PROMISSORY NOTE
PURCHASE AGREEMENT
This Promissory Note Purchase
Agreement (this “ Agreement ”) is made as of the
27th day of January, 2012 by and among rVue Holdings, Inc., a
Nevada corporation (the “ Company ”), and each
of the investors listed on Exhibit A attached to this
Agreement (each an “ Investor ” and together,
the “ Investors ”), and each of the Prior
Investors listed on Exhibit H attached to this Agreement (each a
“Prior Investor” and together, the “Prior
Investors”).
.
RECITALS
The Company previously issued an
aggregate principal amount of $285,000 in secured convertible notes
(“Old Notes”) to the Prior Investors. The Company now
desires to cancel the Old Notes and sell and issue an aggregate
principal amount of up to One Million Two Hundred Seventy Five
Thousand Dollars ($1,275,000) in secured convertible promissory
notes, and each Investor and Prior Investor desires to purchase, a
secured convertible promissory note, in substantially the form
attached hereto as Exhibit B (each, a “ Note
” and together, the “ Notes ”), which
shall be convertible on the terms stated therein into equity
securities of the Company, upon the terms and subject to the
conditions set forth in this Agreement (the “ Offering
”). The Notes and the equity securities issuable upon
conversion thereof are collectively referred to herein as the
“ Securities ”. The Prior Investors have agreed
to cancel and tender the Old Notes to the Company in consideration
for Notes to be issued hereunder in the amounts set forth on
Exhibit H attached hereto.
AGREEMENT
In consideration of the mutual
promises contained herein and other good and valuable
consideration, receipt of which is hereby acknowledged, the parties
to this Agreement agree as follows:
1.
Purchase and Sale of
Notes .
(a)
Sale and Issuance of Notes . Subject to the terms and
conditions of this Agreement, each Investor agrees to purchase at
the Closing (as defined herein), and the Company agrees to sell and
issue to each Investor at the Closing, a Note in the principal
amount set forth opposite such Investor’s name on
Exhibit A for a purchase price equal to such amount
(the “ Purchase Price ”)
(b)
Closings . The purchase and sale of the Notes (the “
Closing ”) shall take place at the principal offices
of the Company, 100 N.E. 3 rd Avenue, Suite 200, Ft.
Lauderdale, Florida 33301, on the date hereof, or at such other
place, time or date as the Company may decide in its sole
discretion.
(c)
Company Deliverables . At the Closing, the Company shall
deliver to each Investor (i) a Note duly executed by Company and
registered in the name of each of the Investors and each of the
Prior Investors, in substantially the form attached hereto as
Exhibit B (the “ Note ”) (ii) a
counterpart signature page to this Agreement, (iii) a counterpart
signature page to the Security Agreement in substantially the form
attached hereto as Exhibit C (the “ Security
Agreement ”) and (iv) a Warrant to purchase shares of the
Company’s common stock, $.001 par value, the number issuable
of which shall be calculated by multiplying the Purchase Price
times 2.5, for a term of 5 years exercisable at $.20, executed by
the Company and registered in the name of the Investor in
substantially the form attached hereto as Exhibit D (the
“ Warrant ”); (iv) copies of the Old Notes, duly
cancelled .
(d)
Investor Deliverables . At the Closing, each Investor shall
deliver to the Company (i) a wire transfer to a bank designated by
the Company equal to the Purchase Price, (ii) a counterpart
signature page to this Agreement, (iii) a counterpart signature
page to the Security Agreement, (iv) a counterpart signature page
to the Collateral Agent Agreement in substantially the form
attached hereto as Exhibit E ( the “ Collateral
Agreement) , and (v) a completed and signed Accredited Investor
Declaration the form of which is attached hereto as Exhibit
F , (“ Accredited Investor Declaration ”).
The Prior Investors shall tender (i) the Old Notes duly cancelled,
(ii) a counterpart signature page to this Agreement, (iii) a
counterpart signature page to the Security Agreement, (iv) a
counterpart signature page to the Collateral Agent Agreement and
(v) a completed and signed Accredited Investor Declaration. This
Agreement, the Notes, the Warrants, the Security Agreement, the
Collateral Agreement and the Accredited Investor Declaration are
hereinafter referred to as the “ Transaction Documents
”.
(e)
Notes Pari Passu . All Notes shall rank pari passu among
themselves. Each Investor acknowledges and agrees that all payments
on the Notes shall be made on a pro-rata basis, in accordance with
each Investor’s Pro-Rata Share (as defined below) at the time
of payment. If, despite the provisions of this Section 1(e), any
Investor shall receive any payment on its Note in excess of its
Pro-Rata Share to which it is then entitled in accordance with this
Agreement, such Investor shall hold such excess payment in trust
for the benefit of the Investors entitled thereto and promptly pay
over or deliver such excess payment to the other Investors for
application in accordance with this Section 1(e) . For the
purposes of this Agreement, the “ Pro- Rata Share
” of an Investor means the proportion which the unpaid
principal amount due under the Note held by that Investor bears to
the aggregate unpaid principal amount due under the Notes held by
all the Investors; provided, however, that any portion of any
Investor’s obligations under a Note converted to equity shall
not be considered outstanding for these purposes.
(f)
Individual Sales . The Company’s agreement with each
of the Investors is a separate agreement, and the sale of the Note
to each of the Investors is a separate sale.
2.
Representations and Warranties
of the Company . The
Company hereby represents and warrants to the Investors that as of
the Closing:
(a)
Organization, Good Standing and Qualification . The Company
is a corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada. The Company has all
requisite corporate power and authority to own and operate its
properties and assets, to execute and deliver this Agreement, the
Security Agreement and the Notes, to issue and sell the Securities,
to carry out the provisions of this Agreement, the Security
Agreement, and the Notes, and to carry on its business as presently
conducted. The Company is duly qualified and is authorized to do
business and is in good standing as a foreign corporation in every
jurisdiction in which the failure to so qualify would have a
material adverse effect on its business, assets, results of
operation, prospects, condition (financial or otherwise) or
liabilities.
(b)
Subsidiaries . Except for those subsidiaries set forth on
Exhibit G , the Company does not own or control, directly or
indirectly, any equity security or other interest of any other
corporation, limited partnership or other business entity. The
Company is not a participant in any joint venture, partnership or
similar arrangement.
(c)
Authorization; Binding Obligations . All corporate action on
the part of the Company, its directors, officers and shareholders
necessary for the authorization of this Agreement, the Security
Agreement, and the Notes, and the performance of all obligations of
the Company hereunder and thereunder has been duly taken and has
not been revoked. This Agreement, the Security Agreement, and the
Notes, when executed and delivered, will be valid and binding
obligations of the Company enforceable in accordance with their
terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application
affecting enforcement of creditors’ rights and (ii) as
limited by general principles of equity.
(d)
Litigation . There is no action, suit, proceeding or
investigation pending or, to the Company’s knowledge,
threatened against the Company that questions the validity of this
Agreement, the Security Agreement, and the Notes or the right of
the Company to enter into any of such agreements, or to consummate
the transactions contemplated hereby or thereby. The foregoing
includes, without limitation, actions, suits, proceedings or
investigations pending or, to the Company’s knowledge,
threatened or any basis therefor known by the Company involving the
prior employment of any of the Company’s employees, their use
in connection with the Company’s business of any information
or techniques allegedly proprietary to any of their former
employers or their obligations under any agreements with prior
employers.
(e)
Old Notes Cancelled. At Closing the Old Notes issued to the
Prior Investors listed on Exhibit H will be cancelled, and
the Prior Investors will be issued new Notes, in the form attached
hereto as Exhibit B in the amounts set forth on Exhibit
H . The form and substance of the new Notes to be issued to the
Prior Investors shall be identical to Exhibit B except for
the name of the holder and the amount.
(f)
Conversion Price and Warrant Price Adjustment. The Company
will use its best efforts to raise an additional $1.5 million in
common equity within 180 days of the first Closing hereunder. If at
that time the Company is unable to raise such capital, (i) the Note
shall thereafter be amended to reflect that the Conversion Price
set forth in Section 3 thereof shall be reduced from $.20 to $.10
without further action, and (ii) the Warrant shall thereafter be
amended to reflect that the Warrant Price set forth therein shall
be reduced from $.20 to $.10 without further action.
3.
Representations and Warranties
of the Investors . Each
Investor hereby represents and warrants to the Company, on its own
behalf and not with respect to any other Investor, severally and
not jointly, that as of the Closing:
(a)
Organization and Good Standing; Requisite Power and
Authority . To the extent that the Investor is an entity, the
Investor is duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization. Investor has
all requisite power and authority to execute and deliver the
Transaction Documents and to carry out their respective provisions.
All actions on the Investor’s part required for the lawful
execution and delivery of the Transaction Documents have been taken
and the Investor has its principal place of business at the address
set forth on the signature page hereof and has not been formed for
the specific purpose of acquiring the Note. Upon their execution
and delivery, the Transaction Documents will constitute a valid and
binding obligation of the Investor, enforceable in accordance with
its terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general
application affecting enforcement of creditors’ rights, and
(ii) as limited by general principles of equity.
(b)
Investment Representations . The Investor understands that
the Securities have not been registered under the United States
Securities Act of 1933, as amended, or any similar federal statute
and the rules and regulations of the SEC thereunder, all as the
same shall be in effect at the time (the “ Securities
Act ”). The Investor also understands that the Securities
are being offered and sold pursuant to an exemption from
registration contained in the Securities Act based in part upon the
Investor’s representations contained in this
Agreement.
(c)
Investor Bears Economic Risk . The Investor has substantial
experience in evaluating and investing in private placement
transactions of securities in companies similar to the Company so
that it is capable of evaluating the merits and risks of its
investment in the Company and has the capacity to protect its own
interests. The Investor is aware that an investment in the
Securities is highly speculative and subject to substantial risks.
The Investor is capable of bearing the high degree of economic risk
and burdens of this investment, including but not limited to the
complete loss of all contributed capital, the lack of a public
market and limited transferability of the Note, which may make the
liquidation of this investment impossible for the indefinite
future. The financial condition of the Investor is such that the
Investor is under no present or contemplated future need to dispose
of any portion of the Securities to satisfy any existing or
contemplated undertaking, need or indebtedness. The Investor acknowledges that the Investor
must bear the economic risk of this investment indefinitely unless
the Securities are registered pursuant to the Securities Act, or an
exemption from registration is available. The Investor understands
that the Company has no present intention of registering the
Securities. The Investor also understands that there is no
assurance that any exemption from registration under the Securities
Act will be available and that, even if available, such exemption
may not allow the Investor to transfer all or any portion of the
Securities under
