Document:

Amendment no. 4 to credit agreement

 Exhibit 10.1 

Execution Version 
 CONSENT
TO ASSET EXCHANGE AGREEMENT 
 AND 

AMENDMENT NO. 4 TO CREDIT AGREEMENT 

December 1, 2014 
 THIS
CONSENT TO ASSET EXCHANGE AGREEMENT AND AMENDMENT NO. 4 TO CREDIT AGREEMENT (this “Agreement”) is made as of November 5, 2014, by and among BEASLEY MEZZANINE HOLDINGS, LLC (the “Borrower”), the undersigned
Lenders and GENERAL ELECTRIC CAPITAL CORPORATION, as administrative agent for the Lenders (in such capacity, and together with its successors and permitted assigns, the “Administrative Agent”). 

WHEREAS, the Borrower, the Lenders, the L/C Issuers and the Administrative Agent are party to that certain Credit Agreement dated as of
August 9, 2012 (as amended and in effect immediately prior to the effectiveness of this Agreement, the “Credit Agreement”), providing, subject to the terms and conditions thereof, for extensions of credit to be made by the
Lenders to the Borrower. 
 WHEREAS, the Borrower and certain of its Subsidiaries have agreed to transfer certain Stations and related
properties to CBS Radio Stations Inc. (collectively, “CBS”), and acquire certain Stations and related properties from CBS, in a cash-free exchange transaction (collectively, the “Exchange”) pursuant to the terms and
conditions of that certain Asset Exchange Agreement dated as of October 1, 2014 among Borrower and such Subsidiaries and CBS (together with its exhibits and disclosure schedules, the “Exchange Agreement”). 

WHEREAS, the Borrower and certain of its Subsidiaries have agreed to transfer WTEL(AM) and its related property to WDYU Broadcasting, Inc., a
North Carolina Corporation (“WDYU”), for partial cash consideration pursuant to the terms and conditions of an Asset Purchase Agreement among Borrower and such Subsidiaries and WDYU substantially in the form attached hereto as Exhibit
A (together with its disclosure schedules, the “Purchase Agreement”, and such transfer transaction pursuant to such agreement being referred to herein as the “WTEL Sale”). 

WHEREAS, the Borrower has requested that the Requisite Lenders consent to the Exchange and the WTEL Sale, in each case pursuant to
Section 7.7(vii)(II) of the Credit Agreement which requires the Requisite Lenders’ consent to Asset Sales that are not otherwise permitted under Section 7.7, it being understood and agreed that the acquisition of
Stations and related assets by the Borrower and its Subsidiaries as part of the Exchange would constitute a Permitted Acquisition under the Credit Agreement upon the satisfaction by Borrower and its Subsidiaries of the conditions set forth in
clause (iv) of Section 7.7 of the Credit Agreement. 
 WHEREAS, in connection with the Exchange, the Borrower has
requested that the Lenders amend the Credit Agreement to, among other things, modify certain aspects of the definition of Consolidated Operating Cash Flow; and 

WHEREAS, subject to the terms and conditions set forth in this Agreement, the Lenders have agreed to the foregoing requested consents and
amendments. 

 NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants
herein contained, and subject to the terms and conditions hereof, the parties hereto agree as follows: 
 1. Definitions; Section
References. Except as otherwise defined in this Agreement, terms defined in the Credit Agreement are used herein as defined therein. 

2. Consent to the Exchange. 

(a) Consent. Subject to the satisfaction of the conditions precedent set forth in Section 4 of this Agreement, the
Requisite Lenders hereby consent to (i) the consummation of the asset disposition contemplated as part of the Exchange pursuant to the terms and conditions of the Exchange Agreement, but without any modification amendment, modification or
waiver of any provisions thereof that would be materially adverse to the Lenders unless otherwise approved in writing by the Administrative Agent (hereinafter, the “Approved Exchange Agreement”) and (ii) the consummation of the
WTEL Sale, in each case, notwithstanding the restrictions on asset dispositions imposed by Section 7.7 of the Credit Agreement, which restrictions are hereby waived by the Lenders to the extent necessary to permit such asset dispositions
on such terms and conditions; and 
 (b) Release. Subject to the satisfaction of the conditions precedent set forth in
Section 4 of this Agreement, the Requisite Lenders hereby irrevocably authorize the Administrative Agent to, and the Administrative Agent hereby effectively does, concurrently with consummation of the Exchange, release its Liens on the
“Beasley Station Assets” (as defined in the Approved Exchange Agreement and the “Station Assets” (as defined in the Purchase Agreement); provided, however, that such Lien release does not include a release of the
Administrative Agent’s security interest in, and the Borrower and each other Credit Party hereby reaffirms the Administrative Agent’s continuing, perfected security interest in, all proceeds of such Beasley Station Assets and Station
Assets received by the Borrower or its Subsidiaries or to which they are entitled and in all of the Borrower’s and each other Credit Party’s claims, rights and interests in, to and under the Exchange Agreement or Purchase Agreement and all
other agreements, documents and instruments contemplated thereby or executed and delivered in connection therewith (such Lien release being hereinafter referred to as the “Release”). The Administrative Agent hereby agrees to, upon
and after consummation of the Exchange and the WTEL Sale, as applicable, execute and deliver such agreements, documents and instruments as may be reasonably requested by the Borrower to evidence the Release, in form and substance reasonably
acceptable to the Administrative Agent. 
 3. Amendments to Credit Agreement. Subject to the satisfaction of the conditions precedent
set forth in Section 4 of this Agreement, the Credit Agreement is hereby amended as follows: 
 (a) Subsection 1.1 of the
Credit Agreement is hereby amended by amending and restating the definition of “Consolidated Operating Cash Flow” as follows: 

“Consolidated Operating Cash Flow” shall mean for Borrower and its Subsidiaries on a Consolidated basis and
determined in accordance with GAAP, for the four Fiscal Quarter period ending on the date of determination, (a) net income or loss for such period, excluding (i) unusual, extraordinary or otherwise non-operating income, gains and losses,
if any, for such period, (ii) any other non-cash gains and losses and (iii) the write-up or write-down of assets for such period (other than write-offs of accounts receivable), plus
(b) to the extent deducted in determining net income for such period, the sum of (i) depreciation expense for such period, (ii) amortization expense for such period, (iii) Consolidated Interest Expense during such period,
(iv) taxes expensed during such period whether current or deferred, (v) other deferred or non-cash expenses relating to trade for such period, (vi) solely to the extent that a Permitted Acquisition or an acquisition permitted by
subsection 7.7(v) shall have been consummated in 

  
 2 

 
accordance with the terms and conditions of this Agreement, Marketing Agreement Payments for such period with respect to such acquisition during such period, (vii) fees and expenses paid in
Cash by Borrower and its Subsidiaries hereunder or under the other Loan Documents or under the Second Lien Loan Documents for the effectiveness of such agreements and the other Closing Date transactions to the extent included in determining net
income for such period, (viii) all legal fees and expenses incurred by Borrower and its Subsidiaries with respect to any acquisition or disposition of a Station permitted hereunder (other than in connection with the Exchange Transaction) as a “like-kind” exchange under Section 1031 of the Internal Revenue Code or a “reverse like-kind exchange” under the Internal Revenue Code, (ix) legal fees incurred by Borrower and its
Subsidiaries with respect to any acquisition of a Station permitted hereunder (other than in connection with the Exchange Transaction), to the extent such legal fees do not exceed Five Hundred Thousand Dollars ($500,000) for any such acquisition or
series of related acquisitions, (x) fees and expenses paid in cash by Borrower and its Subsidiaries in connection with the effectiveness of the Loan Documents or any amendment or waiver thereto (other than in connection with the Exchange
Transaction) to the extent included in determining net income for such period, (xi) fees and expenses paid in cash by Borrower and its Subsidiaries in connection with the Exchange Transaction or the amendment, waiver or consent of any Loan
Documents in connection therewith, in an aggregate amount not to exceed Two Million Dollars ($2,000,000) and (xii) losses and charges incurred with respect to the WHFS-FM Station (Tampa) prior to the reformatting of such Station in an aggregate
amount not to exceed (A) for the four Fiscal Quarter period ending December 31, 2014, the sum of $1,148,352 plus such losses and charges incurred during the Fiscal Quarter ending December 31, 2014, (B) for the four Fiscal Quarter
period ending March 31, 2015, the sum of $775,984 plus such losses and charges incurred during the Fiscal Quarter ending December 31, 2014 plus, if the Effective Date occurs after December 31, 2014, such losses and charges incurred by
CBS Radio Stations, Inc. from December 31, 2014 to the Effective Date (the “2015 CBS Losses and Charges”), (C) for the four Fiscal Quarter period ending June 30, 2015, the sum of $419,111, plus such losses and charges
incurred during the Fiscal Quarter ending December 31, 2014 plus, if the Effective Date occurs after December 31, 2014, the 2015 CBS Losses and Charges, or (D) for the four Fiscal Quarter period ending September 30, 2015, such
losses and charges incurred during the Fiscal Quarter ending December 31, 2014, minus (c) to the extent included in determining net income for such period, non-cash revenue relating to trade. The foregoing shall be calculated on a
Pro Forma Basis with respect to Pro Forma Transactions as provided in subsection 1.2B. 
 (b) Subsection 1.1 of the Credit Agreement
is hereby further amended to add the following definition to such section in its appropriate alphabetical location therein: 

“Exchange Transaction” shall mean the transactions contemplated by that certain Asset Exchange Agreement dated
as of October 1, 2014 among the Borrower, certain of its Subsidiaries and CBS Radio Stations Inc., together with its exhibits and disclosure schedules, but without any modification amendment, modification or waiver of any provisions thereof
that would be materially adverse to the Lenders unless otherwise approved in writing by the Administrative Agent. 
 (c) Subsection
1.1 of the Credit Agreement is hereby further amended to add the following sentence to the end of the definition of “Pro Forma Transaction”: 

Notwithstanding anything herein to the contrary, the acquisition and disposition of Stations and related assets effected in connection with the
Exchange Transaction shall constitute a Pro Forma Transaction hereunder. 

  
 3 

 4. Conditions of Effectiveness. The effectiveness of this Agreement is subject to the
following conditions precedent (the first date on which such condition precedents have been satisfied or waived being the “Effective Date”), the Administrative Agent shall have received each of the following: 

(a) counterparts of this Agreement, duly executed by each Credit Party and the Requisite Lenders; and 

(b) evidence satisfactory to the Administrative Agent that the acquisition of the “CBS Station Assets” (as defined in the Approved
Exchange Agreement) by the Borrower and its Subsidiaries constitutes a Permitted Acquisition and that each of the conditions set forth in Section 7.7(iv) of the Credit Agreement shall have been satisfied with respect to the Exchange,
including, without limitation, each of the following: 
 (i) delivery to the Administrative Agent an executed Officer’s
Certificate of the Borrower confirming that the representations and warranties in Section 5 of the Credit Agreement continue to be true, correct and complete in all material respects after giving effect to the consummation of the
Exchange and providing a representation and warranty that the Borrower’s commercially reasonable projections demonstrate that the Borrower shall be in compliance on a Pro Forma Basis with each of the covenants set forth in
Section 7.6 of the Credit Agreement after giving effect to the Exchange and through the Term Loan Maturity Date; 

(ii) execution and delivery to the Administrative Agent of supplemental Loan Documents, or joinders to existing Loan
Documents, together with related certificates, documents, instruments and opinions, in each case to the extent determined by the Administrative Agent or the Borrower to be necessary to comply with the conditions set forth in Sections 4.2A,
4.2B and 4.2F of the Credit Agreement; 
 (iii) delivery to the Administrative Agent of copies of the executed
or conformed Permitted Acquisition Documents pertaining to the Exchange and any amendments thereto prior to the consummation of the Exchange; 

(iv) the initial “FCC Consent” contemplated by and defined in the Approved Exchange Agreement shall be been obtained
and, in the event such FCC Consent shall have been challenged or contested by any Person, such FCC Consent shall have become a Final Order; and 

(v) the Exchange shall have become effective or will become effective substantially simultaneous with the effectiveness of
this Agreement in accordance with the terms and conditions of the Approved Exchange Agreement. 
 5. Representations and Warranties of
the Credit Parties. Each Credit Party hereby represents and warrants as of the date hereof as follows: 
 (a) This Agreement and the
Credit Agreement as amended hereby constitute the legally valid and binding obligations of such Credit Party, enforceable against such Credit Party in accordance with their respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability. 

  
 4 

 (b) Both before and after giving effect to this Agreement and the consummation of the Exchange
and the WTEL Sale, no Event of Default or Potential Event of Default has occurred and is continuing or will occur. 
 (c) Both before and
after giving effect to this Agreement, the Exchange and the WTEL Sale, the representations and warranties contained in the Credit Agreement and in the other Loan Documents are or will be true, correct and complete in all material respects (or, if
such representation or warranty is qualified by “material” or “Material Adverse Effect”, in all respects) on and as of the date hereof to the same extent as though made on and as of the date hereof, except to the extent such
representations and warranties specifically relate to an earlier date, in which case such representations and warranties were true, correct and complete in all material respects (or, if such representation or warranty is qualified by
“material” or “Material Adverse Effect”, in all respects) on and as of such earlier date (or previously waived in accordance with the Credit Agreement). 

6. Ratification and Reaffirmation. Each Credit Party hereby (i) ratifies and reaffirms all of its payment and performance
obligations, contingent or otherwise, and each grant of security interests and liens in favor of Administrative Agent, any Lender or any other Secured Party, as the case may be, under each Loan Document, in each case after giving effect to the
Exchange and the Release, (ii) agrees and acknowledges that the Liens in favor of Administrative Agent and the Secured Parties under each Loan Document constitute valid, binding, enforceable and perfected first priority liens and security
interests (subject only to Permitted Liens and the Release) securing the Obligations (including, without limitation, from and after the consummation of the Exchange, with respect to all property acquired in connection with the Exchange) and are not
subject to avoidance, disallowance or subordination pursuant to any applicable law, (iii) agrees and acknowledges the Obligations constitute legal, valid and binding obligations of such Credit Party and that (x) no offsets, defenses or
counterclaims to the Obligations or any other causes of action with respect to the Obligations or the Loan Documents exist and (y) no portion of the Obligations is subject to avoidance, disallowance, reduction or subordination pursuant to any
applicable law, (iv) agrees that such ratification and reaffirmation is not a condition to the continued effectiveness of the Loan Documents, and (v) agrees that neither such ratification and reaffirmation, nor Administrative Agent’s
nor any Lender’s solicitation of such ratification and reaffirmation, constitutes a course of dealing giving rise to any obligation or condition requiring a similar or any other ratification or reaffirmation from each party to the Credit
Agreement with respect to any subsequent modifications, consent or waiver with respect to the Credit Agreement or other Loan Documents. Each Credit Party acknowledges and agrees that any of the Loan Documents to which it is a party or otherwise
bound shall continue in full force and effect and that all of its obligations thereunder shall be valid and enforceable and shall not be impaired or limited by the execution or effectiveness of this Agreement or the effectiveness of the Exchange.
The Credit Agreement and each other Loan Document is in all respects hereby ratified and confirmed. This Agreement shall constitute a “Loan Document” for purposes of the Credit Agreement. 

7. Reference to and Effect on the Credit Agreement. 

(a) Upon the effectiveness hereof, each reference to the Credit Agreement in the Credit Agreement or any other Loan Document shall mean and be
a reference to the Credit Agreement as amended hereby. 
 (b) Except as specifically amended above, the Credit Agreement and all other
documents, instruments and agreements executed and/or delivered in connection therewith shall remain in full force and effect and are hereby ratified and confirmed. 

  
 5 

 8. Costs and Expenses of the Administrative Agent. The Borrower shall pay on demand all
actual and reasonable, documented, out-of-pocket costs and expenses of the Administrative Agent and all reasonable, out-of-pocket and documented fees, expenses and disbursements of counsel to the Administrative Agent in connection with the
negotiation, preparation and execution of this Agreement and any document, instrument or agreement delivered pursuant to this Agreement, to the extent required pursuant to subsection 10.2 of the Credit Agreement. 

9. Governing Law. This Agreement shall be governed by, and shall be construed in accordance with the internal laws of the State of New
York, without regard to conflicts of laws principles. 
 10. Limited Effect. This Agreement relates only to the specific matters
expressly covered herein, shall not be considered to be a waiver of any rights, claims or remedies any Lender may have under the Credit Agreement or under any other Loan Document (except as expressly set forth herein) or under applicable law, and
shall not be considered to create a course of dealing or to otherwise obligate in any respect any Lender to execute similar or other amendments or grant any waivers under the same or similar or other circumstances in the future. 

11. Headings. Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part
of this Agreement for any other purpose. 
 12. Counterparts. This Agreement may be executed by one or more of the parties hereto on
any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Signatures delivered by facsimile or PDF shall have the same force and effect as manual signatures delivered
in person. 
 [Signature Pages Follow] 

  
 6 

 IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and year first above
written. 
  

					
	 BEASLEY MEZZANINE HOLDINGS, LLC,
 as
Borrower

		
	By	 	 /s/ B. Caroline Beasley

		 	Name:	 	B. Caroline Beasley
		 	Title:	 	Vice President, Chief Financial Officer, Secretary and Treasurer
	
	 BEASLEY BROADCAST GROUP, INC.,

BEASLEY FM ACQUISITION CORP.,
 BEASLEY AP HOLDINGS, LLC,

BEASLEY BA HOLDINGS, LLC,
 WCHZ LICENSE, LLC,

WGOR LICENSE, LLC,
 WWNN LICENSE, LLC,

as Credit Parties

		
	By	 	 /s/ B. Caroline Beasley

	Name:	 	B. Caroline Beasley
	Title:	 	Vice President, Chief Financial Officer, Secretary and Treasurer
	
	 BEASLEY BROADCASTING OF NEVADA, LLC,

KJUL LICENSE, LLC,
 as Credit Parties

		
	By	 	 /s/ B. Caroline Beasley

	Name:	 	B. Caroline Beasley
	Title:	 	Manager

  
 Signature page to
Consent to Asset Exchange Agreement and Amendment No. 4 to Credit Agreement 
 (Beasley Mezzanine Holdings, LLC) 

 
			
	 BEASLEY BROADCASTING OF SOUTHWEST FLORIDA, INC.,

BEASLEY RADIO, INC.,
 as Credit Parties

		
	By	 	 /s/ B. Caroline Beasley

	Name:	 	B. Caroline Beasley
	Title:	 	Secretary
	
	BEASLEY-REED ACQUISITION PARTNERSHIP,
	KDWN LICENSE LIMITED PARTNERSHIP,
	WAEC LICENSE LIMITED PARTNERSHIP,
	WAZZ LICENSE LIMITED PARTNERSHIP,
	WDAS LICENSE LIMITED PARTNERSHIP,
	WFLB LICENSE LIMITED PARTNERSHIP,
	WIKS LICENSE LIMITED PARTNERSHIP,
	WJBX LICENSE LIMITED PARTNERSHIP,
	WKIS LICENSE LIMITED PARTNERSHIP,
	WKML LICENSE LIMITED PARTNERSHIP,
	WMGV LICENSE LIMITED PARTNERSHIP,
	WNCT LICENSE LIMITED PARTNERSHIP,
	WPOW LICENSE LIMITED PARTNERSHIP,
	WRXK LICENSE LIMITED PARTNERSHIP,
	WSFL LICENSE LIMITED PARTNERSHIP,
	WTMR LICENSE LIMITED PARTNERSHIP,
	WWDB LICENSE LIMITED PARTNERSHIP,
	WXNR LICENSE LIMITED PARTNERSHIP,
	WXTU LICENSE LIMITED PARTNERSHIP,
	as Credit Parties
	
	By: BEASLEY FM ACQUISITION CORP., a general partner of each of the foregoing
		
	By	 	 /s/ B. Caroline Beasley

	Name:	 	B. Caroline Beasley
	Title:	 	 Vice President, Chief Financial Officer,

Secretary and Treasurer

  
 Signature page to
Consent to Asset Exchange Agreement and Amendment No. 4 to Credit Agreement 
 (Beasley Mezzanine Holdings, LLC) 

 
			
	 WJPT LICENSE LIMITED PARTNERSHIP,

as a Credit Party

	
	By: BEASLEY RADIO, INC., as general partner
		
	By	 	 /s/ B. Caroline Beasley

	Name:	 	B. Caroline Beasley
	Title:	 	Secretary
	
	WQAM LICENSE LIMITED PARTNERSHIP, as a Credit Party
	
	By: BEASLEY-REED ACQUISITION PARTNERSHIP, as general partner
	
	By: BEASLEY FM ACQUISITION CORP., as general partner
		
	By	 	 /s/ B. Caroline Beasley

	Name:	 	B. Caroline Beasley
	Title:	 	Vice President, Chief Financial Officer, Secretary and Treasurer
	
	 WXKB LICENSE LIMITED PARTNERSHIP,

as a Credit Party

	
	By: BEASLEY BROADCASTING OF SOUTHWEST FLORIDA, INC., as general partner
		
	By	 	 /s/ B. Caroline Beasley

	Name:	 	B. Caroline Beasley
	Title:	 	Secretary

  
 Signature page to
Consent to Asset Exchange Agreement and Amendment No. 4 to Credit Agreement 
 (Beasley Mezzanine Holdings, LLC) 

 
					
	GENERAL ELECTRIC CAPITAL CORPORATION, as a Lender and as Administrative Agent
		
	By	 	 /s/ Nirmal B. Bivek

		 	Name:	 	Nirmal B. Bivek
		 	Title:	 	Duly Authorized Signatory

  
 Signature page to
Consent to Asset Exchange Agreement and Amendment No. 4 to Credit Agreement 
 (Beasley Mezzanine Holdings, LLC) 

 
					
	GE CAPITAL BANK, as a Lender
		
	By	 	 /s/ Paul Sleet

		 	Name:	 	Paul Sleet
		 	Title:	 	Duly Authorized Signatory
	
	FLORIDA COMMUNITY BANK N.A., as a Lender
		
	By	 	 /s/ Jonathan Simoens

		 	Name:	 	Jonathan Simoens
		 	Title:	 	Senior Vice President
	
	BANK UNITED N.A., as a Lender
		
	By	 	 /s/ Charles J. Klenk

		 	Name:	 	Charles J. Klenk
		 	Title:	 	Senior Vice President
	
	WEBSTER BANK, as a Lender
		
	By	 	  

		 	Name:	 	
		 	Title:	 	
	
	WELLS FARGO BANK, NATIONAL ASSOCIATION, as a Lender
		
	By	 	 /s/ Teddy Koch

		 	Name:	 	Teddy Koch
		 	Title:	 	Vice President
	
	BRANCH BANKING AND TRUST COMPANY, as a Lender
		
	By	 	 /s/ Darren Gersch

		 	Name:	 	Darren Gersch
		 	Title:	 	Market President / Senior Vice President

  
 Signature page to
Consent to Asset Exchange Agreement and Amendment No. 4 to Credit Agreement 
 (Beasley Mezzanine Holdings, LLC) 

 
			
	U.S. BANK NATIONAL ASSOCIATION, as a Lender
		
	By	 	 /s/ Garrett Komjathy

	Name:	 	Garrett Komjathy
	Title:	 	Senior Vice President

  
 Signature page to
Consent to Asset Exchange Agreement and Amendment No. 4 to Credit Agreement 
 (Beasley Mezzanine Holdings, LLC)EXHIBIT 10.1

 

 EXHIBIT 10.1
 

 

 THIS PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT RELATES TO AN OFFERING OF SECURITIES IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”). 
 NONE OF THE SECURITIES TO WHICH THIS PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT (THE “SUBSCRIPTION AGREEMENT”) RELATES HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO U.S. PERSONS (AS DEFINED HEREIN) EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.  IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN ACCORDANCE WITH THE 1933 ACT.
 CONFIDENTIAL
PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT
 (Subscribers Resident Outside of the United States)
 

 TO:
 IFAN Financial, Inc. (the “Company”)
 5694 Mission Center Road, Suite 602-660
 San Diego, CA 92108
 

 

 Purchase of Units
 
 1.
 Subscription
 
 1.1
 The undersigned (the “Subscriber”) hereby irrevocably subscribes for and agrees to purchase from the Company, on the basis of the representations and warranties and subject to the terms and conditions set forth herein, 3,703,703 units (the “Units”) at the price of US $0.27 per Unit (such subscription and agreement to purchase being the “Subscription”) for the total purchase price of One Million ($1,000,000 USD) (the “Subscription Proceeds”) that will be paid in five tranches as described below in the Section 2.4 Payment.
 
 1.2
 Each Unit will consist of one common share in the capital of the Company (each, a “Share”) and one common share purchase warrant (a “Warrant”) subject to adjustment.  One Warrant shall be non-transferable and shall entitle the holder thereof to purchase one share of common stock in the capital of the Company (each, a “Warrant Share”), as presently constituted, and are exercisable until 9:00 pm New York, New York Time on December 31, 2015, at a price per Warrant Share of US $1.00 per Warrant Share.  The Shares, Warrants and the Warrant Shares are referred to as the “Securities”.
 
 1.3
 Subject to the terms hereof, the Subscription will be effective upon its acceptance by the Company.  The Subscriber acknowledges that the offering of the Units (the “Offering”) contemplated hereby is part a private placement of approximately 3,703,703 Units having no maximum subscription level and no minimum aggregate subscription level.
 
 2.
 Payment
 
 2.1
 The Subscription Proceeds must accompany this Subscription and shall be paid by bank wire transfer directly to the Company.
 
 2.2
 The Subscriber acknowledges and agrees that this Subscription Agreement, the Subscription Proceeds and any other documents delivered in connection herewith will be held on behalf of the Company.  In the event that this Subscription Agreement is not accepted by the Company for whatever reason, which the Company expressly reserves the right to do, within 2 days of the delivery of an executed Subscription Agreement by the Subscriber, this Subscription Agreement, the Subscription Proceeds (without interest thereon) and any other documents delivered in connection herewith will be returned to the Subscriber at the address of the Subscriber as set forth in this Subscription Agreement. 
 
 2.3
 Where the Subscription Proceeds are paid to the Company, the Company is entitled to treat such Subscription Proceeds as an interest free loan to the Company until such time as the Subscription is accepted and the certificates representing the Securities have been issued to the Subscriber.
 
 2.4
 The Subscription Proceeds shall be paid as follows: The sum of Two Hundred Thousand Dollars ($200,000) is to be delivered to Seller upon the execution of this Subscription Agreement.  The balance of the Eight Hundred Thousand ($800,000) shall be paid as follows:
 
 (a)
 Two Hundred Thousand ($200,000) to be paid by December 8, 2014;
 
 (b)
 Two Hundred Thousand ($200,000) to be paid by December 29, 2014;
 
 (c)
 Two Hundred Thousand ($200,000) to be paid by January 19, 2015;
 
 (d)
 Two Hundred Thousand ($200,000) to be paid by February 9, 2015.
 
 3.
 Documents Required from Subscriber
 
 3.1
 The Subscriber must complete, sign and return to the Company an executed copy of this Subscription Agreement.
 
 3.2
 The Subscriber shall complete, sign and return to the Company as soon as possible, on request by the Company, any documents, questionnaires, notices and undertakings as may be required by regulatory authorities, and applicable law.
 
 4.
 Closing
 
 4.1
 Closing of the offering of the Shares (the “Closing”) shall occur contemporaneously with the execution of this Subscription Agreement or on such other date as may be determined by the Company (the “Closing Date”).
 
 4.2
 The Company may, at its discretion, elect to close the Offering in one or more closings, in which event the Company may agree with one or more subscribers (including the Subscriber hereunder) to complete delivery of the Securities to such subscriber(s) against payment therefor at any time on or prior to the Closing Date.
 
 5.
 Acknowledgements of Subscriber
 
 5.1
 The Subscriber acknowledges and agrees that:
 
 (a)
 none of the Securities have been registered under the 1933 Act, or under any state securities or “blue sky” laws of any state of the United States, and, unless so registered, may not be offered or sold in the United States or, directly or indirectly, to U.S. Persons, as that term is defined in Regulation S under the 1933 Act (“Regulation S”), except in accordance with the provisions of Regulation S, pursuant to an effective registration statement under the 1933 Act, or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the 1933 Act and in each case in accordance with applicable state and federal securities laws; 
 
 (b)
 except as provided in this Subscription Agreement, the Subscriber acknowledges that the Company has not undertaken, and will have no obligation, to register any of the Securities under the 1933 Act;
 
 (c)
 the decision to execute this Subscription Agreement and acquire the Securities hereunder has not been based upon any oral or written representation as to fact or otherwise made by or on behalf of the Company, and such decision is based entirely upon a review of information (the receipt of which is hereby acknowledged) which has been filed by the Company (the “Public Record”) with the Securities and Exchange Commission (the “SEC”);
 
 (d)
 neither the SEC nor any other securities commission or similar regulatory authority has reviewed or passed on the merits of the Units;
 
 (e)
 there is no government or other insurance covering any of the Securities;
 
 (f)
 there are risks associated with an investment in the Securities;
 
 (g)
 the Subscriber has not acquired the Units as a result of, and will not itself engage in, any “directed selling efforts” (as defined in Regulation S under the 1933 Act) in the United States in respect of the Units which would include any activities undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for the resale of any of the Securities; provided, however, that the Subscriber may sell or otherwise dispose of the Shares and/or Warrant Shares pursuant to registration thereof under the 1933 Act and any applicable state and federal securities laws or under an exemption from such registration requirements;
 
 (h)
 the Subscriber and the Subscriber’s advisor(s) have had a reasonable opportunity to ask questions of and receive answers from the Company in connection with the distribution of the Securities hereunder, and to obtain additional information, to the extent possessed or obtainable without unreasonable effort or expense, necessary to verify the accuracy of the information about the Company;
 
 (i)
 the Subscriber will indemnify and hold harmless the Company and, where applicable, its directors, officers, employees, agents, advisors and shareholders, from and against any and all loss, liability, claim, damage and expense whatsoever (including, but not limited to, any and all fees, costs and expenses whatsoever reasonably incurred in investigating, preparing or defending against any claim, lawsuit, administrative proceeding or investigation whether commenced or threatened) arising out of or based upon any representation or warranty of the Subscriber contained herein or in any document furnished by the Subscriber to the Company in connection herewith being untrue in any material respect or any breach or failure by the Subscriber to comply with any covenant or agreement made by the Subscriber to the Company in connection therewith;
 
 (j)
 none of the Securities are listed on any stock exchange or automated dealer quotation system and no representation has been made to the Subscriber that any of the Securities will become listed on any stock exchange or automated dealer quotation system, except that currently market makers make a market for the Company’s common shares on the FINRA’s OTC Bulletin Board;
 
 (k)
 the Company will refuse to register any transfer of the Shares and/or Warrant Shares not made in accordance with the provisions of Regulation S, pursuant to an effective registration statement under the 1933 Act or pursuant to an available exemption from the registration requirements of the 1933 Act and in accordance with applicable state and federal securities laws;
 
 (l)
 the statutory and regulatory basis for the exemption claimed for the offer of the Units, although in technical compliance with Regulation S, would not be available if the offering is part of a plan or scheme to evade the registration provisions of the 1933 Act or any applicable state and federal securities laws; 
 
 (m)
 the Subscriber has been advised to consult the Subscriber’s own legal, tax and other advisors with respect to the merits and risks of an investment in the Units and with respect to applicable resale restrictions, and it is solely responsible (and the Company is not in any way responsible) for compliance with:
 
 (i)
 any applicable laws of the jurisdiction in which the Subscriber is resident in connection with the distribution of the Units hereunder, and
 
 (ii)
 applicable resale restrictions; and
 
 (n)
 this Subscription Agreement is not enforceable by the Subscriber unless it has been accepted by the Company, and the Subscriber acknowledges and agrees that the Company reserves the right to reject any subscription for any reason.
 
 6.
 Representations, Warranties and Covenants of the Subscriber
 
 6.1
 The Subscriber hereby represents and warrants to and covenants with the Company (which representations, warranties and covenants shall survive the Closing) that:
 
 (a)
 the Subscriber has the legal capacity and competence to enter into and execute this Subscription Agreement and to take all actions required pursuant hereto and, if the Subscriber is a corporation, it is duly incorporated and validly subsisting under the laws of its jurisdiction of incorporation and all necessary approvals by its directors, shareholders and others have been obtained to authorize execution and performance of this Subscription Agreement on behalf of the Subscriber;
 
 (b)
 the entering into of this Subscription Agreement and the transactions contemplated hereby do not result in the violation of any of the terms and provisions of any law applicable to the Subscriber or of any agreement, written or oral, to which the Subscriber may be a party or by which the Subscriber is or may be bound;
 
 (c)
 the Subscriber has duly executed and delivered this Subscription Agreement and it constitutes a valid and binding agreement of the Subscriber enforceable against the Subscriber in accordance with its terms;
 
 (d)
 the Subscriber is acquiring the Securities pursuant to an exemption from the registration and prospectus requirements of applicable securities legislation in all jurisdictions relevant to this Subscription, and, as a consequence, the Subscriber will not be entitled to use most of the civil remedies available under applicable securities legislation and the Subscriber will not receive information that would otherwise be required to be provided to the Subscriber pursuant to applicable securities legislation;
 
 (e)
 the Subscriber is not acquiring the Units for the account or benefit of, directly or indirectly, any U.S. Person;
 
 (f)
 the Subscriber is not a U.S. Person;
 
 (g)
 the Subscriber is resident in the jurisdiction set out under the heading “Name and Address of Subscriber” on the signature page of this Subscription Agreement;
 
 (h)
 the sale of the Units to the Subscriber as contemplated in this Subscription Agreement complies with or is exempt from the applicable securities legislation of the jurisdiction of residence of the Subscriber;
 
 (i)
 the Subscriber is outside the United States when receiving and executing this Subscription Agreement and is acquiring the Units as principal for the Subscriber’s own account, for investment purposes only, and not with a view to, or for, resale, distribution or fractionalisation thereof, in whole or in part, and no other person has a direct or indirect beneficial interest in such Units;
 
 (j)
 the Subscriber is not an underwriter of, or dealer in, the common shares of the Company, nor is the Subscriber participating, pursuant to a contractual agreement or otherwise, in the distribution of the Units;
 
 (k)
 the Subscriber (i) is able to fend for him/her/itself in the Subscription; (ii) has such knowledge and experience in business matters as to be capable of evaluating the merits and risks of its prospective investment in the Units; and (iii) has the ability to bear the economic risks of its prospective investment and can afford the complete loss of such investment;
 
 (l)
 the Subscriber acknowledges that the Subscriber has not acquired the Units as a result of, and will not itself engage in, any “directed selling efforts” (as defined in Regulation S under the 1933 Act) in the United States in respect of the Units which would include any activities undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for the resale of the Shares or Warrant Shares; provided, however, that the Subscriber may sell or otherwise dispose of the Shares or Warrant Shares pursuant to registration of the Shares or Warrant Shares pursuant to the 1933 Act and any applicable state and federal securities laws or under an exemption from such registration requirements and as otherwise provided herein;
 
 (m)
 the Subscriber is not aware of any advertisement of any of the Securities and is not acquiring the Units as a result of any form of general solicitation or general advertising including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio or television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising; and
 
 (n)
 no person has made to the Subscriber any written or oral representations:
 
 (i)
 that any person will resell or repurchase any of the Securities;
 
 (ii)
 that any person will refund the purchase price of any of the Securities;
 
 (iii)
 as to the future price or value of any of the Securities; or
 
 (iv)
 that any of the Securities will be listed and posted for trading on any stock exchange or automated dealer quotation system or that application has been made to list and post any of the Securities of the Company on any stock exchange or automated dealer quotation system.
 
 7.
 Representations and Warranties of the Company
 
 7.1
 The Company acknowledges and agrees that the Subscriber is entitled to rely upon the representations and warranties of the Company contained in this Agreement and further acknowledges that the Subscriber will be relying upon such representations and warranties in purchasing the Shares.
 
 7.2
 The Company warrants that the Public Record fairly represents the status of the Company as at the dates indicated in the Public Record.
 
 8.
 Representations and Warranties will be Relied Upon by the Company
 
 8.1
 The Subscriber acknowledges that the representations and warranties contained herein are made by it with the intention that they may be relied upon by the Company and its legal counsel in determining the Subscriber’s eligibility to purchase the Units under applicable securities legislation, or (if applicable) the eligibility of others on whose behalf it is contracting hereunder to purchase the Units under applicable securities legislation.  The Subscriber further agrees that by accepting delivery of the certificates representing the Securities on the Closing Date, it will be representing and warranting that the representations and warranties contained herein are true and correct as at the Closing Date with the same force and effect as if they had been made by the Subscriber at the Closing Date and that they will survive the purchase by the Subscriber of Units and will continue in full force and effect notwithstanding any subsequent disposition by the Subscriber of such Units.
 
 9.
 Legending of Subject Securities
 
 9.1
 The Subscriber hereby acknowledges that that upon the issuance thereof, and until such time as the same is no longer required under the applicable securities laws and regulations, the certificates representing any of the Securities will bear a legend in substantially the following form:
 “THESE SECURITIES WERE ISSUED IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”).  ACCORDINGLY, NONE OF THE SECURITIES TO WHICH THIS CERTIFICATE RELATES HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD IN THE UNITED STATES OR, DIRECTLY OR INDIRECTLY, TO U.S. PERSONS (AS DEFINED HEREIN) EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN ACCORDANCE WITH THE 1933 ACT.”
 
 9.2
 The Subscriber hereby acknowledges and agrees to the Company making a notation on its records or giving instructions to the registrar and transfer agent of the Company in order to implement the restrictions on transfer set forth and described in this Subscription Agreement.
 
 9.3
 The Subscriber hereby acknowledges and agrees to the Company making a notation on its records or giving instructions to the registrar and transfer agent of the Company in order to implement the restrictions on transfer set forth and described in this Subscription Agreement.
 
 10.
 Costs
 
 10.1
 The Subscriber acknowledges and agrees that all costs and expenses incurred by the Subscriber (including any fees and disbursements of any special counsel retained by the Subscriber) relating to the purchase of the Units shall be borne by the Subscriber.
 
 11.
 Governing Law
 
 11.1
 This Subscription Agreement is governed by the laws of the State of Nevada.  The Subscriber, in its personal or corporate capacity and, if applicable, on behalf of each beneficial purchaser for whom it is acting, irrevocably attorns to the jurisdiction of the courts of the State of Nevada.
 
 12.
 Survival
 
 12.1
 This Subscription Agreement, including without limitation the representations, warranties and covenants contained herein, shall survive and continue in full force and effect and be binding upon the parties hereto notwithstanding the completion of the purchase of the Units by the Subscriber pursuant hereto.
 
 13.
 Assignment
 
 13.1
 This Subscription Agreement is not transferable or assignable.
 
 14.
 Severability
 
 14.1
 The invalidity or unenforceability of any particular provision of this Subscription Agreement shall not affect or limit the validity or enforceability of the remaining provisions of this Subscription Agreement.
 
 15.
 Entire Agreement
 
 15.1
 Except as expressly provided in this Subscription Agreement and in the agreements, instruments and other documents contemplated or provided for herein, this Subscription Agreement contains the entire agreement between the parties with respect to the sale of the Units and there are no other terms, conditions, representations or warranties, whether expressed, implied, oral or written, by statute or common law, by the Company or by anyone else.
 
 16.
 Notices
 
 16.1
 All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication.  Notices to the Subscriber shall be directed to the address on the signature page of this Subscription Agreement and notices to the Company shall be directed to the address on the cover page of this Subscription Agreement.
 
 17.
 Counterparts and Electronic Means
 
 17.1
 This Subscription Agreement may be executed in any number of counterparts, each of which, when so executed and delivered, shall constitute an original and all of which together shall constitute one instrument.  Delivery of an executed copy of this Subscription Agreement by electronic facsimile transmission or other means of electronic communication capable of producing a printed copy will be deemed to be execution and delivery of this Subscription Agreement as of the date hereinafter set forth.
 IN WITNESS WHEREOF the Subscriber has duly executed this Subscription Agreement as of the date of acceptance by the Company.
 ________________________
 (Name of Subscriber – Please type or print)
 _______________________ 
 (Signature and, if applicable, Office)
 ________________________
 (Address of Subscriber)
 _________________________
 (City, State or Province, Postal Code of Subscriber)
 _______________
 (Country of Subscriber)
 

 

 A C C E P T A N C E
 The above-mentioned Subscription Agreement in respect of the Units is hereby accepted by IFAN Financial, Inc.
 DATED at ____, the ___ day of ______, 2014.
 

 IFAN FINANCIAL, INC.
 

 

 Per:
 ________________
 J. Christopher Mizer
 President & CEO
 Authorized Signatory

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