Dated: December 21, 2009
NEITHER THIS DEBENTURE NOR THE SECURITIES INTO WHICH THIS DEBENTURE IS
CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.
No. CCP-1 $225,000
Harcom Productions, Inc.
Convertible Debenture
Maturity Date: December 21, 2010
This Convertible Debenture (the "Debenture") is issued by Harcom
Productions, Inc., an Oklahoma corporation (the "Obligor"), to Xxxxx
Xxxxxxx (the "Holder"), pursuant to that certain Transfer and
Assumption of Liabilities Agreement (the "Transfer and Assumption
Agreement") of even date herewith.
FOR VALUE RECEIVED, the Obligor hereby promises to pay to the
Holder or its successors and assigns the principal sum of Two Hundred
Twenty Five Thousand Dollars ($225,000) in accordance with the
following terms:
Interest. There shall be no interest payable pursuant to this
Debenture.
Right of Redemption. The Obligor at its option shall have the right,
with seven (7) business days advance written notice of the date of
redemption (the "Redemption Date") and the amount to be redeemed (the
"Redemption Notice"), to redeem a portion or all amounts outstanding
under this Debenture prior to the Maturity Date. The Obligor shall pay
an amount equal to the principal amount being redeemed, (the
"Redemption Amount"). Upon any redemptions by the Obligor, the Obligor
shall issue to the Holder a warrant in the form attached hereto as
Exhibit B to purchase such number of shares of Common Stock equal to
the principal amount being redeemed divided by the Fixed Conversion
Price at an exercise price of sixty five percent (65%) of the twenty
eight (28) day trading average prior to the conversion commencing with
the Redemption Date and ending on December 21, 2010. The Obligor shall
deliver to the Holder the Redemption Amount on the third (3rd) business
day after the Redemption Notice.
Notwithstanding the foregoing in the event that the Obligor has elected
to redeem a portion of the outstanding principal amount under this
Debenture the Holder shall be permitted to convert all or any portion
of this Debenture during such seven business day period.
This Debenture is subject to the following additional provisions:
Section 1. This Debenture is exchangeable for an equal aggregate
principal amount of Debentures of different authorized denominations,
as requested by the Holder surrendering the same. No service charge
will be made for such registration of transfer or exchange.
Section 2. Events of Default.
(a) An "Event of Default", wherever used herein, means any one of the
following events (whatever the reason and whether it shall be voluntary
or involuntary or effected by operation of law or pursuant to any
judgment, decree or order of any court, or any order, rule or
regulation of any administrative or governmental body):
(i) Any default in the payment of the principal, free of
any claim of subordination, when it shall become due and
payable (whether on a Conversion Date or the Maturity Date
or by acceleration or otherwise) within seven (7) business
days following the date it shall become due and payable
(whether on a Conversion Date or the Maturity Date or by
acceleration or otherwise);
(ii) The Obligor shall fail to observe or perform any
other covenant, agreement or warranty contained in, or
otherwise commit any breach or default of any provision of
this Debenture (except as may be covered by Section 2(a)(i)
hereof) or any Transaction Document (as defined in Section
5) which failure is not cured within the time prescribed,
or if no time is prescribed, within seven (7) days of the
date written notice of such failure is sent from the
Holder;
(iii) The Obligor or any subsidiary of the Obligor shall
commence, or there shall be commenced against the Obligor
or any subsidiary of the Obligor under any applicable
bankruptcy or insolvency laws as now or hereafter in effect
or any successor thereto, or the Obligor or any subsidiary
of the Obligor commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar
law of any jurisdiction whether now or hereafter in effect
relating to the Obligor or any subsidiary of the Obligor or
there is commenced against the Obligor or any subsidiary of
the Obligor any such bankruptcy, insolvency or other
proceeding which remains undismissed for a period of 61
days; or the Obligor or any subsidiary of the Obligor is
adjudicated insolvent or bankrupt; or any order of relief
or other order approving any such case or proceeding is
entered; or the Obligor or any subsidiary of the Obligor
suffers any appointment of any custodian, private or court
appointed receiver or the like for it or any substantial
part of its property which continues undischarged or
unstayed for a period of sixty one (61) days; or the
Obligor or any subsidiary of the Obligor makes a general
assignment for the benefit of creditors; or the Obligor or
any subsidiary of the Obligor shall fail to pay, or shall
state that it is unable to pay, or shall be unable to pay,
its debts generally as they become due; or the Obligor or
any subsidiary of the Obligor shall call a meeting of its
creditors with a view to arranging a composition,
adjustment or restructuring of its debts; or the Obligor or
any subsidiary of the Obligor shall by any act or failure
to act expressly indicate its consent to, approval of or
acquiescence in any of the foregoing; or any corporate or
other action is taken by the Obligor or any subsidiary of
the Obligor for the purpose of effecting any of the
foregoing;
(iv) The Obligor or any subsidiary of the Obligor shall
default in any of its obligations under any other debenture
or any mortgage, credit agreement or other facility,
indenture agreement, factoring agreement or other
instrument under which there may be issued, or by which
there may be secured or evidenced any indebtedness for
borrowed money or money due under any long term leasing or
factoring arrangement of the Obligor or any subsidiary of
the Obligor in an amount exceeding $100,000, whether such
indebtedness now exists or shall hereafter be created and
such default shall result in such indebtedness becoming or
being declared due and payable prior to the date on which
it would otherwise become due and payable;
(v) The Obligor or any subsidiary of the Obligor shall be
a party to any Change of Control Transaction (as defined in
Section 5);
(vi) The Obligor shall fail for any reason to deliver
Common Stock certificates to a Holder prior to the fifth
(5th) Trading Day after a Conversion Date or the Obligor
shall provide notice to the Holder, including by way of
public announcement, at any time, of its intention not to
comply with requests for conversions of this Debenture in
accordance with the terms hereof;
(b) During the time that any portion of this Debenture is
outstanding, if any Event of Default has occurred, the full principal
amount of this Debenture, together with other amounts owing in respect
thereof, to the date of acceleration shall become at the Holder's
election, immediately due and payable in cash, provided however, the
Holder may request (but shall have no obligation to request) payment of
such amounts in shares of Common Stock of the Obligor based on the
Conversion Price then in effect. In addition to any other remedies,
the Holder shall have the right (but not the obligation) to convert
this Debenture at any time after (x) an Event of Default or (y) the
Maturity Date at the Conversion Price then in-effect. The Holder need
not provide and the Obligor hereby waives any presentment, demand,
protest or other notice of any kind, and the Holder may immediately and
without expiration of any grace period enforce any and all of its
rights and remedies hereunder and all other remedies available to it
under applicable law. Such declaration may be rescinded and annulled by
Xxxxxx at any time prior to payment hereunder. No such rescission or
annulment shall affect any subsequent Event of Default or impair any
right consequent thereon. Upon an Event of Default, notwithstanding
any other provision of this Debenture or any Transaction Document, the
Holder shall have no obligation to comply with or adhere to any
limitations, if any, contained herein on the conversion of this
Debenture or the sale of the Underlying Shares.
Section 3. Conversion.
(a) Conversion at Option of Holder.
(i) This Debenture shall be convertible into common shares of
Harcom Productions, Inc. at the option of the Holder, in whole or
in part at any time and from time to time, after the Original
Issue Date (as defined in Section 5) (subject to the limitations
on conversion set forth in Section 3(b) hereof). The number of
shares of Common Stock issuable upon a conversion hereunder
equals the quotient obtained by dividing (x) the outstanding
amount of this Debenture to be converted by (y) the Conversion
Price (as defined in Section 3(b)(i)). The Obligor shall deliver
Common Stock certificates to the Holder prior to the fifth (5th)
Trading Day after a Conversion Date.
(ii) Notwithstanding anything to the contrary contained herein,
if on any Conversion Date: (1) the number of shares of Common
Stock at the time authorized, unissued and unreserved for all
purposes, or held as treasury stock, is insufficient to pay
principal hereunder in shares of Common Stock; (2) the Common
Stock is not listed or quoted for trading on the OTC or, if not
listed on the OTC, on a Subsequent Market; (3) the Obligor has
failed to timely satisfy its conversion; or (4) the issuance of
such shares of Common Stock would result in a violation of
Section 3(b), then, at the option of the Holder, the Obligor, in
lieu of delivering shares of Common Stock pursuant to Section
3(a)(i), shall deliver, within five (5) Trading Days of each
applicable Conversion Date, an amount in cash equal to the
product of the outstanding principal amount to be converted
divided by the Conversion Price chosen by the Holder pursuant to
Section 3(c)(i), and multiplied by the highest closing price of
the stock from date of the conversion notice until but not
including the date that such cash payment is made.
Further, if the Obligor shall not have delivered any cash due in
respect of conversion of this Debenture by the fifth (5th) Trading
Day after the Conversion Date, the Holder may, by notice to the
Obligor, require the Obligor to issue shares of Common Stock
pursuant to Section 3(c), except that for such purpose the
Conversion Price applicable thereto shall be the lesser of the
Conversion Price on the Conversion Date and the Conversion Price
on the date of such Holder demand. Any such shares will be
subject to the provisions of this Section.
(iii) The Holder shall effect conversions by delivering to the
Obligor a completed notice in the form attached hereto as Exhibit
A (a "Conversion Notice"). The date on which a Conversion Notice
is delivered is the "Conversion Date." Unless the Holder is
converting the entire principal amount outstanding under this
Debenture, the Holder is not required to physically surrender
this Debenture to the Obligor in order to effect conversions.
Conversions hereunder shall have the effect of lowering the
outstanding principal amount of this Debenture in an amount equal
to the applicable conversion. The Holder and the Obligor shall
maintain records showing the principal amounts converted and the
date of such conversions. In the event of any dispute or
discrepancy, the records of the Holder shall be controlling and
determinative in the absence of manifest error.
(b) Conversion Price and Adjustments to Conversion Price.
(i) The conversion price in effect on any Conversion Date shall
be equal to sixty five percent (65%) of the twenty eight (28) day
trading average prior to conversion (the "Fixed Conversion
Price"). The Conversion Price may be adjusted pursuant to the
other terms of this Debenture.
(ii) If the Obligor, at any time while this Debenture is
outstanding, shall (a) pay a stock dividend or otherwise make a
distribution or distributions on shares of its Common Stock or
any other equity or equity equivalent securities payable in
shares of Common Stock, (b) subdivide outstanding shares of
Common Stock into a larger number of shares, (c) combine
(including by way of reverse stock split) outstanding shares of
Common Stock into a smaller number of shares, or (d) issue by
reclassification of shares of the Common Stock any shares of
capital stock of the Obligor, then the Fixed Conversion Price
shall be multiplied by a fraction of which the numerator shall be
the number of shares of Common Stock (excluding treasury shares,
if any) outstanding before such event and of which the
denominator shall be the number of shares of Common Stock
outstanding after such event. Any adjustment made pursuant to
this Section shall become effective immediately after the record
date for the determination of stockholders entitled to receive
such dividend or distribution and shall become effective
immediately after the effective date in the case of a
subdivision, combination or re-classification.
(iii) If the Obligor, at any time while this Debenture is
outstanding, shall issue rights, options or warrants to all
holders of Common Stock (and not to the Holder) entitling them to
subscribe for or purchase shares of Common Stock at a price per
share less than the Fixed Conversion Price, then the Fixed
Conversion Price shall be multiplied by a fraction, of which the
denominator shall be the number of shares of the Common Stock
(excluding treasury shares, if any) outstanding on the date of
issuance of such rights or warrants (plus the number of
additional shares of Common Stock offered for subscription or
purchase), and of which the numerator shall be the number of
shares of the Common Stock (excluding treasury shares, if any)
outstanding on the date of issuance of such rights or warrants,
plus the number of shares which the aggregate offering price of
the total number of shares so offered would purchase at the Fixed
Conversion Price. Such adjustment shall be made whenever such
rights or warrants are issued, and shall become effective
immediately after the record date for the determination of
stockholders entitled to receive such rights, options or
warrants. However, upon the expiration of any such right, option
or warrant to purchase shares of the Common Stock the issuance of
which resulted in an adjustment in the Fixed Conversion Price
pursuant to this Section, if any such right, option or warrant
shall expire and shall not have been exercised, the Fixed
Conversion Price shall immediately upon such expiration be
recomputed and effective immediately upon such expiration be
increased to the price which it would have been (but reflecting
any other adjustments in the Fixed Conversion Price made pursuant
to the provisions of this Section after the issuance of such
rights or warrants) had the adjustment of the Fixed Conversion
Price made upon the issuance of such rights, options or warrants
been made on the basis of offering for subscription or purchase
only that number of shares of the Common Stock actually purchased
upon the exercise of such rights, options or warrants actually
exercised.
(iv) If the Obligor or any subsidiary thereof, as applicable, at
any time while this Debenture is outstanding, shall issue shares
of Common Stock or rights, warrants, options or other securities
or debt that are convertible into or exchangeable for shares of
Common Stock ("Common Stock Equivalents") entitling any Person to
acquire shares of Common Stock, at a price per share less than
the Fixed Conversion Price (if the holder of the Common Stock or
Common Stock Equivalent so issued shall at any time, whether by
operation of purchase price adjustments, reset provisions,
floating conversion, exercise or exchange prices or otherwise, or
due to warrants, options or rights per share which is issued in
connection with such issuance, be entitled to receive shares of
Common Stock at a price per share which is less than the Fixed
Conversion Price, such issuance shall be deemed to have occurred
for less than the Fixed Conversion Price), then, at the sole
option of the Holder, the Fixed Conversion Price shall be reduced
on the date of such issuance to a price (calculated to the
nearest cent) determined by multiplying the Fixed Conversion
Price in effect immediately prior to such issuance by a fraction,
the numerator of which shall be an amount equal to the sum of (A)
the number of shares of Common Stock outstanding immediately
prior to such issuance plus (B) the quotient obtained by dividing
the consideration received by the Company upon such issuance by
the Fixed Conversion Price, and the denominator of which shall be
the total number of shares of Common Stock outstanding
immediately after such issuance. Such adjustment shall be made
whenever such Common Stock or Common Stock Equivalents are
issued. The Obligor shall notify the Holder in writing, no later
than one (1) business day following the issuance of any Common
Stock or Common Stock Equivalent subject to this Section,
indicating therein the applicable issuance price, or of
applicable reset price, exchange price, conversion price and
other pricing terms. No adjustment under this Section shall be
made as a result of (A) conversions under this Debenture, (B)
options or warrants issued prior to the date hereof, or (C)
shares of Common Stock, options, or warrants to purchase shares
of Common Stock issued pursuant to any of the Obligor's stock
option or stock purchase plans, (D) options, warrants or
convertible securities issued in connection with a strategic
alliance, corporate partnering, licensing of technology, merger
or sale of substantially all the assets transaction or (E)
exercise of such options or warrants or conversion of such
securities referred to in clauses (A), (B), (C), or (D).
(v) If the Obligor, at any time while this Debenture is
outstanding, shall distribute to all holders of Common Stock (and
not to the Holder) evidences of its indebtedness or assets or
rights or warrants to subscribe for or purchase any security,
then in each such case the Fixed Conversion Price at which this
Debenture shall thereafter be convertible shall be determined by
multiplying the Fixed Conversion Price in effect immediately
prior to the record date fixed for determination of stockholders
entitled to receive such distribution by a fraction of which the
denominator shall be the Closing Bid Price determined as of the
record date mentioned above, and of which the numerator shall be
such Closing Bid Price on such record date less the then fair
market value at such record date of the portion of such assets or
evidence of indebtedness so distributed applicable to one
outstanding share of the Common Stock as determined by the Board
of Directors in good faith. In either case the adjustments shall
be described in a statement provided to the Holder of the portion
of assets or evidences of indebtedness so distributed or such
subscription rights applicable to one share of Common Stock. Such
adjustment shall be made whenever any such distribution is made
and shall become effective immediately after the record date
mentioned above.
(vi) In case of any reclassification of the Common Stock or any
compulsory share exchange pursuant to which the Common Stock is
converted into other securities, cash or property, the Holder
shall have the right thereafter to, at its option, (A) convert
the then outstanding principal amount, together with any other
amounts then owing hereunder in respect of this Debenture into
the shares of stock and other securities, cash and property
receivable upon or deemed to be held by holders of the Common
Stock following such reclassification or share exchange, and the
Holder of this Debenture shall be entitled upon such event to
receive such amount of securities, cash or property as the shares
of the Common Stock of the Obligor into which the then
outstanding principal amount, together with any other amounts
then owing hereunder in respect of this Debenture could have been
converted immediately prior to such reclassification or share
exchange would have been entitled, or (B) require the Obligor to
prepay the outstanding principal amount of this Debenture, plus
all other amounts due and payable thereon. The entire prepayment
price shall be paid in cash. This provision shall similarly
apply to successive reclassifications or share exchanges.
(vii) The Obligor shall at all times reserve and keep available
out of its authorized Common Stock the full number of shares of
Common Stock issuable upon conversion of all outstanding amounts
under this Debenture; and within seven (7) Business Days
following the receipt by the Obligor of a Holder's notice that
such minimum number of Underlying Shares is not so reserved, the
Obligor shall promptly reserve a sufficient number of shares of
Common Stock to comply with such requirement.
(viii) All calculations under this Section 3 shall be
rounded up to the nearest $0.001 or whole share.
(ix) Whenever the Conversion Price is adjusted pursuant to
Section 3 hereof, the Obligor shall promptly mail to the Holder a
notice setting forth the Conversion Price after such adjustment
and setting forth a brief statement of the facts requiring such
adjustment.
(x) If (A) the Obligor shall declare a dividend (or any other
distribution) on the Common Stock; (B) the Obligor shall declare
a special nonrecurring cash dividend on or a redemption of the
Common Stock; (C) the Obligor shall authorize the granting to all
holders of the Common Stock rights or warrants to subscribe for
or purchase any shares of capital stock of any class or of any
rights; (D) the approval of any stockholders of the Obligor shall
be required in connection with any reclassification of the Common
Stock, any consolidation or merger to which the Obligor is a
party, any sale or transfer of all or substantially all of the
assets of the Obligor, of any compulsory share exchange whereby
the Common Stock is converted into other securities, cash or
property; or (E) the Obligor shall authorize the voluntary or
involuntary dissolution, liquidation or winding up of the affairs
of the Obligor; then, in each case, the Obligor shall cause to be
filed at each office or agency maintained for the purpose of
conversion of this Debenture, and shall cause to be mailed to the
Holder at its last address as it shall appear upon the stock
books of the Obligor, at least twenty (20) calendar days prior to
the applicable record or effective date hereinafter specified, a
notice stating (x) the date on which a record is to be taken for
the purpose of such dividend, distribution, redemption, rights or
warrants, or if a record is not to be taken, the date as of which
the holders of the Common Stock of record to be entitled to such
dividend, distributions, redemption, rights or warrants are to be
determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer or share exchange is
expected to become effective or close, and the date as of which
it is expected that holders of the Common Stock of record shall
be entitled to exchange their shares of the Common Stock for
securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer or share
exchange, provided, that the failure to mail such notice or any
defect therein or in the mailing thereof shall not affect the
validity of the corporate action required to be specified in such
notice. The Holder is entitled to convert this Debenture during
the 20-day calendar period commencing the date of such notice to
the effective date of the event triggering such notice.
(xi) In case of any (1) merger or consolidation of the Obligor
or any subsidiary of the Obligor with or into another Person, or
(2) sale by the Obligor or any subsidiary of the Obligor of more
than one-half of the assets of the Obligor in one or a series of
related transactions within a period of 180 consecutive days, a
Holder shall have the right to (A) exercise any rights under
Section 2(b), (B) convert the aggregate amount of this Debenture
then outstanding into the shares of stock and other securities,
cash and property receivable upon or deemed to be held by holders
of Common Stock following such merger, consolidation or sale, and
such Holder shall be entitled upon such event or series of
related events to receive such amount of securities, cash and
property as the shares of Common Stock into which such aggregate
principal amount of this Debenture could have been converted
immediately prior to such merger, consolidation or sales would
have been entitled, or (C) in the case of a merger or
consolidation, require the surviving entity to issue to the
Holder a convertible Debenture with a principal amount equal to
the aggregate principal amount of this Debenture then held by
such Holder, plus all other amounts owing thereon, which such
newly issued convertible Debenture shall have terms identical
(including with respect to conversion) to the terms of this
Debenture, and shall be entitled to all of the rights and
privileges of the Holder of this Debenture set forth herein and
the agreements pursuant to which this Debentures were issued. In
the case of clause (C), the conversion price applicable for the
newly issued shares of convertible preferred stock or convertible
Debentures shall be based upon the amount of securities, cash and
property that each share of Common Stock would receive in such
transaction and the Conversion Price in effect immediately prior
to the effectiveness or closing date for such transaction. The
terms of any such merger, sale or consolidation shall include
such terms so as to continue to give the Holder the right to
receive the securities, cash and property set forth in this
Section upon any conversion or redemption following such event.
This provision shall similarly apply to successive such events.
(c) Other Provisions.
(i) The Obligor covenants that it will at all times reserve and
keep available out of its authorized and unissued shares of
Common Stock solely for the purpose of issuance upon conversion
of this Debenture, as herein provided, free from preemptive
rights or any other actual contingent purchase rights of persons
other than the Holder, not less than such number of shares of the
Common Stock as shall (subject to any additional requirements of
the Obligor as to reservation of such shares set forth in this
Debenture) be issuable (taking into account the adjustments and
restrictions of Sections 2(b) and 3(c)) upon the conversion of
the outstanding principal amount of this Debenture. The Obligor
covenants that all shares of Common Stock that shall be so
issuable shall, upon issue, be duly and validly authorized,
issued and fully paid, nonassessable.
(ii) Upon a conversion hereunder the Obligor shall not be
required to issue stock certificates representing fractions of
shares of the Common Stock, but may if otherwise permitted, make
a cash payment in respect of any final fraction of a share based
on the Closing Bid Price at such time. If the Obligor elects not,
or is unable, to make such a cash payment, the Holder shall be
entitled to receive, in lieu of the final fraction of a share,
one whole share of Common Stock.
(iii) The issuance of certificates for shares of the Common Stock
on conversion of this Debenture shall be made without charge to
the Holder thereof for any documentary stamp or similar taxes
that may be payable in respect of the issue or delivery of such
certificate, provided that the Obligor shall not be required to
pay any tax that may be payable in respect of any transfer
involved in the issuance and delivery of any such certificate
upon conversion in a name other than that of the Holder of such
Debenture so converted and the Obligor shall not be required to
issue or deliver such certificates unless or until the person or
persons requesting the issuance thereof shall have paid to the
Obligor the amount of such tax or shall have established to the
satisfaction of the Obligor that such tax has been paid.
(iv) Nothing herein shall limit a Holder's right to pursue
actual damages or declare an Event of Default pursuant to Section
2 herein for the Obligor 's failure to deliver certificates
representing shares of Common Stock upon conversion within the
period specified herein and such Holder shall have the right to
pursue all remedies available to it at law or in equity
including, without limitation, a decree of specific performance
and/or injunctive relief, in each case without the need to post a
bond or provide other security. The exercise of any such rights
shall not prohibit the Holder from seeking to enforce damages
pursuant to any other Section hereof or under applicable law.
(v) In addition to any other rights available to the Holder, if
the Obligor fails to deliver to the Holder such certificate or
certificates pursuant to Section 3(a)(i) by the fifth (5th)
Trading Day after the Conversion Date, and if after such fifth
(5th) Trading Day the Holder purchases (in an open market
transaction or otherwise) Common Stock to deliver in satisfaction
of a sale by such Holder of the Underlying Shares which the
Holder anticipated receiving upon such conversion (a "Buy-In"),
then the Obligor shall (A) pay in cash to the Holder (in addition
to any remedies available to or elected by the Holder) the amount
by which (x) the Holder's total purchase price (including
brokerage commissions, if any) for the Common Stock so purchased
exceeds (y) the product of (1) the aggregate number of shares of
Common Stock that such Holder anticipated receiving from the
conversion at issue multiplied by (2) the market price of the
Common Stock at the time of the sale giving rise to such purchase
obligation and (B) at the option of the Holder, either reissue a
Debenture in the principal amount equal to the principal amount
of the attempted conversion or deliver to the Holder the number
of shares of Common Stock that would have been issued had the
Obligor timely complied with its delivery requirements under
Section 3(a)(i). For example, if the Holder purchases Common
Stock having a total purchase price of $11,000 to cover a Buy-In
with respect to an attempted conversion of Debentures with
respect to which the market price of the Underlying Shares on the
date of conversion was a total of $10,000 under clause (A) of the
immediately preceding sentence, the Obligor shall be required to
pay the Holder $1,000. The Holder shall provide the Obligor
written notice indicating the amounts payable to the Holder in
respect of the Buy-In.
Section 4. Notices. Any notices, consents, waivers or other
communications required or permitted to be given under the terms hereof
must be in writing and will be deemed to have been delivered: (i) upon
receipt, when delivered personally; (ii) upon receipt, when sent by
facsimile (provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party); or
(iii) one (1) trading day after deposit with a nationally recognized
overnight delivery service, in each case properly addressed to the party
to receive the same. The addresses and facsimile numbers for such
communications shall be:
If to the Company:
Harcom Productions, Inc.
0000 Xxxxx Xxxxx Xx-Xxx X
Xxxxx, XX 00000
If to the Holder:
Share Xxxxxxx
00000 X. 00xx Xx.
Xxxxx, XX 00000
or at such other address and/or facsimile number and/or to the
attention of such other person as the recipient party has specified by
written notice given to each other party seven (7) business days prior
to the effectiveness of such change. Written confirmation of receipt
(i) given by the recipient of such notice, consent, waiver or other
communication, (ii) mechanically or electronically generated by the
sender's facsimile machine containing the time, date, recipient
facsimile number and an image of the first page of such transmission or
(iii) provided by a nationally recognized overnight delivery service,
shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in
accordance with clause (i), (ii) or (iii) above, respectively.
Section 5. Definitions. For the purposes hereof, the following terms
shall have the following meanings:
"Business Day" means any day except Saturday, Sunday and any day which
shall be a federal legal holiday in the United States or a day on which
banking institutions are authorized or required by law or other
government action to close.
"Change of Control Transaction" means the occurrence of (a) an
acquisition after the date hereof by an individual or legal entity or
"group" (as described in Rule 13d-5(b)(1) promulgated under the
Exchange Act) of effective control (whether through legal or beneficial
ownership of capital stock of the Obligor, by contract or otherwise) of
in excess of fifty percent (50%) of the voting securities of the
Obligor (except that the acquisition of voting securities by the Holder
and its affiliates shall not constitute a Change of Control Transaction
for purposes hereof), (b) a replacement at one time or over time of
more than one-half of the members of the board of directors of the
Obligor which is not approved by a majority of those individuals who
are members of the board of directors on the date hereof (or by those
individuals who are serving as members of the board of directors on any
date whose nomination to the board of directors was approved by a
majority of the members of the board of directors who are members on
the date hereof), (c) the execution by the Obligor of an agreement to
which the Obligor is a party or by which it is bound, providing for any
of the events set forth above in (a), (b) or (c).
"Closing Bid Price" means the price per share of the last reported
trade of the Common Stock on the OTC or on the Subsequent Market on
which the Common Stock is then listed as quoted by Bloomberg, LP.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the common stock, par value $.01, of the Obligor
and stock of any other class into which such shares may hereafter be
changed or reclassified.
"Conversion Date" shall mean the date upon which the Holder gives the
Obligor notice of their intention to effectuate a conversion of this
Debenture into shares of the Company's Common Stock as outlined herein.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Original Issue Date" shall mean the date of the first issuance of this
Debenture regardless of the number of transfers and regardless of the
number of instruments, which may be issued to evidence such Debenture.
"Person" means a corporation, an association, a partnership,
organization, a business, an individual, a government or political
subdivision thereof or a governmental agency.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Trading Day" means a day on which the shares of Common Stock are
quoted on the OTC or quoted or traded on such Subsequent Market on
which the shares of Common Stock are then quoted or listed; provided,
that in the event that the shares of Common Stock are not listed or
quoted, then Trading Day shall mean a Business Day.
"Transaction Documents" means the Transfer and Assumption of
Liabilities Agreement or any other agreement delivered in connection
with the Transfer and Assumption of Liabilities Agreement.
"Underlying Shares" means the shares of Common Stock issuable upon
conversion of this Debenture.
Section 6. Except as expressly provided herein, no provision of this
Debenture shall alter or impair the obligations of the Obligor, which
are absolute and unconditional, to pay the principal and other charges
(if any) on, this Debenture at the time, place, and rate, and in the
coin or currency, herein prescribed. This Debenture is a direct
obligation of the Obligor. This Debenture ranks pari passu with all
other Debentures now or hereafter issued under the terms set forth
herein. As long as this Debenture is outstanding, the Obligor shall not
and shall cause their subsidiaries not to, without the consent of the
Holder, (i) amend its certificate of incorporation, bylaws or other
charter documents so as to adversely affect any rights of the Holder;
(ii) repay, repurchase or offer to repay, repurchase or otherwise
acquire shares of its Common Stock or other equity securities other
than as to the Underlying Shares to the extent permitted or required
under the Transaction Documents; or (iii) enter into any agreement with
respect to any of the foregoing.
Section 7. This Debenture shall not entitle the Holder to any of the
rights of a stockholder of the Obligor, including without limitation,
the right to vote, to receive dividends and other distributions, or to
receive any notice of, or to attend, meetings of stockholders or any
other proceedings of the Obligor, unless and to the extent converted
into shares of Common Stock in accordance with the terms hereof.
Section 8. If this Debenture is mutilated, lost, stolen or destroyed,
the Obligor shall execute and deliver, in exchange and substitution for
and upon cancellation of the mutilated Debenture, or in lieu of or in
substitution for a lost, stolen or destroyed Debenture, a new Debenture
for the principal amount of this Debenture so mutilated, lost, stolen
or destroyed but only upon receipt of evidence of such loss, theft or
destruction of such Debenture, and of the ownership hereof, and
indemnity, if requested, all reasonably satisfactory to the Obligor.
Section 9. No indebtedness of the Obligor is senior to this Debenture
in right of payment, whether with respect to damages or upon
liquidation or dissolution or otherwise. Without the Holder's consent,
the Obligor will not and will not permit any of their subsidiaries to,
directly or indirectly, enter into, create, incur, assume or suffer to
exist any indebtedness of any kind, on or with respect to any of its
property or assets now owned or hereafter acquired or any income or
profits there from that is senior in any respect to the obligations of
the Obligor under this Debenture.
Section 10. This Debenture shall be governed by and construed in
accordance with the laws of the State of Nevada, without giving effect
to conflicts of laws thereof. Each of the parties consents to the
jurisdiction of the Superior Courts of the State of Oklahoma and the
U.S. District Court for the District of Oklahoma in connection with any
dispute arising under this Debenture and hereby waives, to the maximum
extent permitted by law, any objection, including any objection based
on forum non conveniens to the bringing of any such proceeding in such
jurisdictions.
Section 11. If the Obligor fails to strictly comply with the terms of
this Debenture, then the Obligor shall reimburse the Holder promptly
for all fees, costs and expenses, including, without limitation,
attorneys' fees and expenses incurred by the Holder in any action in
connection with this Debenture, including, without limitation, those
incurred: (i) during any workout, attempted workout, and/or in
connection with the rendering of legal advice as to the Holder's
rights, remedies and obligations, (ii) collecting any sums which become
due to the Holder, (iii) defending or prosecuting any proceeding or any
counterclaim to any proceeding or appeal; or (iv) the protection,
preservation or enforcement of any rights or remedies of the Holder.
Section 12. Any waiver by the Holder of a breach of any provision of
this Debenture shall not operate as or be construed to be a waiver of
any other breach of such provision or of any breach of any other
provision of this Debenture. The failure of the Holder to insist upon
strict adherence to any term of this Debenture on one or more occasions
shall not be considered a waiver or deprive that party of the right
thereafter to insist upon strict adherence to that term or any other
term of this Debenture. Any waiver must be in writing.
Section 13. If any provision of this Debenture is invalid, illegal or
unenforceable, the balance of this Debenture shall remain in effect,
and if any provision is inapplicable to any person or circumstance, it
shall nevertheless remain applicable to all other persons and
circumstances. The Obligor covenants (to the extent that it may
lawfully do so) that it shall not at any time insist upon, plead, or in
any manner whatsoever claim or take the benefit or advantage of, any
stay, extension or usury law or other law which would prohibit or
forgive the Obligor from paying all or any portion of the principal of
this Debenture as contemplated herein, wherever enacted, now or at any
time hereafter in force, or which may affect the covenants or the
performance of this indenture, and the Obligor (to the extent it may
lawfully do so) hereby expressly waives all benefits or advantage of
any such law, and covenants that it will not, by resort to any such
law, hinder, delay or impeded the execution of any power herein granted
to the Holder, but will suffer and permit the execution of every such
as though no such law has been enacted.
Section 14. Whenever any payment or other obligation hereunder shall be
due on a day other than a Business Day, such payment shall be made on
the next succeeding Business Day.
Section 15. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS AGREEMENT OR ANY TRANSACTION DOCUMENT OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
PARTIES' ACCEPTANCE OF THIS AGREEMENT.
IN WITNESS WHEREOF, the Obligor has caused this Secured Convertible
Debenture to be duly executed by a duly authorized officer as of the
date set forth above.
Harcom Productions, Inc.
By:Xxxxxx Xxxxxxx
Name:Xxxxxx Xxxxxxx
Title: CFO
EXHIBIT "A"
NOTICE OF CONVERSION
(To be executed by the Holder in order to convert the Debenture)
TO:
The undersigned hereby irrevocably elects to convert $
of the principal amount of the above Debenture into
Shares of Common Stock of Harcom Productions, Inc, according to the
conditions stated therein, as of the Conversion Date written below.
Conversion Date:
Applicable Conversion Price:
Signature:
Name:
Address:
Amount to be converted: $
Amount of Debenture unconverted: $
Conversion Price per share: $
Number of shares of Common Stock to be issued:
Please issue the shares of Common Stock in the following name and to
the following address:
Issue to:
Authorized Signature:
Name:
Title:
Phone Number:
Broker DTC Participant Code:
Account Number:
EXHIBIT "B"
FORM OF WARRANT
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR THE LAWS OF ANY STATE. SUCH SECURITIES AND ANY SECURITIES
ISSUED HEREUNDER MAY NOT BE SOLD OR OTHERWISE TRANSFERRED UNLESS THEY
ARE REGISTERED UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR
AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
--------------- Warrants
HARCOM PRODUCTIONS, INC.
WARRANT CERTIFICATE
This warrant certificate ("Warrant Certificate") certifies that for
value received Xxxxx Xxxxxxx or registered assigns (the "Holder") is
the owner of the number of warrants ("Warrants") specified above, each
of which entitles the Holder thereof to purchase, at any time on or
before the Expiration Date (hereinafter defined), such number of shares
of Common Stock equal to the principal amount being redeemed divided by
the Fixed Conversion Price of Harcom Productions, Inc., an Oklahoma
corporation (the "Company"), upon redemption by the Company at an
exercise price of sixty five percent (65%) of the twenty eight (28) day
trading average prior to the conversion commencing with the Redemption
Date and ending on December ___, 2010.
1. Warrant; Purchase Price
Each Warrant shall entitle the Holder to purchase such number of
shares of Common Stock equal to the principal amount being redeemed
divided by the Fixed Conversion Price of Harcom Productions, Inc., an
Oklahoma corporation (the "Company"), upon redemption by the Company at
an exercise price of sixty five percent (65%) of the twenty eight (28)
day trading average prior to the conversion commencing with the
Redemption Date and ending on December ___, 2010 subject to adjustment
as hereinafter provided (the "Purchase Price"). The Purchase Price and
number of shares of Common Stock issuable upon exercise of each Warrant
are subject to adjustment as provided in Article 6.
2. Exercise; Expiration Date
2.1 The Warrants are exercisable, at the option of the
Holder, at any time after issuance and at or before 5:00 p.m. Central
time on the Expiration Date, upon surrender of this Warrant Certificate
to the Company together with a duly completed Notice of Exercise, in
the form attached hereto as Exhibit A, and payment of an amount equal
to the Purchase Price times the number of Warrants to be exercised. In
the case of exercise of less than all the Warrants represented by this
Warrant Certificate, the Company shall cancel the Warrant Certificate
upon the surrender thereof and shall execute and deliver a new Warrant
Certificate for the balance of such Warrants. In connection with an
exercise of this Warrant, if the Holder desires to simultaneously
convert the Common Stock into the Company's Common Stock pursuant to
the terms of the Common Stock, the Holder shall so state in its Notice
of Exercise.
2.2 The term "Expiration Date" shall mean 5:00 p.m.
Central Time on , or if such date shall in the State of
Oklahoma be a holiday or a day on which banks are authorized to close,
then 5:00 p.m. Central Time the next following date which in the State
of New York is not a holiday in a day on which banks are authorized to
close.
3. Registration and Transfer on Company Books
3.1 The Company shall maintain books for the registration
and transfer of the Warrants and the registration and transfer of the
shares of Common Stock issued upon exercise of the Warrants. The
Company may, by written notice to the Holder, appoint an agent for the
purpose of maintaining the register referred to in this Section 3.1,
issuing the Common Stock or other securities then issuable upon the
exercise of this Warrant, exchanging this Warrant, replacing this
Warrant, or any or an of the foregoing. Thereafter, any such
registration, issuance, exchange or replacement, as the case may be,
shall be made at the office of such agent.
3.2 Prior to due presentment for registration of transfer
of this Warrant Certificate, or the shares of Common Stock issued upon
exercise of the Warrants, the Company may deem and treat the registered
Holder as the absolute owner thereof.
3.3 Neither this Warrant Certificate, nor the Warrants
represented hereby, may be sold, assigned, pledged or otherwise
transferred voluntarily by the Holder, other than to officers or
directors of the Holder, without the consent of the Company. The
Company shall register upon its books any permitted transfer of a
Warrant Certificate, upon surrender of same to the Company with a
written instrument of transfer duly executed by the registered Holder
or by a duly authorized attorney, and evidence of payment of all
applicable transfer taxes, if any. Upon any such registration of
transfer, new Warrant Certificate(s) shall be issued to the
transferee(s) and the surrendered Warrant Certificate shall be canceled
by the Company. A Warrant Certificate may also be exchanged, at the
option of the Holder, for new Warrant Certificates representing in the
aggregate the number of Warrants evidenced by the Warrant Certificate
surrendered.
4. Reservation of Shares
The Company covenants that it will at all times reserve and keep
available out of its authorized Common Stock, solely for the purpose of
issue upon exercise of the Warrants, such number of shares of Common
Stock as shall then be issuable upon the exercise of all outstanding
Warrants. The Company covenants that all shares of Common Stock which
shall be issuable upon exercise of the Warrants shall be duly and
validly issued and fully paid and non-assessable and free from all
taxes, liens and charges with respect to the issue thereof, and that
upon issuance such shares shall be (or shall be convertible into
securities that shall be) listed on each national securities exchange,
if any, on which the other shares of outstanding Common Stock of the
Company are then listed.
5. Loss or Mutilation
Upon receipt by the Company of reasonable evidence of the ownership of
and the loss, theft, destruction or mutilation of any Warrant
Certificate and, in the case of loss, theft or destruction, of
indemnity reasonably satisfactory to the Company, or, in the case of
mutilation, upon surrender and cancellation of the mutilated Warrant
Certificate, the Company shall execute and deliver in lieu thereof a
new Warrant Certificate representing an equal number of Warrants.
6. Adjustment of Purchase Price and Number of Shares
Deliverable
6.1 The number of shares of Common Stock or other
security purchasable upon the exercise of each Warrant (such shares
being referred to in this Section 6 as the "Warrant Shares") and the
Purchase Price with respect to the Warrant Shares shall be subject to
adjustment as follows:
(a) In case the Company shall (i) declare a dividend or
make a distribution on its Common Stock payable in shares of its
capital stock, (ii) subdivide its outstanding shares of Common Stock,
through stock split or otherwise, (iii) combine its outstanding shares
of Common Stock, into a smaller number of shares of Common Stock, or
(iv) issue by reclassification of its of Common Stock (including any
reclassification in connection with a consolidation or merger in which
the Company is the continuing corporation) other securities of the
Company, the number and/or nature of Warrant Shares purchasable upon
exercise of each Warrant immediately prior thereto shall be adjusted so
that the Holder shall be entitled to receive the kind and number of
Warrant Shares or other securities of the Company which he would have
owned or have been entitled to receive after the happening of any of
the events described above, had such Warrant been exercised immediately
prior to the happening of such event or any record date with respect
thereto. Any adjustment made pursuant to this paragraph (a) shall
become effective retroactively as of the record date of such event.
(b) In the event of any capital reorganization or any
reclassification of the capital stock of the Company or in case of the
consolidation or merger of the Company with another corporation (other
than a consolidation or merger in which the outstanding shares of the
Company's Common Stock are not converted into or exchanged for other
rights or interests), or in the case of any sale, transfer or other
disposition to another corporation of all or substantially all the
properties and assets of the Company, the Holder of each Warrant shall
thereafter be entitled to purchase (and it shall be a condition to the
consummation of any such reorganization, reclassification,
consolidation, merger, sale, transfer or other disposition that
appropriate provisions shall be made so that such Holder shall
thereafter be entitled to purchase) the kind and amount of shares of
stock and other securities and property (including cash) which the
Holder would have been entitled to receive had such Warrants been
exercised immediately prior to the effective date of such
reorganization, reclassification, consolidation, merger, sale, transfer
or other disposition; and in any such case appropriate adjustments
shall be made in the application of the provisions of this Article 6
with respect to rights and interest thereafter of the Holder of the
Warrants to the end that the provisions of this Article 6 shall
thereafter be applicable, as near as reasonably may be, in relation to
any shares or other property thereafter purchasable upon the exercise
of the Warrants. The provisions of this Section 6.1(b) shall similarly
apply to successive reorganizations, reclassifications, consolidations,
mergers, sales, transfers or other dispositions. If the per share
consideration payable to the Holder hereof for shares in connection
with any such transaction is in a form other than cash or marketable
securities, then the value of such consideration shall be determined in
good faith by the Company's Board of Directors.
(c) Whenever the number of Warrant Shares purchasable
upon the exercise of each Warrant is adjusted, as provided in this
Section 6.1, the Purchase Price with respect to the Warrant Shares
shall be adjusted by multiplying such Purchase Price immediately prior
to such adjustment by a fraction, of which the numerator shall be the
number of Warrant Shares purchasable upon the exercise of each Warrant
immediately prior to such adjustment, and of which the denominator
shall be the number of Warrant Shares so purchasable immediately
thereafter.
6.2 In the event the Company shall declare a dividend, or
make a distribution to the holders of its Common Stock generally,
whether in cash, property or assets of any kind, including any dividend
payable in stock or securities of any other issuer owned by the Company
(excluding regularly payable cash dividends declared from time to time
by the Company's Board of Directors, the Purchase Price of each Warrant
shall be reduced, without any further action by the parties hereto, by
the Per Share Value (as hereinafter defined) of the dividend. For
purposes of this Section 6.2, the "Per Share Value" of a cash dividend
or other distribution shall be the dollar amount of the distribution on
each Share of Common Stock and the "Per Share Value" of any dividend or
distribution other than cash shall be equal to the fair market value of
such non-cash distribution on each share of Common Stock as determined
in good faith by the Board of Directors of the Company.
6.3 No adjustment in the number of Warrant Shares
purchasable under the Warrants, or in the Purchase Price with respect
to the Warrant Shares, shall be required unless such adjustment would
require an increase or decrease of at least 1% in the number of Warrant
Shares issuable upon the exercise of such Warrant, or in the Purchase
Price thereof; provided, however, that any adjustments which by reason
of this Section 6.3 are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All final
results of adjustments to the number of Warrant Shares and the Purchase
Price thereof shall be rounded to the nearest one thousandth of a share
or the nearest cent, as the case may be. Anything in this Section 6 to
the contrary notwithstanding, the Company shall be entitled, but shall
not be required, to make such changes in the number of Warrant Snares
purchasable upon the exercise of each Warrant, or in the Purchase Price
thereof, in addition to those required by such Section, as it in its
discretion shall determine to be advisable in order that any dividend
or distribution in shares of Common Stock, subdivision,
reclassification or combination of shares of Common Stock, issuance of
rights, warrants or options to purchase Common Stock, or distribution
of shares of stock other than Common Stock, evidences of indebtedness
or assets, (other than distributions of cash out of retained earnings)
or convertible or exchangeable securities hereafter made by the Company
to the holders of its Common Stock shall not result in any tax to the
holders of its Common Stock or securities convertible into Common
Stock.
6.4 Whenever the number of Warrant Shares purchasable
upon the exercise of each Warrant or the Purchase Price of such Warrant
Shares is adjusted, as herein provided, the Company shall mail to the
Holder at the address of the Holder shown on the books of the Company,
a notice of such adjustment or adjustments, prepared and signed by the
Chief Financial Officer or Secretary of the Company, which sets forth
the number of Warrant Shares purchasable upon the exercise of each
Warrant and the Purchase Price of such Warrant Shares after such
adjustment, a brief statement of the facts requiring such adjustment
and the computation by which such adjustment was made.
6.5 In the event that at any time prior to the expiration
of the Warrants and prior to their exercise:
(a) the Company shall declare any distribution; or
(b) there shall be a voluntary or involuntary
dissolution, liquidation, or winding up of the Company (other than in
connection with a consolidation, merger, or sale of all or
substantially all of its property, assets and business as an entity);
or
(c) any notice shall be required to be mailed to the
holders of Common Stock pursuant to the Company's Certificate of
Incorporation;
(each such event hereinafter being referred to as a "Notification
Event"), the Company shall cause to be mailed to the Holder, not less
than 10 days prior to the record date, if any, in connection with such
Notification Event (provided, however, that if there is no record date,
or if 10 days prior notice is impracticable, as soon as practicable)
written notice specifying the nature of such event and the effective
date of, or the date on which the books of the Company shall close or a
record shall be taken with respect to, such event. Such notice shall
also set forth facts indicating the effect of such action (to the
extent such effect may be known at the date of such notice) on the
Purchase Price and the kind and amount of the shares of stock or other
securities or property deliverable upon exercise of the Warrants.
6.6 The form of Warrant Certificate need not be changed
because of any change in the Purchase Price, the number of Warrant
Shares issuable upon the exercise of a Warrant or the number of
Warrants outstanding pursuant to this Section 6, and Warrant
Certificates issued before or after such change may state the same
Purchase Price, the same number of Warrants, and the same number of
Warrant Shares issuable upon exercise of Warrants as are stated in the
Warrant Certificates theretofore issued pursuant to this Agreement.
The Company may, however, at any time, in its sole discretion, make any
change in the form of Warrant Certificate that it may deem appropriate
and that does not affect the substance thereof, and any Warrant
Certificates thereafter issued or countersigned, whether in exchange or
substitution for an outstanding Warrant Certificate or otherwise, may
be in the form as so changed.
7. Voluntary Adjustment by the Company
The Company may, at its option, at any time during the term of the
Warrants, reduce the then current Purchase Price to any amount deemed
appropriate by the Board of Directors of the Company and/or extent the
date of the expiration of the Warrants.
8. Fractional Shares and Warrants
9.1 Anything contained herein to the contrary
notwithstanding, the Company shall not be required to issue any
fraction of a share of Warrant Shares in connection with the exercise
of Warrants. Warrants may not be exercised in such number as would
result (except for the provisions of this paragraph) in the issuance of
a fraction of a share of Warrant Shares unless the Holder is exercising
all Warrants then owned by the Holder. In such event, the Company
shall, upon the exercise of all of such Warrants, issue to the Holder
the largest aggregate whole number of shares of Warrant Shares called
for thereby upon receipt of the Purchase Price for all of such Warrants
and pay a sum in cash equal to the remaining fraction of a share of
Warrant Shares, multiplied by its Market Price Per Share (as determined
pursuant to Section 9.2 below) as of the last business day preceding
the date on which the Warrants are presented for exercise.
10. Governing Law
This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of Oklahoma.
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly executed by its officers thereunto duly
authorized and its corporate seal to be affixed hereon, as of this
day of , 2009
Harcom Productions, Inc.
By:
Name:
Title: CEO
EXHIBIT A
to Warrant Certificate
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise, pursuant to
Section 2 of the Warrant Certificate accompanying this Notice of
Exercise,___________Warrants of the total number of Warrants owned by
the undersigned pursuant to the accompanying Warrant Certificate, and
herewith makes payment of the Purchase Price of such shares in full.
_______________________________
Name of Holder
_______________________________
Signature
Address:
_______________________________
_______________________________
_______________________________
EXHIBIT B
to Warrant Certificate
NOTICE OF CONVERSION
The undersigned hereby irrevocably elects to convert, pursuant to
Section 7 of the Warrant Certificate accompanying this Notice of
Conversion, _________Warrants of the total number of Warrants owned by
the undersigned pursuant to the accompanying Warrant Certificate into
shares of the Common Stock of the Company (the "Shares").
The number of Shares to be received by the undersigned shall be
calculated in accordance with the provisions of Section 7.1 of the
accompanying Warrant Certificate.
_______________________________
Name of Holder
_______________________________
Signature
Address:
_______________________________
_______________________________
_______________________________
