As filed with the Securities and Exchange Commission on December 27, 1999
Registration No. 333-78591
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Post Effective Amendment No.1
FORM SB-2
REGISTRATION STATEMENT
under the
SECURITIES ACT OF 1933
Streamedia Communications, Inc.
(Name of small business issuer in its character)
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Delaware 7375 22-3622272
(State or jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
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James Douglas Rupp
Streamedia Communications, Inc.
244 West 54th Street
New York, NY 10019
(212) 445-1700
(Address and telephone number of principal
executive offices and principal place of business)
James Douglas Rupp
Streamedia Communications, Inc.
244 West 54th Street
New York, NY 10019
(212) 445-1700
(Name, address and telephone number of agent for service)
Copies of all communications to:
Louis E. Taubman, Esq. Bruce A. Cheatham, Esq.
Kogan & Taubman, LLC Winstead Sechrest & Minick, P.C.
39 Broadway, Suite 2250 5400 Renaissance Tower
New York, NY 10019 1201 Elm Street
(212) 425-8200 Dallas, Texas 75270
(212) 482-8104 FAX (214) 745-5400
(214) 745-5390 FAX
Approximate date of proposed sale to public: As soon as practicable after the
effective date of the Registration Statement.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering.
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box.
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. [X] 333-78591
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EXPLANATORY NOTE
The sole purpose of this Post Effective Amendment No. 1 is to file, pursuant to
Rule 462(d) of the Securities Act of 1933, as amended, an exhibit not previously
included in this Registration Statement. None of the information in Part I of
this Registration Statement has changed since the last amendment.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. Indemnification of Directors and Officers.
Delaware General Corporation Law
Section 145(a) of the Delaware General Corporation Law (the "DGCL")
provides that a corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
Section 145(b) of the DGCL provides that a corporation may indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that he is
or was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper.
Section 145(c) of the DGCL provides that to the extent that a present
or former director, officer, employee or agent of a corporation has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in subsections (a) and (b) of Section 145, or in defense
of any claim, issue or matter therein, such person shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by such
person in connection therewith.
Section 145(d) of the DGCL provides that any indemnification under
subsections (a) and (b) of Section 145 (unless ordered by a court) shall be made
by the corporation only as authorized in the specific case upon a determination
that indemnification of the present or former director, officer, employee or
agent is proper in the circumstances because he has met the applicable standard
of conduct set forth in subsections (a) and (b) of Section 145. Such
determination shall be made, with respect to a person who is a director or
officer at the time of such determination, (1) by a majority vote of the
directors who are not parties to such action, suit or proceeding, even though
less than a quorum, or (2) by a committee of such directors designated by
majority vote of such directors, even though less than a quorum, or (3) if there
are no such directors, or if such directors so direct, by independent legal
counsel in a written opinion, or (4) by the stockholders.
Section 145(e) of the DGCL provides that expenses (including attorneys'
fees) incurred by an officer or director in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that such
person is not entitled to be indemnified by the corporation as authorized in
Section 145. Such expenses (including attorneys' fees) incurred by former
directors and officers or other employees and agents may be so paid upon such
terms and conditions, if any, as the corporation deems appropriate.
Item 25. Other Expenses of Issuance and Distribution
Estimated expenses in connection with the public offering by the Company of the
securities offered hereunder are as follows:
Securities and Exchange Commission Filing Fee $7,432
NASD Filing Fee* 7,000
NASDAQ Small Cap Market Application and Listing Fee* 20,000
Accounting Fees and Expenses* 40,000
Legal Fees and Expenses* 120,000
Printing* 40,000
Fees of Transfer Agent and Registrar* 5,000
Underwriters' Non-Accountable Expense Allowance 170,000
Miscellaneous* 15,568
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Total* $425,000
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* Estimated.
Item 26. Recent Sales of Unregistered Securities
On May 16, 1999, we sold 264,490 shares of common stock at $2.00 per
share pursuant to Rule 506 of Regulation D promulgated under the Securities Act
of 1933, as amended. The common stock was offered to a discreet group of
accredited investors without the benefit of general solicitation or advertising.
We raised $523,980 from this private placement in order to provide bridge
financing for this offering.
On August 24, 1999, we issued $1,815,000 of debt securities in the form
of promissory notes which bear interest at a rate of 10% per annum. The notes
were offered pursuant to Rule 506 of Regulation D only to accredited investors,
with no general solicitation or advertising. The notes were offered as a unit,
each unit consisting of a promissory note in the principal amount of $15,000 and
a warrant entitling the holder to purchase 9,000 shares of our common stock at a
price per share equal to the price per share of common stock offered to the
public pursuant to our initial public offering. The warrants will be exercisable
during the period beginning on the first anniversary of the closing of the IPO
and ending on the date five years following the date that the warrants were
issued. The holders of the warrants will have certain "piggyback" registration
rights with respect to the shares underlying the warrants. Specifically, the
holders will be entitled to include their shares if the Company files a
registration statement with Commission during the period beginning one year from
the closing of the IPO and ending two years after the closing of the IPO.
In October 1999, we granted 150,000 options to a consultant to provide
investor relations services to Streamedia. The options allowed the consultant to
acquire shares of our common stock at an exercise price equal to the IPO price
or $2.00 per share in the event that our common shares are not underwritten
through an IPO. In November 1999 we rescinded these options but have
contractually agreed with the consultant to reissue the options following the
completion of the offering. The consultant is not a 5% or greater shareholder,
officer or director of the Company.
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Item 27. Exhibits
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Exhibit No Item
Exhibit 1.1 Form of Amended Underwriting Agreement.(2)
Exhibit 1.2 Form of Underwriters' Warrant Agreement.(1)(2)
Exhibit 3.1 Certificate of Incorporation of the Registrant. (2)
Exhibit 3.2 Bylaws of the Registrant (2)
Exhibit 3.3 Amended to Bylaws of the Registrant (2)
Exhibit 4.1 Public Warrant Agreement (1)
Exhibit 5.1 Opinion of Kogan & Taubman, L.L.C..(2)
Exhibit 10.1 Employment Agreement between Streamedia and James D. Rupp (2)
Exhibit 10.2 Employment Agreement between Streamedia and Gayle Essary (2)
Exhibit 10.3 Employment Agreement between Streamedia and Nicholas J. Malino (2)
Exhibit 10.4 Indemnification Agreement between Streamedia and Directors (2)
Exhibit 10.5 Consulting Agreement between Streamedia and IC Enterprises (2).
Exhibit 10.6 Minutes amending Employment Agreements between Streamedia and Messrs. Rupp, Essary and
Malino.(2)
Exhibit 10.7 Employment Agreement between Streamedia and Walter C. Hollenberg(2)
Exhibit 10.8 Kaleidoscope Media Group, Inc.Agreement
Exhibit 23.1 Consent of Grant Thornton LLP, Independent Certified Public Accountants.(2)
Exhibit 23.2 Consent of Kogan & Taubman, L.L.P. is contained in the opinion filed as Exhibit 5.1 to
this registration statement.(2)
Exhibit 27 Financial Data Schedule (2)
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(1) Filed herewith
(2) Previously filed
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Item 28. Undertakings
The undersigned registrant hereby undertakes as follows:
(1) To provide to the Underwriters at the closing specified in the
Underwriting Agreement certificates in such denominations and
registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.
(2) For the purpose of determining any liability under the
Securities Act, treat each post-effective amendment that
contains a form of prospectus as a new registration statement
relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the
initial bona fide offering of those securities.
(3) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or
persons controlling the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised
that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy, as
expressed in the Act and is, therefore, unenforceable.
(4) In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
shares of the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
(5) For the purposes of determining any liability under the
Securities Act, the information omitted from the form of
prospectus filed as part of a registration statement in
reliance upon Rule 430A and contained in the form of
prospectus filed by the registrant pursuant to Rule 424(b)(1)
or (4) or 497(h) under the Securities Act shall be deemed to
be part of this Registration Statement as of the time it was
declared effective.
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SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorizes this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York on December 27, 1999.
Streamedia Communications, Inc.
By: /s/ Gayle Essary
Gayle Essary, Chairman of the Board
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below constitutes and appoints Gayle Essary and James Douglas
Rupp, and each for them, his true and lawful attorney-in-fact and agent, with
full power of substitution and re-substitution, for him and in his name, place
and stead, in any and all capacities (until revoked in writing), to sign any and
all further amendments to this Registration Statement (including post-effective
amendments), and to file same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
such attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in and about the premises, as fully to all intents and purposes as he might or
could do in person thereby ratifying and confirming all that said
attorneys-in-fact and agents, and each of them, or their substitutes may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
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Signature Title Date
/s/ Gayle Essary Chairman of the Board December 27, 1999
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Gayle Essary (Principal Executive Officer)
/s/ James Douglas Rupp President and CEO, Director December 27, 1999
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James Douglas Rupp (Principal Operating Officer)
/s/ Nicholas J. Malino Chief Financial Officer and Director December 27, 1999
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Nicholas J. Malino (Principal Financial Officer)
/s/ David J. Simonetti Director December 27, 1999
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David J. Simonetti
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UNDERWRITERS' WARRANT AGREEMENT
December __, 1999
INSTITUTIONAL EQUITY CORPORATION
8214 Westchester
Suite 500
Dallas, Texas 75225
CAPITAL WEST SECURITIES, INC.
One Leadership Square
Suite 200
211 North Robinson
Oklahoma City, Oklahoma 73102
Gentlemen:
Streamedia Communications, Inc., a Delaware corporation (the
"Company"), hereby agrees to sell to you, the co-lead underwriters, and you
hereby agree to purchase from the Company at a purchase price of $100.00, unit
purchase warrants (the "Underwriters' Warrants") covering 100,000 of the
Company's units (the "Units"), each Unit consisting of one share of the
Company's Common Stock and one Redeemable Common Stock Purchase Warrant (the
"Redeemable Warrants") issued in accordance with the terms of a warrant
agreement (the "Public Warrant Agreement") dated as of December __, 1999,
between the Company and American Stock Transfer & Trust Company, as warrant
agent (the "Warrant Agent"). The Underwriters' Warrants will be exercisable by
you as to all or any lesser number of Units covered thereby, at the Purchase
Price per Unit as defined below, at any time and from time to time on and after
the first anniversary of the date hereof and ending at 5:00 p.m. on the fifth
anniversary of the date hereof.
1. Definitions.
As used herein the following terms, unless the context otherwise
requires, shall have for all purposes hereof the following meanings:
The term "Common Stock" refers to all stock of any class or classes
(however designated) of the Company, now or hereafter authorized, the holders of
which shall have the right without limitation as to amount, either to all or to
a part of the balance of current dividends and liquidating dividends after the
payment of dividends and distributions on any shares entitled to preference, and
the holders of which shall ordinarily, in the absence of contingency, be
entitled to vote for the election of a majority of the directors of the Company
(even though the right so to vote has been suspended by the occurrence of such a
contingency).
The term "Underlying Common Stock" refers to the shares of Common Stock
(or Other Securities) issuable under this Agreement pursuant to the exercise, in
whole or in part, of the Redeemable Warrants or the Underwriters' Warrants.
The term "Other Securities" refers to any securities of the Company or
any other person (corporate or otherwise) which the holders of the Underwriters'
Warrants at any time shall be entitled to receive, or shall have received, upon
the exercise of the Underwriters' Warrants, in lieu of or in addition to Common
Stock and Redeemable Warrants, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock, Redeemable
Warrants or Other Securities pursuant to Section 7 below or otherwise.
The term "Registration Statement" refers, collectively, to the
Registration Statements relating to the registration of the Units, Common Stock
and Redeemable Warrants with the Securities and Exchange Commission (the
"Commission") pursuant to the Rules and Regulations of the Commission under the
Securities Act of 1933, as amended (the "Act").
The term "Purchase Price" refers to the purchase price of the Units
subject to this Agreement. The initial Purchase Price shall equal 135% of the
offering price per Unit as set forth in the Registration Statement.
The purchase and sale of the Underwriters' Warrants shall take place,
and the purchase price therefore shall be paid by delivery of your check,
simultaneously with the purchase of and payment for any Units of the Company as
provided in that certain Underwriting Agreement relating to the public offering
covered by the Registration Statement.
2. Representations and Warranties.
The Company represents and warrants to you as follows:
(a) Corporate Action. The Company has all requisite corporate power and
authority, and has taken all necessary corporate action, to execute and deliver
this Agreement, to issue and deliver the Underwriters' Warrants and certificates
evidencing same ("Underwriters' Warrant Certificates"), and to authorize and
reserve for issuance, and upon payment from time to time of the Purchase Price
to issue and deliver, the Units, including the Common Stock and the Redeemable
Warrants and shares of Common Stock underlying the Redeemable Warrants.
(b) No Violation. Neither the execution nor delivery of this Agreement,
the consummation of the actions herein contemplated nor compliance with the
terms and provisions hereof will conflict with, or result in a breach of, or
constitute a default or an event permitting acceleration under, any of the
terms, provisions or conditions of the Articles of Incorporation or Bylaws of
the Company or any indenture, mortgage, deed of trust, note, bank loan, credit
agreement, franchise, license, lease, permit, judgment, decree, order, statute,
rule or regulation or any other agreement, understanding or instrument to which
the Company is a party or by which it is bound.
3. Compliance with the Act.
(a) Transferability of Underwriters' Warrants. You agree that the
Underwriters' Warrants may not be transferred, sold, assigned or hypothecated
prior to the first anniversary date of the effective date of the Registration
Statement, except to (i) persons who are officers of you; (ii) a successor to
you in a merger or consolidation; (iii) a purchaser of all or substantially all
of your assets; (iv) your shareholders in the event you are liquidated or
dissolved; (v) participating broker-dealers; and (vi) persons who are partners
or officers of participating broker-dealers.
(b) Registration of Underlying Common Stock. The Underlying Common
Stock has not been registered for resale under the Act and no registration
rights have been granted to the Underwriters. You agree not to make any sale or
other disposition of the Underlying Common Stock except pursuant to a
registration statement which has become effective under the Act, setting forth
the terms of such offering, the underwriting discount and the commissions and
any other pertinent data with respect thereto, unless you have provided the
Company with an opinion of counsel reasonably acceptable to the Company that
such registration is not required.
4. Exercise of Underwriters' Warrants; Partial Exercise.
(a) Exercise in Full. Each Underwriters' Warrant may be exercised in
full by the holder thereof by surrender of the Underwriters' Warrant
Certificate, with the form of subscription at the end thereof duly executed by
such holder, to the Company at its principal office, accompanied by payment, in
cash or by certified or bank cashiers check payable to the order of the Company,
in the respective amount obtained by multiplying the number of Units represented
by the Underwriters' Warrant Certificate (after giving effect to any adjustment
therein as provided in Section 7 below) by the Purchase Price.
(b) Partial Exercise. Each Underwriters' Warrant may be exercised in
part by surrender of the Underwriters' Warrant Certificate in the manner and at
the place provided in Subsection 4(a) above, accompanied by payment, in cash or
by certified or bank cashiers check payable to the order of the Company, in the
respective amount obtained by multiplying the number of Units designated by the
holder in the form of subscription attached to the Underwriters' Warrant
Certificate by the Purchase Price (after giving effect to any adjustment therein
as provided in Section 7 below). Upon any such partial exercise, the Company at
its expense will forthwith issue and deliver to or upon the order of the
purchasing holder, a new Underwriters' Warrant Certificate or Certificates of
like tenor, in the name of the holder thereof or as such holder (upon payment by
such holder of any applicable transfer taxes) may request calling in the
aggregate for the purchase of the number of Units equal to the number of Units
called for on the face of the Underwriters' Warrant Certificate (after giving
effect to any adjustment therein as provided in Section 7 below) minus the
number of Units (after giving effect to such adjustment) designated by the
holder in the aforementioned form of subscription.
(c) Company to Reaffirm Obligations. The Company will, at the time of
any exercise of any Underwriters' Warrant, upon the request of the holder
thereof, acknowledge in writing its continuing obligation to afford to such
holder any rights to which such holder shall continue to be entitled after such
exercise in accordance with the provisions of this Agreement; provided, however,
that if the holder of an Underwriters' Warrant shall fail to make any such
request, such failure shall not affect the continuing obligation of the Company
to afford to such holder any such rights.
5. Redemption of Warrants.
All terms applicable to the redemption of the Redeemable Warrants
underlying the Underwriters' Warrants shall be identical to the redemption
provisions of the Redeemable Warrants set forth in the Public Warrant Agreement.
6. Delivery of Certificates, etc, on Exercise.
As soon as practicable after the exercise of any Underwriters' Warrant
in full or in part, and in any event within twenty days thereafter, the Company
at its expense (including the payment by it of any applicable issue taxes) will
cause to be issued in the name of and delivered to the purchasing holder
thereof, a certificate or certificates for the number of Units, Redeemable
Warrants and fully paid and nonassessable shares of the Underlying Common Stock
to which such holder shall be entitled upon such exercise, plus, in lieu of any
fractional share to which such holder would otherwise be entitled, cash in an
amount determined pursuant to Section 8(g), together with any Other Securities
and property (including cash, where applicable) to which such holder is entitled
upon such exercise pursuant to Section 7 below or otherwise.
7. Anti-dilution Provisions.
The Underwriters' Warrants are subject to the following terms and
conditions during the term thereof:
(a) Stock Distributions and Splits. In case (i) the outstanding shares
of the Common Stock (or Other Securities) shall be subdivided into a greater
number of shares or (ii) a dividend or other distribution in Common Stock (or
Other Securities) shall be paid in respect of Common Stock (or Other
Securities), the Purchase Price in effect immediately prior to such subdivision
or at the record date of such dividend or distribution shall simultaneously with
the effectiveness of such subdivision or immediately after the record date of
such dividend or distribution be proportionately reduced; and if outstanding
shares of Common Stock (or Other Securities) shall be combined into a smaller
number of shares thereof, the Purchase Price in effect immediately prior to such
combination shall simultaneously with the effectiveness of such combination be
proportionately increased. Any dividend or other distribution paid on the Common
Stock (or Other Securities) in stock or any other securities convertible into
shares of Common Stock (or Other Securities) shall be treated as a dividend paid
in Common Stock (or Other Securities) to the extent that shares of Common Stock
(or Other Securities) are issuable upon the conversion thereof.
(b) Adjustments. Whenever the Purchase Price is adjusted as provided in
Subsection 7(a) above, the number of shares of the Underlying Common Stock
purchasable upon exercise of the Underwriters' Warrants immediately prior to
such Purchase Price adjustment shall be adjusted, effective simultaneously with
such Purchase Price adjustment, to equal the product obtained (calculated to the
nearest full share) by multiplying such number of shares of the Underlying
Common Stock by a fraction, the numerator of which is the Purchase Price in
effect immediately prior to such Purchase Price adjustment and the denominator
of which is the Purchase Price in effect upon such Purchase Price adjustment,
which adjusted number of shares of the Underlying Common Stock shall thereupon
be the number of shares of the Underlying Common Stock purchasable upon exercise
of the Underwriters' Warrants until further adjusted as provided herein.
(c) Reorganizations, Mergers and Consolidations. In case the capital
stock of the Company shall be recapitalized including, without limitation, by
reclassifying its outstanding Common Stock (or Other Securities) into a stock
with a different par value or by changing its outstanding Common Stock (or Other
Securities) with par value to stock without par value, then, as a condition of
such recapitalization, lawful and adequate provision shall be made whereby each
holder of an Underwriters' Warrant shall thereafter have the right to purchase,
upon the terms and conditions specified herein, in lieu of the Units theretofore
purchasable upon the exercise of the Underwriters' Warrants, the kind and amount
of shares of stock or Other Securities receivable upon such recapitalization by
a holder of the number of shares of Common Stock (or Other Securities) which the
holder of an Underwriters' Warrant would have had the right to have purchased
immediately prior to such recapitalization. If any consolidation or merger of
the Company with another corporation, or the sale of all or substantially all of
its assets to another corporation, shall be effected in such a way that holders
of Common Stock shall be entitled to receive stock, securities or assets with
respect to or in exchange for Common Stock, then, as a condition of such
consolidation, merger or sale, lawful and adequate provision shall be made
whereby the holder hereof shall thereafter have the right to purchase and
receive upon the basis and upon the terms and conditions specified in this
Agreement and in lieu of the Units immediately theretofore purchasable and
receivable upon the exercise of the rights represented hereby, such shares of
stock, securities or assets as may be issued or payable with respect to or in
exchange for a number of outstanding shares of such Common Stock equal to the
number of shares of such stock immediately theretofore purchasable and
receivable upon the exercise of the rights represented hereby had such
consolidation, merger or sale not taken place, and in any such case, appropriate
provision shall be made with respect to the rights and interests of the holders
of Underwriters' Warrants to the end that the provisions hereof (including
without limitation provisions for adjustments of the Purchase Price and of the
number of shares purchasable and receivable upon the exercise of the
Underwriters' Warrants) shall thereafter be applicable, as nearly as may be, in
relation to any shares of stock, securities or assets thereafter deliverable
upon the exercise hereof (including an immediate adjustment, by reason of such
consolidation or merger, of the Purchase Price to the value for the Common Stock
reflected by the terms of such consolidation or merger if the value so reflected
is less than the Purchase Price in effect immediately prior to such
consolidation or merger). In the event of a merger or consolidation of the
Company with or into another corporation as a result of which a number of shares
of common stock of the surviving corporation greater or lesser than the number
of shares of Common Stock of the Company outstanding immediately prior to such
merger or consolidation are issuable to holders of Common Stock of the Company,
then the Purchase Price in effect immediately prior to such merger or
consolidation shall be adjusted in the same manner as though there were a
subdivision or combination of the outstanding shares of Common Stock of the
Company. The Company will not effect any such consolidation, merger or sale,
unless prior to the consummation thereof the successor corporation (if other
than the Company) resulting from such consolidation or merger or the corporation
purchasing such assets shall assume by written instrument executed and mailed or
delivered to the registered holder hereof at the last address of such holder
appearing on the books of the Company, the obligation to deliver to such holder
such shares of stock, securities or assets as, in accordance with the foregoing
provisions, such holder may be entitled to purchase.
(d) Effect of Dissolution or Liquidation. In case the Company shall
dissolve or liquidate all or substantially all of its assets, all rights under
this Agreement shall terminate as of the date upon which a certificate of
dissolution or liquidation shall be filed with the Secretary of the State of
Delaware (or, if the Company theretofore shall have been merged or consolidated
with a corporation incorporated under the laws of another state, the date upon
which action of equivalent effect shall have been taken); provided, however,
that (i) no dissolution or liquidation shall affect the rights under Subsection
7(c) of any holder of an Underwriters' Warrant and (ii) if the Company's Board
of Directors shall propose to dissolve or liquidate the Company, each holder of
an Underwriters' Warrant shall be given written notice of such proposal at the
earlier of (A) the time when the Company's shareholders are first given notice
of the proposal or (B) the time when notice to the Company's shareholders is
first required.
(e) Notice of Change of Purchase Price. Whenever the Purchase Price or
the kind or amount of securities purchasable under the Underwriters' Warrants
shall be adjusted pursuant to any of the provisions of this Agreement, the
Company shall forthwith thereafter cause to be sent to each holder of an
Underwriters' Warrant, a certificate setting forth the adjustments in the
Purchase Price and/or in such number of shares, and also setting forth in detail
the facts requiring such adjustments, including without limitation a statement
of the consideration received or deemed to have been received by the Company for
any additional shares of stock issued by it requiring such adjustment. In
addition, the Company at its expense shall within 90 days following the end of
each of its fiscal years during the term of this Agreement, and promptly upon
the reasonable request of any holder of an Underwriters' Warrant in connection
with the exercise from time to time of all or any portion of any Underwriters'
Warrant, cause independent certified public accountants of recognized standing
selected by the Company to compute any such adjustment in accordance with the
terms of the Underwriters' Warrants and prepare a certificate setting forth such
adjustment and showing in detail the facts upon which such adjustment is based.
(f) Notice of a Record Date. In the event of (i) any taking by the
Company of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend (other
than a cash dividend payable out of earned surplus of the Company) or other
distribution, or any right to subscribe for, purchase or otherwise acquire any
shares of stock of any class or any other securities or property, or to receive
any other right, (ii) any capital reorganization of the Company, or any
reclassification or recapitalization of the capital stock of the Company, or any
transfer of all or substantially all of the assets of the Company to, or
consolidation or merger of the Company with or into, any other person or (iii)
any voluntary or involuntary dissolution or liquidation of the Company, then and
in each such event the Company will mail or cause to be mailed to each holder of
an Underwriters' Warrant a notice specifying not only the date on which any such
record is to be taken for the purpose of such dividend, distribution or right
and stating the amount and character of such dividend, distribution or right,
but also the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up is to take place, and the time, if any, as of which the holders of
record of Common Stock (or Other Securities) shall be entitled to exchange their
shares of Common Stock (or Other Securities) for securities or other property
deliverable upon such reorganization, reclassification, recapitalization,
transfer, consolidation, merger, dissolution, liquidation or winding-up. Such
notice shall be mailed at least 20 days prior to the proposed record date
therein specified.
8. Further Covenants of the Company.
(a) Reservation of Stock. The Company shall at all times reserve and
keep available, solely for issuance and delivery upon the exercise of the
Underwriters' Warrants, all shares of the Underlying Common Stock from time to
time issuable upon the exercise of the Redeemable Warrants and the Underwriters'
Warrants and shall take all necessary actions to ensure that the par value per
share, if any, of the Underlying Common Stock is, at all times equal to or less
than the then effective Purchase Price.
(b) Title to Units. All Units and shares of the Underlying Common Stock
and Redeemable Warrants delivered upon the exercise of the Underwriters'
Warrants shall be validly issued, fully paid and nonassessable; each holder of
an Underwriters' Warrant shall receive good and marketable title to the Units
and Underlying Common Stock and Redeemable Warrants, free and clear of all
voting and other trust arrangements, liens, encumbrances, equities and claims
whatsoever; and the Company shall have paid all taxes, if any, in respect of the
issuance thereof.
(c) Listing on Securities Exchanges; Registration. If the Company at
any time shall list any Units, Underlying Common Stock or Redeemable Warrants on
any national securities exchange, the Company will, at its expense, use its best
reasonable efforts to simultaneously list on such exchange, upon official notice
of issuance upon the exercise of the Underwriters' Warrants, and maintain such
listing of, all Units, Redeemable Warrants and shares of the Underlying Common
Stock from time to time issuable upon the exercise of the Underwriters'
Warrants; and the Company will so list on any national securities exchange, will
so register and will maintain such listing of, any Other Securities if and at
the time that any securities of like class or similar type shall be listed on
such national securities exchange by the Company.
(d) Exchange of Underwriters' Warrants. Subject to Subsection 3(a)
hereof, upon surrender for exchange of any Underwriters' Warrant Certificate to
the Company, the Company at its expense will promptly issue and deliver to or
upon the order of the holder thereof a new Underwriters' Warrant Certificate or
Certificates of like tenor, in the name of such holder or as such holder (upon
payment by such holder of any applicable transfer taxes) may direct, calling in
the aggregate for the purchase of the number of shares of the Underlying Common
Stock called for on the face or faces of the Underwriters' Warrant Certificate
or Certificates so surrendered.
(e) Replacement of Underwriters' Warrants. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of any Underwriters' Warrant Certificate and, in the case of any such
loss, theft or destruction, upon delivery of an indemnity agreement reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, upon surrender and cancellation of such Underwriters' Warrant
Certificate, the Company, at the expense of the Underwriters' Warrant holder
will execute and deliver, in lieu thereof, a new Underwriters' Warrant
Certificate of like tenor.
(f) Reporting by the Company. The Company agrees that, if it files a
Registration Statement during the term of the Underwriters' Warrants, it will
use its best reasonable efforts to keep current in the filing of all forms and
other materials which it may be required to file with the appropriate regulatory
authority pursuant to the Securities Exchange Act of 1934, as amended, and all
other forms and reports required to be filed with any regulatory authority
having jurisdiction over the Company.
(g) Fractional Shares. No fractional shares of Underlying Common Stock
are to be issued upon the exercise of any Underwriters' Warrant, but the Company
shall pay a cash adjustment in respect of any fraction of a share which would
otherwise be issuable in an amount equal to the same fraction of the highest
market price per share of Underlying Common Stock on the day of exercise, as
determined by the Company.
9. Other Holders.
The Underwriters' Warrants are issued upon the following terms, to all
of which each holder or owner thereof by the taking thereof consents and agrees
as follows: (a) any person who shall become a transferee, within the limitations
on transfer imposed by Subsection 3(a) hereof, of an Underwriters' Warrant
properly endorsed shall take such Underwriters' Warrant subject to the
provisions of Subsection 3(a) hereof and thereupon shall be authorized to
represent himself as absolute owner thereof and, subject to the restrictions
contained in this Agreement, shall be empowered to transfer absolute title by
endorsement and delivery thereof to a permitted bona fide purchaser for value;
(b) each prior taker or owner waives and renounces all of his equities or rights
in such Underwriters' Warrant in favor of each such permitted bona fide
purchaser, and each such permitted bona fide purchaser shall acquire absolute
title thereto and to all rights presented thereby; (c) until such time as the
respective Underwriters' Warrant is transferred on the books of the Company, the
Company may treat the registered holder thereof as the absolute owner thereof
for all purposes, notwithstanding any notice to the contrary and (d) all
references to the word "you" in this Agreement shall be deemed to apply with
equal effect to any person to whom an Underwriters' Warrant Certificate or
Certificates have been transferred in accordance with the terms hereof, and
where appropriate, to any person holding Units, Redeemable Warrants or shares of
the Underlying Common Stock.
10. Miscellaneous.
All notices, certificates and other communications from or at the
request of the Company to the holder of any Underwriters' Warrant shall be
mailed by first class, registered or certified mail, postage prepaid, to such
address as may have been furnished to the Company in writing by such holder, or,
until an address is so furnished, to the address of the last holder of such
Underwriters' Warrant who has so furnished an address to the Company, except as
otherwise provided herein. This Agreement and any of the terms hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of such change, waiver, discharge
or termination is sought. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of Delaware. The headings
in this Agreement are for reference only and shall not limit or otherwise affect
any of the terms hereof. This Agreement, together with the forms of instruments
annexed hereto as Schedule A, constitutes the full and complete agreement of the
parties hereto with respect to the subject matter hereof.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed on this ____ day of December, 1999, by its proper corporate officers
thereunto duly authorized.
<PAGE>
UNDERWRITERS' WARRANT AGREEMENT - Page 1
The above Underwriters'
Warrant Agreement is confirmed this ____ day of December,
1999
INSTITUTIONAL EQUITY CORPORATION
By:
Name:
Title:
CAPITAL WEST SECURITIES, INC.
By:
Name:
Title:
<PAGE>
SCHEDULE A
STREAMEDIA COMMUNICATIONS, INC.
Unit Purchase Warrant
Certificate Evidencing Right to Purchase
__________ Units
This Warrant (the "Warrant") is to certify that ______________________
or assigns, is entitled to purchase at any time or from time to time after 9
A.M., Central Standard time, on _______________, 2000 and until 9 A.M., Central
Standard time, on _____________ __, 2004 up to the above referenced number of
Units consisting of one share of the Company's Common Stock (the "Shares") and
one Redeemable Common Stock Purchase Warrant (the "Redeemable Warrants"), of
Streamedia Communications, Inc., a Delaware corporation (the "Company"), for the
consideration specified in Section 1 of the Warrant Agreement (the
"Underwriters' Warrant Agreement") dated _______________, 1999 between the
Company and Redstone Securities, Inc. (the "Representative"), as representative
of the several underwriters listed in Schedule A, to that certain Underwriting
Agreement dated ________________, 1999 by and among the Company, the
Representative and certain Selling Shareholders of the Company, pursuant to
which this Warrant is issued. All rights of the holder of this Warrant
Certificate are subject to the terms and provisions of the Underwriters' Warrant
Agreement, copies of which are available for inspection at the office of the
Company.
The Units issuable upon the exercise of this Warrant have not been
registered under the Securities Act of 1933, as amended (the "Act"), and no
distribution of the Shares or Redeemable Warrants issuable upon exercise of this
Warrant may be made until the effectiveness of a registration statement under
the Act covering such Units. Transfer of this Warrant Certificate is restricted
as provided in Subsection 3(a) of the Underwriters' Warrant Agreement.
This Warrant has been issued to the registered owner in reliance upon
written representations necessary to ensure that this Warrant was issued in
accordance with an appropriate exemption from registration under any applicable
state and federal securities laws, rules and regulations. This Warrant may not
be sold, transferred, or assigned unless, in the opinion of the Company and its
legal counsel, such sale, transfer or assignment will not be in violation of the
Act, applicable rules and regulations of the Securities and Exchange Commission,
and any applicable state securities laws.
Subject to the provisions of the Act and of the Underwriters' Warrant
Agreement, this Warrant Certificate and all rights hereunder are transferable,
in whole or in part, at the offices of the Company, by the holder hereof in
person or by duly authorized attorney, upon surrender of this Warrant
Certificate, together with the Assignment hereof duly endorsed. Until transfer
of this Warrant Certificate on the books of the Company, the Company may treat
the registered holder hereof as the owner hereof for all purposes.
Any Units, Redeemable Warrants or Shares which are acquired pursuant to
the exercise of this Warrant shall be acquired in accordance with the
Underwriters' Warrant Agreement and certificates representing all securities so
acquired shall bear a restrictive legend reading substantially as follows:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR UNDER ANY APPLICABLE STATE LAW. THEY MAY NOT BE OFFERED FOR
SALE, SOLD, TRANSFERRED OR PLEDGED WITHOUT (1) REGISTRATION UNDER THE
SECURITIES ACT OF 1933 AND ANY APPLICABLE STATE LAW, OR (2) AN OPINION
OF COUNSEL (SATISFACTORY TO THE COMPANY) THAT REGISTRATION IS NOT
REQUIRED.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be executed on this ____ day of _____________, 1999, by its proper corporate
officer's thereunto duly authorized.
<PAGE>
STREAMEDIA COMMUNICATIONS, INC.
By:
Name:
Title:
Attest:
Name:
SUBSCRIPTION
(To be signed only upon exercise of Warrant)
To: Streamedia Communications, Inc.
The undersigned, the holder of the enclosed Warrant Certificate, hereby
irrevocably elects to exercise the purchase right represented by such Warrant
Certificate for, and to purchase thereunder, _________________*Units (as defined
in the Underwriters' Warrant Agreement to which the form of this Subscription
was attached) and herewith makes payment of $______________ therefor by cash,
certified check or official bank check, and requests that the certificate or
certificates for such shares be issued in the name of and delivered to the
undersigned.
Date:
Taxpayer ID No.:
(Signature must conform in all respects to name of holder as
specified on the face of the Warrant Certificate)
(Address)
*Insert the number of shares called for on the face of the Warrant
Certificate (or, in the case of a partial exercise, the portion thereof as to
which the Warrant is being exercised), in either case without making any
adjustment for additional Units or other securities or property or cash which,
pursuant to the adjustment provisions of the Warrant, may be deliverable upon
exercise.
<PAGE>
ASSIGNMENT
(To be signed only upon transfer of Warrant)
For value received, the undersigned hereby sells, assigns and transfers
unto _______________________________ the right represented by the enclosed
Warrant Certificate to purchase ________ Units with full power of substitution
in the premises.
The undersigned represents and warrants that the transfer, in whole in
or in part, of such right to purchase represented by the enclosed Warrant
Certificate is permitted by the terms of the Underwriters' Warrant Agreement
pursuant to which the enclosed Warrant has been issued, and the transferee
hereof, by his acceptance of this Assignment, represents and warrants that he is
familiar with the terms of such Underwriters' Warrant Agreement and agrees to be
bound by the terms thereof with the same force and effect as if a signatory
thereto.
Date:
Taxpayer ID No.:
Warrant Certificate No.:
(Signature must conform in all respects to name of holder as
specified on the face of the Warrant Certificate)
(Address)
Signed in the presence of:
WARRANT AGREEMENT
Streamedia Communications, Inc., a Delaware corporation (Company), and American
Securities Transfer & Trust, Inc. (AST), 12039 West Alameda Parkway, Suite Z-2,
Lakewood, Colorado 80228, a Colorado corporation (Warrant Agent), agree as
follows:
1. Purpose. The Company proposes to publicly offer and issue up
to 1,150,000 units (Units), each Unit consisting of (i) one
(1) share of the Company's $.001 par value common stock
(Shares) and (ii) one warrant permitting the purchase of one
(1) Share (Warrant).
2. Warrants. Each Warrant will entitle the registered holder of a
Warrant (Warrant Holder) to purchase from the Company one (1)
Shares at $12.75 per share (Exercise Price). A Warrant Holder
may exercise all or any number of Warrants resulting in the
purchase of a whole number of Shares.
3. Exercise Period. The Warrants may be exercised at any time
during the period commencing __________, 19____ and ending at
3:00 p.m., Denver Colorado time on __________, 19____
(Expiration Date) except as changed by Section 12 of this
Agreement. After the Expiration Date, any unexercised Warrants
will be void and all rights of Warrant Holders shall cease.
4. Non-Detachability. A Warrant Certificate may not be detached
from a Share certificate contained in a Unit until after
__________, 19____. Until such time a Warrant Certificate may
be split up, combined, exchanged or transferred on the books
of the Warrant Agent only together with a Share Certificate.
After __________, 19____, a Warrant Certificate may be split
up, combined, exchanged or transferred on the books of the
Warrant Agent.
5. Certificates. The Warrant Certificates shall be in registered form only
and shall be substantially in ------------ the form set forth in Exhibit A
attached to this Agreement. Warrant Certificates shall be signed by, ---------
or shall bear the facsimile signature of, the President or a Vice President of
the Company and the Secretary or an Assistant Secretary of the Company and shall
bear a facsimile of the Company's corporate seal. If any person, whose facsimile
signature has been placed upon any Warrant Certificate or the signature of an
officer of the Company, shall have ceased to be such officer before such Warrant
Certificate is countersigned, issued and delivered, such Warrant Certificate
shall be countersigned, issued and delivered with the same effect as if such
person had not ceased to be such officer. Any Warrant Certificate may be signed
by, or made to bear the facsimile signature of, any person who at the actual
date of the preparation of such Warrant Certificate shall be a proper officer of
the Company to sign such Warrant Certificate even though such person was not
such an officer upon
the date of the Agreement.
6. Countersigning. Warrant Certificates shall be manually
countersigned by the Warrant Agent and shall not be valid for
any purpose unless so countersigned. The Warrant Agent hereby
is authorized to countersign and deliver to, or in accordance
with the instructions of, any Warrant Holder any Warrant
Certificate which is properly issued.
<PAGE>
7. Registration of Transfer and Exchanges. Subject to the
provisions of Section 4, the Warrant Agent shall from time to
time register the transfer of any outstanding Warrant
Certificate upon records maintained by the Warrant Agent for
such purpose upon surrender of such Warrant Certificate to the
Warrant Agent for transfer, accompanied by appropriate
instruments of transfer in form satisfactory to the Company
and the Warrant Agent and duly executed by the Warrant Holder
or a duly authorized attorney. Upon any such registration of
transfer, a new Warrant Certificate shall be issued in the
name of and to the transferee and the surrendered Warrant
Certificate shall be cancelled.
8. Exercise of Warrants.
a. Any one Warrant or any multiple of one Warrant
evidenced by any Warrant Certificate may be exercised
upon any single occasion on or after the Exercise
Date, and on or before the Expiration Date. A Warrant
shall be exercised by the Warrant Holder by
surrendering to the Warrant Agent the Warrant
Certificate evidencing such Warrant with the exercise
form on the reverse of such Warrant Certificate duly
completed and executed and delivering to the Warrant
Agent, by good check or bank draft payable to the
order of the Company, the Exercise Price for each
Share to be purchased.
b. Upon receipt of a Warrant Certificate with the exercise form thereon duly
executed together with payment in full of the Exercise Price for the Shares for
which Warrants are then being exercised, the Warrant Agent shall requisition
from any transfer agent for the Shares, and upon receipt shall make delivery of,
certificates evidencing the total number of whole Shares for which Warrants are
then being exercised in such names and denominations as are required for
delivery to, or in accordance with the instructions of, the Warrant Holder. Such
certificates for the Shares shall be deemed to be issued, and the person whom
such Shares are issued of record shall be deemed to have become a holder of
record of such Shares, as of the date of the surrender of such Warrant
Certificate and payment of the Exercise Price, whichever shall last occur,
provided that if the books of the Company with respect to the Shares shall be
deemed to be issued, and the person to whom such Shares are issued of record
shall be deemed to have become a record holder of such Shares, as of the date on
which such books shall next be open (whether before, on or after the Expiration
Date) but at the Exercise Price, whichever shall have last occurred, to the
Warrant Agent.
c. If less than all the Warrants evidenced by a Warrant
Certificate are exercised upon a single occasion, a
new Warrant Certificate for the balance of the
Warrants not so exercised shall be issued and
delivered to, or in accordance with, transfer
instructions properly given by the Warrant Holder
until the Expiration Date.
d. All Warrant Certificates surrendered upon exercise of the
Warrants shall be cancelled.
e. Upon the exercise, or conversion of any Warrant, the
Warrant Agent shall promptly deposit the payment into
an escrow account established by mutual agreement of
the Company and the Warrant Agent at a federally
insured commercial bank. All funds deposited in the
escrow account will be disbursed on a weekly basis to
the Company once they have been determined by the
Warrant Agent to be collected funds. No interest will
be paid to the issuer on these funds. Once the funds
are determined to be collected, the Warrant Agent
shall cause the share certificate(s) representing the
exercised Warrants to be issued.
<PAGE>
f. Expenses incurred by American Securities Transfer &
Trust, Inc. while acting in the capacity as Warrant
Agent will be paid by the Company. These expenses,
including delivery of exercised share certificate to
the shareholder, will be deducted from the exercise
fee submitted prior to distribution of funds to the
Company. A detailed accounting statement relating to
the number of shares exercised, names of registered
Warrant Holder(s) and the net amount of exercised
funds remitted will be given to the Company with the
payment of each exercise amount.
g. At the time of exercise of the Warrant(s), the
transfer fee is to be paid by ____________________.
In the event the shareholder must pay the fee and
fails to remit same, the fee will be deducted from
the proceeds prior to distribution to the Company.
9. Taxes. The Company will pay all taxes attributable to the
initial issuance of Shares upon exercise of Warrants. The
Company shall not, however, be required to pay any tax which
may be payable in respect to any transfer involved in any
issue of Warrant Certificates or in the issue of any
certificates of Shares in the name other than that of the
Warrant Holder upon the exercise of any Warrant.
10. Mutilated or Missing Warrant Certificates. On receipt by the Company
and the Warrant Agent of --------------------------------------------- evidence
satisfactory as to the ownership of and the loss, theft, destruction or
mutilation of any Warrant Certificate, the Company shall execute and the Warrant
Agent shall countersign and deliver in lieu thereof, a new Warrant Certificate
representing an equal aggregate number of Warrants. In the case of loss, theft
or destruction of any Warrant Certificate, the Registered Owner requesting
issuance of a new Warrant Certificate shall be required to secure an indemnity
bond from an approved surety bonding company. In the event a Warrant Certificate
is mutilated, such Certificate shall be surrendered and canceled by the Warrant
Agent prior to delivery of a new Warrant Certificate. Applicants for a
substitute Warrant Certificate shall also comply with such other regulations and
pay such other reasonable charges as the Warrant Agent may prescribe.
11. Reservation of Shares. For the purpose of enabling the Company
to satisfy all obligations to issue Shares upon exercise of
Warrants, the Company will at all times reserve and keep
available free from preemptive rights, out of the aggregate of
its authorized but unissued shares, the full number of Shares
which may be issued upon the exercise of the Warrants will
upon issue be fully paid and nonassessable by the Company and
free from all taxes, liens, charges and security interests
with respect to the issue thereof.
12. Governmental Restrictions. If any Shares issuable upon the exercise of
Warrants require registration -------------------------- or approval of any
governmental authority, the Company will endeavor to secure such registration or
approval; provided that in no event shall such Shares be issued, and the Company
shall have the authority to suspend the exercise of all Warrants, until such
registration or approval shall have been obtained; but all Warrants, the
exercise of which is requested during any such suspension, shall be exercisable
at the Exercise Price. If any such period of suspension continues past the
Expiration Date, all Warrants, the exercise of which have been requested on or
prior to the Expiration Date, shall be exercisable upon the removal of such
suspension until the close of business on the business day immediately following
the expiration of such suspension.
13. Adjustments. If prior to the exercise of any Warrants, the Company
shall have effected one or more ----------- stock split-ups, stock dividends or
other increases or reductions of the number of shares of its $____ par value
common stock outstanding without receiving compensation therefore in money,
services or property, the number of shares of common stock subject to the
Warrant granted shall, (i) if a net increase shall have been effected in the
number of outstanding shares of the Company's common stock, be proportionately
increased, and the cash consideration payable per share shall be proportionately
reduced, and, (ii) if a net reduction shall have been effected in the number of
outstanding shares of the Company's common stock, be proportionately reduced and
the cash consideration payable per share be
proportionately increased.
14. Notice to Warrant Holders. Upon any adjustment as described in Section
13, the Company within 20 days -------------------------- thereafter shall (i)
cause to be filed with the Warrant Agent a certificate signed by a Company
officer setting forth the details of such adjustment, the method of calculation
and the facts upon which such calculation is based, which certificate shall be
conclusive evidence of the correctness of the matters set forth therein, and
(ii) cause written notice of such adjustments to be given to each Warrant Holder
as of the record date applicable to such adjustment. Also, if the Company
proposes to enter into any reorganization, reclassification, sale of
substantially all of its assets, consolidation, merger, dissolution, liquidation
or winding up, the Company shall give notice of such fact at least 20 days prior
to such action to all Warrant Holders which notice shall set forth such facts as
indicate the effect of such action (to the extent such effect may be known at
the date of such notice) on the Exercise Price and the kind and amount of the
shares or other securities and property deliverable upon exercise of the
Warrants. Without limiting the obligation of the Company hereunder to provide
notice to each Warrant Holder, failure of the Company to give notice shall not
invalidate any corporate action taken by the Company.
15. No Fractional Warrants or Shares. The Company shall not be
required to issue fractions of Warrants upon the reissue of
Warrants, any adjustments as described in Section 13 or
otherwise; but the Company in lieu of issuing any such
fractional interest, shall round up or down to the nearest
full Warrant. If the total Warrants surrendered by exercise
would result in the issuance of a fractional share, the
Company shall not be required to issue a fractional share but
rather the aggregate number of shares issuable will be rounded
up or down to the nearest full share.
16. Rights of Warrant Holders. No Warrant Holder, as such, shall
have any rights of a shareholder of the Company, either at law
or equity, and the rights of the Warrant Holders, as such, are
limited to those rights expressly provided in this Agreement
or in the Warrant Certificates. The Company and the Warrant
Agent may treat the registered Warrant Holder in respect of
any Warrant Certificates as the absolute owner thereof for all
purposes notwithstanding any notice to the contrary.
17. Warrant Agent. The Company hereby appoints the Warrant Agent
to act as the agent of the Company and the Warrant Agent
hereby accepts such appointment upon the following terms and
conditions by all of which the Company and every Warrant
Holder, by acceptance of his Warrants, shall be bound:
a. Statements contained in this Agreement and in the
Warrant Certificates shall be taken as statements of
the Company. The Warrant Agent assumes no
responsibility for the correctness of any of the same
except such as describes the Warrant Agent or for
action taken or to be taken by the Warrant Agent.
b. The Warrant Agent shall not be responsible for any
failure of the Company to comply with any of the
Company's covenants contained in this Agreement or in
the Warrant Certificates.
c. The Warrant Agent may consult at any time with
counsel satisfactory to it (who may be counsel for
the Company) and the Warrant Agent shall incur no
liability or responsibility to the Company or to any
Warrant Holder in respect of any action taken,
suffered or omitted by it hereunder in good faith and
in accordance with the opinion or the advice of such
counsel, provided the Warrant Agent shall have
exercised reasonable care in the selection and
continued employment of such counsel.
d. The Warrant Agent shall incur no liability or
responsibility to the Company or to any Warrant
Holder for any action taken in reliance upon any
notice, resolution, waiver, consent, order,
certificate or other paper, document or instrument
believed by it to be genuine and to have been signed,
sent or presented by the proper party or parties.
e. The Company agrees to pay to the Warrant Agent
reasonable compensation for all services rendered by
the Warrant Agent in the execution of this Agreement,
to reimburse the Warrant Agent for all expenses,
taxes and governmental charges and all other charges
of any kind or nature incurred by the Warrant Agent
in the execution of this Agreement and to indemnify
the Warrant Agent and save it harmless against any
and all liabilities, including judgments, costs and
counsel fees, for this Agreement except as a result
of the Warrant Agent's negligence or bad faith.
f. The Warrant Agent shall be under no obligation to institute any action, suit
or legal proceeding or to take any other action likely to involve expense unless
the Company or one or more Warrant Holders shall furnish the Warrant Agent with
reasonable security and indemnity for any costs and expenses which may be
incurred in connection with such action, suit or legal proceeding, but this
provision shall not affect the power of the Warrant Agent to take such action as
the Warrant Agent may consider proper, whether with or without any such security
or indemnity. All rights of action under this Agreement or under any of the
Warrants may be enforced by the Warrant Agent without the possession of any of
the Warrant Certificates or the production thereof at any trial or other
proceeding relative thereto, and any such action, suit or proceeding instituted
by the Warrant Agent shall be brought in its name as Warrant Agent, and any
recovery of judgement shall be for the ratable benefit of the Warrant Holders as
their respective rights or interest may appear.
g. The Warrant Agent and any shareholder, director, officer or employee of
the Warrant Agent may buy, sell or deal in any of the Warrants or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Warrant Agent
under this Agreement. Nothing herein shall preclude the Warrant Agent from
acting in any other capacity for the Company or for any other legal entity.
18. Successor Warrant Agent. Any corporation into which the Warrant Agent
may be merged or converted or ------------------------- with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Warrant Agent shall be a party, or any corporation
succeeding to the corporate trust business of the Warrant Agent, shall be the
successor to the Warrant Agent hereunder without the execution or filing of any
paper or any further act of a party or the parties hereto. In any such event or
if the name of the Warrant Agent is changed, the Warrant Agent or such successor
may adopt the countersignature of the original Warrant Agent and may countersign
such Warrant Certificates either in the name of the predecessor Warrant Agent or
in the name of the successor Warrant Agent.
19. Change of Warrant Agent. The Warrant Agent may resign or be discharged
by the Company from its duties ------------------------ under this Agreement by
the Warrant Agent or the Company, as the case may be, giving notice in writing
to the other, and by giving a date when such resignation or discharge shall take
effect, which notice shall be sent at least 30 days prior to the date so
specified. If the Warrant Agent shall resign, be discharged or shall otherwise
become incapable of acting, the Company shall appoint a successor to the Warrant
Agent. If the Company shall fail to make such appointment within a period of 30
days after it has been notified in writing of such resignation or incapacity by
the resigning or incapacitated Warrant Agent or by any Warrant Holder or after
discharging the Warrant Agent, then any Warrant Holder may apply to the District
Court for Denver County, Colorado, for the appointment of a successor to the
Warrant Agent. Pending appointment of a successor to the Warrant Agent, either
by the Company or by such Court, the duties of the Warrant Agent shall be
carried out by the Company. Any successor Warrant Agent, whether appointed by
the Company or by such Court, shall be a bank or a trust company, in good
standing, organized under the laws of the State of Colorado or of the United
States of America, having its principal office in Denver, Colorado and having at
the time of its appointment as Warrant Agent, a combined capital and surplus of
at least four million dollars. After appointment, the successor Warrant Agent
shall be vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Warrant Agent without further act or deed and
the former Warrant Agent shall deliver and transfer to the successor Warrant
Agent any property at the time held by it thereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for effecting the
delivery or transfer. Failure to give any notice provided for in the section,
however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Warrant Agent or the appointment of the successor
Warrant Agent, as the case may be.
20. Notices. Any notice or demand authorized by this Agreement to
be given or made by the Warrant Agent or by any Warrant Holder
to or on the Company shall be sufficiently given or made if
sent by mail, first class, certified or registered, postage
prepaid, addressed (until another address is filed in writing
by the Company with the Warrant Agent), as follows:
(Name and Address of Company)
Any notice or demand authorized by this Agreement to be given
or made by any Warrant Holder or by the Company to or on the
Warrant Agent shall be sufficiently given or made if sent by
mail, first class, certified or registered, postage prepaid,
addressed (until another address is filed in writing by the
Warrant Agent with the Company), as follows:
American Securities Transfer & Trust, Inc.
1825 Lawrence Street, Suite 444
Denver, CO 80202-1817
Any distribution, notice or demand required or authorized by
this Agreement to be given or made by the Company or the
Warrant Agent to or on the Warrant Holders shall be
sufficiently given or made if sent by mail, first class,
certified or registered, postage prepaid, addressed to the
Warrant Holders at their last known addresses as they shall
appear on the registration books for the Warrant Certificates
maintained by the Warrant Agent.
21. Supplements and Amendments. The Company and the Warrant Agent
may from time to time supplement or amend this Agreement
without the approval of any Warrant Holders in order to cure
any ambiguity or to correct or supplement any provision
contained herein which may be defective or inconsistent with
any other provisions herein, or to make any other provisions
in regard to matters or questions arising hereunder which the
Company and the Warrant Agent may deem necessary or desirable.
22. Successors. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Warrant Agent
shall bind and inure to the benefit of their respective
successors and assigns hereunder.
23. Termination. This Agreement shall terminate at the close of
business on the Expiration Date or such earlier date upon
which all Warrants have been exercised; provided, however,
that if exercise of the Warrants is suspended pursuant to
Section 12 and such suspension continues past the Expiration
Date, this Agreement shall terminate at the close of business
on the business day immediately following expiration of such
suspension. The provisions of Section 17 shall survive such
termination.
24. Governing Law. This Agreement and each Warrant Certificate
issued hereunder shall be deemed to be a contract made under
the laws of the State of Colorado and for all purposes shall
be construed in accordance with the laws of said State.
25. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give any person or corporation other than the
Company, the Warrant Agent and the Warrant Holders any legal
or equitable right, remedy or claim under this Agreement; but
this Agreement shall be for the sole and exclusive benefit of
the Company, the Warrant Agent and the Warrant Holders.
26. Counterparts. This Agreement may be executed in any number of
counterparts, each of such counterparts shall for all purposes
be deemed to be an original and all such counterparts shall
together constitute but one and the same instrument.
Date: ______________,____
(Name of Corporation)
a _____________ corporation
By:
SEAL
ATTEST:
Secretary:
American Securities Transfer & Trust, Inc. a Colorado corporation
By:
Vice President:
SEAL
ATTEST:
Secretary:
