SUBSCRIPTION AGREEMENT
EXHIBIT
10.1
SUBSCRIPTION
AGREEMENT (this “Agreement”) made as of the date set forth on the signature page
hereof between Infosearch Media, Inc., a Delaware corporation (the “Company”)
and the undersigned (the “Subscriber”).
WITNESSETH:
WHEREAS,
the Company is offering in a private placement (the “Offering”) 20,000,000
shares of its common stock (the “Common Stock”) at a price equal to $0.01 per
share (the “Offering Price”). The shares of Common Stock offered hereby are
sometimes referred to as the “Securities;” and
WHEREAS,
the Subscriber desires to purchase that number of Securities set forth on the
signature page hereof on the terms and conditions hereinafter set
forth.
NOW,
THEREFORE, in consideration of the premises and the mutual representations
and
covenants hereinafter set forth, the parties hereto agree as
follows:
I. SUBSCRIPTION
FOR SECURITIES AND REPRESENTATIONS BY SUBSCRIBER
1.1 Subject
to the terms and conditions hereinafter set forth, the Subscriber hereby
irrevocably subscribes for and agrees to purchase from the Company such
Securities as is set forth upon the signature page hereof and the Company agrees
to sell such Securities to the Subscriber for said purchase price. The purchase
price is payable by wire transfer of immediately available funds
contemporaneously with the execution and delivery of this Agreement by the
Subscriber. Certificates for the shares of Common Stock will be delivered by
the
Company to the Subscriber promptly following the date hereof (the
“Closing”).
1.2 The
Subscriber recognizes that the purchase of Securities 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; (ii) the Subscriber may not be able to liquidate
its
investment; (iii) transferability of the Securities is extremely limited; and
(iv) in the event of a disposition, the Subscriber could sustain the loss of
its
entire investment.
1.3 The
Subscriber represents that the Subscriber is an “accredited investor” as such
term is defined in Rule 501 of Regulation D promulgated under the Securities
Act
of 1933, as amended, (the “Act”) and that the Subscriber is able to bear the
economic risk and illiquidity of an investment in the
Securities.
1.4 The
Subscriber hereby acknowledges and represents that (i) the Subscriber has prior
investment experience, including investment in non-listed and unregistered
securities, or that the Subscriber has employed the services of an investment
advisor, attorney and/or accountant to read all of the documents furnished
or
made available by the Company both to the Subscriber and to all other
prospective investors to evaluate the merits and risks of such an investment
on
the Subscriber’s behalf; (ii) the Subscriber recognizes the highly speculative
nature of an investment in the Securities; and (iii) the Subscriber is able
to
bear the economic risk and illiquidity which the Subscriber assumes by investing
in the Securities.
1.5 The
Subscriber understands that none of the Securities have been registered under
the Act by reason of a claimed exemption under the provisions of the Act which
depends, in part, upon the Subscriber’s investment intention. In this
connection, the Subscriber hereby represents that the Subscriber is purchasing
the Securities for the Subscriber’s own account for investment and not with a
view toward the resale or distribution thereof to others. The Subscriber, if
an
entity, was not formed for the purpose of purchasing the
Securities.
1.6 Except
as
otherwise set forth herein, the Subscriber understands and hereby acknowledges
that the Company is under no obligation to register the Securities under the
Act
or any state securities or “blue sky” laws other than as set forth in Section V.
The Subscriber consents that the Company may, if it desires, permit the transfer
of the Securities out of the Subscriber’s name only when the Subscriber’s
request for transfer is accompanied by an opinion of counsel reasonably
satisfactory to the Company that neither the sale nor the proposed transfer
results in a violation of the Act or any applicable state “blue sky” laws
(collectively, “Securities Laws”).
1.7 The
Subscriber consents to the placement of a legend on any certificate or other
document evidencing the Securities indicating that such Securities have not
been
registered under the Act or any state securities or “blue sky” laws and setting
forth or referring to the restrictions on transferability and sale thereof
contained in this Agreement. The Subscriber is aware that the Company will
make
a notation in its appropriate records and issue “stop transfer” instructions to
its transfer agent with respect to the restrictions on the transferability
of
such Securities.
1.8 The
Subscriber represents that the Subscriber has full power and authority
(corporate, statutory and otherwise) to execute and deliver this Agreement
and
to purchase the Securities subscribed for hereby. This Agreement constitutes
the
legal, valid and binding obligation of the Subscriber, enforceable against
the
Subscriber in accordance with its terms.
II. REPRESENTATIONS
BY THE COMPANY
The
Company hereby represents and warrants to the Subscriber that:
2.1 Organization
and Qualification.
The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has full corporate power and lawful
authority to conduct its business as presently conducted. The Company is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction in which the nature of the business presently conducted,
or as
proposed to be conducted, by it or the properties owned, leased or operated
by
it, makes such qualification or licensing necessary and where the failure to
be
so qualified or licensed would have a material adverse effect upon the business,
prospects or financial condition of the Company.
2.2 Capitalization
and Voting Rights.
The
authorized, issued and outstanding capital stock of the Company is as set forth
in its most recent SEC Filing (as hereafter defined). All issued and outstanding
shares of capital stock of the Company are validly issued, fully paid and
nonassessable. Except as set forth in this Agreement and including approximately
Three (3) Million stock options issued to employees as retention grants between
March 31 and May 31, 2008 or in the SEC Filings, there are no outstanding
options, warrants, agreements, commitments, convertible securities, preemptive
rights or other rights to subscribe for or to purchase any shares of capital
stock of the Company nor are there any agreements, promises or commitments
to
issue any of the foregoing, or discussions concerning same. Except as set forth
in the SEC Filings, in this Agreement and as otherwise required by law, there
are no restrictions upon the voting or transfer of the Securities pursuant
to
the Company's Certificate of Incorporation, as amended, (the “Certificate of
Incorporation”), By-laws or other governing documents or any agreement or other
instruments to which the Company is a party or by which the Company is bound;
provided, however, that the Securities will be subject to restrictions on
transfer and Securities Laws as provided herein. For purposes of this Agreement
the term “SEC Filings” means, collectively, the Company's most recent Annual
Report on Form 10-K for the fiscal year ended December 31, 2007 and all other
reports filed by the Company with the SEC pursuant to the Exchange Act since
the
filing of such Annual Report on Form 10-K and prior to the date
hereof.
2.3 Authorization;
Enforceability.
The
Company has all corporate right, power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby. All corporate
action on the part of the Company, its directors and stockholders necessary
for
the authorization, execution, delivery and performance of this Agreement by
the
Company, the authorization, sale, issuance and delivery of the Securities and
the performance of the Company's obligations hereunder has been taken. This
Agreement has been duly executed and delivered by the Company and constitutes
a
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, subject to laws of general application
relating to bankruptcy, insolvency and the relief of debtors and rules of law
governing specific performance, injunctive relief or other equitable remedies,
and to limitations of public policy. The Securities have been duly and validly
authorized and, upon the issuance and delivery thereof and payment therefor
as
contemplated by this Agreement, will be free and clear of liens (other than
any
liens created by or imposed on the holders thereof through no action of the
Company), duly and validly authorized and issued, fully paid and nonassessable.
The issuance and sale of the Securities contemplated hereby will not give rise
to any preemptive rights or rights of first refusal on behalf of any
person.
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2.4
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No
Conflict; Governmental
Consents.
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(a) The
execution and delivery by the Company of this Agreement, the consummation of
the
transactions contemplated hereby and the offer and sale of the Securities will
not result in the violation of any law, statute, rule, regulation, order, writ,
injunction, judgment or decree of any court or governmental authority to or
by
which the Company is bound, or of any provision of the Certificate of
Incorporation or By-laws of the Company, and will not conflict with, or result
in a breach or violation of, any of the terms or provisions of, or constitute
(with due notice or lapse of time or both) a default under, any lease, loan
agreement, mortgage, security agreement, trust indenture or other agreement
or
instrument to which the Company is a party or by which it is bound or to which
any of its properties or assets is subject, nor result in the creation or
imposition of any lien upon any of the properties or assets of the
Company.
(b) No
consent, waiver, approval, authorization or other order of any governmental
authority or other third-party is required to be obtained by the Company in
connection with the authorization, execution and delivery of this Agreement
or
with the authorization, issuance and sale of the Securities, except for such
consents, waivers, approvals, authorizations, orders or filings as may be
required to be obtained or made, and which shall have been obtained or made
at
or prior to the required time.
III. TERMS
OF SUBSCRIPTION
3.1 The
Offering is for 20,000,000 shares of Common Stock.
3.2 The
purchase price is payable by wire transfer of immediately available funds as
provided in Section 1.1.
IV. REGISTRATION
RIGHTS; INDEMNIFICATION.
4.1 Following
Closing, the Company shall execute and deliver to Subscriber a registration
rights agreement, in customary form and reasonably satisfactory to Subscriber,
granting Subscriber customary demand and piggy-back registration rights as
given
to investors in offerings equivalent to the Offering.
4.2 The
Company shall indemnify, save and hold harmless the Subscriber and the
Securities from and against any and all liability, loss, cost, damage,
reasonable attorneys' and accountants' fees and expenses, court costs and all
other out of pocket expenses reasonably incurred by Subscriber in connection
with (a) the breach of any representation, warranty, covenant or agreement
of
the Company made in this Agreement, or (b) interpreting, preserving, exercising
and/or enforcing any of the terms hereof.
V. MISCELLANEOUS
5.1 This
Agreement shall not be changed, modified or amended except by a writing signed
by the parties to be charged, and this Agreement may not be discharged except
by
performance in accordance with its terms or by a writing signed by the party
to
be charged.
5.2 Notwithstanding
the place where this 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 Delaware
without regard to principles of conflicts of law.
5.3 The
holding of any provision of this Agreement to be invalid or unenforceable by
a
court of competent jurisdiction shall not affect any other provision of this
Agreement, which shall remain in full force and effect. If any provision of
this
Agreement shall be declared by a court of competent jurisdiction to be invalid,
illegal or incapable of being enforced in whole or in part, such provision
shall
be interpreted so as to remain enforceable to the maximum extent permissible
consistent with applicable law and the remaining conditions and provisions
or
portions thereof shall nevertheless remain in full force and effect and
enforceable to the extent they are valid, legal and enforceable, and no
provisions shall be deemed dependent upon any other covenant or provision unless
so expressed herein.
5.4 It
is
agreed that a waiver by either party of a breach of any provision of this
Agreement shall not operate, or be construed, as a waiver of any subsequent
breach by that same party.
5.5 The
parties agree to execute and deliver all such further documents, agreements
and
instruments and take such other and further action as may be necessary or
appropriate to carry out the purposes and intent of this Agreement.
5.6 This
Agreement may be executed in two or more counterparts each of which shall be
deemed an original, but all of which shall together constitute one and the
same
instrument.
[SIGNATURE
PAGES FOLLOW]
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SIGNATURE
PAGE
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Date
Signed: June 6, 2008
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Number
of shares:
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20,000,000
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Multiplied
by Offering Price per share:
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x
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$0.01
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Equals
subscription amount:
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=
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$200,000
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/s/
Xxxxxx Xxxxx
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Signature
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Second
Signature (if purchasing jointly)
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Xxxxxx
Xxxxx
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Printed
Name
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Printed
Second Name
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Xxxxxx
Capital Master Fund Ltd
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Entity
Name
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Entity
Name
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2121
Ave of the Stars, Ste 2550
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Address
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Address
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Los
Angeles, CA 90067
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City,
State and Zip Code
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City,
State and Zip Code
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(000)
000-0000
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Telephone-Business
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Telephone--Business
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Facsimile-Business
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Facsimile--Business
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00-000
0000
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Tax
ID # or Social Security #
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Tax
ID # or Social Security #
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Name
in which securities should be issued:
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Xxxxxx
Capital Master Fund Ltd
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This
Subscription Agreement is agreed to and accepted as of June 6,
2008.
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By:
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/s/
Xxxxxx Xxxxxxx
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Name:
Xxxxxx Xxxxxxx
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Title:
President & CEO
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