PRIVATE PLACEMENT PURCHASE AGREEMENT
September 10, 1996, but
effective as of June 7, 1996
All-Comm Media Corporation
000 Xxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx Xxxx, Xxxxxxxxxx, 00000-0000
Gentlemen;
1. At a closing to occur at the offices of your company (the "Company")
simultaneously herewith, the undersigned ("Subscriber") will for $50,000 per
Unit (as defined below) purchase from you, and you will sell, the number of
Units set forth below opposite Subscriber's name below. Such purchase by
Subscriber is part of an offering in which an aggregate of 20 Units will be sold
simultaneously with such sale to Subscriber. Each Unit consists of 100 shares of
Series C Convertible Preferred Stock having a redemption value of $500 per share
(the "Preferred") and warrants to purchase 150,000 shares of common stock of
the Company (the "Warrants").
2. The Certificate of Designation for the Preferred shall be in the form of
Exhibit A. The Preferred shall at the option of the holder be convertible at any
time into common stock at $6.00 per share. If not theretofore converted, the
Preferred shall automatically be deemed converted into common stock at such
price on June 7, 1998. However, the Preferred shall not be redeemed under the
preceding sentence, but shall instead be redeemed at redemption value, together
with dividends accruing thereon at 8% per annum, on June 7, 1998 if the
Company's common stock is not then trading on NASDAQ (or another U.S. securities
exchange approved by the Securities and Exchange Commission where the common
stock may then be listed) or if the registration statement referred to below has
not theretofore been declared effective. The Preferred shall also be entitled to
priority over the common stock in liquidation.
3. The Warrants shall be in the form of Exhibit B. The Warrants shall be
exercisable at $3.00 per share and shall expire on the third anniversary of the
date on which they are first exercisable or, if earlier, on the first (1st) date
on which both (a) and (b) shall be true, namely (a) the registration statement
referred to below shall be in effect and shall have been effective for not less
than the ninety consecutive days immediately preceding such date and (b) the
closing price per share of the Company's common stock on NASDAQ (or such other
securities exchange where the common stock may then be listed) shall not be less
than $8.00 per share and shall have been not less than $8.00 per share during
the twenty consecutive trading days immediately preceding such date. For
example, assume that the closing price per share shall have been $9.00 per share
through October 1, 1996, that the closing price per share shall have been $7.00
per share through March 1, 1997, and that the closing price per share shall have
been $8.00 per share for 20 consecutive trading days thereafter. Assume further
that the Registration Statement shall have been in effect at all times from July
1, 1996. The expiration date of the Warrants shall be the close of business on
the 20th trading day after March 1, 1997. All dates set forth in this paragraph
shall be extended by one day for each day after December 31, 1996 on which the
registration statement referred to in Section 3 is not in effect with respect to
the shares purchasable under the Warrants.
3a. The Company will on or before October 7, 1996 file a registration statement
on Form S-3 or Form S-l (the "Registration Statement") for the public sale by
the holders of the shares which are issuable on conversion of the Preferred or
upon exercise of the Warrants. The Company shall use its best efforts to cause
the Registration
53
Statement to become effective not later than 90 days after the date of
filing, and to remain effective for two years with respect to Common Stock
issued upon conversion of Preferred Stock and three years with respect to Common
Stock issued upon exercise of Warrants. The registration shall be accompanied
by blue sky clearances in such states as the holders may reasonably request. The
Company shall pay all expenses of the registration hereunder, other than the
holders' underwriting discounts. Registration rights may be assigned to
assignees of the Preferred, the Warrants or the underlying stock.
4. (a) Subscriber represents and warrants that it is purchasing the Units solely
for investment solely for its own account and not with a view to or for the
resale or distribution thereof.
(b) Subscriber understands that it may sell or otherwise transfer the
Units, the Preferred, the Warrants or the shares of Common Stock issuable on
conversion or exercise of the Preferred or the Warrants only if such transaction
is duly registered under the Securities Act of 1933, as amended, under the
Registration Statement or otherwise, or if Subscriber shall have received the
favorable opinion of counsel to the holder, which opinion shall be reasonably
satisfactory to counsel to the Company, to the effect that such sale or other
transfer may be made in the absence of registration under the Securities Act of
1933, as amended, and registration or qualification in every applicable state.
The certificates representing the aforesaid securities will be legended to
reflect these restrictions, and stop transfer instructions will apply.
Subscriber realizes that the Units are not a liquid investment.
5. (a) Subscriber has not relied upon the advice of a "Purchaser Representative"
(as defined in Regulation D of the Securities Act) in evaluating the risks and
merits of this investment. Subscriber has the knowledge and experience to
evaluate the Company and the risks and merits relating thereto.
(b) Subscriber represents and warrants that Subscriber is an "accredited
investor" as such term is defined in Rule 501 of Regulation D promulgated
pursuant to the Securities Act of 1933, as amended, and shall be such on the
date any shares are issued to the holder; Subscriber acknowledges that
Subscriber is able to bear the economic risk of losing Subscriber's entire
investment in the shares and understands that an investment in the Company
involves substantial risks; Subscriber has the power and authority to enter into
this agreement, and the execution and delivery of, and performance under this
agreement shall not conflict with any rule, regulation, judgment or agreement
applicable to the Subscriber; and Subscriber has invested in previous
transactions involving restricted securities.
6. This Agreement may not be changed or terminated except by written agreement.
It shall be binding on the parties and on their personal representatives and
permitted assigns. It sets forth all agreements of the parties. It shall be
enforceable by decrees of specific performance (without posting bond or other
security) as well as by other available remedies.
Subscriber: ALL-COMM MEDIA CORPORATION
___________________________________ By:_________________________________
Xxxxx Xxxxxx
Title: Chairman and CEO
Number of Units: _________ Units
54
Exhibit A
Exhibit A intentionally omitted. See Exhibit 3.7, "Certificate of Designation
for Series C Convertible Preferred Stock."
Exhibit B
Neither this Warrant nor the shares of Common Stock issuable on exercise of this
Warrant have been registered under the Securities Act of 1933. None of such
securities may be transferred in the absence of registration under such Act or
an opinion of counsel to the effect that such registration is not required.
ALL-COMM MEDIA CORPORATION
WARRANT
DATED: September 10, 1996
Number of Shares:
Holder:
Address:
______________________________________
THIS CERTIFIES THAT the holder of this Warrant (the "Holder") is entitled to
purchase from ALL-COMM MEDIA CORPORATION, a Nevada corporation (hereinafter
called the "Company"), at the exercise price per share set forth below the
number of shares of the Company's common stock set forth above (the "Common
Stock"). This Warrant shall be exercisable at $3.00 per share until August 14th,
1999 or, if earlier, on the first date on which both (a) and (b) shall be true
namely (a) the registration statement referred to below shall be in effect and
shall have been effective for not less than the ninety consecutive days
immediately preceding such date and (b) the closing price per share of the
company's common stock on Nasdaq shall not be less than $8.00 per share and
shall have been not less than $8.00 per share during the twenty consecutive
trading days immediately preceding such date. For example, assume that the
closing price per share shall have been $9.00 per share through October 1, 1996,
that the closing price per share shall have been $7.00 per share through March
1, 1997, and that the closing price per share shall have been $8.00 per share
for 20 consecutive trading days thereafter. Assume further that the Registration
Statement shall have been in effect at all times from July 1, 1996. The
expiration date of the Warrants shall be the close of business on the 20th
trading day after March 31, 1997. All dates set forth in this paragraph shall be
extended by one day for each day after February 1, 1997 on which the
registration statement referred to in an agreement of even date herewith is not
in effect with respect to the shares purchasable under the Warrant.
1. This Warrant and the Common Stock issuable on exercise of this Warrant
(the "Underlying Shares") may be transferred, sold, assigned or hypothecated,
only if registered by the Company under the Securities Act of 1933 (the "Act")
or if the Company has received from counsel to the Company a written opinion to
the effect that registration of the Warrant or the Underlying Shares is not
necessary in connection with such transfer, sale, assignment or hypothecation.
The Warrant and the Underlying Shares shall be appropriately legended to reflect
6
this restriction and stop transfer instructions shall apply. The Holder shall
through its counsel provide such information as is reasonably necessary in
connection with such opinion.
2. The Holder is entitled to certain registration rights under an agreement
of even date herewith.
3. (a) Any permitted assignment of this Warrant shall be effected by the
Holder by (i) executing the form of assignment at the end hereof, (ii)
surrendering the Warrant for cancellation at the office of the Company,
accompanied by the opinion of counsel to the Company referred to above; and
(iii) unless in connection with an effective registration statement which covers
the sale of this Warrant and or the shares underlying the Warrant, delivery to
the Company of a statement by the transferee (in a form acceptable to the
Company and its counsel) that such Warrant is being acquired by the Holder for
investment and not with a view to its distribution or resale; whereupon the
Company shall issue, in the name or names specified by the Holder (including the
Holder) new Warrants representing in the aggregate rights to purchase the same
number of Shares as are purchasable under the Warrant surrendered. Such Warrants
shall be exercisable immediately upon any such assignment of the number of
Warrants assigned. The transferor will pay all relevant transfer taxes.
Replacement warrants shall bear the same legend as is borne by this Warrant.
4. The term "Holder" should be deemed to include any permitted record
transferee of this Warrant
5. The Company covenants and agrees that all shares of Common Stock which
may be issued upon exercise hereof will, upon issuance, be duly and validly
issued, fully paid and non-assessable and no personal liability will attach to
the holder thereof. The Company further covenants and agrees that, during the
periods within which this Warrant may be exercised, the Company will at all
times have authorized and reserved a sufficient number of shares of Common Stock
for issuance upon exercise of this Warrant and all other Warrants.
6. This Warrant shall not entitle the Holder to any voting rights or other
rights as a stockholder of the Company.
7. In the event that as a result of reorganization, merger, consolidation,
liquidation, recapitalization, stock split, combination of shares or stock
dividends payable with respect to such Common Stock, the outstanding shares of
Common Stock of the Company are at any time increased or decreased or changed
into or exchanged for a different number or kind of share or other security of
the Company or of another corporation, then appropriate adjustments in the
number and kind of such securities then subject to this Warrant shall be made
effective as of the date of such occurrence so that the position of the Holder
upon exercise will be the same as it would have been had it owned immediately
prior to the occurrence of such events the Common Stock subject to this Warrant.
Such adjustment shall be made successively whenever any event listed above shall
occur and the Company will notify the Holder of the Warrant of each such
adjustment. Any fraction of a share resulting from any adjustment shall be
eliminated and the price per share of the remaining shares subject to this
Warrant adjusted accordingly.
8. The rights represented by this Warrant may be exercised at any time
within the period above specified by (i) surrender of this Warrant (with the
purchase form at the end hereof properly executed) at the principal executive
office of the Company (or such other office or
7
agency of the Company as it may designate by notice in writing to the Holder at
the address of the Holder appearing on the books of the Company); (ii) payment
to the Company of the exercise price for the number of Shares specified in the
above-mentioned purchase form together with applicable stock transfer taxes, if
any; and (iii) unless in connection with an effective registration statement
which covers the sale of the shares underlying the Warrant, the delivery to the
Company of a statement by the Holder (in a form acceptable to the Company and
its counsel) that such Shares are being acquired by the Holder for investment
and not with a view to their distribution or resale.
The certificates for the Common Stock so purchased shall be delivered to
the Holder within a reasonable time, not exceeding ten (10) business days after
all requisite documentation has been provided, after the rights represented by
this Warrant shall have been so exercised, and shall bear a restrictive legend
with respect to any applicable securities laws.
9. This Warrant shall be governed by and construed in accordance with the
laws of the State of Nevada. The Nevada courts shall have exclusive jurisdiction
over this instrument and the enforcement thereof; Service of process shall be
effective if by certified mail, return receipt requested. All notices shall be
in writing and shall be deemed given upon receipt by the party to whom
addressed. This instrument shall be enforceable by decrees of specific
performances well as other remedies.
IN WITNESS WHEREOF, ALL-COMM MEDIA CORPORATION has caused this Warrant to
be signed by its duly authorized officers under its corporate seal and to be
dated as of the date set forth above.
ALL-COMM MEDIA CORPORATION
By:______________________________________
Title: Chairman & CEO
In the presence of:
8
