SUBSCRIPTION AGREEMENT Private Placement of Up To One Million Dollars ($1,000,000) Bridge Loan HOW TO SUBSCRIBE
Private
Placement of Up To
One
Million Dollars ($1,000,000)
Bridge
Loan
HOW
TO
SUBSCRIBE
The
minimum investment which must be made by any subscriber is $50,000 in the form
of a Note (individually, the “Note” and collectively, the "Notes") of The Tube
Media Corp. (the "Company"). Subscribers can purchase additional Notes in excess
of the minimum amount of $50,000. Any qualified subscriber who wishes to
purchase a Note should deliver the following items to the Company, at
▇▇▇▇
▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, President:
(1) one
dated
and executed copy of the Subscription Agreement with all blanks properly
completed; and
(2) a
check
payable to the order of “The Tube Media Corp.” in the amount being subscribed
for.
THE
NOTE BEING SUBSCRIBED FOR PURSUANT TO THIS SUBSCRIPTION AGREEMENT HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAWS
OF ANY STATE. THE NOTE MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF
AN
EFFECTIVE REGISTRATION STATEMENT FOR THE NOTE UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND SUCH STATE LAWS AS MAY BE APPLICABLE, OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. ADDITIONAL
RESTRICTIONS ON TRANSFER OF THE NOTE ARE SET FORTH IN THIS SUBSCRIPTION
AGREEMENT.
SUBSCRIPTION
AGREEMENT (the "Agreement") between The Tube Media Corp., a Delaware corporation
(the "Company"), and the purchaser identified on the signature page hereto
(the
"Subscriber").
BACKGROUND
Subscriber
desires to loan, and the Company desires to accept a loan, up to the amount
as
set forth in a Promissory Note of even date herewith between the Subscriber
and
the Company (the "Note") and as set forth on the signature page hereto, upon
the
terms and conditions contained herein.
NOW,
THEREFORE, in consideration of the mutual promises and covenants contained
herein and for the other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending
to be
legally bound, agree as follows:
1. SUBSCRIPTION
FOR NOTE.
(a) Subscriber
hereby subscribes for and agrees to loan up to that amount set forth on the
signature page hereto and as set forth in the Note, being $400,000 (the
“Purchase Price”) on the terms and conditions described herein and as set forth
in the form of Note attached hereto as Exhibit B. Should the sum of at least
$2
million of financing not be received from the Subsequent Offering (as
hereinafter defined) then the Subscriber agrees to subscribe for an additional
$100,000 on April 7, 2006 on the same terms and conditions as set forth herein
and in the Note.
(b) Subscriber
encloses herewith a check payable to the order of “The Tube Media Corp.” in an
amount equal to the Purchase Price.
(c)
By
executing this Agreement, the Subscriber acknowledges that the Subscriber has
been informed of various matters relating to the Company, including but not
limited to, the Risk Factors described in reports that the Company has filed
with the Securities and Exchange Commission.
2. REPRESENTATIONS
AND WARRANTIES OF THE SUBSCRIBER.
Subscriber
hereby represents and warrants as of the date hereof and as of the closing
date
that:
(a) If
the
Subscriber is an entity, (i) the Subscriber is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization
with
full right, corporate or partnership power and authority to enter into and
to
consummate the transactions contemplated by this Agreement and the Note and
otherwise carry out its obligations thereunder; and (ii) the execution, delivery
and performance by the Subscriber of the transactions contemplated by this
Agreement and the Note have been duly authorized by all necessary corporate
or
similar action on the part of the Subscriber. The Agreement has been duly
executed by the Subscriber, and when delivered by the Subscriber in accordance
with the terms hereof, will constitute the valid and legally binding obligation
of the Subscriber, enforceable against it in accordance with its terms, except
(i) as limited by general equitable principles and applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
effecting enforcement of creditors’ rights generally; (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or
other
equitable remedies; and (iii) insofar as indemnification and contribution
provisions may be limited by applicable law;
(b) The
Subscriber understands that the Note is a “restricted security” and has not been
registered under the Securities Act of 1933, as amended (the “Securities Act”)
or any applicable state securities law. The Subscriber is acquiring the Note
as
principal for its own account for investment and not with a view to, or for
sale
in connection with, any distribution of such Note or any part thereof, has
no
present intention of distributing any of such Note and has no arrangement or
understanding with any other persons regarding distribution of such Note. The
Subscriber does not have any agreement or understanding, directly or indirectly,
with any person to distribute the Note;
(c) At
any
time the Subscriber was offered the Note, it was and at the date hereof it
is,
an “accredited investor” as defined in Regulation D of the Securities Act, which
definition is set forth on Exhibit A attached hereto. The Subscriber understands
that the Note is being offered and sold pursuant to an exemption from
registration contained in the Securities Act based in part upon Subscriber’s
representations contained in this Agreement, including, without limitation,
that
the Subscriber is an “accredited investor.” The Subscriber is not, and is not
required to be, registered as a broker-dealer under Section 15 of the Securities
Exchange Act of 1934, as amended;
(d) The
Subscriber, either alone or together with its representatives, has such
knowledge, sophistication and experience in business and financial matters
so as
to be capable of evaluating the merits and risks of the prospective investment
in the Note, and has so evaluated the merits and risks of such investment.
The
Subscriber is able to bear the economic risk of an investment in the Note,
has
no need for liquidity with respect to its investment, and, at the present time,
is able to afford a complete loss of such investment;
(e) The
Subscriber is not purchasing the Note as a result of any advertisement, article,
notice or other communication regarding the Note published in any newspaper,
magazine or similar media or broadcast over television or radio or presented
at
any seminar or any other general solicitation or general
advertisement;
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(f) The
Subscriber has had the opportunity to request and receive all information deemed
necessary by it to evaluate an investment in the Company, including the
Company’s business plan. The Subscriber confirms that the Company has made
available to the Subscriber the opportunity to ask questions of, and receive
answers from the Company concerning the terms and conditions of the Note and
the
nature of the business of the Company, and to obtain additional information
or
documents which the Company possesses or can acquire without unreasonable effort
or expense. The Subscriber confirms that it has relied solely on the foregoing
information and documents provided by the Company and the reports that the
Company files with the Securities and Exchange Commission to evaluate an
investment in the Company. In formulating the decision to acquire the Note,
the
Subscriber has relied solely upon its own advisors and its own independent
investigation of the Company with respect to this Agreement and the nature
and
effect of any investment in the Note;
(g) The
Subscriber represents that after the date the Subscriber learned of the terms
of
this transaction and prior to the date hereof, neither it nor any person over
which the Subscriber has direct control, have made any net short sales of,
or
granted any option for the purchase of or entered into any hedging or similar
transaction with the same economic effect as a net short sale, in the Company’s
common stock;
(h) The
Subscriber agrees to maintain in confidence non-public information, including
this proposed financing, its terms and the information contained in the
Company’s business plan, regarding the Company obtained from the Company or its
agents during the course of this transaction and understands that the Company
has caused these materials to be delivered to Subscriber in reliance upon such
agreement; provided however, that the Subscriber can deliver confidential
non-public information to any potential investor in the Subsequent Offering
transaction in the event such potential investor executes an appropriate
Non-disclosure Agreement in a form acceptable to the Company. The Subscriber
also agrees not to trade in the Company’s securities on the basis of such
non-public information obtained during the course of this
transaction;
(i) If
the
Subscriber is an individual, Subscriber is at least 18 years of age and a bona
fide resident and domiciliary (not a temporary or transient resident) of the
state or country indicated on the signature page hereof and Subscriber has
no
present intention of becoming a resident of any other state or jurisdiction;
(j) If
the
Subscriber is not an individual, Subscriber is domiciled in the state or country
indicated on the signature page hereof, has no present intention of becoming
domiciled in any other state or jurisdiction;
(k) Except
for commissions payable to ________, no brokerage or finder’s fees or
commissions are or will be payable to any broker, financial advisor or
consultant, finder, placement agent, investment banker, bank or other person
with respect to the transactions contemplated by this Agreement based upon
arrangements made by the Subscriber or any of its affiliates. The Company shall
have no obligation with respect to any fees or with respect to any claims made
by or on behalf of persons for fees of a type contemplated by this section
that
may be due in connection with transactions contemplated by this Agreement based
upon arrangements made by the Subscriber or any of its affiliates.
(l) The
Subscriber understands that the Securities and Exchange Commission nor any
state
regulatory authority has approved the Note offered hereby or passed upon the
adequacy or accuracy of the information furnished to the Subscriber or endorsed
the merits of this transaction. Any representation to the contrary is a criminal
offense.
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(m) All
of
the written information pertaining to the Subscriber which the Subscriber has
furnished to the Company, and all information pertaining to the Subscriber
which
is set forth in this Agreement, is correct and complete as of the date hereof
and, if there should be any material change in such information hereafter,
the
Subscriber shall promptly furnish such revised or corrected information to
the
Company. The Subscriber otherwise meets any special suitability standards
applicable to the Subscriber's state of residence.
(n) The
Subscriber agrees that any information furnished by the Company to the
Subscriber does not constitute investment, accounting, legal or tax advice
and
the Subscriber is relying on professional advisers for such advice;
and
(o) The
Subscriber understands the meaning and legal consequences of the foregoing
representations and warranties. The Subscriber certifies that each of the
foregoing representations and warranties is true and correct as of the date
hereof and shall survive the execution hereof and the purchase of the
Note.
3. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
(a)
Incorporation.
The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and is qualified to do business in
each
jurisdiction in which the character of its properties or the nature of its
business requires such qualification. The Company has all requisite corporate
power and authority to carry on its business as now conducted.
(b)
Authorization.
All
corporate action on the part of the Company and its officers, and directors
necessary for the authorization, execution, delivery and performance of this
Agreement and the Note (collectively, the “Transaction
Documents”
)
and
the consummation of the transactions contemplated herein and therein has been
taken. When executed and delivered by the Company, this Agreement and the
Transaction Documents shall constitute the legal, valid and binding obligations
of the Company, enforceable against the Company in accordance with their
respective terms, except (i) as limited by bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally and (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other
equitable remedies. The Company has all requisite corporate power to enter
into
this Agreement and the Transaction Documents and to carry out and perform its
obligations under the terms of this Agreement and the Transaction
Documents.
(c)
Consents.
All
consents, approval, orders, authorizations, registrations, qualifications,
and
filings required on the part of the Company to be obtained or made prior to
the
Closing in connection with the execution, delivery or performance of this
Agreement and the Transaction Documents, and the consummation of the
transactions contemplated herein and therein, have been obtained or made or
will
be obtained or made, prior to the Closing
(d)
No
Conflict.
The
execution and delivery of this Agreement or any of the Transaction Documents
by
the Company and the consummation of the transactions contemplated hereby and
thereby, will not conflict with or result in any violation of or default (with
or without notice or lapse of time, or both) under, or give rise to a right
of
termination, cancellation or acceleration of any obligation or to a loss of
a
material benefit or give rise to an event which results in the creation of
any
lien, charge, restriction, claim or other encumbrance upon any of the Company’s
properties or assets under (i) any provision of the Certificate of Incorporation
or Bylaws of the Corporation or (ii) any agreement or instrument, permit,
franchise, license, judgment, order, statute, law, ordinance, rule or
regulations, applicable to the Company or any of its properties or
assets.
4
4. TRANSFER
RESTRICTIONS.
(a) Subscriber
represents that he understands that the sale or transfer of the Note are
severely restricted and that:
(i) The
Note
has not been registered under the Securities Act or the laws of any other
jurisdiction by reason of a specific exemption or exemptions from registration
under the Securities Act and applicable state securities laws, and that the
Company's reliance on such exemptions is predicated on the accuracy and
completeness of the Subscriber's representations, warranties, acknowledgments
and agreements herein. The Note cannot be sold or transferred by Subscriber
unless subsequently registered under applicable law or an exemption from
registration is available. The Company is not required to register the Note
or
to make any exemption from registration available;
(ii) The
right
to sell or transfer any of the Note will be restricted as described in this
Agreement which include restrictions against sale or transfer in violation
of
applicable securities laws, the requirement that an opinion of counsel be
furnished that any proposed sale or transfer will not violate such laws and
other restrictions and requirements; and
(iii) There
will be no public market for the Note and the Subscriber may not be able to
sell
or otherwise transfer the Note. Accordingly, the Subscriber must bear the
economic risk of Subscriber's investment for an indefinite period of
time.
(b) The
Subscriber agrees that he will not offer to sell, sell or transfer the Note
or
any part thereof or interest therein without registration under the Securities
Act and applicable state securities laws or without providing to the Company
an
opinion of counsel acceptable to the Company that such offer, sale or transfer
is exempt from registration under the Securities Act and under applicable state
securities laws.
(c) The
Subscriber acknowledges that the Note will bear the following
legend:
“The
Note
has not been registered with the Securities and Exchange Commission, or the
securities commission of any state, in reliance upon an exemption from
registration under the Securities Act of 1933, as amended (the “Securities
Act”), and accordingly, may not be offered or sold except pursuant to an
effective registration statement under the Securities Act or pursuant to an
available exemption from, or in a transaction not subject to, the registration
requirement of the Securities Act and in accordance with applicable state
securities laws as evidenced by a legal opinion of counsel to the transferor
to
such effect, the substance of which shall be reasonably acceptable to the
Company.”
Subscriber
further acknowledges that the Company reserves the right to place a stop order
against the Note and to refuse to effect any transfers thereof in the absence
of
an effective registration statement with respect to the Note or in the absence
of an opinion of counsel to the Company that such transfer is exempt from
registration under the Securities Act and under applicable state securities
laws.
5
5. SUBSCRIPTION
IRREVOCABLE BY SUBSCRIBER BUT SUBJECT TO ACCEPTANCE
OR REJECTION BY THE COMPANY.
(a) This
Agreement is not, and shall not be, revocable by the Subscriber.
(b) The
Company, in its sole discretion, has the right to terminate or withdraw the
offering at any time, to accept or reject subscriptions in other than the order
in which they were received, to reject any subscription in whole or in part,
to
allot to the Subscriber less than the amount of Note subscribed for, and to
return without interest the amount paid by the Subscriber.
(c) The
Subscriber understands and agrees that this Agreement 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 completion, execution
and
delivery of this Agreement.
(d) In
the
event of rejection of this subscription in whole (but not in part), or in the
event the sale of the Note subscribed for by the Subscriber is not consummated
by the Company for any reason (in which event this Agreement shall be deemed
to
be rejected), this Agreement and any other agreement entered into between the
Subscriber and the Company relating to this subscription shall thereafter have
no force or effect, except for the Subscriber’s agreement to maintain in
confidence non-public information obtained during the course of this
transaction, and the Company shall promptly cause to be returned to the
Subscriber the Purchase Price remitted by the Subscriber, without interest
thereon or deduction therefrom. In the event that this subscription is accepted
in part, the Company shall promptly cause to be returned to the Subscriber
that
portion of the Purchase Price remitted by the Subscriber which represents
payment for the Note for which this subscription was not accepted, without
interest thereon or deduction therefrom.
6. INDEMNIFICATION
AND HOLD HARMLESS.
The
Subscriber agrees that if the Subscriber breaches any agreement, representation
or warranty the Subscriber has made in this Agreement, the Subscriber agrees
to
indemnify and hold harmless the Company and its directors, officers, employees,
shareholders, financial advisors, attorneys and accountants against any claim,
liability, loss, damage or expense (including, without limitation, attorneys'
fees and other costs of investigating and litigating claims) caused, directly
or
indirectly, by the Subscriber's breach.
7. ESCROW.
The
parties agree that this subscription is for purposes of consummating a bridge
loan on the terms as set forth in the bridge Note being executed simultaneously
herewith. The parties further agree to use diligent efforts to close a private
placement financing up to $5,000,000 on the terms as set forth in a non-binding
letter of intent with Nite Capital L.P. (the “Subsequent Offering”).
Accordingly, the parties hereby agree that any funds raised in the Subsequent
Offering shall be paid into an escrow account, held by a mutually acceptable
escrow agent, and that upon any release of funds from the escrow account, the
bridge loan shall be repaid in accordance with the terms of the bridge Note
of
even date herewith
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8. MISCELLANEOUS.
(a) This
Agreement states the entire understanding between the parties with respect
to
the subject matter hereof, and supersedes all prior oral and written
communications and agreements, and all contemporaneous oral communications
and
agreements, with respect to the subject matter hereof. The Company's business
plan and other information provided by the Company to the Subscriber is not
part
of this Agreement and is subject to change as circumstances require.
(b) This
Agreement, upon acceptance by the Company, shall bind, benefit, and be
enforceable by and against each party hereto and its successors, assigns, heirs
administrators and executors. This Agreement in not transferable or assignable
by the Subscriber. The agreements, representations and warranties contained
herein shall be deemed to be made by and be binding upon the Subscriber and
such
Subscriber's heirs, executors, administrators, other personal representatives,
and their respective successors and permitted assigns.
(c) If
any
provision of this Agreement is construed to be invalid, illegal or
unenforceable, then the remaining provisions hereof shall not be affected
thereby and shall be enforceable without regard thereto.
(d) Article
and section headings in this Agreement are for convenience of reference only,
do
not constitute a part of this Agreement, and shall not affect its
interpretation.
(e) Words
used in this Agreement shall be construed to be of such number and gender as
the
context requires or permits. Unless a particular context clearly provides
otherwise, the words "hereof" and "hereunder" and similar references refer
to
this Agreement in its entirety and not to any specific Section or
subsection.
(f) THIS
AGREEMENT IS MADE UNDER, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH,
THE LAWS OF THE STATE OF FLORIDA, APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED SOLELY THEREIN, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS
OF
LAW.
(g) Any
notice, demand or other communication which any party hereto may be required,
or
may elect, to give to anyone interested hereunder shall be sufficiently given
if
(a) deposited, postage prepaid, in a United States mail letter box, registered
or certified mail, return receipt requested, addressed to such address as may
be
given herein, or (b) delivered personally at such address. Notices to the
Company shall be addressed to ▇▇▇▇▇ ▇. ▇▇▇▇, President, The Tube Media Corp.,
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
(h)
This
Agreement may be executed through the use of separate signature pages or in
any
number of counterparts, and each of such counterparts shall, for all purposes,
constitute one agreement binding on all parties, notwithstanding that all
parties are not signatories to the same counterpart.
7
IN
WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement
on the date set forth below.
Subscription:
I hereby subscribe for, and agree to purchase a Note for a Purchase Price of
$400,000.
Print
Name of Subscriber(s): ▇▇▇▇▇ ▇▇▇▇▇
Signature(s):
/s/ ▇▇▇▇▇ ▇▇▇▇▇
Print
Name and Title of Signatory, if signing for an entity:
Residence/Domicile:
Street
Number and Street
City/State/Zip
Code
Country
Telephone
Number
Social
Security/Taxpayer/Employer
Identification
Number(s)
The
Company hereby accepts the foregoing subscription for $400,000 of a Note as
of
March 31, 2006.
| THE TUBE MEDIA CORP. | ||
| |
|
|
| By: | /s/ ▇▇▇▇▇ ▇▇▇▇ | |
|
Name: ▇▇▇▇▇ ▇▇▇▇ |
||
| Title: President | ||
8
EXHIBIT
A
ACCREDITED
INVESTOR
An
“accredited investor” is one who comes within any of the following
:
|
1.
|
Any
bank as defined in section 3(a)(2) of the Securities Act of 1933,
as
amended (the “Securities Act”), or any savings and loan association or
other institution as defined in section 3(a)(5)(A) of the Securities
Act
whether acting in its individual or fiduciary capacity; any broker
or
dealer registered pursuant to section 15 of the Securities Exchange
Act of
1934, as amended; any insurance company as defined in section 2(13)
of the
Act; any investment company registered under the Investment Company
Act of
1940 or a business development company as defined in section 2(a)(48)
of
that Act; any Small Business Investment Company licensed by the U.S.
Small
Business Administration under section 301(c) or (d) of the Small
Business
Investment Act of 1958; any plan established and maintained by a
state,
its political subdivisions, or any agency or instrumentality of a
state or
its political subdivisions, for the benefit of its employees, if
such plan
has assets in excess of $5,000,000; any employee benefit plan within
the
meaning of the Employee Retirement Income Security Act of 1974 if
the
investment decision is made by a plan fiduciary, as defined in section
3(21) of such Act, which is either a bank, savings and loan association,
insurance company, or registered investment advisor, or if the employee
benefit plan has total assets in excess of $5,000,000 or, if a
self-directed plan, with investment decisions made solely by persons
that
are accredited investors;
|
|
2.
|
Any
private business development company as defined in section 202(a)(22)
of
the Investment Advisors Act of
1940;
|
|
3.
|
Any
organization described in section 501(c)(3) of the Internal Revenue
Code,
corporation, Massachusetts or similar business trust, or partnership,
not
formed for the specific purpose of acquiring the securities offered,
with
total assets in excess of
$5,000,000;
|
|
4.
|
Any
director, executive officer, or general partner of the issuer of
the
securities being offered or sold, or any director, executive officer,
or
general partner of a general partner of that
issuer;
|
|
5.
|
Any
natural person whose individual net worth, or joint net worth with
that
person’s spouse, at the time of his purchase exceeds
$1,000,000;
|
|
6.
|
Any
natural person who had an individual income in excess of $200,000
in each
of the two most recent years or joint income with that person’s spouse in
excess of $300,000 in each of those years and has reasonable expectation
of reaching the same income level in the current
year;
|
|
7.
|
Any
trust, with total assets in excess of $5,000,000, not formed for
the
specific purpose of acquiring the securities offered, whose purchase
is
directed by a sophisticated person as described in Rule 506(b)(2)(ii);
and
|
|
8.
|
Any
entity in which all of the equity owners are accredited
investors.
|
EXHIBIT
B
FORM
OF PROMISSORY NOTE