EXHIBIT 10.1

ONSTREAM MEDIA CORPORATION
SUBSCRIPTION AGREEMENT

SERIES A-12 PREFERRED STOCK

This Subscription Agreement (this “Agreement”) is entered into as of _________,
2008, by and among Onstream Media Corporation, a Florida corporation (the
“Company”), and the undersigned investors (collectively the “Investors” and each
an “Investor”).
 
RECITALS
 
A.           The Company and the Investors are executing and delivering this
Agreement in reliance upon an exemption from securities registration afforded by
the provisions of Section 4(2), Section 4(6) and/or Regulation D (“Regulation
D”) as promulgated by the United States Securities and Exchange Commission (the
“Commission”) under the Securities Act of 1933, as amended (the “1933 Act”).
 
B.           The Investors are holders of shares of the Company’s Series A-10
Preferred Stock as set forth on Exhibit A, which includes shares originally
issued (“Original Issue Shares”) and shares acquired as payment for dividends
and interest.
 
C.           The Series A-10 Preferred shares will automatically convert into
shares of the Company’s Common Stock on December 31, 2008.
 
D.           The Company has designated a new series of preferred stock as
Series A-12 Preferred Stock pursuant to the terms of the Certificate of
Designation, Preferences and Rights in the form attached hereto as Exhibit B
(the “Certificate of Designation”).  The Series A-12 Preferred Stock, in
general, has the same terms and conditions afforded to holders of the Company’s
Series A-10 Preferred Stock except as follows:
 
 
a.
Dividends on the Series A-12 Preferred Stock will be pre-paid in shares of the
Company’s Common Stock;

 
 
b.
The Series A-12 Preferred Stock will automatically convert into shares of the
Company’s Common Stock on or about December 31, 2009 (one year);

 
 
c.
There are no warrants associated with the Series A-12 Preferred Stock:

 
 
d.
Holders of Series A-12 Preferred Stock are not entitled to an adjustment in the
conversion price in the event the Company issues shares of Common Stock;

 
 
e.
Holders of Series A-12 Preferred Stock are not entitled to registration rights;

 
 

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f.
Consent of the holders of Series A-12 Preferred Stock is not required by the
Company prior to incurring debt or creating a senior class of preferred stock;

 
 
g.
Holders of Series A-12 Preferred Holders do not have the right to appoint a
Board seat; and

 
 
h.
Holders of Series A-12 Preferred Stock may, after six months, redeem any or all
shares purchased as additional shares at the additional purchase price of $10.00
per share.  Shares of Series A-12 Preferred stock acquired in exchange for
shares of Series A-10 Preferred Stock have no redemption rights.

 
E.           The Company desires to exchange the Original Issue Shares of Series
A-10 Preferred Shares prior to December 31, 2008 into an equal number of shares
of the Company’s Series A-12 Preferred Stock; provided that (i) the holders of
the Series A-10 Preferred Stock agree to exchange their Original Issue Shares
for shares of the Company’s Series A-12 Preferred Stock; and (ii) agree to
purchase additional shares of Series A-12 Preferred Stock at an additional
purchase price of $10.00 per share.
 
F.           Subject to the terms and conditions of this Agreement, the Company
will (i) convert all shares of the Series A-10 acquired as payment for dividends
and interest on or prior to December 31, 2008; (ii) exchange an aggregate of
_________ Original Issue Shares of the Company’s Series A-10 Preferred Stock for
an aggregate of___________ shares of the Company’s Series A-12 Preferred Stock
(the “Exchanged Shares”); and (iii) issue and sell to the Investors an aggregate
of up to ________ additional shares of the Company’s Series A-12 Preferred Stock
at the additional purchase price of $10.00 per share (the “Additional
Shares”).  The Exchanged Shares and Additional Shares, collectively referred to
herein as the “Shares”.
 
G.           Each Investor hereto, severally and not jointly, has agreed to
exchange his or her Original Issue Shares of Series A-10 Preferred Stock as set
forth on Exhibit A into shares of the Company’s Series A-12 Preferred Stock at
the ratio of one share of Series A-10 Preferred Stock for one share of Series
A-12 Preferred Stock and desires to subscribe for and purchase the number of
Additional Shares as set forth on such Investor’s signature page hereto.
 
NOW, THEREFORE, in consideration of the mutual covenants, agreements and
conditions, and upon acknowledgement of each of the parties of the receipt of
valuable consideration, the parties herein agree as follows:
 
1)           Recitals.  The foregoing recitals are true, correct and are herein
incorporated by reference.

 
 

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2)
Exchange, Purchase and Sale of Shares.

 
a)           The exchange, purchase and sale transaction contemplated hereby
will close no later than 5:00 p.m., E.S.T. on December ___, 2008, or such date
and time may be modified by the Company in its sole discretion (such day, the
“Closing”).
 
b)           At the Closing, the Company shall
 
 
i)
exchange each share of Original Issue Shares of Series A-10 Preferred Stock set
forth on Exhibit A into one share of the Company’s Series A-12 Preferred Stock;
and

 
 
ii)
issue and sell to each Investor such number of Additional Shares as is set forth
next to the Investor’s name on the signature pages hereto.  Investor shall pay
an additional amount equal to $10.00 per Additional Share to be purchased by the
Investor (the “Additional Purchase Price”) in cash (by check or wire transfer)
to the Company.  Promptly after the Closing, the Company shall deliver to
Investor a duly executed certificate representing the Shares which Investor is
purchasing hereunder along with dividends payable in shares of the Company’s
restricted Common Stock as set forth in the Certificate of Designation.

 
 
3)
Representations and Warranties of Investor.

 
Investor hereby, severally and not jointly, represents, warrants and covenants
to the Company that:
 
a)           Terms of Series A-12 Preferred Stock.  Investor (i) understands the
differences in his or her rights as a Series A-10 Preferred Stock holder, which
shall terminate upon exchange, and his or her rights as a holder of Series A-12
Preferred Stock; and (ii) agrees to the terms and conditions of the Series A-12
Preferred Stock as set forth in the Certificate of Designation and are herein
incorporated by reference.
 
b)           Authorization.  Investor has full power and authority to enter into
this Agreement and any related agreements to which it is a party, and each such
agreement constitutes its valid and legally binding obligation, enforceable in
accordance with its terms except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting 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) to the extent the indemnification provisions
contained in this Agreement may be limited by applicable federal or state
securities laws.
 
c)           Exemptions from Registration. Investor understands and acknowledges
that the Shares, and Common Stock underlying the Shares and Common Stock to be
issued as dividends, are being offered and sold under one or more of the
exemptions from registration provided for in Sections 4(2) and 4(6) of the
Securities Act of 1933, as amended including, Regulation D promulgated
thereunder. Investor acknowledges that the Shares are being purchased without
the Investor being offered or furnished any offering literature, prospectus or
other material, financial or otherwise, and that this transaction has not been
scrutinized by the United States Securities and Exchange Commission or by any
regulatory authority charged with the administration of the securities laws of
any state.  Investor understands that the Company is relying on the truth and
accuracy of the representations, declarations and warranties herein made by
Investor in offering the Shares for sale to the Investor without having first
registered the Shares under the Act.

 
 

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d)           Purchase Entirely for Own Account. This Agreement is made with
Investor in reliance upon Investor’s representation to the Company, which by
Investor’s execution of this Agreement, Investor hereby confirms that the Shares
will be acquired for investment for Investor’s own account, not as a nominee or
agent, and not with a view to the resale or distribution of any part thereof,
and that Investor has no present intention of selling, granting any
participation in or otherwise distributing the same.  By executing this
Agreement, Investor further represents that Investor does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any of the
Shares.
 
e)           Investment Experience.  Investor confirms that he/she/it
understands and has fully considered, for purposes of this investment, the risks
of an investment in the Shares and understands that: (i) this investment is
suitable only for an investor who is able to bear the economic consequences or
losing his entire investment, (ii) the purchase of the Shares is a speculative
investment which involves a high degree of risk of loss by the Investor of his
entire investment, and (iii) that there will be no public market for the Shares
and accordingly, it may not be possible for him to liquidate his investment in
the Shares in case of an emergency.  Investor represents that he/she/it is able
to bear the economic risk of its investment, and has such knowledge and
experience in financial or business matters that it is capable of evaluating the
merits and risks of the investment in the Shares.  If other than an individual,
Investor also represents it has not been organized for the purpose of acquiring
the Shares.
 
f)           Accredited Investor.  Investor is an “accredited investor” within
the meaning of SEC Rule 501 of Regulation D.  All of the information in the
Investor Questionnaire delivered by Investor to the Company in connection with
Investor’s purchase of the Shares remains complete, true and correct as of the
Closing.
 
g)           Disclosure of Information. Investor has received all the
information it considers necessary or appropriate for deciding whether to
purchase the Shares. Investor further represents that it has had an opportunity
to ask questions and receive answers from the Company regarding the terms and
conditions of the offering of the Shares and the business, properties, prospects
and financial condition of the Company.
 
h)           Tax Consequences.  Investor has had the opportunity to discuss with
his/her/its representatives, including his attorney and/or his accountant, if
any, the tax consequences of his/her/its investment in the Shares.

 
 

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i)           Restricted Securities. Investor understands that the Shares it is
purchasing and Common Stock underlying the Shares and Common Stock to be issued
as dividends, are characterized as “restricted securities” under the federal
securities laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering, and that under such laws and
applicable regulations, such Shares and Common Stock may be resold without
registration under the Act only in certain limited circumstances.  In the
absence of an effective registration statement covering the Shares or an
available exemption from registration under the Act, the Shares (and any Common
Stock issued on conversion of the Shares or as payment of dividends) must be
held indefinitely.
 
j)           No Brokers.  Investor has not taken any action which would give
rise to any claim by any person for brokerage commissions, finder’s fees or
similar payments relating to this Agreement or the transactions contemplated
hereby.
 
k)           Legends. The Investor consents to the placement of one or more
legends on the Shares as required by applicable securities laws, including a
legend in form substantially as follows: “These securities have not been
registered under the Securities Act of 1933, as amended.  They may not be sold,
offered for sale, pledged or hypothecated in the absence of a registration
statement in effect with respect to the securities under such Act or an opinion
of counsel satisfactory to the Company that such registration is not required or
unless sold pursuant to Rule 144 of such Act.”
 
 
4)
Covenants of the Parties.

 
a)           Performance. The Company and Investor shall perform and comply with
all agreements, obligations and conditions contained in this Agreement, the
Certificate of Designation and related agreements that are required to be
performed or complied with by the Company or Investor.
 
b)           Qualifications.  The Company shall obtain all authorizations,
approvals or permits, if any, of any governmental authority or regulatory body
of the United States or of any state that are required in connection with the
lawful issuance and sale of the Shares pursuant to this Agreement which shall be
timely made after such issuance and sale of the Shares.
 
c)           Amendment to Articles of Incorporation. The Company shall file the
Certificate of Designation as an Amendment to the Company’s Articles of
Incorporation in the form attached hereto as Exhibit B with the Florida
Secretary of State on, or as soon as practical, the date of Closing.
 
d)           Further Consent. The Investor shall have amended any other
agreement or arrangement, or given any further consent required to allow the
Company to execute and perform this Agreement and the Certificate of
Designation.
 
 
5)
Miscellaneous.

 
a)           Survival. The warranties, representations and covenants of the
Investor contained in or made pursuant to this Agreement shall survive the
execution and delivery of this Agreement and the Closing.

 
 

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b)           Successors and Assigns. Except as otherwise provided herein, the
terms and conditions of this Agreement shall inure to the benefit of, and be
binding upon, the respective successors and assigns of the parties (including
transferees of any Shares).  Nothing in this Agreement, express or implied, is
intended to confer upon any party, other than the parties hereto or their
respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
 
c)           Governing Law.  This Subscription Agreement shall be governed by
and construed in accordance with the laws of the State of Florida without giving
effect to any choice or conflict of law provision or rule (whether of the State
of Florida or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Florida.
 
d)           Titles and Subtitles.  The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
 
e)           Notices. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (i) upon personal delivery to the
party to be notified, (ii) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next business
day; (iii) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid; or (iv) one (1) day after deposit
with a nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt.  All communications shall be sent to the
Company at 1291 S.W. 29th Avenue, Pompano Beach, Florida 33069 ATTENTION: Randy
S. Selman, and if to the Investor, to the address as set forth on the signature
page hereof or at such other address as such party may designate by ten (10)
days’ advance written notice to the other parties hereto.
 
f)           Indemnification.  The Investor acknowledges that it understands the
meaning and legal consequences of the representations and warranties contained
in Section 3 and the covenants contained in Section 4, and hereby agrees to
indemnify and hold harmless the Company, its officers or any of its affiliates,
associates, agents or employees from and against any and all loss, damage or
liability (including costs and reasonable attorney's fees) due to or arising out
of a breach of any representation, warranty or acknowledgment of the Investor
contained in this Agreement.
 
g)           Severability. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
 
h)           Entire Agreement. This Agreement and the documents referred to
herein constitute the entire agreement among the parties, and this Agreement
supersedes all prior and contemporaneous written and oral agreements, relating
to the subject matter hereof.
 
i)           Counterparts; Facsimile/PDF Signatures. This Agreement may be
executed in two or more counterparts, and by facsimile signatures or portable
document format (.pdf or similar format), each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
 
[SIGNATURE PAGE FOLLOWS]

 
 

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[Investor Signature Page to Subscription Agreement]

Number of Original Issue Shares of Series A-10 to be Exchanged for Series A-12:
 
____________
 
Number of Additional Shares of Series A-12 to be Purchased:
 
____________
 
Additional Purchase Price ($10.00 Per Additional Share)
 
$___________
 
The Shares are to be issued in
     
(check one):
     

o individual name
 
_________________________________________
   
Print Name of Investor
o joint tenants with rights
 
_________________________________________
of survivorship
 
Print Name of Joint Investor (if applicable)
     
o tenants in the entirety
 
_________________________________________
   
Address
o corporation or partnership
       
_________________________________________
o trust
       
Telephone:________________________________
         
Facsimile: ________________________________
         
Email: ___________________________________
     
Date: __________________
 
_________________________________________
   
Signature of Investor
         
_________________________________________
   
SSN or Tax ID

 
IF INVESTOR IS A CORPORATION, PARTNERSHIP OR TRUST:
 
The undersigned trustee, partner or corporate officer certifies that he/she has
full power and authority from the beneficiaries, partners or directors of the
entity named above to execute this Subscription Agreement on behalf of the
entity and to make the representations and warranties made herein on their
behalf and that the purchase of the Shares has been affirmatively authorized by
the governing board of such entity and is not prohibited by the governing
documents of the entity.
 
Date: ____________________
By:
     
Signature of authorized trustee, partner or
   
corporate officer
               
Print Name and Capacity

 
Onstream Media Corporation hereby accepts the foregoing subscription for shares
of its Series A-12 Preferred Stock subject to the terms and conditions hereof
this ____________________, 2008.
 
SIGNATURE: _____________________________________________________________
 
PRINT NAME AND CAPACITY: ______________________________________________
 

 
 

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EXHIBIT A

Series A-10 Preferred

   
No. of Shares of Series A-10 Preferred
Name
 
Original Issue
 
Issued as
Dividends or
Interest
 
Total
                                         

 
 

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EXHIBIT B

Form of Certificate of Designation of Series A-12 Preferred Stock

 
 

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