STOCK PURCHASE AGREEMENT
 
by and among
 
SOUTHPEAK INTERACTIVE CORPORATION,
 
AND
 
THE PURCHASER INDENTIFIED HEREIN
 
As of May 5, 2010

 
 

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STOCK PURCHASE AGREEMENT
 
This Stock Purchase Agreement (the “Agreement”) dated as of May 5, 2010, by and
among SouthPeak Interactive Corporation, a Delaware corporation (“Company”), and
the purchasers whose names appear on the signature pages attached hereto (each
an “Purchaser”, and collectively, the “Purchasers”).
 
Whereas, each Purchaser is a holder of one or more of the Company’s Class W
warrants (the “Class W Warrants”) and/or Class Z warrants (the “Class Z
Warrants,” and with the Class W Warrants, the “Warrants”);
 
Whereas, the Warrants are exercisable at various strike prices that exceed the
current trading price of the Company’s common stock (the “Common Stock”); and
 
Whereas, in order to enhance the liquidity of the Purchasers’ holdings and
reduce the number of Warrants outstanding, the Company and the Purchasers wish
to cause the Warrants to be converted into shares of Common Stock.
 
Now, Therefore, in consideration of the foregoing, and the representations,
warranties, and conditions set forth below, the parties hereto, intending to be
legally bound, hereby agree as follows:
 
1.           Subscription.  Subject to the terms and conditions hereof, the
Company and each Purchaser, severally and not jointly, agree as follows:
 
(a)           Stock Purchase; Warrant Conversion.  Each Purchaser hereby
subscribes for the aggregate number of shares of Common Stock set forth on the
applicable signature page attached hereto (the “Conversion Shares”).  Each
Conversion Share shall be issued in exchange for that number and class of
Warrants and amount of cash in accordance with the following:
 
(i)           one Conversion Share for six Class Z Warrants and $0.15;
 
(ii)          one Conversion Share for twenty-five Class Z Warrants; or
 
(iii)         one Conversion Share for one hundred Class W Warrants and $0.25.
 
(b)           Delivery.  The Conversion Shares shall be issued in exchange for
Warrants and cash at one or more closings (each, a “Closing”) to be held at such
place and time as Company and the Purchasers participating in such Closing may
determine (the “Closing Date”).  At each such Closing, the Company shall issue
to each of the Purchasers participating in such Closing a stock certificate
representing the number of Conversion Shares subscribed for by such Purchaser,
against such Purchaser’s tender of that number and class of Warrants held by
such Purchaser and payment of cash necessary to satisfy such Purchaser’s
subscription for Conversion Shares.  The tender of Warrants by any Purchaser may
be accomplished through (a) the delivery of physical certificates representing
Warrants, (b) electronic delivery using the Depository Trust Company’s DWAC
(Deposit/Withdrawal At Custodian) System in accordance with the instructions set
forth on Exhibit A, or (c) a combination of the delivery methods set forth in
items (a) and (b) above.

 
 

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(c)           Termination of Obligations under Warrants.  Each Purchaser
understands and agrees that all obligations of the Company pursuant such
Purchaser’s Warrants shall terminate and shall be without any further force of
effect upon the applicable Closing.  Such obligations of the Company terminated,
cancelled and released upon the Closing include, without limitation, (i) any and
all obligations to issue shares of Common Stock upon exercise or conversion of
such Warrants, and (ii) any claims, obligations or other liabilities of the
Company which may have accrued or which may in the future have accrued, pursuant
to such Warrants.
 
(d)           Lost Warrants.  In the event that any Purchaser is unable to
locate or retrieve any Warrant and tender such Warrant at the Closing, such
Purchaser shall execute and deliver a lost instrument affidavit in a form
provided by the Company’s registrar and transfer agent certifying that such
Warrant cannot be located and indemnifying the Company and its registrar and
transfer agent against any claim or loss arising out of failure to tender such
Warrant.
 
(e)           Company’s Right to Reject Subscriptions and/or Terminate
Offering.  Notwithstanding anything in this Agreement or in any document or
instrument delivered pursuant hereto, the Company shall have the right in it
sole discretion, upon notice to each applicable Purchaser, at any time prior to
the applicable Closing, to: (i) reject such Purchaser’s subscription in whole or
in part, and (ii) to terminate the offering of Conversion Shares effected
pursuant hereto.
 
2.           Representation and Warranties of the Company.  The Company hereby
represents and warrants to each Purchaser as of the Closing Date, the following:
 
(a)           Organization and Qualification.  The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has the requisite corporate power and authority to own, lease and
operate its assets and properties and to carry on its business as it is now
being or currently planned by the Company to be conducted.  The Company is not
in violation of any of the provisions of its certificate of incorporation and
bylaws.
 
(b)           Capitalization.  The Company’s periodic reports on Form 10-Q and
Form 10-K and current reports on Form 8-K filed with the Securities and Exchange
Commission (“SEC”) accurately reflect its capitalization as of the dates
indicated in such reports.  The issued and outstanding capital stock of the
Company (i) has been duly and validly issued; (ii) is fully paid and
nonassessable; and (iii) was not issued in violation of any preemptive rights or
rights of first refusal or first offer.
 
(c)           Authority Relative to this Agreement.  The Company has full
corporate power and authority to: (i) execute, deliver and perform this
Agreement, (ii) issue and sell the Conversion Shares to the Purchasers
hereunder, and (iii) carry out the Company’s obligations hereunder and
thereunder and, to consummate the transactions contemplated hereby.  The
execution and delivery of this Agreement and the consummation by the Company of
the transactions contemplated hereby have been duly and validly authorized by
all necessary corporate action on the part of the Company, and no other
corporate proceedings on the part of the Company are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby.  This Agreement
has been duly and validly executed and delivered by the Company and, assuming
the due authorization, execution and delivery thereof by the other parties
hereto, constitutes the legal and binding obligation of the Company, enforceable
against it in accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization or other similar Laws affecting the enforcement of
creditors’ rights generally and by general principles of equity.

 
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(d)           Valid Issuance of the Conversion Shares.  The Conversion Shares to
be issued to the Purchasers hereunder, when issued, sold and delivered in
accordance with the terms of this Agreement for the consideration expressed
herein, will be duly and validly issued, fully paid and non-assessable, free of
restrictions on transfer other than restrictions on transfer under this
Agreement and applicable state and federal securities laws, issued in compliance
with applicable state and federal securities laws, and will not be subject to
any preemptive rights or other similar rights.
 
(e)           No Conflict; Required Filings and Consents.
 
(i)           The execution and delivery of this Agreement by the Company do
not, and the performance of this Agreement by the Company shall not (A) conflict
with or violate the Company’s certificate or incorporation or bylaws, (B)
conflict with or violate any law or any rule or regulation of the
Over-the-Counter bulletin board, (C) result in any breach of or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, or materially impair the Company’s rights or alter the rights or
obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien on any of the properties or assets of the Company pursuant
to, any contracts to which the Company is a party or by or to which any of the
properties or assets of the Company may be bound, subject or affected, or (D)
result in the triggering, acceleration or increase of any payment to any person
pursuant to any contracts to which the Company is a party or by or to which any
of the properties or assets of the Company may be bound, subject or affected,
including any “change in control” or similar provision thereof, except, with
respect to clauses (B), (C) or (D), for any such conflicts, violations,
breaches, defaults, triggers, accelerations, increases or other occurrences that
would not, individually or in the aggregate, have a Material Adverse Effect on
the Company.
 
(ii)           The execution and delivery of this Agreement by the Company do
not, and the performance of its respective obligations hereunder will not,
require any consent, approval, authorization or permit of, or filing with or
notification to, any government or political subdivision or any agency,
authority, bureau, central bank, commission, department or instrumentality of
either, or any court, tribunal, grand jury or arbitrator, in each case whether
foreign or domestic, except (A) for applicable requirements, if any, of the
Securities Act of 1933, as amended (the “Securities Act”), the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), state securities and blue
sky laws, and the rules and regulations thereunder, and appropriate documents
with the relevant authorities of other jurisdictions in which the Company is
qualified to do business, and (B) where the failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications,
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on the Company, or prevent consummation of the
transaction contemplated hereby or otherwise prevent the parties hereto from
performing their obligations under this Agreement.

 
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(iii)           “Material Adverse Effect” means any change, event, violation,
inaccuracy, circumstance or effect, individually or when aggregated with other
changes, events, violations, inaccuracies, circumstances or effects, that is
materially adverse to the business, assets, revenues, financial condition,
results of operations or business prospects of an entity and its subsidiaries,
taken as a whole, except to the extent resulting from: (A) changes in general
industry or economic conditions, (B) adverse effects arising from the
announcement or consummation of the transactions contemplated hereby, or (C)
changes to generally accepted accounting principles that apply generally to the
industry in which the entity operates.
 
(f)           Reporting Company Status.  The Company is subject to the reporting
requirements of the Exchange Act and the Company has taken no action designed
to, or which to its knowledge is likely to, have the effect of, terminating the
registration of the Common Stock under the Exchange Act nor has the Company
received any notification that the SEC is contemplating terminating such
registration.  The Common Stock is traded on the Over-the-Counter bulletin board
and the Company has not received any notice regarding, and to the Company’s
knowledge there is no threat of, the termination or discontinuance of the
eligibility of the Common Stock for such trading.
 
(g)           Exchange Act Filings; Financial Statements.  The Company has filed
all reports, forms or other information required to be filed by it under the
Securities Act and the Exchange Act (the foregoing materials being collectively
referred to herein as the “SEC Reports”), except as otherwise disclosed in any
SEC Reports.  Except as otherwise disclosed in any SEC Reports, as of their
respective dates, the SEC Reports complied in all material respects with the
requirements of the Securities Act and the Exchange Act and the rules and
regulations of the SEC promulgated thereunder, and none of the SEC Reports, when
filed, 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 Company included in the SEC Reports
were prepared in accordance with 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 Company and
its consolidated subsidiaries as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, immaterial, year-end audit adjustments.
 
(h)           Offering Exemption.  Assuming the truth and accuracy of the
representations and warranties contained in Section 3, the offer and sale of the
Conversion Shares as contemplated hereby and the issuance and delivery to the
Purchasers of the Conversion Shares are exempt from registration under the
Securities Act, and will be registered or qualified (or exempt from registration
or qualification) under applicable state securities and blue sky laws, as
currently in effect.

 
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(i)           Brokers or Finders.  Except for [____________], no person will
have, as a result of the transactions contemplated by this Agreement, any valid
right, interest or claim against or upon the Company for any commission, fee or
other compensation pursuant to any agreement, arrangement or understanding
entered into by or on behalf of the Company.
 
3.           Representation and Warranties of the Purchasers.  As of the Closing
Date, each Purchaser severally and not jointly hereby represents and warrants to
the Company that:
 
(a)           Organization and Qualification.  Such Purchaser, if such person is
not an individual, is a validly existing corporation, limited partnership or
limited liability company and has all requisite corporate, partnership or
limited liability company power and authority to invest in the purchase the
Conversion Shares pursuant to this Agreement.
 
(b)           Authorization.  The execution, delivery and performance by such
Purchaser of this Agreement have been duly authorized and each will constitute
the legal, valid and binding obligations of such Purchaser, enforceable against
such Purchaser in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability, relating to or affecting creditors’ rights generally.
 
(c)           No Transfer or Assignment of Securities or Claims.  Such Purchaser
has not sold, assigned, transferred or exercised any of the Warrants to be
tendered by such Purchaser hereunder, and has not transferred or assigned any
claim, right or interest associated therewith.
 
(d)           Purchase Entirely for Own Account.  The Conversion Shares will be
acquired for investment for such Purchaser’s own account, not as a nominee or
agent, and not with a view to the resale or distribution of any part
thereof.  Such Purchaser’s address is listed on the signature page executed by
such Purchaser and attached hereto. Such Purchaser is aware that the Company is
issuing the Conversion Shares pursuant to an exemption from registration under
the Securities Act, and will be qualified (or exempt from registration or
qualification) under applicable state securities and blue sky laws, as currently
in effect.  Such Purchaser is also aware that the Company is relying upon, among
other things, the representations and warranties of such Purchaser contained in
this Agreement for purposes of qualifying for such exemption from registration
under the Securities Act.
 
(e)           Disclosure of Information.  Such Purchaser has had an opportunity
to receive all information related to the Company requested by it and to ask
questions of and receive answers from the Company regarding its business and the
terms and conditions of the offering of the Conversion Shares.  Neither such
inquiries nor any other due diligence investigation conducted by such Purchaser
shall modify, limit or otherwise affect such Purchaser’s right to rely on the
representations and warranties of the Company contained in this Agreement.
 
(f)           Investment Experience.  Such Purchaser acknowledges that it can
bear the economic risk and complete loss of its investment in the Conversion
Shares and has such knowledge and experience in financial or business matters
that it is capable of evaluating the merits and risks of the investment
contemplated hereby.

 
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(g)           Accredited Investor.  Such Purchaser is an accredited investor as
defined in Rule 501(a) of Regulation D, as amended, under the Securities Act.
 
(h)           Restricted Securities; Legends.  Such Purchaser understands that
the Conversion Shares 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 securities may be resold without registration under
the Securities Act only in certain limited circumstances. Such Purchaser
acknowledges that the Conversion Shares will bear the following legend or
similar legend as applicable:
 
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “ACT”). SUCH SECURITIES MAY NOT BE TRANSFERRED
UNLESS A REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS TO SUCH TRANSFER
OR IN THE OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY, SUCH TRANSFER
MAY BE MADE PURSUANT TO RULE 144.
 
(i)           No General Solicitation.  Such Purchaser did not learn of the
investment in the Conversion Shares as a result of any general solicitation or
general advertising.
 
(j)           Prohibited Transactions.  During the last thirty days prior to the
date hereof, neither such Purchaser nor any affiliate of such Purchaser which
(i) had knowledge of the transactions contemplated hereby, (ii) has or shares
discretion relating to such Purchaser’s investments or trading or information
concerning such Purchaser’s investments, including in respect of the Conversion
Shares, or (A) is subject to such Purchaser’s review or input concerning such
affiliate’s investments or trading (collectively, “Trading Affiliates”) has,
directly or indirectly, effected or agreed to effect any short sale, whether or
not against the box, established any “put equivalent position” (as defined in
Rule 16a-1(h) under the Exchange Act) with respect to the Common Stock, granted
any other right (including, without limitation, any put or call option) with
respect to the Common Stock or with respect to any security that includes,
relates to or derived any significant part of its value from the Common Stock or
otherwise sought to hedge its position in the Common Stock (each, a “Prohibited
Transaction”).  Such Purchaser acknowledges that the representations, warranties
and covenants contained in this Section 3(j) are being made for the benefit of
the Purchasers as well as the Company and that each of the other Purchasers
shall have an independent right to assert any claims against such Purchaser
arising out of any breach or violation of the provisions of this Section 3(j).
 
(k)           Brokers or Finders. Except for [____________], no person will
have, as a result of the transactions contemplated by this Agreement, any valid
right, interest or claim against or upon the Company or any Purchaser for any
commission, fee or other compensation pursuant to any agreement, arrangement or
understanding entered into by or on behalf of such Purchaser.
 
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4.           General Provisions.
 
(a)           Notices.  All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally or by commercial
delivery service, or mailed by registered or certified mail (return receipt
requested) or sent via facsimile (with confirmation of receipt), (i) if to a
Purchaser, to such Purchaser’s address set forth on the applicable signature
page attached hereto, or at such other address or facsimile number as such
Purchaser shall have furnished to the Company in writing; or (ii) if to the
Company to SouthPeak Interactive Corporation, 2900 Polo Parkway, Midlothian,
Virginia 23113, Attn:  Terry Phillips, with a copy (which shall not constitute
notice) to Greenberg Traurig, LLP, 1750 Tysons Boulevard, Suite 1200, McLean,
Virginia 22102, Attn:  Mark Wishner, Esq., or at such other address as the
Company shall have furnished in writing to the Purchasers.
 
(b)           Counterparts.  This Agreement may be executed in one or more
counterparts, including by facsimile and/or PDF, all of which shall be
considered one and the same agreement and shall become effective when one or
more counterparts have been signed by each of the parties and delivered to the
other parties, it being understood that all parties need not sign the same
counterpart.
 
(c)           Entire Agreement; Nonassignability; Parties in Interest.  This
Agreement and the documents and instruments and other agreements specifically
referred to herein or delivered pursuant hereto, including the exhibits, (i)
constitute the entire agreement among the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof,
(ii) are not intended to confer upon any other person any rights or remedies
hereunder, and (iii) shall not be assigned.  No representations, warranties,
inducements, promises or agreements, oral or written, by or among the parties
not contained herein shall be of any force of effect.
 
(d)           Successors and Assigns.  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. 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.
 
(e)           Amendments and Waivers.  Any term of this Agreement may be
amended, and the observance of any term hereof may be waived (either generally
or in a particular instance), only with the written consent of the Company and
the holders of a majority of the Conversion Shares.
 
(f)           Governing Law.  This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Virginia, without regard to
the laws that might otherwise govern under applicable principles of conflicts of
law.  Each of the parties hereto irrevocably consents to the exclusive
jurisdiction of any state or federal court located in Chesterfield County,
Virginia in connection with any matter based upon or arising out of this
Agreement or the matters contemplated herein, agrees that process may be served
upon them in any manner authorized by the laws of the Commonwealth of Virginia
for such persons and waives and covenants not to assert or plead any objection
which they might otherwise have to such jurisdiction and such process.

 
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(g)           Rules of Construction.  The parties hereto agree that they have
been represented by counsel during the negotiation, preparation and execution of
this Agreement and, therefore, waive the application of any law, regulation,
holding or rule of construction providing that ambiguities in an agreement or
other document will be construed against the party drafting such agreement or
document.  References herein to “Dollars” or “$” shall refer to U.S. dollars and
all payments and all calculations of amount hereunder shall be made in U.S.
dollars.
 
(h)           Separability of Agreements; Severability of this Agreement.  The
Company’s agreement with each of the Purchasers is a separate agreement and the
sale of Conversion Shares to each of the Purchasers is a separate sale.  Unless
otherwise expressly provided herein, the rights of each Purchaser hereunder are
several rights, not rights jointly held with any of the other Purchasers.  Any
invalidity, illegality or limitation on the enforceability of the Agreement or
any part thereof, by any Purchaser whether arising by reason of the law of the
respective Purchaser’s domicile or otherwise, shall in no way affect or impair
the validity, legality or enforceability of this Agreement with respect to other
Purchasers.  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.
 
[Signature Pages to Follow]

 
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IN WITNESS WHEREOF, the undersigned has caused this Stock Purchase Agreement to
be duly executed by an authorized signatory as of the date first indicated
above.
 
SOUTHPEAK INTERACTIVE CORPORATION
     
By:  
     
Name:
Terry Phillips
 
Title:
Chairman

 
[Company signature page to Stock Purchase Agreement]
  
 
 

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IN WITNESS WHEREOF, the undersigned has caused this Stock Purchase Agreement to
be duly executed by an authorized signatory as of the date first indicated
above.
 
Name of Purchaser:
                 
Signature:
                 
Name of Signatory:
   
Title of Signatory:
           
SSN or EIN of Purchaser:
   
Address:
           
Facsimile Number for Notice:
                 
Email Address for Notice:
       

 
Check the box and complete the corresponding subscription information for each
applicable method of payment:
 

   
Conversion
Shares
Subscribed For
 
Class W
Warrants
Tendered
 
Class Z
Warrants
Tendered
 
Cash Payment
                      o
one Conversion Share for six Class Z Warrants and $0.15
 
=
Not applicable
+
 
+
               
(Number of
Conversion Shares
multiplied by six)
 
(Number of
Conversion Shares
multiplied by $0.15)
                      o
one Conversion Share for twenty-five Class Z Warrants
 
=
Not applicable
+
 
+
Not applicable
             
(Number of
Conversion Shares
multiplied by twenty-
five)
                          o
one Conversion Share for one hundred Class W Warrants and $0.25
 
=
 
+
Not applicable
+
           
(Number of
Conversion Shares
multiplied by one
hundred)
     
(Number of
Conversion Shares
multiplied by $0.25)
                         
Total Conversion
Shares
Subscribed For
 
Total Class W
Warrants
Tendered
 
Total Class Z
Warrants
Tendered
 
Total Cash
Payment
       
=
 
+
 
+
   

 
[Purchaser signature page to Stock Purchase Agreement]
 

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EXHIBIT A
 
DWAC Delivery Instructions
 
Purchasers may deliver some or all of the Warrants to be tendered pursuant to
the Agreement electronically using the Depository Trust Company’s DWAC
(Deposit/Withdrawal At Custodian) System.  In order to transfer Warrants to the
Company using the DWAC System, a Purchaser must instruct its broker to transfer
uncertificated warrants to American Stock Transfer & Trust Company, the
Company’s registrar and transfer agent, via DWAC using transfer agent code
2941.  There is a nominal cost associated with the act of delivering securities
through the DWAC System.  American Stock Transfer & Trust Company typically
charges the tendering broker $35, and the broker may or may not pass this cost
on to the transferring Purchaser.
 
The Company’s point of contact at American Stock Transfer & Trust Company is Ms.
Grace Deer-Loiseau, (718) 921-8261.

 
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