Document:

subscription agreement FMLY sb2june2004

 

SUBSCRIPTION AGREEMENT

FAMILY ROOM ENTERTAINMENT CORPORATION

a New Mexico Corporation

Family Room Entertainment Corporation

8530 Wilshire Boulevard, Suite 420

Beverly Hills, California 90211

Dear ____________:

The undersigned (the "Subscriber") understands that Family Room Entertainment Corporation., a New Mexico corporation (the "Company") is offering for sale an open number of shares of common stock of the Company in consideration of cash at $0.075 per share. This offer terminates on ______,__, 2004. 

The Subscriber acknowledges and understands that the offering of the Shares (the "Offering") is being made without registration of the Shares under the Securities Act of 1933, as amended (the "Act"), or any securities, "blue sky" or other similar laws of any state ("State Securities Laws").

 

1.    Subscription. The Subscriber hereby subscribes for and agrees to purchase _________Shares for the aggregate purchase consideration of ____________.

 

2.    Payment for the Shares. The undersigned herewith tenders the consideration (“Purchase Price”) required to purchase the amount of Shares subscribed for hereunder.     

Payment of the Purchase Price is being made wire transfer or deposit by certified check into the following escrow account: 

            Bank:         Union Bank of California

                           The Private Bank – Newport Beach

                            Irvine, CA 92612

        ABA Routing:       122 000 496

Account No:    470 000 1879

Account Name:     Owen M. Naccarato

                            Attorney Fund Account III

If this subscription is not accepted or the Offering is terminated by the Company for any reason all documents will be returned to the Subscriber.

3.   Acceptance of Subscription. The Subscriber understands and acknowledges that the Company has the unconditional right, exercisable in its sole and absolute discretion, to (i) accept or reject this Subscription Agreement, in whole or in part, (ii) no subscription shall be valid unless and until accepted by the Company, (iii) this Subscription Agreement shall be deemed to be accepted by the Company only when it is signed by an authorized officer of the Company on behalf of the Company, and (iv) notwithstanding anything in this Subscription Agreement to the contrary, the Company shall have no obligation to issue the Shares to any person to whom the issuance of the Shares would constitute a violation of the Act or any State Securities Laws. The Company will cause the Secretary of the Company to deliver the Shares purchased by the Subscriber to the Subscriber promptly after the Company has accepted this Subscription Agreement.

4.   Representations and Warranties of the Subscriber. The Subscriber hereby represents and warrants to and covenants with the Company, as well as each officer, director and agent of the Company, and each soliciting broker, if any, as follows:

(a)   General

(i)   The Subscriber has all requisite authority to enter into this Subscription Agreement and to perform all the obligations required to be performed by the Subscriber hereunder.

(ii) The Subscriber is the sole party in interest and is not acquiring the Shares as an agent or otherwise for any other person. The Subscriber is a resident of the state set forth opposite its name on the signature page hereto and (a) if a corporation, partnership, trust or other form of business organization, it has its principal office within such state; (b) if an individual, he or she has his or her principal residence in such state; and (c) if a corporation, partnership, trust or other form of business organization which was organized for the specific purpose or acquiring the Shares, all of the beneficial owners are residents of such state.

(iii) The Subscriber recognizes that the total amount of consideration tendered to purchase the Shares is placed at the risk of the business and may be completely lost. The purchase of the Shares of the Company as an investment involves extreme risk.

(iv) The Subscriber realizes that the Shares cannot readily be sold as there will be no public market therefor, that it may not be possible to sell or dispose of the and therefore the Shares must not be purchased unless the Subscriber has liquid assets sufficient to assure that such purchase will cause no undue financial difficulties and the Subscriber can provide for current needs and possible personal contingencies.

(v) The Subscriber confirms and represents that he/she is able (i) to bear the economic risk of his/her invest­ment, (ii) to hold the securities for an inde­finite period of time, and (iii) to afford a complete loss of his/her investment. The Subscriber also repre­sents that he/she has (i) adequate means of providing for his/her current needs and possible personal contingencies, and (ii) has no need for liquidity in this particular investment. 

(vi) The Subscriber represents that he/she has sufficient knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of the proposed investment.

(vi) The Subscriber has not become aware of the offering of Shares of the Company by any form of general solicitation or advertising, including, but not limited to advertisements, articles, notices or other communications published in any newspaper, magazine or other similar media or broadcast over television or radio or any seminar or meeting where those individuals that have attended have been invited by any such or similar means of general solici­tation or advertising.

(b)   Information Concerning the Company.

(i) The Subscriber has been provided access to all information requested in evaluating his/her purchase of the Shares. 

(ii) The Subscriber is familiar with the business and financial condition, properties, operations and prospects of the Company, and, at a reasonable time prior to the execution of this Subscription Agreement, has been afforded the opportunity to ask questions of and received satisfactory answers from the Company's officers and directors, or other persons acting on the Company's behalf, concerning the business and financial condition, properties, operations and prospects of the Company and concerning the terms and conditions of the offering of the Shares and has asked such questions as it desires to ask and all such questions have been answered to the full satisfaction of the Subscriber.

(iii) The Subscriber understands that, unless the Subscriber notifies the Company in writing to the contrary before the Closing, all the representations and warranties contained in this Subscription Agreement will be deemed to have been reaffirmed and confirmed as of the Closing, taking into account all information received by the Subscriber.

(iv) The Subscriber understands that the purchase of the Shares involves various risks. 

(v) No representations or warranties have been made to the Subscriber by the Company as to the tax consequences of this investment, or as to profits, losses or cash flow which may be received or sustained as a result of this investment.

(vi) All documents, records and books pertaining to a proposed investment in the Shares which the Subscriber has requested have been made available to the Subscriber.

(c)Status of the Subscriber

(i) The Subscriber represents that the Subscriber is an Accredited Investor as the term Accredited Investor is defined in Rule 501 of Regulation D of the Act. (check each category of "Accredited Investor" below which is applicable to the Subscriber):

( )   (A)   a 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;

( )   (B)   a 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 a reasonable expectation of reaching the same income level in the current year.

( )   (C)   a bank as defined in Section 3(a)(2) of the Act or a savings and loan association or other institution as defined in Section 3(a)(5) (A) of the Act, whether acting in its individual or fiduciary capacity; broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934; an insurance partnership as defined in Section 2(13) of the Act; an investment company registered under the Investment Company Act of 1940 (the "1940 Act") or business development company as defined in Section 2(a) (48) of the 1940 Act; a Small Business Investment Company licensed by the U.S. Small Business as defined under Section 301(c) or (d) of the Small Investment Act of 1958; a 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 total assets in excess of $5,000,000; or an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 ("ERISA"), if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of ERISA, which fiduciary is either a bank, savings and loan association, insurance company or registered investment adviser, 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 (as listed in categories (A) - (G));

( )   (D)   a private business development company as defined in Section 202(a) (22) of the Investment Advisors Act of 1970;

( )   (E)   an organization described in Section 501 (c)(3) of the Internal Revenue Code, a corporation, Massachusetts or similar business trust, or a partnership, with total assets in excess of $5,000,000, and which was not formed for the specific purpose of acquiring the Common Stock;

( )   (F)   a trust, with total assets in excess of $5,000,000 not formed for the specific purposes of acquiring the Common Stock whose purchase is directed by a person who has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of an investment in the Common Stock; and

( )   (G)   an entity in which all of the equity owners are Accredited Investors (as listed in categories (A) - (F)) or is an Accredited Investor defined by Regulation D.

   (ii) The Subscriber is a non-accredited investor and;

       

       ( )     (A)     The Subscriber represents that he/she has sufficient knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of the proposed investment.

       ( )    (B)          Represents that he/she has received the current financial information on the Company to review and in fact has reviewed the documents.

(iii) The Subscriber agrees to furnish any additional information requested to assure compliance with applicable Federal and State Securities Laws in connection with the purchase and sale of the Common Stock.

(d)   Restrictions on Transfer or Sale of the Shares or Securities Underlying the Shares 

(i) The Subscriber is acquiring the Shares subscribed solely for the Subscriber's own beneficial account, for investment purposes, and not with view to, or for resale in connection with, any distribution of the Shares. The Subscriber understands that the offer and the sale of the Shares has not been registered under the Act or any State Securities Laws by reason of specific exemptions under the provisions thereof which depend in part upon the investment intent of the Subscriber and of the other representations made by the Subscriber in this Subscription Agreement. The Subscriber understands that the Company is relying upon the representations, covenants and agreements contained in this Subscription Agreement (and any supplemental information) for the purposes of determining whether this transaction meets the requirements for such exemptions.

(ii) The Subscriber understands that the Shares are all "restricted securities" under applicable federal securities laws and that the Act and the rules of the Securities and Exchange Commission (the "Commission") provide in substance that the Subscriber may dispose of the Shares only pursuant to an effective registration statement under the Act or an exemption therefrom. The certificates evidencing the Shares offered hereby will bear a legend which clearly sets forth this restriction. The Subscriber understands that the Subscriber may not at any time demand the purchase by the Company of the Subscriber’s Shares. The legend will state as follows: 

“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (AACT@), OR THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR PURSUNAT TO AN EXEMPTION FROM REGISTRATION AND DELIVERY TO FAMILY ROOM ENTERTAINMENT CORPORATION OF AN OPINION OF LEGAL COUNSEL SATISFACTORY TO FAMILY ROM ENTERTAINMENT CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT OR ANY APPLICABLE STATE SECURITIES LAWS”.

(iii) The Subscriber agrees: (A) that the Subscriber will not sell, assign, pledge, give, transfer or otherwise dispose of the Shares, or any interest therein, or make any offer or attempt to do any of the foregoing, except pursuant to a registration of the Shares under the Act and all applicable State Securities Laws or in a transaction which is exempt from the registration provisions of the Act and all applicable State Securities Laws; (B) that the Company and any transfer agent for the Shares of the Company shall not be required to give effect to any purported transfer of any of the Shares except upon compliance with the foregoing restrictions; and (C) that a restrictive legend will be placed on the certificates representing the Shares.

(iv) The Subscriber has not offered or sold any portion of the Shares subscribed for and has no present intention of dividing such Shares with others or of reselling or otherwise disposing of any portion of such Shares either currently or after the passage of a fixed or determinable period of time or upon the occurrence or nonoccurrence of any predetermined event or circumstance.

5.   Survival and Indemnification. All representations, warranties and covenants contained in this Agreement and the indemnification contained in this Paragraph 5 shall survive (i) the acceptance of the Subscription Agreement by the Company (ii) changes in this transaction and documents related to this transaction which are not material or which are to the benefit of the Subscriber, and (iii) the death or disability of the Subscriber. The Subscriber acknowledges the meaning and legal consequences of the representations, warranties and covenants in Paragraph 4 hereof and that the Company has relied upon such representations, warranties and covenants in determining the Subscriber's qualification and suitability to purchase the Shares. The Subscriber hereby agrees to indemnify, defend and hold harmless the Company, and its officers, directors, employees, agents and controlling persons, from and against any and all losses, claims, damages, liabilities, expenses (including attorneys' fees and disbursements), judgment or amounts paid in settlement of actions arising out of or resulting from the untruth of any representation herein or the breach of any warranty or covenant herein. Notwithstanding the foregoing, however, no representation, warranty, covenant or acknowledgment made herein by the Subscriber shall in any manner be deemed to constitute a waiver of any rights granted to it under the Securities or State Securities laws.

6.   Conditions to Obligations of the Company. The obligations of the Company to sell the Shares specified herein is subject to the condition that the representations and warranties of the Subscriber contained in Paragraph 4 hereof shall be true and correct on and as of the Closing in all respects with the same effect as though such representations and warranties had been made on and as of the Closing.

7.   Notices. All notices and other communications provided for herein shall be in writing and shall be deemed to have been duly given if delivered personally or sent by registered or certified mail, return receipt requested, postage prepaid, or overnight air courier guaranteeing next day delivery:

(a)   if to the Company, to it at the following address:

Family Room Entertainment Corporation

8530 Wilshire Boulevard, Suite 420

Beverly Hills, California 90211

(b)   if to the Subscriber, at the address set forth on the last page hereof or directly to the Subscriber at the address set forth on the signature page hereto, or at such other address as either party shall have specified by notice in writing to the other.

All notice and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; two days after being deposited in the mail, postage prepaid, if mailed; and the next day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery.

If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it.

8.   Notification of Changes. The Subscriber agrees and covenants to notify the Company immediately upon the occurrence of any event prior to the Closing which would cause any representation, warranty, covenant or other statement contained in the Subscription Agreement to by false or incorrect or of any change in any statement made herein occurring prior to the Closing.

9.   Assignability. This Subscription Agreement is not assignable by the Subscriber, and may not be modified, waived or terminated except by an instrument in writing signed by each of the parties hereto.

10.Binding Effect. Except as otherwise provided herein, this Subscription Agreement shall be binding upon and inure to the benefit of the parties and their heirs, executors, administrators, successors, legal representatives and assigns, and the agreements, representations, warranties and acknowledgments contained herein shall be deemed to be made by and be binding upon such heirs, executors, administrators, successors, legal representatives and assigns. If the Subscriber is more than one person, the obligation of the Subscriber shall be joint and several and the agreements, representations, warranties and acknowledgments contained herein shall be deemed to be made by and be binding upon each such person and his heirs, executors, administrators and successors.

11.   Obligations Irrevocable. The obligations of the Subscriber shall be irrevocable, except with the consent of the Company, until the Closing or earlier termination of the Offering.

12.   Entire Agreement. This Subscription Agreement constitutes the entire agreement of the Subscriber and the Company relating to the matters contained herein, superseding all prior contracts or agreements, whether oral or written.

13.   Governing Law. This Subscription Agreement shall be governed and controlled as to the validity, enforcement, interpretations, construction and effect and in all other aspects by the substantive laws of the State of California.

14.   Severability. If any provision of this Subscription Agreement or the application thereof to any Subscriber or circumstance shall be held invalid or unenforceable to any extent, the remainder of this Subscription Agreement and the application of such provision to other subscriptions or circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law.

15.   Headings. The headings in this Subscription Agreement are inserted for convenience and identification only and are not intended to describe, interpret, define, or limit the scope, extent or intent of this Subscription Agreement or any provision hereof.

16.   Counterparts. This Subscription Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which together shall be deemed to be one and the same agreement.

17.   Documents Being Tendered. The Subscriber hereby tenders a completed and executed copy of this Subscription Agreement, along with the consideration for the Shares subscribed.

Dated:   ________ ___, 2004

   FAMILY ROOM ENTERTAINMENT CORPORATION

       a New Mexico Corporation

By: ______________________________________

         Name: 

        Title:    

AGREED TO:

_____________________________________

SUBSCRIBER

	 
	 	 	 
	

	 

Dated:    Los Angeles, California

______ ___, 2004

The undersigned, a Subscriber to the within Subscription Agreement, agrees to purchase ___________ shares of Common Stock of Family Room Entertainment Corporation, in accordance with the terms of the within Subscription Agreement at $ 0.075 per share for the sum of $ __________ .

_______________________________________________

SUBSCRIBER

AGREED TO:

Family Room Entertainment Corporation

By: __________________________________<PAGE>
                                                                   Exhibit 10.25

                        ADDENDUM TO EMPLOYMENT AGREEMENT
                                MICHAEL COSGRAVE
                                    JUNE 2004

         The following is an addendum to the original Employment Agreement
entered into by and between Pharmion Corporation and Michael Cosgrave, signed
January 5, 2001.

TERMINATION AFTER CHANGE IN CONTROL. Upon a termination by the Company without
Just Cause, (see attached definitions). or termination by Executive for Good
Reason (see attached definitions) occurring on or within twenty-four (24) months
after a Change in Control (as defined below), (i) the vesting and exercisability
of all of Executive's stock options and other equity-based awards will be
accelerated in full so that all such stock options will be immediately
exercisable for fully vested stock and any other stock awards will be fully
vested as of the date of such Termination, and (ii) Executive's stock options
will remain exercisable in accordance with the plan document. For purposes of
this Agreement, "Change of Control" shall mean (1) a sale of all or
substantially all the assets of the Company; (2) a merger into or consolidation
of the Company with any other corporation, except any such merger or
consolidation involving the Company or a subsidiary of the Company in which the
holders of capital stock of the Company immediately prior to such merger or
consolidation continue to hold immediately following such merger or
consolidation at least 50% by voting power of the capital stock of (a) the
surviving or resulting corporation or (b) if the surviving or resulting
corporation is a wholly owned subsidiary of another corporation immediately
following such merger or consolidation, the parent corporation of such surviving
or resulting corporation, (3) the acquisition by any person, entity or group
within the meaning of Section 13(d) or 14(d)(2) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), or any comparable successor provisions
(excluding any employee benefit plan, or related trust, sponsored or maintained
by the Company or any parent or subsidiary corporation of the Company) of the
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act, or comparable successor rule) of securities of the Company
representing at least fifty percent (50%) of the combined voting power entitled
to vote in the election of directors, or (4) individuals who, on the date of
execution of this Agreement, are members of the Company's Board of Directors
(the "Incumbent Board"), cease for any reason to constitute at least a majority
of the members of the Board of Directors; provided, however, that if the
appointment or election (or nomination for election) of any new Board of
Directors member was approved or recommended by a majority vote of the members
of the Incumbent Board then still in office, such new member shall, for purposes
of this Agreement, be considered as a member of the Incumbent Board.

Employee                                      Pharmion Corporation:
/s/ Michael Cosgrave                          /s/ Pam Herriott
--------------------                          --------------------
Date:                                         Date:
 6/15/04                                       6/15/04
 ---------                                     ---------

<PAGE>

                             TERMINATION DEFINITIONS

         1. TERMINATION BY THE COMPANY FOR JUST CAUSE. The Company may terminate
Executive's employment under this Agreement for Just Cause. For purposes of this
Agreement, "Just Cause" for termination shall mean that the Company, acting in
good faith based upon the information then known to it, determines that:

               (i) Executive has committed or engaged in negligent or willful
conduct that is likely to be detrimental to the Company;

               (ii) Executive has engaged in acts which constitute theft, fraud,
or other illegal or dishonest conduct;

               (iii) Executive has willfully disobeyed the reasonable and lawful
directives of the Company's Chief Executive Officer, Chief Operating Officer, or
Board of Directors;

               (iv) Executive has refused or is unwilling to perform his/her job
duties;

               (v) Executive has failed adequately to perform his/her job duties
(provided, however, that the Company shall first provide Executive with written
notice of the deficiencies in his/her performance and Executive shall be given
45 days to remedy such deficiencies);

               (vi) Executive has demonstrated habitual absenteeism;

               (vii) Executive is substantially dependent on alcohol or any
controlled substance or violates any general Company policy with regard to
alcohol or controlled substances;

               (viii) Executive has engaged in acts which constitute sexual or
other forms of illegal harassment or discrimination;

               (ix) Executive makes public remarks that disparage the Company,
its Board of Directors, officers, directors, advisors, executives, affiliates or
subsidiaries;

               (x) Executive violates his/her fiduciary duty to the Company, or
his/her duty of loyalty to the Company; or

               (xi) Executive breaches any term of this Agreement or the
Confidentiality Agreement.

<PAGE>

         The Parties acknowledge that this definition of "Just Cause" in not
intended and does not apply to any aspect of the relationship between the
Company and any of its employees, including Executive, beyond determining
Executive's eligibility for severance.

         2. TERMINATION BY THE COMPANY WITHOUT JUST CAUSE. The Company may
terminate Executive's employment without Just Cause upon written notice to
Executive.

         3. TERMINATION BY EXECUTIVE FOR GOOD REASON. Upon written notice to the
Company, Executive may terminate his/her employment under this Agreement for
Good Reason. For purposes of this Agreement, "Good Reason" shall mean:

               (i) The Company becoming insolvent, as evidenced by its inability
to meet its obligations in the ordinary course of business;

               (ii) A reduction in Executive's Base Salary of more than 10% per
year, without Executive's consent;

               (iii) Executive being required to relocate his/her residence
further than 45 miles from the Company's office, without Executive's consent; or

               (iv) A material reduction in the scope of Executive's duties or a
material change in the content of Executive's duties.

         Executive must provide the Company with written notice of his/her
decision to terminate his/her employment for Good Reason no later than 90 days
following the receipt of a notice from the Company that an act or event
constituting Good Reason has occurred.

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