Contract
Exhibit
10.9
THIS
WARRANT AND THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 ("FEDERAL ACT") OR THE SECURITIES
LAWS OF ANY STATE IN RELIANCE UPON THE EXEMPTIONS CONTAINED THEREIN, AND IN
PARTICULAR PARAGRAPH (13) OF SECTION 10-5-9 OF THE GEORGIA SECURITIES LAW.
THIS
WARRANT AND ANY SHARES ISSUED UPON EXERCISE OF THIS WARRANT MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS
REGISTERED UNDER THE FEDERAL ACT AND APPLICABLE STATE SECURITIES LAWS OR THE
COMPANY IS SATISFIED THAT SUCH REGISTRATION IS NOT REQUIRED.
IN
MAKING
AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE
COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS
INVOLVED.
INVESTORS
SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISK OF THIS
INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
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Warrant
to Purchase for 2,000,000 Shares
of Common Stock
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LIMELIGHT
MEDIA GROUP, INC.
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June
30, 2005
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WARRANT
CERTIFICATE
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1.
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Issuance
of Warrant; Term.
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(a)
For
and
in consideration of good and valuable consideration, the receipt and sufficiency
of all of which are hereby acknowledged, Limelight Media Group, Inc. (the
"Company") hereby grants to Xxxx Xxxxxx ("Holder") the right to purchase one
million (2,000,000) shares of the Company's Common Stock, $.001 par value per
share (the "Common Stock").
(b)
The
shares of Common Stock issuable upon exercise of this Warrant are hereinafter
referred to as the "Shares." This Warrant shall be exercisable at any time
and
from time to time from the date hereof until this Warrant expires at 5:00 P.M.
Eastern time on July 1, 2008.
2.
Exercise
Price.
The
exercise price (the "Exercise Price") per share for which all or any of the
Shares may be purchased pursuant to the terms of this Warrant shall be Zero
Dollars and 05/100ths ($0.05)
3.
Exercise.
This
Warrant may be exercised by the Holder hereof (but only on the conditions
hereafter set forth) as to all or any increment or increments of ten (10) Shares
(or the balance of the Shares if less than that number), upon delivery of
written notice of intent to exercise to the Company at the following address:
0000 Xxxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, XX 00000, Attention: President,
or
any other address as the Company shall designate in a written notice to the
Holder hereof, together with this Warrant and payment to the Company of the
aggregate Exercise Price of the Shares so purchased. The Exercise Price shall
be
payable by certified or bank check. Upon exercise of this Warrant, the Company
shall as promptly as practicable, and in any event within fifteen (15) days
thereafter, execute and deliver to the Holder of this Warrant a certificate
or
certificates for the total number of whole Shares for which this Warrant is
being exercised in the names and denominations as are requested by the Holder.
If this Warrant shall be exercised with respect to less than all of the Shares,
the Holder shall be entitled to receive a new Warrant covering the number of
Shares in respect of which this Warrant shall not have been exercised, which
new
Warrant shall in all other respects be identical to this Warrant. The Company
covenants and agrees that it will pay when due any and all state and federal
issue taxes which may be payable in respect of the issuance of this Warrant
or
the issuance of any Shares upon exercise of this Warrant.
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4.
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Covenants
and Conditions.
The above provisions are subject to the
following:
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(a)
Neither
this Warrant nor the Shares have been registered under the Securities Act of
1933, as amended ("Securities Act"), or any state securities laws ("Blue Sky
Laws"). This Warrant has been acquired for investment purposes and not with
a
view to distribution or resale and may not be pledged, hypothecated, sold,
made
subject to a security interest, or otherwise transferred without (i) an
effective registration statement for the Warrant under the Securities Act and
all applicable Blue Sky Laws, or (ii) an opinion of counsel, which opinion
and
counsel shall be reasonably satisfactory to the Company and its counsel, that
registration is not required under the Securities Act or under any applicable
Blue Sky Laws (the Company hereby acknowledges that Xxxxx Xxxxxxx Xxxxxxx and
Xxxxx, LLP is acceptable counsel). Transfer of Shares issued upon the exercise
of this Warrant shall be restricted in the same manner and to the same extent
as
the Warrant, and the certificates representing the Shares shall, subject to
Section 6 hereof, bear substantially the following legend:
The
securities represented by this certificate have been issued in reliance upon
the
representation of the Holder that they have been acquired for investment and
not
with a view toward the resale or other distribution thereof, and have not been
registered under the Securities Act of 1933 (the "Federal Act") or the
securities laws of any state in reliance upon the exemptions from registration
contained therein, and may not be offered, sold, transferred, encumbered or
otherwise disposed of unless there is an effective registration statement under
the Federal Act and applicable state securities laws relating thereto or the
Company is satisfied registration is not required.
The
Holder hereof and the Company agree to execute all other documents and
instruments as counsel for the Company reasonably deems necessary to effect
the
compliance of the issuance of this Warrant and any shares of Common Stock issued
upon exercise hereof with applicable federal and state securities
laws.
(b)
The
Company covenants and agrees that all Shares which may be issued upon exercise
of this Warrant will, upon issuance and payment therefor, be legally and validly
issued and outstanding, fully paid and nonassessable, free from all taxes,
liens, charges and preemptive rights, if any, with respect thereto or to the
issuance thereof. The Company shall at all times reserve and keep available
for
issuance upon the exercise of this Warrant that number of authorized but
unissued shares of Common Stock as will be sufficient to permit the exercise
in
full of this Warrant.
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5.
Adjustment
of Exercise Price and Number of Shares Issuable.
The
Exercise Price and the number of Shares (or other securities or property)
issuable upon exercise of this Warrant shall be subject to adjustment from
time
to time upon the occurrence of any of the events enumerated in this Section
5.
(a)
Common
Stock Reorganization.
If the
Company shall (i) subdivide or consolidate its outstanding shares of Common
Stock (or any class thereof) into a greater or smaller number of shares, (ii)
pay a dividend or make a distribution on its Common Stock (or any class thereof)
in shares of its capital stock, or (iii) issue by reclassification of its Common
Stock (or any class thereof) any shares of its capital stock (any event
described in clauses (i), (ii) or (iii) being called a "Common Stock
Reorganization"), then the Exercise Price and the type of securities for which
this Warrant is exercisable shall be adjusted immediately so that the Holder
thereafter shall be entitled to receive upon exercise of this Warrant the
aggregate number and type of securities that it would have received if this
Warrant had been exercised immediately prior to the Common Stock
Reorganization.
(b)
Adjustment
in Number of Shares.
Upon
each adjustment to the Exercise Price pursuant to subsections (a) of this
Section 5, this Warrant shall thereafter evidence the right to receive upon
payment of the adjusted Exercise Price that number of Shares obtained by
multiplying the number of Shares previously issuable upon exercise of this
Warrant by a fraction, the numerator of which is the Exercise Price prior to
adjustment and the denominator of which is the adjusted Exercise Price.
(c)
Capital
Reorganizations.
If
there shall be any consolidation, merger or amalgamation of the Company with
another person or entity or any acquisition of capital stock of the Company
by
means of a share exchange, other than a consolidation, merger or share exchange
in which the Company is the continuing corporation or any sale or conveyance
of
the property of the Company as an entirety or substantially as an entirety,
or
any reorganization or recapitalization of the Company (a "Capital
Reorganization"), then the Holder of this Warrant shall no longer have the
right
to purchase Common Stock, but shall have instead the right to purchase, upon
exercise of this Warrant, the kind and amount of shares of stock and other
securities and property (including cash) which the Holder would have owned
or
have been entitled to receive pursuant to the Capital Reorganization if this
Warrant had been exercised immediately prior to the effective date of the
Capital Reorganization. As a condition to effecting any Capital Reorganization,
the Company or the successor or surviving corporation, as the case may be,
shall
assume by a supplemental agreement, satisfactory in form, scope and substance
to
the Holder (which shall be mailed or delivered to the Holder of this Warrant
at
the last address of the Holder appearing on the books of the Company) the
obligation to deliver to the Holder shares of stock, securities, cash or
property as, in accordance with the foregoing provisions, the Holder may be
entitled to purchase, and all other obligations of the Company set forth in
this
Warrant.
(d)
Determination
of Fair Market Value.
Subject
to the provisions set forth below, the fair market value of the Company or
of
any non-cash consideration received by the Company upon any Common Stock
Distribution shall be determined in good faith by the Board of Directors of
the
Company. Upon each determination, the Company shall promptly give notice thereof
to the Holder, setting forth in reasonable detail the calculation of the fair
market value and the method and basis of determination thereof (the "Company
Determination"). If the Holder shall disagree with the Company Determination
and
shall, by notice to the Company given within thirty (30) days after the
Company's notice of the Company Determination, elect to dispute the Company
Determination, the Company shall, within thirty (30) days after receipt of
the
notice, engage an investment bank or other qualified appraisal firm acceptable
to the Holder to make an independent determination of the fair market value
of
the Company or of any non-cash consideration received by the Company upon any
Common Stock Distribution (the "Appraiser Determination"). The Appraiser
Determination shall be final and binding on the Company and the Holder. The
cost
of the Appraiser Determination shall be borne by the Company.
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(e)
Adjustment
Rules.
Any
adjustments pursuant to this Section 5 shall be made successively whenever
an
event referred to herein shall occur. No adjustment shall be made pursuant
to
this Section 5 in respect of the issuance from time to time of shares of Common
Stock upon the exercise of this Warrant or upon the exercise or conversion
of
any other Option Securities or Convertible Securities.
(f)
Proceedings
Prior to Any Action Requiring Adjustment.
As a
condition precedent to the taking of any action which would require an
adjustment pursuant to this Section 5, the Company shall take any action which
may be necessary, including obtaining regulatory approvals or exemptions, in
order that the Company may thereafter validly and legally issue as fully paid
and nonassessable all shares of Common Stock which the Holder of this Warrant
is
entitled to receive upon exercise thereof.
(g)
Notice
of Adjustment.
Not
less than ten (10) days prior to the record date or effective date, as the
case
may be, of any action which requires or might require an adjustment or
readjustment pursuant to this Section 5, the Company shall give notice to the
Holder of the event, describing the event in reasonable detail and specifying
the record date or effective date, as the case may be, and, if determinable,
the
required adjustment and the computation hereof. If the required adjustment
is
not determinable at the time of the notice, the Company shall give notice to
the
Holder of the adjustment and computation promptly after the adjustment becomes
determinable.
6.
Transfer
of Warrant.
Subject
to the provisions of Section 4 hereof, this Warrant may be transferred, in
whole
or in part, to any person or business entity, by presentation of the Warrant
to
the Company with written instructions for the transfer. Upon the presentation
for transfer, the Company shall promptly execute and deliver a new Warrant
or
Warrants in the form hereof in the name of the assignee or assignees and in
the
denominations specified in the instructions. The Company shall pay all expenses
incurred by it in connection with the preparation, issuance and delivery of
Warrants under this Section. Any transferee of this Warrant by acceptance
thereof, agrees to be bound by all of the terms and conditions of this
Warrant.
7.
Warrant
Holder Not Shareholder; Rights Offering; Preemptive Rights.
Except
as otherwise provided herein, this Warrant does not confer upon the Holder
any
right whatsoever as a shareholder of the Company. Notwithstanding the foregoing,
if the Company should offer to all of the Company's shareholders the right
to
purchase any securities of the Company, then all shares of Common Stock that
are
subject to this Warrant shall be deemed to be outstanding and owned by the
Holder and the Holder shall be entitled to participate in the offer. The Company
shall not grant any preemptive rights with respect to any of its capital stock
if the preemptive rights are exercisable upon exercise of this
Warrant.
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8.
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Basic
Financial Information.
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The
Company will deliver to Holder:
(a)
As
soon
as practicable after the end of each fiscal year of the Company, and in any
event within ninety (90) days thereafter, a consolidated balance sheet of the
Company as at the end of such fiscal year, and consolidated statements of
operations, cash flow and changes in equity of the Company for such year,
prepared in accordance with GAAP consistently applied and setting forth in
each
case in comparative form the figures for the previous fiscal year, all in
reasonable detail and audited and reported on by independent public accountants
of recognized national standing selected by the Company.
(b)
From
the
date the Company becomes subject to the reporting requirements of the Exchange
Act, and in lieu of the financial information required pursuant to Section
8(a),
copies of its annual reports and all exhibits thereto and its quarterly reports,
if any, respectively,
(c)
As
soon
as practicable after transmission or occurrence and in any event within ten
(10)
days thereof, copies of any financial reports or communications (exclusive
of
reports or communications relating to the practice of medicine) delivered to
any
class of the Company's security Holders or broadly to the financial community,
including any filings by the Company with any securities exchange, the
Commission or the National Association of Securities Dealers.
(d)
with
reasonable promptness, any other financial data as the Holder may reasonably
request.
9.
Lost,
Stolen, Mutilated or Destroyed Warrant.
If this
Warrant is lost, stolen, mutilated or destroyed, the Company may, on such terms
as to indemnity or otherwise as it may in its discretion reasonably impose
(which shall, in the case of a mutilated Warrant, include the surrender
thereof), issue a new Warrant of like denomination and tenor as the Warrant
so
lost, stolen, mutilated or destroyed. Any such new Warrant shall represent
the
original contractual obligation of the Company, whether or not the allegedly
lost, stolen, mutilated or destroyed Warrant shall be at any time enforceable
by
anyone.
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10.
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Certain
Notices.
In case at any time the Company shall propose
to:
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(a)
declare
any cash dividend upon its Common Stock;
(b)
declare
any dividend upon its Common Stock payable in stock or make any special dividend
or other distribution to the Holders of its Common Stock;
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(c)
offer
for
subscription to the Holders of any of its Common Stock any additional shares
of
stock in any class or other rights;
(d)
reorganize,
or reclassify the capital stock of the Company, or consolidate, merge or
otherwise combine with, or sell all or substantially all of its assets to,
another corporation; or
(e)
voluntarily
or involuntarily dissolve, liquidate or wind up of the affairs of the
Company;
then
in
any one or more of these events, the Company shall give to the Holder, by
certified or registered mail, (i) at least twenty (20) days' prior written
notice of the date on which the books of the Company shall close or a record
shall be taken for the dividend, distribution or subscription rights or for
determining rights to vote in respect of any reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up, and (ii)
in
the case of the reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding up, at least twenty (20) days' prior written
notice of the date when the same shall take place. Any notice required by clause
(i) shall also specify, in the case of any dividend, distribution or
subscription rights, the date on which the Holders of Common Stock shall be
entitled thereto, and any notice required by clause (ii) shall specify the
date
on which the Holders of Common Stock shall be entitled to exchange their Common
Stock for securities or other property deliverable upon the reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up, as the case may be.
10.
Redemption.
This
Warrant shall be redeemable by the Company at $0.05 per share remaining subject
hereto after 20 business days' written notice if the price of the Common Stock
closes above $0.50 for 20 consecutive trading days and provided that the Company
then has in effect an effective registration statement with respect to the
shares of Common Stock issuable upon exercises of this Warrant.
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IN
WITNESS WHEREOF,
the
parties hereto have executed this Warrant as of the date first above
written.
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LIMELIGHT
MEDIA GROUP, INC.
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By:
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/s/Xxxxx Xxxx | ||
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Name:
Xxxxx Xxxx
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Title:
President
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