COMMON STOCK PURCHASE AGREEMENT
This
Common Stock Purchase Agreement (the “Agreement”)
is
made and entered into as of May 15, 2008 (the “Effective
Date”),
by
and among InfoSonics Corporation, a Maryland corporation (the “Company”),
and
Fanrock Investments Limited, a corporation organized under the laws of the
British Virgin Islands (“Fanrock”).
A. The
Company and Fanrock have entered
into that certain Stock Purchase and Sale Agreement dated January 19, 2005
(the
“2005
Agreement”),
pursuant to which the Company purchased all of the outstanding shares of
Primasel S.A., a corporation organized under the laws of Uruguay.
B. In
connection with this Agreement, the Company and Fanrock entered into that
certain Amendment No. 1 to Stock Purchase and Sale Agreement (the “Amendment”),
whereby the parties agreed to amend the profit sharing agreement set forth
in
the 2005 Agreement.
C. As
consideration for the Amendment, the Company desires to sell and issue to
Fanrock, and Fanrock desires to receive from the Company, 100,000 shares of
the
Company’s unregistered common stock.
1. AGREEMENT
TO PURCHASE AND SELL STOCK.
1.1 Authorization.
As of
the Effective Date, the Company has authorized the issuance, pursuant to the
terms and conditions of this Agreement, of 100,000 shares of the Company's
Common Stock, $0.001 par value per share (the “Shares”).
1.2 Agreement
to Purchase and Sell.
The
Company hereby agrees to sell to Fanrock, and Fanrock hereby agrees to receive
from the Company, the Shares in exchange for the Amendment.
1.3 Delivery
of Stock Certificate. The
Company shall deliver to Fanrock a duly executed stock certificate evidencing
the Shares.
2. REPRESENTATIONS
AND WARRANTIES OF INVESTOR.
Fanrock
hereby represents and warrants to, and agrees with, the Company,
that:
2.1 Authorization.
This
Agreement constitutes Fanrock's valid and legally binding obligation,
enforceable in accordance with its terms. Fanrock represents that it has full
power and authority to enter into this Agreement.
2.2 Purchase
for Own Account for Investment.
Fanrock
is purchasing the Shares for Fanrock’s own account for investment purposes only
and not with a view to, or for sale in connection with, a distribution of the
Shares within the meaning of the Securities Act of 1933, as amended (the
“1933
Act”).
Fanrock has no present intention of selling or otherwise disposing of all or
any
portion of the Shares and no one other than Fanrock has any beneficial ownership
of any of the Shares. Fanrock also represents that Fanrock has not been formed
for the specific purpose of acquiring the Shares.
2.3 Access
to Information.
Fanrock
has had access to all information regarding the Company and its present and
prospective business, assets, liabilities and financial condition that Fanrock
reasonably considers important in making the decision to purchase the Shares,
and Fanrock has had ample opportunity to ask questions of the Company’s
representatives concerning such matters and this investment.
2.4 Understanding
of Risks.
Fanrock
is fully aware of: (i) the highly speculative nature of the investment in the
Shares; (ii) the financial hazards involved; (iii) the lack of liquidity of
the
Shares and the restrictions on transferability of the Shares (e.g.,
that
Fanrock may not be able to sell or dispose of the Shares or use them as
collateral for loans); (iv) the qualifications and backgrounds of the management
of the Company; and (v) the tax consequences of investment in the
Shares.
2.5 Investor’s
Qualifications.
Fanrock
understands that the purchase of the Shares involves substantial risk. Fanrock:
(i) is able to fend for itself, can bear the economic risk of Fanrock's
investment in the Shares and has such knowledge and experience in financial
or
business matters that Fanrock is capable of evaluating the merits and risks
of
this investment in the Shares and protecting its own interests in connection
with this investment and/or (ii) has a preexisting personal or business
relationship with the Company and certain of its officers, directors or
controlling persons of a nature and duration that enables Fanrock to be aware
of
the character, business acumen and financial circumstances of such
persons.
2.6 Accredited
Investor Status.
Fanrock
is an “accredited investor” within the meaning of Regulation D promulgated under
the 0000 Xxx.
2.7 No
General Solicitation.
At no
time was Fanrock presented with or solicited by any publicly issued or
circulated newspaper, mail, radio, television or other form of general
advertising or solicitation in connection with the offer, sale and purchase
of
the Shares.
2.8 Compliance
with Securities Laws.
Fanrock
understands and acknowledges that, in reliance upon the representations and
warranties made by Fanrock herein, the Shares are not being registered with
the Securities and Exchange Commission (“SEC”)
under
the 1933 Act or being qualified under the California Corporate Securities Law
of
1968, as amended (the “Law”),
but
instead are being issued under an exemption or exemptions from the registration
and qualification requirements of the 1933 Act and the Law which impose certain
restrictions on Fanrock’s ability to transfer the Shares.
2.9 Restrictions
on Transfer.
Fanrock
understands that Fanrock may not transfer any Shares unless such Shares are
registered under the 1933 Act and qualified under the Law or unless, in the
opinion of counsel to the Company, exemptions from such registration and
qualification requirements are available.
2.10 Foreign
Securities Compliance.
If
Fanrock is not a United States person (as defined in Regulation S of the 1933
Act), Fanrock hereby represents that it itself as to the full observance of
the
laws of its jurisdiction in connection with any invitation to purchase the
Shares, or any use of this Agreement, including, without limitation, (i) the
legal requirements within its jurisdiction for the offer and purchase of the
Shares, (ii) any foreign exchange restrictions applicable to such offer and
purchase, (iii) any governmental or other consents that may need to be obtained,
and (iv) the income tax and other tax consequences, if any, that may be relevant
to the offer, purchase, holding, redemption, sale or other transfer of the
Shares. Fanrock’s offer, purchase and payment for, and its continued beneficial
ownership of the Shares will not violate any applicable securities or other
laws
of its jurisdiction.
3. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.
The
Company represents and warrants to Fanrock as follows:
3.1 Organization
and Good Standing.
The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Maryland, and duly qualified to transact business
in the State of California, and has all requisite corporate power and authority
to enter into and carry out the transactions contemplated by this
Agreement,
and to
carry on its business as now conducted and as proposed
to be conducted.
3.2 Corporate
Authority.
All
corporate actions on the part of the Company and its officers and directors
necessary for (i) the authorization, execution, delivery and performance of
this
Agreement, the consummation of the transactions contemplated hereby and thereby,
and the performance of all of the Company’s obligations under this Agreement,
and (ii) the authorization, issuance, and delivery of all of the Shares being
sold under this Agreement, have been taken.
3.3 Valid
Issuance.
(a) The
Shares to be issued pursuant hereto have been duly authorized by all necessary
corporate action and, when issued and paid for in accordance with the terms
hereof, shall be validly issued and outstanding, fully paid and
non-assessable
and free
of restrictions on transfer other than those set forth in this Agreement or
federal and state securities laws.
(b) Based
in
part on the representations made by Fanrock in Section 3 hereof, the issuance
of
the Shares solely to Fanrock in accordance with this Agreement is exempt from
the registration and prospectus delivery requirements of the U.S. Securities
Act
of 1933, as amended (the “1933
Act”)
and
the securities registration and qualification requirements of the currently
effective provisions of the securities laws of the State of California.
3.4 Due
Authorization.
This
Agreement constitutes valid and legally binding obligations of the Company,
enforceable in accordance with their respective terms, except as may be limited
by (i) applicable bankruptcy, insolvency, reorganization or others laws of
general application relating to or affecting the enforcement of creditors'
rights generally and (ii) the effect of rules of law governing the availability
of equitable remedies.
4. RESTRICTIVE
LEGENDS AND STOP-TRANSFER ORDERS.
4.1 Legends.
Fanrock
understands and agrees that the Company will place the legend set forth below
or
a similar legend on any stock certificate(s) evidencing the Shares, together
with any other legends that may be required by state or federal securities
laws,
the Company’s Articles of Incorporation or Bylaws, any other agreement between
Fanrock and the Company or any agreement between Fanrock and any third
party:
THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT
OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND MAY NOT
BE
TRANSFERRED EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES
LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE ISSUER OF THESE
SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY
TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN
COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
4.2 Stop-Transfer
Instructions.
Fanrock
agrees that, to ensure compliance with the restrictions imposed by this
Agreement, the Company may issue appropriate “stop-transfer” instructions to its
transfer agent, if any, and if the Company transfers its own securities, it
may
make appropriate notations to the same effect in its own records.
4.3 Refusal
to Transfer.
The
Company will not be required (i) to transfer on its books any Shares that have
been sold or otherwise transferred in violation of any of the provisions of
this
Agreement or (ii) to treat as owner of such Shares, or to accord the right
to
vote or pay dividends, to any purchaser or other transferee to whom such Shares
have been so transferred.
5. COMPLIANCE
WITH LAWS AND REGULATIONS.
The
issuance and transfer of the Shares will be subject to and conditioned upon
compliance by the Company and Fanrock with all applicable state and federal
laws
and regulations. If Fanrock is not a United States person (as defined in
Regulation S of the 1933 Act), Fanrock agrees to provide the Company with such
filings, if any, as may be required by the securities or other laws of his
or
her jurisdiction in connection with this Agreement and the offer and purchase
of
the Shares.
6. GENERAL
PROVISIONS.
6.1 Binding
on Successors and Assigns.
This
Agreement, and the rights and obligations of the parties hereunder, will inure
to the benefit of, and be binding upon, their respective successors, assigns,
heirs, executors, administrators and legal representatives.
6.2 Governing Law
and Venue.
This
Agreement will be governed by and construed in accordance with the internal
laws
of the State of California, excluding that body of law pertaining to conflict
of
laws. Any suit brought hereon shall be brought in the state or federal courts
sitting in Los Angeles County, California, the parties hereto hereby waiving
any
claim or defense that such forum is not convenient or proper. Each party hereby
agrees that any such court shall have in personam jurisdiction over it and
consents to service of process in any manner authorized by California
law.
6.3 Counterparts.
This
Agreement may be executed in any number of counterparts, each of which when
so
executed and delivered will be deemed an original, and all such counterparts
together will constitute one and the same agreement.
6.4 Entire
Agreement.
This
Agreement constitutes the entire agreement and understanding of the parties
with
respect to the subject matter of this Agreement, and supersede any and all
prior
understandings and agreements, whether oral or written, between or among the
parties hereto with respect to the specific subject matter
hereof.
IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed in by
its
duly authorized representative and Fanrock has executed this Agreement, as
of
the Effective Date.
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INFOSONICS
CORPORATION
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By:
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/s/
Xxxx Xxxxxxxx
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Name:
Xxxx Xxxxxxxx
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Title:
Chief Financial Officer
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By:
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/s/
Xxxxxx Xxxxxxxx
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Name:
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Xxxxxx
Xxxxxxxx
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Title: President
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Address:
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E-mail:
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[Signature
Page To Common Stock Purchase Agreement]
