Exhibit 10.11
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
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
/s/ Subscriber By: /s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
Title: Chairman and CEO
Number of Units: Units
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