1
EXHIBIT 10.13
FIRST AMENDMENT TO
PLACEMENT AGREEMENT
OF
MICRO-MEDIA SOLUTIONS, INC.
This First Amendment to Placement Agreement of Micro-Media Solutions,
Inc. (the "First Amendment") is executed to be effective as of the 30th day of
May, 1998, by and between Micro-Media Solutions, Inc., a Utah corporation (the
"Company") and Equity Services, Ltd., a Nevis company ("ESL").
Introductory Provisions
The following provisions are a part of and form the basis for this
First Amendment:
A. The Company and ESL previously entered into a placement agreement
dated April 21, 1998 (the "Placement Agreement") whereby ESL agreed to
privately place Two Hundred Thirty Five Thousand Eight Hundred Forty Nine
(235,849) shares (the "Shares") of the Company's Series D 6% cumulative
convertible non-voting preferred stock (the "Series D Preferred Stock").
B. As of the date of this First Amendment, ESL has received, in
response to its solicitations of interest, indications of interest in
purchasing more shares of Series D Preferred Stock than are currently available
for purchase.
C. ESL wishes to privately place additional shares of Series D
Preferred Stock on behalf of the Company and the Company wishes to issue and
sell additional shares of Series D Preferred Stock to accomodate the additional
interest in the Series D Preferred Stock
D. The Company and ESL desire to amend the Placement Agreement to
reflect the agreement of the parties set forth above along with various other
agreements of the parties.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. Section 1 of the Placement Agreement is deleted in its entirety and
the following is substituted therefor:
"1. Description of Securities and Offering.
(a) ESL has agreed to privately place Two Hundred Fifty Thousand Eight
Hundred Forty Nine (250,849) shares (the "Shares") of the Company's Series D 6%
cumulative convertible non-voting preferred stock (the "Series D Preferred
Stock")(the "Private Placement") at a price of Ten and 60/100 Dollars ($10.60)
per Share (the "Private Placement Price"). Subject to the terms and
2
conditions herein, the placement of the Shares is to occur as follows: (i) One
Hundred Eighty Nine Thousand Three Hundred Forty (189,340) Shares will be
placed on or before April 30, 1998 ("Phase I") and (ii) Sixty One Thousand Five
Hundred Nine (61,509) Shares will be placed on or about June 30, 1998 ("Phase
II"). The Shares shall have a cumulative dividend of six percent (6%) per
annum, payable on a fiscal quarterly basis, which shall be paid in cash, or at
the option of a holder of Series D Preferred Stock, by the issuance of shares
of the Company's common stock, par value $0.10 per share (the "Common Stock")
based on the thirty (30) days average closing bid price of the Common Stock
immediately prior to the dividend date. Each Share shall be immediately
convertible into ten (10) shares of Common Stock subject to adjustment. The
closing of Phase I of the Private Placement will occur on or before April 30,
1998 (the "Phase I Closing") and the closing of Phase II of the Private
Placement will occur on or about June 30, 1998 (the "Phase II Closing");
provided, however that ESL will be given an opportunity to review the Company's
achievement of the business and financial milestones set forth on Exhibit "E"
attached hereto, before proceeding with each subsequent Phase of the Private
Placement. The Series D Preferred Stock Holders will agree that so long as the
Company remains certified as an Historically Underutilized Business ("HUB"),
they will not convert their Series D Preferred Stock in such a manner as to
cause the Company to lose its HUB status.
The Company shall grant the holders of the Shares, the holders of the
Common Stock issued as dividends on the Shares and the holders of the Common
Stock issued upon conversion of the Shares, one (1) demand registration right,
beginning immediately after the closing of each Phase of the Private Placement
contemplated herein and "piggyback" registration rights beginning on the date
of Closing of each Phase of the Private Placement. The terms of these
registration rights shall be as set forth in a Registration Rights Agreement
(herein so called) substantially in the form attached hereto as Exhibit "A".
(b) The commissions to which ESL shall be entitled for such placement
shall be as follows: (i) a sum equal to seven percent (7%) of the total
proceeds resulting from the placement of the Shares; and (ii) shares of Series
D Preferred Stock with value equal to five percent (5%) of the total proceeds
resulting from the placement of the Shares (the "Placement Agent's Shares").
ESL shall also be paid in cash (i) a sum equal to three percent (3%) of the
total proceeds resulting from the placement of the Shares as a non-accountable
expense allowance and (ii) an amount equal to the legal fees of ESL's counsel
not to exceed Ten Thousand and No/100 Dollars ($10,000.00). ESL will be paid
the commissions and the non-accountable expense allowance simultaneously with
the closing of each Phase in which they are earned. ESL will be paid an amount
equal to the legal fees of ESL's counsel simultaneously with the Phase I
Closing.
(c) In addition, the Company agrees to sell to ESL, for an aggregate
price of $100.00, a five (5) year option ("ESL Purchase Option") to purchase up
to Two Hundred Fifty Thousand Eight Hundred Fifty (250,850) shares of Common
Stock ("ESL Option Shares") at a price of $1.59 per Option Share exercisable
for a period of five (5) years commencing one (1) year after the Phase II
Closing or June 30, 1999, whichever is earlier, as follows: ESL shall be
entitled to purchase for Fifty Dollars ($50.00) an option to purchase up to One
Hundred Eighty Nine Thousand Three Hundred Forty (189,340) ESL Option Shares
immediately upon the occurrence of the Phase I Closing; and ESL shall be
entitled to purchase for Fifty Dollars ($50.00) an option to purchase up to
Sixty One Thousand Five Hundred Ten (61,510) ESL Option Shares immediately upon
the occurrence of the Phase II Closing. The holders of ESL Option Shares and
the Placement Agent's Shares will have
3
registration rights as set forth in a Registration Rights Agreement (herein so
called) substantially in the form attached hereto as Exhibit "B"."
2. Section 13 of the Placement Agreement is deleted in its entirety
and the following is substituted therefor:
"13. Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, express
overnight courier, registered first class mail, overnight courier, or
telecopied (followed by registered mail or overnight courier), initially to the
address set forth below, and thereafter at such other address, notice of which
is given in accordance with the provisions of this Section 13.
if to the Company:
Micro-Media Solutions, Inc.
501 Xxxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxx Xxxxxx, President
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy (which shall not constitute notice) to:
Vial, Hamilton, Xxxx & Xxxx, L.L.P.
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
if to ESL:
Equity Services, Ltd.
Xx. Xxxxxxx Xxxxx
Xxxxxxxxx Xxxxxx Steps
P.O. Box N-4805
Nassau, Bahamas
Attn: Xx. Xxxx Xxxxxxxxx, Director
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy (which shall not constitute notice) to:
Gardere & Xxxxx, L.L.P.
3000 Thanksgiving Tower
0000 Xxx Xxxxxx
Xxxxxx, Xxxxx 00000-0000
Attn: I. Xxxxx Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
4
All such notices and communications shall be deemed to have been duly given:
when delivered by hand, if personally delivered; three (3) business days after
being deposited in the mail, registered mail, return receipt requested, postage
prepaid, if mailed; when received after being deposited in the regular mail;
the next business day after being deposited with an overnight courier, if
deposited with a nationally recognized, overnight courier service; when receipt
is acknowledged, if telecopied (subject to follow up as discussed above)."
3. Except as otherwise specified herein, the terms and provisions
hereof shall in no manner impair, limit, restrict or otherwise affect the
representations, warranties, covenants and obligations of the parties hereto as
evidenced by the Placement Agreement (and all Exhibits thereto).
4. Attorneys' Fees. If any action is necessary to enforce or interpret
the terms of this First Amendment, the prevailing party shall be entitled to
reasonable attorneys' fees and costs, in addition to any other relief to which
he is or may be entitled. This provision shall be construed as applicable to
the entire agreement.
5. Remedies. Each party hereto, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this First Amendment. The
Company agrees that monetary damages would not be adequate compensation to ESL
for any loss incurred by reason of a breach by the Company of the provisions of
this First Amendment and the Company hereby agrees to waive (to the extent
permitted by law) the defense in any action for specific performance that a
remedy of law would be adequate.
6. Time of Essence. Time shall be of the essence of this First
Amendment.
7. Construction. This First Amendment shall be construed in accordance
with the internal laws of the State of Texas.
8. Execution. This First Amendment may be executed in any number of
counterparts each of which taken together shall constitute one and the same
instrument.
9. Joint Drafting of First Amendment. This First Amendment has been
prepared by the joint efforts of the respective counsel for each of the parties
hereto and shall not be construed against a particular party simply by reason
of such party being the drafting party.
10. Entire Agreement. This First Amendment and the Placement
Agreement, together with those certain Investor Subscription Agreements by and
between the Company and each subscriber to the Private Placement, constitute
the entire understanding by and between the parties with respect to the subject
matter hereof. This First Amendment can only be modified, including any
extension of the offering period, by a written agreement duly signed by persons
authorized to sign agreements on behalf of the respective parties.
11. Facsimile Signature. This First Amendment may be executed by
facsimile copy and any such facsimile copy bearing the facsimile signature of
any party hereto shall have full legal force and effect and shall be binding
against the party having executed this First Amendment by facsimile.
5
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
EXECUTED to be effective as of the date first written hereinabove.
MICRO-MEDIA SOLUTIONS, INC.
By: /s/ Xxxx Xxxxxx
----------------------------
XXXX XXXXXX,
President
Accepted and agreed to as of the
date first above written by:
EQUITY SERVICES, LTD.
By:/s/ Xxxx Xxxxxxxxx
------------------------------
XXXX XXXXXXXXX, Director
6
EXHIBIT "A"
Registration Rights Agreement - Subscribers to Private Placement
EXHIBIT "B"
Registration Rights Agreement - ESL
EXHIBIT "E"
Business and Financial Milestones of the Companyd
