Exhibit 10.8
SECURITIES EXCHANGE AGREEMENT
THIS SECURITIES EXCHANGE AGREEMENT (the "AGREEMENT"), dated as of February
3rd, 2006, is entered into by and among RelationServe Media, Inc., a Delaware
corporation (the "Company") and each of the other parties identified on the
signature pages hereto ("STAC Management").
RECITALS:
WHEREAS, pursuant to the terms and conditions of a Securities Purchase
Agreement (the "Securities Purchase Agreement") dated as of October 31, 2005,
among SendTec Acquisition Corp., a Delaware corporation ("STAC"), the Company,
each purchaser identified on the signature pages thereto (each, including its
successors and assigns, a "Purchaser" and collectively the "Purchasers") and
Christiana Corporate Services, Inc., a Delaware corporation, as agent for the
Purchasers, various transactions which shall constitute the Consolidation (as
such term is defined in the Securities Purchase Agreement) are occurring on the
date hereof with the result being that STAC will become a wholly-owned
subsidiary of the Company;
WHEREAS, among the transactions which are part of the Consolidation are
(i) the shares of Common Stock, par value $0.001 per share (the "STAC Common
Stock") held by STAC Management as set forth on Schedule A will be exchanged for
shares of common stock, par value $0.001 per share (the "Company Common Stock")
as set forth on Schedule A.
In consideration of the premises and the mutual covenants and the
agreements herein set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. EXCHANGE. The STAC Common Stock specified on Schedule A will be
exchanged for the Company Common Stock specified on Schedule A. Certain of the
STAC Common Stock specified on Schedule A has been held in escrow by Xxxxxx
Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP as escrow agent (the "Escrow Agent") and
the Company Common Stock exchanged for such STAC Common Stock will also be held
in escrow by the Escrow Agent. To effectuate the foregoing transactions, (a)
each of the members of the STAC Management shall deliver to the Company the
certificate(s) representing the STAC Common Stock held by them, together with
separate stock powers duly endorsed in blank, and (b) the Company shall deliver
to the members of the STAC Management certificates representing their Company
Common Stock. In addition, to effectuate the escrow of the Company Common Stock
to be received by STAC Management, each of STAC, certain of the members of STAC
Management and the Company will provide notice to the Escrow Agent that certain
of the shares of Company Common Stock will become the Escrow Property pursuant
to the terms of the Escrow Agreement dated as of October 31, 2005 by and between
the members of the STAC Management, STAC, the Company and the Escrow Agent and
such shares of Company Common Stock will be delivered to the Escrow Agent.
2. RESTRICTED STOCK. Each of the members of the STAC Management
understands (a) that the Company Common Stock to be received hereunder are
characterized as "restricted securities" under the federal securities laws, and
that under such laws and applicable regulations these shares may not be sold or
otherwise disposed of without first being registered under the Securities Act of
1933, as amended (the "SECURITIES ACT"), or pursuant to an exemption therefrom,
and (b) that the certificates representing the Company Common Stock shall bear
the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THE SHARES REPRESENTED BY THIS CERTIFICATE MAY
NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR A WRITTEN OPINION OF COUNSEL, REASONABLY
ACCEPTABLE TO THE ISSUER IN FORM AND SUBSTANCE, THAT
SUCH TRANSFER IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OF 1933."
3. COMPANY'S REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to the members of the STAC Management that:
(a) The Company has the full power and authority to execute, deliver
and perform this Agreement and each other agreement, instrument and document to
be executed and delivered by or on behalf of the Company in connection herewith.
(b) This Agreement, and each other agreement, instrument and
document to be executed and delivered by or on behalf of the Company in
connection herewith, has been duly authorized, executed and delivered by the
Company and constitutes the valid, binding and enforceable obligation of the
Company, enforceable in accordance with its terms.
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(c) Upon the consummation of the transactions contemplated hereby,
the shares of Company Common Stock to be issued to each of the members of the
STAC Management will be duly authorized, validly issued, fully paid and
nonassessable.
4. REPRESENTATIONS AND WARRANTIES OF THE STAC MANAGEMENT. Each member of
the STAC Management, severally, but not jointly, represents and warrants to the
Company that:
(a) Such member of the STAC Management is the record and beneficial
owner of the STAC Common Stock held by him as specified on Schedule A, free and
clear of any security interests, liens, taxes, charges, restrictions,
encumbrances or adverse claims whatsoever other than pursuant to the Escrow
Agreement and has the full right, capacity, power and authority to exchange
their STAC Common Stock for Company Common Stock as contemplated hereby.
(b) Such member of the STAC Management possesses all requisite
power, authority and capacity to execute, deliver and perform this Agreement and
each other agreement, instrument and document to be executed and delivered by or
on behalf of such member of the STAC Management in connection herewith
(c) This Agreement, and each other agreement, instrument and
document to be executed and delivered by or on behalf of such member of the STAC
Management in connection herewith, has been duly authorized, executed and
delivered by such member of the STAC Management and constitutes the valid,
binding and enforceable obligations of such member of the STAC Management,
enforceable in accordance with its respective terms.
(d) Such member of the STAC Management is acquiring the Company
Common Stock for investment purposes only and solely for his own account and not
with a view to, or for resale in connection with, the distribution or
disposition thereof, except for such distributions or dispositions which are
effected in compliance with the Securities Act;
(e) Such member of the STAC Management understands that the shares
of Company Common Stock have not been registered under the Securities Act or
under any state securities or "blue sky" laws;
(f) Such member of the STAC Management will not directly or
indirectly offer, sell, transfer, assign, pledge, hypothecate or otherwise
dispose of, or solicit any offers to purchase or otherwise acquire or take a
pledge of, any of the Company Common Stock, except in accordance with the
Securities Act and all applicable state securities or "blue sky" laws;
(g) The financial situation of such member of the STAC Management is
such that he can afford to bear the economic risk of holding the shares of
Company Common Stock for an indefinite period of time and suffer a complete loss
of his investment in the shares of Company Common Stock;
(h) Such member of the STAC Management has such knowledge and
experience in financial and business matters that he is capable of evaluating
the merits and risks relating to his investment in the shares of Company Common
Stock;
(i) Such member of the STAC Management acknowledges that he must
continue to bear the economic risk of his investment in the Company Common Stock
until the Company Common Stock is subsequently registered under the Securities
Act or an exemption from such registration is available;
(j) Such member of the STAC Management understands that the shares
of Company Common Stock represent a speculative investment which involves a high
degree of risk of loss of his investment therein;
(k) In making his decision to receive the Company Common Stock under
this Agreement, such member of the STAC Management has relied upon independent
investigations made by him and, to the extent believed by him to be appropriate,
his representatives, including his own professional, tax and other advisors; and
(l) All information that such member of the STAC Management has
provided to the Company concerning himself and his financial position is true,
complete and correct as of the date of this Agreement.
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5. SURVIVAL. The representations and warranties set forth in this
Agreement shall specifically survive the consummation of the Consolidation.
6. TAXES. It is the intention of the parties that the transactions
contemplated by this Agreement constitute a tax-free exchange pursuant to
Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended.
Notwithstanding the foregoing, the Company and each member of the STAC
Management hereby expressly agree that any tax consequences resulting from the
transactions contemplated hereby will be the respective sole obligation of the
affected party. Neither party hereto or any representative of either party makes
or has made any representation with respect to the tax consequences of the
transactions contemplated hereby.
7. REGISTRATION. The Company hereby grants each member of STAC Management
unlimited and customary "piggyback" registration rights with respect to the
Company Common Stock they are receiving in connection with this Agreement. Such
piggyback registration rights provision will survive until such time as the
Company Common Stock may be sold without volume restrictions pursuant to Rule
144(k) of the Securities Act of 1933, as amended. In addition, the Company is
obligated to file a Registration Statement on or before forty-five days after
the Consolidation (the "Required Registration") pursuant to a Registration
Rights Agreement it is entering into on the date of the Consolidation (as such
term is defined in the Securities Purchase Agreement) as well as a Registration
Rights Agreement it entered into on October 31, 2005 and as filed under a Form
8-K filing with the Securities and Exchange Committee on November 4, 2005. The
Company hereby undertakes and agrees to register the resale of all of the shares
of the Company Common Stock that each of the members of STAC Management is
receiving in connection with this Agreement in the Required Registration.
8. RELEASE. Each member of the STAC Management hereby knowingly, freely
and voluntarily waives his rights and fully releases and discharges the Company,
its affiliates, successors and assigns, and all of its current and former
officers, directors, agents and employees from any and all suits, legal actions,
or claims of any nature, whether known or unknown, which he had, has or may have
arising from the valuation, pricing and calculation of the consideration
received in exchange for the STAC Common Stock, that could be asserted by each
member of the STAC Management or by their respective successors, permitted
assigns or representatives.
9. TERMINATION. This Agreement shall terminate if and when the Securities
Purchase Agreement is terminated for any reason and, upon such termination, the
parties hereto shall cease to have any rights or obligations hereunder, and this
Agreement shall be null and void and of no further force or effect.
10. MISCELLANEOUS. This Agreement (a) represents the entire agreement of,
and supersedes all prior agreements and understandings among, the parties hereto
with respect to the subject hereof, (b) shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, representatives,
successors and assigns, (c) may be amended only by a writing signed by the
parties hereto, (d) shall be governed by the internal laws of the State of New
York and (e) may be executed in any number of counterparts each of which shall
constitute an original and all of which shall constitute one and the same
agreement and photostatic or facsimile copies of fully-executed counterparts of
this Agreement shall be given the same effect as originals.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the day, month and year first written above.
RELATIONSERVE MEDIA INC.
By:/s/
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Name: Xxxxx XxXxxxxx
Title: Chief Executive Officer
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Xxxx Xxxxxxx
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Xxxx Xxxxx
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Xxxxxx Xxxxx
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Xxxxx Xxxxxx
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Xxxxxx Xxxxxxxx, as a tenant by the
entirety
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Xxxxxx Xxxxxxxx, as a tenant by the
entirety
/s/
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Xxxxxx Xxxxxxx
/s/
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Xxxxxx Xxxxxx
SIGNATURE PAGE TO SECURITIES EXCHANGE AGREEMENT
