EXHIBIT 10(f)
Date: February 1, 2000
Purchase Point Media Corp.
2832 Bellevue Ave.,
West Vancouver, BC., V7V 1E8
Dear Sirs:
The undersigned (the "Subscriber") has hereby subscribed for Five
Hundred (500) units of Purchase Point Media Corp., (the "Company"), a Minnesota
Corporation in a private sale of certain units (the "Units") each consisting of
one thousand shares at $1.00 per share of common stock and one redeemable common
stock purchase warrant (the "Warrants") issued by the Company, as set out and
described in the Warrant Agreement dated February 1, 2000 (the "Warrant
Agreement"). The undersigned hereby certifies and agrees on behalf of the
Subscriber:
1. If the Subscriber is other than an individual, the Subscriber is
duly organized, validly existing and in good standing under the laws of the
jurisdiction in which it was formed and is authorized to invest in the Units
being purchased hereby. The person executing this letter on behalf of the
Subscriber is duly authorized to do so on the Subscriber's behalf.
2. The Subscriber is acquiring the Units for its own account or for
accounts for which it exercises sole investment discretion and not with a view
to or for sale in connection with and distribution thereof, subject nevertheless
to any requirement of law that the disposition of the Subscriber's property
shall at all times be and remain within its control.
3. The Subscriber has received a Business Plan, relating to the
Company. The Subscriber has reviewed and understands the material to which a
reference is made in this paragraph 3 and understands that substantial risks are
involved in an investment in the Units. The Subscriber represents that in making
its investment decision to acquire the Units, the Subscriber has not relied on
representations, warranties, opinions, projections, financial or other
information or analyses, if any, supplied to it by any person, the Company or
any of its affiliates, except as expressly contained in the Business Plan. The
Subscriber has had an opportunity, within a reasonable period of time prior to
purchasing the Units to ask questions concerning the Units and has received
satisfactory answers to such questions.
4. The Subscriber has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of an
investment in the Units and the Subscriber (or any account referred to above) is
able to bear the economic risks of such an investment.
5. The Subscriber is an "accredited investor" as defined in Rule 501
promulgated pursuant to the Securities Act of 1933, as amended (the "Securities
Act"), and all applicable state securities laws.
6. The Subscriber will comply with all applicable federal and state
securities laws, rules and regulations in connection with any subsequent resale
of the Unites by the Subscriber.
7. The Subscriber understands that the Units have not been and will not
be registered under the Securities Act or any state securities act or any other
federal or state laws, that the Company is not required so to register the
Units, and that the Units may be resold only if registered pursuant to the
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provisions of the Securities Act, and other applicable federal and state
securities laws, or if an exemption from any requirement of registration is
available.
8. The Subscriber is not an employee benefit plan, trust or account,
including an individual retirement account, subject to Section 406 of the
Employee Retirement Income Security Act of 1974, as amended or subject to
Section 4975 of the Internal Revenue Code of 1986, as amended, or comparable
provisions of any subsequent enactment (any such plan, trust or account being
referred to as a "Plan"), a trustee of any Plan, or any entity whose underlying
assets include the assets of any Plan by reason of such Plan's investment in the
entity.
9. Before the Subscriber sells all or any part of the Units, the
Subscriber will (i) obtain from each subscriber of Units an investment letter
containing the same representations, warranties and agreements contained in
paragraphs 1 through 8 above and in this paragraph 9, and (ii) if requested by
the Company, deliver an opinion of counsel, satisfactory in form and substance
to the Company, to the effect that such sale is in compliance with the
Securities Act and all other applicable federal and state securities laws.
10. The Subscriber shall have one hundred eighty (180) days from the
date first above written to provide the Company with the proceeds of the
subscription fund unless extend an additional ninety (180) days of the Company
(the Subscription period). At the end of the Subscription period the Company
will issue to the Subscriber, a stock and Warrant Certificate representing those
Units that have been fully paid for.
11. Subscriber acknowledges that compliance with the requirements of
paragraph 9 and 10 is a condition to registration of the transfer of the Units
on the books of the Company.
Very truly yours,
Quadrant Financial Inc.
-----------------------
By: Lucilliller
--------------------------------
Name: Lucille OEI
------------------------------
Title: MANAGER
-----------------------------
_500 UNITS ___________________
Number of Units Subscribed
page two of two
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WARRANT AGREEMENT
THIS WARRANT AGREEMENT, dated as of the 1st day of February, 2000, is
executed by PURCHASE POINT MEDIA CORP., a Minnesota corporation (the "Company")
and Quadrant Financial Inc., a Bahamas Corporation (the Warrant Holder).
W I T N E S S E T H:
WHEREAS, the Company has intends to privately offer and sell a maximum
of 500 unregistered warrants, each to purchase 1,000 shares of the Company's
common stock, with no par value per share ("Shares"), and
WHEREAS, the Company desires to provide for the issuance of
certificates representing the warrants ("Warrants"), and
WHEREAS, the Company desires to act as Warrant Agent in connection with
the issuance, registration, transfer and exchange of Warrants and the exercise
of the Warrants.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth and for the purpose of defining the terms and
provisions of the Warrants and the respective rights and obligations hereunder
of the Company, the holders of Warrants, and the parties hereto agree as
follows:
SECTION 1
DEFINITIONS
In addition to those terms defined above, as used herein, the following
terms shall have the following meanings, unless the context shall otherwise
require:
"CORPORATE OFFICE"
The office of the Warrant Agent (or its successor) at which its
principal business shall be administered in the office of the Company located,
as of the date hereof, at 2832 Bellevue Ave., West Vancouver, BC., V7V 1E8.
"EXERCISE DATE"
As to any Warrant, the date on which the Warrant Agent shall have
received both (i) the Warrant Certificate representing such Warrant, with the
exercise form therefor duly executed by the Registered Holder thereof or his
duly authorized attorney (in writing), and (ii) payment in cash or by check made
payable to the Company, of an amount in lawful money of the United States of
America equal to the applicable Purchase Price.
"EXPIRATION DATE"
The Expiration Date of the Warrants shall be 5:00 p.m. (Eastern
Standard Time) on the earlier of (i) the date which is the last day of the five
year period commencing on the Initial Warrant Exercise Date, or (ii) such later
date as the Company may at its option determine.
If such Expiration Date shall be a holiday in the State of Minnesota or
shall be a day on which banks are authorized to close in Minnesota, then
Expiration Date shall mean 5:00 p.m. (Minnesota time)
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on the next following day that in the State of Minnesota is not a holiday or a
day on which banks are authorized to close.
"INITIAL WARRANT EXERCISE DATE"
9:00 o'clock a.m. on the day following the closing of the private
offering of Units of the Company by the Company. If such Initial Warrant
Exercise Date shall be a holiday in the State of Minnesota or shall be a date on
which banks are authorized to close in Minnesota, then Initial Warrant Exercise
Date shall mean 9:00 o'clock a.m. (Minnesota time) on the next following day
that in the State of Minnesota is not a holiday or a day on which banks are
authorized to close.
"PURCHASE PRICE"
The purchase price upon exercise of the Warrants is $1.00 per share.
"REGISTERED HOLDER"
The person in whose name any certificate representing Warrants shall be
registered on the books maintained by the Warrant Agent pursuant to Section 6.
"SHARES"
The shares of the Company's common stock, have no par value per share
(the "Common Stock"), issuable upon exercise of the Warrants.
"STOCK"
The shares of the Company's capital stock of any class, whether now or
thereafter authorized, that has the right to participate in the distribution of
earnings and assets of the Company without limit as to amount or percentage.
SECTION 2
WARRANTS AND ISSUANCE OF WARRANTS
2.1. WARRANT
Each Warrant shall entitle the Registered Holder of the Warrant
representing such Warrant to purchase one Thousand shares of Common Stock.
2.2. EXECUTION OF WARRANTS
Upon execution of this Agreement, Warrants representing an aggregate of
_______ Warrants shall be executed by the Company and delivered to the
Purchasers of Warrants. After certificates representing an aggregate of _______
Warrants shall have been duly executed and delivered by the Company (or by the
Transfer Agent or Warrant Agent, if one then be acting) and upon written order
of the Company signed by its President and by its Secretary, additional Warrants
shall be countersigned, issued and delivered by the Company to the Transfer
Agent or Warrant Agent then acting.
2.3. DELIVERY OF ADDITIONAL WARRANTS
From time to time, up to the Expiration Date, the Company (or the
Transfer Agent if then acting) shall countersign and deliver stock certificates
in required whole number denominations upon the exercise of Warrants in
accordance with this Agreement. From time to time, up to the Expiration Date,
the Warrant Agent shall sign and deliver Warrants in required whole number
denominations to the persons entitled thereto in connection with any transfer or
exchange permitted under this Agreement. No Warrants shall be issued except (i)
those initially issued hereunder, (ii) those issued on or after the Initial
Warrant Exercise Date, upon the exercise of any Warrants pursuant to Section 4,
to evidence any
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unexercised Warrants held by the exercising Registered Holder, (iii) those
issued upon any transfer or exchange pursuant to Section 6, and (iv) those
issued pursuant to Section 7.
SECTION 3
FORM AND EXECUTION OF WARRANT CERTIFICATES
3.1 FORM OF WARRANTS
The Warrants shall be substantially in the form annexed hereto as
Exhibit "A" respectively (the provisions of which are hereby incorporated
herein) and may have such letters, numbers, or other marks of identification or
designation and such legends, summaries, or endorsements printed, lithographed,
or engraved thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange on which the Warrants may be
listed, or to conform to usage. The Warrants shall be dated the date of issuance
thereof (whether upon initial issuance, transfer, exchange or in lieu of
mutilated, lost, stolen or destroyed Warrants). The Warrants shall be numbered
serially.
3.2. VALIDITY OF SIGNATURES
Warrants shall be executed on behalf of the Company by its President
and by its Secretary, by manual signatures or by facsimile signatures printed
thereon, and shall have imprinted thereon a facsimile of the Company's seal.
Warrants shall be manually countersigned by the Warrant Agent, if the Warrant
Agent is other than the Company, and shall not be valid for any purpose unless
so countersigned. In case any officer of the Company who signed a Warrant ceases
to be such officer of the Company before issuance of such Warrant, or before
countersignature by the Warrant Agent, if the Warrant Agent is other than the
Company, and issuance and delivery thereof, such Warrant may nevertheless be
countersigned by the Warrant Agent, if the Warrant Agent is other than the
Company, and issued and delivered with the same force and effect as though the
person who signed such Warrant had not ceased to be such officer of the Company.
SECTION 4
EXERCISE
4.1. EXERCISE PROCEDURES
Each Warrant may be exercised at any time on or after the Initial
Warrant Exercise Date, but not after the Expiration Date, as appropriate, upon
the terms and subject to the conditions set forth herein and in the applicable
Warrant. A Warrant shall be deemed to have been exercised immediately prior to
the close of business on the Exercise Date, and the person entitled to receive
the securities deliverable upon such exercise shall be treated for all purposes
as the holder thereof with respect to such number of Shares as shall equal the
aggregate number of full Shares issuable upon such exercise. As soon as
practicable on or after the Exercise Date, and in conformity with usual
practices respecting such conduct, the Warrant Agent (on behalf of the Company)
shall cause to be issued and delivered to the person or persons entitled to
receive the same a certificate or certificates for the securities deliverable
upon such exercise. Upon the exercise of any Warrant, the Warrant Agent shall
promptly notify the Company in writing of such fact and of the number of
securities delivered upon such exercise, and shall deposit promptly in the
Company's bank account upon receipt therefor the dollar amount equal to the
Purchase Price multiplied by the number of Shares for which notice of exercise
has been received.
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4.2. NO FRACTIONAL SHARES
Notwithstanding that the number of Shares purchasable upon the exercise
of a Warrant is adjusted pursuant to Section 8 of this Agreement, the Company
shall nonetheless not be required to issue fractions of Shares upon exercise of
the Warrants or to distribute Shares certificates that evidence fractional
Shares. In lieu of fractional Shares, there shall be returned to exercising
registered holders of the Warrants upon such exercise an amount in cash, in
United States dollars, equal to the amount in excess of that required to
purchase the largest number of full Shares.
The Holder of a Warrant by the acceptance thereof expressly waives his
right to receive any fractional Warrant or any fractional shares upon exercise
of a Warrant.
4.3. PARTIAL EXERCISE
In case the registered holder of any Warrant shall exercise fewer than
all of the Warrants evidenced thereby, a new Warrant evidencing Warrants
equivalent to the Warrants remaining unexercised shall be issued by the Warrant
Agent to the registered holder of such Warrant to or his duly authorized assign,
subject to the provisions of this Agreement.
SECTION 5
RESERVATION OF SHARES; LISTING; PAYMENT OF TAXES
5.1. RESERVATION OF SHARES
The Company covenants that it will at all times reserve and keep
available out of its authorized Shares, solely for the purpose of issuance upon
exercise of Warrants, such number of Shares as shall then be issuable upon the
exercise of all outstanding Warrants. The Company covenants that all Shares that
shall be issuable upon exercise of the Warrants shall be duly and validly
issued, fully paid and nonassessable and free from all taxes, liens, and charges
with respect to the issue thereof, and that upon issuance the Company shall use
its best efforts to cause such shares to be included for trading in the NASDAQ
System or to be listed on each national securities exchange, if any, on which
the Company's other outstanding Shares are then listed.
5.2. GOVERNMENTAL APPROVALS
If the Shares reserved under this Section require qualification or
registration with or approval of any governmental authority, federal or state,
before such securities may be validly issued or delivered pursuant to such
exercise, the Company covenants that it will, in good faith, endeavor to secure
such registration or qualification or approval; provided, however, that the
Company shall not be required to issue Shares to any person, pursuant to
exercise of the Warrants, who shall be resident in any state in which such
exercise would be unlawful or if such qualification, registration or approval
shall require the Company to file a general consent of service of process or
qualify to do business as a foreign corporation in such state.
5.3. PAYMENT OF TAXES
The Company shall pay all documentary, stamp, or ??????? and other
governmental charges that may be imposed with respect to the issuance of
Warrants or the issuance or delivery of any Shares upon exercise of the
Warrants, provided, however, that if Shares are to be delivered in a name other
than the name of the Registered Holder of the Warrant representing any Warrant
being exercised, then no such delivery shall be made unless the person
requesting the same ??????? to the Warrant Agent the amount of transfer taxes or
charges incident thereto, if any.
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5.4. REQUISITION OF SHARES
The Warrant Agent is hereby irrevocably authorized by the Company to
requisition, from time to time, certificates representing Shares required to be
delivered upon exercise of the Warrants.
SECTION 6
EXCHANGE AND REGISTRATION OF TRANSFER
6.1. EXCHANGES AND TRANSFERS
Warrants may be exchanged for other Warrants representing an equal
aggregate number of Warrants or may be transferred, in whole or in part, under
the terms of this Agreement. Warrants to be exchanged shall be surrendered to
the Warrant Agent at its Corporate Office, and the Company shall execute and the
Warrant Agent shall countersign, issue and deliver in exchange therefor the
Warrant or Warrants that the Registered Holder making the exchange shall be
entitled to receive.
6.2. BOOKS AND RECORDS
The Warrant Agent shall keep at such office books and records in which
it shall register Warrants and the transfer thereof. Upon due presentment at
such office of any Warrant for registration of transfer, the Company shall
execute and the Warrant Agent shall issue and deliver to the transferee(s) a new
Warrant or Warrants representing an equal aggregate number of Warrants.
6.3. PROCEDURES OF TRANSFERS, ETC.
With respect to all Warrants presented for registration of transfer, or
for exchange or exercise, the subscription form on the reverse thereof shall be
duly endorsed, or be accompanied by a written instrument or instruments of
transfer and subscription, in form satisfactory to the Company and the Warrant
Agent. Such documentation shall be duly executed by the Registered Holder or his
duly authorized attorney.
The Company may require payment by the holders of Warrants of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with exchange or registration of transfer of Warrants.
All Warrants so surrendered for exchange or transfer shall be promptly
canceled by the Warrant Agent in accordance with previous instructions
pertaining to the Company's Shares.
6.4. REGISTERED HOLDERS
Prior to due presentment for registration of transfer, the Company and
the Warrant Agent may deem and treat the Registered Holder of any Warrant as the
absolute owner thereof and of each Warrant represented thereby, for all purposes
(notwithstanding any notations of ownership or writing thereon made by anyone
other than the Company or the Warrant Agent), and shall not be affected by any
notice to the contrary.
SECTION 7
LOSS OR MUTILATION
Upon receipt by the Company and the Warrant Agent of satisfactory
evidence of the ownership of and the loss, theft, destruction, or mutilation of
any Warrant, and (i) in the case of loss, theft or destruction, upon receipt by
the Company and the Warrant Agent of indemnity satisfactory to them, or (ii) in
the case of mutilation, upon surrender and cancellation upon receipt of such
Warrant, the Company shall execute and the Warrant Agent shall countersign and
deliver in lieu thereof a new Warrant
5
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representing an equal aggregate number of warrants. Applicants for a substitute
Warrant shall comply with such other reasonable regulations and pay such other
reasonable charges as the Warrant Agent may prescribe.
SECTION 8
ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES DELIVERABLE
8.1. ADJUSTMENT EVENTS
The Exercise Price and the number of shares (and, in certain events,
the class or classes of capital stock of the Company) purchased upon the
exercise of each Warrant are each, respectively, subject to adjustment from time
to time as hereinafter provided prior to the expiration of any Warrant by its
exercise or by its terms, in case any one or more of the events and referred to
described below shall occur at any time or from time to time; that is to say, if
the Company shall:
(i) issue any shares of its Common Stock as a dividend or
subdivide its outstanding shares of Common Stock into a
greater number of shares,
then, in either of such cases, the then applicable purchase price per share of
the shares of Common Stock purchasable pursuant to each Warrant in effect at the
time of such action shall be proportionately reduced and the number of shares at
that time purchasable pursuant to each Warrant shall be proportionately
increased; or
(ii) combine its outstanding shares of Common Stock into a smaller
number of such shares,
then, in such case, the then applicable purchase price per share of the shares
of Common Stock purchasable pursuant to each Warrant in effect at the time of
such action shall be proportionately increased and the number of shares of
Common Stock at that time purchasable pursuant to each Warrant shall be
proportionately decreased; or
(iii) issue by reclassification of its shares of Common Stock any
shares of its capital stock,
then, as a condition of such recapitalization, lawful and adequate provision
shall be made whereby the holder of each Warrant shall have, immediately after
the effective date of any such reclassification, the right to purchase, upon the
basis and on the teens and conditions specified herein, in lieu of the shares of
Common Stock of the Company theretofore purchasable upon the exercise of each
Warrant, such shares of stock or other securities as may be issued or payable
with respect to or in exchange for the number of shares of Common Stock of the
Corporation theretofore purchasable upon the exercise of each Warrant, had such
recapitalization not taken place; and in any such event, the rights of the
Warrant holder to any adjustment in the number of Shares of Common Stock
purchasable upon the exercise of each Warrant, as hereinbefore provided, shall
continue and be preserved in respect of any stock or other securities which the
Warrant holder becomes entitled to purchase.
If after an adjustment the holder of a Warrant upon exercise of it may
receive shares of two or more classes of capital stock of the Company, the Board
of Directors shall in good faith determine the allocation of the adjusted
Exercise Price between or among the classes of capital stock. After such
allocation, that portion of the Exercise Price applicable to each share of each
such class of capital stock shall thereafter be subject to adjustment on terms
comparable to those applicable to Common Stock in
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this Agreement. Notwithstanding the allocation of the Exercise Price between or
among shares of capital stock as provided by this Section 8, a Warrant may only
be exercised in full by payment of the entire Exercise Price currently in
effect; or
(iv) merge or consolidate with or into another corporation or sell
or convey to another corporation, all or substantially all of
the Company's assets
then, as a condition of such consolidation, merger, sale or conveyance, the
Company, or such successor or purchasing corporation, as the case may be, shall
make lawful and adequate provision whereby the Registered Holder of each Warrant
then outstanding shall receive, on exercise of such Warrant, the kind and amount
of securities and property receivable upon such change, consolidation, merger,
sale or conveyance by a holder of the number of securities issuable upon
exercise of such Warrant immediately prior to such consolidation, merger, sale
or conveyance, and shall forthwith file at the Corporation Office of the Warrant
Agent a statement signed by its Chairman of the Board or President and by its
Secretary or an Assistant Secretary evidencing such provisions. Such provisions
shall include provision for adjustments that shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Section 8.
(v) take a record of the holders of its Common Stock for the
purpose of entitling them to purchase shares of its Common
Stock at a price per share more than 10% below the current
market price per share of its Common Stock (as defined below)
at the date of taking such record,
then, the number of shares of Common Stock purchasable pursuant to this Warrant
shall be adjusted by multiplying (a) the number of shares of Common Stock which
the holder hereof was entitled to receive immediately prior to such adjustment
(taking into account fractional interests to the nearest 1000th of a share) by
(b) a fraction, the numerator of which is the number of shares of the Common
Stock of the Corporation outstanding (excluding the shares owned by the
Corporation) immediately prior to the taking of such record plus the number of
additional shares offered for purchase, and the denominator of which is the
number of shares of Common Stock of the Corporation outstanding (excluding
shares owned by the Corporation) immediately prior to the taking of such record
plus the number of shares which the aggregate offering price of the total number
of additional shares so offered could purchase at such current market price and
the adjusted purchase price per share shall be that number determined by
multiplying (a) the adjusted purchase price per share in effect immediately
prior to the taking of such record by (b) a fraction, the numerator of which is
the number of shares purchasable hereunder immediately prior to taking of such
record and the denominator of which is the number of shares purchasable
hereunder immediately after the taking of such record.
(vi) reduce the exercise price of any or all classes of warrants,
then, as a condition of such reduction it shall be made
uniformly as to all warrants of that class then outstanding.
For the purpose hereof, the current market price per share of Common stock of
the Corporation at any date shall be deemed to be the average of the daily
closing prices for the thirty (30) consecutive business days commencing forty
five (45) business days before the day in question. The closing price for each
day shall be the last sale price, or, in case of no sales on such day, the
average, of the closing bid and asked prices, in either case as officially
quoted by any National Securities Exchange, or, if the Common Stock of the
Corporation is not listed or admitted to trading on any such Exchange, the
average of the highest bid and asked prices as reported in the sheets of the
National Association of Securities Dealers, Inc. for the over the counter market
in New York City, or if not so reported, the average of the highest bid and
asked prices as furnished by any New York Stock Exchange firm selected from time
to time by the Company for the purpose.
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8.2. CONDITIONS PRECEDENT
Before taking any action that would cause an adjustment increasing the
then par value of the Shares issuable upon exercise of the Warrants above the
Purchase Price, the Company shall have the right to take any corporate action
that may, in the opinion of its counsel, be necessary in order that the Company
may validly and legally issue fully paid and nonassessable Shares at such
adjusted Purchase Price except, however, the par value may not be increased to
amount in excess of $.50 per share.
Upon any adjustment of the Purchase Price required to be made pursuant
to this Section 8, within 30 days thereafter the Company shall (a) cause to be
filed with the Warrant Agent written notice thereof, which notice shall be
accompanied by a certificate of the Company's independent auditors, stating the
adjusted Purchase Price and the adjusted number of Shares purchasable or the
kind and amount of any securities or property purchasable upon exercise of a
Warrant, as the case may be, and setting forth in reasonable detail the method
of calculation and the facts upon which such calculation and the facts upon
which such calculation is based, which certificate shall be conclusive evidence
of the correctness of such adjustment, absent manifest error and (b) cause to be
mailed to each of the Registered Holders of the Warrant Certificates written
notice of such adjustment. Such notice may be given in advance and included as a
part of the notice required to be mailed pursuant hereto.
(i) In case at any time (a) the Company shall declare any dividend
upon its Shares payable otherwise than in cash or in Shares of
the Company; or (b) the Company shall offer for subscription
to the holders of its Shares any additional shares of stock of
any class or any other securities convertible into shares of
stock or any rights to subscribe thereto; or (c) there shall
be any capital reorganization or reclassification of the
capital stock of the Company, or a sale of all or
substantially all of the assets of the Company, or a
consolidation or merger of the Company with another
corporation (other than a merger in which the Company is the
continuing corporation, and which does not result in any
reclassification or change of the then outstanding Shares or
other capital stock issuable upon exercise of the Warrants
(other than a change in par value or a subdivision or
combination of such shares); or (d) there shall be a voluntary
or involuntary dissolution, liquidation or winding up of the
Company;
then, in any one or more of said cases, the Company shall cause to be mailed to
each of the Registered Holders of outstanding Warrants, at the earliest
practicable time (and in any event not less than 20 days before any record date
or other date set for definitive action), written notice of the date of which
the books of the Company shall close or a record shall be taken for such
dividend, distribution of, or grant of subscription rights, or such
reorganization, reclassification, sale, consolidation, merger, dissolution,
liquidation, or winding up shall take place, as the case may be. Such notice
shall also set forth such facts as shall indicate the effect of such action (to
the extent such effect may be known at the date of such notice) on the kind and
amount of shares of stock and other securities and property deliverable upon
exercise of the Warrants. Such notice shall also specify the date as of which
the record holders of the Shares shall participate in said dividend,
distribution, or subscription rights or shall be entitled to exchange their
shares for securities or other property deliverable upon such reorganization,
reclassification, sale, consolidation, merger, dissolution, liquidation or
winding up, as the case may be (on which date, in the event of voluntary or
involuntary dissolution, liquidation or winding up of the Company, the right to
exercise the Warrants shall terminate).
(ii) Without limiting the obligation of the Company to provide
notice to the Registered Holders of corporate actions
hereunder, it is agreed that failure of the Company to give
notice shall not invalidate such corporate action of the
Company.
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SECTION 9
REPRESENTATIONS, WARRANTIES AND COVENANTS
The Company hereby represents, warrants and covenants to the Registered
Holder of the Warrants as follows:
9.1. ALTERING RIGHTS OF STOCK
Company will not amend or repeal its Articles of Incorporation
("Articles") or bylaws in such a manner as to alter or change adversely the
preferences, rights, privileges or powers of, or restrictions provided for the
benefit of the class or series of Common stock, or increase or decrease the
number of authorized shares of such class or series.
9.2. NO DILUTION OR IMPAIRMENT
Company will not, by amendment of its Articles or through any
reorganization, consolidation, dissolution, sale or merger, or by any other
voluntary act or deed, avoid or seek to avoid the performance or observance of
any of the covenants, stipulations or conditions to be performed or observed by
Company, but will at all times in good faith assist in the carrying out of all
provision of the Warrants and the taking of all other action which may be
necessary or appropriate in order to protect the rights of the holder of the
Warrants against dilution or other impairment. Without limiting the generality
of the foregoing, Company agrees that it will not establish or increase the par
value of the shares of any Common Stock which are at the time issuable upon
exercise of the Warrant above the then prevailing Warrant Price hereunder and
that, before taking any action which would cause an adjustment reducing the
Warrant Price hereunder below the then par value, if any, of the shares of any
Common Stock issuable upon exercise hereof, Company will take any corporate
action which may, in the opinion of its counsel, be necessary in order that
Company may validly and legally issue fully paid and nonassessable shares of
such Common Stock at the Warrant Price as so adjusted.
9.3. CORPORATE POWER
Company has the corporate power and authority to execute, deliver and
perform this Agreement, and Company has the corporate power and authority to
execute, delivery and perform the Warrants and to issue, sell and deliver the
Warrants and, upon exercise of any of the Warrants, to issue and deliver the
shares of Common Stock issuable upon exercise of the Warrants.
9.4. AUTHORIZATION: BINDING EFFECT
The execution, delivery and performance by Company of this Agreement,
and the execution, delivery and performance by Company of the Warrants, the
issuance, sale and delivery of the Warrants, and the issuance and delivery of
the Common Stock upon exercise of the Warrants, have been duly authorized by all
requisite corporate action on the part of Company and do not violate any order
of any court or other agency of government, the Articles or bylaws of Company,
or any provision of any law applicable to Company, or any provision of any
indenture, agreement or other instrument to which Company is a party or by which
Company or any of their respective properties or assets is bound or affected, or
conflict with, result in a breach of or constitute (with or without notice or
lapse of time or both) a default under any such indenture, agreement or other
instrument, or result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon any of the properties or assets of
Company. Each of this Agreement and the Warrants has been duly executed and
delivered by
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Company as necessary, and each does or will constitutes the legal, valid and
binding obligation of Company enforceable in accordance with its terms (subject,
as to enforcement of remedies, to general principles of equity and to applicable
bankruptcy, reorganization, insolvency, moratorium and similar laws from time to
time in effect).
9.5. WARRANTS
The Common Stock shares have been duly reserved for issuance upon
exercise of the Warrants and, when so issued, will be duly authorized, validly
issued, fully paid and nonassessable shares of Common Stock. The issuance and
delivery of the Common Stock upon exercise of the Warrants will not be subject
to any preemptive rights of stockholders of Company or to any right of first
refusal or other similar right in favor of any person.
9.6. GOVERNMENTAL APPROVALS
Except for Filing Form D with respect to the issuance and sale of the
Warrants, which filing will be made promptly after the date hereof, no
registration or filing with, or consent or approval of, or other action by, any
federal, state or other governmental agency or instrumentality is or will be
necessary for the valid execution, delivery and performance of this Agreement,
the Warrants, or the issuance and delivery of the Warrants, or, upon exercise of
the Warrants or the issuance and delivery of the shares of Common Stock.
9.7. OFFERING OF THE WARRANTS
Neither Company nor any person or entity authorized or employed by
Company as agent, broker, dealer or otherwise in connection with the offering or
sale of the Warrants or any similar securities of Company has offered the
Warrants or any such securities for sale to, or solicited any offers to buy the
Warrants, or any similar securities of Company from, or otherwise approached or
negotiated with respect thereto with, any person or persons under circumstances
that have involved the use of any form of general advertising or solicitation as
such terms are used in Regulation D under the Securities Act of 1933, as amended
(the "33 Act") or under The Securities Act of the State of Nevada or the
applicable Blue Sky Laws of any other jurisdiction (collectively the "Securities
Laws"), and neither the Company nor any person action on its behalf has taken or
will take any action (including, without limitation, any offer, issuance or sale
of any security of Company whether to a subsequent investor or otherwise) under
circumstances which might require the integration of such security with the
offering of the Warrants, under the Securities Laws unavailable for the
offering, issuance or sale of the Warrants.
SECTION 10
INDEMNITY
Company shall indemnify and hold harmless each Registered Holder
(including any broker or dealer through whom such securities may be sold) and
each person, if any, who controls any such Registered Holder from and against
any and all losses, claims, damages, expenses or liabilities, joint and several,
to which they or any of them may become subject under the Securities Laws or
under any other statute or at common law or otherwise, and, except as
hereinafter provided, will reimburse each Registered Holder and each such
controlling person, if any, for any legal or other expenses reasonably incurred
by any of them in connection with investigating or defending any actions,
whether or not resulting in any liability, insofar as such losses, claims,
damages, expenses, liabilities or actions arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
registration statement, any preliminary prospectus or the final prospectus (or
the registration statement or prospectus as from time to time amended or
supplemented by Company) or arise out of or are based upon the omission or
alleged omission to state therein not misleading. Promptly after receipt by any
Registered Holder or any person controlling such Registered Holder of notice of
the commencement of any action in respect of which indemnity may be sought
against Company such Registered Holder will notify Company
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in writing of the commencement thereof, and, subject to the provisions
hereinafter stated, Company shall assume the defense of such action (including
the employment of counsel, who shall be counsel satisfactory such Registered
Holder or such controlling person, as the case may be, and the payment of legal
expenses) insofar as such action shall relate to any alleged liability in
respect of which indemnity may be sought against Company. Any Registered Holder
or any such controlling person shall have the right to employ separate counsel
in any such action and to participate in the defense thereof but the fees and
expenses of such separate counsel shall not be at the expense of Company unless
the employment of such counsel has been specifically authorized by Company,
which authorization shall be given whenever the party seeking indemnity has been
advised by its counsel that one or more legal defenses may be available to it
that are not available to Company or that for other reasons, separate
representation may be necessary, to avoid a conflict. Company shall not be
liable to indemnify any person for any settlement of any such action effected
without the consent of Company and Subscriber.
SECTION 11
BINDING EFFECT
The terms of the Warrants shall be binding upon and shall inure to the
benefit of any successors or assigns of Company and of the Registered Holder or
Registered Holders thereof and of the Common Stock issued or issuable upon the
exercise thereof.
SECTION 12
REDEMPTION
12.1. GENERAL.
At any time on or after the Initial Warrant Exercise Date the Company
may redeem the Warrants, at its option, upon thirty days' notice at a price of
$.001 per Warrant provided that the average closing bid price on the over the
counter market for the Common Stock for 10 consecutive trading days to the date
of notice of redemption shall have been $20.00 or higher.
12.2. NOTICE OF REDEMPTION
If the Company exercises its right to redeem the Warrants, it shall
mail a notice of redemption to Registered Holders of the Warrants proposed for
redemption, first class, postage prepaid, not later than thirty days before the
date fixed for redemption, at the holders' last addresses as shall appear on the
records of the Warrant Agent. Any notice mailed in the manner provided herein
shall be conclusively presumed to have been duly given whether or not the
Registered Holder receives such notice.
12.3. CONTENTS OF NOTICE
The notice of redemption shall specify the redemption price, date fixed
for redemption, the place where the Warrant shall be delivered, and the
redemption price shall be paid, and that the right to exercise the Warrant shall
terminate at 5:00 p.m. (Minnesota time) on the business day immediately
preceding the date fixed form redemption. The date fixed for the redemption of
the Warrants shall be the Redemption Date.
12.4. EFFECT OF REDEMPTION
Any right to exercise a Warrant shall terminate at 5:00 p.m. (Las Vegas
time) on the business day immediately preceding the Redemption Date. On and
after the Redemption Date, Holders of the Warrants shall have no further rights
except to receive, upon surrender of the Warrant, the redemption price of $.001,
without interest, per Warrant.
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SECTION 13
RIGHTS OF THE REGISTERED HOLDER
No registered holder shall, by virtue hereof, be entitled to any rights
of a shareholder in the company, either at law or equity. The rights of the
Registered Holder are limited to those expressed in the Warrant and are not
enforceable against the Company except to the extent set forth in this Agreement
and in the Warrant Certificates.
SECTION 14
MODIFICATION OF AGREEMENT
The Company, by supplemental agreement, may make any changes in this
Agreement (i) that they shall deem appropriate to cure any ambiguity or to
correct any defective or inconsistent provision or manifest mistake or error
herein contained; or (ii) that they may deem necessary or desirable and, in
either case, that shall not adversely affect the interests of the holders of
Warrant Certificates (this provision, for instance, shall permit the Purchase
Price to be decreased at the Company's option).
SECTION 15
NOTICES
All notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been made when delivered or
mailed, first-class postage prepaid, or delivered to a telegraph office for
transmission: (a) if to the Registered Holder of a Warrant Certificate, at the
address of such holder as shown on the registry books maintained by the Warrant
Agent; (b) if to the Company, at 2832 Bellevue Ave., West Vancouver, BC., V7V
1E8, or at such other address as may have been furnished to the Warrant Agent if
one then be acting, or to the Registered Holders in writing by the Company.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed,
as of the day and year first above written.
Attest:
PURCHASE POINT MEDIA CORP.
/s/ ILLEGIBLE By: /s/ ILLEGIBLE
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Manager, Quadrant Financial Inc. President
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