SUBSCRIPTION AGREEMENT
This Subscription Agreement dated as of , 2006 (the "Agreement")
is entered into by and among Mediavest, Inc., a New Jersey corporation (the
"Company"), and the individuals and entities listed on Exhibit A hereto (the
"Purchasers").
BACKGROUND
WHEREAS, the Company is offering in a private placement to "accredited
investors" (as such term in defined in Regulation D ("Regulation D") promulgated
under the Securities Act of 1933, as amended (the "Securities Act")) a minimum
of $1,500,000 (the "Minimum Amount") and up to $10,000,000 (the "Maximum
Amount") of units consisting of (i) one share of common stock, $0.0001 par value
per share, of the Company (the "Common Stock") and (ii) one Warrant (the
"Warrant") to purchase, at an exercise price of $2.00 per share, one share of
Common Stock (each unit is being sold at an offering price of $1.00 per unit
(the "Units")) (the "Offering");
WHEREAS, the Purchaser desires to purchase that number of Units set forth
on the signature page hereof on the terms and conditions hereinafter set forth
and on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
representations and covenants hereinafter set forth, the parties hereto agree as
follows:
1. Authorization and Sale of Units.
1.1 Authorization. The Company has, or before the Initial Closing
(as defined in Section 2) will have, duly authorized the sale and issuance,
pursuant to the terms of this Agreement, of (a) up to 10,000,000 shares of its
Common Stock; and (b) Warrants to purchase up to 10,000,000 shares of Common
Stock in the form attached hereto at Exhibit B.
1.2 Sale of Units; Subscription for Units. Subject to the terms and
conditions of this Agreement, at the applicable Closing, the Company will sell
and issue to each of the Purchasers, and each of the Purchasers will purchase
the number of Units set forth opposite such Purchaser's name on Exhibit A for
the purchase price of $1.00 per Unit. The shares of Common Stock and the
Warrants being sold under this Agreement are sometimes hereinafter collectively
referred to as the "Securities." The Company's agreement with each of the
Purchasers is a separate agreement, and the sale of Units to each of the
Purchasers is a separate sale.
To subscribe for Units, this Agreement must be properly completed,
executed and the purchase price delivered to American Stock Transfer and Trust
Company, 59 Maiden Lane, New York, New York 10038, Attention: Henry Reinhold,
accompanied by a check payable to "American Stock Transfer and Trust Company,
Escrow Agent for Mediavest, Inc." (the "Escrow Agent"). A Purchaser desiring to
deliver the purchase price for the Units in the form of wire transfer shall wire
to the Escrow Agent at: JP Morgan Chase, 55 Water Street, New York, New York
10041, ABA# 021 000 021, Account #323-836909, Attention: Henry Reinhold. If the
purchase price is paid by wire transfer, the Purchaser shall (i) include the
Purchaser's name in the wire transfer instructions; and (ii) request from the
bank or other financial institution that is originating the transfer the federal
wire number with respect to the and retain that number for future reference.
1.3 Use of Proceeds. The Company will use the proceeds from the sale
of the Units for working capital and general corporate purposes.
2. The Closing. The initial closing shall occur on the sale by the Company
of at least the Minimum Amount and under this Agreement shall take place at such
time and place as the Company may designate (the "Initial Closing," and the date
on which the Initial Closing occurs, the "Initial Closing Date"). Following the
Initial Closing Date, and up to October 31, 2006, the Company may hold
additional closings (each, with the Initial Closing, a "Closing", and each such
date, with the Initial Closing Date, a "Closing Date") at such places and times
as designated by the Company until the earlier of (i) such time as the Company
has sold up to the Maximum Amount or (ii) October 31, 2006. There is no
assurance that either the Minimum Amount or the Maximum Amount will be sold.
Promptly following the applicable Closing, the Company shall deliver
to each of the Purchasers a certificate for the number of shares of Common Stock
and warrant agreements for the number Warrants being purchased by such
Purchaser, registered in the name of such Purchaser, against payment to the
Company of the purchase price therefor by check or wire transfer, as specified
in Exhibit A
The Purchaser hereby authorizes and directs the Company to deliver the
Securities to be issued to the Purchaser pursuant to this Agreement directly to
the residential or business address indicated on the signature page hereto.
3. Representations of the Purchasers. Each of the Purchasers severally
represents and warrants to the Company as follows:
(a) The Purchaser has received and carefully reviewed such
information and documentation relating to the Company that the Purchaser has
requested, including without limitation, the Company's filings with the United
States Securities and Exchange Commission (the "Commission").
(b) The Purchaser has had a reasonable opportunity to ask questions
of and receive answers from the Company concerning the Company and the Offering,
and all such questions, if any, have been answered to the full satisfaction of
the Purchaser.
(c) The Purchaser understands that the Company has determined that
the exemption from the registration provisions of the Securities Act provided by
Regulation D is applicable to the offer and sale of the Securities, based, in
part, upon the representations, warranties and agreements made by the Purchaser
herein.
(d) Except as set forth herein, no representations or warranties
have been made to the Purchaser by the Company or any agent, employee or
affiliate of the Company and in entering into this transaction, the Purchaser is
not relying upon any information other than the results of independent
investigation by the Purchaser.
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(e) The Purchaser has full power and authority to execute and
deliver this Agreement and to perform the obligations of the Purchaser hereunder
and this Agreement is a legally binding obligation of the Purchaser in
accordance with its terms.
(f) Regulation D.
(i) The Purchaser understands and acknowledges that: (A) the
Securities acquired pursuant to this Agreement have not been registered under
the Securities Act and are being sold in reliance upon an exemption from
registration afforded by Regulation D; and that such Securities have not been
registered with any state securities commission or authority; (B) pursuant to
the requirements of Regulation D, the Securities may not be transferred, sold or
otherwise exchanged unless in compliance with the provisions of Regulation D
and/or pursuant to registration under the Securities Act, or pursuant to an
available exemption thereunder; and (C) other than as set forth in Section 5.1
of this Agreement, the Company is under no obligation to register the Securities
under the Securities Act or any state securities law, or to take any action to
make any exemption from any such registration provisions available.
(ii) The Purchaser is an accredited investor within the
meaning of Rule 501 of Regulation D, is knowledgeable, sophisticated and
experienced in making, and is qualified to make, decisions with respect to
investment shares representing an investment decision like that involved in the
purchase of the Securities.
(iii) The Purchaser is purchasing the Securities for his, her
or its own account for investment only and has no intention of selling or
distributing the Securities and no other person has any interest in or
participation in the Securities or any right, option, security interest, pledge
or other interest in or to the Securities. The Purchaser recognizes that an
investment in the Securities involves a high degree of risk, including a risk of
total loss of the Purchaser. The Purchaser understands, acknowledges and agrees
that it must bear the economic risk of its investment in the Securities for an
indefinite period of time and has knowledge and experience in financial and
business matters such that it is capable of evaluating the risks of the
investment in the Securities and the Purchaser understands, acknowledges and
agrees that prior to any such offer or sale, the Company may require, subject to
the fulfillment of the Company's obligations under Section 6 of this Agreement,
as a condition to effecting a transfer of the Securities, an opinion of counsel,
acceptable to the Company, as to the registration or exemption therefrom under
the Securities Act and any state securities acts, if applicable.
(iv) The Purchaser acknowledges that the Securities will bear
a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE
"SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND
UNDER APPLICABLE STATE SECURITIES LAWS OR THE COMPANY SHALL
HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF
SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE
PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED.
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(g) Neither the Purchaser, nor any affiliate of the Purchaser
or any person acting on his, her or its behalf, has recently sold shares of
unregistered Common Stock of the Company.
4. Condition to the Obligations of the Company. The obligations of the
Company under Section 1.2 of this Agreement are subject to fulfillment, or the
waiver, of the following condition on or before the Closing:
4.1 Accuracy of Representations and Warranties. The representations
and warranties of the Purchasers contained in Section 3 shall be true on and as
of the Closing Date with the same effect as though such representations and
warranties had been made on and as of that date (except that any representation
or warranty expressly stated to have been made or given as of a specific date
need be true only as of such date).
5. Covenants of the Company.
5.1 Piggyback Registration Rights. If at any time the Company shall
determine to register under the Securities Act any of its securities (other than
on Form S-8 or Form S-4 or their then equivalents and other than shares to be
issued solely (i) in connection with any acquisition of any entity or business
(ii) upon the exercise of stock options, or (iii) pursuant to employee benefit
plans), it shall send to each holder of Registrable Shares (as defined below),
including each holder who has the right to acquire Registrable Shares, written
notice of such determination and, if within thirty (30) days after receipt of
such notice, such holder shall so request in writing, the Company shall use its
commercially reasonable efforts to include in such registration statement all or
any part of the Registrable Shares such holder requests to be registered
therein; provided that, if, in connection with any offering involving an
underwriting of Common Stock to be issued by the Company, the managing
underwriter shall prohibit the inclusion of shares of Common Stock by selling
holders in such registration statement or shall impose a limitation on the
number of shares of such Common Stock which may be included in any such
registration statement because, in its judgment, such limitation is necessary to
effect an orderly public distribution, and such limitation is imposed pro rata
with respect to all securities whose holders have a contractual, incidental
("piggyback") right to include such securities in the registration statement and
as to which inclusion has been requested pursuant to such right and there is
first excluded from such registration statement all shares of Common Stock
sought to be included therein by (i) any holder thereof not having any such
contractual, incidental registration rights, and (ii) any holder thereof having
contractual, incidental registration rights subordinate and junior to the rights
of the holders of Registrable Shares, the Company shall then be obligated to
include in such registration statement only such limited portion (which may be
none) of the Registrable Shares with respect to which such holder has requested
inclusion hereunder. "Registrable Shares" means the shares of Common Stock
included in the Units and the shares of Common Stock underlying the Warrants
included in the Units; provided, however, that shares of Common Stock shall
cease to be Registrable Shares upon any sale of such shares pursuant to (i) a
registration statement filed under the Securities Act, or (ii) Rule 144
promulgated under the Securities Act.
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5.2 Reservation of Common Stock. The Company shall reserve and
maintain a sufficient number of shares of Common Stock for issuance upon
exercise of all of the outstanding Securities.
6. Transfer of Securities. The Purchaser is aware that the Company will
make a notation in its appropriate records and issue "stop transfer"
instructions to its transfer agent with respect to the restrictions on the
transferability of such Securities.
(a) The Purchaser understands that this subscription is not binding
upon the Company until the Company accepts it, which acceptance is at the sole
discretion of the Company and is to be evidenced by the Company's execution of
this Agreement where indicated. This Agreement shall be null and void if the
Company does not accept it as aforesaid. In the event the Company does not
accept the Offering proceeds, the Offering will not be completed and all
Offering proceeds will thereafter be promptly returned to the Purchasers without
interest or deduction. The undersigned understands that the Company may, in its
sole discretion, reject this subscription, in whole or in part, and/or reduce
this subscription in any amount and to any extent, whether or not pro rata
reductions are made of any other investor's subscription.
(b) Subject to applicable state securities laws, the subscription
delivered to the Company by the Purchaser pursuant to this Agreement is not
subject to revocation by the Purchaser, but may be rejected by the Company, in
whole or in part, in the Company's sole discretion, in which event the purchase
price and execution copy of this Agreement submitted will be returned (by mail)
to the undersigned without interest or deduction within 15 business days
thereafter.
7. Forward Split. The Purchaser is aware that the Company intends to split
(or dividend) shares of its Common Stock on a two and a half-for-one basis (the
"Stock Split") on or about August 17, 2006 (the "Effective Date"). Since the
Closing is anticipated to take place after the Effective Date, the Purchasers in
the Offering will not benefit from the Stock Split. The Purchaser is aware that
all purchases made pursuant to this Agreement reflect post-Stock Split share
numbers and that the per share purchase price and the number of shares purchased
will be reflected on a post-Stock Split basis at Closing. Thus, whereas, without
giving effect to the Stock Split, each $1.00 paid by a Purchaser in the Offering
would have purchased a unit consisting of (i) two and a half shares of Common
Stock, and (ii) a warrant to purchase two and a half shares of Common Stock, at
an exercise price of $2.00 per share, after giving effect to the Stock Split,
each $1.00 paid by a Purchaser in the Offering will purchase a unit consisting
of (i) one share of Common Stock, and (ii) a warrant to purchase one share of
Common Stock, at an exercise price of $2.00 per share.
8. The Shares are subject to standard anti-dilution provisions in the
event of forward or reverse stock splits or recapitalizations. For example, if
the Company engages in a two for one reverse stock split, a holder of 100,000
Shares will be affected as follows:
Pre-Split Ownership:
100,000 Shares
Post-Split Ownership:
50,000 Shares
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9. Broker's Fees. The Purchaser is aware that, in connection with the
Offering, the Company may pay a broker's fee or fees totaling up to 10% of the
gross proceeds received by the Company from the Offering.
10. Miscellaneous.
10.1 Successors and Assigns. This Agreement and any rights and
obligations hereunder may not be transferred or assigned by the Purchaser
without the prior written consent of the Company. This Agreement shall inure to
the benefit of, and be binding upon the Company and the Purchaser and their
respective heirs, legal representatives and permitted assigns.
10.2 Survival. All representations and warranties and all covenants,
agreements and obligations made by the Company or the Purchasers in this
Agreement, or in any instrument or document furnished in connection with this
Agreement or the transactions contemplated hereby, shall survive the Closing and
any investigation at any time made by or on behalf of any indemnified party.
10.3. Indemnification. The Purchaser agrees to indemnify the Company
and hold it harmless from and against any and all losses, damages, liabilities,
costs and expenses which it may sustain or incur in connection with the breach
by the Purchaser of any representation, warranty or covenant made by the
Purchaser .
10.4 Notices. All notices or other communications hereunder shall be
in writing and shall be deemed to have been duly given if delivered personally
or mailed by certified or registered mail, return receipt requested, postage
prepaid, as follows:
(a) If to the Company, to Mediavest, Inc., c/o Trinad Capital,
2121 Avenue of the Stars, Suite 1650, Los Angeles, CA 90067, Attention: Chief
Executive Officer or to such other address as the Company or the undersigned
shall have designated to the other by like notice.
(b) If to a Purchaser, at his, her or its address set forth on
Exhibit A, or at such other address or addresses as may have been furnished to
the Company in writing by such Purchaser.
10.5 Entire Agreement. This Agreement and the Warrant embody the
entire agreement and understanding between the parties hereto with respect to
the subject matter hereof and supersede all prior agreements and understandings
relating to such subject matter.
10.6 Amendments and Waivers. Except as otherwise expressly set forth
in this Agreement, any term of this Agreement may be amended and the observance
of any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively) with the written consent of
the Company and the majority of the Purchasers. No waivers of or exceptions to
any term, condition or provision of this Agreement, in any one or more
instances, shall be deemed to be, or construed as, a further or continuing
waiver of any such term, condition or provision.
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10.7 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall be one and the same document.
10.8 Section Headings. The section headings are for the convenience
of the parties and in no way alter, modify, amend, limit, or restrict the
contractual obligations of the parties.
10.9 Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
10.10 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
[signature page to follow]
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SIGNATURE PAGE Date Signed: , 2006
- --------------------------- ---------
Number of Units:
--------------
Multiplied by Offering Price Per Unit: x $1.00
-----
Equals Amount: = $
---------------
- --------------------------- --------------------------------
Signature Second Signature
(if purchasing jointly)
- --------------------------- --------------------------------
Printed Name Printed Second Name
- --------------------------- --------------------------------
Entity Name Entity Name
- --------------------------- --------------------------------
Address Address
- --------------------------- --------------------------------
City, State and Zip Code City, State and Zip Code
- --------------------------- --------------------------------
Telephone-Business Telephone-Business
- --------------------------- --------------------------------
Facsimile-Business Facsimile-Business
- --------------------------- --------------------------------
Tax ID # or Social Security # Tax ID # or Social Security #
Name in which securities should be issued:
--------------------------------
================================================================================
This Agreement is agreed to and accepted as of , 2006.
--------
MEDIAVEST, INC.
By:
--------------------------------
Name:
Title:
EXHIBIT A
List of Purchasers
Name and Address No. of Units Aggregate
of Purchaser Purchase Price
$
$
$
$
$
$
$
$
$
TOTALS: $
- -------
EXHIBIT B
Warrant