delivery by Montmelian Investisements Limited of a Subscription Agreement

 

                                                       EXHIBIT 10.31 PAGE 1 OF 7

THESE SECURITIES MAY NOT BE PUBLICLY OFFERED OR SOLD UNLESS AT THE TIME OF SUCH
OFFER OR SALE, THE PERSON MAKING SUCH OFFER OF SALE DELIVERS A PROSPECTUS
MEETING THE REQUIREMENTS OF THE SECURITIES ACT OF 1933 FORMING A PART OF A
REGISTRATION STATEMENT, OR POST-EFFECTIVE AMENDMENT THERETO, WHICH IS EFFECTIVE
UNDER SAID ACT, OR UNLESS IN THE OPINION OF COUNSEL TO THE CORPORATION, SUCH
OFFER AND SALE IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF SAID ACT.

                                  W A R R A N T

         For the Purchase of Common Stock, Par Value $.0001 per Share of

                              ADVANCED MEDIA, INC.

             (Incorporated under the Laws of the State of Delaware)

                       VOID AFTER 5 P.M. December 31, 1997

No. D-2                                           Warrant to Purchase
                                                  250,000 Shares

           THIS IS TO CERTIFY that, for value received, the undersigned is
entitled, subject to the terms and conditions set forth herein, to purchase the
number of shares set forth above of Common Stock, par value $.0001 per share
(the "Common Stock"), of ADVANCED MEDIA, INC., a Delaware corporation (the
"Corporation") at a purchase price per share of $.10, for the period commencing
December 13, 1996 [the date which is 135 days following the execution and
delivery by Montmelian Investisements Limited of a Subscription Agreement
between the undersigned and the Corporation] and ending at or before 5 P.M., New
York City time, on December 31, 1997, but not thereafter, from the Corporation,
if and to the extent this Warrant is exercised, in whole or in part, during the
period this Warrant remains in force, and to receive a certificate or
certificates representing the shares of Common Stock so purchased, upon
presentation and surrender to the Corporation of this Warrant, with the form of
exercise notice attached hereto as Exhibit A (the "Exercise Notice") duly
executed, and accompanied by payment of the purchase price of each share
purchased either in cash or by certified or bank cashier's check payable to the
order of the Corporation.

                                                       EXHIBIT 10.31 PAGE 2 OF 7

           1. The Corporation covenants and agrees that all shares of Common
Stock may be delivered upon the exercise of this Warrant and will, upon
delivery, be fully paid and non-assessable. The Corporation covenants and agrees
that it will from time to time take all such action as may be requisite to
assure that the par value per share of the Common Stock is at all times equal to
or less than the then current Warrant purchase price per share of the Common
Stock issuable upon exercise of this Warrant.

           2. Subject to the availability of a sufficient number of authorized
and unissued shares of Common Stock, the rights represented by this Warrant are
exercisable at the option of the holder hereof in whole at any time, or in part
from time to time, within the period above specified at the prices specified in
Section 1 hereof.

           3. The holder hereof agrees that the Warrants and shares of Common
Stock will not be offered or sold (1) unless at the time of such offer or sale,
there is delivered a prospectus meeting the requirements of the Securities Act
of 1933, as amended, forming a part of an applicable post-effective amendment to
the Registration Statement, or forming a part of a new registration statement
with respect to such offer and sale, or (2) unless in the opinion of counsel to
the Corporation satisfactory to the holder hereof, such offer and sale is exempt
from the provisions of Section 5 of the Act. Subject to the foregoing, this
Warrant may be transferred by the holder hereof to any person(s) or entity(ies).
Any such transfer shall be effected by the holder hereof by surrender of this
Warrant for cancellation to the Company accompanied by a certificate signed by
the holder hereof stating that such holder has authorized such transfer and
indicating for each such person and entity the number of shares of Common Stock
to be purchasable by each such person; whereupon the Company shall issue in the
name or names specified by the holder hereof (including himself) a new Warrant
or Warrants of like tenor and representing in the aggregate rights to purchase
same number of shares of Common Stock as are purchasable hereunder.

           4. (a) Subject to paragraph 2 above, as promptly as practicable (but
in any event within ten [10] business days) after the receipt of an Exercise
Notice and payment of the exercise price as aforesaid, the Company shall issue
and deliver to the holder, issued in the name of such holder or such other
person or persons as such holder may reasonably request, a certificate or
certificates for the number of full shares of Common Stock issuable upon the
exercise of this Warrant (or specified portion thereof). Such exercise shall be
deemed to have been effected as of the close of business on the date on which
such Exercise Notice shall have been received by the Company, and at such time
the rights of the Holder (or specified portion thereof) as such Holder shall
cease, and the person or persons in whose name or names any certificate or
certificates for shares of Common Stock shall be issuable upon such exercise
shall be deemed to have become the Holder or Holders of record of the shares of
Common Stock represented thereby.

              (b) No payment or adjustment shall be made upon any exercise on
account of any cash dividends declared for payment as of a record date prior to
the date of exercise of this Warrant. In the case of any Warrant which is
exercised in part only, the Company shall, upon such exercise, execute and
deliver to the Holder thereof, at the expense of the Company a new Warrant in
amount equal to the unexercised portion of the Warrant surrendered and otherwise
of like tenor therewith. No

                                                       EXHIBIT 10.31 PAGE 3 OF 7

fractional shares of Common Stock shall be issued upon exercise of this Warrant,
but if the exercise results in a fraction, an amount equal to such fraction
multiplied by the applicable exercise Price shall be paid in cash to the Holder
of the Warrant being exercised.

           The Exercise Price and the number of shares deliverable hereunder
shall be adjusted from time to time as hereinafter set forth.

           A. Stock Dividends, Subdivisions and Combinations. If after the date
hereof the Company shall:

              (1) pay a dividend or make a distribution in shares of Common
           Stock to holders of its capital stock of any class, or

              (2) subdivide the outstanding shares of its Common Stock into a
           larger number of shares, or

              (3) combine the outstanding shares of its Common Stock into a
           smaller number of shares, or

              (4) issue by reclassification of its shares of Common Stock any
           shares of Common Stock of the Company.

then the Exercise Price shall be adjusted to that price determined by
multiplying the Exercise Price in effect immediately prior to such event by a
fraction (I) the numerator of which shall be the total number of outstanding
shares of Common Stock of the Company immediately prior to such event, and (ii)
the denominator of which shall be the total number of outstanding shares of
Common Stock of the Company immediately after such event. An adjustment made
pursuant to this paragraph A shall become effective immediately after the record
date in the case of a dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision, combination
or reclassification.

           B. Minimum Adjustment. Except as hereinafter provided, no adjustment
of the Exercise Price hereunder shall be made if such adjustment results in a
change of the Exercise Price then in effect of less than one cent ($.01) per
share. Any adjustment of less than one cent ($.01) per share of any Exercise
Price shall be carried forward and shall be made at the time of and together
with any subsequent adjustment which, together with adjustment or adjustments so
carried forward, amounts to one cent ($.01) per share or more. However, upon
exercise of this Warrant, the Company shall make all necessary adjustments (to
the nearest cent) not theretofore made to the Exercise Price up to and including
the date upon which this Warrant is exercised.

           C. Notice of Adjustments. Whenever the Exercise Price shall be
adjusted pursuant to this Section 4, the Company shall promptly deliver a
certificate signed by the President or Vice President and by the Treasurer or an
Assistant Treasurer or the Secretary or an Assistant Secretary of the Company,
setting forth, in reasonable detail, the event requiring the adjustment, the
amount of the

                                                       EXHIBIT 10.31 PAGE 4 OF 7

adjustment, the method by which such adjustment was calculated (including a
description of the basis on which the Board of Directors of the Company made any
determination hereunder), by first class mail postage prepaid to each Holder.

              (c) In the case of any consolidation or merger of the Company with
another entity, or the sale of all or substantially all of its assets to another
entity, or any reorganization or reclassification of the Common Stock or other
equity securities of the Company (except a split-up, combination or
reclassification, provision for which is made in paragraph A of Section 4(c)
hereof), then, as a condition of such consolidation, merger, sale,
reorganization or reclassification, lawful and adequate provision shall be made
whereby the Holder shall thereafter have the right to receive upon the basis and
upon the terms and conditions specified herein and in lieu of the Common Stock
immediately theretofore receivable upon exercise of this Warrant, such shares of
stock, securities, assets or cash as may (by virtue of such consolidation,
merger, sale, reorganization or reclassification) be issued or payable with
respect to or in exchange for a number of outstanding shares of Common Stock
equal to the number of shares of Common Stock immediately theretofore so
receivable hereunder had such consolidation, merger, sale, reorganization or
reclassification not taken place, and in any such case appropriate provisions
shall be made with respect to the rights and interests of the Holder to the end
that the provisions of this Section 4 (including, without limitation, provisions
for adjustment of the per share Exercise Price) shall thereafter be applicable
as nearly as may be, in relation to any shares of stock, securities, assets or
cash thereafter deliverable upon exercise of this Warrant.

              (d) The right to exercise this Warrant shall not be suspended
during any period while the stock transfer books of the Company for its Common
Stock may be closed. The Company shall not be required, however, to deliver
certificates of its Common Stock upon such exercise while such books are duly
closed for any purpose, but the Company may postpone the delivery of the
certificates for the Common Stock until the opening of such books, and they
shall, in such case, be delivered forthwith upon the opening thereof, or as soon
as practicable thereafter.

           5. This Warrant shall not entitle the holder hereof to any voting
rights or other rights as a shareholder of the Corporation, or to any other
rights whatsoever except the rights herein expressed, and no dividends shall be
payable or accrue in respect of this Warrant or the interest represented hereby
or the shares purchasable hereunder until or unless, and except to the extent
that, this Warrant shall be exercised.

           6. This Warrant is exchangeable upon the surrender hereof by the
holder hereof to the Corporation for new Warrants of like tenor representing in
the aggregate the right to purchase the number of shares purchasable hereunder,
each of such new Warrants to represent the right to purchase such number of
shares as shall be designated by the holder hereof at the time of such
surrender.

           7. The Corporation will transmit to the holder of this Warrant such
information, documents and reports as are generally distributed to shareholders
of the Corporation concurrently with the distribution thereof to such
shareholders.

                                                       EXHIBIT 10.31 PAGE 5 OF 7

           8. Notices to be given to the holder of this Warrant shall be deemed
to have been sufficiently given if delivered or mailed, addressed in the name
and at the address of such holder appearing in the records of the Corporation,
and if mailed, sent first class registered or certified mail, postage prepaid.
The address of the Corporation is 80 Orville Drive, Bohemia, New York 11716, and
the Corporation shall give written notice of any change of address to the holder
hereof.

           IN WITNESS WHEREOF, the Corporation has caused this Warrant to be
executed by the signature of its Chairman of the Board and its seal affixed and
attested by its Assistant Secretary.

Dated: As of August 1, 1996

                                            ADVANCED MEDIA, INC.

                                            By: /s/ Hans J. Kaemmlein
                                               -------------------------
                                               Chairman of the Board
[Corporate Seal]

ATTEST:

By: /s/ Alan W. Schoenbart
   -------------------------
   Alan W. Schoenbart
   Assistant Secretary

                                                       EXHIBIT 10.31 PAGE 6 OF 7

                                                                       Exhibit A
                                                                       ---------

                                    [FORM OF]
                              ELECTION TO PURCHASE

              The undersigned hereby irrevocably elects to exercise __________
of the Warrants represented by this Warrant and to purchase the shares of Common
Stock issuable upon the exercise of said Warrants, and requests that
certificates for such shares be issued and delivered as follows:

ISSUE TO:
                                     (NAME)

                          (ADDRESS, INCLUDING ZIP CODE)

              (SOCIAL SECURITY OR OTHER TAX IDENTIFICATION NUMBER)

DELIVER TO:
                                     (NAME)

at
                          (ADDRESS, INCLUDING ZIP CODE)

              If the number of Warrants hereby exercised is less than all the
Warrants represented by this Warrant, the undersigned requests that a new
Warrant representing the number of full Warrants not exercised be issued and
delivered as set forth below.

              In full payment of the purchase price with respect to the Warrants
exercised and transfer taxes, if any, the undersigned hereby tenders payment of
$_________ by certified check or money order payable in United States currency
to the order of the Company.

Dated  ____________________, 19__

Name of Warrant Holder:  ______________________________________________________

Address:  _____________________________________________________________________

_______________________________________________________________________________

Signature:  ___________________________________________________________________

                                                       EXHIBIT 10.31 PAGE 7 OF 7

                              [FORM OF] ASSIGNMENT

              FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers unto the Assignee named below all of the rights of the undersigned
represented by the within Warrant, with respect to the number of Warrants set
forth below:

Name of Assignee                 Address           No. of Warrants

and does hereby irrevocably constitute and appoint ___________ Attorney to make
such transfer on the books of Advanced Media, Inc. maintained for that purpose,
with full power of substitution in the premises.

Dated:, 199_.

                                                   Signature

SIGNATURE(S) GUARANTEED

By
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(Banks, Stock Brokers, Savings and Loan Associations, and Credit Unions) WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM PURSUANT TO
S.E.C. RULE 17Ad-15.

                                    Signature
NOTICE: The signature(s) on this assignment must correspond with the name(s) as
written upon the face of the Certificate, in every particular, without
alteration or enlargement or any change whatever.

 

Basic Info X:

Name: delivery by Montmelian Investisements Limited of a Subscription Agreement
Type: Subscription Agreement
Date: Nov. 12, 1996
Company: ADVANCED MEDIA INC
State: Delaware

Other info:

Date:

  • December 13 , 1996
  • December 31 , 1997
  • August 1 , 1996

Organization:

  • State of Delaware
  • C. Notice of Adjustments
  • Board of Directors
  • Advanced Media , Inc.

Location:

  • Delaware
  • P.M.
  • New York City
  • Bohemia
  • United States

Money:

  • $ .0001
  • $ .10
  • one cent $ .01

Person:

  • Orville Drive
  • Hans J. Kaemmlein
  • Alan W. Schoenbart