issued, fully paid, nonassessable and free of any liens, charges, restrictions,
claims, preemptive rights or other encumbrances and will, assuming the accuracy
of the representations and warranties made by TBC to the Corporation, be issued
in compliance with applicable state and federal securities laws.
3.4 Consents.
All
consents, approval, orders, authorizations, registrations, qualifications,
and
filings required on the part of the Corporation or its Subsidiaries to be
obtained or made prior to the Closing in connection with the execution, delivery
or performance of this Agreement and the Transaction Agreements, and the
consummation of the transactions contemplated herein and therein, including
the
issuance of the Stock and the Warrants, have been obtained or made or will
be
obtained or made, prior to the Closing.
3.5 No
Conflict.
The
execution and delivery of this Agreement or any of the Transaction Agreements
by
the Corporation or any of its Subsidiaries and the consummation of the
transactions contemplated hereby and thereby, including the issuance of the
Stock and the Warrants, will not conflict with or result in any violation of
or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of any obligation or
to
a loss of a material benefit or give rise to an event which results in the
creation of any lien, charge, restriction, claim or other encumbrance upon
any
of the Corporation’s properties or assets under (i) any provision of the
Certificate of Incorporation or Bylaws of the Corporation or (ii) any agreement
or instrument, permit, franchise, license, judgment, order, statute, law,
ordinance, rule or regulations, applicable to the Corporation, its Subsidiaries
or any of their respective properties or assets.
3.6 Brokers
or Finders.
Neither
the Corporation nor any of its Subsidiaries has dealt with any broker or finder
in connection with the transactions contemplated by this Agreement or any of
the
Transaction Agreements, and neither the Corporation nor any of its Subsidiaries
has incurred, and shall not incur, directly or indirectly, any liability for
any
brokerage or finders’ fees or agents commissions or any similar charges in
connection with this Agreement, the Transaction Agreements or any transaction
contemplated hereby or thereby.
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SECTION
4.
Representations
and Warranties of TBC
TBC
hereby represents, warrants and covenants to the Corporation, on the date hereof
and at the time of each issuance of Stock or Warrants hereunder,
that:
4.1 Authorization.
TBC has
full right, power and authority to enter into this Agreement and each of the
Transaction Agreements, and such agreements constitute its valid and legally
binding obligation, enforceable in accordance with its terms, except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally and (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies.
4.2 Entirely
for Own Account.
This
Agreement and each of the Transaction Agreements is made with TBC in reliance
upon TBC’s representation to the Corporation, which by TBC’s execution of this
Agreement TBC hereby confirms, that the Stock to be received by TBC is for
investment for TBC’s own account, not as a nominee or agent, and not with a view
to the resale or distribution of any part thereof, and that TBC has no present
intention of selling, granting any participation in or otherwise distributing
the same. By executing this Agreement, TBC further represents that TBC does
not
have any contract, undertaking, agreement or arrangement with any person to
sell, transfer or grant participations to such person or to any third person,
with respect to any of the Stock.
4.3 Disclosure
of Information.
TBC
believes it has received all the information it considers necessary or
appropriate for deciding whether to take possession the Stock. TBC further
represents that it has had an opportunity to ask questions and receive answers
from the Corporation regarding the terms and conditions of the offering of
the
Stock and the business, properties, prospects and financial condition of the
Corporation.
4.4 Investment
Experience.
TBC
acknowledges that it can bear the economic risk of its investment, and has
such
knowledge and experience in financial or business matters that it is capable
of
evaluating the merits and risks of the investment in the Stock. TBC also
represents it has not been organized for the purpose of taking the possession
of
the Stock.
4.5 Accredited
Investor.
TBC is
an “accredited investor” within the meaning of SEC Rule 501 of Regulation D as
presently in effect.
4.6 Restricted
Securities.
TBC
understands that the Stock it is receiving constitutes “restricted securities”
under the federal securities laws inasmuch as they are being issued by the
Corporation in a transaction not involving a public offering and that under
such
laws and applicable regulations such shares of Stock may be resold without
registration under the Securities Act only in certain limited circumstances.
In
the absence of an effective registration statement covering the Stock or an
available exemption from registration under the Securities Act, the Stock must
be held indefinitely. In this connection, TBC represents that it is familiar
with SEC Rule 144, as presently in effect, and understands the resale
limitations imposed thereby and by the Securities Act, including without
limitation the Rule 144 condition that current information about the Corporation
be available to the public.
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4.7
Transfer
Restrictions.
(a) The
Stock, Warrants, and Stock acquired on the exercise of the Warrants may only
be
disposed of in compliance with state and federal securities laws. In connection
with any transfer of Stock, Warrants, and Stock acquired on the exercise of
the
Warrants other than pursuant to an effective registration statement, the
Corporation may require the transferor thereof to provide to the Corporation
an
opinion of counsel selected by the transferor, the form and substance of which
opinion shall be reasonably satisfactory to the Company, to the effect that
such
transfer does not require registration of such transferred securities under
the
Securities Act. As a condition of transfer, any such transferee shall agree
in
writing to be bound by the terms of this Agreement and the Registration Rights
Agreement and shall have the rights of TBC under this Agreement and the
Registration Rights Agreement, provided, that the foregoing shall not apply
to a
transfer of securities pursuant to an effective registration
statement.
(b) TBC
agrees to the imprinting, so long as is required by
applicable federal and state securities laws, of
a
legend on any of the Stock, Warrants or Stock acquired upon the exercise of
the
Warrants in the following form:
With
respect to certificates representing Stock (including Warrant
Shares):
THESE
SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION,
OR THE SECURITIES COMMISSION OF ANY STATE, IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.
With
respect to the Warrants:
THE
EXERCISE OF THIS WARRANT HAS NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE. THIS WARRANT
MAY
ONLY BE EXERCISED PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) AND APPLICABLE
SECURITIES LAWS. AS A CONDITION PRECEDENT TO THE EXERCISE OF THIS WARRANT,
THE
COMPANY MAY REQUIRE SUCH CERTIFICATES AND OPINIONS OF COUNSEL AS IT DEEMS
REASONABLY NECESSARY FROM THE PERSON EXERCISING THIS WARRANT TO ESTABLISH THE
EXISTENCE OF SUCH EXEMPTIONS.
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NEITHER
THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT,
AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.
THIS
WARRANT IS SUBJECT TO OTHER RESTRICTIONS ON TRANSFER AS SET FORTH IN A
SECURITIES ISSUANCE AGREEMENT, THE FORM OF WHICH IS AVAILABLE FROM THE COMPANY.
(c) Certificates
evidencing the Stock, including Warrant Shares, shall not contain any legend
(including the legend set forth in Section 4.7 hereof): (i) following any sale
of such Stock pursuant to an effective registration statement under the
Securities Act or pursuant to Rule 144, or (ii) if such Stock is eligible for
sale under Rule 144(k), provided that, in each case, TBC provides a copy of
such
certificates or confirmations as the
Corporation reasonably
requests.
4.8 TBC
Counsel.
TBC
acknowledges that it and, if applicable, its advisors has had the opportunity
to
review this Agreement, the exhibits and schedules attached hereto and the
transactions contemplated by this Agreement with such TBC’s own legal counsel.
TBC is relying solely on such TBC’s legal counsel and not on the Corporation’s
legal counsel, for legal advice with respect to this investment or the
transactions contemplated by this Agreement.
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SECTION
5.
Miscellaneous
5.1 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Delaware.
5.2 Successors
and Assigns.
Except
as otherwise expressly provided herein, the provisions hereof shall inure to
the
benefit of and be binding upon the successors and assigns of the
parties.
5.3 Entire
Agreement; Amendment.
This
Agreement and the Transaction Agreements and the other documents delivered
pursuant hereto or thereto constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof and thereof.
Neither this Agreement nor any term hereof may be amended, waived, discharged
or
terminated except by a written instrument signed by the Corporation and
TBC.
5.4 Notices,
etc.
All
notices and other communications required or permitted hereunder shall be mailed
by internationally recognized courier service and facsimile addressed (a) if
to
TBC, as indicated below TBC’s signature with a copy to the designated entity or
at such other address as TBC shall have furnished to the Corporation in writing
or if to the Corporation, at its address set forth below or at such other
address as the Corporation shall have furnished to TBC in writing. All such
notices or communications shall be deemed given when delivered personally by
courier, by internationally recognized courier or by facsimile.
5.5 Delays
or Omissions.
No
delay or omission to exercise any right, power or remedy accruing to any party
to this Agreement, upon any breach or default or another party under this
Agreement, shall impair any such right, power or remedy of such party nor shall
it be construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any
other
breach or default theretofore or thereafter occurring. All remedies, either
under this Agreement or by law or otherwise afforded to any party, shall be
cumulative and not alternative.
5.6 Severability.
In case
any provision of this 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.
5.7 Titles
and Subtitles.
The
titles of the Sections and subsections of this Agreement are for convenience
of
reference only and are not to be considered in construing this
Agreement.
5.8 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.
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5.9 Fees
and Expenses.
The
parties hereto shall pay their own costs and expenses in connection
herewith.
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IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered by their duly authorized officers as of the day and year first written
above.
| THE TUBE MEDIA CORP. | ||
| |
|
|
| By: | /s/ Xxxxx X. Xxxx | |
|
Name: Xxxxx X. Xxxx |
||
| Title: President | ||
|
Address:
0000 Xxxx Xxxxxxx Xxxxx Xxxx,
Xxxxx 000
Xxxx Xxxxxxxxxx, XX 00000
|
||
| TRIBUNE BROADCASTING COMPANY | ||
| |
|
|
| By: | /s/ Xxxx X. Xxxxxxx | |
|
Name: Xxxx X. Xxxxxxx |
||
| Title: President | ||
|
Address:
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
|
||
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Exhibit
A
Registration
Rights Agreement
[The
Registration Rights Agreement was filed as an
Exhibit to the Form 8-K]
-10-
