STOCK AND WARRANT ISSUANCE AGREEMENT
Exhibit
10.31
This
STOCK
AND WARRANT ISSUANCE AGREEMENT (this
“Agreement”)
is
entered into as of 10th
December, 2007, by and between MiniClip Limited, a company registered in England
and Wales with company number 04150754
whose
registered office is at 15 The Timber Yard, Xxxxxxxx Xx., Xxxxxx, X0 0XX, Xxxxxx
Xxxxxxx (“MC”),
and
GoFish Corporation, a Nevada corporation with offices at 000 Xxxxxxx Xxxxxx,
00xx
Xxxxx,
Xxx Xxxxxxxxx, XX 00000 (“GF”).
Any
capitalized term used in this Agreement but not otherwise defined shall have
the
meaning ascribed to such term in the Advertising Representation Agreement (as
defined below).
WITNESSETH:
WHEREAS,
MC and
GF have entered into an Advertising Representation Agreement dated December,
2007 (the “Advertising
Representation Agreement”)
(for
the purpose of this Agreement, the term “Advertising
Representative Agreement”
shall
include any successor agreement or substantially similar arrangement, in each
case, under which GF has the exclusive right to sell Advertising in the
Territory on the MC Site), pursuant to which, among other things, MC has agreed
to xxxxx XX the exclusive right to sell Advertising in the Territory on the
MC
Site; and
WHEREAS,
upon the
terms and subject to the conditions of this Agreement, GF has agreed to issue
to
MC the Shares (as defined below) and the Warrants (as defined below), in
consideration of MC’s execution of the Advertising Representation Agreement and
MC’s grant of the rights thereunder.
NOW,
THEREFORE, in
consideration of the mutual covenants and obligations set forth herein, and
for
other good and valuable consideration, the receipt and sufficient of which
is
hereby acknowledged, MC and GF agree as follows:
1. Definitions.
In
addition to the terms defined elsewhere in this Agreement, the following terms
shall have the following meanings:
“Common
Stock”
shall
mean the common stock of GF, $0.001 par value per share;
“Shares”
means
300,000 shares of Common Stock to be issued to MC pursuant to Section
2.1
hereof;
“Warrants”
means
Common Stock purchase warrants to purchase 300,000 shares of Common Stock with
an exercise price of $1.75 per share of Common Stock, in a form determined
by
GF, to be issued to MC pursuant to Section 2.1
hereof;
and
“Warrant
Shares”
means
the shares of Common Stock issuable upon exercise of the Warrants.
2. Issuance
of the Shares and Warrants.
2.1 Upon
the
terms and subject to the conditions set forth in this Agreement, GF shall issue
to MC at the Closing, and MC shall accept from GF at the Closing, the Shares
(at
a purchase price of $2.00 per Share) and the Warrants (at an exercise price
of
$1.75 per Warrant Share), free and clear of any lien and any other encumbrance
(except for restrictions on transfer under federal or state securities laws
and
regulations and except as contemplated by this Agreement), in each case
registered in the name of MC. The execution and delivery of the Advertising
Representation Agreement and MC’s grant of the rights thereunder, collectively,
shall constitute full payment of the purchase price by MC for the Shares and
the
Warrants.
2.2 Upon
the
terms and subject to the conditions set forth in this Agreement, ownership
of
the Shares shall vest in MC (or its nominee that is an affiliate of MC) as
follows:
2.2.1 one-half
(1/2) of the aggregate number of the Shares shall vest on July 1, 2008 if the
Advertising Representation Agreement then remains in effect; provided,
however,
that in
the event that the Advertising Representation Agreement is terminated by MC
or
by GF in the event of a material breach of the Advertising Representation
Agreement or material default by MC, upon such termination MC shall forfeit
all
of its interest in the Shares to the extent not vested immediately prior to
such
termination; and
2.2.2 the
remaining one-half (1/2) of the aggregate number of the Shares shall vest on
January 1, 2009 if the Advertising Representation Agreement then remains in
effect; provided,
however,
that in
the event that the Advertising Representation Agreement is terminated by MC
or
by GF in the event of a material breach of the Advertising Representation
Agreement or material default by MC upon such termination, MC shall forfeit
all
of its interest in the Shares to the extent not vested immediately prior to
such
termination.
2.3 Upon
the
terms and subject to the conditions set forth in this Agreement, ownership
of
the Warrants shall vest in MC (or its nominee that is an affiliate of MC) as
follows:
2.3.1 one-half
(1/2) of the Warrants shall vest on July 1, 2008 and thus be exercisable on
or
after that date if the Advertising Representation Agreement then remains in
effect; provided, however, that in the event that the Advertising Representation
Agreement is terminated by MC or by GF in the event of a material breach of
the
Advertising Representation Agreement or material default by MC upon such
termination, MC shall forfeit all of its interest in the Warrants (and the
underlying Warrant Shares) to the extent not vested immediately prior to such
termination; and
2.3.2 the
remaining one-half (1/2) of the Warrants shall vest on January 1, 2009 and
thus
become exercisable on and from that date if the Advertising Representation
Agreement then remains in effect; provided,
however,
that in
the event that the Advertising Representation Agreement is terminated by MC
or
by GF in the event of a material breach of the Advertising Representation
Agreement or material default by MC upon such termination, MC shall forfeit
all
of its interest in the Warrants (and the underlying Warrant Shares) to the
extent not vested immediately prior to such termination.
2.4 Upon
the
terms and subject to the conditions set forth in this Agreement, MC shall have
the right to vote unvested Shares and to receive any and all dividends and
other
distributions made with respect to unvested Shares.
3. Closing.
3.1 Upon
the
terms and subject to the conditions set forth in this Agreement, the closing
of
the transactions contemplated hereby (the “Closing”)
shall
take place on the date hereof or at such other time or place as MC or GF may
mutually agree (such date is hereinafter referred to as the “Closing
Date”).
3.2 At
the
Closing, in exchange for MC’s execution and delivery of the Advertising
Representation Agreement and MC’s granting of the rights thereunder, GF will
issue to MC, and hold in escrow for the benefit of MC: (a) a certificate
registered in the name of MC evidencing the number of Shares subject to vesting
on July 1, 2008 pursuant to the terms of Section
2.2.1
hereof,
(b) a certificate registered in the name of MC evidencing the remaining number
of Shares subject to vesting on January 1, 2009 pursuant to the terms of Section
2.2.2
hereof,
(c) a certificate registered in the name of MC evidencing the number of Warrants
subject to vesting on July 1, 2008 pursuant to the terms of Section 2.3.1
hereof
and (d) a certificate registered in the name of MC evidencing the remaining
number of Warrants subject to vesting on January 1, 2009 pursuant to the terms
of Section
2.3.2
hereof.
Upon vesting of the Shares and the Warrants pursuant to the terms of this
Agreement, GF shall deliver to MC the applicable certificates evidencing the
vested Shares and the vested Warrants; and for the avoidance of doubt all
rights, title and ownership of the Shares shall transfer to MC free and clear
of
any lien and any other encumbrance (except for restrictions on transfer under
federal or state securities laws and regulations and except as contemplated
by
this Agreement) at that time.
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4. Conditions
to Closing.
4.1 Conditions
to Closing of MC.
MC’s
obligations to purchase the Shares and the Warrants at the Closing are subject
to (a) the execution and delivery of the Advertising Representation Agreement
by
GF; (b) the delivery of the applicable written resolutions of GF’s board of
directors approving the issuance of the Shares in the agreed form; and (c)
the
execution and delivery of this Agreement by GF.
4.2 Conditions
to Closing of GF.
GF’s
obligations to issue and sell the Shares and the Warrants at the Closing are
subject to (a) the execution and delivery of the Advertising Representation
Agreement by MC and (b) the execution and delivery of this Agreement by
MC.
5. GF’s
Representations and Warranties.
GF
represents and warrants to MC as follows (each warranty is without prejudice
to
any other warranty or undertaking and, except where expressly stated, no clause
contained in this Agreement governs or limits the extent or application of
any
other clause):
5.1 Organization
and Standing.
GF is
duly incorporated, validly existing and in good standing under the laws of
the
State of Nevada, with the corporate power and authority to own and use its
properties and assets and to carry on its business as currently
conducted.
5.2 Authorization.
GF has
the requisite corporate power and authority to enter into and to consummate
the
transactions contemplated by this Agreement and otherwise to carry out its
obligations hereunder.
5.3 Issuance
of the Shares and the Warrants.
The
Shares, the Warrants and the Warrant Shares, when issued in accordance with
the
terms of this Agreement, will be duly and validly issued, fully paid and
nonassessable, free and clear of any lien and any other encumbrance (except
for
restrictions on transfer under federal or state securities laws and regulations
and except as contemplated by this Agreement). The Shares and the Warrants,
when
issued in accordance with the terms of this Agreement, will not be subject
to
any preemptive or similar rights of any other person, and no person has any
right of first refusal, preemptive right, right of participation, or any similar
right to participate in the issuance of the Shares and the Warrants contemplated
by this Agreement.
6. MC’s
Investor Representations and Warranties.
MC
represents and warrants to GF as follows (each warranty is without prejudice
to
any other warranty or undertaking and, except where expressly stated, no clause
contained in this Agreement governs or limits the extent or application of
any
other clause):
3
6.1 MC
understands and acknowledges that (i) the Shares, the Warrants and the Warrant
Shares have neither been registered under the Securities Act of 1933, as amended
(the “Securities
Act”)
nor
qualified under any state securities laws, (ii) the Shares, the Warrants and
the
Warrant Shares are being offered and issued pursuant to an exemption from
registration contained in the Securities Act and qualification provisions of
applicable state securities laws and (iii) the availability of such exemption
and qualification provisions depends in part on, and GF will rely upon the
accuracy and truthfulness of, MC’s representations contained in this Agreement
to the extent they impact such exemption and MC hereby consents to such
reliance.
6.2 MC
understands and acknowledges that Shares, the Warrants and the Warrant Shares
may not be offered, resold, pledged or otherwise transferred except (i) pursuant
to an exemption from registration under the Securities Act or pursuant to an
effective registration statement in compliance with Section 5 under the
Securities Act and (ii) in accordance with all applicable securities laws of
the
states of the United States.
6.3 MC
is
acquiring the Shares, the Warrants and the Warrant Shares solely for its own
account for investment and not for the interest of any other person and not
with
a view to, or in connection with, any resale or distribution of the Shares,
the
Warrants and the Warrant Shares or any part thereof. MC has no agreement,
arrangement or other understanding with any person to sell, transfer or pledge
Shares, the Warrants and the Warrant Shares or any part thereof or which would
guarantee MC any profit or against any loss with respect to such Shares,
Warrants and Warrant Shares, and MC has no plan to enter into such an agreement
or arrangement.
6.4 MC
is not
acquiring the Shares, the Warrants and the Warrant Shares as a result of any
advertisement, article, notice or other communication regarding the Shares,
the
Warrants and the Warrant Shares published in any newspaper, magazine or similar
media or broadcast over television or radio or presented at any seminar or
any
other general solicitation or general advertisement.
6.5 MC
is an
“accredited investor” as defined in Rule 501(a) under the Securities Act. MC is
not a registered broker-dealer under Section 15 of the Securities Exchange
Act
of 1934, as amended (the “Exchange
Act”).
MC
has such knowledge, sophistication and experience in business and financial
matters so as to be capable of evaluating the merits and risks of such
investment. MC is able to bear the economic risks of an investment in the
Shares, the Warrants and the Warrant Shares and is able to afford a complete
loss of such investment. MC can afford to hold the Shares, the Warrants and
the
Warrant Shares for an indefinite period of time and MC has no need for liquidity
in an investment in the Shares, the Warrants and the Warrant
Shares.
6.6 MC
understands and acknowledges that there will be placed on the certificates
evidencing the Shares, the Warrants and the Warrant Shares, or any substitutions
therefor, the following legend:
"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, IN EACH CASE AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE
TRANSFEROR TO SUCH EFFECT, THE FORM AND SUBSTANCE OF WHICH SHALL BE SATISFACTORY
TO GOFISH CORPORATION.
4
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO VESTING AND FORFEITURE
UNDER THE TERMS SET FORH IN THE STOCK AND WARRANT ISSUANCE AGREEMENT, DATED
AS
OF …….DECEMBER, 2007, BY AND BETWEEN MINICLIP LIMITED AND GOFISH
CORPORATION.”
6.7 MC
acknowledges that prior to MC’s decision to make an investment in the Shares,
the Warrants and the Warrant Shares, MC has (i) reviewed all reports, forms
or
other information filed by GF under the Exchange Act, including pursuant to
Section 13(a) or 15(d) thereof (the foregoing materials and all exhibits
included therein and financial statements, notes and schedules thereto and
documents incorporated by reference therein being collectively referred to
herein as the “SEC
Reports”)
as
necessary to make an informed investment decision with respect to MC’s
investment in the Shares, the Warrants and the Warrant Shares.
6.8 MC
acknowledges that an investment in the Shares, the Warrants and the Warrant
Shares involves, and has considered carefully before deciding to make an
investment in the Shares, the Warrants and the Warrant Shares, certain risks
and
uncertainties set forth in the SEC Reports, including those identified under
the
heading “Risk Factors” in GF’s most recent Quarterly Report on Form 10-QSB and
GF’s most recent Annual Report on Form 10-KSB, filed with the SEC. MC has taken
full cognizance of, understands such risks, and has obtained sufficient
information to evaluate the merits and risks of an investment in the Shares,
the
Warrants and the Warrant Shares. MC understands and acknowledges that no federal
or state agency has passed on or made any recommendations or endorsements with
respect to MC’s acquisition of the Shares, the Warrants and the Warrant
Shares.
6.9 MC
has
relied solely upon its own independent investigation made by it and its legal
counsel and advisors in making its decision to make an investment in the Shares,
the Warrants and the Warrant Shares. MC understands and agrees that neither
GF
nor the GF’s management is making any representations or warranties of any kind
respecting the economic returns or tax-related effects that may result from
MC’s
acquisition of the Shares, the Warrants and the Warrant Shares. MC disclaims
reliance upon any statements, representations, warranties or projections by
GF
respecting GF, the Shares, the Warrants and the Warrant Shares or the present
or
future value thereof, except for the express representations and warranties
of
GF contained in this Agreement.
7. Other
Agreements.
7.1 Certificates
evidencing the Shares, the Warrants and the Warrant Shares shall contain the
restrictive legends as required by federal or state law, including as set forth
in Section 6.6
hereof.
MC agrees to execute such other documents and to provide such additional
information as may be required by law for GF to issue the Shares, the Warrants
and the Warrant Shares to MC.
7.2 MC
hereby
covenants and agrees that the Shares, the Warrants and the Warrant Shares may
only be disposed of in compliance with state and federal securities laws. In
connection with any transfer of the Shares, the Warrants and the Warrant Shares,
GF may require MC to provide to GF an opinion of counsel to the effect that
such
transfer does not require registration of such transferred securities under
the
Securities Act of 1933, the form and substance of which shall be satisfactory
to
GF.
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8. Miscellaneous.
8.1 Governing
Law.
This
Agreement and all acts and transactions pursuant hereto and the rights and
obligations of the parties hereto shall be governed, construed and interpreted
in accordance with the laws of the State of California, without giving effect
to
its principles of conflicts of law or choice of law.
8.2 Successors
and Assigns.
The
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties as are
permitted by this Agreement. Nothing in this Agreement, express or implied,
is
intended to confer upon any party other than the parties hereto or their
respective successors and permitted assigns any rights, remedies, obligations,
or liabilities under or by reason of this Agreement, except as expressly
provided in this Agreement. Notwithstanding the foregoing, neither this
Agreement nor either party’s
rights
or obligations hereunder shall
be
assigned or transferred by either party without the prior written consent of
the
other party
and any
attempted assignment without
such written consent shall be void ab
initio
and of
no force and effect.
8.3 Survival.
The
representations and warranties contained herein shall survive the execution
and
delivery of this Agreement and the sale of the Shares, the Warrants and the
Warrant Shares.
8.4 Entire
Agreement.
This
Agreement and the Advertising Representation Agreement embody the entire
understanding and agreement between MC and GF regarding the subject matter
hereto and thereto, and supersedes and extinguishes all prior agreements and
understandings relating to the subject matter hereof and thereof of any nature
whatsoever, whether or not in writing, between the parties.
8.5 Counterparts.
This
Agreement may be executed in any number of counterparts and signatures and
may
be delivered by facsimile, each of which shall be enforceable against the
parties actually executing such counterparts, and all of which together shall
constitute one instrument.
8.6 Expenses.
MC and
GF shall each bear their own legal and other expenses in connection with the
transactions contemplated hereby.
8.7 Waiver.
No
waiver by either party of any default shall be deemed as a waiver of prior
or
subsequent default of the same of other provisions of this
Agreement.
8.8 Notices.
Ay
notice to be given under this Agreement shall be given in accordance with the
notice provisions of the Advertising Representation Agreement.
8.9 California
Corporate Securities Law.
THE
ISSUANCE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT
BEEN
QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA
AND
THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE
ISSUANCE OF SECURITIES IS EXEMPT FROM THE QUALIFICATION BY SECTION 25100, 25102,
OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO
THIS
AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED
UNLESS THE ISSUANCE IS SO EXEMPT.
8.10 Severability.
If any
term, clause or provision hereof is held invalid or unenforceable by a court
of
competent jurisdiction in any respect, such invalidity shall not affect the
validity or operation of any other term, clause or provision and such invalid
term, clause or provision shall be deemed to be severed from this
Agreement.
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8.11 Headings.
Headings of the sections and subsections of this Letter Agreement are for the
convenience of the parties only, and shall be given no substantive or
interpretative effect whatsoever.
8.12 No
Waiver.
No
waiver or modification of this Agreement shall be binding upon a party unless
made in writing and signed by each of the parties and no failure or delay in
enforcing any right will be deemed a waiver.
8.13 Remedies.
The
rights under this Agreement are independent, cumulative and without prejudice
to
all other rights available to it whether as a matter of common law, statute,
custom of otherwise.
8.14 Non-exclusion
of Fraud.
Nothing
in this Agreement or in any other document referred to herein shall be read
or
construed as excluding any liability or remedy as a result of
fraud.
[Signature
page follows]
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IN
WITNESS WHEREOF,
the
parties have executed this Stock and Warrant Issuance Agreement as of the date
first written above.
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MINICLIP
LIMITED
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By:
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/s/ Xxxxxx
Xxxxx
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Name: Xxxxxx
Xxxxx
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Title: CEO
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GOFISH
CORPORATION
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By:
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/s/ Xxxxxxx
Xxxxxx
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Name: Xxxxxxx
Xxxxxx
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Title: President
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[SIGNATURE
PAGE TO STOCK AND WARRANT ISSUANCE AGREEMENT]
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