1
EXHIBIT 10.11
PLACEMENT AGREEMENT
OF
MICRO-MEDIA SOLUTIONS, INC.
January 31, 1998
EQUITY SERVICES, LTD.
Xx. Xxxxxxx Xxxxx
Xxxxxxxxx Xxxxxx Steps
P.O. Box N-4805
Nassau, Bahamas
Gentlemen:
The undersigned, Micro-Media Solutions, Inc., a Utah corporation (the
"Company"), confirms its agreement with Equity Services, Ltd., a Nevis company
("ESL") as follows:
22. Description of Securities and Offering.
(a) ESL has agreed to privately place (the "Private Placement")
Ninety Four Thousand Three Hundred Forty (94,340) shares (the "Shares") of the
Company's Series C 6% Cumulative Convertible Non-Voting Preferred Stock (the
"Series C Preferred Stock"), each Share being immediately convertible into ten
(10) shares of the Company's common stock, at a price of Ten and 60/100 Dollars
($10.60) per Share (the "Private Placement Price"), on or before February 3,
1998 (the "Closing").
PLACEMENT AGREEMENT OF
MICRO-MEDIA SOLUTIONS, INC.
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The Shares shall have a cumulative dividend of six percent (6%) per
annum, payable on a fiscal quarterly basis, which shall be paid by the issuance
of shares of the common stock of the Company, par value $0.10 per share (the
"Common Stock") based on the thirty (30) day average closing bid price of the
Common Stock immediately prior to the dividend date.
Immediately upon the occurrence of the Closing, the Company shall
grant the holders of the Shares, the holders of the Common Stock issued upon
conversion of the Shares and the holders of the Common Stock issued as
dividends on the Shares one (1) demand registration right and "piggyback"
registration rights. The terms of these registration rights shall be as set
forth in a Registration Rights Agreement (herein so called) substantially in
the form attached hereto as Exhibit "A". The Company shall bear all expenses
in connection with the preparation and filing of such registration statements.
(b) The commissions to which ESL shall be entitled, and which the
Company shall pay, for such placement shall be as follows: (i) a sum equal to
seven percent (7%) of the total proceeds resulting from the placement of the
Shares, payable in cash; and (ii) Four Thousand Seven Hundred Seventeen (4,717)
Shares (the "Placement Agent's Shares"). ESL shall also be paid (i) a sum
equal to three percent (3%) of the total proceeds resulting from the placement
of the Shares as a non-accountable expense allowance and (ii) an amount equal
to the legal fees of ESL's counsel not to exceed Ten Thousand and No/100
Dollars ($10,000.00). ESL will be paid the commission, fees, and
non-accountable expense allowance simultaneously with the Closing.
(c) In addition, the Company agrees to sell to ESL, for an
aggregate price of $100, a five (5) year option ("ESL Purchase Option") to
purchase up to Forty Seven Thousand One Hundred Seventy (47,170) shares of
Common Stock ("ESL's Option Shares") at a price of Four Dollars ($4.00) per
Option Share exercisable for a period of five (5) years commencing January 31,
1999. The holders of ESL's Option Shares and the Placement Agent's Shares will
have registration rights as set forth in the Registration Rights Agreement
substantially in the form attached hereto as Exhibit "B".
23. Appointment of Placement Agent. ESL's appointment by the Company as
Placement Agent shall commence upon the date of the execution of this
Agreement, and shall continue until and through February 15, 1998, unless (i)
the Shares shall be completely sold prior to that date, (ii) the offering has
been terminated by written agreement between ESL and the Company, or (iii) this
Agreement shall be terminated at a prior date as provided herein.
24. Release of Placement Agent. ESL's commitment to serve as Placement
Agent on behalf of the Company is made subject to the release of ESL: (i) in
the event of war, (ii) in the event of any material adverse change in the
business, property or financial condition of the Company (of which ESL shall be
the sole judge), (iii) in the event of any pending or threatened action, suit
or proceeding at law or in equity against the Company, or by any Federal, State
or other commission, board or agency wherein any unfavorable decision would
materially affect the business, property, financial condition or income of the
Company (of which ESL shall be the sole judge), (iv) in the event of a breach
by the Company of any covenant, representation or warranty contained in this
Agreement or (v) in the event of adverse market conditions (of which ESL shall
be the sole judge).
25. Representations and Warranties of the Company.
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The Company represents and warrants to ESL as follows:
(a) The Company has been duly incorporated and is validly existing
and in good standing under the laws of the State of Utah, with full corporate
power and authority to own, lease and operate its properties and to conduct its
business as currently conducted, and is duly registered and qualified to
conduct its business and is in good standing in each jurisdiction or place
where the nature of its properties or the conduct of its business requires such
registration or qualification and failure to so register or qualify would have
a material adverse effect on the Company.
(b) The Company has registered shares of its Common Stock pursuant
to Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), is in full compliance with all reporting requirements of the Exchange
Act, and the Common Stock is quoted on the NASDAQ Over-the-Counter Bulletin
Board (trading symbol: MSIA).
(c) The Company has furnished ESL with copies of the Company's
Business Plan dated July 3, 1997, most recent Annual Report on Form 10-KSB
filed with the Securities and Exchange Commission (the "Commission") and all
Forms 10-QSB and 8-K, together with any amendments thereto, filed thereafter,
if any (collectively, the "Disclosure Documents"). Immediately prior to the
Closing, there will be no other capital stock issued and outstanding, nor will
there be outstanding any rights to acquire, commitments to issue or securities
convertible into capital stock other than as stated in the Disclosure Documents
and except for those rights to demand Three Hundred Thousand (300,000) shares
of Common Stock that is the subject of a dispute involving Argus Management,
Inc. ("Argus"). The Disclosure Documents at the time of their filing did not
include any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements contained therein, in light of
the circumstances under which they were made not misleading.
(d) Except as shown on the Company's most recent audited financial
statements prepared by Xxxxxxx Accountants dated March 31, 1997, a copy of
which has been furnished to ESL, and as otherwise previously disclosed in
writing to ESL or in the Disclosure Documents, the Company will have no other
indebtedness outstanding immediately prior to the Closing.
(e) Upon issuance at the Closing, in accordance with this
Agreement, the Shares will be duly and validly authorized and issued, fully
paid and nonassessable, free from all encumbrances and restrictions other than
restrictions on transfer imposed by applicable securities laws and/or this
Agreement, and will not subject the holders thereof to personal liability by
reason of being such holders. The shares of Common Stock, when issued and
delivered upon conversion of the Series C Preferred Stock, the ESL Option
Shares and the Placement Agent's Shares, will be duly and validly authorized
and issued, fully paid and nonassessable, free from all encumbrances and
restrictions other than restrictions on transfer imposed by applicable
securities laws and/or this Agreement, and will not subject the holders thereof
to personal liability by reason of being such holders.
(f) This Agreement has been duly authorized, validly executed and
delivered on behalf of the Company and is a valid and binding agreement of the
Company enforceable in
PLACEMENT AGREEMENT OF
MICRO-MEDIA SOLUTIONS, INC.
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accordance with its terms, subject to general principles of equity and to
bankruptcy or other laws affecting the enforcement of creditors' rights
generally, and the Company has full power and authority to execute and deliver
this Agreement and the other agreements and documents contemplated hereby and
to perform its obligations hereunder and thereunder.
(g) The execution and delivery of this Agreement, the issuance of
the Shares, the shares of Common Stock issuable upon conversion of the Series C
Preferred Stock, the ESL Option Shares, the Placement Agent's Shares, and the
consummation of the transactions contemplated by the Investor Subscription
Agreement (herein so called) by the Company, will not conflict with or result
in a breach of or a default under any of the terms or provisions of, the
Company's articles of incorporation or By-laws, or of any material provision of
any indenture, mortgage, deed of trust or other material agreement or
instrument to which the Company is a party or by which it or any of its
properties or assets is bound, any material provision of any law, statute,
rule, regulation, or any existing applicable decree, judgment or order by any
court, federal or state regulatory body, administrative agency, or other
governmental body having jurisdiction over the Company, or any of its
properties or assets and will not result in the creation or imposition of any
material lien, charge or encumbrance upon any property or assets of the Company
or any of its subsidiaries pursuant to the terms of any agreement or instrument
to which any of them is a party or by which any of them may be bound or to
which any of their property or any of them is subject.
(h) No authorization, approval, filing with or consent of any
governmental body is required for the issuance and sale of the Shares, except
for filings pursuant to Regulation D promulgated under the Securities Act of
1933, as amended (the "Act") or any state blue sky filings.
(i) Except as previously disclosed in writing to ESL and except as
stated in the Disclosure Documents, there is no action, suit or proceeding
before or by any court or governmental agency or body, domestic or foreign, now
pending or threatened against or affecting the Company, or any of its
properties, which could reasonably be anticipated to result in any material
adverse change in the condition (financial or otherwise) or in the earnings,
business affairs, business prospects, properties or assets of the Company.
(j) Subsequent to the dates as of which information is given in
the Disclosure Documents, except as contemplated herein, the Company has not
incurred any material liabilities or material obligations, direct or
contingent, or entered into any material transactions not in the ordinary
course of business, and there has not been any change in its capitalization or
any material adverse change in its condition (financial or otherwise) net
worth, results of operations or prospects, except as otherwise previously
disclosed to ESL.
(k) The Company has conducted, is conducting and will conduct its
business so as to comply in all material respects with all applicable statutes
and regulations, and the Company is not charged with and, to the knowledge of
the Company, is not under investigation with respect to any violation of any
statutes or regulations nor is it the subject of any pending or threatened
adverse proceedings by any regulatory authority having jurisdiction over its
business or operations.
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MICRO-MEDIA SOLUTIONS, INC.
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(l) Except as set forth in the Disclosure Documents, the Company
has good and indefeasible title to all properties and assets described therein
as owned by it, free and clear of all liens, charges, encumbrances, or
restrictions.
(m) The Company has filed all necessary federal and state income
and franchise tax returns and has paid all taxes shown as due thereon.
(n) The Company has no knowledge of any tax deficiency that might
be asserted against it that might materially and adversely affect its business
or properties.
(o) The Company maintains insurance of the types and in amounts
generally deemed adequate for its business and consistent with insurance
coverage maintained by similar companies and businesses, including, but not
limited to, insurance covering all real and personal property owned or leased
by the Company against theft, damage, destruction, acts of vandalism, products
liability and all other risks customarily insured against, all of which
insurance is in full force and effect.
(p) No labor disturbance by the employees of the Company exists or
is imminent that could reasonably be expected to have a material adverse effect
on the conduct of the business, operations, financial condition, or income of
the Company.
(q) Neither the Company nor any employee or agent of the Company
has made any payment of funds of the Company or received or retained any funds
in violation of law other than payment of potentially usurious interest and as
stated in the Disclosure Documents.
(r) Subject in part to the truth and accuracy of the subscriber's
representations set forth in the Investor Subscription Agreement, the offer,
sale and issuance of the Shares are exempt from registration requirements of
the 1933 Act, and neither the Company nor any authorized agent acting on its
behalf will take any action hereafter that will cause the loss of such
exemption.
(s) The Company has no patents, trademarks, service marks,
copyrights, or licenses other than commercially available software licenses.
The Company is not aware that any of its executive officers is obligated under
any contract (including licenses, covenants or commitments of any nature) or
other agreement, or subject to any judgment, decree or order of any court or
administrative agency that would interfere with the use of his or her best
efforts to promote the interest of the Company or that would conflict with the
Company's business as proposed to be conducted.
(t) Except for agreements explicitly contemplated hereby or set
forth in the Disclosure Documents, there are no agreements between the Company
and any of its officers, directors, affiliates or any affiliate thereof, other
than employment agreements between the Company and its officers and directors.
(u) As of the Closing, no representation or warranty of the
Company contained in this Section 4, and no statement contained in any exhibit,
schedule, certificate, list, summary or other
PLACEMENT AGREEMENT OF
MICRO-MEDIA SOLUTIONS, INC.
6
disclosure document provided or to be provided to ESL pursuant hereto or in
connection with the transactions contemplated hereby, contains or will contain
any untrue statement of a material fact, or omits or will omit to state any
material fact which is necessary in order to make statements contained therein
not misleading.
The representations, warranties and covenants of the Company contained in this
Agreement shall inure to the benefit of each subscriber to the Private
Placement contemplated by this Agreement and such subscribers shall constitute
identified third-party beneficiaries under this Agreement. No termination,
modification, or waiver of the representations, warranties and covenants of the
Company contained in this Agreement shall be permitted in any manner adversely
affecting their interests without their prior written consent. The
representations, warranties and covenants of the Company contained herein shall
survive the Closing.
26. Affirmative Covenants of the Company.
(a) The Company will use its best efforts to: (i) list shares of
its Common Stock on The Nasdaq SmallCap Market or a national securities
exchange (such as AMEX or NYSE) and (ii) at a minimum, to maintain such listing
for a period of five (5) years from the time of such listing.
(b) The Company will continue to engage the financial public
relations firm currently engaged by the Company.
(c) The financial statements of the Company shall be audited by a
"Big Six" or such other independent public accounting firm to which ESL may
consent. Further, the Company shall not effect a change in its accounting firm
to other than a "Big Six" firm for a period of two (2) years following the
Closing.
(d) The Company shall be responsible for and shall bear all
expenses directly and necessarily incurred in connection with the Private
Placement, including but not limited to, the cost of preparing, printing and
delivering all placement and selling documents, including but not limited to
the Placement Agreement, Investor Subscription Agreements, Registration Rights
Agreements, Placement Agent's Option Agreements and blue sky memorandum and
stock certificates; blue sky fees, filing fees, legal fees and disbursements of
counsel in connection with blue sky matters; fees and disbursements of the
transfer and warrant agent; the cost of two (2) sets of bound closing volumes
for ESL and its counsel; the cost of three (3) tombstone advertisements, one
(1) of which shall be in a national business newspaper, one (1) of which shall
be in a major Texas newspaper and one (1) shall be in a publication chosen by
ESL; the cost of five (5) lucite tombstones; and an amount equal to the legal
fees of ESL's counsel not to exceed Ten Thousand Dollars
($10,000.00)(collectively, the "Company Expenses"). If the Private Placement
is not completed because the Company prevents it or because of a breach by the
Company of any covenants, representations or warranties contained herein, the
Company's liability for such expense allowance shall be limited to Ten Thousand
and No/100 Dollars ($10,000.00).
(e) The Company will, and will cause its subsidiaries, if any, to
do the following: (i)
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maintain and preserve its and their respective businesses consistent with
normal business practices; (ii) conduct its and their respective business,
taken together as a group, in an orderly, efficient and customary manner
consistent with normal business practices; and (iii) keep and maintain all of
its and their respective properties in good working order and condition,
ordinary wear and tear excepted.
(f) The Company will deliver to ESL for a period of three (3)
years from the Closing:
(i) within forty-five (45) days after the close of each
quarter, a copy of its consolidated balance sheet as of the close of
such month and its profit and loss statement and surplus
reconciliation for that month, all prepared in accordance with
generally accepted accounting principles consistently applied, and
certified as being fairly presented in all material respects by the
Company's President or its Chief Financial Officer;
(ii) at any time within the period from thirty (30) days
prior to and until thirty (30) days after the start of any fiscal
year, financial projections of the Company and its subsidiaries, if
any, for such fiscal year prepared in reasonable detail, which
financial projections shall be presented to the Company's Board of
Directors for their approval at their regular meeting first following
the preparation of such projections;
(iii) promptly upon the filing thereof, all reports and
statements filed with the Commission (or any governmental authority
succeeding to any of its functions) or with any securities exchange;
and
(iv) such other information and data with respect to the
Company or any of its subsidiaries, if any, as from time to time may
be reasonably requested by ESL (including, without limitation, such
other information as the Company shall have supplied to any of its
security holders in their capacity as such) to the extent the Company
possesses such information or can acquire it without unreasonable
effort or expense.
(g) The Company will continue to pay the premiums on the One
Million and No/100 Dollars ($1,000,000.00) of "key man" life insurance on the
life of Xxxx Xxxxxx. Such "key man" life insurance will be kept in force for a
minimum period of either three (3) years from the Closing or the term of the
employment agreement between the Company and Xxxx Xxxxxx, whichever is longer.
(h) For a period of three (3) years from the Closing, the Company,
at its expense, shall, upon request by ESL from time to time, provide ESL with
copies of the Company's daily transfer sheets.
(i) The Company and its President shall call a meeting of the
Board of Directors at such times as may be necessary but at least once every
fiscal quarter. As soon as practical after the Closing, the Board of Directors
shall include at least two (2) non-affiliated directors, which directors shall
not be officers or employees of the Company ("Outside Directors"). In
addition, the Company will allow one (1) designated representative of ESL to
receive timely notice of,
PLACEMENT AGREEMENT OF
MICRO-MEDIA SOLUTIONS, INC.
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attend and make comments at all meetings of its Board of Directors. (Such
designated representative shall also be sent all standard communications and
notifications from the Company to the members of its Board of Directors
concerning annual and special meetings in the same fashion and on the same
basis, including with respect to timing, as he would if he were a member of the
Board of Directors.) Further, for a period of five (5) years from the Closing,
the holders of the Series C Preferred Stock shall have the right to designate
one (1) member of the Board of Directors and the Company will cause such
designee to be elected to the Company's Board of Directors.
(j) The Company will cause the Board of Directors to maintain a
Compensation Committee, which shall be comprised of three (3) members, of which
one (1) member shall be a director designated by the holders of the Shares.
The Compensation Committee shall have authority with respect to the matters set
forth in clauses (i) and (ii) of paragraph (m) of this Section 5.
(k) The Company will cause the Board of Directors to maintain an
Audit Committee, which shall be comprised of three (3) members, of which one
(1) member shall be a director designated by the holders of the Shares.
(l) The management of the Company shall prepare and deliver to
each member of the Board (including ESL's designee) monthly reports
highlighting business developments and activities, with those persons having
assigned responsibilities reporting on operations and activities in their areas
of responsibility.
(m) The Company will promptly send to ESL and each subscriber to
the Private Placement, in no event later than ninety (90) days following each
meeting (unless ESL or each such subscriber shall waive such right in writing)
copies of the complete minutes of each meeting of its Board of Directors,
executive and similar committees thereof.
(n) Without in any way limiting the generality of matters which
may be appropriate for consideration or action by the Board of Directors, prior
to taking action with respect to any of the following items, the Board of
Directors or, in the case of clauses (i) and (ii), the Compensation Committee
thereof, must approve the following actions:
(i) Changes in officers and their compensation,
including, without limitation, all significant employee benefits other
than health care and similar insurance plans;
(ii) All incentive programs (and revisions thereto) for
employees such as stock option plans, equity plans, bonus plans, etc.;
(iii) Company budgets, which shall be submitted within the
period from thirty (30) days prior to and until thirty (30) days after
the commencement of each fiscal year covering sales, direct costs,
indirect costs, profit targets, capital expenditures, and cash flow;
(iv) Major appropriations in excess of Fifty Thousand
Dollars ($50,000.00) for
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any capital items not in the Company budget for the fiscal year;
(v) Major new facilities and their location, excluding
any small leased facilities in the local area so long as their annual
rental obligation does not exceed Fifty Thousand Dollars ($50,000.00)
per year;
(vi) All matters pertaining to mergers and acquisitions,
without exception;
(vii) Purchase contracts of a major nature;
(viii) Sales contracts of an unusual size or complexity;
(ix) Sale or purchase of patents, rights, or any royalty
or license agreements;
(x) Warranty and distribution policies of an unusual
nature which are not representative of industry patterns;
(xi) Financing programs and policies applicable to public
offerings, private placements, and long-term debt;
(xii) Treasury policies;
(xiii) Selection of auditors and corporate counsel;
(xiv) Banking resolutions;
(xv) Cash policies such as pension funds, investments,
etc., other than normal bank deposits;
(xvi) All matters of litigation in which the Company is to
be the plaintiff or other initiating party; and
(xvii) Conflict of interest matters.
(o) The management of the Company shall notify and consult with
the Board of Directors (by written, telegraphic or telephonic notice) prior to
taking any initial action with respect to any of the following matters (it
being understood that the Board of Directors will determine the propriety of
further or alternative action with respect to such matters at their next
meeting):
(i) All matters of personnel policies as they apply to
any labor agreements or organization of unions;
(ii) All matters of public policy, wherein the Company is
to be involved in any community, political, or religious cause or
program;
PLACEMENT AGREEMENT OF
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(iii) All matters of litigation that involve or may involve
the Company as a defendant, other than timely filing of appropriate
documents to avoid prejudicing the rights of the Company;
(iv) Audit programs and policies; and
(v) Any operating decisions which in the judgment of the
President and Chief Executive Officer should be presented to the
Board.
(p) The Company shall file a Certificate of Designation with the
Secretary of State of Utah, setting forth the rights and preferences of the
Series C Preferred Stock substantially in the form attached hereto as Exhibit
"C".
27. Negative Covenants of the Company.
(a) For a period of eighteen (18) months following the Closing,
the Company will not, without the prior written consent of ESL, grant any
options to purchase securities of the Company to employees that are exercisable
at a price below the greater of the Private Placement Price or the fair market
value of the securities on the date of grant.
(b) For a period of three (3) years following the Closing, the
Company will not, without the prior written consent of ESL, offer or sell any
of its securities in reliance on Regulation S of the Securities Act of 1933, as
amended.
(c) The Company will not use any proceeds from the Private
Placement to repay any indebtedness of the Company including but not limited to
any indebtedness to current executive officers or principal stockholders of the
Company, other than the aggregate sum of Four Hundred Eighty Thousand Dollars
($480,000.00), payable to various vendors of the Company that are not
affiliates.
(d) The Company shall not, without the prior unanimous written
consent of ESL and the holders of the Series C Preferred Stock, create any new
class or series of stock having a dividend and/or liquidation preference senior
to the Series C Preferred Stock or increase the size of the authorized number
of shares of Series C Preferred Stock.
(e) The Company will not issue press releases without first providing
ESL a copy of the proposed prior to its dissemination for a period of eighteen
(18) months from the Closing, or February 3, 1998, whichever is earlier.
(f) For a period of thirteen (13) months from the Closing or February
3, 1998, whichever is earlier, the compensation of the executive officers of
the Company shall be subject to the approval of ESL, which approval shall not
unreasonably be withheld.
(g) The Company will not sell any of its securities at a price lower
than the Private Placement Price for a period of twenty-four (24) months from
the Closing or February 3, 1998, whichever is earlier, without the prior
written consent of ESL.
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28. Representations and Warranties of ESL.
ESL represents, warrants and covenants to the Company as follows:
(a) ESL has been duly incorporated and is validly existing and in
good standing under the laws of Nevis, with full corporate power and authority
to own, lease and operate its properties and to conduct its business as
currently conducted.
(b) This Agreement has been duly authorized, validly executed and
delivered on behalf of ESL and is a valid and binding agreement of ESL
enforceable in accordance with its terms, subject to general principles of
equity and to bankruptcy or other laws affecting the enforcement of creditors'
rights generally, and ESL has full power and authority to execute and deliver
this Agreement and the other agreements and documents contemplated hereby and
to perform its obligations hereunder and thereunder.
29. Indemnification. The Company hereby agrees to indemnify and hold
harmless ESL and its officers, directors, shareholders, employees, agents and
attorneys against any and all losses, claims, damages, liabilities and expenses
incurred by each such person in connection with defending or any reasonable
investigation of colorable claims or liabilities, including any costs or
expenses incurred, to which any such indemnified party may become subject under
the Securities' Act, or under any other statute, at common law or otherwise,
insofar as such losses, claims, demands, liabilities and expenses arise out of
or are based upon, in whole or in part, (i) any untrue statement or alleged
untrue statement of a material fact made by the Company, (ii) any omission or
alleged omission of a material fact with respect to the Company, or (iii) any
breach of any representation, warranty or agreement made by the Company in this
Agreement.
30. Mergers and Acquisitions.
(a) The Company agrees that ESL will be paid a finder's fee of
seven percent (7%) of the first $1,000,000.00, six percent (6%) of the second
$1,000,000.00 and five percent (5%) of the next $5,000,000.00 ranging in
$1,000,000.00 increments down to two and one-half percent (2-1/2%) of the
excess (with a reduction by one-half percent (0.5%) for each $1,000,000.00
thereafter up to $9,000,000.00), if any, over $9,000,000.00 of the
consideration (stock or other property to be valued at the fair market value of
same on the date of receipt by the Company) involved in any transaction
(including mergers, acquisitions, joint ventures and any other business for the
Company introduced by ESL) consummated by the Company, in which ESL introduced
the other party to the Company during a period ending five (5) years from
November 11, 1997 (an "Introduced Transaction") and with whom the Company did
not have a prior relationship; and
(b) Any such finder's fee due to ESL will be paid in cash at the
closing of the particular Introduced Transaction for which the finder's fee is
due. This finder's fee is not in addition to the finder's fee contained in
that certain placement agreement dated November 11, 1997, by and between the
Company and ESL, but is merely a restatement thereof.
31. Conditions Precedent to Closing.
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MICRO-MEDIA SOLUTIONS, INC.
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(a) Prior to the Closing, ESL shall have received a legal opinion
addressed to ESL and each subscriber to the Private Placement from counsel for
the Company, confirming the representations and warranties of the Company
contained in Section 4, substantially in the form attached hereto as Exhibit
"D".
(b) ESL shall have received a fully executed Placement Agent's
Option Certificate from the Company for the options earned upon the Closing.
(c) ESL shall have received a fully executed Registration Rights
Agreement with respect to the Placement Agent's Shares and the ESL Option
Shares from the Company for the ESL Option Shares and Placement Agent's Shares
earned upon the Closing.
(d) ESL shall have received a certified copy of the resolution of
the Board of Directors of the Company authorizing the transactions contemplated
herein.
(e) The Company shall have filed with the Office of the Secretary
of State of Utah a Certificate of Designation acceptable to ESL, substantially
in the form attached hereto as Exhibit "C".
(f) The Company shall have amended its Bylaws in such a manner so
as to make its Bylaws consistent with the terms and conditions of this
Agreement and the transactions contemplated herein, a copy of which will have
been provided to ESL.
(g) Prior to the Closing, ESL shall have received the certificates
representing the Placement Agent's Shares earned for the Private Placement.
(h) Prior to the Closing, ESL shall have received a fully-executed
subscription agreement from each subscriber to the Private Placement.
32. Effective Date of this Agreement and Termination.
(a) This Agreement shall become effective upon its execution by
ESL.
(b) This Agreement shall terminate on the earlier of February 15,
1998, or the Closing.
33. Parties. This Agreement shall inure to the benefit of and be binding
upon ESL, the Company and ESL's and its respective successors and assigns.
Except as provided for in Section 4 hereinabove, nothing expressed or mentioned
in this Agreement is intended or shall be construed to give any person or
corporation, other than the parties hereto and their respective successors and
assigns and the controlling persons, officers, directors, employees, agents and
attorneys of the parties, any legal or equitable right, remedy or claim under
or in respect of this Agreement or any provision herein contained. Except as
provided in Section 4, this Agreement and all conditions and provisions hereof
being intended to be and being for the sole and exclusive benefit of the
parties hereto and their respective successors and assigns and said controlling
persons, officers, directors, employees, agents and attorneys, and for the
benefit of no other person or corporation.
PLACEMENT AGREEMENT OF
MICRO-MEDIA SOLUTIONS, INC.
13
34. Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, express
overnight courier, registered first class mail, overnight courier, or
telecopied (followed by registered mail or overnight courier), initially to the
address set forth below, and thereafter at such other address, notice of which
is given in accordance with the provisions of this Section 13.
if to the Company:
Micro-Media Solutions, Inc.
501 Xxxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxx Xxxxxx, President
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
if to ESL:
Equity Services, Ltd
Xx. Xxxxxxx Xxxxx
Xxxxxxxxx Xxxxxx Steps
P.O. Box N-4805
Nassau, Bahamas
Attn: Xx. Xxxx Xxxxxxxxx, Director
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy (which shall not constitute notice) to:
Novakov, Davidson & Xxxxx, P.C.
0000 Xx. Xxxx Xxxxx
000 X. Xx. Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000-0000
Attn: I. Xxxxx Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
All such notices and communications shall be deemed to have been duly given:
when delivered by hand, if personally delivered; three (3) business days after
being deposited in the mail, registered mail, return receipt requested, postage
prepaid, if mailed; when received after being deposited in the regular mail;
the next business day after being deposited with an overnight courier, if
deposited with a nationally recognized, overnight courier service; when receipt
is acknowledged, if telecopied.
35. Attorneys' Fees. If any action is necessary to enforce or interpret
the terms of this agreement, the prevailing party shall be entitled to
reasonable attorneys' fees and costs, in
PLACEMENT AGREEMENT OF
MICRO-MEDIA SOLUTIONS, INC.
14
addition to any other relief to which he is or may be entitled. This provision
shall be construed as applicable to the entire agreement.
36. Time of Essence. Time shall be of the essence of this Agreement.
37. Construction. This Agreement shall be construed in accordance with
the internal laws of the State of Texas.
38. Execution. This Agreement may be executed in any number of
counterparts each of which taken together shall constitute one and the same
instrument.
39. Joint Drafting of Agreement. This Agreement has been prepared by the
joint efforts of the respective counsel for each of the parties hereto and
shall not be construed against a particular party simply by reason of such
party being the drafting party.
40. Entire Agreement. This Agreement constitutes the entire understanding
by and between the parties with respect to the subject matter hereof. This
Agreement can only be modified, including any extension of the offering period,
by a written agreement duly signed by persons authorized to sign agreements on
behalf of the respective parties.
41. Facsimile Signature. This Agreement may be executed by facsimile copy
and any such facsimile copy bearing the facsimile signature of any party hereto
shall have full legal force and effect and shall be binding against the party
having executed this Agreement by facsimile.
PLACEMENT AGREEMENT OF
MICRO-MEDIA SOLUTIONS, INC.
15
If the foregoing is in accordance with your understanding, please sign
below and return to us a counterpart hereof, and upon your acceptance hereof,
this letter and the acceptance hereof shall constitute a binding agreement
between ESL and the Company.
Very truly yours,
MICRO-MEDIA SOLUTIONS, INC.
By: /s/ Xxxx Xxxxxx
---------------------------------
XXXX XXXXXX, President
Accepted and agreed to as of the
date first above written by:
EQUITY SERVICES, LTD.
By:/s/ Xxxx Xxxxxxxxx
XXXX XXXXXXXXX, Director
PLACEMENT AGREEMENT OF
MICRO-MEDIA SOLUTIONS, INC.
16
EXHIBIT "A"
REGISTRATION RIGHTS AGREEMENT -
Subscribers to Private Placement
EXHIBIT "B"
REGISTRATION RIGHTS AGREEMENT - ESL
EXHIBIT "C"
CERTIFICATE OF DESIGNATION
EXHIBIT "D"
FORM OF LEGAL OPINION
17
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of the 31st day of January, 1998 by and between MICRO-MEDIA
SOLUTIONS, INC., a Utah corporation (the "Company") and EQUITY SERVICES, LTD.,
a Nevis company (the "Shareholder").
R E C I T A L S:
WHEREAS, the Shareholder is acquiring (i) Four Thousand Seven Hundred
Seventeen (4,717) shares of the Company's Series C 6% Cumulative Convertible
Preferred Stock, stated value $10.60 per share (the "Series C Preferred Stock")
pursuant to that certain placement agreement by and between the Company and the
Shareholder dated January 31, 1998 (the "Placement Agreement") and (ii) an
option to purchase up to Forty Seven Thousand One Hundred Seventy (47,170)
shares of the Company's common stock, par value $0.10 per share (the "Common
Stock") pursuant to that certain Placement Agent's Option Certificate dated
January 31, 1998 (the "Option Shares"); and
WHEREAS, the Company desires to grant to the Shareholder certain
registration rights relating to the shares of Common Stock issuable upon
conversion of any of the Series C Preferred Stock and the Option Shares
(collectively, the "Shares"); and the Shareholder desires to obtain such
registration rights, subject to the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual premises,
representations, warranties and conditions set forth in this Agreement, the
parties hereto, intending to be legally bound, hereby agree as follows:
13. Definitions and References. For purposes of this Agreement, in
addition to the definitions set forth above and elsewhere herein, the following
terms shall have the following meanings:
(a) The term "Commission" shall mean the Securities and
Exchange Commission and any successor agency.
(b) The terms "register", "registered" and "registration"
shall refer to a registration effected by preparing and filing a
registration statement or similar document in compliance with the 1933
Act (as herein defined) and the declaration or ordering of
effectiveness of such registration statement or document.
(c) For purposes of this Agreement, the term "Registrable
Stock" shall mean (i) any shares of Common Stock issuable upon
conversion of any of the Series C Preferred Stock, (ii) the Option
Shares, (iii) any shares of Common Stock
18
issued by way of a stock split, reorganization, merger or
consolidation, and (iv) any Common Stock issued as a dividend on the
Shares. For purposes of this Agreement, any Registrable Stock shall
cease to be Registrable Stock when (v) a registration statement
covering such Registrable Stock has been declared effective and such
Registrable Stock has been disposed of pursuant to such effective
registration statement, (w) such Registrable Stock is sold pursuant to
Rule 144 (or any similar provision then in force) under the 1933 Act,
(x) such Registrable Stock is eligible to be sold pursuant to Rule
144(k) under the 1933 Act, (y) such Registrable Stock has been
otherwise transferred, no stop transfer order affecting such stock is
in effect and the Company has delivered new certificates or other
evidences of ownership for such Registrable Stock not bearing any
legend indicating that such shares have not been registered under the
1933 Act, or (z) such Registrable Stock is sold by a person in a
transaction in which the rights under the provisions of this Agreement
are not assigned.
(d) The term "Holder" shall mean the Shareholder or any
transferee or assignee thereof to whom the rights under this Agreement
are assigned in accordance with Section 10 hereof, provided that the
Shareholder or such transferee or assignee shall then own the
Registrable Stock.
(e) The term "1933 Act" shall mean the Securities Act of
1933, as amended.
(f) An "affiliate of such Holder" shall mean a person who
controls, is controlled by or is under common control with a Holder,
or the spouse or children (or a trust exclusively for the benefit of
the spouse and/or children) of a Holder, or, in the case of a Holder
that is a partnership, its partners.
(g) The term "Person" shall mean an individual,
corporation, partnership, trust, limited liability company,
unincorporated organization or association or other entity, including
any governmental entity.
(h) The term "Requesting Holder" shall mean a Holder or
Holders of in the aggregate at least a majority of the Registrable
Stock.
(i) References in this Agreement to any rules,
regulations or forms promulgated by the Commission shall include
rules, regulations and forms succeeding to the functions thereof,
whether or not bearing the same designation.
14. Demand Registration.
(a) Commencing immediately upon the date of Closing (as
defined in the Placement Agreement), any Requesting Holders may make a
written request to the Company (specifying that it is being made
pursuant to this Section 2) that the Company file a registration
statement under the 1933 Act (or a similar document pursuant to any
other statute then in effect corresponding to the 0000 Xxx) covering
the registration of Registrable Stock. In such event, the Company
shall (x) within ten (10) days thereafter notify in writing all other
Holders of Registrable Stock of such request, and (y) use its best
efforts to cause to be registered under the 1933 Act all Registrable
Stock that the Requesting Holders and such other Holders have, within
forty-five (45) days after the Company has given such notice,
requested be registered.
REGISTRATION RIGHTS AGREEMENT
19
(b) If the Requesting Holders intend to distribute the
Registrable Stock covered by their request by means of an underwritten
offering, they shall so advise the Company as a part of their request
pursuant to Section 2.(a) above, and the Company shall include such
information in the written notice referred to in clause (x) of Section
2.(a) above. In such event, the Holder's right to include its
Registrable Stock in such registration shall be conditioned upon such
Holder's participation in such underwritten offering and the inclusion
of such Holder's Registrable Stock in the underwritten offering to the
extent provided in this Section 2. All Holders proposing to
distribute Registrable Stock through such underwritten offering shall
enter into an underwriting agreement in customary form with the
underwriter or underwriters. Such underwriter or underwriters shall be
selected by a majority in interest of the Requesting Holders and shall
be approved by the Company, which approval shall not be unreasonably
withheld; provided, that all of the representations and warranties by,
and the other agreements on the part of, the Company to and for the
benefit of such underwriters shall also be made to and for the benefit
of such Holders and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement
shall be conditions precedent to the obligations of such Holders; and
provided further, that no Holder shall be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements
regarding such Holder, the Registrable Stock of such Holder and such
Holder's intended method of distribution and any other representation
required by law or reasonably required by the underwriter.
(c) Notwithstanding any other provision of this Section 2
to the contrary, if the managing underwriter of an underwritten
offering of the Registrable Stock requested to be registered pursuant
to this Section 2 advises the Requesting Holders in writing that in
its opinion marketing factors require a limitation of the number of
shares to be underwritten, the Requesting Holders shall so advise all
Holders of Registrable Stock that would otherwise be underwritten
pursuant hereto, and the number of shares of Registrable Stock that
may be included in such underwritten offering shall be allocated among
all such Holders, including the Requesting Holders, in proportion (as
nearly as practicable) to the amount of Registrable Stock requested to
be included in such registration by each Holder at the time of filing
the registration statement; provided, that in the event of such
limitation of the number of shares of Registrable Stock to be
underwritten, the Holders shall be entitled to an additional demand
registration pursuant to this Section 2. If any Holder of Registrable
Stock disapproves of the terms of the underwriting, such Holder may
elect to withdraw by written notice to the Company, the managing
underwriter and the Requesting Holders. The securities so withdrawn
shall also be withdrawn from registration.
(d) Notwithstanding any provision of this Agreement to
the contrary, the Company shall not be required to effect a
registration pursuant to this Section 2 during the period starting
with the fourteenth (14th) day immediately preceding the date of an
anticipated filing by the Company of, and ending on a date ninety (90)
days following the effective date of, a registration statement
pertaining to a public offering of securities for the account of the
Company; provided, that the Company shall actively employ in good
faith all reasonable efforts to cause such registration statement to
become effective; and provided further, that the Company's estimate of
the date of filing such registration statement shall be made in good
faith.
REGISTRATION RIGHTS AGREEMENT
20
(e) The Company shall be obligated to effect and pay for
a total of only two (2) registrations pursuant to this Section 2,
unless increased pursuant to Section 2.(c) hereof; provided, that a
registration requested pursuant to this Section 2 shall not be deemed
to have been effected for purposes of this Section 2.(e), unless (i)
it has been declared effective by the Commission, (ii) if it is a
shelf registration, it has remained effective for the period set forth
in Section 3.(b), (iii) the offering of Registrable Stock pursuant to
such registration is not subject to any stop order, injunction or
other order or requirement of the Commission (other than any such
action prompted by any act or omission of the Holders), and (iv) no
limitation of the number of shares of Registrable Stock to be
underwritten has been required pursuant to Section 2.(c) hereof.
15. Obligations of the Company. Whenever required under Section 2
to use its best efforts to effect the registration of any Registrable Stock,
the Company shall, as expeditiously as possible:
(a) prepare and file with the Commission, not later than
ninety (90) days after receipt of a request to file a registration
statement with respect to such Registrable Stock, a registration
statement on any form for which the Company then qualifies or which
counsel for the Company shall deem appropriate and which form shall be
available for the sale of such issue of Registrable Stock in
accordance with the intended method of distribution thereof, and use
its best efforts to cause such registration statement to become
effective as promptly as practicable thereafter; provided that before
filing a registration statement or prospectus or any amendments or
supplements thereto, the Company will (i) furnish to one (1) counsel
selected by the Requesting Holders copies of all such documents
proposed to be filed, and (ii) notify each such Holder of any stop
order issued or threatened by the Commission and take all reasonable
actions required to prevent the entry of such stop order or to remove
it if entered;
(b) prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectus used
in connection therewith as may be necessary to keep such registration
statement effective for such period of time as would satisfy the
holding period requirements of Rule 144(k) promulgated by the
Commission with respect to the Shares or such shorter period which
will terminate when all Registrable Stock covered by such registration
statement has been sold (but not before the expiration of the forty
(40) or ninety (90) day period referred to in Section 4(3) of the 1933
Act and Rule 174 thereunder, if applicable), and comply with the
provisions of the 1933 Act with respect to the disposition of all
securities covered by such registration statement during such period
in accordance with the intended methods of disposition by the sellers
thereof set forth in such registration statement;
(c) furnish to each Holder and any underwriter of
Registrable Stock to be included in a registration statement copies of
such registration statement as filed and each amendment and supplement
thereto (in each case including all exhibits thereto), the prospectus
included in such registration statement (including each preliminary
prospectus) and such other documents as such Holder may reasonably
request in order to facilitate the disposition of the Registrable
Stock owned by such Holder;
REGISTRATION RIGHTS AGREEMENT
21
(d) use its best efforts to register or qualify such
Registrable Stock under such other securities or blue sky laws of such
jurisdictions as any selling Holder or any underwriter of Registrable
Stock reasonably requests, and do any and all other acts which may be
reasonably necessary or advisable to enable such Holder to consummate
the disposition in such jurisdictions of the Registrable Stock owned
by such Holder; provided that the Company will not be required to (i)
qualify generally to do business in any jurisdiction where it would
not otherwise be required to qualify but for this Section 3.(d)
hereof, (ii) subject itself to taxation in any such jurisdiction, or
(iii) consent to general service of process in any such jurisdiction;
(e) use its best efforts to cause the Registrable Stock
covered by such registration statement to be registered with or
approved by such other governmental agencies or other authorities as
may be necessary by virtue of the business and operations of the
Company to enable the selling Holders thereof to consummate the
disposition of such Registrable Stock;
(f) notify each selling Holder of such Registrable Stock
and any underwriter thereof, at any time when a prospectus relating
thereto is required to be delivered under the 1933 Act (even if such
time is after the period referred to in Section 3.(b)), of the
happening of any event as a result of which the prospectus included in
such registration statement contains an untrue statement of a material
fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein in light of the
circumstances being made not misleading, and prepare a supplement or
amendment to such prospectus so that, as thereafter delivered to the
purchasers of such Registrable Stock, such prospectus will not contain
an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein in light of the circumstances being made not misleading;
(g) make available for inspection by any selling Holder,
any underwriter participating in any disposition pursuant to such
registration statement, and any attorney, accountant or other agent
retained by any such seller or underwriter (collectively, the
"Inspectors"), all financial and other records, pertinent corporate
documents and properties of the Company (collectively, the "Records"),
and cause the Company's officers, directors and employees to supply
all information reasonably requested by any such Inspector, as shall
be reasonably necessary to enable them to exercise their due diligence
responsibility, in connection with such registration statement.
Records or other information which the Company determines, in good
faith, to be confidential and which it notifies the Inspectors are
confidential shall not be disclosed by the Inspectors unless (i) the
disclosure of such Records or other information is necessary to avoid
or correct a misstatement or omission in the registration statement,
or (ii) the release of such Records or other information is ordered
pursuant to a subpoena or other order from a court of competent
jurisdiction. Each selling Holder shall, upon learning that disclosure
of such Records or other information is sought in a court of competent
jurisdiction, give notice to the Company and allow the Company, at the
Company's expense, to undertake appropriate action to prevent
disclosure of the Records or other information deemed confidential;
REGISTRATION RIGHTS AGREEMENT
22
(h) furnish, at the request of any Requesting Holder, on
the date that such shares of Registrable Stock are delivered to the
underwriters for sale pursuant to such registration or, if such
Registrable Stock is not being sold through underwriters, on the date
that the registration statement with respect to such shares of
Registrable Stock becomes effective, (1) a signed opinion, dated such
date, of the legal counsel representing the Company for the purposes
of such registration, addressed to the underwriters, if any, and if
such Registrable Stock is not being sold through underwriters, then to
the Requesting Holders as to such matters as such underwriters or the
Requesting Holders, as the case may be, may reasonably request and as
would be customary in such a transaction; and (2) a letter dated such
date, from the independent certified public accountants of the
Company, addressed to the underwriters, if any, and if such
Registrable Stock is not being sold through underwriters, then to the
Requesting Holders and, if such accountants refuse to deliver such
letter to such Holder, then to the Company (i) stating that they are
independent certified public accountants within the meaning of the
1933 Act and that, in the opinion of such accountants, the financial
statements and other financial data of the Company included in the
registration statement or the prospectus, or any amendment or
supplement thereto, comply as to form in all material respects with
the applicable accounting requirements of the 1933 Act, and (ii)
covering such other financial matters (including information as to the
period ending not more than five (5) business days prior to the date
of such letter) with respect to the registration in respect of which
such letter is being given as the Requesting Holders may reasonably
request and as would be customary in such a transaction;
(i) enter into customary agreements (including if the
method of distribution is by means of an underwriting, an underwriting
agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition
of the Registrable Stock to be so included in the registration
statement;
(j) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available
to its security holders, as soon as reasonably practicable, but not
later than eighteen (18) months after the effective date of the
registration statement, an earnings statement covering the period of
at least twelve (12) months beginning with the first full month after
the effective date of such registration statement, which earnings
statements shall satisfy the provisions of Section 11(a) of the 1933
Act; and
(k) use its best efforts to cause all such Registrable
Stock to be listed on The Nasdaq Small Cap Market and/or any other
securities exchange on which similar securities issued by the Company
are then listed or traded.
The Company may require each selling Holder of Registrable Stock as to
which any registration is being effected to furnish to the Company such
information regarding the distribution of such Registrable Stock as the Company
may from time to time reasonably request in writing.
REGISTRATION RIGHTS AGREEMENT
23
Each Holder agrees that, upon receipt of any notice from the Company
of the happening of any event of the kind described in Section 3.(f) hereof,
such Holder will forthwith discontinue disposition of Registrable Stock
pursuant to the registration statement covering such Registrable Stock until
such Holder's receipt of the copies of the supplemented or amended prospectus
contemplated by Section 3.(f) hereof, and, if so directed by the Company, such
Holder will deliver to the Company (at the Company's expense) all copies, other
than permanent file copies then in such Holder's possession, of the prospectus
covering such Registrable Stock current at the time of receipt of such notice.
In the event the Company shall give any such notice, the Company shall extend
the period during which such registration statement shall be maintained
effective pursuant to this Agreement (including the period referred to in
Section 3.(b)) by the number of days during the period from and including the
date of the giving of such notice pursuant to Section 3.(f) hereof to and
including the date when each selling Holder of Registrable Stock covered by
such registration statement shall have received the copies of the supplemented
or amended prospectus contemplated by Section 3.(f) hereof.
16. Incidental Registration. Commencing immediately after the
date of Closing (as defined in the Investor Agreement), if the Company
determines that it shall file a registration statement under the 1933 Act
(other than a registration statement on a Form S-4 or S-8 or filed in
connection with an exchange offer or an offering of securities solely to the
Company's existing stockholders) on any form that would also permit the
registration of the Registrable Stock and such filing is to be on its behalf
and/or on behalf of selling holders of its securities for the general
registration of its common stock to be sold for cash, at each such time the
Company shall promptly give each Holder written notice of such determination
setting forth the date on which the Company proposes to file such registration
statement, which date shall be no earlier than thirty (30) days from the date
of such notice, and advising each Holder of its right to have Registrable Stock
included in such registration. Upon the written request of any Holder received
by the Company no later than twenty (20) days after the date of the Company's
notice, the Company shall use its best efforts to cause to be registered under
the 1933 Act all of the Registrable Stock that each such Holder has so
requested to be registered. If, in the written opinion of the managing
underwriter or underwriters (or, in the case of a non-underwritten offering, in
the written opinion of the placement agent, or if there is none, the Company),
the total amount of such securities to be so registered, including such
Registrable Stock, will exceed the maximum amount of the Company's securities
which can be marketed (i) at a price reasonably related to the then current
market value of such securities, or (ii) without otherwise materially and
adversely affecting the entire offering, then the amount of Registrable Stock
to be offered for the accounts of Holders shall be reduced pro rata to the
extent necessary to reduce the total amount of securities to be included in
such offering to the recommended amount; provided, that if securities are being
offered for the account of other Persons as well as the Company, such reduction
shall not represent a greater fraction of the number of securities intended to
be offered by Holders than the fraction of similar reductions imposed on such
other Persons other than the Company over the amount of securities they
intended to offer.
17. Holdback Agreement - Restrictions on Public Sale by Holder.
(a) To the extent not inconsistent with applicable law,
each Holder whose Registrable Stock is included in a registration
statement agrees not to effect any public sale or distribution of the
issue being registered or a similar security of the Company, or
REGISTRATION RIGHTS AGREEMENT
24
any securities convertible into or exchangeable or exercisable for
such securities, including a sale pursuant to Rule 144 under the 1933
Act, during the fourteen (14) days prior to, and during the ninety
(90) day period beginning on, the effective date of such registration
statement (except as part of the registration), if and to the extent
requested by the Company in the case of a nonunderwritten public
offering or if and to the extent requested by the managing underwriter
or underwriters in the case of an underwritten public offering.
(b) Restrictions on Public Sale by the Company and
Others. The Company agrees (i) not to effect any public sale or
distribution of any securities similar to those being registered, or
any securities convertible into or exchangeable or exercisable for
such securities, during the fourteen (14) days prior to, and during
the ninety (90) day period beginning on, the effective date of any
registration statement in which Holders are participating (except as
part of such registration), if and to the extent requested by the
Holders in the case of a non-underwritten public offering or if and to
the extent requested by the managing underwriter or underwriters in
the case of an underwritten public offering; and (ii) that any
agreement entered into after the date of this Agreement pursuant to
which the Company issues or agrees to issue any securities convertible
into or exchangeable or exercisable for such securities (other than
pursuant to an effective registration statement) shall contain a
provision under which holders of such securities agree not to effect
any public sale or distribution of any such securities during the
periods described in (i) above, in each case including a sale pursuant
to Rule 144 under the 1933 Act.
18. Expenses of Registration. The Company shall bear all expenses
incurred in connection with each registration pursuant to Sections 2 and 4 of
this Agreement, excluding underwriters' discounts and commissions, but
including, without limitation, all registration, filing and qualification fees,
word processing, duplicating, printers' and accounting fees (including the
expenses of any special audits or "cold comfort" letters required by or
incident to such performance and compliance), exchange listing fees or National
Association of Securities Dealers fees, messenger and delivery expenses, all
fees and expenses of complying with securities or blue sky laws, fees and
disbursements of counsel for the Company. The selling Holders shall bear and
pay the underwriting commissions and discounts applicable to the Registrable
Stock offered for their account in connection with any registrations, filings
and qualifications made pursuant to this Agreement.
19. Indemnification and Contribution.
(a) Indemnification by the Company. The Company agrees
to indemnify, to the full extent permitted by law, each Holder, its
officers, directors and agents and each Person who controls such
Holder (within the meaning of the 0000 Xxx) against all losses,
claims, damages, liabilities and expenses caused by any untrue or
alleged untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus or any
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statement therein (in
case of a prospectus or preliminary prospectus, in the light of the
circumstances under which they were made) not misleading. The Company
will also indemnify any underwriters of the
REGISTRATION RIGHTS AGREEMENT
25
Registrable Stock, their officers and directors and each Person who
controls such underwriters (within the meaning of the 0000 Xxx) to the
same extent as provided above with respect to the indemnification of
the selling Holders.
(b) Indemnification by Holders. In connection with any
registration statement in which a Holder is participating, each such
Holder will furnish to the Company in writing such information with
respect to such Holder as the Company reasonably requests for use in
connection with any such registration statement or prospectus and
agrees to indemnify, to the extent permitted by law, the Company, its
directors and officers and each Person who controls the Company
(within the meaning of the 0000 Xxx) against any losses, claims,
damages, liabilities and expenses resulting from any untrue or alleged
untrue statement of material fact or any omission or alleged omission
of a material fact required to be stated in the registration
statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or necessary to make the statements
therein (in the case of a prospectus or preliminary prospectus, in the
light of the circumstances under which they were made) not misleading,
to the extent, but only to the extent, that such untrue statement or
omission is contained in any information with respect to such Holder
so furnished in writing by such Holder. Notwithstanding the
foregoing, the liability of each such Holder under this Section 7.(b)
shall be limited to an amount equal to the initial public offering
price of the Registrable Stock sold by such Holder, unless such
liability arises out of or is based on willful misconduct of such
Holder.
(c) Conduct of Indemnification Proceedings. Any Person
entitled to indemnification hereunder agrees to give prompt written
notice to the indemnifying party after the receipt by such Person of
any written notice of the commencement of any action, suit, proceeding
or investigation or threat thereof made in writing for which such
Person will claim indemnification or contribution pursuant to this
Agreement and, unless in the reasonable judgment of such indemnified
party, a conflict of interest may exist between such indemnified party
and the indemnifying party with respect to such claim, permit the
indemnifying party to assume the defense of such claims with counsel
reasonably satisfactory to such indemnified party. Whether or not
such defense is assumed by the indemnifying party, the indemnifying
party will not be subject to any liability for any settlement made
without its consent (but such consent will not be unreasonably
withheld). Failure by such Person to provide said notice to the
indemnifying party shall itself not create liability except to the
extent of any injury caused thereby. No indemnifying party will
consent to entry of any judgment or enter into any settlement which
does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release from all
liability in respect of such claim or litigation. If the indemnifying
party IS not entitled to, or elects not to, assume the defense of a
claim, it will not be obligated to pay the fees and expenses of more
than one (1) counsel with respect to such claim, unless in the
reasonable judgment of any indemnified party a conflict of interest
may exist between such indemnified party and any other such
indemnified parties with respect to such claim, in which event the
indemnifying party shall be obligated to pay the fees and expenses of
such additional counsel or counsels.
(d) Contribution. If for any reason the indemnity
provided for in this Section 7 is unavailable to, or is insufficient
to hold harmless, an indemnified party, then the
REGISTRATION RIGHTS AGREEMENT
26
indemnifying party shall contribute to the amount paid or payable by
the indemnified party as a result of such losses, claims, damages,
liabilities or expenses (i) in such proportion as is appropriate to
reflect the relative benefits received by the indemnifying party on
the one hand and the indemnified party on the other, or (ii) if the
allocation provided by clause (i) above is not permitted by applicable
law, or provides a lesser sum to the indemnified party than the amount
hereinafter calculated, in such proportion as is appropriate to
reflect not only the relative benefits received by the indemnifying
party on the one hand and the indemnified party on the other but also
the relative fault of the indemnifying party and the indemnified party
as well as any other relevant equitable considerations. The relative
fault of such indemnifying party and indemnified parties shall be
determined by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material
fact, has been made by, or relates to information supplied by, such
indemnifying party or indemnified parties; and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such action. The amount paid or payable by a party as a result
of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations set forth
in Section 7.(c), any legal or other fees or expenses reasonably
incurred by such party in connection with any investigation or
proceeding.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 7.(d) were
determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred
to in the immediately preceding paragraph. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the 0000 Xxx) shall be entitled to contribution from any Person who
was not guilty of such fraudulent misrepresentation.
If indemnification is available under this Section 7, the
indemnifying parties shall indemnify each indemnified party to the
full extent provided in Sections 7.(a) and 7.(b) without regard to the
relative fault of said indemnifying party or indemnified party or any
other equitable consideration provided for in this Section 7.
20. Participation in Underwritten Registrations. No Holder may
participate in any underwritten registration hereunder unless such Holder (a)
agrees to sell such Holder's securities on the basis provided in any
underwriting arrangements approved by the Holders entitled hereunder to approve
such arrangements, and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
21. Rule 144. The Company covenants that it will file the reports
required to be filed by it under the 1933 Act and the Securities Exchange Act
of 1934, as amended, and the rules and regulations adopted by the Commission
thereunder; and it will take such further action as any Holder may reasonably
request, all to the extent required from time to time to enable such Holder to
sell Registrable Stock without registration under the 1933 Act within the
limitation of the exemptions provided by (a) Rule 144 under the 1933 Act, as
such Rule may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the Commission. Upon the request of any Holder,
the Company will deliver to such Holder a written statement as to whether it
has complied with such requirements.
REGISTRATION RIGHTS AGREEMENT
27
22. Transfer of Registration Rights. The registration rights of
any Holder under this Agreement with respect to any Registerable Stock may be
transferred to any transferee of such Registrable Stock; provided that such
transfer may otherwise be effected in accordance with applicable securities
laws; provided further, that the transferring Holder shall give the Company
written notice at or prior to the time of such transfer stating the name and
address of the transferee and identifying the securities with respect to which
the rights under this Agreement are being transferred; provided further, that
such transferee shall agree in writing, in form and substance satisfactory to
the Company, to be bound as a Holder by the provisions of this Agreement; and
provided further, that such assignment shall be effective only if immediately
following such transfer the further disposition of such securities by such
transferee is restricted under the 1933 Act. Except as set forth in this
Section 10, no transfer of Registrable Stock shall cause such Registrable Stock
to lose such status.
23. Mergers, Etc. The Company shall not, directly or indirectly,
enter into any merger, consolidation or reorganization in which the Company
shall not be the surviving corporation unless the proposed surviving
corporation shall, prior to such merger, consolidation or reorganization, agree
in writing to assume the obligations of the Company under this Agreement, and
for that purpose references hereunder to "Registrable Stock" shall be deemed to
be references to the securities which the Holders would be entitled to receive
in exchange for Registrable Stock under any such merger, consolidation or
reorganization; provided, however, that the provisions of this Section 11 shall
not apply in the event of any merger, consolidation or reorganization in which
the Company is not the surviving corporation if each Holder is entitled to
receive in exchange for its Registrable Stock consideration consisting solely
of (i) cash, (ii) securities of the acquiring corporation which may be
immediately sold to the public without registration under the 1933 Act, or
(iii) securities of the acquiring corporation which the acquiring corporation
has agreed to register within ninety (90) days of completion of the transaction
for resale to the public pursuant to the 1933 Act.
24. Miscellaneous.
(a) No Inconsistent Agreements. The Company will not
hereafter enter into any agreement with respect to its securities
which is inconsistent with the rights granted to the Holders in this
Agreement.
(b) Remedies. Each Holder, in addition to being entitled
to exercise all rights granted by law, including recovery of damages,
will be entitled to specific performance of its rights under this
Agreement. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by
it of the provisions of this Agreement and hereby agrees to waive (to
the extent permitted by law) the defense in any action for specific
performance that a remedy of law would be adequate.
(c) Amendments and Waivers. The provisions of this
Agreement may not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be given
unless the Company has obtained the written consent of the Holders of
at least a majority of the Registrable Stock then outstanding affected
by such amendment, modification, supplement, waiver or departure.
REGISTRATION RIGHTS AGREEMENT
28
(d) Successors and Assigns. Except as otherwise
expressly provided herein, the terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties hereto. Nothing in this
Agreement, express or implied, is intended to confer upon any Person
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) Governing Law. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of
Texas applicable to contracts made and to be performed wholly within
that state, without regard to the conflict of law rules thereof.
(f) Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
(g) Headings. The headings in this Agreement are used
for convenience of reference only and are not to be considered in
construing or interpreting this Agreement.
(h) Notices. Any notice required or permitted under this
Agreement shall be given in writing and shall be delivered in person
or by telecopy or by overnight courier guaranteeing no later than
second business day delivery, directed to (i) the Company at the
address set forth below its signature hereof or (ii) a Holder at the
address of the Administrator set forth below its signature hereof. Any
party may change its address for notice by giving ten (10) days
advance written notice to the other parties. Every notice or other
communication hereunder shall be deemed to have been duly given or
served on the date on which personally delivered, or on the date
actually received, if sent by telecopy or overnight courier service,
with receipt acknowledged.
(i) Severability. In the event that any one or more of
the provisions contained herein, or the application thereof in any
circumstances, is held invalid, illegal or unenforceable in any
respect for any reason, the validity, legality and enforceability of
any such provision in every other respect and of the remaining
provisions contained herein shall not be in any way impaired thereby,
it being intended that all of the rights and privileges of the Holders
shall be enforceable to the fullest extent permitted by law.
(j) Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement and intended to be a
complete and exclusive statement of the agreement and understanding of
the parties hereto in respect of the subject matter contained herein.
There are no restrictions, promises, warranties or undertakings other
than those set forth or referred to herein. This Agreement supersedes
all prior agreements and understandings between the parties with
respect to such subject matter.
REGISTRATION RIGHTS AGREEMENT
29
(k) Enforceability. This Agreement shall remain in full
force and effect notwithstanding any breach or purported breach of, or
relating to, the Investor Agreement.
(l) Recitals. The recitals are hereby incorporated in
the Agreement as if fully set forth herein.
[THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written hereinabove.
MICRO-MEDIA SOLUTIONS, INC.
By: /s/ Xxxx Xxxxxx
--------------------------------
Name: XXXX XXXXXX
Title: President
501 Xxxxxx
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
EQUITY SERVICES, LTD.
By: /s/ Xxxx Xxxxxxxxx
Name: XXXX XXXXXXXXX
Title: Director
Xx. Xxxxxxx Xxxxx
Xxxxxxxxx Xxxxxx Steps
P.O. Box N-4805
Nassau, Bahamas
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
REGISTRATION RIGHTS AGREEMENT
30
THE OPTION REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND IS
SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AS SET FORTH IN THIS
CERTIFICATE. THIS OPTION MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT OR AN OPINION OF COUNSEL TO THE EFFECT THAT THE PROPOSED
SALE, TRANSFER OR DISPOSITION MAY BE EFFECTUATED WITHOUT REGISTRATION
UNDER THE ACT.
MICRO-MEDIA SOLUTIONS, INC.
PLACEMENT AGENT'S OPTION CERTIFICATE
THIS PLACEMENT AGENT'S OPTION CERTIFICATE (the "Option Certificate")
certifies that for value received, EQUITY SERVICES, LTD. (the "Holder"), is the
owner of this option (the "Option"), which entitles the Holder thereof to
purchase, commencing January 31, 1999 and before the Expiration Date (as
defined below) Forty Seven Thousand One Hundred Seventy (47,170) shares (the
"Option Shares") of fully paid and non-assessable shares of the common stock,
$0.10 par value per share (the "Common Stock"), of MICRO-MEDIA SOLUTIONS, INC.,
a Utah corporation (the "Company") at a purchase price of Four Dollars ($4.00)
per Option Share (the "Strike Price"), in lawful money of the United States of
America by bank or certified check, subject to adjustment as hereinafter
provided.
m. OPTION; PURCHASE PRICE.
This Option shall entitle the Holder hereof to purchase the Option
Shares at the Strike Price. The Strike Price and the number of Option Shares
evidenced by this Option Certificate are subject to adjustment as provided in
Article 6.
n. EXERCISE; EXPIRATION DATE.
a. Exercise. This Option is exercisable, at the option of the
Holder, commencing on January 31, 1999, and before the Expiration Date (as
defined below) by delivering to the Company written notice of exercise (the
"Exercise Notice"), stating the number of Option Shares to be purchased
thereby, accompanied by bank or certified check payable to the order of the
Company for the Option Shares being purchased. Within ten (10) days of the
Company's receipt of the Exercise Notice accompanied by the consideration for
the Option Shares being purchased, the Company shall issue and deliver to the
Holder a certificate representing the Option Shares being purchased. In the
case of exercise for less than all of the Option Shares represented by this
Option Certificate, the Company shall cancel this Option Certificate upon the
surrender hereof and shall execute and deliver a new Option Certificate for the
remaining balance of such Option Shares.
PLACEMENT AGENT'S OPTION CERTIFICATE
31
b. Termination. The term "Expiration Date" shall mean 5:00 p.m.,
Austin, Texas time, on January 31, 2004 or if such date in the State of Texas
shall be a holiday or a day on which banks are authorized to close, then 5:00
p.m., Austin, Texas time, the next following day which in the State of Texas is
not a holiday or a day on which banks are authorized to close.
o. RESTRICTIONS ON TRANSFER.
a. Restrictions. This Option, and the Option Shares or any other
security issuable upon exercise of this Option may not be assigned,
transferred, sold or otherwise disposed of unless (i) there is in effect a
registration statement under the Securities Act of 1933, as amended (the "Act")
covering such sale, transfer or other disposition or (ii) the Holder furnishes
to the Company an opinion of counsel, reasonably acceptable to counsel for the
Company, to the effect that the proposed sale, transfer or other disposition
may be effected without registration under the Act, as well as other
documentation incidental to such sale, transfer or other disposition as the
Company's counsel shall reasonably request.
b. Legend. Any Option Shares issued upon the exercise of this
Option shall bear a legend in substantially the form as follows:
"The shares evidenced by this certificate were issued upon
exercise of an Option and may not be sold, transferred or
otherwise disposed of in the absence of an effective
registration statement under the Securities Act of 1933 (the
"Act") or an opinion of counsel to the effect that the
proposed sale, transfer or disposition may be effectuated
without registration under the Act."
p. RESERVATION OF SHARES.
The Company covenants that it will at all times reserve and keep
available out of its authorized Common Stock, solely for the purpose of
issuance upon exercise of this Option, such number of shares of Common Stock as
shall then be issuable upon the exercise of this Option. The Company covenants
that all shares of Common Stock which shall be issuable upon exercise of this
Option shall be duly and validly issued, fully paid and non-assessable and free
from all taxes, liens and charges with respect to the issue thereof.
q. LOSS OR MUTILATION.
Upon receipt by the Company of evidence of the loss, theft,
destruction or mutilation of this Option Certificate and, in the case of loss,
theft or destruction, of indemnity reasonably satisfactory to the Company, or
in the case of mutilation, upon surrender and cancellation of the mutilated
Option Certificate, the Company shall execute and deliver in lieu thereof, a
new Option Certificate representing an equal number of Option Shares
exercisable thereunder.
PLACEMENT AGENT'S OPTION CERTIFICATE
32
r. ANTI-DILUTION PROVISIONS.
a. Number of Option Shares. The number of shares of Common Stock
and the Strike Price per Option Share pursuant to this Option shall be subject
to adjustment from time to time as provided for in this Section 6(a).
Notwithstanding anything contained herein, the aggregate Strike Price for the
total number of Option Shares issuable pursuant to this Option shall remain
unchanged. In case the Company shall at any time change as a whole, by
subdivision or combination in any manner or by the making of a stock dividend,
the number of outstanding shares of Common Stock into a different number of
shares (i.e. forward or reverse stock split), (i) the number of shares which
the Holder of this Option shall have been entitled to purchase pursuant to this
Option shall be increased or decreased in direct proportion to such increase or
decrease of shares, as the case may be, and (ii) the Strike Price per Option
Share (but not the aggregate Strike Price) in effect immediately prior to such
change shall be increased or decreased in inverse proportion to such increase
or decrease of shares, as the case may be.
b. Fractional Shares. No certificate for fraction shares shall
be issued upon the exercise of this Option, but in lieu thereof the Company
shall purchase any such fractional shares calculated to the nearest cent.
c. Rights of the Holder. The Holder of this Option shall not be
entitled to any rights of a shareholder of the Company in respect of any Option
Shares purchasable upon the exercise hereof until such Option Shares have been
paid for in full and issued to it. The Holder of this Option shall be deemed
to be a shareholder of the Company from and after the time this Option is
exercised and the Option Shares therefor exercised have been paid for in full.
As soon as practicable after such exercise, the Company shall deliver a
certificate or certificates for the number of full shares of Common Stock
issuable upon such exercise, to the person or persons entitled to receive the
same.
s. REGISTRATION RIGHTS.
The Holder of this Option and the Option Shares issued upon exercise
of this Option will have registration rights beginning on the date of execution
of this Option Certificate. The terms of these registration rights shall be as
set forth in the Registration Rights Agreement by and between the Holder and
the Company, in substantially the form attached hereto as Exhibit "A".
t. REPRESENTATIONS AND WARRANTIES.
The Holder, by acceptance of this Option, represents and warrants to,
and covenants and agrees with, the Company as follows:
a. The Option is being acquired for the Holder's own account for
investment and not with a view toward resale or distribution of any part
thereof, and the Holder has no present intention of selling, granting any
participation in, or otherwise distributing the same.
b. The Holder is an "accredited investor" within the meaning of
Rule 501 of Regulation D under the Act.
PLACEMENT AGENT'S OPTION CERTIFICATE
33
c. The Holder (i) is not a citizen or resident of the United
States of America, (ii) is not an entity organized under any laws of any state
of the United States of America and (iii) does not have any offices in the
United States of America.
u. MISCELLANEOUS.
a. Transfer Taxes; Expenses of Registration. The Company shall
bear all expenses incurred in connection with each registration pursuant to
this Option Certificate, excluding underwriters' discounts and commissions, but
including, without limitation, all registration, filing and qualification fees,
word processing, duplicating, printers' and accounting fees (including the
expenses of any special audits or "cold comfort" letters required by or
incident to such performance and compliance), exchange listing fees or National
Association of Securities Dealers fees, messenger and delivery expenses, all
fees and expenses of complying with securities or blue sky laws, fees and
disbursements of counsel for the Company. The selling Holder shall bear and
pay the underwriting commissions and discounts applicable to the Option Shares
offered for their account in connection with any registrations, filings and
qualifications made pursuant to this Option Certificate. The Holder shall pay
any and all brokerage fees and transfer taxes incidental to the sale or
exercise of this Option or the sale of the underlying shares issuable
hereunder.
b. Notice. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, express
overnight courier, registered first class mail, overnight courier, or
telecopied, initially to the address set forth below, and thereafter at such
other address, notice of which is given in accordance with the provisions of
this Section 9b.
if to the Company:
Micro-Media Solutions, Inc.
501 Xxxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxx Xxxxxx, President
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
if to Holder:
Equity Services, Ltd.
Xx. Xxxxxxx Xxxxx
Xxxxxxxxx Xxxxxx Steps
P.O. Box N-4805
Nassau, Bahamas
Attn: Xxxx Xxxxxxxxx, Director
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
PLACEMENT AGENT'S OPTION CERTIFICATE
34
with a copy (which shall not constitute notice) to:
Novakov, Davidson & Xxxxx, P.C.
0000 Xx. Xxxx Xxxxx
000 X. Xx. Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000-0000
Attn: I. Xxxxx Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
All such notices and communications shall be deemed to have been duly given:
when delivered by hand, if personally delivered; three (3) business days after
being deposited in the mail, postage prepaid, if mailed; the next business day
after being deposited with an overnight courier, if deposited with a nationally
recognized, overnight courier service; when receipt is acknowledged, if
telecopied.
c. Governing Law. This Option Certificate shall be governed by,
and construed in accordance with, the laws of the State of Texas, without
reference to its principles regarding conflicts of laws.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
PLACEMENT AGENT'S OPTION CERTIFICATE
35
IN WITNESS WHEREOF, the Company has caused this Option Certificate to
be fully executed as of the date set forth below.
MICRO-MEDIA SOLUTIONS, INC.
By: /s/ Xxxx Xxxxxx
-----------------------------------
XXXX XXXXXX, President
ATTEST: /s/ Xxxxxxxx Xxxxxxxx
-------------------------------
Name: Xxxxxxxx Xxxxxxxx
Title: Secretary
Date: January 31, 1998
PLACEMENT AGENT'S OPTION CERTIFICATE
36
FORM OF EXERCISE OF OPTION
The undersigned hereby elects to exercise this Option as to ______
shares of Common Stock covered hereby. Enclosed herewith is a bank or
certified check in the amount of $_________________.
Date: _____________________ ______________________________
Name:
Address:
Signature
______________________________
EXHIBIT "A"
REGISTRATION RIGHTS AGREEMENT
between Holder and the Company
