FUND.COM INC. SUBSCRIPTION AGREEMENT
Exhibit
10.1
XXXX.XXX
INC.
THIS SUBSCRIPTION AGREEMENT
(this “Agreement”) is by and between the
undersigned subscriber (the “Subscriber”) and Xxxx.xxx Inc., a Delaware
corporation (the “Company”).
A. Reference
is made to that certain Option Agreement dated August 28, 2009, by and among the
Company and the other parties thereto (the “Option”).
B. The
Company and the Subscriber have entered into a certain Option Agreement dated as
of January 25, 2010 (the “Option Agreement”) under which the Subscriber agreed
to purchase, for up to $5,000,000, an aggregate of up to 23,809,524 shares of
Class A Common Stock of the Company (the “Shares”) at a purchase price of $0.21
per share, the terms of which are described in the Option Agreement;
and
C. The
Company desires to issue to the undersigned, and the undersigned desires to
purchase the number of Shares set forth on the signature page hereto, subject to
the terms of this Agreement;
NOW, THEREFORE, the parties
hereto agree as follows:
1. Subscription. On
the terms and subject to the conditions of this Agreement and the Option, the
undersigned hereby subscribes for and agrees to purchase the
Shares.
2. Closing. The closing
of this subscription (the “Closing”) will take place at the offices of the
Company on or prior to February 15, 2010. The undersigned understands that the
proceeds of the subscription will be held in a trust account maintained by the
Company’s counsel pending the Closing. Notwithstanding section 1 of the Option
or any other provision to the contrary, payment for all or a portion of the
Shares may be made on or prior to February 15, 2010.
3. Acceptance of
Subscription. The Company may, in its sole discretion, accept
or reject this subscription in whole or in part. The undersigned
subscriber acknowledges that this subscription is irrevocable and may only be
terminated by the Company’s rejection of this subscription in whole or in
part. This subscription is not binding upon the Company, and the
Company is not obligated to issue the Shares to the undersigned until the
Company accepts this subscription in whole or in part at a
Closing. If the Company rejects all or part of this subscription,
subscription proceeds will be returned to the undersigned promptly without
deduction and without interest. Upon acceptance of this subscription,
the Company will immediately be entitled to retain the proceeds of the
subscription and shall apply such proceeds in accordance with the Option
Agreement. Notwithstanding the foregoing, the provisions of this
Section 3 are subject to all of the Subscriber’s rights under the Option, which
are expressly reserved and not waived.
4. Representations and
Warranties of the Subscriber. The undersigned hereby
represents, warrants and covenants to the Company as follows:
A. The
undersigned has received, reviewed and fully understands the Option
Agreement.
B. The
undersigned has been afforded the opportunity to ask all questions and receive
all answers the undersigned wished concerning the Company and the terms and
conditions of Option and to obtain any additional information the Company
possesses or can acquire without unreasonable effort or expense that is
necessary to verify the accuracy of the information set forth in the Option
Agreement. No oral or written statement, inducement or assurance that
is contrary to the information set forth in the Option Agreement has been made
by or on behalf of the Company to the undersigned.
C. Each
equity owner of the undersigned is an “accredited investor” (as defined in Rule
501 of Regulation D of the Securities Act of 1933, as amended (the “Securities
Act”)). In order to be an accredited investor, natural persons must
(i) be a natural person whose net worth (either individually or jointly with
spouse) exceeds $1,000,000; or (ii) be a natural person whose individual income
(that is, not combined with that of a spouse or other joint purchaser) was in
excess of $200,000 per year in both of the last two years and is reasonably
expected to be in excess of $200,000 in this year. The undersigned
has such knowledge and experience in financial and business matters to enable
him, her or it to utilize the information made available to him, her or it in
connection with this offering to evaluate the merits and risks of the
prospective investment, and to make an informed investment decision with respect
thereto.
D. The
undersigned (i) has adequate means of providing for his, her or its current
needs and possible contingencies, (ii) has no need for liquidity in this
investment, (iii) is able to bear completely all of the economic risks of this
investment, and (iv) can afford a complete loss of such investment.
E. The
Shares to be acquired under this Agreement are being acquired solely by and for
the undersigned for investment and not as a nominee or agent for the benefit of
any other person, and except with respect to the Call Option granted to Recovery
Capital Inc. pursuant to the provisions of the Option Agreement, the undersigned
has no current intention to distribute or resell the Shares.
F. The
undersigned understands and acknowledges that (i) there is not and will be no
public or other market for the Shares, (ii) the offer and sale of the Shares has
not been registered under the Securities Act, (iii) the offer and sale of the
Shares is being made in reliance on the exemption for non-public offerings
provided by Section 4(2) of the Securities Act and/or Regulation D promulgated
thereunder, (iv) the Shares must be held indefinitely unless they are
subsequently registered for resale under the Securities Act or an exemption from
such registration is available, and (v) the Company is under no obligation to
register for resale the Shares or to assist him, her or it in complying with any
exemption from registration.
G. The
undersigned understands that no Federal or State agency has passed upon this
issuance, or made any finding or determination as to the fairness of the
investment or any recommendation or endorsement of the Shares. The
undersigned understands that the Option Agreement has not been filed with or
reviewed by any federal or state securities authorities because of the private
and limited nature of this issuance.
H. The
undersigned has not been furnished any offering literature other than the Option
and the Option Agreement including the exhibits thereto, and the undersigned has
relied only on the information contained in the Option and the Option Agreement
and any additional information furnished or made available to the undersigned by
the Company, as described above, and not on any information, representation or
warranty made by any other person in any other document or otherwise
communicated, whether verbally or in writing.
I. The
undersigned is a limited liability company formed under the laws of the State of
Colorado, and has the legal capacity to execute, deliver, and perform this
Agreement.
J. All
information that the undersigned has provided to the Company concerning himself,
herself or itself, his, her or its financial position, and his, her or its
knowledge of financial and business matters, is true and complete as of the date
set forth on the signature page hereto, and if there is any adverse change in
such information before this subscription is accepted, the undersigned will
immediately provide the Company with accurate and complete information
concerning any such change.
K. The
undersigned has not used any person as a “purchaser representative” within the
meaning of Regulation D promulgated under the Securities Act to represent the
undersigned in determining whether or not to purchase the Shares.
5. Representations and
Warranties of the Company. The Company hereby represents,
warrants and covenants to the Subscriber as follows:
A.
All
corporate action on the part of the Company, its officers, directors and
stockholders necessary for the authorization, issuance, sale and delivery to the
Subscriber of the Shares pursuant to the Option Agreement, has been taken or
will be taken prior to the issuance of the Shares. The issuance and
sale of the 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.
B.
The
issuance and sale of the Shares to Subscriber pursuant to the Option 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 material 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 nonrenewal of any permit,
license, authorization or approval applicable to the Company, its business or
operations or any of its assets or properties.
C.
Immediately
prior to the issuance of the Shares, 300,000,000 shares of Class A Common Stock,
par value $0.001 per share, 10,000,000 shares of Class B Common Stock, par value
$0.001 per share, and 10,000,000 shares of Preferred Stock, par value $0.001 per
share were duly authorized, and 270,725,007 shares of such Class A Common Stock
were issued and outstanding on a fully-diluted basis, taking into account all
issued and outstanding Class B Common Stock, Preferred Stock and all other
notes, warrants, options and other securities convertible into shares of Class A
Common Stock. The Shares have been duly authorized, and upon their
issuance and sale to Subscriber will be validly issued, fully paid and
nonassessable and will have been issued in compliance with all applicable state
federal laws concerning the issuance of securities.
D.
The
Company has filed all forms, reports, statements and schedules and made all
other filings with the SEC required to be filed by it pursuant to the federal
securities laws (the “SEC Reports”), and such SEC Reports were prepared in all
material respects in accordance with the requirements of the Securities Act, the
Exchange Act and the published rules and regulations of the SEC thereunder. Such
SEC Reports did not and will not as of the time they were filed contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were and will be made, not
misleading. The Company shall maintain its status as a reporting
company under the Exchange Act until at least December 31,
2010.
6. Entire Agreement;
Modification. This Agreement constitutes the entire agreement
among the parties hereto with respect to the subject matter hereof, and neither
this Agreement nor any provisions hereof may be waived, changed, discharged, or
terminated except by an instrument in writing signed by the party against whom
any waiver, change, discharge, or termination is sought.
7. Notices. Any
notice, demand, or other communication which any party hereto may be required,
or may elect, to give hereunder shall be sufficiently given if deposited,
postage prepaid, in the United States mail, registered or certified mail,
addressed, if to the Company, to the “Chief Executive Officer” of the Company at
00 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000 and if to the undersigned,
to the address set forth on the signature page hereof or at such other address
as either party shall have specified by notice to the other delivered personally
at such addresses.
8. Binding
Effect. Except as otherwise provided herein, this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, executors, administrators, successors, legal representatives
and assigns. If the undersigned is more than one person, the
obligations of the undersigned shall be joint and several and the agreements,
representations, warranties, and acknowledgments herein contained shall be
deemed to be made by and be binding upon each such person or entity and his, her
or its respective, heirs, executors, administrators, successors,
legal representatives, and assigns.
9. Assignability. The
undersigned agrees not to transfer or assign this Agreement, or any of the
undersigned's interest herein.
10. Applicable
Law. This Agreement shall be governed by and construed in
accordance with the internal laws of Delaware.
[SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, the undersigned has executed this Agreement evidencing the
undersigned’s intention to be bound by the terms of this Agreement, on the date
set forth below. .
FORM OF
OWNERSHIP. Please indicate form of ownership desired.
|
o Individual
|
o Joint
tenants with right of survivorship
|
|
o Tenants
in common
|
o Community
property
|
|
o Corporation
|
o Company
|
|
o Trust
|
o Other
(specify):
|
INDIVIDUAL(S)
SIGN
HERE:
__________________________________________
Signature
__________________________________________
Social
Security Number
__________________________________________
Printed
Name
Residence
Address:__________________________
Date:______________________________________
ADDITIONAL
INVESTOR (if
any):
__________________________________________
Signature
Social
Security Number
Printed
Name
Residence
Address:__________________________
Date:_____________________________________
ENTITIES
SIGN HERE:
By:_______________________________________
Title:
Name:
__________________________________________
Printed
Legal Name of Entity
__________________________________________
Type of
entity and place of organization
Federal
Employer ID No.:
Principal
Place of Business:
__________________________________________
__________________________________________
Date:______________________________________
Accepted
as to ______ Shares on _________________, 2010
XXXX.XXX
INC.
By:________________________________
Name:
Xxxxxxx Xxxxxxx
Title:
Chief Executive Officer
