Exhibit 10.2

 

EXECUTION

 

WARRANT PURCHASE AGREEMENT

 

THIS WARRANT PURCHASE AGREEMENT (this “Agreement”) is made as of July 8, 2015
(the “Closing Date”) by and between GRANDPARENTS.COM, INC., a Delaware
corporation (the “Company”) and VB FUNDING, LLC, a Delaware limited liability
company (“Purchaser”).

 

RECITALS

 

A.        As of the date hereof, Purchaser intends to extend certain credit
accommodations to the Company as described in the Credit Agreement (as defined
below).

 

B.        As a condition of Purchaser’s willingness to extend such credit
accommodations, the Company has agreed to issue and sell to Purchaser on the
Closing Date a warrant (the “Warrant”) for the purchase of common stock of the
Company, and, if applicable, on the consummation of the Second Closing (as
defined herein) a second warrant for the purchase of common stock of the Company
(the “Advance Warrant”, and, together with the Warrant, the “Warrants”)) as more
particularly described herein.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Purchaser hereby agree as follows:

 

1.Authorization and Purchase of the Warrant.

 

(a)Authorization of the Warrant. As of the Closing Date, the Company’s Board of
Directors has authorized the issuance by the Company and the sale to the
Purchaser of the Warrants to purchase an aggregate of up to 20,000,000 shares of
common stock, par value $0.01 per share (the “Common Stock”) of the Company, all
as more fully described below and subject to the conditions set forth below and
in the form of warrant annexed hereto as Exhibit 1. The shares of Common Stock
issuable upon exercise of each Warrant are herein referred to as the “Warrant
Shares;” and the Warrants and the Warrant Shares are herein together referred to
as the “Securities”.

 

(b)Purchase of Warrants. Subject to the terms and conditions set forth below and
in the Warrants, on the Closing Date the Company shall issue to Purchaser the
Warrant in consideration of the senior secured term loan in the amount of up to
$5,000,000.00 as governed by, among other things, that certain Credit Agreement
dated of even date herewith between the Company and the Purchaser (the “Credit
Agreement”) and, if applicable, on the Second Closing Date the Company shall
issue to Purchaser the Advance Warrant in consideration of the Additional
Advance (as defined in the Credit Agreement) as governed by, among other things,
the Credit Agreement.

 

 

 

 

(c)Cancelation of Prior Warrant. Contemporaneously herewith, Purchaser shall
tender, for cancellation, that certain Warrant No. GP-187 dated May 18, 2015
(the “Surrender Warrant”) issued by the Company to Purchaser pursuant to that
certain Warrant Purchase Agreement dated May 18, 2015 in accordance with the
terms of such Warrant Purchase Agreement and the Surrender Warrant.

 

2.The Closings.

 

(a)Concurrently with the execution and delivery of this Agreement, the Company
and Purchaser shall consummate the issuance and sale of the Warrant, which shall
be a warrant to purchase 12,500,000 shares of Common Stock, to Purchaser
pursuant to the terms of this Agreement.

 

(b)Concurrently with, and as a condition to the closing of the Additional
Advance (as defined in the Credit Agreement), the Company and Purchaser shall
consummate the issuance and sale of the Advance Warrant (the “Second Closing”),
which shall be a warrant to purchase 7,500,000 shares of Common Stock, pursuant
to the terms of this Agreement.

 

3.Representations and Warranties of the Company. The Company represents and
warrants to Purchaser as of the Closing Date as follows:

 

(a)Corporate Power; Authorization. The Company has the requisite corporate power
and has taken all requisite corporate action on the part of the Company to
execute and deliver each of this Agreement and the Warrants, to sell and issue
the Securities and to carry out and perform all of its obligations hereunder and
thereunder. The execution and delivery of this Agreement has been duly
authorized by all necessary corporate action on the part of the Company. This
Agreement has been validly executed on behalf of the Company and constitutes the
valid and binding obligation of the Company, enforceable in accordance with its
terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting creditors’
rights generally and (ii) as limited by equitable principles generally
(regardless of whether enforcement is sought in a proceeding at law or in
equity). The consummation by the Company of the transactions contemplated herein
will not result in a violation of any of the terms or provisions of the
Company’s Third Amended and Restated Certificate of Incorporation or Second
Amended and Restated Bylaws.

 

(b)Validity of Securities. The Warrants have been duly authorized and when
issued in accordance with this Agreement, will be validly issued and shall be
clear of any liens or encumbrances and shall not be subject to preemptive rights
or similar rights of stockholders; and when the Warrant Shares are issued upon
due exercise in accordance with and for the consideration provided for in the
Warrants, they will be validly issued and outstanding, fully paid and
nonassessable and free of any liens or encumbrances arising through the Company.

 

 

 

 

(c)SEC Documents; Financial Statements. Each of the Company’s material reports
required to be filed by it under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”) made with the Securities and Exchange Commission (the
“SEC”) (collectively, the “SEC Documents”), as of their respective dates (or, if
amended or superseded by a filing prior to the Closing Date, then on the date of
such filing), conforms in all material respects to the requirements of the
Exchange Act and the rules and regulations of the Commission promulgated
thereunder. Each of the SEC Documents when filed (or, if amended or superseded
by a filing prior to the Closing Date, then on the date of such filing) did not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements made therein,
in the light of the circumstances in which they were made, not misleading. The
financial statements of the Company included in the SEC Documents (the
“Financial Statements”) comply as to form in all material respects with
applicable accounting requirements and with the published rules and regulations
of the Commission with respect thereto as in effect at the time of filing (or,
if amended or superseded by a filing prior to the Closing Date, then on the date
of such filing). The Financial Statements have been prepared in accordance with
United States generally accepted accounting principles applied on a consistent
basis during the periods involved, except as may be otherwise specified in such
Financial Statements or the notes thereto, and fairly present in all material
respects the financial position of the Company and its consolidated subsidiaries
as of the respective dates they were prepared subject, in the case of interim
financial statements, to normal, and recurring year-end audit adjustments and
the absence of notes. From December 31, 2014 through the date hereof, except for
any events described in the SEC Documents, to the knowledge of the Company there
have been no events giving rise to a material adverse effect on the business of
the Company.

 

(d)Authorized and Unissued Shares of Common Stock. During the period within
which any Warrant may be exercised, the Company shall maintain a reserve from
its duly authorized shares of Common Stock for issuance pursuant to this
Agreement and the Warrants in such amount as may be required to fulfill its
obligations to issue the Warrant Shares under this Agreement and the Warrants.

 

4.Representations and Warranties of Purchaser. Purchaser hereby represents and
warrants to the Company as of the Closing Date as follows:

 

(a)Investment Experience. Purchaser is, and on the date which it exercises a
Warrant it will be, an “accredited investor” within the meaning of Rule 501
under the Securities Act of 1933, as amended (the “Securities Act”), and was not
organized for the specific purpose of acquiring the Securities. The Purchaser
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 Securities, and has so evaluated the merits and
risks of such investment. The Purchaser is able to bear the economic risk of an
investment in the Securities and, at the present time, is able to afford a
complete loss of such investment. Purchaser has had the opportunity to ask
questions and receive answers concerning the terms and conditions of its
purchase of the Securities and to obtain any additional information from the
Company that is necessary to verify the information furnished in the SEC
Documents.

 

 

 

 

(b)Investment Intent. Purchaser is (i) purchasing the Warrants and (ii) upon
exercise of the Warrants will acquire the Warrant Shares issuable upon exercise
thereof, for investment purposes for its own account only and not with a view
to, or for resale in connection with, any public sale or “distribution” thereof
within the meaning of the Securities Act. Purchaser understands that the
Securities have not been registered under the Securities Act or registered or
qualified under the applicable securities law of any other jurisdiction in
reliance on specific exemptions therefrom, which exemptions may depend upon,
among other things, the bona fide nature of Purchaser’s investment intent as
expressed herein.

 

(c)Authorization. Purchaser has the requisite limited liability company power
and has taken all requisite limited liability company action on the part of the
Purchaser to execute and deliver this Agreement and to carry out and perform all
of its obligations hereunder. The execution and delivery of this Agreement has
been duly authorized by all necessary limited liability company action on the
part of the Purchaser. This Agreement has been validly executed on behalf of the
Purchaser and constitutes the valid and binding obligation of the Purchaser,
enforceable in accordance with its terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or affecting creditors’ rights generally and (ii) as limited by equitable
principles generally (regardless of whether enforcement is sought in a
proceeding at law or in equity). The consummation by the Purchaser of the
transactions contemplated herein will not result in a violation of any of the
terms or provisions of the Company’s Certificate of Formation or its limited
liability company operating agreement.

 

(d)No Legal, Tax or Investment Advice. Purchaser understands that nothing in
this Agreement or any other materials presented to Purchaser in connection with
the purchase and sale of the Securities constitutes accounting, legal, tax or
investment advice. Purchaser has consulted such accounting, legal, tax and
investment advisors as it, in its sole discretion, has deemed necessary or
appropriate to make an informed decision with respect to its acquisition of the
Securities.

 

5.Restrictions on Transfer of Securities; Registrable Securities.

 

(a)Restrictions on Transferability. The Securities shall not be offered, sold,
resold, pledged, assigned or otherwise transferred from Purchaser to a
transferee (any such transferee, a “Holder”) other than (i) if such Securities
have been registered for sale pursuant to an effective registration statement
under the Securities Act or (ii) (A) in accordance with the provisions of
Section 6(d) hereof, (B) in accordance with the applicable provisions of the
Warrants, and (C) where the Purchaser shall have delivered to the Company an
opinion of counsel, in a form acceptable to the Company and from counsel
reasonably acceptable to the Company, to the effect that such Securities to be
sold, assigned or transferred may be sold, assigned or transferred pursuant to
an exemption from such registration. Purchaser will be required to notify any
subsequent purchaser of any then-existing resale restrictions as set forth
above. The Company shall be entitled to give stop transfer instructions to the
transfer agent with respect to the Securities to enforce the foregoing
restrictions.

 

(b)Restrictive Legends. The Purchaser understands that the Securities have been
issued (or will be issued in the case of the Warrant Shares) pursuant to an
exemption from registration or qualification under the Securities Act and
applicable state securities laws, and the Securities (or any other securities
issued in respect of the Securities upon any stock split, stock dividend,
recapitalization, reorganization, scheme, arrangement or otherwise) shall
(unless otherwise permitted by the provisions hereof or the Warrants) be stamped
or otherwise imprinted with a legend substantially in the following form (in
addition to any legend required under applicable federal or state securities
laws):

 

 

 

 

THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THEY MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO SUCH SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

 

(c)Limitation on Transfer. Notwithstanding the other applicable provisions of
this Agreement to the contrary, the Purchaser agrees that it shall not transfer
the Warrants to more than ten (10) holders, and each holder to whom all or part
of any Warrant shall be transferred, by executing the assignment agreement
attached to the Warrant, cannot transfer such Warrant to more than one holder.

 

6.Miscellaneous.

 

(a)Waiver; Amendment. The terms of this Agreement may be waived or amended only
with the written consent of the Company and Purchaser.

 

(b)Governing Law. This Agreement and any Warrants shall each be construed and
enforced in accordance with, and the rights of the parties shall be governed by,
the laws of the State of New York without regard to conflict of laws.

 

(c)Survival. The representations, warranties, covenants and agreements made
herein shall survive any investigation made by the Company or Purchaser and the
Closing.

 

(d)Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted assigns. The Company
may not assign this Agreement or any rights or obligations hereunder without the
prior written consent of the Purchaser. The Purchaser may assign its rights
under this Agreement to any person to whom Purchaser assigns or transfers any
Securities, provided (i) such transferor agrees in writing with the transferee
or assignee for the assignment of such rights, and a copy of such agreement is
furnished to the Company after such assignment, (ii) the Company is furnished
with written notice of the name and address of such transferee or assignee,
(iii) such transferee agrees in writing to be bound, with respect to the
transferred Securities, by the provisions hereof that apply to the “Purchaser,”
and (iv) such transfer shall have been made in accordance with the applicable
requirements of this Agreement and with all laws applicable thereto.

 

(e)Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subject
hereof.

 

(f)Notices, etc. All notices and other communications required or permitted
hereunder shall be effective upon receipt and shall be in writing and may be
delivered in person, by facsimile, overnight delivery service or U.S. mail, in
which event it may be mailed by first-class, certified or registered, postage
prepaid, addressed:

 

 

 

 

  If to Purchaser: VB Funding, LLC     190 Farmington Avenue     Farmington, CT
06032     Facsimile: (860) 676-8617     Attention: VJ Dowling         If to the
Company: Grandparents.com, Inc.     589 Eighth Avenue, 6th floor     New York
New York 10018     Facsimile: (646) 654-6106       Attention: Matthew Schwartz,
VP & Chief     Compliance Officer

 

or in any case at such other address as Purchaser or the Company shall have
furnished to the other in writing.

 

(g)Severability of this Agreement. If any provision of this Agreement shall be
judicially determined to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.

 

(h)Titles and Subtitles. The titles of the paragraphs and subparagraphs of this
Agreement are for convenience of reference and shall not, by themselves,
determine the construction of this Agreement.

 

(i)Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be an original, but all of which together shall constitute
one instrument.

 

(j)Confidentiality. All references to the Purchaser contained in any press
release, advertisement or promotional material issued by the Company must be
approved in writing by the Purchaser in advance of issuance. Notwithstanding the
foregoing, the Company retains the right in its sole discretion to disclose this
Agreement (including its terms and conditions), as well as Purchaser, as needed
to comply with its obligations under applicable laws and regulations, including
stock exchange regulations.

 

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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of
the date first set forth above.

 

  GRANDPARENTS.COM, INC.,   a Delaware corporation         By: /s/ Matthew
Schwartz   Name: Matthew Schwartz   Title: VP/Chief Compliance Officer        
VB FUNDING, LLC,   a Delaware limited liability company         By: /s/ Vincent
J. Dowling, Jr.   Name: Vincent J. Dowling, Jr.   Title: Managing Member