SECURITIES PURCHASE AGREEMENT
EXHIBIT 10.16
THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of _______________, 2017, is entered into by and between CUR Holdings, Inc., a Delaware corporation (the “Company”), CÜR Media, Inc., a Delaware corporation (“CUR Media”) and the Buyer(s) set forth on the signature page(s) affixed hereto (individually, a “Buyer” or collectively, the “Buyers”).
WITNESSETH:
WHEREAS, the Company, CÜR Media, a U.S. publicly traded company in the business of developing and commercializing a streaming music experience for listening on the web and mobile devices (the “Music Streaming Business”), and the Buyer(s) are executing and delivering this Agreement in connection with a private placement offering of the Company’s securities (the “Offering”) in reliance upon an exemption from securities registration pursuant to Section 4(a)(2) under the Securities Act of 1933, as amended (the “Securities Act”), and/or Rule 506(b) of Regulation D (“Regulation D”) and/or Regulation S (“Regulation S”), as promulgated by the U.S. Securities and Exchange Commission (the “SEC”) thereunder; and
WHEREAS, the parties desire that, upon the terms and subject to the conditions contained herein, the Company shall sell to the Buyers, as provided herein, and the Buyers shall purchase from the Company, in one or more closings (each, a “Closing”), a minimum of $6,000,000 (the “Minimum Amount”) of units of the Company’s securities (the “Preferred Stock Units”), each Preferred Stock Unit consisting of (a) one (1) share (each a “Unit Share” and, collectively, the “Unit Shares”) of the Company’s Series A Convertible Preferred Stock, $0.0001 par value per share (“Series A Preferred Stock”), and (b) 5-year warrants (each a “Unit Warrant” and, collectively, the “Unit Warrants”) to purchase 6.5087 shares of the Company’s Common Stock (as defined below) (each a “Unit Warrant Share” and, collectively, the “Unit Warrant Shares”), at an exercise price equal to $1.00 per each full share (the “Exercise Price”), at a Preferred Stock Unit purchase price of $5.15 per share (the “Unit Purchase Price”; and the aggregate Unit Purchase Price shall be allocated among the Buyer(s) in the respective amounts set forth on the Buyer Omnibus Signature Page(s), affixed hereto (the “Subscription Amount”); and
WHEREAS, $1,000,000 of the $6,000,000 Minimum Amount shall reflect the assignment and transfer to the Company of (a) a Secured Non-Recourse Promissory Note of Standard Holdings, Inc., a Nevada corporation, in the principal amount of $315,000 (the “Standard Holdings Note”), issued to CUR Holdings, LLC, a New York limited liability company, by Standard Holdings, Inc., and (b) a Convertible Line of Credit Promissory Note of CÜR Media, in the principal amount of $685,000 (the “LOC Note”), issued to the CUR Holdings, LLC by CÜR Media (solely as to the outstanding principal balance due under the LOC Note), both of which notes will be assigned and transferred to the Company in consideration of the purchase of Preferred Stock Units by CUR Holdings, LLC (to the extent the outstanding principal balance on the LOC Note is less than $685,000, CUR Media will draw down the amount representing the difference between $685,000 and the outstanding balance on the LOC Note immediately prior to the Initial Closing (as defined below)); and
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WHEREAS, the Unit Shares shall initially be convertible into shares (the “Series A Conversion Shares”) of the Company’s common stock, $0.0001 par value per share (“Common Stock”), at a conversion rate of 1-for1, subject to adjustment based on the Share Escalation Formula (as defined below), and other standard adjustments (the “Conversion Rate”), and shall have certain other rights and preferences as further set forth in the Certificate of Designation of Series A Convertible Preferred Stock of the Company, substantially in the form of Exhibit A to this Agreement (the “Certificate of Designation”), to be filed with the Secretary of State of the State of Delaware prior to the initial Closing of the Offering (the “Initial Closing”); and
WHEREAS, the Unit Warrants shall initially be exercisable to purchase Unit Warrant Shares at an Exercise Price equal to $1.00 per each full share, subject to adjustment based on the Warrant Escalation Formula (as defined below), and other standard adjustments (the “Exercise Price”), pursuant to the terms and conditions of the form of Warrant, substantially in the form of Exhibit B to this Agreement (the “Warrant”); and
WHEREAS, upon consummation of the Offering, each of the holders of the Preferred Stock Units shall have a right, but not an obligation, to put all, but not less than all, of such holder’s Preferred Stock Units to the Company (the “Put Right”) at a price per Preferred Stock Unit equal to the Unit Purchase Price (the “Put Price”) under certain circumstances defined in a Security Agreement among the Company and the Buyers, substantially in the form of Exhibit C to this Agreement (the “Security Agreement”); and, in order to secure the Company’s obligation to pay the Put Price to any holder of Preferred Stock Units upon such holder’s exercise of its Put Right, each holder of Preferred Stock Units will have a first priority security interest in and to all now owned or hereafter acquired assets and property, real and personal, of the Company and its subsidiaries, including, without limitation, all of the Intellectual Property (as defined below) (the “Company Assets”), such security interest to be senior to all current indebtedness of the Company, pursuant to the terms of the Security Agreement, and (a) pari passu with the other holders of Preferred Stock Units, for up to the amount equal to such holder’s Subscription Amount, and (b) pari passu with the New Note Purchaser (as defined below), for all amounts due to be paid to the New Note Purchaser pursuant to the terms of the New Note (as defined below); and
WHEREAS, the aggregate proceeds from the sale of Preferred Stock Units shall be held in escrow, pending Closing of the purchase and sale of the Preferred Stock Units, pursuant to the terms of the Escrow Agreement, dated September 15, 2017, by and among the Company, the Placement Agent (as defined below), the Buyers, the representative for Buyers introduced to the Company other than by the Placement Agent or any sub-agents of the Placement Agent (the “Subscriber Representative”), and the Escrow Agent (as defined below), a copy of which is attached hereto as Exhibit D (the “Escrow Agreement”); and
WHEREAS, the Company may offer and sell Preferred Stock Units at any time through and including October 31, 2017, subject to a 30-day extension to be mutually agreed to by the Company and the Placement Agent (as defined below) (as such date may be extended, the “Offering Period”); and
WHEREAS, GP Nurmenkari, Inc. (the “Placement Agent”), a Financial Industry Regulatory Authority (“FINRA”) registered broker-dealer, will act as the Company’s non-exclusive Placement Agent, on a reasonable best efforts basis, in connection with up to $3,000,000 (the “Placement Agent Maximum Amount”) of the Preferred Stock Units offered in the Offering; and
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WHEREAS, the Placement Agent will be paid at each Closing (as defined below) a cash commission of 10% of funds raised from Buyers introduced to the Offering by the Placement Agent (the “Placement Agent Fee”), and will receive warrants (“Placement Agent Warrants”) to purchase a number of Preferred Stock Units equal to 10% of the number of Preferred Stock Units sold in the Offering to Buyers introduced to the Offering by the Placement Agent, with a term of five (5) years, at an exercise price per at Preferred Stock Unit of $5.15 (“Placement Agent Units”); and
WHEREAS, any sub-agent of the Placement Agent that introduced or introduces Buyers to the Offering will be entitled to share in the Placement Agent Fee and Placement Agent Warrants attributable to those investors as described above, pursuant to the terms of an executed sub-agent agreement between the sub-agent(s) and the Placement Agent; and
WHEREAS, simultaneously with the Initial Closing, and as a contingency thereto, the holders (the “Secured Noteholders”) of the existing 12% Senior Secured Convertible Promissory Notes (the “Secured Notes”) of CÜR Media will assign, convey, transfer and set over to the Company all of the Secured Noteholders’ right, title, interest and obligations in, to and under the Secured Notes, and all claims, suits, causes of action and any other rights thereunder, in exchange for units of securities of the Company, at an exchange rate of $2.00 of principal and interest due under said Secured Note per unit (the “Secured Note Conversion Units”), each Secured Note Conversion Unit consisting of (a) one (1) share (each a “Secured Note Conversion Unit Share” and, collectively, the “Secured Note Conversion Unit Shares”) of the Company’s Common Stock, and (b) a 5-year warrant (each a “Secured Note Conversion Unit Warrant” and, collectively, the “Secured Note Conversion Unit Warrants”) to purchase one (1) share of the Company’s Common Stock for every Secured Note Conversion Unit Share received upon exchange, at an exercise price equal to $1.00 per share (the “Secured Note Conversion Unit Warrant Shares”) (pursuant to the terms of the Secured Convertible Notes, the Secured Convertible Notes were set to convert into Secured Note Conversion Units od CUR Media at a price per Secured Note Conversion Unit of the lesser of (a) 80% of the price per share of the equity securities sold in the Offering, or (b) $2.00); and
WHEREAS, simultaneously with the Initial Closing, the Company shall consummate a closing of its offering (the “New Note Offering”) of a 12% Senior Secured Promissory Note of the Company, in the principal amount of $2,500,000, with a term of twelve (12) months (the “New Note”), at a purchase price of 100% (par), and at the closing of the New Note Offering, the purchaser of the New Note (the “New Note Purchaser”) shall receive 10-year warrants to purchase 1,000,000 shares (the “Warrant Shares”) of the Company’s Common Stock, at an exercise price of $0.0001 per share (the “Warrants”); and
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WHEREAS, the Company is negotiating a transaction with CÜR Media, pursuant to which, under certain circumstances, the Company will either (a) merge with and into CÜR Media (the “Merger”), or (b) acquire the assets and liabilities of CÜR Media related to the Music Streaming Business (the “Asset Acquisition” and, together with the Merger, the “Combination Transaction”), as further described in the Term Sheet, dated September 11, 2017, by and between the Company and CÜR Media, a copy of which is attached hereto as Exhibit E (the “Term Sheet”), with the intention that, following the Combination Transaction, the Buyers will hold (a) shares of Series A convertible preferred stock of the combined company resulting from the Combination Transaction (the “Combined Company”) in an aggregate amount equal to 16%, assuming the $6,000,000 Minimum Amount is raised in the Offering (the “Share Percentage Interest”), of the Combined Company’s outstanding shares of common stock (including the full number of Secured Note Conversion Shares and Unsecured Note Conversion Shares (as defined below) issued upon conversion of all amounts due under CÜR Media’s issued and outstanding Secured Convertible Notes and Unsecured Notes (as defined below), respectively, but not including the exercise of any of CÜR Media’s outstanding warrants or stock options), and (b) warrants to purchase shares of common stock of the Combined Company in an aggregate amount equal to 16%, assuming the $6,000,000 Minimum Amount is raised in the Offering (the “Warrant Percentage Interest”), of all of the Combined Company’s outstanding warrants and stock options (including the full number of Secured Note Conversion Warrants and Unsecured Note Conversion Warrants (as defined below) issued upon conversion of all amounts due under CÜR Media’s issued and outstanding Secured Convertible Notes and Unsecured Convertible Notes (as defined below), respectively; and
WHEREAS, prior to the Initial Closing, and as a contingency thereto, shareholders representing at least fifty-one percent (51%) of the voting capital stock of each of the Company and CÜR Media will have entered into voting agreements pursuant to which they will have agreed to vote in favor of the Merger and/or Acquisition, as applicable; and
WHEREAS, simultaneously with the each Closing, all of the Buyers purchasing Preferred Stock Units in the applicable Closing of the Offering will sign a Voting Agreement agreeing to vote in favor of the Merger and/or Acquisition, as applicable, substantially in the form of Exhibit F to this Agreement (the “Voting Agreement”); and
WHEREAS, simultaneously with, and as a contingency to, the Combination Transaction, the holders of all of CÜR Media’s existing 12% Unsecured Convertible Promissory Notes (the “Unsecured Convertible Notes”) will convert the principal and any accrued and unpaid interest due under the Unsecured Convertible Notes into units of the Combined Company’s securities (the “Unsecured Note Conversion Units”), each Unsecured Note Conversion Unit consisting of (a) one (1) share (each a “Unsecured Note Conversion Unit Share” and, collectively, the “Unsecured Note Conversion Unit Shares”) of the Combined Company’s common stock, and (b) a 5-year warrant (each a “Unsecured Note Conversion Unit Warrant” and, collectively, the “Unsecured Note Conversion Unit Warrants”) to purchase one (1) share of the Combined Company’s common stock for every Unsecured Note Conversion Unit Share received upon conversion, at an exercise price equal to $1.00 per share (the “Unsecured Note Conversion Unit Warrant Shares”) (pursuant to the terms of the Unsecured Convertible Notes, the Unsecured Convertible Notes will convert into Unsecured Note Conversion Units at a price per Unsecured Note Conversion Unit of the lesser of (a) 80% of the price per share of the equity securities sold in the Offering, or (b) $2.00); and
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WHEREAS, in the event of the consummation of the Merger, CÜR Media has agreed to provide the Buyers with registration rights with respect to securities of CÜR Media they may receive in exchange for their Series A Conversion Shares and Unit Warrant Shares, pursuant to the terms of a Registration Rights Agreement among the CUR Media and the Buyers, the New Note Purchaser, and the holders of Conversion Units, substantially in the form of Exhibit G to this Agreement (the “Registration Rights Agreement”).
NOW, THEREFORE, in consideration of the mutual covenants and other agreements contained in this Agreement the Company and the Buyer(s) hereby agree as follows:
1. PURCHASE AND SALE OF SHARES.
(a) Purchase of Preferred Stock Units. Subject to the satisfaction (or waiver) of the terms and conditions of this Agreement, each Buyer agrees, severally and not jointly, to purchase at Closing (as defined below), and the Company agrees to sell and issue to each Buyer, severally and not jointly, at Closing, such number of Preferred Stock Units as is set forth on the Buyer Omnibus Signature Page, attached hereto as Annex A, for each Buyer affixed hereto. Upon a Buyer’s execution of this Agreement on the Buyer Omnibus Signature Page and Buyer’s completion of the Investor Certification, attached hereto as Annex B, the Investor Profile, attached hereto as Annex C, the Anti-Money Laundering Information Form, attached hereto as Annex D, and if applicable, the Wire Transfer Authorization (each attached hereto), the Buyer shall wire transfer the Subscription Amount set forth on its Buyer Omnibus Signature Page, in same-day funds, in accordance with the instructions set forth immediately below, which Subscription Amount shall be held in escrow pursuant to the terms of the Escrow Agreement and disbursed in accordance therewith.
Wire Instructions
Bank Name: |
PNC Bank |
Bank Address: |
000 Xxxxxxxx Xxxxxx Xxxxxxxxxx, XX 00000 |
ABA/Routing #: |
000000000 |
SWIFT Code: |
XXXXXX00 |
Account Name: |
Delaware Trust Company |
Account Number: |
5605012373 |
FFC: |
CUR HOLDINGS, INC.; Acct# 79-3121 |
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MUST INCLUDE THE BUYER’S NAME |
(b) Closing Date. The Initial Closing of the purchase and sale of the Preferred Stock Units shall take place at 10:00 a.m. New York time on or before the fifth (5th) business day following the satisfaction of the conditions to the Initial Closing set forth herein and in Sections 6 and 7 below (or such later date as is mutually agreed to by the Company and the Buyer(s)). There may be additional Closings of the Offering, on or before the fifth (5th) business day following the satisfaction of the conditions to each additional Closing set forth herein and in Sections 6 and 7 below (or such later date as is mutually agreed to by the Company and the Buyer(s)), subject to prior termination (the date of any such Closing is hereinafter referred to as a “Closing Date”). Each Closing shall occur on a Closing Date at the offices of CKR Law LLP, 1330 Avenue of the Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (or such other place as is mutually agreed to by the Company and the Buyer(s)). Preferred Stock Units may be offered and sold through the end of the Offering Period.
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(c) Escrow Arrangements; Form of Payment. Upon execution hereof by the Buyer and pending the Closing, the Unit Purchase Price shall be deposited in a non-interest bearing escrow account with Delaware Trust Company, as escrow agent (the “Escrow Agent”), pursuant to the terms of the Escrow Agreement. Subject to the satisfaction of the terms and conditions of this Agreement, (i) on the Closing Date, the Escrow Agent shall deliver to the Company in accordance with the terms of the Escrow Agreement the Unit Purchase Price for the Preferred Stock Units to be issued and sold to the Buyer(s) on such Closing Date, and (ii) promptly after the Closing Date, but in no instance more than seven (7) business days after the Closing, the Company shall deliver to the Buyer(s), (a) stock certificates representing the number of Unit Shares and (b) warrant certificates representing the number of Unit Warrants, purchased by the Buyer(s) on the applicable Closing Date, duly executed on behalf of the Company.
(d) Acceptance of Subscriptions. Each Buyer understands and agrees that the Company, in its sole and absolute discretion, reserves the right to accept or reject this or any other subscription for Preferred Stock Units, in whole or in part, notwithstanding prior receipt by the Buyer of notice of acceptance of this subscription. If the subscription is rejected in whole or the Offering of the Preferred Stock Units is terminated, all funds received by the Escrow Agent from the Buyer will be promptly returned without interest or offset, and this subscription shall thereafter be of no further force or effect. If this subscription is rejected in part, the funds for the rejected portion of this subscription will be returned without interest or offset, and this subscription will continue in full force and effect to the extend this subscription was accepted.
(e) Offering Period. The Company may offer and sell Preferred Stock Units at any time through the Offering Period.
(f) Offering Amount. The Company may offer and sell more than the Minimum Amount of Preferred Stock Units in its sole discretion, in which case the Share Percentage Interest and Warrant Percentage Interest will increase accordingly. The Placement Agent Maximum Amount may be increased upon mutual approval by the Company and the Placement Agent.
2. BUYER’S REPRESENTATIONS AND WARRANTIES.
Each Buyer represents and warrants, severally and not jointly, as to such Buyer, that:
(a) Investment Purpose. Each Buyer is acquiring the Preferred Stock Units, including the Unit Shares and the Unit Warrants, and, upon conversion of the Unit Shares or exercise of the Unit Warrants, the Buyer will acquire the Series A Conversion Shares or the Unit Warrant Shares, respectively (the Preferred Stock Units, Unit Shares, Unit Warrants, Series A Conversion Shares and Unit Warrant Shares being hereinafter referred to collectively as the “Securities”), for its own account for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted under the Securities Act; provided, however, that by making the representations herein, such Buyer reserves the right to dispose of the Securities at any time in accordance with or pursuant to an effective registration statement covering such Securities, or an available exemption under the Securities Act. The Buyer agrees not to sell, hypothecate or otherwise transfer the Securities unless such Securities are registered under the federal and applicable state securities laws or unless, in the opinion of counsel satisfactory to the Company, an exemption from such law is available, and subject to any restrictions set forth in the Certificate of Designation.
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(b) Residence of Buyer. Each Buyer resides in the jurisdiction set forth on the Buyer Omnibus Signature Page affixed hereto.
(c) Accredited Investor Status. The Buyer meets the requirements of at least one of the suitability standards for an “Accredited Investor” as that term is defined in Rule 501(a)(3) of Regulation D, for the reason set forth on the Investor Certification attached hereto as Annex B, or is not a “U.S. Person” as that term is defined in Rule 902(k) of Regulation S.
(d) Non-US Person. If a Buyer is not a person in the United States or a U.S. Person (as defined in Rule 902(k) of Regulation S) or is not purchasing the Preferred Stock Units, Unit Shares and Unit Warrants on behalf of a person in the United States or a U.S. Person:
(i) neither the Buyer nor any disclosed principal is a U.S. Person nor are they subscribing for the Preferred Stock Units, Unit Shares and Unit Warrants for the account of a U.S. Person or for resale in the United States and the Buyer confirms that the Preferred Stock Units, Unit Shares and Unit Warrants have not been offered to the Buyer in the United States and that this Agreement has not been signed in the United States;
(ii) the Buyer acknowledges that the Preferred Stock Units, Unit Shares and Unit Warrants have not been registered under the Securities Act and may not be offered or sold in the United States or to a U.S. Person unless the securities are registered under the U.S. Securities Act and all applicable state securities laws or an exemption from such registration requirements is available, and further agrees that hedging transactions involving such securities may not be conducted unless in compliance with the U.S. Securities Act;
(iii) the Buyer and if applicable, the disclosed principal for whom the Buyer is acting, understands that the Company is the seller of the Preferred Stock Units, Unit Shares, Unit Warrants, Series A Conversion Shares and Unit Warrant Shares, and that, for purposes of Regulation S, a “distributor” is any underwriter, dealer or other person who participates pursuant to a contractual arrangement in the distribution of securities sold in reliance on Regulation S and that an “affiliate” is any partner, officer, director or any person directly or indirectly controlling, controlled by or under common control with any person in question. Except as otherwise permitted by Regulation S, the Buyer and if applicable, the disclosed principal for whom the Buyer is acting, agrees that it will not, during a one-year distribution compliance period, act as a distributor, either directly or through any affiliate, or sell, transfer, hypothecate or otherwise convey the Preferred Stock Units, Unit Shares, Unit Warrants, Series A Conversion Shares or Unit Warrant Shares other than to a non-U.S. Person;
(iv) the Buyer and if applicable, the disclosed principal for whom the Buyer is acting, acknowledges and understands that in the event the Preferred Stock Units, Unit Shares, or Unit Warrants are offered, sold or otherwise transferred by the Buyer or if applicable, the disclosed principal for whom the Buyer is acting, to a non-U.S Person prior to the expiration of a one year distribution compliance period, the purchaser or transferee must agree not to resell such securities except in accordance with the provisions of Regulation S, pursuant to registration under the Securities Act, or pursuant to an available exemption from registration; and must further agree not to engage in hedging transactions with regard to such securities unless in compliance with the Securities Act; and
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(v) neither the Buyer nor any disclosed principal will offer, sell or otherwise dispose of the Preferred Stock Units, Unit Shares, Unit Warrants, Series A Conversion Shares Unit Warrant Shares in the United States or to a U.S. Person unless (A) the Company has consented to such offer, sale or disposition and such offer, sale or disposition is made in accordance with an exemption from the registration requirements under the Securities Act and the securities laws of all applicable states of the United States or, (B) the SEC has declared effective a registration statement in respect of such securities.
(e) Accredited Investor Qualifications. The Buyer (i) if a natural person, represents that the Buyer has reached the age of 21 and has full power and authority to execute and deliver this Agreement and all other related agreements or certificates and to carry out the provisions hereof and thereof; (ii) if a corporation, partnership, or limited liability company or partnership, or association, joint stock company, trust, unincorporated organization or other entity, represents that such entity was not formed for the specific purpose of acquiring the Preferred Stock Units, Unit Shares and Unit Warrants, such entity is duly organized, validly existing and in good standing under the laws of the state of its organization, the consummation of the transactions contemplated hereby is authorized by, and will not result in a violation of state law or its charter or other organizational documents, such entity has full power and authority to execute and deliver this Agreement and all other related agreements or certificates and to carry out the provisions hereof and thereof and to purchase and hold the Preferred Stock Units, Unit Shares and Unit Warrants, the execution and delivery of this Agreement has been duly authorized by all necessary action, this Agreement has been duly executed and delivered on behalf of such entity and is a legal, valid and binding obligation of such entity; or (iii) if executing this Agreement in a representative or fiduciary capacity, represents that it has full power and authority to execute and deliver this Agreement in such capacity and on behalf of the subscribing individual, xxxx, partnership, trust, estate, corporation, or limited liability company or partnership, or other entity for whom the Buyer is executing this Agreement, and such individual, partnership, xxxx, trust, estate, corporation, or limited liability company or partnership, or other entity has full right and power to perform pursuant to this Agreement and make an investment in the Company, and represents that this Agreement constitutes a legal, valid and binding obligation of such entity. The execution and delivery of this Agreement will not violate or be in conflict with any order, judgment, injunction, agreement or controlling document to which the Buyer is a party or by which it is bound.
(f) Buyer Relationship with Brokers. The Buyer’s substantive relationship with a broker, if any, for the transactions contemplated hereby, or subagent thereof (collectively, “Brokers”), through which the Buyer may be subscribing for the Preferred Stock Units, Unit Shares and Unit Warrants predates such Broker’s contact with the Buyer regarding an investment in the Preferred Stock Units, Unit Shares and Unit Warrants.
(g) Solicitation. The Buyer is unaware of, is in no way relying on, and did not become aware of the offering of the Preferred Stock Units, Unit Shares and Unit Warrants through or as a result of, any form of general solicitation or general advertising including, without limitation, any article, notice, advertisement or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, in connection with the offering and sale of the Preferred Stock Units, Unit Shares and Unit Warrants and is not subscribing for the Preferred Stock Units, Unit Shares and Unit Warrants and did not become aware of the offering of the Preferred Stock Units, Unit Shares and Unit Warrants through or as a result of any seminar or meeting to which the Buyer was invited by, or any solicitation of a subscription by, a person not previously known to the Buyer in connection with investments in securities generally.
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(h) Brokerage Fees. The Buyer has taken no action that would give rise to any claim by any person for brokerage commissions, finders’ fees or the like relating to this Agreement or the transaction contemplated hereby.
(i) Buyer’s Advisors. The Buyer and the Buyer’s attorney, accountant, purchaser representative and/or tax advisor, if any (collectively, the “Advisors”), as the case may be, has such knowledge and experience in financial, tax, and business matters, and, in particular, investments in securities, so as to enable it to utilize the information made available to it in connection with the Preferred Stock Units, Unit Shares and Unit Warrants to evaluate the merits and risks of an investment in the Preferred Stock Units, Unit Shares and Unit Warrants and the Company and to make an informed investment decision with respect thereto.
(j) Buyer Liquidity. Each Buyer has adequate means of providing for such Buyer’s current financial needs and foreseeable contingencies and has no need for liquidity of its investment in the Preferred Stock Units, Unit Shares and Unit Warrants for an indefinite period of time, and after purchasing the Preferred Stock Units, Unit Shares and Unit Warrants the Buyer will be able to provide for any foreseeable current needs and possible personal contingencies. The Buyer must bear and acknowledges the substantial economic risks of the investment in the Preferred Stock Units, Unit Shares and Unit Warrants including the risk of illiquidity and the risk of a complete loss of this investment.
(k) High Risk Investment. The Buyer is aware that an investment in the Preferred Stock Units, Unit Shares and Unit Warrants, and upon conversion of the Unit Shares or exercise of the Unit Warrants, in the Series A Conversion Shares or Unit Warrant Shares, respectively, involves a number of very significant risks and has carefully researched and reviewed and understands the risks of, and other considerations relating to, the purchase of the Preferred Stock Units, Unit Shares and Unit Warrants, and upon conversion of the Unit Shares or exercise of the Unit Warrants, the Series A Conversion Shares or Unit Warrant Shares, respectively.
(l) Reliance on Exemptions. Each Buyer understands that the Preferred Stock Units, Unit Shares and Unit Warrants are being offered and sold to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and such Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of such Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of such Buyer to acquire the Securities.
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(m) Information. Each Buyer and its Advisors have been furnished with all documents and materials relating to the business, finances and operations of the Company and CUR Media and its subsidiaries and information that Buyer requested and deemed material to making an informed investment decision regarding Buyer’s purchase of the Preferred Stock Units, Unit Shares, Unit Warrants and, upon conversion of the Unit Shares or exercise of the Unit Warrants, the Series A Conversion Shares or Unit Warrant Shares, respectively. Each Buyer and its Advisors have been afforded the opportunity to review such documents and materials, as well as the CÜR Media’s SEC Filings, as such term is defined below (hard copies of which were made available to the Buyer upon request to the CÜR Media or were otherwise accessible to the Buyer via the SEC’s XXXXX system), and the information contained therein, including the description of the risks and uncertainties that could affect CÜR Media’s business appearing in the section captioned "Risk Factors" in CÜR Media’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, which CÜR Media’s filed with the SEC on April 14, 2016, as updated in subsequent filings CÜR Media has made with the SEC. Each Buyer and its Advisors have been afforded the opportunity to ask questions of the Company and CÜR Media and their management. Each Buyer understands that such discussions, as well as any written information provided by the Company and CÜR Media, were intended to describe the aspects of the Company’s and CUR Media’s businesses and prospects which the Company and CÜR Media believe to be material, respectively, but were not necessarily a thorough or exhaustive description, and except as expressly set forth in this Agreement, the Company and CÜR Media make no representations or warranties with respect to the completeness of such information and make no representations or warranties of any kind with respect to any information provided by any entity other than the Company and CUR Media, as applicable. Some of such information may include projections as to the future performance of the Company and CÜR Media and its subsidiaries, which projections may not be realized, may be based on assumptions which may not be correct and may be subject to numerous factors beyond the Company’s and CÜR Media’s and its subsidiaries’ control, as applicable. Additionally, the Buyer understands and represents that he is purchasing the Preferred Stock Units, Unit Shares and Unit Warrants, notwithstanding the fact that the Company and CÜR Media and its subsidiaries may disclose in the future certain material information the Buyer has not received, including the financial results of the Company CÜR Media and its subsidiaries for their current fiscal quarters. Neither such inquiries, nor any other due diligence investigations conducted by such Buyer or its Advisors, shall modify, amend or affect such Buyer’s right to rely on the Company’s and CÜR Media’s representations and warranties contained in Section 3 and 4 below, respectively. Each Buyer has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of the Preferred Stock Units, Unit Shares and Unit Warrants.
(n) No Other Representations or Information. In evaluating the suitability of an investment in the Preferred Stock Units, Unit Shares and Unit Warrants, and if applicable, upon conversion of the Unit Shares or exercise of the Unit Warrants, the Series A Conversion Shares or Unit Warrant Shares, respectively, the Buyer has not relied upon any representation or information (oral or written) with respect to the Company or CÜR Media or its subsidiaries, or otherwise, other than as stated in this Agreement. No oral or written representations have been made, or oral or written information furnished, to the Buyer or its Advisors, if any, in connection with the offering of the Preferred Stock Units, Unit Shares and Unit Warrants.
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(o) No Governmental Review. Each Buyer understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Preferred Stock Units, Unit Shares or Unit Warrants (or upon conversion of the Unit Shares or exercise of the Unit Warrants, the Series A Conversion Shares or Unit Warrant Shares, respectively), or the fairness or suitability of the investment in the Preferred Stock Units, Unit Shares or Unit Warrants (or upon conversion of the Unit Shares or exercise of the Unit Warrants, the Series A Conversion Shares or Unit Warrant Shares, respectively), nor have such authorities passed upon or endorsed the merits of the offering of the Preferred Stock Units, Unit Shares or Unit Warrants (or upon conversion of the Unit Shares or exercise of the Unit Warrants, the Series A Conversion Shares or Unit Warrant Shares, respectively).
(p) Transfer or Resale. Each Buyer understands that: (i) the Preferred Stock Units, Unit Shares and Unit Warrants and, upon conversion of the Unit Shares or exercise of the Unit Warrants, the Series A Conversion Shares or Unit Warrant Shares, respectively, have not been and may not be registered under the Securities Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, or (B) such Buyer shall have delivered to the Company an opinion of counsel, in a generally acceptable form, to the effect that such securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration requirements; (ii) any sale of such securities made in reliance on Rule 144 under the Securities Act (or a successor rule thereto) (“Rule 144”) may be made only in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of such securities under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the Securities Act) may require compliance with some other exemption under the Securities Act or the rules and regulations of the SEC thereunder; and (iii) the Company is not, and except as otherwise set forth in this Agreement and the Registration Rights Agreement, no other person is, under any obligation to register such securities under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder. The Company reserves the right to place stop transfer instructions against the certificates for the Preferred Stock Units, Unit Shares and Unit Warrants and, upon conversion of the Unit Shares or exercise of the Unit Warrants, the Series A Conversion Shares or Unit Warrant Shares, respectively to the extent specifically set forth under this Agreement. There can be no assurance that there will be any market or resale for the Preferred Stock Units, Unit Shares or Unit Warrants (or upon conversion of the Unit Shares or exercise of the Unit Warrants, the Series A Conversion Shares or Unit Warrant Shares, respectively), nor can there be any assurance that the Preferred Stock Units, Unit Shares or Unit Warrants (or upon conversion of the Unit Shares or exercise of the Unit Warrants, the Series A Conversion Shares or Unit Warrant Shares, respectively) will be freely transferable at any time in the foreseeable future.
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(q) Legends. Each Buyer understands that the certificates or other instruments representing the Preferred Stock Units, Unit Shares and Unit Warrants (and upon conversion of the Unit Shares or exercise of the Unit Warrants, the Series A Conversion Shares or Unit Warrant Shares, respectively) shall bear a restrictive legend in substantially the following form (and a stop transfer order may be placed against transfer of such stock certificates):
For U.S. Persons:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (C) IN COMPLIANCE WITH RULE 144 OR 144A THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, (D) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, OR (E) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS, AND THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE COMPANY AN OPINION OF COUNSEL OR OTHER EVIDENCE OF EXEMPTION, IN EITHER CASE REASONABLY SATISFACTORY TO THE COMPANY. HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.
For Non-U.S. Persons:
THESE SECURITIES WERE ISSUED IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED IN REGULATION S) PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”). ACCORDINGLY, NONE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD IN THE UNITED STATES OR, DIRECTLY OR INDIRECTLY, TO U.S. PERSONS EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT, AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN ACCORDANCE WITH THE 1933 ACT.
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The legend set forth above shall be removed and the Company, within three (3) business days, shall issue a certificate without such legend to the holder of the Preferred Stock Units, Unit Shares and Unit Warrants (and upon conversion of the Unit Shares or exercise of the Unit Warrants, the Series A Conversion Shares or Unit Warrant Shares, respectively) upon which it is stamped, if, unless otherwise required by state securities laws, (i) the Buyer or its broker make the necessary representations and warranties to the transfer agent for the Common Stock that it has complied with the prospectus delivery requirements in connection with a sale transaction, provided the Preferred Stock Units, Unit Shares and Unit Warrants (and upon conversion of the Unit Shares or exercise of the Unit Warrants, the Series A Conversion Shares or Unit Warrant Shares, respectively) are registered under the Securities Act or (ii) in connection with a sale transaction, after such holder provides the Company with an opinion of counsel satisfactory to the Company, which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale, assignment or transfer of the Preferred Stock Units, Unit Shares and Unit Warrants (or and upon conversion of the Unit Shares or exercise of the Unit Warrants, the Series A Conversion Shares or Unit Warrant Shares, respectively) may be made without registration under the Securities Act.
(r) Organization and Standing of Buyer. If the Buyer is an entity, it is duly incorporated or organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization. If the Buyer is an individual, he or she is at least the greater of (a) eighteen (18) years of age or (b) the age of legal majority in his or her jurisdiction of residence.
(s) Authorization, Enforcement. The Buyer has the requisite power and authority to enter into and perform under this Agreement, the Certificate of Designation, the Warrants, the Security Agreement, the Escrow Agreement, the Voting Agreement and the Registration Rights Agreement (collectively, the “Transaction Documents”) and to purchase the Preferred Stock Units, Unit Shares and Unit Warrants being sold to it hereunder. The execution, delivery and performance of this Agreement and the Transaction Documents by such Buyer and the consummation by Buyer of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate or partnership action, and no further consent or authorization of such Buyer or Buyer’s Board of Directors, stockholders, partners, members, as the case may be, is required. This Agreement and the other Transaction Documents (to the extent the Buyer is party thereto) have been duly authorized, executed and delivered by such Buyer and upon execution of this Agreement and the Transaction Documents by the other parties hereto and thereto, constitute, or shall constitute when executed and delivered, a valid and binding obligation of such Buyer enforceable against such Buyer in accordance with the terms hereof and thereof, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.
(t) No Conflicts. The execution, delivery and performance of this Agreement and the other Transaction Documents and the consummation by such Buyer of the transactions contemplated hereby and thereby or relating hereto do not and will not (i) if the Buyer is not an individual, result in a violation of such Buyer’s charter documents or bylaws or other organizational documents or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of any agreement, indenture or instrument or obligation to which such Buyer is a party or by which its properties or assets are bound, or result in a violation of any law, rule, or regulation, or any order, judgment or decree of any court or governmental agency applicable to such Buyer or its properties (except for such conflicts, defaults and violations as would not, individually or in the aggregate, have a material adverse effect on such Buyer). Such Buyer is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under this Agreement and the other Transaction Documents or to purchase the Preferred Stock Units, Unit Shares and Unit Warrants in accordance with the terms hereof, provided that for purposes of the representation made in this sentence, such Buyer is assuming and relying upon the accuracy of the relevant representations and agreements of the Company and CÜR Media herein.
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(u) Receipt of Documents. Each Buyer, its counsel and/or its Advisors have received and read in their entirety: (i) this Agreement and each representation, warranty and covenant set forth herein; and (ii) all due diligence and other information necessary to verify the accuracy and completeness of such representations, warranties and covenants; each Buyer has received answers to all questions such Buyer submitted to the Company and CÜR Media regarding an investment in the Company; and each Buyer has relied on the information contained therein and has not been furnished any other documents, literature, memorandum or prospectus.
(v) Status as a Former Shell Company. Each Buyer understands that CÜR Media is a former “shell company” as such term is defined in Rule 12b-2 under the Exchange Act. CÜR Media ceased to be a “shell company” on January 28, 2014, and filed Form 10 type information under cover of Form 8-K on February 3, 2014. Pursuant to Rule 144(i), securities issued by a current or former shell company (such as the Securities) that otherwise meet the holding period and other requirements of Rule 144 nevertheless cannot be sold in reliance on Rule 144 until one year after such company (a) is no longer a shell company; and (b) has filed current “Form 10 information” (as defined in Rule 144(i)) with the SEC reflecting that it is no longer a shell company, and provided that at the time of a proposed sale pursuant to Rule 144, such company is subject to the reporting requirements of section 13 or 15(d) of the Exchange Act and has filed all reports and other materials required to be filed by section 13 or 15(d) of the Exchange Act, as applicable, during the preceding 12 months (or for such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports. As a result, the restrictive legends on certificates for the securities cannot be removed except in connection with an actual sale meeting the foregoing requirements or pursuant to an effective registration statement.
(w) Trading Activities. The Buyer’s trading activities with respect to the Company’s and/or CÜR Media’s capital stock shall be in compliance with all applicable federal and state securities laws, rules and regulations and the rules and regulations of the principal market on which the Company’s and/or CÜR Media’s capital stock is listed or traded, as applicable. Neither the Buyer nor its affiliates has an open short position in the Company’s and/or CÜR Media’s capital stock, as applicable, and, except as set forth below, the Buyer shall not, and shall not cause any of its affiliates under common control with the Buyer, to engage in any short sale as defined in any applicable SEC or Financial Industry Regulatory Authority (FINRA) rules on any hedging transactions with respect to the Company’s and/or CÜR Media’s capital stock until the earlier to occur of (i) the third anniversary of the Closing Date, or (ii) the Buyers no longer own the Company’s and/or CÜR Media’s capital stock. Without limiting the foregoing, the Buyer agrees not to engage in any naked short transactions in excess of the amount of shares owned (or an offsetting long position) by the Buyer.
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(x) Regulation FD. Each Buyer acknowledges and agrees that certain of the information received by it in connection with the transactions contemplated by this Agreement is of a confidential nature and may be regarded as material non-public information under Regulation FD promulgated by the SEC and that such information has been furnished to the Buyer for the sole purpose of enabling the Buyer to consider and evaluate an investment in the Preferred Stock Units, Unit Shares and Unit Warrants. The Buyer agrees that it will treat such information in a confidential manner, will not use such information for any purpose other than evaluating an investment in the Preferred Stock Units, Unit Shares and Unit Warrants, will not, directly or indirectly, trade or permit the Buyer’s agents, representatives or affiliates to trade in any securities of the Company or CÜR Media while in possession of such information and will not, directly or indirectly, disclose or permit the Buyer’s agents, representatives or affiliates to disclose any of such information without the Company’s or CÜR Media’s prior written consent, as applicable. The Buyer shall make its agents, affiliates and representatives aware of the confidential nature of the information contained herein and the terms of this section including the Buyer’s agreement to not disclose such information, to not trade in the Company’s or CÜR Media’s securities, as applicable, while in the possession of such information, and to be responsible for any disclosure or other improper use of such information by such agents, affiliates or representatives. Likewise, without the Company’s or CÜR Media’s prior written consent, as applicable, the Buyer will not, directly or indirectly, make any statements, public announcements or other release or provision of information in any form to any trade publication, to the press or to any other person or entity whose primary business is or includes the publication or dissemination of information related to the transactions contemplated by this Agreement.
(y) No Legal Advice from the Company or CÜR Media. Each Buyer acknowledges that it had the opportunity to review this Agreement and the transactions contemplated by this Agreement with its own legal counsel and investment and tax Advisors. Each Buyer is relying solely on such Advisors and not on any statements or representations of the Company or CÜR Media, or any of their employees, representatives or agents for legal, tax, economic and related considerations or investment advice with respect to this investment, the transactions contemplated by this Agreement or the securities laws of any jurisdiction.
(z) No Group Participation. Each Buyer and its affiliates is not a member of any group, nor is any Buyer acting in concert with any other person, including any other Buyer, with respect to its acquisition of the Preferred Stock Units, Unit Shares and Unit Warrants (and upon conversion of the Unit Shares or exercise of the Unit Warrants, the Series A Conversion Shares or Unit Warrant Shares, respectively).
(aa) Reliance. Any information which the Buyer has heretofore furnished or is furnishing herewith to the Company or any Broker is complete and accurate and may be relied upon by the Company and any Broker in determining the availability of an exemption from registration under U.S. federal and state securities laws in connection with the offering of securities as described in this Agreement and the related summary term sheet and transmittal letter, if any. The Buyer further represents and warrants that it will notify and supply corrective information to the Company immediately upon the occurrence of any change therein occurring prior to the Company’s issuance of the Preferred Stock Units, Unit Shares and Unit Warrants. Within five (5) days after receipt of a request from the Company or any Broker, the Buyer will provide such information and deliver such documents as may reasonably be necessary to comply with any and all laws and ordinances to which the Company or any Broker is subject.
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(bb) (For ERISA plan Buyers only). The fiduciary of the ERISA plan represents that such fiduciary has been informed of and understands the Company’s investment objectives, policies and strategies, and that the decision to invest “plan assets” (as such term is defined in ERISA) in the Company is consistent with the provisions of ERISA that require diversification of plan assets and impose other fiduciary responsibilities. The Buyer fiduciary or Plan (a) is responsible for the decision to invest in the Company; (b) is independent of the Company or any of its affiliates; (c) is qualified to make such investment decision; and (d) in making such decision, the Buyer fiduciary or Plan has not relied primarily on any advice or recommendation of the Company or any of its affiliates;
(cc) Anti-Money Laundering; OFAC.
[The Buyer should check the Office of Foreign Assets Control (“OFAC”) website at xxxx://xxx.xxxxx.xxx/xxxx before making the following representations.] The Buyer represents that the amounts invested by it in the Company in the Preferred Stock Units, Unit Shares and Unit Warrants were not and are not directly or indirectly derived from activities that contravene U.S. federal or state or international laws and regulations, including anti-money laundering laws and regulations. U.S. federal regulations and Executive Orders administered by OFAC prohibit, among other things, the engagement in transactions with, and the provision of services to, certain foreign countries, territories, entities and individuals. The lists of OFAC prohibited countries, territories, persons and entities can be found on the OFAC website at xxxx://xxx.xxxxx.xxx/xxxx. In addition, the programs administered by OFAC (the “OFAC Programs”) prohibit dealing with individuals[1] or entities in certain countries regardless of whether such individuals or entities appear on the OFAC lists;
To the best of the Buyer’s knowledge, none of: (1) the Buyer; (2) any person controlling or controlled by the Buyer; (3) if the Buyer is a privately-held entity, any person having a beneficial interest in the Buyer; or (4) any person for whom the Buyer is acting as agent or nominee in connection with this investment is a country, territory, individual or entity named on an OFAC list, or a person or entity prohibited under the OFAC Programs. Please be advised that the Company may not accept any amounts from a prospective investor if such prospective investor cannot make the representation set forth in the preceding paragraph. The Buyer agrees to promptly notify the Company should the Buyer become aware of any change in the information set forth in these representations. The Buyer understands and acknowledges that, by law, the Company may be obligated to “freeze the account” of the Buyer, either by prohibiting additional subscriptions from the Buyer, declining any redemption requests and/or segregating the assets in the account in compliance with governmental regulations, and a Broker may also be required to report such action and to disclose the Buyer’s identity to OFAC. The Buyer further acknowledges that the Company may, by written notice to the Buyer, suspend the redemption rights, if any, of the Buyer if the Company reasonably deems it necessary to do so to comply with anti-money laundering regulations applicable to the Company or any Broker or any of the Company’s other service providers. These individuals include specially designated nationals, specially designated narcotics traffickers and other parties subject to OFAC sanctions and embargo programs;
__________________
1 These individuals include specially designated nationals, specially designated narcotics traffickers and other parties subject to OFAC sanctions and embargo programs.
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To the best of the Buyer’s knowledge, none of: (1) the Buyer; (2) any person controlling or controlled by the Buyer; (3) if the Buyer is a privately-held entity, any person having a beneficial interest in the Buyer; or (4) any person for whom the Buyer is acting as agent or nominee in connection with this investment is a senior foreign political figure[2], or any immediate family[3] member or close associate[4] of a senior foreign political figure, as such terms are defined in the footnotes below; and
If the Buyer is affiliated with a non-U.S. banking institution (a “Foreign Bank”), or if the Buyer receives deposits from, makes payments on behalf of, or handles other financial transactions related to a Foreign Bank, the Buyer represents and warrants to the Company that: (1) the Foreign Bank has a fixed address, other than solely an electronic address, in a country in which the Foreign Bank is authorized to conduct banking activities; (2) the Foreign Bank maintains operating records related to its banking activities; (3) the Foreign Bank is subject to inspection by the banking authority that licensed the Foreign Bank to conduct banking activities; and (4) the Foreign Bank does not provide banking services to any other Foreign Bank that does not have a physical presence in any country and that is not a regulated affiliate.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each of the Buyers that:
(a) Organization and Qualification. The Company is a corporation duly organized and validly existing in good standing under the laws of the jurisdiction of its formation, and has the requisite corporate power to own its properties and to carry on its business as now being conducted. The Company is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect, as defined below.
___________________
2 A “senior foreign political figure” is defined as a senior official in the executive, legislative, administrative, military or judicial branches of a foreign government (whether elected or not), a senior official of a major foreign political party, or a senior executive of a foreign government-owned corporation. In addition, a “senior foreign political figure” includes any corporation, business or other entity that has been formed by, or for the benefit of, a senior foreign political figure.
3 “Immediate family” of a senior foreign political figure typically includes the figure’s parents, siblings, spouse, children and in-laws.
4 A “close associate” of a senior foreign political figure is a person who is widely and publicly known to maintain an unusually close relationship with the senior foreign political figure, and includes a person who is in a position to conduct substantial domestic and international financial transactions on behalf of the senior foreign political figure.
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(b) Authorization, Enforcement, Compliance with Other Instruments. (i) The Company, has the requisite corporate power and authority to enter into and perform its obligations under this Agreement and the other Transaction Documents and to issue the Preferred Stock Units, Unit Shares and Unit Warrants in accordance with the terms hereof and thereof, (ii) the execution and delivery by the Company of each of the Transaction Documents to which it is a party and the consummation by it of the transactions contemplated hereby and thereby, including, without limitation, the issuance of the Preferred Stock Units, Unit Shares and Unit Warrants have been duly authorized by the Company’s Board of Directors, and no further consent or authorization is required by the Company, its Board of Directors or its stockholders, (iii) each of the Transaction Documents will be duly executed and delivered by the Company, (iv) the Transaction Documents when executed will constitute the valid and binding obligations of the Company enforceable against the Company in accordance with their terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors’ rights and remedies.
(c) Capitalization. The authorized capital stock of the Company consists of 300,000,000 shares of Common Stock and 10,000,000 shares of preferred stock, par value $0.0001 per share (the “Preferred Stock”). As of the date hereof the Company has 500,000 shares of Common Stock issued and outstanding, and (ii) except for the Unit Shares to be issued in connection with the Offering (including any Placement Agent Units), or as otherwise reflected in the Company’s capitalization table set forth in Schedule 3(c) hereto, no shares of Preferred Stock are issued and outstanding; provided, however, the Company has agreed to issue a single share of Preferred Stock designated as Series B Voting Preferred Stock, which carries certain special powers, including the right to elect a majority of the Board of Directors and the right to approve the Merger and/or Asset Acquisition. All of the outstanding shares of Common Stock of the Company have been duly authorized, validly issued and are fully paid and nonassessable. No shares of capital stock of the Company are subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by the Company. As of the date of this Agreement except as otherwise reflected in the capitalization table set forth in Schedule 3(c) hereto, (i) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the Company, or contracts, commitments, understandings or arrangements by which the Company is or may become bound to issue additional shares of capital stock of such Company or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the Company, (ii) there are no outstanding debt securities, (iii) there are no agreements or arrangements under which the Company is obligated to register the sale of any of its securities under the Securities Act, and (iv) there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Preferred Stock Units, Unit Shares and Unit Warrants as described in this Agreement. The Preferred Stock Units, Unit Shares and Unit Warrants (and upon conversion of the Unit Shares or exercise of the Unit Warrants, the Series A Conversion Shares or Unit Warrant Shares, respectively) when issued, will be free and clear of all pledges, liens, encumbrances and other restrictions (other than those arising under applicable securities laws as a result of the issuance of the Preferred Stock Units, Unit Shares and Unit Warrants). No co-sale right, right of first refusal or other similar right exists with respect to the Preferred Stock Units, Unit Shares or Unit Warrants (or upon conversion of the Unit Shares or exercise of the Unit Warrants, the Series A Conversion Shares or Unit Warrant Shares, respectively) or the issuance and sale thereof. The issuance and sale of the Preferred Stock Units, Unit Shares and Unit Warrants (and upon conversion of the Unit Shares or exercise of the Unit Warrants, the Series A Conversion Shares or Unit Warrant Shares, respectively) will not result in a right of any holder of securities of the Company to adjust the exercise, exchange or reset price under such securities. The Company has made available to the Buyer true and correct copies of the Company’s Certificate of Incorporation, as in effect on the date hereof (the “Certificate of Incorporation”), and the Company’s Bylaws, as in effect on the date hereof (the “Bylaws”), and the terms of all securities exercisable for Common Stock of the Company and the material rights of the holders thereof in respect thereto.
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(d) Issuance of Securities. The Preferred Stock Units, Unit Shares and Unit Warrants are duly authorized and, upon issuance in accordance with the terms hereof, shall be duly issued, fully paid and nonassessable, are free from all taxes, liens and charges with respect to the issue thereof. Upon conversion of the Unit Shares or exercise of the Unit Warrants, the Series A Conversion Shares or Unit Warrant Shares, respectively, in accordance with the Transaction Documents, the Series A Conversion Shares and Unit Warrant Shares will be duly issued, fully paid and nonassessable.
(e) No Conflicts. Except as set forth on Schedule 3(e), the execution, delivery and performance of each of the Transaction Documents by the Company, and the consummation by the Company of the transactions contemplated hereby and thereby will not (i) result in a violation of the Certificate of Incorporation, or the Bylaws of the Company or (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company is a party, or result in a violation of any law, rule, regulation, order, judgment or decree (including U.S. federal and state securities laws and regulations) applicable to the Company or by which any property or asset of the Company is bound or affected except for those which could not reasonably be expected to have a material adverse effect on the assets, business, condition (financial or otherwise), results of operations or future prospects of the Company (a “Material Adverse Effect”). Except those which could not reasonably be expected to have a Material Adverse Effect, the Company is not in violation of any term of or in default under its constitutive documents. Except those which could not reasonably be expected to have a Material Adverse Effect, the Company is not in violation of any term of or in default under any material contract, agreement, mortgage, indebtedness, indenture, instrument, judgment, decree or order or any statute, rule or regulation applicable to the Company. The business of the Company is not being conducted, and shall not be conducted in violation of any material law, ordinance, or regulation of any governmental entity, except for any violation which could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. Except as specifically contemplated by this Agreement and as required under the Securities Act and any applicable state securities laws, the Company is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under or contemplated by this Agreement or the other Transaction Documents in accordance with the terms hereof or thereof. Neither the execution and delivery by the Company of the Transaction Documents to which it is a party, nor the consummation by the Company of the transactions contemplated hereby or thereby, will require any notice, consent or waiver under any contract or instrument to which the Company is a party or by which the Company is bound or to which any of its assets is subject, except for any notice, consent or waiver the absence of which would not have a Material Adverse Effect and would not adversely affect the consummation of the transactions contemplated hereby or thereby. All consents, authorizations, orders, filings and registrations which the Company is required to obtain pursuant to the preceding two sentences have been obtained or effected on or prior to the date hereof. The Company is unaware of any facts or circumstance, which might give rise to any of the foregoing.
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(f) Absence of Litigation. Except as set forth on Schedule 3(f), there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body now pending or, to the knowledge of the Company, threatened, against or affecting the Company, wherein an unfavorable decision, ruling or finding would (i) adversely affect the validity or enforceability of, or the authority or ability of the Company to perform its obligations under, this Agreement or any of the other Transaction Documents, or (ii) have a Material Adverse Effect.
(g) Acknowledgment Regarding Buyer’s Purchase of the Preferred Stock Units. The Company acknowledges and agrees that each Buyer is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby. The Company further acknowledges that each Buyer is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby and thereby and any advice given by such Buyer or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to such Buyer’s purchase of the Preferred Stock Units, Unit Shares and Unit Warrants (and upon conversion of the Unit Shares or exercise of the Unit Warrants, the Series A Conversion Shares or Unit Warrant Shares, respectively). The Company further represents to the Buyers that the Company’s decision to enter into the Transaction Documents has been based solely on the independent evaluation by the Company and its representatives.
(h) No General Solicitation. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Preferred Stock Units, Unit Shares or Unit Warrants.
(i) No Integrated Offering. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would require registration of the Preferred Stock Units, Unit Shares or Unit Warrants under the Securities Act or cause this offering of the Preferred Stock Units, Unit Shares or Unit Warrants to be integrated with prior offerings by the Company for purposes of the Securities Act.
(j) Employee Relations. Except as set forth on Schedule 3(j), The Company is not involved in any labor dispute nor, to the knowledge of the Company, is any such dispute threatened. The Company is not party to any collective bargaining agreement. The Company’s employees are not members of any union, and the Company’s relationship with its employees is good.
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(k) Intellectual Property Rights. Except as set forth on Schedule 3(k), the Company owns or possesses all patents, trademarks, domain names (whether or not registered) and any patentable improvements or copyrightable derivative works thereof, websites and intellectual property rights relating thereto, service marks, trade names, copyrights, licenses and authorizations, and all rights with respect to the foregoing, which are necessary for the conduct of its business as now conducted (the “Intellectual Property”) without any conflict with the rights of others except for such conflicts that would not result in a Material Adverse Effect. Neither the Company nor any subsidiary has received any notice of infringement of, or conflict with, the asserted rights of others with respect to any intellectual property that it utilizes.
(l) Environmental Laws.
(i) The Company has complied with all applicable Environmental Laws (as defined below), except for violations of Environmental Laws that, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect. There is no pending or, to the knowledge of the Company, threatened civil or criminal litigation, written notice of violation, formal administrative proceeding, or investigation, inquiry or information request, relating to any Environmental Law involving the Company, except for litigation, notices of violations, formal administrative proceedings or investigations, inquiries or information requests that, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect. For purposes of this Agreement, “Environmental Law” means any national, state, provincial or local law, statute, rule or regulation or the common law relating to the environment or occupational health and safety, including without limitation any statute, regulation, administrative decision or order pertaining to (i) treatment, storage, disposal, generation and transportation of industrial, toxic or hazardous materials or substances or solid or hazardous waste; (ii) air, water and noise pollution; (iii) groundwater and soil contamination; (iv) the release or threatened release into the environment of industrial, toxic or hazardous materials or substances, or solid or hazardous waste, including without limitation emissions, discharges, injections, spills, escapes or dumping of pollutants, contaminants or chemicals; (v) the protection of wild life, marine life and wetlands, including without limitation all endangered and threatened species; (vi) storage tanks, vessels, containers, abandoned or discarded barrels, and other closed receptacles; (vii) health and safety of employees and other persons; and (viii) manufacturing, processing, using, distributing, treating, storing, disposing, transporting or handling of materials regulated under any law as pollutants, contaminants, toxic or hazardous materials or substances or oil or petroleum products or solid or hazardous waste. As used above, the terms “release” and “environment” shall have the meaning set forth in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (“CERCLA”).
(ii) To the knowledge of the Company there is no material environmental liability with respect to any solid or hazardous waste transporter or treatment, storage or disposal facility that has been used by the Company.
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(iii) The Company (i) has received all permits, licenses or other approvals required of it under applicable Environmental Laws to conduct its businesses, and (ii) is in compliance with all terms and conditions of any such permit, license or approval.
(m) Title. The Company has good and marketable title to all of its personal property and assets free and clear of any material restriction, mortgage, deed of trust, pledge, lien, security interest or other charge, claim or encumbrance which would have a Material Adverse Effect. With respect to properties and assets it leases, the Company is in material compliance with such leases and holds a valid leasehold interest free of any liens, claims or encumbrances which would have a Material Adverse Effect.
(n) No Material Adverse Breaches, etc. Except as set forth on Schedule 3(n), the Company is not subject to any charter, corporate or other legal restriction, or any judgment, decree, order, rule or regulation which in the judgment of the Company’s officers has or is expected in the future to have a Material Adverse Effect. The Company is not in breach of any contract or agreement which breach, in the judgment of the Company’s officers, has or is expected to have a Material Adverse Effect.
(o) Tax Status. Except as set forth in Schedule 3(o), the Company has made and filed all U.S. federal and state, income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject and (unless and only to the extent that the Company or such subsidiary has set aside on its books provisions reasonably adequate for the payment of all unpaid and unreported taxes) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and has set aside on its books provision reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due from the Company by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any such claim.
(p) Certain Transactions. Except for arm’s length transactions pursuant to which the Company makes payments in the ordinary course of business upon terms no less favorable than it could obtain from third parties, none of the officers, directors, or employees of the Company is presently a party to any transaction with the Company (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any corporation, partnership, trust or other entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner.
(q) Rights of First Refusal. The Company is not obligated to offer the securities offered hereunder on a right of first refusal basis or otherwise to any third parties including, but not limited to, current or former stockholders of the Company, underwriters, Brokers, agents or other third parties.
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(r) Reliance. The Company acknowledges that the Buyers are relying on the representations and warranties made by the Company hereunder and that such representations and warranties are a material inducement to the Buyer purchasing the Preferred Stock Units, Unit Shares and Unit Warrants. The Company further acknowledges that without such representations and warranties of the Company made hereunder, the Buyers would not enter into this Agreement.
(s) Brokers’ Fees. The Company does not have any liability or obligation to pay any fees or commissions to any Broker, finder or agent with respect to the transactions contemplated by this Agreement, except for the payment of the Placement Agent Fee and issuance of the Placement Agent Warrants to the Placement Agent.
(t) No Disqualification Event.
(i) None of Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Company participating in the Offering, any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of sale (each, an “Issuer Covered Person” and, together, “Issuer Covered Persons”) is subject to any of the “Bad Actor” disqualifications currently described in Rule 506(d)(1)(i) to (vii) under the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e).
(ii) The Company is not aware of any person, other than any Issuer Covered Person that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of the Preferred Stock Units, Unit Shares and Unit Warrants.
(iii) The Company will promptly notify the Buyers in writing of (A) any Disqualification Event relating to any Issuer Covered Person and (B) any event that would, with the passage of time, become a Disqualification Event relating to any Issuer Covered Person.
4. REPRESENTATIONS AND WARRANTIES OF THE CÜR MEDIA.
CÜR Media represents and warrants to each of the Buyers that:
(a) Organization and Qualification. Except as set forth on Schedule 4(a) hereto, CÜR Media is a corporation duly organized and validly existing in good standing under the laws of the jurisdiction of its formation, and has the requisite corporate power to own its properties and to carry on its business as now being conducted. Except as set forth on Schedule 4(a) hereto, CÜR Media is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect, as defined below.
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(b) Authorization, Enforcement, Compliance with Other Instruments. (i) CÜR Media, has the requisite corporate power and authority to enter into and perform its obligations under this Agreement and the other Transaction Documents, (ii) the execution and delivery by CÜR Media of each of the Transaction Documents to which it is a party and the consummation by it of the transactions contemplated hereby and thereby, have been duly authorized by CÜR Media’s Board of Directors, and no further consent or authorization is required by CÜR Media, its Board of Directors or its stockholders, (iii) each of the Transaction Documents will be duly executed and delivered by CÜR Media, (iv) the Transaction Documents when executed will constitute the valid and binding obligations of CÜR Media enforceable against CÜR Media in accordance with their terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors’ rights and remedies.
(c) Capitalization. Attached hereto as Schedule 4(c) is CÜR Media’s capitalization table. The authorized capital stock of CÜR Media consists of 300,000,000 shares of common stock, par value $0.0001 per share (“CÜR Media Common Stock”) and 10,000,000 shares of preferred stock, par value $0.0001 per share (the “CÜR Media Preferred Stock”). As of the date hereof CÜR Media has 3,026,996 shares of CÜR Media Common Stock issued and outstanding, and (ii) no shares of CÜR Media Preferred Stock are issued and outstanding. All of the outstanding shares of CÜR Media Common Stock have been duly authorized, validly issued and are fully paid and nonassessable. No shares of capital stock of CÜR Media are subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by CÜR Media. As of the date of this Agreement except as set forth in CÜR Media’s SEC Filings (as defined below), or as otherwise reflected in the capitalization table set forth in Schedule 4(c) hereto, (i) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of CÜR Media, or contracts, commitments, understandings or arrangements by which CÜR Media is or may become bound to issue additional shares of capital stock of CÜR Media or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of CÜR Media, (ii) there are no outstanding debt securities, (iii) there are no agreements or arrangements under which CÜR Media is obligated to register the sale of any of its securities under the Securities Act, and (iv) there are no outstanding registration statements. CÜR Media has made available to the Buyer true and correct copies of CÜR Media’s Certificate of Incorporation, as in effect on the date hereof (the “Certificate of Incorporation”), and CÜR Media’s Bylaws, as in effect on the date hereof (the “Bylaws”), and the terms of all securities exercisable for CÜR Media Common Stock and the material rights of the holders thereof in respect thereto.
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(d) No Conflicts. The execution, delivery and performance of each of the Transaction Documents by CÜR Media, and the consummation by CÜR Media of the transactions contemplated hereby and thereby will not (i) result in a violation of the Certificate of Incorporation, or the Bylaws of CÜR Media or (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which CÜR Media is a party, or result in a violation of any law, rule, regulation, order, judgment or decree (including U.S. federal and state securities laws and regulations) applicable to CÜR Media or by which any property or asset of CÜR Media is bound or affected except for those which could not reasonably be expected to have a material adverse effect on the assets, business, condition (financial or otherwise), results of operations or future prospects of CÜR Media and its subsidiaries taken as a whole (a “Material Adverse Effect”). Except those which could not reasonably be expected to have a Material Adverse Effect, CÜR Media is not in violation of any term of or in default under its constitutive documents. Except those which could not reasonably be expected to have a Material Adverse Effect, or as otherwise set forth on Schedule 4(d) hereto, CÜR Media is not in violation of any term of or in default under any material contract, agreement, mortgage, indebtedness, indenture, instrument, judgment, decree or order or any statute, rule or regulation applicable to CÜR Media. The business of CÜR Media is not being conducted, and shall not be conducted in violation of any material law, ordinance, or regulation of any governmental entity, except for any violation which could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. Except as specifically contemplated by this Agreement and as required under the Securities Act and any applicable state securities laws, CÜR Media is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under or contemplated by this Agreement or the other Transaction Documents in accordance with the terms hereof or thereof. Neither the execution and delivery by CÜR Media of the Transaction Documents to which it is a party, nor the consummation by CÜR Media of the transactions contemplated hereby or thereby, will require any notice, consent or waiver under any contract or instrument to which CÜR Media is a party or by which CÜR Media is bound or to which any of its assets is subject, except for any notice, consent or waiver the absence of which would not have a Material Adverse Effect and would not adversely affect the consummation of the transactions contemplated hereby or thereby. All consents, authorizations, orders, filings and registrations which CÜR Media is required to obtain pursuant to the preceding two sentences have been obtained or effected on or prior to the date hereof. CÜR Media is unaware of any facts or circumstance, which might give rise to any of the foregoing.
(e) SEC Filings; Financial Statements. Except as set forth on Schedule 4(e)(i) hereto, CÜR Media has filed (and, except for certain Current Reports on Form 8-K, has, within the past two years, timely filed (subject to 12b-25 filings with respect to certain periodic filings)) all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (all of the foregoing and all other documents filed with the SEC prior to the date hereof and all exhibits included therein and financial statements and schedules thereto and documents incorporated by reference therein, being hereinafter referred to herein as the “SEC Filings”). The SEC Filings are available to the Buyers via the SEC’s XXXXX system. As of their respective dates, the SEC Filings complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the SEC promulgated thereunder, and none of the SEC Filings, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. As of their respective dates, the audited financial statements of CÜR Media included in the Company’s SEC Filings for the period from inception through December 31, 2015, and the subsequent unaudited interim financial statements included in CÜR Media’s SEC Filings (collectively, the “Financial Statements”) complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements were prepared in accordance with generally accepted accounting principles, consistently applied, during the periods involved (except (i) as may be otherwise indicated in such Financial Statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements), and fairly present in all material respects the financial position of CÜR Media as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). As of the date hereof, there are no outstanding or unresolved comments in comment letters received from the staff of the SEC with respect to any of the SEC Filings. No other information provided by or on behalf of CÜR Media to the Buyer including, without limitation, information referred to in this Agreement, contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Attached hereto as Schedule 4(e)(ii) is a copy of CÜR Media’s Condensed Consolidated Balance Sheets as of June 30, 2016 and December 31, 2015 (unaudited), which has not been reviewed by CÜR Media’s independent auditors and is provided for informational purposes only.
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(f) Absence of Litigation. Except as set forth in the CÜR Media’s SEC Filings, or as otherwise set forth on Schedule 4(f) hereto, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body now pending or, to the knowledge of CÜR Media, threatened, against or affecting CÜR Media, wherein an unfavorable decision, ruling or finding would (i) adversely affect the validity or enforceability of, or the authority or ability of CÜR Media to perform its obligations under, this Agreement or any of the other Transaction Documents, or (ii) have a Material Adverse Effect.
(g) No General Solicitation. Neither CÜR Media, nor any of its affiliates, nor any person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Preferred Stock Units, Unit Shares or Unit Warrants.
(h) Employee Relations. Except as set forth on Schedule 4(h) hereto, CÜR Media is not involved in any labor dispute nor, to the knowledge of CÜR Media, is any such dispute threatened. CÜR Media is not party to any collective bargaining agreement. CÜR Media’s employees are not members of any union, and, except as set forth on Schedule 4(h) hereto, CÜR Media’s relationship with its employees is good.
(i) Intellectual Property Rights. Except as set forth on Schedule 4(i) hereto, CÜR Media owns or possesses all patents, trademarks, domain names (whether or not registered) and any patentable improvements or copyrightable derivative works thereof, websites and intellectual property rights relating thereto, service marks, trade names, copyrights, licenses and authorizations, and all rights with respect to the foregoing, which are necessary for the conduct of its business as now conducted (the “Intellectual Property”) without any conflict with the rights of others except for such conflicts that would not result in a Material Adverse Effect. Neither CÜR Media nor any subsidiary has received any notice of infringement of, or conflict with, the asserted rights of others with respect to any intellectual property that it utilizes.
(j) Environmental Laws.
(i) CÜR Media has complied with all applicable Environmental Laws (as defined below), except for violations of Environmental Laws that, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect. There is no pending or, to the knowledge of CÜR Media, threatened civil or criminal litigation, written notice of violation, formal administrative proceeding, or investigation, inquiry or information request, relating to any Environmental Law involving the Company, except for litigation, notices of violations, formal administrative proceedings or investigations, inquiries or information requests that, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect. For purposes of this Agreement, “Environmental Law” means any national, state, provincial or local law, statute, rule or regulation or the common law relating to the environment or occupational health and safety, including without limitation any statute, regulation, administrative decision or order pertaining to (i) treatment, storage, disposal, generation and transportation of industrial, toxic or hazardous materials or substances or solid or hazardous waste; (ii) air, water and noise pollution; (iii) groundwater and soil contamination; (iv) the release or threatened release into the environment of industrial, toxic or hazardous materials or substances, or solid or hazardous waste, including without limitation emissions, discharges, injections, spills, escapes or dumping of pollutants, contaminants or chemicals; (v) the protection of wild life, marine life and wetlands, including without limitation all endangered and threatened species; (vi) storage tanks, vessels, containers, abandoned or discarded barrels, and other closed receptacles; (vii) health and safety of employees and other persons; and (viii) manufacturing, processing, using, distributing, treating, storing, disposing, transporting or handling of materials regulated under any law as pollutants, contaminants, toxic or hazardous materials or substances or oil or petroleum products or solid or hazardous waste. As used above, the terms “release” and “environment” shall have the meaning set forth in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (“CERCLA”).
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(ii) To the knowledge of CÜR Media there is no material environmental liability with respect to any solid or hazardous waste transporter or treatment, storage or disposal facility that has been used by CÜR Media.
(iii) CÜR Media (i) has received all permits, licenses or other approvals required of it under applicable Environmental Laws to conduct its businesses, and (ii) is in compliance with all terms and conditions of any such permit, license or approval.
(k) Title. CÜR Media has good and marketable title to all of its personal property and assets free and clear of any material restriction, mortgage, deed of trust, pledge, lien, security interest or other charge, claim or encumbrance which would have a Material Adverse Effect. With respect to properties and assets it leases, CÜR Media is in material compliance with such leases and holds a valid leasehold interest free of any liens, claims or encumbrances which would have a Material Adverse Effect.
(l) Internal Accounting Controls. Except as set forth in CÜR Media’s SEC Filings, CÜR Media is in material compliance with the provisions of the Xxxxxxxx-Xxxxx Act of 2002 currently applicable to CÜR Media. Except as set forth in CÜR Media’s SEC Filings, the Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability, and (iii) the recorded amounts for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
(m) No Material Adverse Breaches, etc. CÜR Media is not subject to any charter, corporate or other legal restriction, or any judgment, decree, order, rule or regulation which in the judgment of CÜR Media’s officers has or is expected in the future to have a Material Adverse Effect. Except as set forth in Schedule 4(m), CÜR Media is not in breach of any contract or agreement which breach, in the judgment of CÜR Media’s officers, has or is expected to have a Material Adverse Effect.
(n) Tax Status. Except as set forth in Schedule 4(n), CÜR Media has made and filed all U.S. federal and state, income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject and (unless and only to the extent that the Company or such subsidiary has set aside on its books provisions reasonably adequate for the payment of all unpaid and unreported taxes) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and has set aside on its books provision reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due from CÜR Media by the taxing authority of any jurisdiction, and the officers of CÜR Media know of no basis for any such claim.
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(o) Certain Transactions. Except for arm’s length transactions pursuant to which CÜR Media makes payments in the ordinary course of business upon terms no less favorable than it could obtain from third parties, none of the officers, directors, or employees of CÜR Media is presently a party to any transaction with CÜR Media (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of CÜR Media, any corporation, partnership, trust or other entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner.
(p) Reliance. CÜR Media acknowledges that the Buyers are relying on the representations and warranties made by the Company hereunder and that such representations and warranties are a material inducement to the Buyer purchasing the Preferred Stock Units, Unit Shares and Unit Warrants. CÜR Media further acknowledges that without such representations and warranties of CÜR Media made hereunder, the Buyers would not enter into this Agreement.
(q) Brokers’ Fees. CÜR Media does not have any liability or obligation to pay any fees or commissions to any Broker, finder or agent with respect to the transactions contemplated by this Agreement.
(r) No Disqualification Event.
(i) None of CÜR Media, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Company participating in the Offering, any beneficial owner of 20% or more of CÜR Media’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with CÜR Media in any capacity at the time of sale (each, an “Issuer Covered Person” and, together, “Issuer Covered Persons”) is subject to any of the “Bad Actor” disqualifications currently described in Rule 506(d)(1)(i) to (vii) under the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). CÜR Media has exercised reasonable care to determine whether any Covered Person is subject to a Disqualification Event. CÜR Media has complied, to the extent applicable, with its disclosure obligations under Rule 506(e).
(ii) CÜR Media is not aware of any person, other than any Issuer Covered Person that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of the Preferred Stock Units, Unit Shares and Unit Warrants.
(iii) CÜR Media will promptly notify the Buyers in writing of (A) any Disqualification Event relating to any Issuer Covered Person and (B) any event that would, with the passage of time, become a Disqualification Event relating to any Issuer Covered Person.
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5. COVENANTS.
(a) Best Efforts. Each party shall use its best efforts to timely satisfy each of the conditions to be satisfied by it as provided in Sections 6 and 7 of this Agreement.
(b) Form D. The Company agrees to file a Form D with respect to the offer and sale of the Preferred Stock Units, Unit Shares and Unit Warrants as required under Regulation D. The Company shall, on or before each Closing Date, take such action as the Company shall reasonably determine is necessary to qualify the Preferred Stock Units, Unit Shares and Unit Warrants (and the Series A Conversion Shares and Unit Warrant Shares), or obtain an exemption for the Preferred Stock Units, Unit Shares and Unit Warrants (and the Series A Conversion Shares and Unit Warrant Shares) for sale to the Buyers at each Closing pursuant to this Agreement under applicable securities or “Blue Sky” laws of the states of the United States and shall provide evidence of any such action so taken to the Buyers on or prior to each Closing Date.
(c) Reporting Status. CÜR Media has not yet filed (i) Quarterly Reports on Form 10-Q for the fiscal quarters ended June 30, 2016, September 30, 2016, March 31, 2017, and June 30, 2017, and (ii) an Annual Report on Form 10-K for the fiscal year ended December 31, 2016 (the “Late Periodic Reports”) and, therefore, is not current with its SEC Filings. CÜR Media plans to use a portion of the proceeds from the Offering to pay professional fees required to file the Late Periodic Reports and become current as soon as possible after the Initial Closing. Going forward, until the date on which the Buyer(s) shall have sold all of the Series A Conversion Shares, or any securities exchanged for such Series A Conversion Shares in connection with the Combination Transaction, CÜR Media shall use best efforts to file in a timely manner (or, with respect to Form 8-K reports, shall use its reasonable commercial efforts to file in a timely manner) all reports required to be filed with the SEC pursuant to the Exchange Act, and the regulations of the SEC thereunder, and CÜR Media shall not terminate its status as an issuer required to file reports under the Exchange Act even if the Exchange Act or the rules and regulations thereunder would otherwise permit such termination.
(d) Listings or Quotation. CÜR Media’s Common Stock is currently traded on the OTC Pink Limited Information marketplace under the symbol “CURM”. CÜR Media plans to upgrade its Common Stock to the OTCQB marketplace as soon as possible following the Initial Closing, by filing the Late Periodic Reports and taking any other required action. Following the upgrade, and until the date the Buyer(s) shall have sold all of the Series A Conversion Shares, or any securities exchanged for such Series A Conversion Shares in connection with the Combination Transaction, CÜR Media shall use its best efforts to maintain the listing or quotation of its Common Stock upon the OTCQB tier of the OTC marketplace.
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(e) Contracts with the Labels. The Company and CÜR Media are currently negotiating licensing agreements (“Content Licensing Agreements”) with the three major music labels, Universal Music Group, Sony Music Entertainment and Warner Music Group (the “Labels”). Prior to Closing, the Company and CÜR Media shall have completed negotiation of the Content Licensing Agreements with the Labels, subject only to payment of any required advances or other content licensing fees due pursuant to the Content Licensing Agreements with the Labels (“Label Payments”). The Content Licensing Agreements shall enable CÜR Media to digitally distribute sound recordings and related materials owned or controlled by the Labels in connection with its CÜR-branded Internet music service, CUR Music. Until the date on which the Buyer(s) shall have sold all of the Series A Conversion Shares, or any securities exchanged for such Series A Conversion Shares in connection with the Combination Transaction, the Company, or the Combined Company, as applicable, shall use best efforts to maintain the Content Licensing Agreements with the Labels.
(f) Use of Proceeds. The Company shall use the net proceeds from the Offering (after deducting fees and expenses related to the Offering (including Placement Agent fees, if applicable, legal fees and expenses, and fees payable to the Escrow Agent)) to pay any required Label Payments due to the Labels pursuant to the Content Licensing Agreements with the Labels sufficient to allow CÜR Media to proceed with soliciting subscriptions for CÜR Music, and to extend a line of credit to CÜR Media for up to the full amount of the aggregate net proceeds from the Offering (and the New Note Offering), (1) to enable CUR Media to pay (a) outstanding accounts payable of CÜR Media, to be negotiated into structured settlements, (b) CÜR Media’s employee deferred compensation, and (c) monthly payments due by CÜR Media under the New Note, and (2) for working capital and general corporate purposes.
(g) Resales Absent Effective Registration Statement. Each of the Buyers understands and acknowledges that (i) the Transaction Documents will, if applicable, require the Company to issue and deliver the Series A Conversion Shares to the Buyers with legends restricting their transferability under the Securities Act, and (ii) Buyer is aware that resales of such Series A Conversion Shares may not be made unless, at the time of resale, there is an effective registration statement under the Securities Act covering such Buyer’s resale(s) or an applicable exemption from registration.
(h) Combination Transaction. The Company is negotiating a Combination Transaction with the CÜR Media, with the intention that, following the consummation of the Combination Transaction, the Buyers will hold (a) shares of Series A convertible preferred stock of the Combined Company in an aggregate amount equal to the Share Percentage Interest of 16% of the Combined Company’s outstanding shares of common stock (including the full number of Secured Note Conversion Shares and Unsecured Note Conversion Shares issued upon conversion of all amounts due under CÜR Media’s issued and outstanding Secured Convertible Notes and Unsecured Convertible Notes, respectively, but not including the exercise of any of the CÜR Media’s outstanding warrants or stock options), and (b) warrants to purchase shares of common stock of the Combined Company in an aggregate amount equal to the Warrant Percentage Interest of 16% of all of the Combined Company’s outstanding warrants and stock options (including the full number of Secured Note Conversion Warrants and Unsecured Note Conversion Warrants issued upon conversion of all amounts due under CÜR Media’s issued and outstanding Secured Convertible Notes and Unsecured Convertible Notes, respectively). Any securities of the Combined Company issued to the Buyers or the Placement Agent at the effective time of the Combination Transaction, in exchange for securities of the Company, will be at an exchange rate of 1-for-1, with appropriate adjustments and, otherwise, on their original terms and conditions.
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(i) Registration Rights. Upon consummation of the Merger, the Buyers shall have registration rights with respect to the Series A Conversion Shares and Unit Warrant Shares, or any securities exchanged for such Series A Conversion Shares and/or Warrant Shares in connection with the Merger, pursuant to the terms of the Registration Rights Agreement.
(j) Share Escalation Formula and Warrant Escalation Formula.
(i) Share Escalation Formula. In the event that CÜR Media and/or the Combined Company following the Combination Transaction, as applicable, obtains less than 250,000 active subscribers to CÜR Music within eighteen months from the date on which CÜR Music is available for sale in the iTunes app store and the Google Play store and CÜR Media and/or the Combined Company, as applicable, begins marketing the product (the “Launch Date”), the Conversion Rate for the Unit Shares, and/or any securities exchanged for such Unit Shares in connection with the Combination Transaction, will be adjusted so that (assuming the $7,500,000 is raised in the Offering, resulting in a Share Percentage Interest of 20%) the Share Percentage Interest shall be increased by 1.5% for every 10,000 active subscribers that the number of active subscribers is less than 250,000, up to a maximum increase of 30% (for a total Share Percentage Interest of 50%) in the case that the number of active subscribers is only 50,000 or less (the “Share Escalation Formula”). For illustration purposes, if $7,500,000 is raised in the Offering, and the number of active subscribers to CÜR Music eighteen months from the Launch Date is 200,000, then the Conversion Rate for the Unit Shares, or any securities exchanged for such Unit Shares in connection with the Combination Transaction would be adjusted so that the Share Percentage Interest is increased by 7.5% to a total of 27.5% (an increase of 5 times 1.5%).
(ii) Warrant Escalation Formula. In the event that CÜR Media and/or the Combined Company following the Combination Transaction obtains less than 250,000 active subscribers to CÜR Music within one year from the Launch Date, the number of Unit Warrant Shares underlying the Unit Warrants, and/or any securities exchanged for such Unit Warrant Shares in connection with the Combination Transaction, shall be increased by 6.5087 shares for each full share of Common Stock that the additional Unit Shares, and/or any securities exchanged for such Unit Shares in connection with the Combination Transaction, are convertible into giving effect to the increase in the Share Percentage Interest.
(iii) Adjustment. If greater than $7,500,000 is raised in the Offering, the Share Escalation Formula and Warrant Escalation Formula will be adjusted accordingly in order to maintain the maximum escalation to up to 50%.
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(k) Put at the Option of the Holder. Each holder of Preferred Stock Units, and/or any securities exchanged for such Preferred Stock Units in connection with the Combination Transaction, shall have a right, but not an obligation, to Put all, but not less than all, of such holder’s Preferred Stock Units, and/or any securities exchanged for such Preferred Stock Units in connection with the Combination Transaction, to the Company, CÜR Media or the Combined Company, as applicable, at the Put Price:
(i) upon any voluntary or involuntary bankruptcy, liquidation, dissolution or winding up of the affairs of the Company, CÜR Media or the Combined Company, as applicable; or
(ii) if, at any time within eighteen (18) months following the Launch Date, the market capitalization of the Company, CÜR Media or the Combined Company, as applicable, is not greater than $50,000,000, based on the average closing price of the common stock of the Company, CÜR Media or Combined Company, as applicable, for any thirty (30) consecutive trading days, based on the fully diluted, as converted number of shares of the common stock of the Company, CÜR Media or Combined Company, as applicable.
(l) Lien. In order to secure payment of the Put Price to any holder of Preferred Stock Units, and/or any securities exchanged for such Preferred Stock Units in connection with the Combination Transaction, the holders of the Preferred Stock Units, and/or any securities exchanged for such Preferred Stock Units in connection with the Combination Transaction, shall have a general first priority security interest (the “Lien”) on the Company Assets, or the assets of CÜR Media or Combined Company following the Combination Transaction, as applicable, for up to the total Subscription Amount invested in the Offering, such Lien to be senior to all current indebtedness of the Company, or the assets of CÜR Media or Combined Company following the Combination Transaction, as applicable, pursuant to the terms of the Security Agreement; provided, however, that the Buyers’ security interest in and lien on the Company Assets, or the assets of CÜR Media or Combined Company following the Combination Transaction, as applicable, will rank pari passu with the first priority security interest in and lien on the Company Assets, or the assets of CÜR Media or Combined Company following the Combination Transaction, as applicable, granted to the New Note Purchaser in connection with the New Note Offering. The Lien shall terminate when (a) the Company, CUR Media or the Combined Company, as applicable, either (i) obtains 250,000 active subscribers to CÜR Music, or (ii) consummates a qualified offering of at least $10,000,000 (excluding the capital raised in this Offering) in equity securities or securities convertible into or exercisable for equity securities (a “Qualified Offering”), or (b) with respect to any Buyer, when such Buyer either converts any Unit Shares, or exercises any Unit Warrants, and/or any securities exchanged for such Unit Shares and/or Unit Warrants in connection with the Combination Transaction, as applicable.
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(m) Indemnification of Buyers. In consideration of the Buyer’s execution and delivery of this Agreement and acquiring the Preferred Stock Units, Unit Shares and Unit Warrant Shares hereunder, and in addition to all of the Company’s other obligations under this Agreement, the Company shall defend, protect, indemnify and hold harmless the Buyer(s) and each other holder of the Preferred Stock Units, Unit Shares and Unit Warrant Shares (and, if applicable, the Series A Conversion Shares and/or Unit Warrant Shares), and all of their officers, directors, employees and agents (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Buyer Indemnitees”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith (irrespective of whether any such Buyer Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by the Buyer Indemnitees or any of them as a result of, or arising out of, or relating to (a) any actual or alleged false acknowledgment, representation or warranty, or misrepresentation or omission to state a material fact by the Company or (b) any breach of any covenant, agreement or obligation of the Company contained in this Agreement. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities, which is permissible under applicable law. The indemnity agreements contained herein shall be in addition to any cause of action or similar right of any Buyer Indemnitee against the Company or others, and any liabilities the Company may be subject to pursuant to law.
(n) Delivery of Preferred Stock Units, Unit Shares, Unit Warrants and Transaction Documents. Promptly after the Closing Date, but in no instance more than seven (7) business days after the Closing, the Company shall deliver to the Buyer(s), the stock certificates representing the Unit Shares and the warrant certificates representing the Unit Warrants, in the respective amounts set forth on the Buyer Omnibus Signature Pages affixed hereto, together with fully-executed copies of this Agreement and the other Transaction Documents, each duly executed on behalf of the Company.
(o) Reservation of Stock Issuable Upon Conversion. The Company, CÜR Media and/or the Combined Company, as applicable, shall at all times reserve and keep available out of its authorized but unissued shares of such company’s common stock, solely for the purpose of effecting the conversion of the Unit Shares, and/or any securities exchanged for such Unit Shares in connection with the Combination Transaction, such number of its shares of common stock as shall from time to time be sufficient to effect the conversion of all outstanding Unit shares, and/or any securities exchanged for such Unit Shares in connection with the Combination Transaction. If at any time the number of authorized but unissued shares of common stock of the Company, CÜR Media and/or the Combined Company, as applicable, shall not be sufficient to effect the conversion of all then outstanding Unit Shares, and/or any securities exchanged for such Unit Shares in connection with the Combination Transaction, the Company, CÜR Media and/or the Combined Company, as applicable, will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of such company’s common stock to such number of shares as shall be sufficient for such purpose, including, without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to the Articles of Incorporation.
(p) Good Standing. As soon as practicable following the Initial Closing, CÜR Media will get back in good standing in the jurisdiction of its formation and in jurisdictions in which it is authorized to conduct business.
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6. CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.
The obligation of the Company hereunder to issue and sell the Preferred Stock Units, Unit Shares and Unit Warrants to the Buyer(s) at each Closing is subject to the satisfaction, at or before each Closing Date, of each of the following conditions, provided that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion:
(a) Each Buyer shall have executed this Agreement, and the Security Agreement, Escrow Agreement, Voting Agreement, and Registration Rights Agreement, and completed and executed the Investor Certification, the Investor Profile and the Anti-Money Laundering Information Form and delivered them to the Company.
(b) The Buyer(s) shall have delivered to the Escrow Agent the Unit Purchase Price for the Preferred Stock Units, Unit Shares and Unit Warrants in respective amounts as set forth on the signature page(s) affixed hereto and the Escrow Agent shall have delivered the net proceeds to the Company by wire transfer of immediately available U.S. funds pursuant to the wire instructions provided by the Company.
(c) With respect to the Initial Closing, proceeds from the sale of the Preferred Stock Units, Unit Shares and Unit Warrants of not less than the Minimum Amount shall be in escrow pursuant to the Escrow Agreement.
(d) The representations and warranties of the Buyer(s) contained in this Agreement shall be true and correct in all material respects as of the date when made and as of the applicable Closing Date as though made at that time (except for representations and warranties that speak as of a specific date), and the Buyer(s) shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Buyer(s) at or prior to the applicable Closing Date.
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7. CONDITIONS TO THE BUYER’S OBLIGATION TO PURCHASE.
The obligation of the Buyer(s) hereunder to purchase the Preferred Stock Units, Unit Shares and Unit Warrants at the applicable Closing is subject to the satisfaction, at or before the applicable Closing Date, of each of the following conditions:
(a) The Company and CÜR Media shall each have executed this Agreement, and the Security Agreement, Escrow Agreement, Voting Agreement, and Registration Rights Agreement, as applicable.
(b) The representations and warranties of the Company and CÜR Media contained in this Agreement and the other Transaction Documents shall be true and correct in all material respects (except to the extent that any of such representations and warranties is already qualified as to materiality in Section 3 and 4, respectively, above, in which case, such representations and warranties shall be true and correct without further qualification) as of the date when made and as of the applicable Closing Date as though made at that time (except for representations and warranties that speak as of a specific date) and the Company and CÜR Media, respectively, shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement and the other Transaction Documents to be performed, satisfied or complied with by the Company CÜR Media at or prior to the applicable Closing Date.
(c) The Company shall have obtained any and all consents, permits, approvals, registrations and waivers necessary or appropriate for consummation by the Company of the purchase and sale of the Preferred Stock Units, Unit Shares and Unit Warrants and the transactions contemplated hereby or under the Transaction Documents, all of which shall be in full force and effect.
(d) The Buyers shall have received a certificate, executed by the President of the Company, dated as of the Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by the Buyers.
(e) The Company shall have delivered to the Buyers a certificate, executed on its behalf by an appropriate officer, dated as of the Closing Date, certifying the resolutions adopted by its Board of Directors approving the transactions contemplated by this Agreement, the other Transaction Documents and the issuance of the Preferred Stock Units, Unit Shares and Unit Warrants, certifying the current versions of its Certificate of Incorporation and By-laws (or equivalent documents), and certifying as to the signatures and authority of persons signing this Agreement on behalf of the Company. The foregoing certificate shall only be required to be delivered on the first Closing Date, unless any information contained in the certificate has changed.
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(f) The Buyer(s) shall have received an opinion from the Company’s legal counsel, dated as of the Closing Date. The foregoing opinions shall only be required to be delivered on the Closing Date for the Initial Closing.
(g) The Company shall have filed the Certificate of Designation with the Secretary of State of the State of Delaware.
(h) The Company and CÜR Media shall have fully negotiated Content Licensing Agreements with the Labels, subject only to payment of any required Label Payments, which shall be paid to the Labels from the proceeds of the Offering at the Initial Closing.
(i) With respect to the Initial Closing, proceeds from the sale of the Preferred Stock Units, Unit Shares and Unit Warrants of not less than the Minimum Amount shall be in escrow pursuant to the Escrow Agreement.
8. GOVERNING LAW: MISCELLANEOUS.
(a) Governing Law. This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York without regard to the principles of conflict of laws. The parties further agree that any action between them shall be heard exclusively in federal or state court sitting in the New York County, New York, and expressly consent to the jurisdiction and venue of the Supreme Court of New York, sitting in New York County and the United States District Court for the Southern District of New York for the adjudication of any civil action asserted pursuant to this paragraph.
(b) Irrevocable Subscription. Each of the Buyers hereby acknowledges and agrees that the subscription hereunder is irrevocable by such Buyer, except as required by applicable law, and that this Agreement shall survive the death or disability of the Buyer and shall be binding upon and inure to the benefit of the parties and their heirs, executors, administrators, successors, legal representatives, and permitted assigns. If the Buyer is more than one person, the obligations of the Buyer hereunder shall be joint and several and the agreements, representations, warranties, and acknowledgments herein shall be deemed to be made by and be binding upon each such person and such person’s heirs, executors, administrators, successors, legal representatives, and permitted assigns.
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(c) Expenses. Each of the parties hereto shall pay its own fees and expenses (including the fees of any attorneys, accountants, appraises or others engaged by such party) in connection with this Agreement and the transactions contemplated hereby whether or not the transactions contemplated hereby are consummated; provided, however, that (i) the Company will reimburse the Placement Agent for its documented expenses and legal fees in an aggregate amount of up to $40,000.
(d) Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument. All of such counterparts shall be read as though one and they shall have the same force and effect as though all the signers had signed a single page. In the event that any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an executed signature page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.
(e) Headings. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.
(f) Severability. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.
(g) Entire Agreement, Amendments. This Agreement supersedes all other prior oral or written agreements between the Buyer(s), the Company, CÜR Media, and their affiliates and persons acting on their behalf with respect to the matters discussed herein (including any term sheet), and this Agreement, the other Transaction Documents and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company, CÜR Media, nor any Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the party to be charged with enforcement.
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(h) Notices. Any notices, consents, waivers, or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered (i) upon receipt, when delivered personally; (ii) upon confirmation of receipt, when sent by facsimile or electronic mail; (iii) upon receipt when sent by U.S. certified mail, return receipt requested, or (iv) one (1) day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:
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CÜR Holdings, Inc. 0 Xxxxx Xxxxx Xxxxxx, XX 00000 Attention: Xxxxxxx X. Xxxxx, President Telephone: 000.000.0000 E-Mail: xxxx@xxxxxxx0000.xxx |
CÜR Media, Inc. ___________________________ ___________________________ Attention: Xxxxxx Xxxxxx, Chief Executive Officer Telephone: 000.000.0000 E-Mail: xxxxxxx@xxxxxxxx.xxx | |
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In either case, with a copy to: |
CKR Law LLP 1330 Avenue of the Xxxxxxxx, 00xx Xxxxx Xxx Xxxx, XX 00000 Attention: Xxxx X. Xxxxxxxxx Telephone: 000.000.0000 Facsimile: 212.259.8200 E-Mail: xxxxxxxxxx@xxxxxx.xxx |
If to the Buyer(s), to its address, facsimile number or e-mail address set forth on the Buyer Omnibus Signature Page affixed hereto. Each party shall provide five (5) days’ prior written notice to the other party of any change in address, facsimile number or e-mail address.
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(i) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. Neither the Company, CÜR Media, nor any Buyer shall assign this Agreement or any rights or obligations hereunder without the prior written consent of the other party hereto; provided, however, that the Company may assign this Agreement and its rights and obligations hereunder and under the Preferred Stock Units, Unit Shares and Unit Warrants and any other Transaction Documents to an affiliated entity without the consent of any Buyer if simultaneously therewith the affiliated entity assumes the obligations of the Company under this Agreement.
(j) No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.
(k) Survival. Unless this Agreement is terminated under Section 7 (n) , the representations and warranties of the Buyer(s), the Company and CÜR Media contained in Sections 2, 3 and 4, respectively, the agreements and covenants set forth in Sections 5 and 8 shall survive the Closing for a period of twelve (12) months following the date on which all of the Units Shares, and/or any securities exchanged for such Unit Shares in connection with the Merger, are converted in their entirety. Each Buyer shall be responsible only for its own representations, warranties, agreements and covenants hereunder.
(l) Publicity. The Company and CÜR Media shall have the right to approve, before issuance any press release or any other public statement with respect to the transactions contemplated hereby made by any other party; and the Company and/or CÜR Media shall be entitled, without the prior approval of any Buyer, to issue any press release or other public disclosure with respect to such transactions required under applicable securities or other laws or regulations or as it otherwise deems appropriate.
(m) Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
(n) Termination. In the event that the Initial Closing shall not have occurred with respect to the Buyers on or before thirty (30) business days from the date hereof due to the Company’s or the Buyer’s failure to satisfy the conditions set forth in Sections 6 and 7 above (and the non-breaching party’s failure to waive such unsatisfied condition(s)), the non-breaching party shall have the option to terminate this Agreement with respect to such breaching party by providing five (5) days’ written notice to such breaching party of the non-breaching party’s intent to terminate this Agreement (and if the non-breaching party is the Buyer, to also withdraw its subscription) at the close of business on such date without liability of any party to any other party.
(o) No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.
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(p) Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, the Buyers, the Company and CÜR Media will be entitled to specific performance under this Agreement. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations described in the foregoing sentence and hereby agree to waive in any action for specific performance of any such obligation the defense that a remedy at law would be adequate).
(q) ANTI MONEY LAUNDERING REQUIREMENTS
The USA PATRIOT Act |
What is money laundering? |
How big is the problem and why is it important? |
The USA PATRIOT Act is designed to detect, deter, and punish terrorists in the United States and abroad. The Act imposes new anti-money laundering requirements on brokerage firms and financial institutions. Since April 24, 2002, all brokerage firms have been required to have new, comprehensive anti-money laundering programs.
To help you understand these efforts, we want to provide you with some information about money laundering and our steps to implement the USA PATRIOT Act. |
Money laundering is the process of disguising illegally obtained money so that the funds appear to come from legitimate sources or activities. Money laundering occurs in connection with a wide variety of crimes, including illegal arms sales, drug trafficking, robbery, fraud, racketeering, and terrorism. |
The use of the U.S. financial system by criminals to facilitate terrorism or other crimes could well taint our financial markets. According to the U.S. State Department, one recent estimate puts the amount of worldwide money laundering activity at $1 trillion a year. |
What are we required to do to eliminate money laundering? | |
Under new rules required by the USA PATRIOT Act, our anti-money laundering program must designate a special compliance officer, set up employee training, conduct independent audits, and establish policies and procedures to detect and report suspicious transaction and ensure compliance with the new laws. |
As part of our required program, we may ask you to provide various identification documents or other information. Until you provide the information or documents we need, we may not be able to effect any transactions for you. |
(r) Omnibus Signature Page. This Agreement is intended to be read and construed in conjunction with the Certificate of Designation, Warrant, Security Agreement, Escrow Agreement, Voting Agreement, and Registration Rights Agreement. Accordingly, pursuant to the terms and conditions of this Agreement and such related agreements, it is hereby agreed that the execution by the Buyer of this Agreement, in the place set forth on the Buyer Omnibus Signature Page below, shall constitute agreement to be bound by the terms and conditions hereof and the terms and conditions of the Security Agreement, Escrow Agreement, Voting Agreement, and Registration Rights Agreement, with the same effect as if such separate but related agreement were separately signed.
[Remainder of page left blank intentionally. Signature pages follow.]
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IN WITNESS WHEREOF, the Buyers, the Company and CUR Media have caused this Securities Purchase Agreement to be duly executed as of the date first written above.
COMPANY:
CUR HOLDINGS, INC. |
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CUR MEDIA:
CÜR MEDIA, INC. |
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The Buyers executing the Omnibus Signature Page attached hereto as Annex A and the documents annexed thereto and delivering the same to the Company or their agents shall be deemed to have executed this Securities Purchase Agreement and agreed to the terms hereof. |
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A. | To subscribe for Preferred Stock Units in the private offering of CUR Holdings, Inc.: |
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1. | Date and Fill in the number of Preferred Stock Units being purchased and Complete and Sign the Buyer Omnibus Signature Page of the Securities Purchase Agreement, attached as Annex A. |
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2. | Initial the Investor Certification attached as Annex B. |
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3. | Complete and Sign the Investor Profile attached as Annex C. |
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4. | Complete and Sign the Anti-Money Laundering Information Form attached as Annex D. |
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5. | Fax or email all forms and then send all signed original documents to: |
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CKR Law LLP |
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Xxx Xxxx, XX 00000 |
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Facsimile Number: 000.000.0000 |
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Telephone Number: 000.000.0000 |
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Attention: Xxxxxxxx X. Xxxx |
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Email: xxxxx@xxxxxx.xxx |
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6. | If you are paying the Unit Purchase Price by wire transfer, you should send a wire transfer for the exact dollar amount of the Unit Purchase Price of the principal amount of Preferred Stock Units you are offering to purchase according to the following instructions: |
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PNC Bank |
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000 Xxxxxxxx Xxxxxx Xxxxxxxxxx, XX 00000 |
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000000000 |
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XXXXXX00 |
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Account Name: |
Delaware Trust Company |
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Account Number: |
5605012373 |
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CUR HOLDINGS, INC.; Acct# 79-3121 |
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MUST INCLUDE THE BUYER’S NAME |
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Annex A
BUYER OMNIBUS SIGNATURE PAGE
to
Securities Purchase Agreement, Security Agreement, Registration Rights Agreement, Voting Agreement and Escrow Agreement
The undersigned, desiring to: (i) enter into the Securities Purchase Agreement, dated as of ____________,[5] 2017 (the “Securities Purchase Agreement”), the Security Agreement (the “Security Agreement”), the Registration Rights Agreement (the “Registration Rights Agreement”), the Voting Agreement (the “Voting Agreement”) and the Escrow Agreement (the “Escrow Agreement”), between the undersigned, CUR Holdings, Inc. (the “Company”), and the other parties thereto, in or substantially in the forms furnished to the undersigned, and (ii) purchase the Preferred Stock Units of the Company as set forth below, hereby agrees to purchase such Preferred Stock Units from the Company and further agrees to join the Securities Purchase Agreement, the Security Agreement, the Registration Rights Agreement, the Voting Agreement and the Escrow Agreement, each as a party thereto, with all the rights and privileges appertaining thereto, and to be bound in all respects by the terms and conditions thereof. The undersigned specifically acknowledges having read the representations section in the Securities Purchase Agreement entitled “Buyer’s Representations and Warranties,” and hereby represents that the statements contained therein are complete and accurate with respect to the undersigned as a Buyer.
The Buyer hereby elects to purchase _______________ Preferred Stock Units consisting of _______________ Unit Shares and _______________ Unit Warrants for a Subscription Amount of US$_________________ (to be completed by the Buyer) under the Securities Purchase Agreement.
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DATED: ________________________
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1 Will reflect the Closing Date. Not to be completed by Buyer.
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Annex B
CUR HOLDINGS, INC.
INVESTOR CERTIFICATION
For Individual Investors Only
(all Individual Investors must INITIAL where appropriate):
Initial _______ |
I have a net worth of at least US$1 million either individually or through aggregating my individual holdings and those in which I have a joint, community property or other similar shared ownership interest with my spouse. (For purposes of calculating your net worth under this paragraph, (a) your primary residence shall not be included as an asset; (b) indebtedness secured by your primary residence, up to the estimated fair market value of your primary residence at the time of your purchase of the securities, shall not be included as a liability (except that if the amount of such indebtedness outstanding at the time of your purchase of the securities exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of your primary residence, the amount of such excess shall be included as a liability); and (c) indebtedness that is secured by your primary residence in excess of the estimated fair market value of your primary residence at the time of your purchase of the securities shall be included as a liability.) |
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Initial _______ |
I have had an annual gross income for the past two years of at least US$200,000 (or US$300,000 jointly with my spouse) and expect my income (or joint income, as appropriate) to reach the same level in the current year. |
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Initial _______ |
I am a director or executive officer of CÜR Holdings, Inc. |
For Non-Individual Investors
(all Non-Individual Investors must INITIAL where appropriate):
Initial _______ |
The investor certifies that it is a partnership, corporation, limited liability company or business trust that is 100% owned by persons who meet at least one of the criteria for Individual Investors set forth above. |
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Initial _______ |
The investor certifies that it is a partnership, corporation, limited liability company or business trust that has total assets of at least US$5 million and was not formed for the purpose of investing the Company. |
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Initial _______ |
The investor certifies that it is an employee benefit plan whose investment decision is made by a plan fiduciary (as defined in ERISA §3(21)) that is a bank, savings and loan association, insurance company or registered investment advisor. |
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Initial _______ |
The investor certifies that it is an employee benefit plan whose total assets exceed US$5,000,000 as of the date of this Agreement. |
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Initial _______ |
The undersigned certifies that it is a self-directed employee benefit plan whose investment decisions are made solely by persons who meet at least one of the criteria for Individual Investors. |
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Initial _______ |
The investor certifies that it is a U.S. bank, U.S. savings and loan association or other similar U.S. institution acting in its individual or fiduciary capacity. |
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Initial _______ |
The undersigned certifies that it is a broker-dealer registered pursuant to §15 of the Securities Exchange Act of 1934. |
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Initial _______ |
The investor certifies that it is an organization described in §501(c)(3) of the Internal Revenue Code with total assets exceeding US$5,000,000 and not formed for the specific purpose of investing in the Company. |
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Initial _______ |
The investor certifies that it is a trust with total assets of at least US$5,000,000, not formed for the specific purpose of investing in the Company, and whose purchase is directed by a person with such knowledge and experience in financial and business matters that such person is capable of evaluating the merits and risks of the prospective investment. |
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Initial _______ |
The investor certifies that it is a plan established and maintained by a state or its political subdivisions, or any agency or instrumentality thereof, for the benefit of its employees, and which has total assets in excess of US$5,000,000. |
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Initial _______ |
The investor certifies that it is an insurance company as defined in §2(13) of the Securities Act of 1933, or a registered investment company. |
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For Non-U.S. Person Investors
(all Investors who are not a U.S. Person must INITIAL this section):
Initial _______ |
The investor is not a “U.S. Person” as defined in Regulation S; and specifically the investor is not: |
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A. |
a natural person resident in the United States of America, including its territories and possessions (“United States”); |
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B. |
a partnership or corporation organized or incorporated under the laws of the United States; |
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C. |
an estate of which any executor or administrator is a U.S. Person; |
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D. |
a trust of which any trustee is a U.S. Person; |
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E. |
an agency or branch of a foreign entity located in the United States; |
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F. |
a non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. Person; |
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G. |
a discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated, or (if an individual) resident in the United States; or |
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H. |
a partnership or corporation: (i) organized or incorporated under the laws of any foreign jurisdiction; and (ii) formed by a U.S. Person principally for the purpose of investing in securities not registered under the Securities Act, unless it is organized or incorporated, and owned, by accredited investors (as defined in Rule 501(a) under the Securities Act) who are not natural persons, estates or trusts. |
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And, in addition: |
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I. |
the investor was not offered the securities in the United States; |
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J. |
at the time the buy-order for the securities was originated, the investor was outside the United States; and |
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K. |
the investor is purchasing the securities for its own account and not on behalf of any U.S. Person (as defined in Regulation S) and a sale of the securities has not been pre-arranged with a purchaser in the United States. |
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Annex C
CUR HOLDINGS, INC.
Investor Profile
(Must be completed by Investor)
Section–A - Personal Investor Information
Investor Name(s): |
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Individual executing Profile or Trustee: |
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Social Security Numbers / Federal I.D. Number: |
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Date of Birth: |
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Marital Status: |
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Joint Party Date of Birth: |
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Investment Experience (Years): |
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Annual Income: |
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Liquid Net Worth: |
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Net Worth*: |
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Tax Bracket: |
_____ 15% or below |
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25% - 27.5% |
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Over 27.5% |
Home Street Address: |
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Home City, State & Zip Code: |
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Home Phone: |
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Home Fax: |
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Home Email: |
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Employer: |
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Employer Street Address: |
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Employer City, State & Zip Code: |
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Bus. Phone: |
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Bus. Fax: |
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Bus. Email: |
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Type of Business: |
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Outside Broker/Dealer: |
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Section B – Certificate Delivery Instructions
____ Please deliver certificate to the Employer Address listed in Section A.
____ Please deliver certificate to the Home Address listed in Section A.
____ Please deliver certificate to the following address:
Section C – Form of Payment – Wire Transfer
____ Wire funds from my outside account according to Section 1(a) of the Securities Purchase Agreement.
____ The funds for this investment are rolled over, tax deferred from __________ within the allowed 60-day window.
Please check if you are a FINRA member or affiliate of a FINRA member firm: ____
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Investor Signature |
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* For purposes of calculating your net worth in this form, (a) your primary residence shall not be included as an asset; (b) indebtedness secured by your primary residence, up to the estimated fair market value of your primary residence at the time of your purchase of the securities, shall not be included as a liability (except that if the amount of such indebtedness outstanding at the time of your purchase of the securities exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of your primary residence, the amount of such excess shall be included as a liability); and (c) indebtedness that is secured by your primary residence in excess of the estimated fair market value of your primary residence at the time of your purchase of the securities shall be included as a liability.
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ANTI MONEY LAUNDERING REQUIREMENTS
The USA PATRIOT Act
The USA PATRIOT Act is designed to detect, deter, and punish terrorists in the United States and abroad. The Act imposes new anti-money laundering requirements on brokerage firms and financial institutions. Since April 24, 2002 all brokerage firms have been required to have new, comprehensive anti-money laundering programs.
To help you understand these efforts, we want to provide you with some information about money laundering and our steps to implement the USA PATRIOT Act.
What is money laundering?
Money laundering is the process of disguising illegally obtained money so that the funds appear to come from legitimate sources or activities. Money laundering occurs in connection with a wide variety of crimes, including illegal arms sales, drug trafficking, robbery, fraud, racketeering, and terrorism.
How big is the problem and why is it important?
The use of the U.S. financial system by criminals to facilitate terrorism or other crimes could well taint our financial markets. According to the U.S. State Department, one recent estimate puts the amount of worldwide money laundering activity at $1 trillion a year.
What are we required to do to eliminate money laundering?
Under rules required by the USA PATRIOT Act, our anti-money laundering program must designate a special compliance officer, set up employee training, conduct independent audits, and establish policies and procedures to detect and report suspicious transaction and ensure compliance with such laws. As part of our required program, we may ask you to provide various identification documents or other information. Until you provide the information or documents we need, we may not be able to effect any transactions for you.
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Annex D
ANTI-MONEY LAUNDERING INFORMATION FORM
The following is required in accordance with the AML provision of the USA PATRIOT ACT.
(Please fill out and return with requested documentation.)
INVESTOR NAME: ______________________________________________________
LEGAL ADDRESS: ______________________________________________________
SSN# or TAX ID#
OF INVESTOR: ______________________________________________________
YEARLY INCOME: _____________________________________________________
FOR INVESTORS WHO ARE INDIVIDUALS: AGE: ___________________________
NET WORTH: ________________________________________________________ *
* | For purposes of calculating your net worth in this form, (a) your primary residence shall not be included as an asset; (b) indebtedness secured by your primary residence, up to the estimated fair market value of your primary residence at the time of your purchase of the securities, shall not be included as a liability (except that if the amount of such indebtedness outstanding at the time of your purchase of the securities exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of your primary residence, the amount of such excess shall be included as a liability); and (c) indebtedness that is secured by your primary residence in excess of the estimated fair market value of your primary residence at the time of your purchase of the securities shall be included as a liability. |
FOR INVESTORS WHO ARE INDIVIDUALS: OCCUPATION: ________________________
ADDRESS OF BUSINESS OR OF EMPLOYER:____________________________________
___________________________________________________________________________
FOR INVESTORS WHO ARE ENTITIES:
YEARLY INCOME:____________ NET WORTH:____________
TYPE OF BUSINESS: ____________________________________
INVESTMENT OBJECTIVE(S) (FOR ALL INVESTORS): ___________________________
1. | IDENTIFICATION & DOCUMENTATION AND SOURCE OF FUND. Please submit a copy of non-expired identification for the authorized signatory(ies) on the investment documents, showing name, date of birth, address and signature. The address shown on the identification document MUST match the Investor’s address shown on the Investor Signature Page. |
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Current Driver’s License |
or |
Valid Passport |
or |
Identity Card |
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(Circle one or more) |
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2. |
If the Investor is a corporation, limited liability company, trust or other type of entity, please submit the following requisite documents: (i) Articles of Incorporation, Bylaws, Certificate of Formation, Operating Agreement, Trust or other similar documents for the type of entity; and (ii) Corporate Resolution or power of attorney or other similar document granting authority to signatory(ies) and designating that they are permitted to make the proposed investment. | ||||
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3. |
Please advise where the funds were derived from to make the proposed investment: |
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Investments |
Savings |
Proceeds of Sale |
Other ____________ |
(Circle one or more)
Signature: _______________________________________
Print Name: ______________________________________
Title (if applicable): ________________________________
Date: ___________________________________________
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