Exhibit 4.11
SERIES A PREFERRED STOCK PURCHASE AGREEMENT
THIS SERIES A PREFERRED STOCK PURCHASE AGREEMENT (the "Agreement") is
entered into as of October 11, 2005, by and between Branded Media Corporation, a
Nevada corporation (the "Company") and The Vantage Fund, a Massachusetts
Business Trust ("Purchaser").
RECITALS
WHEREAS, the Company has authorized the sale and issuance of an aggregate
of Six Hundred Thousand (600,000) shares of its Series A Preferred Stock (the
"Shares");
WHEREAS, Purchaser desires to purchase the Shares on the terms and
conditions set forth herein; and
WHEREAS, the Company desires to issue and sell the Shares to Purchaser on
the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises hereinafter set forth, the parties hereto agree as follows:
1. AGREEMENT TO SELL AND PURCHASE.
1.1 Authorization of Shares. On or prior to the Closing (as defined in
Section 2 below), the Company shall have authorized (a) the sale and issuance to
Purchaser of the Shares and (b) the issuance of such shares of Common Stock to
be issued upon conversion of the Shares (the "Conversion Shares"). The Shares
and the Conversion Shares shall have the rights, preferences, privileges and
restrictions set forth in the Certificate of Designation of Series A Preferred
Stock, in the form attached hereto as Exhibit A (the "Certificate of
Designation").
1.2 Sale and Purchase. Subject to the terms and conditions hereof, at
the Closing (as hereinafter defined) the Company hereby agrees to issue and sell
to Purchaser, and Purchaser agrees to purchase from the Company, Two Hundred
Fifty-Five Thousand (220,000) shares at a purchase price of $10.00 per share
($2,200,000.00).
2. CLOSING, DELIVERY AND PAYMENT.
2.1 Closing. The closing of the sale and purchase of the Shares under
this Agreement (the "Closing") shall take place at 10:00 a.m. on the date
hereof, at the offices of the Company or such other time or place as the Company
and Purchaser may mutually agree (such date is hereinafter referred to as the
"Closing Date").
2.2 Delivery. At the Closing, subject to the terms and conditions
hereof, the Company will deliver to Purchaser a certificate representing the
number of Shares to be purchased at the Closing by Purchaser, against payment of
the purchase price by certified check or wire transfer made payable to the order
of the Company.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
Except as set forth on a Schedule of Exceptions delivered by the Company to
Purchaser at the Closing specifically identifying the relevant Section, the
Company hereby represents and warrants to Purchaser as of the date of this
Agreement as follows:
3.1 Organization, Good Standing and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Nevada. The Company has all requisite corporate power and
authority to own and operate its properties and assets, to execute and deliver
this Agreement, the Registration Rights Agreement in the form attached hereto as
Exhibit B (the "Registration Rights Agreement") and the Common Stock Purchase
Warrant Agreement, in the form attached hereto as Exhibit C (the "Warrant
Agreement") (collectively, the "Related Agreements"), to issue and sell the
Shares and the Conversion Shares, and to carry out the provisions of this
Agreement and to carry on its business as presently conducted and as presently
proposed to be conducted. The Company is duly qualified and is authorized to do
business and is in good standing as a foreign corporation in all jurisdictions
in which the nature of its activities and of its properties (both owned and
leased) makes such qualification necessary, except for those jurisdictions in
which failure to do so would not have a material adverse effect on the Company
or its business.
3.2 Subsidiaries. The Company does not own or control any equity
security or other interest of any other corporation, limited partnership or
other business entity. The Company is not a participant in any joint venture,
partnership or similar arrangement.
3.3 Capitalization; Voting Rights. The authorized capital stock of the
Company, immediately prior to the Closing, will consist of (a) 500,000,000
shares of Common Stock, par value $.001 per share, 29,220,499 shares of which
are issued and outstanding and (b) 10,000,000 shares of Preferred Stock, par
value $.001 per share, 600,000 of which are designated Series A Preferred Stock,
none of which are issued and outstanding. All issued and outstanding shares of
the Company's Common Stock (a) have been duly authorized and validly issued to
the persons listed on Exhibit D hereto, (b) are fully paid and nonassessable,
and (c) were issued in compliance with all applicable state and federal laws
concerning the issuance of securities. The rights, preferences, privileges and
restrictions of the Shares are as stated in the Certificate of Designation. Each
share of Series A Preferred Stock is convertible into Common Stock, subject to
adjustment as provided in the Certificate of Designation. The Conversion Shares
have been duly and validly reserved for issuance. When issued in compliance with
the provisions of this Agreement and the Certificate of Designation, the Shares
and the Conversion Shares will be validly issued, fully paid and nonassessable,
and, other than in connection with this Agreement or the Related Agreements,
will be free of any liens or encumbrances; provided, however, that the Shares
and the Conversion Shares may be subject to restrictions on transfer under state
and/or federal securities laws as set forth herein or as otherwise required by
such laws at the time a transfer is proposed.
3.4 Authorization; Binding Obligations. All corporate action on the part
of the Company and its officers, directors and shareholders necessary for the
authorization of this Agreement and the Related Agreements, the performance of
all obligations of the Company hereunder and thereunder at the Closing and the
authorization, sale, issuance and delivery of the Shares pursuant hereto and the
Conversion Shares pursuant to the Certificate of Designation has been taken or
will be taken prior to the Closing. This Agreement and the Related Agreements,
when executed and delivered, will be valid and binding obligations of the
Company enforceable in accordance with their terms, except (a) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws of
general application affecting enforcement of creditors' rights, (b) general
principles of equity that restrict the availability of equitable remedies, and
(c) to the extent that the enforceability of the indemnification provisions in
Section 2.9 of the Registration Rights Agreement may be limited by applicable
laws. The sale of the Shares and the subsequent conversion of the Shares into
Conversion 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.
3.5 Financial Statements. The Company has made available to Purchaser
its audited financial statements as at September 30, 2004 and unaudited
financial statements for the nine month period ending June 30, 2005
(collectively, the "Financial Statements"). The Financial Statements, together
with the notes thereto, are complete and correct in all material respects, have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods indicated, except as
disclosed therein, and present fairly the financial condition and position of
the Company; provided, however, that the unaudited financial statements are
subject to normal recurring year-end audit adjustments (which are not expected
to be material), and do not contain all footnotes required under generally
accepted accounting principles.
3.6 Liabilities. The Company has no material liabilities and, to the
best of its knowledge, has no material contingent liabilities not disclosed in
the Financial Statements, except current liabilities incurred in the ordinary
course of business subsequent to the Statement Date which have not had, either
in any individual case or in the aggregate, a materially adverse effect on the
Company.
3.7 Agreements; Action.
(a) All agreements, understandings or proposed transactions between
the Company and any of its officers, directors, affiliates or any affiliate
thereof is set forth in the attached Exhibit E.
(b) All agreements, understandings, instruments, contracts, proposed
transactions, judgments, orders, writs or decrees to which the Company is a
party or to its knowledge by which it is bound which may involve (i) obligations
(contingent or otherwise) of, or payments to, the Company in excess of $20,000
(other than obligations of, or payments to, the Company arising from purchase or
sale agreements entered into in the ordinary course of business), or (ii) the
transfer or license of any patent, copyright, trade secret or other proprietary
right to or from the Company (other than licenses arising from the purchase of
"off the shelf" or other standard products), or (iii) provisions restricting the
development, manufacture or distribution of the Company's products or services,
or (iv) indemnification by the Company with respect to infringements of
proprietary rights (other than indemnification obligations arising from purchase
or sale or license agreements entered into in the ordinary course of business)
are set forth in the attached Exhibit F.
(c) The Company has not (i) declared or paid any cash dividends, or
authorized or made any distribution upon or with respect to any class or series
of its capital stock, (ii) incurred any indebtedness for money borrowed or any
other liabilities (other than with respect to dividend obligations,
distributions, indebtedness and other obligations incurred in the ordinary
course of business and other than as disclosed in the Financial Statements) in
excess of $10,000 individually or in excess of $20,000 in the aggregate, (iii)
made any loans or advances to any person, other than ordinary advances for
travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its
assets or rights, other than the sale of its inventory in the ordinary course of
business.
(d) For the purposes of subsections (a) and (b) above, all
indebtedness, liabilities, agreements, understandings, instruments, contracts
and proposed transactions involving the same person or entity (including persons
or entities the Company has reason to believe are affiliated therewith) shall be
aggregated for the purpose of meeting the individual minimum dollar amounts of
such subsections.
3.8 Obligations to Related Parties. All obligations of the Company to
officers, directors, shareholders, or employees of the Company other than (a)
for payment of salary for services rendered, (b) reimbursement for reasonable
expenses incurred on behalf of the Company and (c) for other standard employee
benefits made generally available to all employees (including stock option
agreements outstanding under any stock option plan approved by the Board of
Directors of the Company) are set forth in Exhibit E. None of the officers,
directors or shareholders of the Company, or any members of their immediate
families, are indebted to the Company or have any direct or indirect ownership
interest in any firm or corporation with which the Company is affiliated or with
which the Company has a business relationship, or any firm or corporation which
competes with the Company, except that officers, directors and/or shareholders
of the Company may own stock in publicly traded companies which may compete with
the Company. No officer, director or shareholder, or any member of their
immediate families, is a party to or, directly or indirectly, interested in any
material contract with the Company (other than such contracts as relate to any
such person's ownership of capital stock or other securities of the Company).
Except as may be disclosed in the Financial Statements, the Company is not a
guarantor or indemnitor of any indebtedness of any other person, firm or
corporation.
3.9 Changes. Since June 30, 2005 there has not been to the Company's
knowledge:
(a) Any change in the assets, liabilities, financial condition or
operations of the Company from that reflected in the Financial Statements, other
than changes in the ordinary course of business, none of which individually or
in the aggregate has had or is expected to have a material adverse effect on
such assets, liabilities, financial condition, operations or prospects of the
Company;
(b) Any resignation or termination of any officer or key employee of
the Company; nor, to the best of its knowledge, is any such resignation or
termination imminent;
(c) Any material change, except in the ordinary course of business,
in the contingent obligations of the Company by way of guaranty, endorsement,
indemnity, warranty or otherwise;
(d) Any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the properties, business or
prospects or financial condition of the Company;
(e) Any waiver by the Company of a valuable right or of a material
debt owed to it;
(f) Any direct or indirect loan made by the Company to any
shareholder, employee, officer or director of the Company, other than advances
made in the ordinary course of business;
(g) Any material change in any compensation arrangement or agreement
with any employee, officer, director or shareholder;
(h) Any declaration or payment of any dividend or other distribution
of the assets of the Company;
(i) Any labor organization activity;
(j) Any debt, obligation or liability incurred, assumed or guaranteed
by the Company, except those for immaterial amounts and for current liabilities
incurred in the ordinary course of business;
(k) Any sale, assignment or transfer of any patents, trademarks,
copyrights, trade secrets or other intangible assets;
(l) Any change in any material agreement to which the Company is a
party or by which it is bound which materially and adversely affects the
business, assets, liabilities, financial condition, operations or prospects of
the Company; or
(m) Any other event or condition of any character that, either
individually or cumulatively, has materially and adversely affected the
business, assets, liabilities, financial condition, operations or prospects of
the Company.
(n) Any arrangement or commitment by the Company to do any of the
acts described in subsections (a) through (m) above.
3.10 Title to Properties and Assets; Liens, Etc. The Company has good
title to its properties and assets, including the properties and assets
reflected in the most recent balance sheet included in the Financial Statements,
and good title to its leasehold estates, in each case subject to no mortgage,
pledge, lien, lease, encumbrance or charge, other than (a) those resulting from
taxes which have not yet become delinquent, (b) minor liens and encumbrances
which do not materially detract from the value of the property subject thereto
or materially impair the operations of the Company, and (c) those that have
otherwise arisen in the ordinary course of business. All facilities, machinery,
equipment, fixtures, vehicles and other properties owned, leased or used by the
Company are in good operating condition and repair and are reasonably fit and
usable for the purposes for which they are being used. The Company is in
compliance with all material terms of each lease to which it is a party or is
otherwise bound.
3.11 Copyrights and Trademarks. The Company owns or possesses sufficient
legal rights to all trademarks, service marks, trade names, copyrights, trade
secrets, licenses, information and other proprietary rights and processes
necessary for its business as now conducted and as presently proposed to be
conducted, without any known infringement of the rights of others. There are no
outstanding options, licenses or agreements of any kind relating to the
foregoing other than those granted by the Company to resellers, distributors,
dealers or customers in the ordinary course of business, nor is the Company
bound by or a party to any options, licenses or agreements of any kind with
respect to the patents, trademarks, service marks, trade names, copyrights,
trade secrets, licenses, information and other proprietary rights and processes
of any other person or entity. The Company has not received any communications
alleging that the Company has violated or, by conducting its business as
presently proposed, would violate any of the patents, trademarks, service marks,
trade names, copyrights or trade secrets or other proprietary rights of any
other person or entity. The Company is not aware that any of its employees is
obligated under any contract (including licenses, covenants or commitments of
any nature) or other agreement, or subject to any judgment, decree or order of
any court or administrative agency, that would interfere with their duties to
the Company or that would conflict with the Company's business as presently
proposed to be conducted. Neither the execution nor delivery of this Agreement
or the Related Agreements, nor the carrying on of the Company's business by the
employees of the Company, nor the conduct of the Company's business as presently
proposed, will, to the Company's knowledge, conflict with or result in a breach
of the terms, conditions or provisions of, or constitute a default under, any
contract, covenant or instrument under which any employee is now obligated. The
Company does not believe it is or will be necessary to utilize any inventions,
trade secrets or proprietary information of any of its employees made prior to
their employment by the Company, except for inventions, trade secrets or
proprietary information that have been assigned to the Company.
3.12 Compliance with Other Instruments. The Company is not in violation
or default of any term of its Charter, Certificate of Designation or Bylaws, or
of any provision of any mortgage, indenture, contract, agreement, instrument or
contract to which it is party or by which it is bound or of any judgment,
decree, order, writ. The execution, delivery, performance of and compliance with
this Agreement and the Related Agreements, and the issuance and sale of the
Shares pursuant hereto and of the Conversion Shares pursuant to the Certificate
of Designation, 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 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
non-renewal of any permit, license, authorization or approval applicable to the
Company, its business or operations or any of its assets or properties.
3.13 Litigation. There is no action, suit, proceeding or investigation
pending or to the Company's knowledge currently threatened against the Company
that questions the validity of this Agreement or the Related Agreements or the
right of the Company to enter into any of such agreements, or to consummate the
transactions contemplated hereby or thereby, or which might result, either
individually or in the aggregate, in any material adverse change in the assets,
condition, affairs or prospects of the Company, financially or otherwise, or any
change in the current equity ownership of the Company. The foregoing includes,
without limitation, actions involving the prior employment of any of the
Company's employees, their use in connection with the Company's business of any
information or techniques allegedly proprietary to any of their former
employers, or their obligations under any agreements with prior employers. The
Company is not a party or subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality. There is no action, suit, proceeding or investigation by the
Company currently pending or which the Company intends to initiate.
3.14 Employees. The Company has no collective bargaining agreements with
any of its employees. There is no labor union organizing activity pending or, to
the Company's knowledge, threatened with respect to the Company. The Company is
not a party to or bound by any currently effective employment contract, deferred
compensation arrangement, bonus plan, incentive plan, profit sharing plan,
retirement agreement or other employee compensation plan or agreement. To the
Company's knowledge, no employee of the Company, nor any consultant with whom
the Company has contracted, is in violation of any term of any employment
contract, proprietary information agreement or any other agreement relating to
the right of any such individual to be employed by, or to contract with, the
Company because of the nature of the business to be conducted by the Company;
and to the Company's knowledge the continued employment by the Company of its
present employees, and the performance of the Company's contracts with its
independent contractors, will not result in any such violation. The Company has
not received any notice alleging that any such violation has occurred. No
employee of the Company has been granted the right to continued employment by
the Company or to any material compensation following termination of employment
with the Company. The Company is not aware that any officer or key employee, or
that any group of key employees, intends to terminate his, her or their
employment with the Company, nor does the Company have a present intention to
terminate the employment of any officer, key employee or group of key employees.
3.15 Obligations of Management. Each officer of the Company is currently
devoting one hundred percent (100%) of his or her business time to the conduct
of the business of the Company. The Company is not aware that any officer or key
employee of the Company is planning to work less than full time at the Company
in the future. No officer or key employee is currently working or, to the
Company's knowledge, plans to work for a competitive enterprise, whether or not
such officer or key employee is or will be compensated by such enterprise.
3.16 Registration Rights and Voting Rights.
(a) The Company is presently under obligation, and has granted
rights, to register shares of the Company's presently outstanding securities and
securities that may hereafter be issued and are set forth in the attached
Exhibit G.
(b) To the Company's knowledge no shareholder of the Company has
entered into any agreement with respect to the voting of equity securities of
the Company.
3.17 Compliance with Laws; Permits. The Company is not in violation of
any applicable statute, rule, regulation, order or restriction of any domestic
or foreign government or any instrumentality or agency thereof in respect of the
conduct of its business or the ownership of its properties which violation would
materially and adversely affect the business, assets, liabilities, financial
condition, operations or prospects of the Company. No governmental orders,
permissions, consents, approvals or authorizations are required to be obtained
and no registrations or declarations are required to be filed in connection with
the execution and delivery of this Agreement and the issuance of the Shares or
the Conversion Shares, except such as has been duly and validly obtained or
filed, or with respect to any filings that must be made after the Closing, as
will be filed in a timely manner. The Company has all franchises, permits,
licenses and any similar authority necessary for the conduct of its business as
now being conducted by it, the lack of which could materially and adversely
affect the business, properties, prospects or financial condition of the Company
and believes it can obtain, without undue burden or expense, any similar
authority for the conduct of its business as planned to be conducted.
3.18 Environmental and Safety Laws. The Company is not in violation of
any applicable statute, law or regulation relating to the environment or
occupational health and safety, and to its knowledge, no material expenditures
are or will be required in order to comply with any such existing statute, law
or regulation. No Hazardous Materials (as defined below) are used or have been
used, stored, or disposed of by the Company or, to the Company's knowledge after
reasonable investigation, by any other person or entity on any property owned,
leased or used by the Company. For the purposes of the preceding sentence,
"Hazardous Materials" shall mean (a) materials which are listed or otherwise
defined as "hazardous" or "toxic" under any applicable local, state, federal
and/or foreign laws and regulations that govern the existence and/or remedy of
contamination on property, the protection of the environment from contamination,
the control of hazardous wastes, or other activities involving hazardous
substances, including building materials, or (b) any petroleum products or
nuclear materials.
3.19 Offering Valid. Assuming the accuracy of the representations and
warranties of the Purchasers contained in Section 4.2 hereof, the offer, sale
and issuance of the Shares and the Conversion Shares will be exempt from the
registration requirements of the Securities Act of 1933, as amended (the
"Securities Act"), and will have been registered or qualified (or are exempt
from registration and qualification) under the registration, permit or
qualification requirements of all applicable state securities laws. Neither the
Company nor any agent on its behalf has solicited or will solicit any offers to
sell or has offered to sell or will offer to sell all or any part of the Shares
to any person or persons so as to bring the sale of such Shares by the Company
within the registration provisions of the Securities Act or any state securities
laws.
3.20 Full Disclosure. The Company has provided Purchaser with all
information requested by Purchaser in connection with its decision to purchase
the Shares, including all information the Company believes is reasonably
necessary to make such investment decision. Neither this Agreement, the Exhibits
hereto, the Related Agreements nor any other document delivered by the Company
to Purchaser or its attorneys or agents in connection herewith or therewith or
with the transactions contemplated hereby or thereby, taken as a whole, contain
any untrue statement of a material fact nor omit to state a material fact
necessary in order to make the statements contained herein or therein not
misleading. Notwithstanding the foregoing, the Business Plan, dated August, 2005
(the "Business Plan") provided to Purchaser was prepared by the management of
the Company in a good faith effort to describe the Company's presently proposed
business and products and the markets therefore. The assumptions applied in
preparing the Business Plan appeared reasonable to management as of the date
thereof and as of the date hereof; however, there is no assurance that these
assumptions will prove to be valid or that the objectives set forth in the
Business Plan will be achieved.
3.21 Minute Books. The minute books of the Company made available to
Purchaser contain a complete summary of all meetings of directors and
shareholders since the time of incorporation.
3.22 Real Property Holding Corporation. The Company is not a real
property holding corporation within the meaning of Code Section 897(c)(2) and
any regulations promulgated thereunder.
3.23 Insurance. The Company has fire and casualty insurance policies
with coverage customary for companies similarly situated to the Company.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser hereby represents and warrants to the Company as follows:
4.1 Requisite Power and Authority. Purchaser is a corporation, duly
organized, validly existing and in good standing under the laws of
Massachusetts. Purchaser has all necessary power and authority under all
applicable provisions of law to execute and deliver this Agreement and the
Related Agreements and to carry out their provisions. All action on the part of
Purchaser and its officers, directors and shareholders required to authorize the
lawful execution and delivery of, and performance of obligations under, this
Agreement and the Related Agreements by Purchaser have been or will be taken
prior to the Closing. Upon their execution and delivery, this Agreement and the
Related Agreements will be valid and binding obligations of Purchaser,
enforceable in accordance with their terms, except (a) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application affecting enforcement of creditors' rights and (b) general
principles of equity that restrict the availability of equitable remedies, and
(c) to the extent that the enforceability of the indemnification provisions of
Section 2.9 of the Registration Rights Agreement may be limited by applicable
laws.
4.2 Investment Representations. Purchaser understands that neither the
Shares nor the Conversion Shares have been registered under the Securities Act.
Purchaser also understands that the Shares are being offered and sold pursuant
to an exemption from registration contained in the Securities Act based in part
upon Purchaser's representations contained in the Agreement. Purchaser hereby
represents and warrants as follows:
(a) Purchaser Bears Economic Risk. Purchaser has substantial
experience in evaluating and investing in private placement transactions of
securities in companies similar to the Company so that it is capable of
evaluating the merits and risks of its investment in the Company and has the
capacity to protect its own interests. Purchaser must bear the economic risk of
this investment indefinitely unless the Shares (or the Conversion Shares) are
registered pursuant to the Securities Act, or an exemption from registration is
available. Purchaser understands that the Company has no present intention of
registering the Shares, the Conversion Shares or any shares of its Common Stock.
Purchaser also understands that there is no assurance that any exemption from
registration under the Securities Act will be available and that, even if
available, such exemption may not allow Purchaser to transfer all or any portion
of the Shares or the Conversion Shares under the circumstances, in the amounts
or at the times Purchaser might propose.
(b) Acquisition for Own Account. Purchaser is acquiring the Shares
and the Conversion Shares for Purchaser's own account for investment only, and
not with a view towards their distribution.
(c) Purchaser Can Protect Its Interest. Purchaser represents that by
reason of its, or of its management's, business or financial experience,
Purchaser has the capacity to protect its own interests in connection with the
transactions contemplated in this Agreement and the Related Agreements. Further,
Purchaser is aware of no publication of any advertisement in connection with the
transactions contemplated in the Agreement.
(d) Accredited Investor. Purchaser represents that it is an
accredited investor within the meaning of Regulation D under the Securities Act.
(e) Company Information. Purchaser has received and read the
Financial Statements and Business Plan and has had an opportunity to discuss the
Company's business, management and financial affairs with directors, officers
and management of the Company and has had the opportunity to review the
Company's operations and facilities. Purchaser has also had the opportunity to
ask questions of and receive answers from, the Company and its management
regarding the terms and conditions of this investment.
(f) Rule 144. Purchaser acknowledges and agrees that the Shares, and,
if issued, the Conversion Shares must be held indefinitely unless they are
subsequently registered under the Securities Act or an exemption from such
registration is available. Purchaser has been advised or is aware of the
provisions of Rule 144 promulgated under the Securities Act as in effect from
time to time, which permits limited resale of shares purchased in a private
placement subject to the satisfaction of certain conditions, including, among
other things: the availability of certain current public information about the
Company, the resale occurring following the required holding period under Rule
144 and the number of shares being sold during any three-month period not
exceeding specified limitations.
4.3 Transfer Restrictions. Purchaser acknowledges and agrees that the
Shares and, if issued, the Conversion Shares are subject to restrictions on
transfer as set forth in the Registration Rights Agreement.
5. CONDITIONS TO CLOSING.
5.1 Conditions to Purchaser's Obligations at the Closing. Purchaser's
obligation to purchase the Shares at the Closing are subject to the
satisfaction, at or prior to the Closing Date, of the following conditions:
(a) Representations and Warranties True; Performance of Obligations.
The representations and warranties made by the Company in Section 3 hereof shall
be true and correct as of the Closing Date with the same force and effect as if
they had been made as of the Closing Date, and the Company shall have performed
all obligations and conditions herein required to be performed or observed by it
on or prior to the Closing.
(b) Consents, Permits, and Waivers. The Company shall have obtained
any and all consents, permits and waivers necessary or appropriate for
consummation of the transactions contemplated by the Agreement and the Related
Agreements (except for such as may be properly obtained subsequent to the
Closing).
(c) Filing of Certificate of Designation. The Certificate of
Designation shall have been filed with the Secretary of State of the State of
Nevada and shall continue to be in full force and effect as of the Closing Date.
(d) Corporate Documents. The Company shall have delivered to
Purchaser or its counsel, copies of all corporate documents of the Company as
Purchaser shall reasonably request.
(e) Reservation of Conversion Shares. The Conversion Shares issuable
upon conversion of the Shares shall have been duly authorized and reserved for
issuance upon such conversion.
(f) Compliance Certificate. The Company shall have delivered to
Purchaser a Compliance Certificate, executed by the President of the Company,
dated the Closing Date, to the effect that the conditions specified in
subsections (a), (b), (c) and (e) of this Section 5.1 have been satisfied.
(g) Registration Rights Agreement. A Registration Rights Agreement
substantially in the form attached hereto as Exhibit B shall have been executed
and delivered by the parties thereto.
(h) Board of Directors. The size of the Company's Board of Directors
shall be at least seven and no more than ten. The Holders of the Series A
Preferred shall be entitled to elect one member of the Company's Board of
Directors.
(i) Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated at the Closing hereby and all
documents and instruments incident to such transactions shall be reasonably
satisfactory in substance and form to Purchaser and its counsel, and Purchaser
and its counsel shall have received all such counterpart originals or certified
or other copies of such documents as they may reasonably request.
(j) Due Diligence. Purchaser shall have completed, to its
satisfaction, its due diligence review of the Company.
(k) Board Approval. Purchaser shall have obtained the necessary
approval from its Board of Directors.
5.2 Conditions to Obligations of the Company. The Company's obligation
to issue and sell the Shares at the Closing is subject to the satisfaction, on
or prior to the Closing, of the following conditions:
(a) Representations and Warranties True. The representations and
warranties in Section 4 made by Purchaser shall be true and correct at the date
of Closing, with the same force and effect as if they had been made on and as of
said date.
(b) Performance of Obligations. Purchaser shall have performed and
complied with all agreements and conditions herein required to be performed or
complied with by it on or before the Closing.
(c) Filing of Certificate of Designation. The Certificate of
Designation shall have been filed with the Secretary of State of the State of
Delaware.
(d) Registration Rights Agreement. A Registration Rights Agreement
substantially in the form attached hereto as Exhibit B shall have been executed
and delivered by Purchaser.
(e) Consents, Permits, and Waivers. The Company shall have obtained
any and all consents, permits and waivers necessary or appropriate for
consummation of the transactions contemplated by the Agreement and the Related
Agreements (except for such as may be properly obtained subsequent to the
Closing).
6. MISCELLANEOUS.
6.1 Governing Law. This Agreement shall be governed in all respects by
the laws of the State of New York.
6.2 Survival. The representations, warranties, covenants and agreements
made herein shall survive any investigation made by Purchaser and the closing of
the transactions contemplated hereby. All statements as to factual matters
contained in any certificate or other instrument delivered by or on behalf of
the Company pursuant hereto in connection with the transactions contemplated
hereby shall be deemed to be representations and warranties by the Company
hereunder solely as of the date of such certificate or instrument.
6.3 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto and shall inure to the benefit of and be enforceable by each
person who shall be a holder of the Shares from time to time.
6.4 Entire Agreement. This Agreement, the Exhibits and Schedules hereto,
the Related Agreements and the other documents delivered pursuant hereto
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof and no party shall be liable or bound to any
other in any manner by any representations, warranties, covenants and agreements
except as specifically set forth herein and therein.
6.5 Severability. In case any provision of the Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
6.6 Amendment and Waiver.
(a) This Agreement may be amended or modified only upon the written
consent of the Company and holders of at least fifty percent (50%) of the Shares
(treated as if converted and including any Conversion Shares into which the
Shares have been converted that have not been sold to the public).
(b) The obligations of the Company and the rights of the holders of
the Shares and the Conversion Shares under the Agreement may be waived only with
the written consent of the holders of at least fifty percent (50%) of the Shares
(treated as if converted and including any Conversion Shares into which the
Shares have been converted that have not been sold to the public).
6.7 Delays or Omissions. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any party, upon any breach,
default or noncompliance by another party under this Agreement, the Related
Agreements or the Certificate of Designation, shall impair any such right, power
or remedy, nor shall it be construed to be a waiver of any such breach, default
or noncompliance, or any acquiescence therein, or of or in any similar breach,
default or noncompliance thereafter occurring. It is further agreed that any
waiver, permit, consent or approval of any kind or character on Purchaser's part
of any breach, default or noncompliance under this Agreement, the Related
Agreements or under the Certificate of Designation or any waiver on such party's
part of any provisions or conditions of the Agreement, the Related Agreements,
or the Certificate of Designation must be in writing and shall be effective only
to the extent specifically set forth in such writing. All remedies, either under
this Agreement, the Related Agreements, the Certificate of Designation, by law,
or otherwise afforded to any party, shall be cumulative and not alternative.
6.8 Notices. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the
party to be notified, (b) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next business
day, (c) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (d) one (1) day after deposit with
a nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent to the Company
at the address as set forth below its name on the signature page hereof and to
Purchaser at the address set forth below its name on the signature page hereof
or at such other address as the Company or Purchaser may designate by ten (10)
days advance written notice to the other parties hereto.
6.9 Expenses. The Company and Purchaser shall pay all of their own costs
and expenses that it incurs with respect to the negotiation, execution, delivery
and performance of the Agreement.
6.10 Attorneys' Fees. In the event that any suit or action is instituted
to enforce any provision in this Agreement, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.
6.11 Titles and Subtitles. The titles of the sections and subsections of
the Agreement are for convenience of reference only and are not to be considered
in construing this Agreement.
6.12 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
6.13 Broker's Fees. Except as set forth on the Schedule of Exceptions,
each party hereto represents and warrants that no agent, broker, investment
banker, person or firm acting on behalf of or under the authority of such party
hereto is or will be entitled to any broker's or finder's fee or any other
commission directly or indirectly in connection with the transactions
contemplated herein. Each party hereto further agrees to indemnify each other
party for any claims, losses or expenses incurred by such other party as a
result of the representation in this Section 6.14 being untrue.
6.14 Public Announcements. Neither party shall make any public
announcement of this transaction without the consent of the other party hereto,
such consent not to be unreasonably withheld.
6.15 Confidentiality. Each party hereto agrees that, except with the
prior written consent of the other party, it shall at all times keep
confidential and not divulge, furnish or make accessible to anyone any
confidential information, knowledge or data concerning or relating to the
business or financial affairs of the other parties to which such party has been
or shall become privy by reason of this Agreement or the Related Agreements,
discussions or negotiations relating to this Agreement or the Related
Agreements, the performance of its obligations hereunder or the ownership of the
Shares purchased hereunder. The provisions of this Section 6.15 shall be in
addition to, and not in substitution for, the provisions of any separate
nondisclosure agreement executed by the parties hereto.
6.16 Pronouns. All pronouns contained herein, and any variations thereof
shall be deemed to refer to the masculine, feminine or neutral, singular or
plural, as to the identity of the parties hereto may require.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed the SERIES A PREFERRED
STOCK PURCHASE AGREEMENT as of the date set forth in the first paragraph hereof.
COMPANY:
BRANDED MEDIA CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------------
Xxxxxx X. Xxxxxx, President
PURCHASER:
THE VANTAGE FUNDS
By: /s/ J. Xxxxxxx Xxxxxxx
---------------------------------------------
J. Xxxxxxx Xxxxxxx, Director of Operations
