THIS PURCHASE AGREEMENT made as of the 6th day of September, 2007
EXHIBIT
10.1
THIS
PURCHASE AGREEMENT made as of the 6th day of September,
2007
BETWEEN:
FLUID
MEDIA NETWORKS, INC., a corporation existing under the laws of the
State of Nevada
(the
"Company")
-
and -
PFH
INVESTMENTS LIMITED, a corporation existing under the laws of the
Province of Ontario
(the
"Lender")
WHEREAS,
pursuant to a convertible debenture and security agreement dated May
29, 2006 (the "Debenture") between Fluid Audio Network, Inc.
("FAN") and the Lender, FAN is indebted to the Lender
thereunder (the "Indebtedness");
AND
WHEREAS the Indebtedness consists, as at and including the date hereof,
of US$27,945 of interest and US$ 1,000,000 of principal;
AND
WHEREAS, in connection with the issuance of the Debenture, FAN granted
to the Lender warrants (the "Initial Warrants").to acquire up
to 166,667 shares of common stock of FAN at an original exercise price of
US$3.00 per share at any time and from time to time until May 29,
2009;
AND
WHEREAS the Company is the successor by way of merger to
FAN;
AND
WHEREAS the Debenture does not provide for the right of the Company to
prepay the Indebtedness;
AND
WHEREAS the Lender and the Company have agreed that the Company will
purchase the Debenture and the Indebtedness evidenced thereby, on the terms
and
conditions hereinafter set forth;
NOW
THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:
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1.
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In
full and complete satisfaction of any and all Obligations (as such
term is
defined in the Debenture), on the date of completion of the Company's
initial public offering of shares in Canada (provided that such date
occurs no later than October 31, 2007) (the "IPO Date"),
the Company shall:
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(a)
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purchase
the Debenture and the Indebtedness evidenced thereby for an aggregate
purchase price of US$1,368,000, inclusive of any and all accrued
and
outstanding interest, in immediately available funds to the Lender
(or to
whomever the Lender directs);
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(b)
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grant
to the Lender warrants to acquire up to 125,000 shares of common
stock of
the Company at an exercise price of US$3.00 per share at any time
and from
time to time until the date which is four years following the IPO
Date.
Such warrants shall be in the form annexed hereto as Schedule "A"
and, for
greater certainty, are in addition to the Initial Warrants referred
to in
the third recital hereof; and
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(c)
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pay
the Lender's actual legal fees and disbursements, not to exceed $5,000,
within 10 business days of receipt of an invoice
therefor.
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2.
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Upon
receipt of the payment referred to in paragraph 1(a) and the original
certificate representing the additional warrants referred to in paragraph
1(b) hereof, the Lender shall deliver up to the Company the original
Debenture and shall, at the expense of the Company, promptly deliver
to
the Company upon request all instruments necessary in order to cancel
and
discharge any and all registrations of the security constituted by
the
Debenture.
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3.
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The
parties hereby confirm that the Initial Warrants are in full force
and
effect, unamended and that the exercise price for the Initial Warrants
is
US$2.00 per share.
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4.
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Each
of the parties shall execute and deliver to the other such documents
and
take such other actions as the other may reasonably request in order
to
consummate the transactions contemplated
hereby.
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5.
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This
Purchase Agreement shall be governed by and interpreted and enforced
in
accordance with the laws of the Province of Ontario and the federal
laws
of Canada applicable therein.
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6.
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This
Purchase Agreement may be executed in any number of counterparts
(including counterparts by facsimile or pdf) and all such counterparts
taken together shall be deemed to constitute one and the same
instrument.
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IN
WITNESS WHEREOF, the parties hereto have executed this Purchase
Agreement as of the date first above written.
Per:
/s/ Xxxxxx X. Xxxxxxx
Authorized
Signatory
PFH
INVESTMENTS LIMITED
Per: /s/
Xxxxx Xxxxxxx
Authorized
Signatory
