MEDIACOMM BROADCASTING SYSTEMS, INC.
d/b/a XXXXXXX.XXX
Exhibit No. 10.4
Copy of Funding Agreement
dated September 30, 1999
FUNDING AGREEMENT
This Agreement, entered into this 30th day of September 1999, is by,
between, and among Mediacomm Broadcasting Systems, Inc., a Colorado corporation,
d/b/a Xxxxxxx.xxx, ("MBSI") and, David's Odyssey, L.L.C., a limited liability
company ("Odyssey").
RECITALS:
---------
WHEREAS, MBSI is undertaking the public offering, through its officers and
directors and not an underwriter, of a minimum of 450,000 and a maximum of
900,000 shares of its no par value common stock at a price of $1.00 per share
under a Form SB-2 Registration Statement (the "Registration Statement") to be
filed with the United States Securities and Exchange Commission as soon as
practicable and no later than approximately October 31, 1999, and
WHEREAS, MBSI has agreed to include in said Registration Statement warrants
to purchase shares of the common stock of MBSI to be acquired hereunder by
Odyssey ("Odyssey" or "Funding Party") and the shares of common stock underlying
the warrants.
WHEREAS, Odyssey has agreed to provide interim financing to MBSI in the
form of a loan as hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual terms and conditions set
forth herein, and other valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
1. The Loan. Odyssey agrees to loan to MBSI, the following amount of funds
which shall be made available by Odyssey in the amount specified:
Amount
Name of Loan Payment Date
---- ------- ------------
Odyssey $45,000 October 1, 1999
The terms and conditions of the loan to MBSI are set forth in the form of a
Promissory Note, a copy of which is attached hereto as Exhibit "A" and
incorporated herein (the "MBSI Note"). Simultaneous with the furnishing of funds
by Odyssey, as stipulated above, to MBSI, MBSI shall execute and deliver an MBSI
Note to Odyssey. The principal and interest due under the MBSI Note are
convertible into shares of common stock of MBSI, upon default in payment of the
MBSI Note, at the option of the Funding Party, as set forth in the MBSI Note.
2. Issuance of Common Shares. As partial consideration for Odyssey
providing the loan specified above, MBSI shall issue to Odyssey shares of the
common stock of MBSI (the "Consideration Shares") as follows:
Funding Party Number of Shares
------------- ----------------
Odyssey 360,000
3. Issuance of Warrants. Also, as partial consideration for Odyssey
providing the loan to MBSI, MBSI shall issue to Odyssey Series "A" warrants to
purchase Common Shares of MBSI at a price of $2.00 per share, which warrants
shall be subject to the terms and conditions set forth in the form attached
hereto as Exhibit "B" and incorporated herein (the "Warrants"). The Warrants
shall be issued, and Warrant certificates delivered to Odyssey contemporaneous
with the provision of the loan funds as follows:
Funding Party Number of Warrants
------------- ------------------
Odyssey 360,000
4. Registration Rights. MBSI hereby grants the following registration
rights as to the Consideration Shares, the shares issuable upon conversion of
the MBSI Notes, if any, the Warrants, and the shares of Common Stock underlying
such Series "A" Warrants:
a. Registration Statement. MBSI shall include in the Registration
Statement to be filed by MBSI as aforesaid, the Series "A" Warrants, and the
shares of Common Stock of MBSI underlying the Series "A" Warrants, and the
shares of Common Stock issuable upon conversion of the Series "A" Warrants, if
any.
i. If for any reason the Registration Statement referred to is
not filed on or before approximately October 31, 1999, or, if filed, does not
become effective and remain effective during such period of time as a Funding
Party shall be the Holder of Series "A" Warrants, then the Funding Party may
from time to time beginning one year from the date hereof and before October 1,
2005, convert the Series "A" Warrants then held by the Funding Party, in whole
or in part, into the number of shares of Common Stock of MBSI determined by
dividing (a) the aggregate fair market value, as of the date of conversion, of
the shares of Common Stock of MBSI issuable upon exercise of the warrants minus
the aggregate exercise price of the warrants to purchase shares of the Common
Stock of MBSI by (b) the fair market value, as of the date of conversion, of one
share of the Common Stock of MBSI. For the purposes of this paragraph, fair
market value shall be determined in accordance with the following provisions:
(1) If the Common Stock of MBSI is not at the time
listed or admitted on any stock exchange but is traded on the
Nasdaq National Market System or SmallCap Market or is quoted on
the OTC Bulletin Board, the fair market value shall be the
closing selling price per share of such Common Stock on the date
in question, as such price is reported by the National
Association of Securities Dealers through, in order of
preference, the Nasdaq National Market System, the SmallCap
Market, or the OTC Bulletin Board, or any successor system. If
there is not closing selling price for such Common Stock on the
date in question, then the fair market value shall be the closing
selling price on the last preceding date for which such a
quotation exists.
(2) If the Common Stock is at the time listed or
admitted to trading on any stock exchange, the fair market value
shall be the closing selling price per share of such Common Stock
on the date in question on the stock exchange determined by the
Board of Directors of MBSI to be the primary market for such
Common Stock, as such price is officially quoted in the composite
tape of transaction on the exchange. If there is no closing
selling price for such Common Stock on the date in questions then
the fair market value shall be the closing selling price on the
last preceding date for which such a quotation exists.
(3) If the Common Stock is at the time neither
listed nor admitted to trading on any exchange nor traded on the
Nasdaq National Market System nor the SmallCap Market, nor traded
on the OTC Bulletin board, then such fair market value shall be
determined by the Board of Directors of MBSI after taking into
account such factors as the Board of Directors of MBSI shall deem
appropriate.
b. Piggyback Rights. If and when MBSI shall file a registration
statement with the SEC under the Securities Act of 1933 (the "Act") for the sale
of any of the securities of MBSI prior to October 1, 2005, on a form prescribed
by the Act which is appropriate for registration for sale of any of the
following securities of MBSI (the "Registerable Securities") held by the Funding
Party who is the registered holder of such securities at the date of the
proposed filing of the registration statement by MBSI, to wit:
o Series "A" Warrants held by Funding Party
o Shares of MBSI Common Stock acquired by Funding Party on exercise of
the Series "A" Warrants
o Shares of MBSI Common Stock acquired by Funding Party on conversion
of the Series "A" Warrants
o Shares of Common Stock acquired by Funding party on conversion of an
MBSI Note
o The Consideration Shares held by Funding Party,
then MBSI shall give written notice of its intent to file such a registration
statement to the Funding Parties who are the registered holders of the
Registerable Securities. The Funding Parties who are the registered holders of
any of the Registerable Securities, within 20 days following receipt of notice
of the proposed filing of a registration statement by MBSI, shall have the right
to have included in said registration statement such number of the Registerable
Securities held by a Funding Party as shall be specified by the Funding Party,
provided, however, that the inclusion of such Registerable Securities shall not
unreasonably interfere with MBSI's registration of its securities and that in no
event shall MBSI be obligated (i) to file such registration statement at any
time other than during the period to end March 31, 2005, or (ii) to keep the
prospectus with respect to such securities current for more than five years
after the effective date of the registration statement covering the Registerable
Securities. If a Funding Party does not make a request for such registration
within twenty days after receipt of the notice aforesaid from MBSI, then MBSI
shall have no obligation to include any such Registerable Securities in such
registration statement, or in any future registration statement.
c. Underwriting Requirements. In connection with any offering
involving an underwriting of shares being issued by MBSI under subparagraph (b)
above, MBSI shall not be required under subparagraph (b) to include any of the
Registerable Securities in such underwriting unless the Funding Party who is the
registered holder of the Registerable Securities accepts the terms of the
underwriting as agreed upon between MBSI and the underwriters selected by it,
and then only in such quantity as will not, in the opinion of the underwriters,
jeopardize the success of the offering by MBSI. If the total amount of
securities, including the Registerable Securities, requested to be included in
such offering exceeds the amount of securities to be sold, other than by MBSI,
that the underwriters reasonably believe compatible with the success of the
offering, then only the number of such securities, including the Registerable
Securities, which the underwriters believe will not jeopardize the success of
the offering shall be included in the offering, but in no event shall the number
of Registerable Securities included in the offering be reduced below ten percent
(10%) of the total number of shares included in such offering, unless the
Funding Party agrees to a lesser percentage.
d. State Registrations. At the written request of the Funding Party
who is the registered holder of the Registerable Securities, MBSI shall file a
registration statement with one state in which the Funding Party intends to sell
the Registerable Securities, provided that such filing can be made without
unreasonable expense to MBSI and without materially affecting the Registration
Statement filed with the SEC. MBSI shall cooperate with the Funding Party in the
filing of the Registration Statement in one or more additional states, provided
that the Funding Party shall reimburse MBSI for its time, effort, and costs
reasonably associated with such filings.
e. Payment of Expenses. MBSI shall bear all expenses incurred by it in
registering the Registerable Securities hereunder, including without limitation,
all filing, registration and qualification fees of the SEC or any state agency
(except for fees incurred in states expressly designated by the Funding Party in
subparagraph (d) above), printing expenses, fees and disbursements of legal
counsel and all accounting expenses including expenses of the year-end audits.
The Funding Party shall bear the fees and disbursements of its own legal
counsel, underwriting or brokerage discounts and commissions, expenses of its
brokers or underwriters, and fees of the National Association of Securities
Dealers, Inc.
f. Cooperation of the Funding Party. It shall be a condition of the
obligations of MBSI to take action in response to any request for registration
by the Funding Party that such request include or be accompanied by all of the
following: (i) the Funding Party's confirmation that it then has a present
intention of selling or distributing the Registerable Securities which are the
subject of such request; (ii) information with respect to the Funding Party and
the number of Registerable Securities proposed to be sold and a description of
such Registerable Securities, or, to the extent that such information is not
then available, the Funding Party's undertaking to furnish the same; (iii) the
indemnity agreement specified in subparagraph (g) below; (iv) the Funding
Party's agreement to refrain, in connection with such registration, offering and
sale, from taking any action violative of the anti-manipulative rules
promulgated under the Securities Exchange Act of 1934, as amended; and (v) the
Funding Party's agreement to cooperate with MBSI generally in connection with
such registration, and the undertaking to execute such further documents
relating to formal matters in connection with such registration, offering and
sale as may be necessary, appropriate and proper to effectuate the transactions
contemplated by such request.
g. Indemnification. Any registration hereunder shall be accompanied by
an agreement of the Funding Party to indemnify MBSI, each of its directors, each
of its officers who sign the registration statement, and each person who
controls MBSI against any loss, claim, liability, damage or action arising out
of or based on any untrue statement (or alleged untrue statement) of a material
fact contained in the registration statement when the same becomes effective or
in any final prospectus or amendment or supplement thereto, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and to reimburse the
indemnified persons for any legal or other expenses reasonably incurred in
investigating or defending any such action or claim, but only to the extent that
the untrue statement (or alleged untrue statement) or omission (or alleged
omission) was made in reliance upon and in conformity with written information
furnished to MBSI by or on behalf of the Funding Party for use in the
registration statement, final prospectus, or amendment or supplement thereto, as
the case may be.
5. The securities acquired and to be acquired pursuant to this Funding
Agreement have not been registered under the Securities Act of 1933 (the "Act"),
or under the securities laws of any state. The securities have been and will be
acquired for investment any may not be transferred or sold in the absence of an
effective registration statement or other compliance under the act and the laws
of the applicable state or a "no action" or interpretive letter from the
Securities and Exchange Commission or an opinion of counsel reasonably
satisfactory to MBSI, and its legal counsel, to the effect that the sale or
transfer is exempt from registration under the act and such state statutes.
a. Odyssey represents and warrants:
i. The securities acquired and to be acquired pursuant to this
Funding Agreement are being acquired for the Funding Party's own account to be
held for investment purposes only and not with a view to, or for, resale in
connection with any distribution of such securities or any interest therein
without registration, or an applicable exemption from registration, or other
compliance under the Act, or any state securities law, and the Funding Party has
no direct or indirect participation in any such undertaking or in underwriting
such an undertaking.
ii. The Funding Party has been advised and understands that said
securities have not been registered under the Act, or any state securities laws,
and MBSI is under no obligation to register the securities under the Act or such
state securities laws, except as specifically provided herein.
6. Miscellaneous.
a. Notices. All communications provided for herein shall be in writing
and shall be deemed to be given or made when served personally or when deposited
in the United States mail, certified return receipt requested, addressed as
follows, or at such other address as shall be designated by any party hereto in
written notice to the other party hereto delivered pursuant to this subsection:
Odyssey: David's Odyssey, L.C.C.
0000 Xxxx 0000 Xxxxx
Xxxxxxxx, Xxxx 00000
Attn: Xxxxx Xxxxxxx
With Copy to: Xxxxxx X. Xxxxx
Attorney at Law
00 Xxxx 000 Xxxxx
Xxxxx 000
Xxxx Xxxx Xxxx, XX 00000
b. Default. Should any party to this Agreement default in any of the
covenants, conditions, or promises contained herein, the defaulting party shall
pay all costs and expenses, including a reasonable attorney's fee, which may
arise or accrue from enforcing this Agreement, or in pursuing any remedy
provided hereunder or by the statutes of the State of Utah.
c. Assignment. Except as set forth in Paragraph 1 above, this
Agreement may not be assigned in whole or in part by the Funding Party without
the prior written consent of MBSI.
d. Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto, their heirs, executors,
administrators, successors and approved assigns.
e. Partial Invalidity. If any term, covenant, condition, or provision
of this Agreement or the application thereof to any person or circumstance shall
to any extent be invalid or unenforceable, the remainder of this Agreement or
application of such term or provision to persons or circumstances other than
those as to which it is held to be invalid or unenforceable shall not be
affected thereby and each term, covenant, condition, or provision of this
Agreement shall be valid and shall be enforceable to the fullest extent
permitted by law.
f. Entire Agreement. This Agreement constitutes the entire
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all negotiations, representations, prior discussions,
letters of intent, and preliminary agreements between the parties hereto
relating to the subject matter of this Agreement.
g. Interpretation of Agreement. This Agreement shall be interpreted
and construed as if equally drafted by all parties hereto.
h. Survival of Covenants, Etc. All covenants, representations, and
warranties made herein to any party, or in any statement or document delivered
to any party hereto, shall survive the making of this Agreement and shall remain
in full force and effect until the obligations of such party hereunder have been
fully satisfied.
i. Further Action. The parties hereto agree to execute and deliver
such additional documents and to take such other and further action as may be
required to carry out fully the transactions contemplated herein.
j. Amendment. This Agreement or any provision hereof may not be
changed, waived, terminated, or discharged except by means of a written
supplemental instrument signed by the party or parties against whom enforcement
of the change, waiver, termination, or discharge is sought.
k. Full Knowledge. By their signatures, the parties acknowledge that
they have carefully read and fully understand the terms and conditions of this
Agreement, that each party has had the benefit of counsel, or has been advised
to obtain counsel, and that each party has freely agreed to be bound by the
terms and conditions of this Agreement.
l. Headings. The descriptive headings of the various sections or parts
of this Agreement are for convenience only and shall not affect the meaning or
construction of any of the provisions hereof.
m. Counterparts. This Agreement may be executed in two or more
partially or fully executed counterparts, each of which shall be deemed an
original and shall bind the signatory, but all of which counterparts together
shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto executed the foregoing Funding
Agreement as of the day and year first above written.
MBSI: Mediacomm Broadcasting Systems, Inc.
d/b/a Xxxxxxx.xxx
By /s/
--------------------------
Xxx Xxxxxxxx, President
Odyssey: David's Odyssey, L.L.C.
By /s/
--------------------------
Xxxxx X. Xxxxxxx, Manager
Exhibit "A"
Date: _________, 0000
Xxxxxx: $
MEDIACOMM BROADCASTING SYSTEMS, INC.
d/b/a Xxxxxxx.xxx
(A Colorado Corporation)
PROMISSORY NOTE
---------------
THE ISSUE OF THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE. THESE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE TRANSFERRED OR SOLD
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE ACT OR
THE LAWS OF THE APPLICABLE STATE OR A "NO ACTION" OR INTERPRETIVE LETTER FROM
THE SECURITIES AND EXCHANGE COMMISSION OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE ISSUER, AND ITS COUNSEL, TO THE EFFECT THAT THE SALE OR
TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE ACT AND SUCH STATE STATUTES.
---------------
Mediacomm Broadcasting Systems, Inc., a corporation duly organized and
existing under the laws of the State of Colorado, d/b/a Xxxxxxx.xxx (hereinafter
referred to as "Xxxxxxx.xxx" or "Maker"), for value received, hereby promises to
pay to the following person (the "Lender"):
David's Odyssey, L.L.C.
the principal sum of Forty-five thousand dollars ($45,000), as loaned by the
Lender to the Maker as set forth in the Funding Agreement of even date herewith
and incorporated herein (the "Funding Agreement"), in such lawful money of the
United States of America as at the time of payment shall be legal tender for the
payment of public and private debts, on the terms and at the time hereinafter
provided.
This Note is subject to the terms and conditions of the Funding Agreement
and any inconsistencies between this Note and the Funding Agreement shall be
governed by the Funding Agreement. This Note is also subject to the following
further terms and provisions:
1. Payment of Principal and Interest. The outstanding principal amount of
this Note, which amount shall be equal to the funds loaned by Lender to the
Maker hereunder and not otherwise repaid pursuant hereto, together with all
interest then accrued shall be due and payable on the date of the initial
release of funds under the registration statement (the "Registration Statement")
filed by the Company pursuant to the Funding Agreement or one year from the date
hereof, whichever shall first occur (the "Due Date"). Interest on the
outstanding principal shall accrue at the rate of ten percent (10%) per annum
from the date of delivery of such principal funds by the Lender. All interest
shall be calculated on the basis of a 365-day year, counting the actual number
of days elapsed from the date the principal amount is delivered to the Maker
through the Due Date. Interest on any overdue payments of principal and interest
due hereunder shall accrue and be payable at the rate of twelve percent (12%)
per annum, based on the actual number of days elapsed from the date such
principal or interest payment was due to the date of actual payment.
2. Prepayment. This Note is subject to prepayment, in whole or in part, at
any time upon not less than 30 days notice by registered mail at the election of
the Maker. Prepayment shall be effected by paying the amount equal to the
outstanding principal amount of this Note, plus all interest accrued to the date
of prepayment. During the 30 days following the date of any notice of
prepayment, the holder shall have the right to convert this Note to the common
stock of the Maker, on the terms and conditions provided for in paragraph 2
above.
3. Satisfaction and Discharge of Note. This Note shall cease to be of
further effect when:
a. The Maker has paid or caused to be paid all sums payable hereunder
by the Maker, including all outstanding principal amounts and interest accrued
under the Note; and
b. All the conditions precedent herein provided for relating to the
satisfaction and discharge of this Note have been complied with.
4. Events of Default. "Event of Default," when used herein, whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law pursuant to any judgment, decree,
or order of any court or any order, rule, or regulation of any administration or
government body or be caused by the provisions of any paragraph herein means any
one of the following events:
a. Default in the payment of any principal or interest on this Note
when it becomes due and payable, and continuance of such default for a period of
30 days; or
b. Default in the performance or breach of any covenant or warranty of
the Maker in this Note (other than a covenant or warranty, the breach or default
in performance of which is elsewhere in this section specifically dealt with),
and continuation of such default or breach for a period of 30 days after there
has been given to the Maker by registered or certified mail, by the holder of
this Note, a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a notice of default hereunder; or
c. The entry of a decree or order by a court having jurisdiction in
the premises adjudging the Maker a bankrupt or insolvent under the Federal
Bankruptcy Act or any other applicable federal or state law, or appointing a
receiver, liquidator, assignee, trustee (or other similar official) of the Maker
or of any substantial part of its property , or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 60 consecutive days;
d. The institution by the Maker of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of bankruptcy or
insolvency proceedings against it, or a filing by it of a petition or answer or
consent seeking reorganization or relief under the Federal Bankruptcy Act or any
other applicable federal or state law; or the consent by it to the filing of any
such petition or the appointment of a receiver, liquidator, assignee, trustee
(or other similar official) of the Maker or of any substantial part of its
property, or the making by it of any assignment for the benefit of creditors, or
the admission by it in writing of its inability to pay its debts generally as
they become due, or the taking of corporate action by the Maker in furtherance
of any such action; or
e. Any material breach of the representations or warranties of the
Maker in, the Funding Agreement, or any material default of the Maker of the
terms and conditions of the Funding Agreement.
5. Conversion to Shares on Default. As an alternative to any remedy
available to the Lender under law or equity in the event of the failure of the
Maker to have paid or to pay the principal and interest due hereunder by or on
October 1, 2000, then, on and after that date, until such the time said
principal and interest shall have been paid, the Lender shall have the option to
convert all or any portion of the amount due on this Note on the date of
conversion into shares of the common stock of the Maker at the rate of $0.10 per
share of common stock.
6. Acceleration of Maturity. If an Event of Default occurs and is
continuing then, in every such case, the holder of this Note may declare the
outstanding principal of this Note to be due and payable immediately, by a
notice in writing to the Maker of such default, and upon any such declaration,
such principal shall become immediately due and payable. At such time after such
declaration of acceleration has been made, and before a judgment or decree for
payment of money due has been obtained by the holder, the holder of this Note,
by written notice to the Maker, may rescind and annul such declaration and its
consequences, if all Events of Default, other than the nonpayment of the
principal of this Note which has become due solely by such acceleration, has
been cured or waived. No such rescission shall affect any subsequent default or
impair any right consequent thereon.
7. Restrictions. The Lender, by acceptance hereof, represents and warrants
as follows:
a. The Note is being acquired for the Lender's own account to be held
for investment purposes only and not with a view to, or for, resale in
connection with any distribution of such Note or any interest therein without
registration, or an applicable exemption from registration, or other compliance
under the Act, or any state securities law, and the holder hereof has no direct
or indirect participation in any such undertaking or in underwriting such an
undertaking.
b. The Lender knows and understands that the Note has not been
registered under the Act, or any state securities laws, and the Maker is under
no obligation to register the Note under the Act or such state securities laws.
8. Non-Negotiability and Assignment. This Note is non-negotiable and is
assignable by the Lender only with the prior written consent of the Maker.
9. Presentment Waiver. The Maker, and guarantors hereof, if any, severally
waive presentment for payment, protest, and notice of protest and of nonpayment
of this Note.
Mediacomm Broadcasting Systems, Inc.
d/b/a Xxxxxxx.xxx
By
Exhibit "B"
MEDIACOMM BROADCASTING SYSTEMS, INC.
d/b/a Xxxxxxx.xxx
(A Colorado Corporation)
WARRANT CERTIFICATE
WARRANT NUMBER SERIES A - ____ NUMBER OF WARRANTS:_________
SERIES "A" WARRANT CERTIFICATE FOR THE PURCHASE OF SHARES
OF THE NO PAR VALUE COMMON STOCK OF
MEDIACOMM BROADCASTING SYSTEMS, INC., d/b/a XXXXXXX.XXX
THE ISSUE OF THESE WARRANTS HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE. THESE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE TRANSFERRED OR SOLD
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE ACT OR
THE LAWS OF THE APPLICABLE STATE OR A "NO ACTION" OR INTERPRETIVE LETTER FROM
THE SECURITIES AND EXCHANGE COMMISSION OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY, AND ITS COUNSEL, TO THE EFFECT THAT ANY PROPOSED
SALE OR TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE ACT AND SUCH STATE
STATUTES.
FOR VALUE RECEIVED, Mediacomm Broadcasting Systems, Inc. (the "Company"), a
Colorado corporation, hereby certifies that ______________________________, the
registered holder hereof, or registered assigns (in either case the "Holder") is
entitled to purchase, subject to the terms and conditions hereinafter set forth,
at any time beginning one year after the date hereof and before October 1, 2005,
and not thereafter, one (1) share of the Common Stock of the Company for each
one (1) Warrant exercised at a price of $2.00 per share of Common Stock and
receive a certificate(s) for the number of shares of Common Stock so purchased
upon presentation and surrender of this Warrant Certificate together with the
Form of Subscription, constituting a part hereof, to the transfer agent of the
Company duly executed and accompanied by payment of the purchase price for all
shares purchased, either by certified check or bank draft, payable to the order
of the Company. Fractions of shares of the Common Stock of the Company will not
be issued. Any denominations of money less that $1.00 paid by the Holder will be
retained by the Company.
The Company covenants and agrees that all shares of Common Stock which may
be delivered upon the exercise of this Warrant will, upon delivery, be free from
all taxes, liens and charges with respect to the purchase thereof. This Warrant
shall not be exercised by Holder in any state where such exercise would be
unlawful such as a state in which the shares of common stock of the Company are
not registered or qualified as the case requires.
The Company agrees at all times to reserve or hold available a sufficient
number of shares of its Common Stock to cover the number of shares issuable upon
the exercise of this and all other Series "A" Warrants then outstanding.
This Warrant does not entitle the Holder to any voting rights or other
rights as a shareholder of the Company, or to any other rights whatsoever except
the rights herein set forth, and no dividend shall be payable or accrue in
respect to this Warrant or the interest represented hereby, or the shares
purchasable hereunder, until or unless, and except to the extent that this
Warrant shall be exercised, and the Common Stock purchasable upon exercise
thereof shall become deliverable.
The Warrants are not redeemable nor cancelable by the Company.
This Warrant is exchangeable upon the surrender hereof by the Holder to the
Company for new Warrants of like tenor and date representing in the aggregate
the right to purchase the number of shares purchasable hereunder, each of such
new Warrants to represent the right to purchase such number of shares as many be
designated by the registered owner at the time of such surrender.
The Company may deem and treat the Holder at any time as the absolute owner
hereof for all purposes and shall not be affected by any notice to the contrary.
The number of shares of Common Stock purchasable upon the exercise of this
Warrant and the purchase price shall be subject to adjustment from time to time
as follows:
(1) If the Company shall at any time subdivide its outstanding shares of
Common Stock by recapitalization, reclassification or split-up thereof, or if
the Company shall declare a stock dividend or distribute shares of Common Stock
to its stockholders, the number of shares of Common Stock purchasable upon
exercise of this Warrant immediately prior to such subdivision shall be
proportionately increased in each instance, and if the Company shall at any time
reduce the then outstanding shares of Common Stock by recapitalization,
reclassification or combination thereof, the number of shares of Common Stock
purchasable upon exercise of this Warrant immediately prior to such
recapitalization, reclassification or combination shall be proportionately
decreased in each instance.
(2) If the Company shall distribute to all of the holders of its shares of
Common Stock any security (except as provided in the preceding paragraph) or
other assets (other than a distribution made as a dividend payable out of
earnings or out of any earned surplus legally available for dividends under the
laws of the jurisdiction of incorporation of the Company), the Board of
Directors of the Company shall make such equitable adjustment in the Warrant
Price in effect immediately prior to the record date of such distribution as may
be necessary to preserve to the Holder of this Warrant rights substantially
proportionate to those enjoyed hereunder by such Holder immediately prior to the
happening of such distribution. Any such adjustment shall become effective as of
the day following the record date for such distribution.
(3) Whenever the number of shares of Common Stock purchasable upon the
exercise of this Warrant is required to be adjusted as herein provided, the
Warrant Price shall be adjusted (to the nearest cent) in each instance by
multiplying such Warrant Price immediately prior to such adjustment by a
fraction (x) the numerator of which shall be the number of shares of Common
Stock purchasable upon the exercise of the Warrants immediately prior to such
adjustment, and (y) the denominator of which shall be the number of shares of
Common Stock so purchasable immediately thereafter.
(4) In case of any reclassification of the outstanding shares of Common
Stock, other than a change covered by paragraph (1) above or which solely
affects the par value of such shares of Common Stock, or in the case of any
merger or consolidation of the Company with or into another corporation (other
that a consolidation merger in which the Company is the continuing corporation
and which does not result in any reclassification or capital reorganization of
the outstanding shares of Common Stock), or in the case of any sale or
conveyance to another corporation of the property of the Company as an entirety
or substantially as an entirety in connection with which the Company is
dissolved, the Holder of this Warrant shall have the right thereafter (until the
expirations of the respective rights of exercise of the Warrant) to receive upon
the exercise thereof, for the same aggregate Warrant Price payable hereunder
immediately prior to such event, the kind and amount of shares of stock or other
securities or property receivable upon such reclassification, capital
reorganization, merger or consolidation, or upon the dissolution following any
sale or other transfer, which a holder of the number of shares of Common Stock
of the Company would obtain upon exercise of the Warrants immediately prior to
such event; and if any classification also results in a change in shares of
Common Stock covered by paragraph (1) above, then such adjustment shall be made
pursuant to both paragraph (1) above and this paragraph (4). The provisions of
this paragraph (4) shall similarly apply to successive reclassifications, or
capital reorganizations, mergers or consolidations, sales or other transfers.
(5) In case of the dissolution, liquidation or winding-up of the Company,
all rights under any of the Warrants outstanding and not expired by their terms
shall terminate on a date fixed by the Company, such date so fixed to be not
earlier than the date of the commencement of the proceedings for such
dissolution, liquidation or winding-up and not later than thirty (30) days after
such commencement date. Notice of such termination of purchase rights shall be
given to the registered Holder of this Warrant Certificate as the same shall
appear on the books of the Company, by certified or registered mail at least
thirty (30) days prior to such termination date.
(6) In case the Company shall, at any time prior to the Expiration Date of
the Warrants, and prior to the exercise thereof, offer to the holders of its
Common Stock any right to subscribe for additional shares of any class of
securities of the Company, then the Company shall give written notice thereof to
the registered Holder of this Warrant Certificate not less than thirty (30) days
prior to the date on which the books of the Company are closed or a record date
fixed for the determination of stockholders entitled to such subscription
rights. Such notice shall specify the date as to which the books shall be closed
or record date be fixed with respect to such offer or subscription, and the
rights of the Holder of this warrant to participate in such offer or
subscription shall terminate if this Warrant shall not be exercised on before
one day prior to the date of such closing of the books or such record date.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its duly authorized officer this 1st day of October 1999.
Mediacomm Broadcasting Systems, Inc.
d/b/a Xxxxxxx.xxx
By
President
ATTEST:
Secretary
MEDIACOMM BROADCASTING SYSTEMS, INC.
d/b/a Xxxxxxx.xxx
ASSIGNMENT FORM
(To be executed by the registered Holder to effect a
Transfer of the Within Warrant)
For Value Received _____________ hereby sells, assigns, and transfer unto
(Please print or typewrite name and address,
including postal zip code of assignee)
this Warrant and the rights represented thereby to purchase Common Stock in
accordance with the terms and conditions thereof, and does hereby irrevocable
constitute and appoint attorney to transfer this Warrant on the books of
Mediacomm Broadcasting Systems, Inc., d/b/a Xxxxxxx.xxx, with full power of
substitution.
Date: ____________________ Signed ___________________________
MEDIACOMM BROADCASTING SYSTEMS, INC.
d/b/a Xxxxxxx.xxx
SUBSCRIPTION FORM
(To Be Executed by the Registered Holder to Exercise The Rights
To Purchase Common Stock Evidenced By The Within Warrant)
The undersigned hereby irrevocably subscribes for shares of the Common Stock of
Mediacomm Broadcasting Systems, Inc., d/b/a Xxxxxxx.xxx, pursuant and in
accordance with the terms and conditions of the Warrant and hereby makes payment
of $ therefor, and requests that certificate(s) for such shares be issued in the
name of the undersigned and be delivered to the address stated below, and if
such number of shares shall not be all of the shares purchasable hereunder, that
a new Warrant of like tenor for the balance of the remaining shares purchasable
hereunder be delivered to the undersigned at the address stated below:
Date: _____________________ Signed ______________________________
SIGNATURE(S) MUST BE GUARANTEED BY A FIRM WHICH IS A MEMBER OF A REGISTERED
NATIONAL STOCK EXCHANGE, OR BY A BANK (OTHER THAN A SAVINGS BANK), OR A TRUST
COMPANY. THE SIGNATURE TO THIS SUBSCRIPTION FORM MUST CORRESPOND WITH THE NAME
AS WRITTEN UPON THE FACE OF THE WARRANT. IN EVERY PARTICULAR, WITHOUT ALTERATION
OR ENLARGEMENT, OR ANY CHANGE WHATSOEVER.
