EXHIBIT 10.22
FORM OF
PRIVATE PLACEMENT PURCHASE AGREEMENT
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April __, 1997
All-Comm Media Corporation
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
re: Purchase of Notes
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Gentlemen:
I. The undersigned ("Subscriber") has reviewed the filings which All-Comm Media
Corporation (the "Company") has made with the Securities Exchange Commission
during the past 12 months. The Company represents and warrants to the
Subscriber that all such filings are correct and accurate in all material
respects and in all material respects state all facts necessary to make such
filings not misleading. Subscriber has had the opportunity to discuss the
Company's affairs with the Company's officers.
II. Sale of Notes.
A. The Company hereby sells to Subscriber, and Subscriber hereby purchases
from the Company the principal amount of Convertible Notes ("Notes") set
forth opposite its name below. The purchase price for each Note is equal to
the principal amount thereof and is payable in cash concurrently with the
execution and delivery hereof.
B. The Notes are in the form of Exhibit A annexed hereto.
C. The term "Purchasers" as used herein means subscribers who in the
aggregate are on this day purchasing Notes in the aggregate principal
amount of $________ under agreements of the same tenor as this Agreement.
III. The Company shall forthwith pay to Xxxxxxx Trading Company a finders fee
equal to 7% of all cash amounts paid by Purchasers for the Notes.
IV. The prior written consent of the holders of a majority in interest of the
Notes shall be required before the Company effects any offering of securities
under Regulation D or Regulation S or under any other exemption from
registration requirements under the Securities Act of 1933. This paragraph
shall cease to be effective on the later to occur of December 31, 1997 or the
90th day after the effectiveness of the Registration Statement (as hereinafter
defined).
V. Registration.
A. The Company will file before the 30th day after the date of this
Agreement, a registration statement on Form S-3 (the "Registration
Statement") for the public sale by Subscriber of the shares which are
issuable on conversion of the Notes. The shares to be covered by the
Registration Statement are collectively referred to as the "registered
shares."
B. The Company shall use its diligent 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. The registration shall be
accompanied by blue sky clearances in such states as Subscriber may
reasonably request.
C. The Company shall pay all expenses of the registration hereunder, other
than Subscriber's underwriting discounts.
D. The Company shall supply to Subscriber a reasonable number of copies of
all registration materials and prospectuses. The Company and Subscriber
shall execute and deliver to each other indemnity agreements which are
conventional in registered offerings of this type. The Subscriber shall
reasonably cooperate with the Company in the preparation and filing of the
Registration Statement and appropriate amendments thereto.
E. Subscriber may transfer a proportionate part of its registration rights
to transferees of the Notes or portions thereof.
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VI. Certain Representations.
A. Subscriber represents and warrants that it is purchasing the Notes
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 Notes
or the shares issuable on conversion of the Notes 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 Notes are
not a liquid investment.
C. 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.
D. 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.
VII. 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.
VIII. This Agreement shall be governed by, and construed in accordance with, the
laws of the State of Nevada. The federal and state courts sitting in the State
of Nevada shall have exclusive jurisdiction over all matters relating to this
Agreement. Trial by jury is expressly waived.
IX. All notices, requests, service of process, consents, and other
communications under this Agreement shall be in writing and shall be deemed to
have been delivered (i) on the date personally delivered, or (ii) one day after
properly sent by Federal Express, addressed to the respective parties at their
address set forth in this Agreement, or (iii) upon being transmitted by
facsimile so long as a confirmation copy is simultaneously forwarded by Federal
Express, in each case addressed to the respective parties at their address set
forth in this Agreement. Either party hereto may designate a different address
by providing written notice of such new address to the other party hereto as
provided above.
X. Each party hereto shall be responsible for its own expenses with regard to
the negotiation and execution of this Agreement.
SUBSCRIBER:_____________________ AGREED:
Signature ALL-COMM MEDIA CORPORATION
type or print name:_____________
Address:________________________ By:_____________________________
Fax No._________________________ Title:
Social Security No:_____________
Principal Amount of Notes: $_____________
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EXHIBIT A
THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD, PLEDGED,
HYPOTHECATED, OR OTHERWISE TRANSFERRED, DISPOSED OF OR OFFERED FOR SALE, IN
WHOLE OR IN PART, IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER
THAT ACT COVERING THIS NOTE AND/OR THE COMMON STOCK ISSUABLE UPON CONVERSION
THEREOF, OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO ALL-COMM MEDIA
CORPORATION, THAT AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
$__________________
CONVERTIBLE NOTE
(the "Note")
ALL-COMM MEDIA CORPORATION
ALL-COMM MEDIA CORPORATION, a Nevada corporation (hereinafter called the
"Corporation"), for value received, hereby promises to pay to the order of
________________________ (hereinafter the "Holder") the principal sum of
$__________ on April 15, 1999, together with interest accruing at the rate of 6%
per annum and payable at maturity or, if earlier, upon conversion. Principal
and interest shall be payable at the address of the Holder.
I. This Note is one of a duly authorized issue of Convertible Notes of the
Corporation (designated herein as the "Notes"), and is being issued under
Private Placement Purchase Agreements of similar tenor between the Corporation
and the Holder (the "Subscription Agreement"). The Holders of the Notes are
referred to herein collectively as "Purchasers."
II. Conversion Rights.
A. The Holder shall have the right at any time or times prior to maturity,
in its sole discretion, to convert the principal amount of this Note and/or
the accrued interest thereon, in whole or in part, into a number of shares
(the "Conversion Shares") of the Corporation's common stock (the "Common
Stock" equal to the amount converted divided by the Conversion Price. The
Conversion Price means a price per share equal to the lesser of $2.50 per
share or 83% of the average closing bid price of the Common Stock during
the last five trading days prior to conversion.
B. The Note shall be convertible at any time only to the extent that Holder
would not as a result of such exercise beneficially own more that 4.99% of
the then outstanding Common Stock. Beneficial ownership shall be defined in
accordance with Rule 13d-3 under the Securities Exchange Act of 1934. The
opinion of counsel to Holder shall prevail in the event of any dispute on
the calculation of Holder's beneficial ownership.
C. In the event that the Holder elects to exercise its conversion rights
hereunder, it shall give to the Corporation written notice of such election
(which may be by fax) and shall surrender this Note to the Corporation for
cancellation against payment of interest accrued through the date of
conversion. Conversion shall be effective upon such notice provided that
the Note is surrendered within a reasonable time thereafter.
D. In the event that the Holder proposes to convert all or any portion of
the principal or interest of this Note at a time when the conversion price
would be less than $1.50, the Corporation shall at its option be entitled
to redeem all or any portion of the Note proposed to be converted. Such
option shall be exercisable by paying to the Holder, within three business
days after the date of such proposed conversion, 117% of the amount of
principal proposed to be converted and 117% of the amount of interest
proposed to be converted.
E. The Corporation shall at all times reserve and keep available out of its
authorized and unissued common shares, solely for issuance upon the
conversion of the Note as herein provided, such number of common shares as
shall from time to time be issuable upon the conversion of the Note.
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III. Adjustments to Conversion Rights.
A. In case the Corporation shall issue common stock as a dividend upon
common stock or in payment of a dividend thereon, shall subdivide the
number of outstanding shares of its common stock into a greater number of
shares or shall contract the number of outstanding shares of its common
stock into a lesser number of shares, the number of Conversion Shares to
which the Holder is entitled to receive pursuant to Section 2 shall be
adjusted, effective at the close of business on the date such common
shares are to be issued, so that the Conversion Shares shall be equal to
the product obtained by multiplying the Conversion Shares in effect
immediately prior to the close of business on such date by a fraction, the
denominator of which shall be the number of shares of common stock
outstanding immediately prior to such dividend, subdivision, or
contraction, and the numerator of which shall be the number of shares of
common stock outstanding immediately after such dividend, subdivision or
contraction.
B. If any capital reorganization or reclassification of the common stock,
or consolidation, or merger of the Corporation with or into another
corporation, or the sale or conveyance of all or substantially all of its
assets to another corporation shall be effected, then, as a condition
precedent of such reorganization or sale, the following provision shall be
made: The Holder of the Note shall from and after the date of such
reorganization or sale have the right to receive (in lieu of the shares of
common stock of the Corporation immediately theretofore receivable with
respect to such Note, upon the exercise of conversion rights), such shares
of stock, securities or assets as would have been issued or payable with
respect to or in exchange for the number of outstanding shares of such
common stock immediately theretofore receivable with respect to such Note.
In any such case, appropriate provision shall be made with respect to the
rights and interests of the Holders to the end that such conversion rights
(including, without limitation, provisions for appropriate adjustments)
shall thereafter be applicable, as nearly as may be practicable in
relation to any shares of stock, securities or assets thereafter
deliverable upon the exercise thereof.
IV. Registration Rights and Certain Remedies. The Subscription Agreements
provide for the filing by the Company of a registration statement for the sale
of the shares issuable on conversion of this Note. Notwithstanding anything to
the contrary set forth herein: if the registration statement hereinafter
referred to is not effective by the 110th day after the date hereof, then, in
addition to the Subscriber's other remedies:
A. the interest rate under the Notes shall be increased to 18% per annum
(or, if less, the highest rate permitted by law) until the registration
statement is declared effective, and
B. at Subscriber's option, the Notes shall not be repaid by the Company
and shall remain convertible and accrue interest, until such date as is
designated by Subscriber but not later than 180 days after the
effectiveness of the registration statement.
V. Purchase for Investment. The Holder, by acceptance hereof, acknowledges
that the Note (and the Common Stock into which the Note is convertible) has not
been registered under the Act, covenants and agrees with the Corporation that
such Holder is taking and holding this Note (and the Common Stock into which the
Note is convertible) for investment purposes and not with a view to, or for sale
in connection with, a distribution thereof and that this Note (and the Common
Stock into which the Note is convertible) may not be assigned, hypothecated or
otherwise disposed of in the absence of an effective registration statement
under the Act or an opinion of counsel for the Holder, which counsel shall be
reasonably satisfactory to the Corporation, to the effect that such disposition
is in compliance with the Act, and represents and warrants that such Holder is
an "accredited investor" that such Holder has, or with his representative has,
such knowledge and experience in financial and business matters to be capable of
evaluating the merits and risks in respect of this Note (and the Common Stock
into which the Note is convertible) and is able to bear the economic risk of
such investment.
VI. Events of Default and Acceleration of the Note.
An "event of default" with respect to this Note shall exist if any of the
following shall occur:
A. The Corporation shall breach or fail to comply with any provision of
this Note and such breach or failure shall continue for thirty (30) days
after written notice by any Holder of any Note to the Corporation.
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B. A receiver, liquidator or trustee of the Corporation or of a
substantial part of its properties shall be appointed by court order and
such order shall remain in effect for more than sixty (60) days; or the
Corporation shall be adjudicated bankrupt or insolvent; or a substantial
part of the property of the Corporation shall be sequestered by court
order and such order shall remain in effect for more than sixty (60) days;
or a petition to reorganize the Corporation under any bankruptcy,
reorganization or insolvency law shall be filed against the Corporation
and shall not be dismissed within sixty (60) days after such filing.
C. The Corporation shall file a petition in voluntary bankruptcy or
request reorganization under any provision of any bankruptcy,
reorganization or insolvency law, or shall consent to the filing of any
petition against it under any such law.
D. The Corporation shall make an assignment for the benefit of its
creditors, or admit in writing its inability to pay its debts generally as
they become due, or consent to the appointment of a receiver, trustee or
liquidator of the Corporation, or of all or any substantial part of its
properties.
If an event of default shall occur, the Holder may, in addition to such Holder's
other remedies, by written notice to the Corporation, declare the principal
amount of this Note, together with all interest accrued thereon, to be due and
payable immediately. Upon any such declaration, such amount shall become
immediately due and payable and the Holder shall have all such rights and
remedies provided for under the terms of this Note and the Stock Pledge
Agreement.
VII. Miscellaneous.
A. All notices and other communications required or permitted to be given
hereunder shall be in writing and shall be given (and shall be deemed to
have been duly given upon receipt) by delivery in person, by telegram,
recognized overnight mail carrier, telex or other standard form of
telecommunications, or by registered or certified mail, postage prepaid,
return receipt requested, addressed as follows: (a) if to the Holder, to
such address as such Holder shall furnish to the Corporation in accordance
with this Section, or (b) if to the Corporation, to it at its headquarters
office, or to such other address as the Corporation shall furnish to the
Holder in accordance with this Section.
B. THIS NOTE SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEVADA APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
ENTIRELY WITHIN SUCH STATE.
C. The Corporation waives protest, notice of protest, presentment,
dishonor, notice of dishonor and demand.
D. If any provision of this Note shall for any reason be held to be
invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provision hereof, but this Note shall be construed as if
such invalid or unenforceable provision had never been contained herein.
E. The waiver of any event of default or the failure of the Holder to
exercise any right or remedy to which it may be entitled shall not be
deemed a waiver of any subsequent event of default or of the Holder's
right to exercise that or any other right or remedy to which the Holder is
entitled.
F. The Holder of this Note shall be entitled to recover his legal and
other costs of collecting on this Note, and such costs shall be deemed
added to the principal amount of this Note.
G. In addition to all other remedies to which the Holder may be entitled
hereunder, Holder shall also be entitled to decrees of specific
performance without posting bond or other security.
IN WITNESS WHEREOF, the Corporation has caused this Note to be duly executed on
the date first written above.
ATTEST: ALL-COMM MEDIA CORPORATION .
______________________________ By: ________________________________
Name: Name:
Title: Title:
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