EQUITY PURCHASE AGREEMENT
THIS EQUITY PURCHASE AGREEMENT entered into as of the 29th day
of July, 2015 (this "AGREEMENT"), by and between RED RIVER
VENTURES LLC, a Wyoming limited liability company ("INVESTOR"),
and MEDIA ASSETS GROUP, INC., a Wyoming corporation (the
"COMPANY").
WHEREAS, the parties desire that, upon the terms and
subject to the conditions contained herein, the Company shall
issue and se11 to Investor, from time to time as provided
herein, and Investor shall purchase up to Five Million Dollars
($5,000,000) of the Company's Common Stock (as defined below);
and
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1 DEFINED TERMS as used in this Agreement, the
following terms shall have the following meanings specified or
indicated (such meanings to be equally applicable to both the
singular and plural forms of the terms defined)
"CLEARING DATE" shall be the date in which the Estimated
Put Shares (as defined in Section 2.2(a)) have been deposited
into the Investor's brokerage account.
"CLOSING 11 shall mean one of the closings of a purchase
and sale of shares of Common Stock pursuant to Section 2.3.
"CLOSING CERTIFICATE" shall mean the closing certificate of
the Company in the form of Exhibit B hereto.
"CLOSING PRICE" shall mean the closing bid price for the
Company's common stock on the Principal Market on a Trading Day
as reported by Bloomberg Finance L.P.
"COMMITMENT PERIOD" shall mean the period commencing on the
Effective Date, and ending on the earlier of (i) the date on
which Investor shall have purchased Put Shares pursuant to this
Agreement for an aggregate Purchase Price of the Maximum
Commitment Amount, or (ii) the date occurring twenty four (24)
months from the date of commencement of the Commitment Period.
"DOLLAR VOLUME" shall mean the product of (a) the Closing
Price multiplied by (b) the trading volume on the Principal
Market on a Trading Day.
"EFFECTIVE DATE" shall mean the date that the Regulation A+
Offering is declared effective by the SEC.
"MATERIAL ADVERSE EFFECT" shall mean any effect on the
business, operations, properties, or financial condition of the
Company that is material and adverse to the Company and/or any
condition, circumstance, or situation that would prohibit or
otherwise materially interfere with the ability of the Company
to enter into and perform its obligations under any of this
Agreement.
"PURCHASE PRICE" shall mean 80% of tl1e Market Price on
such date on which the Purchase Price is calculated in
accordance with the terms and conditions of this Agreement.
"PUT" shall mean the right of the Company to require the
Investor to purchase shares of Common Stock, subject to the
terms and conditions of this Agreement.
"PUT DATE" shall mean any Trading Day during the Commitment
Period that a Put Notice is deemed delivered pursuant to Section
22(b).
"PUT NOTICE" shall mean a written notice, substantially in
the form of Exhibit A hereto, to Investor setting forth the
Investment Amount with respect to which the Company intends to
1equire Investor to purchase shares of Common Stock pursuant to
the terms of this Agreement
"PUT SHARES" shall mean all shares of Common Stock issued
or issuable pursuant to a Put that has been exercised or may be
exercised in accordance with the terms and conditions of this
Agreement.
"REGISTERED SECURITIES" shall mean the (a) Put Shares, and
(b) any securities issued or issuable with respect to any of the
foregoing by way of exchange, stock dividend or stock split or
in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization or otherwise. As
to any particular Registered Securities, once issued such
securities shall cease to be Registrable Securities when (i) a
Regulation A+ Offering has been declared effective by the SEC
and such Registrable Securities have been disposed of pursuant
to a Regulation A+ Offering, (ii) such Registrable Securities
have been sold under circumstances under which ail of the
applicable conditions of Rule 144 are met, (ii;) such time as
such Registrable Securities have been otherwise transferred to
holders who may trade such shares without restriction under the
Securities Act or (iv) in the opinion of counsel to the Company,
which counsel shall be reasonably acceptable to Investor, such
Registrable Securities may be sold without registration under
the Securities Act or the need for an exemption from any such
registration requirements and without any time, volume or
n:anner limitations pursuant to Rule 144(b)(i) (or any similar
provision then in effect) under the Securities Act.
"REGULATION A+ OFFERING" shall mean the Company's effective
Regulation A+ Offering on file with the SEC, and any follow up
offering or amendment thereto.
"SHORT SALES" shall mean all "short sales" as defined in
Rule 200 of Regulation SHO under the Exchange Act (but shall not
be deemed to include the location and/or reservation of
borrowable shares of Common Stock).
"SUBSCRIPTION DATE" shall mean the date on which this
Agreement is executed and delivered by the Company and Investor.
"TRADING DAY'' shall mean a day on which the Principal
Market shall be open for business.
"UNDERWRITER" shall mean any underwriter participating in
any disposition of the Registered Securities on behalf of
Investor pursuant to the Regulation A+ Offering.
"VALUATION PERIOD" shall mean the period of ten (10)
Trading Days immediately following the Clearing Date associated
with the applicable Put Notice during which the Purchase Price
of the Common Stock is valued; provided, however, that if a
Valuation Event occurs during any Valuation Period, a new
Valuation Period shall begin on the Trading Day immediately
after the occurrence of such Valuation Event and end on the
tenth (l0th) Trading Day thereafter. Investor shall notify the
Company. in writing of the occurrence of the Clearing Date
associated with a Put Notice. The Valuation Period shall begin
the first Trading Day following such written notice from
Investor.
ARTICLE II
PURCHASE AND SALE OF COMMON STOCK
Section 2.l INVESTMENTS.
(a) PUTS. Upon the terms and conditions set forth
herein (including, without limitation, the provisions of Article
VII), on any Put Date the Company may exercise a Put by the
delivery of a Put Notice. The number of Put Shares that Investor
shall purchase pursuant to such Put shall be determined by
dividing the Investment Amount specified in the Put Notice by
the Purchase Price with respect to such Put Notice.
(b) DUE DILIGENCE FEE. As a condition for the
execution of this Agreement by the Investor, the Company shall
issue to the Investor three million (3,000,000) common shares to
be included in the Regulation A+ Offering and be eligible for
immediate resale upon the Effective Date by the SEC.
Section 2.2 MECHANICS.
(a) PUT NOTICE. At any time and from time to time
during the Commitment Period, the Company may deliver a Put
Notice to Investor, subject to the conditions set forth in
Section 7.2; provided, however, that the Investment Amount
identified in the applicable Put Notice, when taken together
with all prior Put Notices, shall not exceed the Maximum
Commitment Amount. On the Put Date the Company shall deliver to
Investor's brokerage account estimated put shares equal to the
Investment Amount indicated in the Put Notice divided by the
Closing Price on the Trading Day immediately preceding the Put
Date, multiplied by one hundred twenty five percent (125%) (the
"Estimated Put Shares"). On the Trading Date immediately
following delivery of the Estimated Put Shares, Investor shall
deliver payment by check or wire transfer to the Company an
amount equal to the par value of the Estimated Put Shares ("Par
Value Payment").
(b) DATE OF DELIVERY OF PUT NOTICE. A Put Notice shall
be deemed delivered on (i) the Trading Day it is received by
facsimile or otherwise by Investor if such notice is received on
or prior to 12:00 noon New York time, or (ii) the immediately
succeeding Trading Day if it is received by facsimile or
otherwise after 12:00 noon New York time on a Trading Day or at
any time on a day which is not a Trading Day.
(c) FLOOR PRICE. In the event that, during a Valuation
Period, the Closing Price on any Trading Day falls more than
twenty five percent (25%) below the average of the closing trade
prices for the ten (IO) trading days immediately preceding the
date of the Company's Put Notice (a "Low Bid Price"), for each
such Trading Day, the parties shall have no right to sell and
shall be under no obligation to purchase one tenth (I/I 0th) of
the Investment Amount specified in the Put Notice, and the
Investment Amount shall accordingly be deemed reduced by such
amount. In the event that during a Valuation Period there exists
a Low Bid Price for any three (3) Trading Days-not necessarily
consecutive-then the balance of each party's right and
obligation to sell and purchase the Investment Amount under such
Put Notice shall terminate on such third Trading Day
("Termination Day"), and the Investment Amount shall be adjusted
to include only one-tenth (I/10th) of the initial Investment
Amount for each Trading Day during the Valuation Period prior to
the Termination Day that the Bid Price equals or exceeds the Low
Bid Price.
Section 2.3 CLOSINGS. At the end of the Valuation Period
the Purchase Price shall be established and the number of Put
Shares shall be determined for a particular Put If the number of
Estimated Put Shares initially delivered to Investor is greater
than the Put Shares purchased by Investor pursuant to such Put,
then immediately after the Valuation Period the Investor shall
deliver to Company any excess Estimated Put Shares associated
with such Put. If the number of Estimated Put Shares delivered
to Investor is less than the Put Shares purchased by Investor
pursuant to a Put, then immediately after the Valuation Period
the Company shall deliver to Investor the difference between the
Estimated Put Shares and the Put Shares issuable pursuant to
such Put. The Closing of a Put shall occur upon the Mt Trading
Day following the completion of the Valuation Period, whereby
Investor shall deliver the Investment Amount specified in 1he
Put Notice, less the Par Value Payment, by wire transfer of
immediately available funds to an account designated by the
Company. In lieu of delivering physical certificates
representing the Common Stock issuable in accordance with clause
(a) of this Section 2.3, and provided that the Transfer Agent
then is participating in the Depository Trust Company ("DTC")
Fast Automated Securities Transfer ("FAST") program, upon
request of Investor, but subject to the applicable provisions of
Article VIII hereof, the Company shall use its commercially
reasonable efforts to cause the Transfer Agent to electronically
transmit, prior to the applicable Closing Date, the applicable
Put Shares by crediting the account of the Investor's prime
broker with DTC through its Deposit Withdrawal Agent Commission
("DWAC") system, and pro\ide proof satisfactory to the Investor
of such delivery. In addition, on or prior to such Closing Date,
each of the Company and Investor shall deliver to each other all
documents, instruments and writings required to be delivered or
reasonably requested by either of them pursuant to this
Agreement in order to implement and effect the transactions
contemplated herein.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF INVESTOR
Investor represents and warrants to the Company that:
Section 3.1 INTENT. Investor is entering into this
Agreement for its own account and Investor has no present
arrangement (whether or not legally binding) at any time to sell
the Registered Securities to or through any person or entity;
provided, however, that Investor reserves the right to dispose
of the Registered Securities at any time in accordance with
federal and state securities laws applicable to such
disposition.
Section 3.2 NO LEGAL ADVICE FROM THE COMPANY. The Investor
acknowledges that it has had the opportunity to review this
Agreement and the transactions contemplated by this Agreement
with its own legal counsel and investment and tax advisors. The
Investor is relying solely on such counsel and advisors and not
on any statements or representations of the Company or any of
its representatives or agents for legal, tax or investment
advice with respect to this investment, the transactions
contemplated by this Agreement or the securities laws of any
jurisdiction.
Section 3.3 SOPHISTICATED INVESTOR. Investor is a
sophisticated investor (as described in Rule 506(b)(2)(ii) of
Regulation D) and an accredited investor (as defined in Rule 501
of Regulation D), and Investor has such experience in business
and financial matters that it i1 capable of evaluating the
merits and risks of an investment in the Registered Securities.
Investor acknowledges that an investment in the Registered
Securities is speculative and involves a high degree of risk.
Section 3.4 AUTHORITY. (a) Investor has the requisite power
and authority to enter into and perform its obligations under
this Agreement and the transactions contemplated hereby in
accordance with its terms; the execution and delivery of this
Agreement and the consummation by it of the transactions
contemplated hereby and thereby have been duly authorized by all
necessary action and no further consent or authorization of
Investor or its partners is required; and (c) this Agreement has
been duly authorized and validly executed and delivered by
Investor and constitutes a valid and binding obligation of
Investor enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency, or similar laws
relating to, or affecting generally the enforcement of,
creditors' rights and remedies or by other equitable principles
of general application.
Section 3.5 NOT AN AFFILIATE. Investor is not an officer,
director or "affiliate" (as that term is defined in Rule 405 of
the Securities Act) of the Company.
Section 3.6 ORGANIZATION AND STANDING. Investor is a
limited liability company duly organized, validly existing and
in good standing under the laws of the State of Wyoming and has
all requisite power and authority to own, lease and operate its
properties and to carry on its business as now being conducted.
Investor is duly qualified and in good standing in every
jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, other
than those in which the failure so to qualify would not have a
material adverse effect on Investor.
Section 3.7 ABSENCE OF CONFLICTS. The execution and
delivery of this Agreement and any other document or instrument
contemplated hereby, and the consummation of the transactions
contemplated hereby and thereby, and compliance-with the
requirements hereof and thereof, will not (a) violate any law,
rule, regulation, order, writ, judgment, injunction, decree or
award binding on Investor, (b) violate any provision of any
indenture, instrument or agreement to which Investor is a party
or is subject, or by which Investor or any of its assets is
bound, or conflict with or constitute a material default
thereunder, (c) result in the creation or imposition of any lien
pursuant to the terms of any such indenture, instrument or
agreement, or constitute a breach of any fiduciary duty owed by
Investor to any third party, or (d) require the approval of any
third-party (that has not been obtained) pursuant to any
material contract, instrument, agreement, relationship or legal
obligation to which Investor is subject or to which any of its
assets, operations or management may be subject.
Section 3.8 DISCLOSURE; ACCESS TO INFORMATION. Investor had
an opportunity to review copies of the SEC Documents filed on
behalf of the Company and has had access to all publicly
available information with respect to the Company.
Section 3.9 MANNER OF SALE. At no time was Investor
presented with or solicited by or through any leaflet, public
promotional meeting, television advertisement or any other form
of general solicitation or advertising.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Investor that, except as
disclosed in the SEC Documents:
Section 4.1 ORGANIZATION OF THE COMPANY. The Company is a
corporation duly organized and validly existing and in good
standing under the laws of the State of Wyoming and has all
requisite power and authority to own, lease and operate 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 or property owned by it
makes such qualification necessary, other t. an those in which
the failure so to qualify would not have a Material Adverse
Effect.
Section 4.2 AUTHORITY. (a) The Company has the requisite
corporate power and authority to enter into and perform its
obligations under this Agreement and to issue the Put Shares;
(b) the execution and delivery of this Agreement by the Company
and the consummation by it of the transactions contemplated
hereby and thereby have been duly authorized by all necessary
corporate action and no further consent or authorization of the
Company or its Board of Directors or stockholders is required;
and (c) each of this Agreement and has been duly executed and
delivered by the Company and constitutes a valid and binding
obligation of the Company enforceable against the Company in
accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, or similar laws
relating to, or affecting generally the enforcement of,
creditors' rights and remedies or by other equitable principles
of general application.
Section 4.3 CAPITALIZATION. As of the date hereof, the
authorized capital stock of the Company consists of 500,000,000
shares of Common Stock, $0.001 par value per share, of which
200,000,000 shares were issued and outstanding as of July 21,
2015.
Except as otherwise disclosed in the SEC Documents or on
Schedule 4.3, there are no outstanding securities which are
convertible into shares of Common Stock; whether such conversion
is currently exercisable or exercisable only upon some future
date or the occurrence of some event in the future.
All of the outstanding shares of Common Stock of foe
Company have been duly and validly authorized and issued and are
fully paid and non-assessable.
Section 4.4 COMMON STOCK. The Company is in full compliance
with all reporting requirements of the Exchange Act, and the
Company has maintained all requirements for the continued
listing or quotation of the Common Stock, and such Common Stock
is currently listed or quoted on the Principal Market which is
presently the OTCQX.
Section 4.5 SEC DOCUMENTS. The Company may make available
to Investor true and complete copies of the SEC Documents
(including, without limitation, proxy information and
solicitation materials). To the Company's knowledge, the Company
has not provided to Investor any information that, according to
applicable law, rule or regulation, should have been disclosed
publicly prior to the date hereof by the Company, but which has
not been so -disclosed. As of their respective dates, the SEC
Documents complied in all material respects with the
requirements of the Exchange Act, and other federal laws, rules
and regulations applicable to such SEC Documents, and none of
the SEC Documents 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. The financial statements of the Company included in
the SEC Documents comply as to form and substance in all
material respects with applicable accounting requirements and
the published rules and regulations of the SEC or other
applicable rules and regulations with respect thereto. Such
financial statements have been prepared in accordance with
generally accepted accounting principles applied on a consistent
basis during the periods involved (except (a) as may be
otherwise indicated in such financial statements or the notes
thereto or (b) in the case of unaudited interim statements, to
the extent they may not include footnotes or may be condensed or
summary statements) and fairly present in all material respects
the financial position of the Company as of the dates thereof
and the results of operations and cash flows for the periods
1hen ended (subject, in the case of unaudited statements, to
normal year-end audit adjustments).
Section 4.6 VALID ISSUANCES. When issued and paid for as
herein provided, the Put Shares shall be duly and validly
issued, fully paid, and non-assessable. The sales of the Put
Shares pursuant to this Agreement, and the Company's performance
of its obligations hereunder, shall not (a) result in the
creation or imposition of any liens, charges, claims or other
encumbrances upon the Put She; or any of the assets of the
Company, or (b) entitle the holders of outstanding shares of
Common Stock to preemptive or other rights to subscribe to or
acquire the Common Stock or other securities of the Company. The
Put Shares shall not subject Investor to personal liability, in
excess of the subscription price by reason of the ownership
thereof.
Section 4.7 NO CONFLICTS. The execution, delivery and
performance of this Agreement by the Company and the
consummation by the Company of the transactions contemplated
hereby, including without !imitation the issuance of the Put
Shares, do not and will not (a) result in a violation of the
Company's Articles of Incorporation or By-Laws or (b) conflict
with, or constitute a material default (or an event that with
notice or lapse of time or both would become a material default)
under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any material agreement,
indenture, instrument or any "lock-up" or similar provision of
any underwriting or similar agreement to which the Company is a
party, or (c) result in a violation of any federal, state or
local law, rule, regulation, order, judgment or decree
(including 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 such conflicts,
defaults, terminations, amendments, accelerations, cancellations
and violations as would not, individually or in the aggregate,
have a Material Adverse Effect) nor is the Company otherwise in
violation of, conflict with or in default under any of the
foregoing. The business of the Company is not being conducted in
violation of any law, ordinance or regulation of any
governmental entity, except for possible violations that either
singly or in the aggregate do not and will not have a Material
Adverse Effect. The Company is- not required under federal,
state or local law, rule or regulation 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 or issue and sell the Common Stock in accordance with
the terms hereof (other than any SEC, FINRA or state securities
filings that may be required to be made by the Company
subsequent to any Closing, any Regulation A+ Offering that may
be filed pursuant hereto); provided that for purposes of the
representation made in this sentence, the Company is assuming
and relying upon the accuracy of the relevant representations
and agreements of Investor herein.
Section 4.8 NO MATERIAL ADVERSE CHANGE. Since July 21, 2015
no event has occurred that would have a Material Adverse Effect
on the Company.
Section 4.9 LITIGATION AND OTHER PROCEEDINGS. Except as
disclosed' in the Company's SEC filings, there are no lawsuits
or proceedings pending or to the knowledge of the Company
threatened, against the Company, nor has the Company received
any written or oral notice of any such action, suit, proceeding
or investigation, which would have a Material Adverse Effect. No
judgment order, writ, injunction or decree or award has been
issued by or, so far as is known by the Company, requested of
any court, arbitrator or governmental agency which would have a
Material Adverse Effect.
Section 4.10 DILUTION, The number of shares of Common Stock
issuable as Put Shares may increase substantially in certain
circumstances, including, but not necessarily limited to, the
circumstance wherein the trading price of the Common Stock
declines during the period between the Effective Date and the
end of the Commitment Period. The Company's executive officers
and directors have studied and fully understand the nature of
the transactions contemplated by this Agreement and recognize
that they have a potential dilutive effect. The board of
directors of the Company has concluded in its good faith
business judgment that such issuance is in the best interests of
the Company. The Company specifically acknowledges that, subject
to Section 22(c), its obligation to issue the Put Shares is
binding upon the Company and enforceable regardless of the
dilution such issuance may have on the ownership interests of
other shareholders of the Company.
ARTICLE V
COVENANTS OF INVESTOR
Section 5.1 COMPLIANCE WITH LAW; TRADING IN SECURITIES.
Investor's trading activities with respect to shares of the
Common Stock will be in compliance with all applicable state and
federal securities laws, rules and regulations and the rules and
regulations of FINRA and the Principal Market on which the
Common Stock is listed or quoted.
Section 5.2 SHORT SALES AND CONFIDENTIALITY. Neither
Investor nor any 2.ffiliate of the Investor acting on its behalf
or pursuant to any understanding with it will execute any Short
Sales during the period from the date hereof to the end of the
Commitment Period. For the purposes hereof, and in accordance
with Regulation SHO, the sale after delivery of a Put Notice of
such number of shares of Common Stock reasonably expected to be
purchased under a Put Notice shall not be deemed a Short Sale.
Other than to other Persons party to this Agreemen4
Investor has maintained the confidentiality of all disclosures
made to it in connection with this transaction {including the
existence and terms of this transaction).
ARTICLE VI
COVENANTS OF THE COMPANY
Section 6.1 RESERVATION OF COMMON STOCK. The Company will,
from time to time as needed in advance of a Closing Date,
reserve and keep available until the consummation of such
Closing, free of preemptive rights sufficient shares of Common
Stock for the purpose of enabling the Company to satisfy its
obligation to issue the Put Shares to be issued in connection
therewith. The number of shares so reserved from time to time,
as theretofore increased or reduced as hereinafter provided, may
be reduced by the number of shares actually delivered hereunder.
Section 6.2 LISTING OF COMMON STOCK. If the Company applies
to have the Common Stock traded on any other Principal Market,
it shall include in such application the Put Shares, and shall
take such other action as is necessary or desirable in the
reasonable opinion of Investor to cause the Common Stock to be
listed on such other Principal Market as promptly as possible.
The Company shall use its commercially reasonable efforts to
continue the listing and trading of the Common Stock on the
Principal Market (including, without limitation, maintaining
sufficient net tangible assets) and will comply in all respects
with the Company's reporting, filing and other obligations under
the bylaws or rules of the FINRA and the Principal Market.
Section 6.3 CERTAIN AGREEMENTS. So long as this Agreement
remains in effect, the Company covenants and agrees that it will
not, without the prior written consent of the Investor, enter
into any other equity line of credit agreement with a third
party during the Commitment Period having terms and conditions
substantially comparable to this Agreement. For the avoidance of
doubt, nothing contained in the Transaction Documents shall
restrict, or require the Investor's consent for, any agreement
providing for the issuance or distribution of (or the issuance
or distribution of) any equity securities pursuant to any
agreement or arrangement that is not commonly understood to be
an "equity line of credit."
ARTICLE VII
CONDITIONS TO DELIVERY OF
PUT NOTICES AND CONDITIONS TO CLOSING
Section 7.1 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE
COMPANY TO ISSUE AND SELL COMMON STOCK. The obligation hereunder
of the Company to issue and sell the Put Shares to Investor is
subject to the satisfaction of each of the conditions set forth
below.
(a)ACCURACY OF INVESTOR'S REPRESENTATIONS AND
WARRANTIES. The representations and warranties of Investor shall
be true and correct in all material respects as of the date of
this Agreement and as of the date of each such Closing as though
made at each such time.
(b)PERFORMANCE BY INVESTOR. Investor shall have
performed, satisfied and complied in all respects with all
covenants, agreements and conditions required by this Agreement
to be performed, satisfied or complied with by Investor at or
prior to such Closing.
(c)PRINCIPAL MARKET REGULATION. The Company shall not
issue any Put Shares, and the Investor shall not have the right
to receive any Put Shares, if the issuance of such shares would
exceed the aggregate number of shares of Common Stock which the
Company may issue without breaching the Company's obligations
under the rules or regulations of the Principal Market (the
"EXCHANGE CAP").
Section 7.2 CONDITIONS PRECEDENT TO THE RIGHT OF THE
COMPANY TO DELIVER A PUT NOTICE AND THE OBLIGATION OF INVESTOR
TO PURCHASE PUT SHARES. The right of the Company to deliver a
Put Notice and the obligation of Investor hereunder to acquire
and pay for the Put Shares is subject to the satisfaction of
each of the following conditions:
(a) EFFECTIVE REGULATION A+ OFFERING. The Regulation
A+ Offering, and any amendment or supplement thereto, shall
remain effective for the sale by Investor of the Registered
Securities subject to such Put Notice, and (i) neither the
Company nor Investor shall have received notice that the SEC has
issued or intends to issue a stop order with respect to such
Regulation A+ Offering or that the SEC otherwise has suspended
or withdrawn the effectiveness of such Regulation A+ Offering,
either temporarily or permanently, or intends or has threatened
to do so and (ii) no other suspension of the use or withdrawal
of the effectiveness of such Regulation A+ Offering or related
prospectus shall exist.
(b) ACCURACY OF THE COMPANY'S REPRESENTATIONS AND
WARRANTIES. The representations and warranties of the Company
shall be true and correct in all material respects (except for
representations and warranties specifically made as of a
particular date), except for any conditions which have
temporarily caused any representations or warranties herein to
be incorrect and which have been corrected with no continuing
impairment to the Company or Investor.
(c) PERFORMANCE BY THE COMPANY. The Company shall have
performed, satisfied and complied in all material respects with
all covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the
Company.
(d) NO INJUNCTION. No statute, rule, regulation,
executive order, decree, ruling or injunction shall have been
enacted, entered, promulgated or adopted by any court or
governmental authority of competent jurisdiction that prohibits
or directly and materially adversely affects any of the
transactions contemplated by this Agreement, and no proceeding
shall have been commenced that may have the effect of
prohibiting or materially adversely affecting any of the
transactions contemplated by this Agreement.
(e) ADVERSE CHANGES. Since the date of filing of the
Company's most recent SEC Document, no event that had or is
reasonably likely to have a Material Adverse Effect has
occurred.
(f) NO SUSPENSION OF TRADING IN OR DELISTING OF COMMON
STOCK. The trading of the Common Stock shall not have been
suspended by the SEC, the Principal Market or the FINRA and the
Common Stock shall have been approved for listing or quotation
on and shall not have been delisted from the Principal Market.
(g) [INTENTIONALLY OMITTED]
(h) TEN PERCENT LIMITATION. On each Closing Date, the
number of Put Shares then to be purchased by Investor shall not
exceed the number of such shares that, when aggregated with all
other shares of Common Stock then owned by Investor beneficially
or deemed beneficially owned by Investor, would result in
Investor owning more than 9.99% of all of such Common Stock as
would be outstanding on such Closing Date, as determined in
accordance with Section 16 of the Exchange Act and the
regulations promulgated thereunder. For purposes of this
Section, in the event that the amount of Common Stock
outstanding a1determined in accordance with Section 16 of the
Exchange Act and the regulations promulgated thereunder is
greater on a Closing Date than on the date upon which the Put
Notice associated with such Closing Date is given, the amount of
Common Stock outstanding on such Closing Date shall govern for
purposes of determining whether Investor, when aggregating all
purchases of Common Stock made pursuant to this Agreement, would
own more than 9.99% of the Common Stock following such Closing
Date.
(i) PRINCIPAL MARKET REGULATION. The Company shall not
issue any Put Shares, and the Investor shall not have the right
to receive any Put Shares, if the issuance of such shares would
exceed the Exchange Cap.
(j) NO KNOWLEDGE. The Company shall have no knowledge
of any event more likely than not to have the effect of causing
such Regulation A+ Offering to be suspended or otherwise
ineffective (which event is more likely than not to occur within
the fifteen (15) Trading Days following the Trading Day on which
such Put Notice is deemed delivered).
(k) NO VIOLATION OF SHAREHOLDER APPROVAL REQUIREMENT.
The issuance of shares of Common Stock with respect to the
applicable Closing, if any, shall not violate the shareholder
approval requirements of the Principal Market.
(l) NO VALUATION EVENT. No Valuation Event shall have
occurred since the Put Date.
(m) OTHER. On the date of delivery of each Put Notice,
Investor shall have received a certificate in substantially the
form and substance of Exhibit B hereto, executed by an executive
officer of the Company and to the effect that all the conditions
to such Closing shall have been satisfied as at the date of each
such certificate.
ARTICLE VIII
LEGENDS
Section 8.1 NO STOCK LEGEND OR STOCK TRANSFER
RESTRICTIONS. No legend shall be placed on the share
certificates representing the Put Shares.
Section 8.2 INVESTOR'S COMPLIANCE. Nothing in this
Article VIII shall affect in any way Investor's obligations
under any agreement to comply with all applicable securities
laws upon the sale of the Common Stock.
ARTICLE IX
NOTICES; INDEMNIFICATION
Section 9.1 NOTICES. All notices, demands, requests,
consents, approvals, and other communications required or
permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (a) personally served, (b) deposited
in the mail, registered or certified, return receipt requested,
postage prepaid, (c) delivered by reputable air courier service
with charges prepaid, or (d) transmitted by hand delivery,
telegram, facsimile, or email as a PDF, addressed as set forth
below or to such other address as such party shall have
specified most recently by written notice given in accordance
herewith. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (i)
upon hand delivery or delivery by facsimile, with accurate
confirmation generated by the transmitting facsimile machine, or
email as a PDF, at the address or number designated below (if
delivered on a business day during normal business hours where
such notice is to be received), or the first business day
following such delivery (if delivered other than on a business
day during normal business hours where such notice is to be
received) or (ii) on the second business day following the date
of mailing by express courier service or on the fifth business
day after deposited in the mail, in each case, fully prepaid,
addressed to such address, or upon actual receipt of such
mailing, whichever shall first occur.
The addresses for such communications shall be:
If to the Company:
MEDIA ASSETS GROUP, INC.
XX Xxx 00000X
Xxx Xxxxxxx, XX 00000
Attn: Xxxx Xxxxxx, President
If to Investor:
RED RIVER VENTURES LLC
00000 Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxx XxXxxxx
Either party hereto may from time to time change its address or
facsimile number for notices under this Section 9.1 by giving at
least ten (10) days' prior written notice of such changed
address or facsimile number to the other party hereto.
Section 9.2 INDEMNIFICATION. Each party (an "Indemnifying
Party") agrees to indemnify and hold harmless the other party
along with its officers, directors, employees, and authorized
agents, and each Person or entity, if any, who controls such
party within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act (an "Indemnified Party") from and
against any Damages, joint or several, and any action in respect
thereof to which the Indemnified Party becomes subject to,
resulting from, arising out of or relating to (i) any
misrepresentation, breach of warranty or nonfulfillment of or
failure to perform any covenant or agreement on the part of
Indemnifying Party contained in this Agreement, (ii) any untrue
statement or alleged untrue statement of a material fact
contained in the Regulation A+ Offering or any post-effective
amendment thereof or supplement thereto, or the omission or
alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not
misleading, (iii) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary
prospectus or contained in the final prospectus (as amended or
supplemented, if the Company files any amendment thereof or
supplement thereto with the SEC) or the omission or alleged
omission to state therein any material fact necessary to make
the statements made therein, in the light of the circumstances
under which the statements therein were made, not misleading, or
(iv) any violation or alleged violation by the Company of the
Securities Act, the Exchange Act, any state securities law or
any rule or regulation under the Securities Act, the Exchange
Act or any state securities law, as such Damages are incurred!
except to the extent such Damages result primarily from
Indemnified Party's failure to perform any covenant or agreement
contained in this Agreement or Indemnified Party1s negligence,
recklessness or bad faith in performing its obligations under
this Agreement; provided, however, that the foregoing indemnity
agreement shall not apply to any Damages of an Indemnified Party
to the extent, but only to the extent, arising out of or based
upon any untrue statement or alleged untrue statement or
omission or alleged omission made by an Indemnifying Party in
reliance upon and in conformity with written information
furnished to the Indemnifying Party by the Indemnified Party
expressly for use in the Regulation A+ Offering, any post-
effective amendment thereof or supplement thereto, or any
preliminary prospectus or final prospectus (as amended or
supplemented).
Section 9.3 METHOD OF ASSERTING INDEMNIFICATION CLAIMS. All
claims for indemnification by any Indemnified Party (as defined
below) under Section 9.2 shall be asserted and resolved as
follows:
(a) In the event any claim or demand in respect of
"1lich an Indemnified Party might seek indemnity under Section
9.2 is asserted against or sought to be collected from such
Indemnified Party by a person other than a party hereto or an
affiliate thereof (a "THIRD PARTY CLAIM"), the Indemnified Party
shall deliver a written notification, enclosing a copy of all
papers served, if any, and specifying the nature of and basis
for such Third Party Claim and for the Indemnified Party's claim
for indemnification that is being asserted under any provision
of Section 9.2 again3t an Indemnifying Party, together with the
amount or, if not then reasonably ascertainable, the estimated
amount, determined in good faith, of such Third Party Claim (a
"CLAIM NOTICE") with reasonable promptness to the Indemnifying
Party. If the Indemnified Party fails to provide the Claim
Notice with reasonable promptness after the Indemnified Party
receives notice of such Third Party Claim, the Indemnifying
Party shall not be obligated to indemnify the Indemnified Party
with respect to such Third Party Claim to the extent that the
Indemnifying Party's ability to defend has been prejudiced by
such failure of the Indemnified Party. The Indemnifying Party
shall notify the Indemnified Party as soon as practicable within
the period ending thirty (30) calendar days following receipt by
the Indemnifying Party of either a Claim Notice or ? Indemnity
Notice (as defined below) (the "DISPUTE PERIOD") whether the
Indemnifying Party disputes its liability or the amount of its
liability to the Indemnified Party under Section 9.2 and whether
the Indemnifying Party desires, at its sole cost and expense, to
defend the Indemnified Party against such Third Party Claim.
(i) If the Indemnifying Party notifies the
Indemnified Party within the Dispute Period that the
Indemnifying Party desires to defend the Indemnified Party with
respect to the Third Party Claim pursuant to this Section
9.3(a), then the Indemnifying Party shall have the right to
defend, with counsel reasonably satisfactory to the Indemnified
Party, at the sole cost and expense of the Indemnifying Party,
such Third Party Claim by all appropriate proceedings, which
proceedings shall be vigorously and diligently prosecuted by the
Indemnifying Party to a final conclusion or will be settled at
the discretion of the Indemnifying Party (but only with the
consent of the Indemnified Party in the case of any settlement
that provides for any relief other than the payment of monetary
damages or that provides for the payment of monetary damages as
to which the Indemnified Party shall not be indemnified in full
pursuant to Section 9.2). The Indemnifying Party shall have full
control of such defense and proceedings, including any
compromise or settlement thereof; provided, however, that the
Indemnified Party may, at the sole cost and expense of the
Indemnified Party, at any time prior to the Indemnifying Party's
delivery of the notice referred to in the first sentence of this
clause (i), file any motion, answer or other pleadings or take
any other action that the Indemnified Party reasonably believes
to be necessary or appropriate to protect its interests; and
provided further, that if requested by the Indemnifying Party,
the Indemnified Party will, at the sole cost and expense of the
Indemnifying Party, provide reasonable cooperation to the
Indemnifying Party in contesting any Third Party Claim that the
Indemnifying Party elects to contest. The Indemnified Party may
participate in, but not control, any defense or settlement of
any Third Party Claim controlled by the Indemnifying Party
pursuant to this clause (i), and except as provided in the
preceding sentence, the Indemnified Party shall bear its own
costs and expenses with respect to such participation.
Notwithstanding the foregoing, the Indemnified Party may
takeover the control of the defense or settlement of a Third
Party Claim at any time if it irrevocably waives its right to
indemnity under Section 9.2 with respect to such Third Party
Claim.
(ii) lf the Indemnifying Party fails to notify
the Indemnified Party within the Dispute Period that the
Indemnifying Party desires to defend the Third Party Claim
pursuant to Section 9.3(a), or if the Indemnifying Party gives
such notice but fails to prosecute vigorously and diligently or
settle the Third Party Claim, or if the Indemnifying Party fails
to give any notice whatsoever within the Dispute Period, then
the Indemnified Party shall have the right to defend, at the
sole cost and expense of the Indemnifying Party, the Third Party
Claim by all appropriate proceedings, which proceedings shall be
prosecuted by the Indemnified Party in a reasonable manner and
in good faith or will be settled at the discretion of the
Indemnified Party(with the consent of the Indemnifying Party,
which consent will not be unreasonably withheld). The
Indemnified Party will have full control of such defense and
proceedings, including any compromise or settlement thereof;
provided, however, that if requested by the Indemnified Party,
the Indemnifying Party will, at the sole cost and expense of the
Indemnifying Party, provide reasonable cooperation to the
Indemnified Party and its counsel in contesting any Third Party
Claim which the Indemnified Party is contesting. Notwithstanding
the foregoing provisions of this clause (ii), if the
Indemnifying Party has notified the Indemnified Party within the
Dispute Period that the Indemnifying Party disputes its
liability or the amount of its liability hereunder to the
Indemnified Party with respect to such Third Party Claim and if
such dispute is resolved in favor of the Indemnifying Party in
the manner provided in clause (iii) below, the Indemnifying
Party will not be required to bear the costs and expenses of the
Indemnified Party's defense pursuant to this clause (ii) or of
the Indemnifying Party's participation therein at the
Indemnified Party's request, and the Indemnified Party shall
reimburse the Indemnifying Party in full for all reasonable
costs and expenses incurred by the Indemnifying Party in
connection with such litigation. The Indemnifying Party may
participate in, but not control, any defense or settlement
controlled by the Indemnified Party pursuant to this clause
(ii), and the Indemnifying Party shall bear its own costs and
expenses with respect to such participation.
(iii) If the Indemnifying Party notifies the
Indemnified Party that it does not dispute its liability or the
amount of its liability to the Indemnified Party with respect to
the Third Party Claim under Section 9.2 or fails to notify the
Indemnified Party within the Dispute Period whether the
Indemnifying Party disputes its liability or the amount of its
liability to the Indemnified Party with respect to such Third
Party Claim, the amount of Damages specified in the Claim Notice
shall be conclusively deemed a liability of the Indemnifying
Party under Section 9.2 and the Indemnifying Party shall pay the
amount of such Damages to the Indemnified Party on demand. If
the Indemnifying Party has timely disputed its liability or the
amount of its liability with respect to such claim, the
Indemnifying Party and the Indemnified Party shall proceed in
good faith to negotiate a resolution of such dispute; provided,
however, that if the dispute is not resolved within thirty (30)
days after the Claim Notice, the Indemnifying Party shall be
entitled to institute such legal action as it deems appropriate.
(b) In the event any Indemnified Party should have a
claim under Section 9.2 against the Indemnifying Party that does
not involve a Third Party Claim, the Indemnified Party shall
deliver a written notification of a claim for indemnity under
Section 9.2 specifying the nature of and basis for such claim,
together with the amount or, if not then reasonably
ascertainable, the estimated amount, determined in good faith,
of such claim (an "INDEMNITY NOTICE") with reasonable promptness
to the Indemnifying Party. The failure by any Indemnified Party
to give the Indemnity Notice shall not impair such party's
rights hereunder except to the extent that the Indemnifying
Party demonstrates that it has been irreparably prejudiced
thereby. If the Indemnifying Party notifies the Indemnified
Party that it does not dispute the claim or the amount of the
claim described in such Indemnity Notice or fails to notify the
Indemnified Party within the Dispute Period whether the
Indemnifying Party disputes the claim or the amount of the claim
described in such Indemnity Notice, the amount of Damages
specified in the Indemnity Notice will be conclusively deemed a
liability of the Indemnifying Party under Section 9.2 and the
Indemnifying Party shall pay the amount of such Damages to the
Indemnified Party on demand. If the Indemnifying Party has
timely disputed its liability or the amount of its liability
with respect to such claim, the Indemnifying Party and the
Indemnified Party shall proceed in good faith to negotiate a
resolution of such dispute; provided, however, that if the
dispute is not resolved within thirty (30) days after the Claim
Notice, the Indemnifying Party shall be entitled to institute
such legal action as it deems appropriate.
(c) The Indemnifying Party agrees to pay the
Indemnified Party, promptly as such expenses are incurred and
are due and payable, for any reasonable legal fees or other
reasonable expenses incurred by them in connection with
investigating or defending any such Claim.
(d) The indemnity provisions contained herein shall be
in addition to (i) any cause of action or similar rights of the
Indemnified Party against the Indemnifying Party or others, and
(ii) any liabilities the Indemnifying Party may be subject to.
ARTICLE X
MISCELLANEOUS
Section 10.1 GOVERNING LAW; JURISDICTION. This Agreement
shall be governed by and interpreted in accordance with the Jaws
of the State of Wyoming without regard to the principles of
conflicts of law. Each of the Company and Investor hereby submit
to the exclusive jurisdiction of the United States Federal and
state courts located in Cheyenne, Wyoming with xxxxxxx.xx any
dispute arising under this Agreement, the agreements entered
into in connection herewith or the transactions contemplated
hereby or thereby.
Section 10.2 JURY TRIAL WAIVER. The Company and the
Investor hereby waive a trial by jury in any action proceeding
or counterclaim brought by either of the parties hereto against
the other in respect of any matter arising out of or in
connection with the Transaction Documents.
Section 10.3 ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the Company and Investor and
their respective successors. Neither this Agreement nor any
rights of Investor or the Company hereunder may be assigned by
either party to any other person.
Section 10.4 THIRD PARTY BENEFICIARIES. This Agreement is
intended for the benefit of the Company and Investor and their
respective successors, and is not for the benefit of, nor may
any provision hereof be enforced by, any other person.
Section 10.5 TERMINATION. The Company may terminate this
Agreement at any time by written notice to the Investor.
Additionally, this Agreement shall terminate at the end of
Commitment Period or as otherwise provided herein; provided,
however, that the provisions of Articles IX, and Sections IO.I
and 10.2 shall survive the termination of this Agreement for a
period of twenty four (24) months.
Section 10.6 ENTIRE AGREEMENT, AMENDMENT; NO WAIVER. This
Agreement and the instruments referenced herein contain the
entire understanding of the Company and Investor with respect to
the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company
nor investor makes any representation, warranty, covenant or
undertaking with respect to such matters. This Agreement may not
be amended.
Section 10.7 FEES AND EXPENSES. The Company agrees to pay
its own expenses in connection with the preparation of this
Agreement and performance of its obligations hereunder. The
Company shall pay all stamp or other similar taxes and duties
levied in connection with issuance of the Put Shares pursuant
hereto.
Section 10.8 COUNTERPARTS. This Agreement may be executed
in multiple counterparts, each of which may be executed by less
than all of the parties and shall be deemed to be an original
instrument which shall be enforceable against the parties
actually executing such counterparts and all of which together
shall constitute one and the same instrument. This Agreement may
be delivered to the other parties hereto by facsimile
transmission or email of a copy of this Agreement bearing the
signature of the parties so delivering this Agreement.
Section 10.9 SEVERABILITY. In the event that any provision
of this Agreement becomes or is declared by a court of competent
jurisdiction to be illegal, unenforceable or void, this
Agreement shall continue in full force and effect without said
provision; provided that such severability shall be ineffective
if it materially changes the economic benefit of this Agreement
to any party.
Section 10.10 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 md accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.
Section 10.11 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.
Section 10.12 EQUITABLE RELIEF. The Company recognizes that
in the event that it fails to perfom1, observe, or discharge any
or all of its obligations under this Agreement, any remedy at
law may prove to be inadequate relief to Investor. The Company
therefore agrees that Investor shall be entitled to temporary
and permanent injunctive relief in any such case without the
necessity of proving actual damages.
Section 10.13 TITLE AND SUBTITLES. The titles and subtitles
used in this Agreement are used for the convenience of reference
and are not to be considered in construing or interpreting this
Agreement
Section 10.14 REPORTING ENTITY FOR THE COMMON STOCK. The
reporting entity relied upon for the determination of the
Closing Price for the Common Stock on any given Trading Day for
the purposes of this Agreement shall be Bloomberg Finance L.P.
or any successor thereto. The written mutual consent of Investor
and the Company shall be required to employ any other reporting
entity.
Section 10.15 PUBLICITY. The Company and Investor shall
consult with each other in issuing any press releases or
otherwise making public statements with respect to the
transactions contemplated hereby and no party shall issue any
such press release or otherwise make any such public statement
without the prior written consent of the other parties, which
consent shall not be unreasonably withheld or delayed, except
that no prior consent shall be required if such disclosure is
required by law, in which such case the disclosing party shall
provide the other parties with prior notice of such public
statement. Notwithstanding the foregoing, the Company shall not
publicly disclose the name of Investor without the prior written
consent of such Investor, except to the extent required by law.
Investor acknowledges that this Agreement and all or part of the
Transaction Documents may be deemed to be "material contracts"
as that term is defined by Item 60l(b)(l0) of Regulation S-K,
and that the Company may therefore be required to file such
documents as exhibits to reports or Regulation A+ Offerings
filed under the Securities Act or the Exchange Act. Investor
further agrees that the status of such documents and materials
as material contracts shall be determined solely by the Company,
in consultation with its counsel.
IN WITNESS WHEREOF, the Parties hereto have executed this
Agreement as of the date first above written.
RED RIVER VENTURES LLC MEDIA ASSETS GROUP, INC.
_/s/ Xxxx McNamee______ _/s/ Xxxx Berner______
By: Xxxx XxXxxxx By: Xxxx Xxxxxx
Its: Managing Member Its: President
