EX.10.25
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 62 Units will be sold
simultaneously with such sale to Subscriber. Each Unit consists of 100 shares of
Series B Convertible Preferred Stock having a redemption value of $50,000 per
share (the "Preferred") and warrants to purchase 60,000 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 the lesser of $1.25 per share or 80% of the average
closing sales price of the common stock on NASDAQ (or such other securities
exchange where the common stock may then be listed) during the last five trading
days prior to conversion. If not theretofore converted, the Preferred shall
automatically be deemed converted into common stock at such price on the second
anniversary of the date of issuance. 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 6% per annum, on
the second anniversary of the date of issuance 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 only to the extent that authorized but unissued shares of Common
Stock of the Company are available for such exercise. The Company shall as soon
as practicable call a special stockholders' meeting to approve the amendment of
the Certificate of Incorporation of the Company to authorize 30,000,000
additional shares of Common Stock and the directors of the Company shall
recommend to the stockholders that they vote in favor of such amendment. By
separate agreement, executive officers of the Company who own an aggregate of
11.4% of the Company's outstanding Common Stock have agreed to vote their shares
in favor of such amendment. If at any time thereafter that the Warrants are
exercised there are not a sufficient number of authorized but unissued shares of
Common Stock of the Company available for such exercise, the Company promptly
will take all necessary steps to secure the authorization of sufficient
additional shares of Common Stock to permit such exercise. The Warrants shall be
exercisable at $2.50 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 31, 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 the 120th day after the date of this Agreement
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
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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: ____________________________________
Number of Units: ____________________ Title:
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Exhibit A
Exhibit A intentionally omitted. See Exhibit 3.6, "Certificate of Designation
for Series B Convertible Preferred Stock, as amended."
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: June __, 1996
Number of Shares:
Holder:
Address:
__________________________________
THIS CERTIFIES THAT the holder of this Warrant ("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 ("Common Stock").
The Warrants shall be exercisable only to the extent that authorized but
unissued shares of Common Stock of the Company are available for such exercise.
The Company shall as soon as practicable call a special stockholders' meeting to
approve the amendment of the Certificate of Incorporation of the Company to
authorize 30,000,000 additional shares of Common Stock and the directors of the
Company shall recommend to the stockholders that they vote in favor of such
amendment. By separate agreement, executive officers of the Company who own an
aggregate of 11.4% of the Company's outstanding Common Stock have agreed to vote
their shares in favor of such amendment. If at any time thereafter that the
Warrants are exercised there are not a sufficient number of authorized but
unissued shares of Common Stock of the Company available for such exercise, the
Company promptly will take all necessary steps to secure the authorization of
sufficient additional shares of Common Stock to permit such exercise. This
Warrant shall be exercisable at S2.50 per share until the third anniversary of
the date on which they are first exercisable 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
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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 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
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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 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 California. The California 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:_________________________________
In the presence of:
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