WARRANT AGREEMENT
WARRANT AGREEMENT dated as of June 30, 2001, between Uncommon Media
Group, Inc., a Florida corporation with an office located at 00 Xxxx 00xx
Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx (the "Company") and Grubman, Indursky &
Xxxxxxxxx, PC, a New York Professional Corporation Partnership with an office
located at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000 (together with any assigns
thereof, the "GIS").
WHEREAS, the Company proposes to issue to GIS a warrant (the "Warrant")
to purchase a certain number of common shares of the Company, par value $.001
per share (the "Common Stock") in consideration of the payment deferral of
certain accrued professional fees currently owed by the Company to GIS;
NOW, THEREFORE, in consideration of the agreements herein set forth and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. Grant. In consideration of an agreement to defer payment of certain
accrued professional fees currently owed by the Company, GIS is hereby granted
the right to purchase, at any time from and after the date hereof, until 5:00
P.M., EST, on June 29, 2006 up to 100,000 Shares, 50,000 of which shall be at an
initial exercise price of $1.00 per Share, 25,000 of which shall be at an
initial exercise price of $1.50 per Share, and 25,000 of which shall be at an
initial exercise price of $2.00 per Share. The Warrant granted pursuant hereto
shall be evidenced in a certain certificate annexed hereto as Exhibit A (the
"Warrant Certificate") in which all other terms and conditions associated with
the Warrant shall be expressly set forth.
2. Authorization. The Company has full corporate power and authority to
execute and deliver this Warrant Agreement and the Warrant Certificate annexed
hereto, and this Warrant Agreement and the Warrant Certificate, once executed
and delivered, constitutes the valid and legally binding obligation of the
Company, enforceable in accordance with its terms and conditions.
3. Governing Law. This Agreement shall be deemed to be a contract made
under the laws of the State of New York and for all purposes shall be construed
in accordance with the laws of the State of New York without regard to conflict
of laws.
4. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and such counterparts shall together constitute but one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
UNCOMMON MEDIA GROUP, INC. GRUBMAN, INDURSKY & XXXXXXXXX, PC
By:__________________________ By:__________________________
Name: Xxxxxxxx Xxxxx Name:
Title: President Title: Partner
1
THE SECURITIES REPRESENTED BY THIS WARRANT CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF (i) AN EFFECTIVE REGISTRATION
STATEMENT AS TO SUCH SECURITIES UNDER SAID ACT, (ii) AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY, OR NO-ACTION LETTER ISSUED BY THE SECURITIES AND
EXCHANGE COMMISSION, THAT SUCH REGISTRATION IS NOT REQUIRED, OR (Iiii) UNLESS
SOLD PURSUANT TO, AND IN COMPLIANCE WITH THE REQUIREMENTS OF, RULE 144 OF SUCH
ACT.
Uncommon Media Group, INC.
COMMON STOCK PURCHASE WARRANT
Void after 5:00 PM EST Right to Purchase 100,000
June 29, 2006 shares of Common Stock
(subject to adjustment)
No. W-0002
Uncommon Media Group, Inc. (the "Company"), a Florida corporation,
hereby certifies that, for value received, Holder (as hereinafter defined), is
entitled, subject to the terms set forth herein, to purchase from the Company at
any time or from time to time before 5:00 P.M. E.S.T., on June 29, 2006, fully
paid and nonassessable shares of Common Stock, $.001 par value, of the Company,
at the purchase price per share as set forth in Section 1 below. The number and
character of such shares of Common Stock and the Purchase Price (as hereinafter
defined) are subject to adjustment as provided herein.
This Warrant Certificate is the Common Stock Purchase Warrant (the
"Warrant"), evidencing the right to purchase shares of Common Stock of the
Company, issued pursuant to a certain Warrant Agreement (the "Agreement"), dated
as of June 30, 2001, between the Company and Grubman,Indursky & Xxxxxxxxx, PC or
its assigns (the "Holder"). This Warrant evidences a right to purchase an
aggregate of 100,000 shares of Common Stock of the Company, subject to
adjustment as provided herein.
As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
(a) The term "Company" includes, in addition to the Company
itself, any corporation which shall succeed to or assume the
obligations of the Company hereunder.
(b) The term "Common Stock" includes all stock of any class or
classes (however designated) of the Company, authorized on or after the
date hereof, the holders of which shall have the right, without
limitation as to amount, either to all or to a share 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 contingencies,
be entitled to vote for the election of a majority of directors of the
Company (even though the right so to vote has been suspended by the
happening of such a contingency).
2
(c) The term "Other Securities" refers to any stock (other
than Common Stock) and other securities of the Company or any other
Person (corporate or otherwise) which the holder of the Warrant at any
time shall be entitled to receive, or shall have received, on the
exercise of the Warrant, in lieu of or in addition to Common Stock, or
which at any time shall be issuable or shall have been issued in
exchange for or in replacement of Common Stock or Other Securities
pursuant to Section 6 or otherwise.
(d) The term "Person" shall have that meaning ascribed in the
Securities Act of 1933, as amended.
(e) The term "Shares" means the Common Stock of the Company
issued or issuable upon exercise of the Warrant.
1. Exercise of Warrant.
This Warrant, or any part hereof, is exercisable at a price (the "Purchase
Price") as follows:
* 50,000 Shares shall be at an initial exercise price of $1.00
per Share,
* 25,000 Shares shall be at an initial exercise price of $1.50
per Share, and
* 25,000 Shares shall be at an initial exercise price of $2.00
per Share,
in each case subject to adjustment as hereinafter provided. Upon delivery of
notice of intention to exercise all or any part of this Warrant, together with
payment of the Purchase Price for the Shares purchased at the Company's
principal offices, the Holder shall be entitled to receive a certificate or
certificates for the Shares so purchased in those denominations set forth in
such notice by Holder. Payment of the Purchase Price may be made, at the option
of the Holder: (a) by cash, money order, certified or bank cashier's check or
wire transfer, (b) the surrender to the Company of securities of the Company
having a value equal to the aggregate Purchase Price, as determined in good
faith by the Company's board of directors, or (c) the delivery of a notice to
the Company that the Holder is exercising this Warrant by authorizing the
Company to reduce the number of shares of Common Stock subject to this Warrant
by the number of shares having an aggregate value equal to the aggregate
Exercise Price. In the event of the exercise of less than all of the Shares
purchasable under this Warrant, the Company shall, at its expense, amend this
Warrant so as only to reduce the number of Shares to which it may thereafter be
exercised.
2. Adjustment of Purchase Price and Number of Shares.
2.1 (a) In case the Company shall (i) pay a dividend on its Common
Stock in Common Stock, (ii) subdivide its outstanding shares of Common Stock, or
(iii) combine its outstanding shares of Common Stock into a small number of
shares, then, in such an event, the Purchase Price in effect immediately prior
thereto shall be adjusted proportionately so that the adjusted Purchase Price
will bear the same relation to the Purchase Price in effect immediately prior to
any such event as the total number of shares of Common Stock outstanding
immediately prior to any such event shall bear to the total number of shares of
Common Stock outstanding immediately after such event. An adjustment made
pursuant to this subdivision (a), (i) shall become effective retroactively
immediately after the record date in the case of a dividend and (ii) shall
become effective immediately after the effective date in the case of a
subdivision or combination. The Purchase Price, as so adjusted, shall be
readjusted in the same manner upon the happening of any successive event or
events described herein.
3
(b) In case the Company shall distribute to holders of shares of Common
Stock Other Securities, evidences of its indebtedness or assets (excluding cash
dividends or distributions) or purchase rights, options or warrants to subscribe
for or purchase such Other Securities, evidences of indebtedness or assets, then
in each such case the Purchase Price in effect thereafter shall be determined by
multiplying the Purchase Price in effect immediately prior thereto by a
fraction, the numerator of which shall be the total number of then-outstanding
shares of Common Stock multiplied by the current market price per share of
Common Stock on the record date mentioned below, less the fair market value of
the Other Securities, assets or evidences of indebtedness so distributed or of
such rights, options or warrants as determined by the then current trading price
of such Other Securities, assets or evidences of indebtedness so distributed or
of such rights, options or warrants or, if there is no such active trading
market, in the good faith determination of the Board of Directors, and the
denominator of which shall be the total number of outstanding shares of Common
Stock multiplied by such current market price per share of Common Stock. Such
adjustment shall be made whenever any such distribution is made and shall become
effective retroactively immediately after the record date for the determination
of stockholders entitled to receive such distribution.
2.2. Upon each adjustment of the Purchase Price pursuant to subdivision
(a) of Subsection 2.1, the number of shares of Common Stock purchasable upon
exercise of this Warrant Certificate shall be adjusted to the number of shares
of Common Stock, calculated to the nearest one hundredth of a share, obtained by
multiplying the number of shares of Common Stock purchasable immediately prior
to such adjustment upon the exercise of this Warrant Certificate by the Purchase
Price in effect prior to such adjustment and dividing the product so obtained by
the new Purchase Price.
2.3 In case of any capital reorganization of the Company, or of any
reclassification of the Common Stock, this Warrant Certificate shall be
exercisable after such capital reorganization or reclassification upon the terms
and conditions specified in this Warrant Certificate, for the number of shares
of stock or other securities which the Common Stock issuable (at the time of
such capital reorganization or reclassification) upon exercise of this Warrant
Certificate would have been entitled to receive upon such capital reorganization
or reclassification if such exercise had taken place immediately prior to such
action. The subdivision or combination of shares of Common Stock at any time
outstanding into a greater or lesser number of shares of Common Stock shall not
be deemed to be a reclassification of the Common Stock of the Company for the
purposes of this Subsection 2.3.
2.4 The form of this Warrant Certificate need not be changed because of
any change in the Purchase Price pursuant to this Section 2 and any Warrant
Certificate issued after such change may state the same Purchase Price and the
same number of shares of Common Stock as are stated in this Warrant Certificate
as initially issued.
3. Adjustment for Reorganization, Consolidation, Merger, Etc.
3.1 Merger, Etc. In case at any time or from time to time after March
21, 2001, the Company shall (a) effect a reorganization, (b) consolidate with or
merge into any other Person, or (c) transfer all or substantially all of its
properties or assets to any other Person under any plan or arrangement
contemplating the dissolution of the Company within 24 months from the date of
such transfer (any such transaction being hereinafter sometimes referred to as a
4
"Reorganization") then, in each such case, the Holder, upon the exercise hereof
as provided in Section 1 at any time after the consummation or effective date of
such Reorganization (the "Effective Date"), shall receive, in lieu of the Shares
issuable on such exercise prior to such consummation or such effective date, the
stock and other securities and property (including cash) to which such Holder
would have been entitled upon such consummation or in connection with such
dissolution, as the case may be, if such holder had so exercised this Warrant
immediately prior thereto (all subject to further adjustment thereafter as
provided in Section 2, provided that the successor corporation in any such
Reorganization described in clause (b) or (c) above where the Company will not
be the surviving entity (the "Acquiring Company") has agreed prior to such
Reorganization in a writing satisfactory in form and substance to the Holder
that this Warrant shall continue in full force and effect and the terms hereof
shall be applicable to the shares of stock and other securities and property
receivable on exercise after the consummation of such Reorganization, and shall
be binding upon the issuer of any such stock or other securities (including, in
the case of any transfer of properties or assets referred to above, the Person
acquiring all or substantially all of the properties or assets of the Company).
3.2 Continuation of Terms. This Warrant shall continue in full force
and effect and the terms hereof shall be applicable to the shares of stock and
other securities and property receivable on the exercise of this Warrant after
the consummation of such reorganization, consolidation or merger or the
effective date of dissolution following any such transfer, as the case may be,
and shall be binding upon the issuer of any such stock or other securities,
including, in the case of any such transfer, the Person acquiring all or
substantially all of the properties or assets of the Company, whether or not
such Person shall have expressly assumed the terms of this Warrant as provided
in Section 3.1.
4. No Dilution or Impairment.
The Company will not, by amendment of its certificate of incorporation or
through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms of the Warrants,
but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such action as may be necessary or appropriate in order
to protect the rights of the holders of the Warrants against dilution or other
impairment.
5. Replacement of Warrants.
On receipt of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of any Warrant and, in the case of any such
loss, theft or destruction of any Warrant, on delivery of an indemnity agreement
or security reasonably satisfactory in form and amount to the Company or, in the
case of any such mutilation, on surrender and cancellation of such Warrant, the
Company at its expense will execute and deliver, in lieu thereof, a new Warrant
of like tenor.
6. Remedies.
The Company stipulates that the remedies at law of the Holder in the event of
any default or threatened default by the Company in the performance of or
compliance with any of the terms of this Warrant are not and will not be
adequate, and that such terms may be specifically enforced by a decree for the
specific performance of any agreement contained herein or by an injunction
against a violation of any of the terms hereof or otherwise.
5
7. Negotiability, Assignment, etc.
This Warrant may be transferred by written assignment to any third party assigns
provided however that any such assignment ddoes not conflict with the
restrictions set forth in the legend appearing at the header hereof.
8. Notice, etc.
All notices and other communications from the Company to the Holder shall be
mailed by first class registered or certified mail, postage prepaid, at such
address as may have been furnished to the Company in writing by Holder or, until
any such holder furnishes to the Company an address, then to, and at the address
of, the Holder of this Warrant who has so furnished an address to the Company.
9. Miscellaneous.
This Warrant and any term 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
Warrant is being delivered in the State of New York and shall be construed and
enforced in accordance with and governed by its laws. The headings in this
Warrant are for purposes of reference only, and shall not limit or otherwise
affect any of the terms hereof. This Warrant is being executed as an instrument
under seal. All nouns and pronouns used herein shall be deemed to refer to the
masculine, feminine or neuter, as the identity of the person or persons to whom
reference is made herein may require.
13. Expiration.
The right to exercise this Warrant shall expire at 5:00 P.M., E.S.T, on June 29,
2006.
Dated: June 30, 2001 UNCOMMON MEDIA GROUP, INC.
By:________________________
Name: Xxxxxxxx Xxxxx
Title: President
Attest:
6
