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EXHIBIT 10.37, PAGE 1 OF 8
STOCK SUBSCRIPTION AGREEMENT
Stock Subscription Agreement, dated as of April 25, 1997, between
Advanced Media, Inc., a Delaware corporation (the "Company") and the person or
persons executing the signature page hereto (the "Purchaser").
WHEREAS, the Purchaser desires to subscribe for, and the Company
desires to issue to the Purchaser, ___________ shares of common stock, par value
$.0001 per share (the "Common Stock") of the Company, all upon the terms and
conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
premises, covenants, representations and warranties herein contained, it is
hereby agreed as follows:
1. Subscription Price; Issuance of Stock; Price Guarantee.
(a) In reliance on the representations and warranties contained herein
and subject to the terms and conditions hereof, in exchange for the __________
shares of Common Stock to be issued to the Purchaser hereunder, the Purchaser
shall pay to the Company and amount equal to $0.05 per share or $__________ in
the aggregate (the "Purchase Price"), in immediately available funds, not later
than__________, 1997 (such shares of Common Stock described in this Section 1
being referred to herein as the "Stock").
(b) The Company agrees that if the value of the Stock purchased
hereunder (whether or not disposed of by the Purchaser) is not at least equal to
$0.11 on the date on which a registration statement on Form S-3 under the
Securities Act (as defined below) which registers shares of Common Stock is
declared effective, then the Company will issue to the Purchaser additional
shares of Common Stock so that the aggregate value, as defined below, on such
date of the Stock (whether or not disposed of by the Purchaser) and such
additional shares of Common Stock shall be at least equal to the amount obtained
by multiplying the total number of such shares by $0.11. In the event that the
number of additional shares required to be issued hereunder pursuant to the
terms of this Section 1(b) is not a whole number, then the number of shares to
be issued will be rounded to the nearest whole number, and no fractional shares
will be issued. The Company will issue such additional shares of Common Stock
within ten (10) business days following the date set forth above. For purposes
of this agreement, the "value" of shares of Common Stock shall be the average of
the closing bid price of shares of Common Stock on the ten (10) trading days
preceding the applicable date.
2. Representations and Warranties of the Company.
The Company represents and warrants to the Purchaser as follows:
2.1. Corporate Status.
The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware with full corporate
power and authority to carry its business as now conducted.
2.2. Authority of Agreement.
The Company has the power and authority to execute and deliver
this Agreement and to carry out its obligations hereunder. The execution,
delivery and performance by the Company of this Agreement and the consummation
of the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of the Company and this Agreement
constitutes the valid and legally binding obligation of the Company enforceable
against the Company in accordance with its terms, except as the same may be
limited by bankruptcy, insolvency, reorganization or other laws affecting the
enforcement of creditors' rights generally now or hereafter in effect and
subject to the application of equitable principles and the availability of
equitable remedies.
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EXHIBIT 10.37, PAGE 2 OF 8
2.3. No Conflicts.
The execution, delivery and performance of this Agreement and
the other instruments and agreements to be executed, delivered and performed by
the Company pursuant hereto and the consummation of the transactions
contemplated hereby and thereby by the Company do not and will not with or
without the giving of notice or the passage of time or both, violate or conflict
with or result in a breach or termination of any provision of, or constitute a
default under, the Certificate of Incorporation or the By-Laws or any order,
judgment, decree, statute, regulation, contract, agreement or any other
restriction of any kind or description to which the Company may be bound.
2.4 Fully Paid and Non-Assessable; Available Shares
Upon issuance of the Stock and payment therefor pursuant to
the terms hereof, each share of Stock shall be validly issued, fully paid and
non-assessable.
2.5 Reporting Requirements.
The Company will timely file with the SEC all periodic reports
required by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
3. Representations and Warranties of the Purchaser.
The Purchaser represents and warrants to the Company as follows:
3.1. Status.
If the Purchaser is a corporation or other entity, the
Purchaser is a corporation or other entity duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization with
full power and authority to execute, deliver and perform its obligations under
this Agreement. If the Purchaser is an individual, the Purchaser has legal
capacity to execute, deliver and perform his or her obligations under this
Agreement.
3.2 Authority for Agreements.
The Purchaser has the power and authority to execute and
deliver this Agreement and to carry out its obligations hereunder. The
execution, delivery and performance by the Purchaser of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary action on the part of the Purchaser and this Agreement
constitutes the valid and legally binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms, except as the
same may be limited by bankruptcy, insolvency, reorganization or other laws
affecting the enforcement of creditors' rights generally now or hereafter in
effect and subject to the application of equitable principles and the
availability of equitable remedies.
3.3. No Conflicts.
The execution, delivery and performance of this Agreement and
the other instruments and agreements to be executed, delivered and performed by
the Purchaser pursuant hereto and the consummation of the transactions
contemplated hereby and thereby by the Purchaser do not and will not with or
without the giving of notice or the passage of time or both, violate or conflict
with or result in a breach or termination of any provision of, or constitute a
default under, the Certificate of Incorporation or the By-Laws of the Purchaser
(if the Purchaser is a corporation), any other organizational instrument (if the
Purchaser is a legal entity other than a corporation) or any order, judgment,
decree, statute, regulation, contract, agreement or any other restriction of any
kind or description to which the Purchaser is a party or by which the Purchaser
may be bound.
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EXHIBIT 10.37, PAGE 3 OF 8
3.4. Investor Representations and Acknowledgments.
(a) The Purchaser is acquiring the Stock for the Purchaser's
own account for investment only and not with a view to, or for sale in
connection with, a distribution of the Stock within the meaning of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(the "Securities Act") and any applicable state, securities or blue-sky laws.
The Purchaser is an accredited investor (as defined under Regulation D under the
Securities Act).
(b) The Purchaser is not a party or subject to or bound by any
contract, undertaking, agreement or arrangement with any person to sell,
transfer or pledge the Stock or any part thereof to any person, and has no
present intention to enter into such a contract, undertaking, agreement or
arrangement.
(c) The Purchaser acknowledges to the Company that:
(i) The Company has advised the Purchaser that the Stock has
not been registered under the Securities Act or under the laws
of any state on the basis that the issuance thereof
contemplated by this Agreement is exempt from such
registration;
(ii) The Company's reliance on the availability of such
exemption is, in part, based upon the accuracy and
truthfulness of the Purchaser's representations contained
herein;
(iii) The Stock cannot be resold without registration or an
exemption under the Securities Act and such state securities
laws, and that certificates representing the Stock will bear a
restrictive legend to such effect;
(iv) The Purchaser has evaluated the merits and risks of
purchasing the Stock, and has such knowledge and experience in
financial and business matters that the Purchaser is capable
of evaluating the merits and risks of such purchase, is aware
of and has considered the financial risks and financial
hazards of purchasing the Stock, and is able to bear the
economic risk of purchasing the Stock, including the
possibility of a complete loss with respect thereto; and
(v) The Purchaser has had access to such information regarding
the business and finances of the Company, including without
limitation copies of the Company's annual report on form 10-K,
quarterly reports on form 10-Q, any current reports on form
8-K, recent press releases and pursuant to meetings with
management of the Company, and such other matters with respect
to the Company as would concern a reasonable person
considering the transactions contemplated by this Agreement
and/or concerned with the operation of the Company.
4. Registration of the Stock.
4.1 Registration Rights. The Company agrees that, following the
execution and delivery of this Agreement, it will prepare and file a
registration statement on Form S-3 (the "Registration Statement"), which
Registration Statement will include the Stock and any additional shares of
Common Stock issued pursuant to Section 1(b) of this Agreement . The Company
agrees to use commercially reasonable efforts to cause such Registration
Statement to be declared effective by the Securities and Exchange Commission on
or before July 15, 1997, although there can be no assurance that the
Registration Statement will be declared effective within such time.
4.2 Additional Shares. In the event that the Registration Statement is
not declared effective on or before July 15, 1997, the Company shall issue to
you, in respect of each 30-day period after July 15, 1997 for which the
Registration Statement is not effective, such number of shares as shall equal
two and one-half (22%) percent of the Stock, without giving effect to the number
of shares, if any, issued pursuant to the Section 1(b) hereof.
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EXHIBIT 10.37, PAGE 4 OF 8
4.3 Delay of Registration. Notwithstanding anything in the foregoing to
the contrary, the Company shall not be obligated to effect a the registration of
the Registration Statement at any time when the Company, in the good faith
judgment of its Board of Directors, reasonably believes that the filing thereof
at the time requested, or the offering of securities pursuant thereto, would be
detrimental to the interests of Company or its shareholders. The delay of the
Registration Statement cannot be suspended, pursuant to the provisions of the
preceding sentence, for more than 120 days after the date of the Board's
determination referenced in the preceding sentence.
5. Company's Obligations for Registrations.
5.1 Costs and Expenses. The Company shall pay all costs
(excluding expenses of counsel to the Holders and underwriting, dealers or
selling commissions, if any, which shall be borne by the Holders), fees and
expenses in connection with the filing of the Registration Statement filed
pursuant to Section 4 hereof including, without limitation, the Company's legal
and accounting fees, printing expenses, blue sky fees and expenses.
5.2 Blue Sky Laws. The Company will take all necessary action
which may be required in qualifying or registering the Stock included in a
registration statement for offer and sale under the securities or blue sky laws
of such states as reasonably are requested by the Holder(s); provided, that the
Company shall not be obligated to execute or file any general consent to service
of process or to qualify as a foreign corporation to do business under the laws
of any such jurisdiction; provided, further, that the Company shall not be
obligated to qualify or register shares of Common Stock in any state where the
Company's shares are not already qualified or registered for offer and sale as
of the effective date of the Company's public offering.
5.3 Indemnification of Holders. The Company shall indemnify
the Holder(s) of the Stock to be sold pursuant to any registration statement and
each person, if any, who controls such Holders within the meaning of Section 15
of the Securities Act or Section 20(a) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), against all loss, claim, damage, expense or
liability (including all expenses reasonably incurred in investigating,
preparing or defending against any claim whatsoever) to which any of them may
become subject under the Securities Act, the Exchange Act or otherwise, arising
from such registration statement; provided, however, that the Company shall not
be required to indemnify the Holders for any loss, claim, damage, expense or
liability arising from any misstatement or omission of a material fact which is
based on information furnished in writing by or on behalf of such Holders, or
their successors or assigns, for inclusion in the registration statement. In
addition, the Company shall not be obligated to indemnify the Holders for any
loss, claims, damage, expense or liability arising from any misstatement or
omission of a material fact where the Company shall have timely delivered to the
Holders amendments or supplements of a registration statement or prospectus
which correct such misstatement or omission of a material fact and the Holders
fail to utilize such amendment or supplement in the offer and sale of the Stock.
5.4 Indemnification of the Company. The Holders(s) of the
Stock to be sold pursuant to a registration statement, and their successors and
assigns, shall severally, and not jointly, indemnify the Company, its officers
and directors and each person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act, against all loss, claim, damage, expense or liability (including all
expenses reasonably incurred in investigating, preparing or defending against
any claim whatsoever) to which they may become subject under the Securities Act,
the Exchange Act or otherwise, arising from information furnished in writing by
or on behalf of such Holders, or their successors or assigns, for inclusion in
such registration statement.
5.5 Copies. The Company shall furnish to each Holder of Stock
such number of copies of the registration statement, each amendment thereto, the
prospectus included in such registration (including each preliminary prospectus)
and such other documents as such Holder any reasonably request in order to
facilitate the disposition of the Stock owned by such Holder.
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EXHIBIT 10.37, PAGE 5 OF 8
6. Further Assurances.
At any time and from time to time after the date hereof, each party
shall, without further consideration, execute and deliver to the other such
other instruments or documents and shall take such other actions as the other
may reasonably request to carry out the transactions contemplated by this
Agreement.
7. Miscellaneous.
Any party may waive compliance by the other with any of the provisions
of this Agreement. No waiver of any provision shall be construed as a waiver of
any other provision. Any waiver must be in writing. The headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. This Agreement may not be
modified or amended except in writing signed by both parties hereto. This
Agreement may be executed in several counterparts, each of which shall be deemed
an original, and all of which shall constitute one and the same instrument. This
Agreement shall be governed in all respects, including validity, interpretation
and effect, by the laws of the State of New York, applicable to contracts made
and to be performed in New York. This Agreement shall be binding upon and inure
to the benefit of and be enforceable by the successors and assigns of the
parties hereto. This Agreement shall not be assignable by either party, other
than to an affiliate (as defined under the Exchange Act and the rules and
regulations thereunder) thereof, without the prior written consent of the other,
such consent not to be unreasonably withheld. The rights and obligations
contained in this Agreement are solely for the benefit of the parties hereto and
are not intended to benefit or be enforceable by any other party, other than a
permitted assignee hereunder, under the third party beneficiary doctrine or
otherwise.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
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EXHIBIT 10.37, PAGE 6 OF 8
EXECUTION PAGE FOR SUBSCRIPTION BY INDIVIDUALS
(not applicable to subscriptions by entities, Individual
Retirement Accounts, Keogh Plans or ERISA Plans)
TOTAL SUBSCRIPTION AMOUNT $ ___________ .
/ / INDIVIDUAL OWNER / / CUSTODIAN UNDER
(One signature required below) Uniform Gifts to Minors Act
/ / JOINT TENANTS WITH RIGHT
OF SURVIVORSHIP (Insert applicable state)
(All tenants must sign below) (Custodian must sign below)
/ / TENANTS IN COMMON / / COMMUNITY PROPERTY
(All tenants must sign below) (Both spouses in community property
states must sign below)
Print information as it is to appear on the Company records.
___________________________
(Name of Subscriber) (Social Security or Taxpayer ID No.)
___________________________
(Home Address) (Home Telephone)
___________________________
(Business Address) (Business Telephone)
___________________________
(Name of Co-Subscriber) (Social Security or Taxpayer ID No.)
___________________________
(Home Address) (Home Telephone)
___________________________
(Business Address) (Business Telephone)
SIGNATURE(S)
Dated:______________, 1995.
(1)By:___________________________ (2) By:
Signature of Authorized Signatory Signature of Authorized Co-Signatory
_________________________________
Print Name of Signatory and Title, if applicable Print Name of Co-Signatory and Title,
if applicable
ACCEPTED AND AGREED:
ADVANCED MEDIA, INC.
By:______________________________ Dated: _____________________ , 1995.
Name:
Title:
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EXHIBIT 10.37, PAGE 7 OF 8
EXECUTION PAGE FOR SUBSCRIPTION BY ENTITIES
TOTAL SUBSCRIPTION AMOUNT $ ________________________________ .
/ / EMPLOYMENT BENEFIT PLAN OR TRUST (including pension plan, profit sharing plan, other
defined contribution plan and SEP)
/ / IRA, IRA ROLLOVER OR KEOGH PLAN
/ / TRUST (other than employee benefit trust)
/ / CORPORATION (Please include certified corporate resolution authorizing signature)
/ / PARTNERSHIP
/ / OTHER
Print information as it is to appear on the Company records.
_________________________________________
(Name of Subscriber) (Taxpayer ID Number)
_________________________________________ (Plan number, if applicable)
_________________________________________
(Address) (Telephone Number)
Name and Taxpayer ID number of sponsor, if applicable
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EXHIBIT 10.37, PAGE 8 OF 8
The undersigned trustee, partner, corporate officer or fiduciary certifies that
he or she has full power and authority from all beneficiaries, partners or
shareholders of the entity named above to execute this Note Purchase Agreement
on behalf of the entity and to make the representations, warranties and
agreements made herein on their behalf and that investment in the Notes has been
affirmatively authorized by the governing board or body of such entity and is
not prohibited by law or the governing documents of the entity.
SIGNATURE(S)
Dated: _____________ , 1995.
By: _____________________________ By:
Signature of Authorized Signatory Signature of Required Authorized
Co-Signatory
_________________________________
Print Name of Signatory Print Name of Required Co-Signatory
_________________________________
Print Name of Signatory Print Title of Required Co-Signatory
ACCEPTED AND AGREED:
ADVANCED MEDIA, INC.
By_______________________________
Dated:_______________________, 1995
Name:
Title: