MEDIACOMM BROADCASTING SYSTEMS, INC.
d/b/a XXXXXXX.XXX
Exhibit No. 10.2
Copy of Funding Agreement
dated August 6, 1999
FUNDING AGREEMENT
This Agreement, entered into this 6th day of August 1999, is by, between,
and among Mediacomm Broadcasting Systems, Inc., a Colorado corporation, d/b/a
Xxxxxxx.xxx, ("MBSI") and, Business Development Corporation, a Colorado
corporation ("BDC"), Xxxxxxx Xxxxxx XXX, an individual ("Xxxxxx"), Xxxxxx Family
Partners, a partnership ("MFP"), and Summer Breeze L.L.C., a Colorado limited
liability company, ("SBLLC").
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 ("SEC") 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 BDC,
Xxxxxx, MFP and SBLLC, (hereinafter "Funding Parties") and the shares of common
stock underlying the warrants,
WHEREAS, the Funding Parties have agreed to provide interim financing to
MBSI in the form of loans 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 severally agree as follows:
1. The Loans. The Funding Parties, severally and not jointly, each hereby
agrees to loan to MBSI, the following amount of funds which shall be made
available by the following Funding Parties in the amounts specified:
Amount
Name of Loan Payment Date
---- ------- ------------
BDC $45,000 As of the date of this Agreement
Xxxxxx $25,000 As of the date of this Agreement
MFP $20,000 As of the date of this Agreement
SBLLC $45,000 As of the date of this Agreement
The terms and conditions of the loans to MBSI are set forth in the form of
Promissory Notes, a copy of which is attached hereto as Exhibit "A" and
incorporated herein (the "MBSI Note(s)"). Simultaneous with the furnishing of
funds by each of the Funding Parties to MBSI, MBSI shall execute and deliver an
MBSI Note to such party. 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 providing the
loans specified above by the Funding Parties, MBSI shall issue to each of the
Funding Parties shares of the Common Stock of MBSI (the "Consideration Shares")
as follows:
Funding Party Number of Shares
------------- ----------------
BDC 360,000
Xxxxxx 200,000
MFP 160,000
SBLLC 360,000
3. Issuance of Warrants. Also, as partial consideration for providing the
loans to MBSI by the Funding Parties, MBSI shall issue to each of the Funding
Parties Series "A" warrants to purchase shares of the Common Stock 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 contemporaneous with the execution of this Funding Agreement to each
of the Funding Parties as follows:
Funding Party Number of Warrants
------------- ------------------
BDC 360,000
Xxxxxx 200,000
MFP 160,000
SBLLC 360,000
4. Registration Rights. MBSI hereby grants the following registration
rights as to the Consideration Shares, the shares of Common Stock issuable upon
conversion of the MBSI Notes, if any, the Series "A" Warrants, and the shares of
Common Stock underlying such Series "A" Warrants and the shares of Common Stock
issuable upon conversion of the Series "A" Warrants, if any:
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.
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 August 6,
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 August 6, 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 a 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 a Funding Party
o Shares of MBSI Common Stock acquired by a Funding Party on exercise
of the Series "A" Warrants
o Shares of MBSI Common Stock acquired by a Funding Party on
conversion of the Series "A" Warrants
o Shares of Common Stock acquired by a Funding party on conversion of
an MBSI Note
o The Consideration Shares held by a 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 the sale of securities 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 Parties being
the registered holders of the Registerable Securities accept 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 of securities by MBSI. If the total
amount of securities, including the Registerable Securities, requested to be
included in such registration statement exceeds the amount of securities to be
sold, other than by MBSI, that the underwriters reasonably believe compatible
with the success of the offering by MBSI, then only the number of such
securities, including the Registerable Securities, which the underwriters
believe will not jeopardize the success of the offering by MBSI shall be
included in the registration statement, but in no event shall the number of
Registerable Securities included in the registration statement be reduced below
ten percent (10%) of the total number of securities included in such
registration statement.
d. State Registrations. At the written request of Funding Parties who
are the registered holders of a majority in number of the Registerable
Securities, MBSI shall, concurrently with a registration statement filed under
paragraph b. above, file a registration or qualification document, as the case
requires, with one state in which the Funding Parties intend 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 under paragraph b. above. MBSI shall cooperate with
the holders of the Registerable Securities in the filing of such registration or
qualification document in one or more additional states, provided that the
Funding Parties 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 Parties
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 Parties shall bear the fees and disbursements of their 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 Parties. It shall be a condition of the
obligations of MBSI to take action in response to any request for registration
by the Funding Parties that such request include or be accompanied by all of the
following: (i) the Funding Parties' confirmation that such persons then have a
present intention of selling or distributing the Registerable Securities which
are the subject of such request; (ii) information with respect to the Funding
Parties 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 Parties' undertaking to furnish
the same; (iii) the indemnity agreement specified in subparagraph g. below; (iv)
the Funding Parties' 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 Act of 1933 and the Securities Exchange
Act of 1934, as amended; and (v) the Funding Parties' 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 of the Registerable Securities
pursuant hereto shall be accompanied by an agreement of the Funding Parties who
are the registered holders of the securities to be registered 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 Parties 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 and which may 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 the 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. Each of the Funding Parties, severally, represents and warrants:
i. The securities acquired and to be acquired and which may 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 the
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. Condition That Common Stock be Split. It is an express condition to
Funding Parties duty to perform the terms of this agreement that MBSI shall have
accomplished a forward three for (3:1) stock split of the Common Stock of MBSI
and there be no more than 7,800,000 shares of such stock outstanding as of the
time the said Registration Statement referred to in paragraph 4.a. hereof is
filed.
7. 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 parties hereto delivered pursuant to this
subsection:
BDC: 000 Xxxxxx Xxxx.
Xxxxx 0000
Xx. Xxxxxxxxxx, XX 00000
Attn: Van Xxxxxxx
Xxxxxx and MFP: 00 Xxxx Xxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
SBLLC: 00 Xxx Xxxx Xxxxx
Xxxxxxxxx Xxxxx, XX 00000
Attn: Xxxx XxXxxx
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. This Agreement is not assignable in whole or in part by
any 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 to that 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, that each is informed to its satisfaction, 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 each signatory, but all of which counterparts together
shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have 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 X. Xxxxxxxx, President
BDC: Business Development Corporation
By /s/
---------------------------
Xxx Xxxxxxx, President
Xxxxxx: Xxxxxxx Xxxxxx XXX
By /s/
---------------------------
MFP: Xxxxxx Family Partners
By /s/
---------------------------
Xxxxxxx Xxxxxx, Partner
SBLLC: Summer Breeze L.L.C.
By /s/
---------------------------
Xxxx X. XxXxxx, Manager
Exhibit "A"
Date: _________, 0000
Xxxxxx: $
MEDIACOMM BROADCASTING SYSTEMS, INC.
d/b/a Xxxxxxx.xxx
(A Colorado Corporation)
PROMISSORY NOTE
---------------
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. THIS NOTE HAS
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 OF THIS NOTE 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"):
the principal sum of ___________________________ dollars ($______), as loaned by
the Lender to the Maker as set forth in a 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 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")
to be filed by the Maker 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.
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 administrative or
governmental 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 the continuing 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 continuing 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 Non-payment. 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
August 6, 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 of this Note, 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 Lender has no intention to
directly or indirectly participate in any such undertaking or in underwriting
such an undertaking.
b. The Lender knows and understands that issue of this Note has not
been registered under the Act, or any state securities laws, and that the Maker
is under no obligation to register the issue of this Note under the Act or any
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, its guarantors, 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 August 6, 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 6th day of August 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 Certificate and the rights represented thereby to purchase Common
Stock in accordance with the terms and conditions thereof, and does hereby
irrevocably constitute and appoint attorney to transfer this Warrant Certificate
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 to and in accordance with the terms and conditions of the attached
Warrant Certificate 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 under the terms of the Warrant Certificate, that a
new Warrant Certificate of like tenor for the balance of the remaining shares
purchasable thereunder 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 IT APPEARS UPON THE FACE OF THE WARRANT CERTIFICATE. IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT, OR ANY CHANGE WHATSOEVER.
