SUBSCRIPTION AGREEMENT
FOR
SERIES B STOCK
(NEW INVESTORS)
This SUBSCRIPTION AGREEMENT, dated as of the ___ day of October, 1997,
is made between JAMtv Corporation, a Delaware corporation (the "Company"), and
__________________________________________, being referred to herein as the
"Subscriber."
W I T N E S S E T H :
WHEREAS, the Company is authorized to issue a series of shares of Series
B Convertible Preferred Stock, par value $.01 per share (the "Series B Stock"),
such Series B Stock having the rights, preferences, and privileges as set forth
in the Company's Second Amended and Restated Certificate of Incorporation;
WHEREAS, the Company desires to issue to the Subscriber, and the
Subscriber desires to purchase and receive from the Company, shares of Series B
Stock as described in this Agreement; and
WHEREAS, in connection with the offer and sale of the Series B Stock
hereunder, the Subscriber shall become a party to that certain Stockholders'
Agreement, dated as of June 2, 1997, among the Company and the other parties
named therein, as amended from time to time (the "Stockholders' Agreement");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein, the parties hereby agree as follows:
1. PURCHASE OF SHARES
1.1 ISSUANCE OF SHARES. Subject to the terms and conditions
of this Agreement, Subscriber hereby subscribes for, and the Company agrees to
sell to Subscriber, an aggregate of __________ shares of the Series B Stock (the
"Subscribed Shares") upon the terms and conditions of this Agreement. The
purchase by and sale to the Subscriber of the Subscribed Shares is made only by
means of this Agreement and any supplements or amendments hereto. The
Subscriber hereby agrees that this subscription is and shall be irrevocable.
1.2 CONSIDERATION FOR SHARES. The consideration to the
Company for the Subscribed Shares shall be $5.00 per share (the "Purchase
Price"), and the representations, warranties, covenants, and other undertakings
of Subscriber set forth herein. Simultaneously with the execution of this
Agreement, the Subscriber shall pay to the Company the Purchase Price in cash or
such other form of immediately available funds as is acceptable by the Company.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents and warrants to, and covenants with, the Subscriber as
follows:
2.1 ORGANIZATION. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to own, lease and
operate its properties, to carry on its business as presently conducted and as
proposed to be conducted and to carry out the transactions contemplated by this
Agreement.
2.2 AUTHORIZATION. The execution, delivery and performance
by the Company of this Agreement has been duly authorized by all requisite
corporate action by the Company, and this Agreement constitutes a valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms except to the extent that enforceability may be limited by
bankruptcy, insolvency or other similar laws affecting creditors' rights
generally or equitable principles.
The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby, the compliance with the
provisions hereof by the Company and the issuance, sale and delivery of the
Subscribed Shares and the Series B Reserved Shares (as defined in Section 2.4
below) by the Company will not:
(a) violate any court order or legal requirement applicable to
the Company or any of its properties or assets,
(b) conflict with or result in any breach of any of the terms,
conditions or provisions of, or constitute (with due notice or lapse of
time, or both) a default (or give rise to any right of termination,
cancellation or acceleration) under, or result in the creation of any
encumbrance upon any of the properties or assets of the Company under,
(i) the Certificate of Incorporation, (ii) the by-laws of the Company or
(iii) any note, indenture, mortgage, lease agreement or other contract,
agreement or instrument to which the Company is a party or by which it
or any of its properties or assets is bound or affected, or
(c) require the approval, consent, authorization or act of, or
the making of any declaration, filing or registration with, any person
(other than such notifications or filings required under applicable
state securities laws, if any, which shall be made by the Company on a
timely basis).
2.3 CAPITALIZATION. (a) The authorized capital stock of the
Company immediately prior to the consummation of the transactions contemplated
hereby shall consist of:
(i) 2,500,000 shares of Series A Preferred Stock, of which
1,666,666 shares of Series A-I Convertible Preferred Stock are
outstanding;
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(ii) 8,000,000 shares of Common Stock, of which (x) 1,150,530
shares shall have been validly issued and be outstanding, fully paid and
non-assessable, with no personal liability attaching to the ownership
thereof; (y) 2,500,000 shares shall have been duly reserved for issuance
upon the conversion of the Series A Preferred Stock, and (z) 400,000
shares shall have been duly reserved for issuance upon conversion of the
Series B Stock;
(iii) 400,000 shares of Series B Preferred Stock, none of which
are outstanding; and
(vi) 1,600,000 shares of preferred stock, par value $.01 per
share, issuable in series, of which none are outstanding.
(b) Except as set forth on SCHEDULE 2.3(b) hereto, there are no
preemptive or similar rights to purchase or otherwise acquire shares of the
capital stock of the Company pursuant to any provision of law, the Certificate
of Incorporation or by-laws of the Company (in each case as amended and in
effect on the date hereof), or any agreement to which the Company is a party;
and, there is, to the best knowledge of the Company, no agreement, restriction
or encumbrance (such as a right of first refusal, right of first offer, proxy,
voting agreement, voting trust, registration rights agreement, stockholders'
agreement, etc.) with respect to the sale or voting of any shares of capital
stock of the Company (whether outstanding or issuable upon conversion or
exercise of outstanding securities). The transactions contemplated by this
Agreement will not trigger any anti-dilution protection provisions given by the
Company to any person or entity (including without limitation, any stockholder,
lender, warrant holder, lessor and/or licensee).
2.4 ISSUANCE OF SERIES B STOCK AND RESERVATION OF SERIES B
RESERVED SHARES. The Company has authorized (a) the issuance of up to 400,000
shares of Series B Stock, and (b) the reservation of such number of shares of
Common Stock as is necessary, but not less than 400,000 shares of Common Stock,
for issuance upon conversion of the Series B Stock (such reserved shares being
referred to herein as the "SERIES B RESERVED SHARES").
2.5 AUTHORIZATION OF THE SERIES B STOCK AND SERIES B RESERVED
SHARES. The authorization, issuance, sale and delivery of the Series B Stock
and the authorization, reservation, issuance, sale and delivery of the Series B
Reserved Shares have been duly authorized by all requisite corporate action of
the Company, and when issued, sold and delivered in accordance with this
Agreement, the Series B Stock and the Series B Reserved Shares will be validly
issued and outstanding, fully paid and nonassessable with no personal liability
attaching to the ownership thereof, and not subject to preemptive or any other
similar rights of the stockholders of the Company or others. The terms,
designations, powers, preferences and relative, participating, optional and
other special rights, and the qualifications, limitations and restrictions, of
the Series B Stock are as stated in the Certificate of Incorporation.
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3. REPRESENTATIONS, WARRANTIES, AND COVENANTS OF THE SUBSCRIBER.
The Subscriber represents and warrants to the Company as follows:
(i) The Subscriber is acquiring the Series B Stock being
purchased by it hereunder for its own account, for investment and
not with a view to the distribution thereof within the meaning of
the Securities Act of 1933, as amended (the "Securities Act");
(ii) The Subscriber understands that (i) the Series B
Stock has not been, and that the Series B Reserved Shares will
not be, registered under the Securities Act, by reason of their
issuance by the Company in a transaction exempt from the
registration requirements of the Securities Act and (ii) the
Series B Stock and the Series B Reserved Shares may not be sold
unless such disposition is registered under the Securities Act or
is exempt from registration;
(iii) The Subscriber further understands that the
exemption from registration afforded by Rule 144 (the provisions
of which are known to the Subscriber) promulgated under the
Securities Act depends on the satisfaction of various conditions,
and that, if applicable, Rule 144 may afford the basis for sales
only in limited amounts;
(iv) The Subscriber has not employed any broker or
finder in connection with the transactions contemplated by this
Agreement;
(v) The Subscriber is an "Accredited Investor" (as
defined in Rule 501(a) under the Securities Act);
(vi) The Subscriber has such knowledge and experience in
financial or business matters that it is capable of evaluating the
merits and risks of the transactions contemplated by this Agreement;
(vii) The Subscriber has been furnished with any materials which
the Subscriber has requested relating to the Company, its business and
financial condition, the offering of the Series B Stock, and the
simultaneous offering of the Series A-II Convertible Preferred Stock of
the Company, and the Subscriber has been afforded an opportunity to ask
questions and receive answers concerning such matters;
(viii) The Subscriber has full power and authority
without the consent or approval of any court, agency or other
third party, to enter into and perform this Agreement. This
Agreement has been duly authorized by all necessary action on the
part of the Subscriber. When duly executed and delivered this
Agreement will constitute a valid and binding agreement of the
Subscriber enforceable against the Subscriber in accordance with
its terms except to the extent that enforceability
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may be limited by bankruptcy, insolvency or other similar laws
affecting creditors' rights generally or equitable principles.
4. MISCELLANEOUS PROVISIONS.
4.1 TRANSFER TAXES. The Company will be liable for and will
pay, and will hold the Subscriber harmless from, any and all liability with
respect to any stamp, transfer or similar taxes arising from the execution,
delivery or performance of this Agreement or any modification, amendment or
alteration of the terms or provisions of this Agreement, and that it will
similarly be liable for, pay and hold the Subscriber harmless from all issue
taxes in respect of the issuance of the Series B Stock and the Series B Reserved
Shares to such Subscriber.
4.2 EXCHANGES; LOST, STOLEN OR MUTILATED CERTIFICATES. Upon
surrender by the Subscriber to the Company of any certificate representing
shares of Series B Stock or Series B Reserved Shares purchased or acquired
hereunder, the Company at its expense will issue in exchange therefor, and
deliver to such Subscriber, a new certificate or certificates representing such
shares, in such denominations as may be requested by such Subscriber. Upon
receipt of evidence satisfactory to the Company of the loss, theft, destruction
or mutilation of any certificate representing any Series B Stock or Series B
Reserved Shares purchased or acquired by the Subscriber hereunder, and in case
of any such loss, theft or destruction, upon delivery of any indemnity agreement
satisfactory to the Company, or in any case of any such mutilation, upon
surrender and cancellation of such certificate, the Company at its expense will
issue and deliver to such Subscriber a new certificate for such Series B Stock
or Series B Reserved Shares of like tenor, in lieu of such lost, stolen or
mutilated certificate.
4.3 NO BROKER'S COMMISSION. The Subscriber and the Company
agree that none of the parties has employed or retained any person, firm, or
Company as a broker, dealer, or sales agent to bring about or to represent any
of them in the transaction contemplated by this Agreement.
4.4 CONSTRUCTION. This Agreement shall be governed by, and
construed and enforced in accordance with, the internal laws of the State of
Illinois without giving effect to the conflict of law provisions thereof.
4.5 SURVIVAL OF REPRESENTATIONS. All representations,
warranties, covenants, and agreements made herein shall survive the execution
and delivery of this Agreement.
4.6 NOTICES. All notices hereunder shall be in writing and
shall be deemed to have been given at the time when mailed by certified mail,
return receipt requested and postage prepaid, addressed as follows:
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If to the Company:
JAMtv Corporation
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Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
with a copy to:
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Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
If to the Subscriber:
___________________________________
___________________________________
___________________________________
Facsimile:_________________________
4.7 ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the Company, the Subscriber, and their respective
successors and permitted assigns. The Subscriber shall not assign this
Agreement without the prior written consent of the Company.
4.8 AMENDMENTS AND WAIVERS. This Agreement and the exhibit
hereto set forth the entire understanding of the parties with respect to the
investment contemplated hereby. This Agreement may be amended only by an
instrument in writing signed by both parties.
4.9 INTERPRETATION. In case any or one or more of the
provisions contained in this Agreement shall, for any reason, be held to be
invalid, illegal, or unenforceable in any respect, such invalidity, illegality,
or unenforceability shall not affect any other provisions of this Agreement, and
this Agreement shall be construed as if such invalid, illegal, or unenforceable
provision had never been contained herein.
4.10 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
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4.11 HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not constitute a part hereof.
4.12 STOCKHOLDERS' AGREEMENT. The Subscriber hereby agrees
that by executing and delivering this Agreement, the Subscriber and the shares
acquired pursuant hereto shall be bound by all of the terms and conditions of
the Stockholders' Agreement, a copy of which is set forth as EXHIBIT A hereto,
including but not limited to restrictions on transfer.
4.13 REGISTRATION RIGHTS. The shares issuable upon conversion
of the Subscribed Shares shall be "Registrable Securities" within the meaning of
the Registration Rights Agreement, dated as of June 2, 1997, by and among the
Company and the parties named therein, a copy of which is set forth as EXHIBIT
B, and the Subscriber, by executing and delivering this Agreement, agrees to be
bound by the terms and conditions thereof.
[Signature Page Follows]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day and year first above written.
JAMTV CORPORATION
By:
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇, CEO
SUBSCRIBER
--------------------------------
[Print Name]
By:
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Name:
Title:
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