EXHIBIT 10.23
EQUITY LINE PURCHASE AGREEMENT
By and Between
JAG Media Holdings, Inc.
and
Cornell Capital Partners, LP
EQUITY LINE PURCHASE AGREEMENT, dated as of April 9, 2002 (this
"Agreement"), by and between Cornell Capital Partners, LP, a Delaware limited
partnership (the "Investor") and JAG Media Holdings, Inc., a Nevada corporation
(the "Company").
WHEREAS, the Investor is a limited partnership and the business affairs
of the Investor are managed by Yorkville Advisors Management, LLC, a Delaware
limited liability company; and
WHEREAS, the parties desire that, upon the terms and subject to the
conditions contained herein, the Company may issue and sell to Investor from
time to time as provided herein and pursuant to one or more of the exemptions
from the registration requirements of the Securities Act of 1933, as amended
(the "Act"), provided by Section 4(2) of the Act or Regulation D promulgated
thereunder, shares of its Common Stock (as defined below) for an aggregate
purchase of up to Ten Million Dollars ($10,000,000); and
WHEREAS, Westrock Advisors, Inc., a New York corporation and registered
broker-dealer (the "Placement Agent"), has been engaged as the Company's
exclusive placement agent for the offering;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Investor agree
as follows:
ARTICLE I
CERTAIN DEFINITIONS
"Act" has the meaning ascribed to it in the recitals hereto.
"Action" has the meaning ascribed to it in Section 4.15 hereof.
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly controls or is controlled by or under common control with
such Person. For the purposes of this definition, "control," when used with
respect to any Person, means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise;
and the terms of "affiliated," "controlling" and "controlled" have meanings
correlative to the foregoing.
"Bid Price" means the closing bid price of the Common Stock on the
Principal Market for its regular trading session on the date in question (as
reported by Bloomberg L.P.), or if there is no such price on such date, then the
closing bid price as reported on the date nearest preceding such date.
"Business Day" means any day (other than a Saturday or Sunday) on which
banks are open for business in New York City, New York.
"Calculation Notice" means the written notice of the Company, in the
form of Exhibit B hereto, which is delivered to the Investor on a Closing Date,
specifying the Investment Amount as determined pursuant to Section 2.1 hereof
and number of Put Shares issuable to the Investor at such Closing.
"Closing" has the meaning ascribed to it in Section 2.2(a) hereof.
"Closing Date" has the meaning ascribed to it in Section 2.2(a) hereof.
"Commission" means the U.S. Securities and Exchange Commission.
"Commitment Period" means the period commencing on the Effective Date
and expiring on the earliest to occur of: (x) the date on which the Investor
shall have paid an aggregate of Ten Million Dollars ($10,000,000) in Investment
Amounts for Put Shares pursuant to this Agreement, (y) the date this Agreement
is terminated in accordance with the terms hereof, or (z) the date occurring
twenty four (24) months after the Effective Date.
"Common Stock" means the Company's Class A common stock, par value
$.00001 per share, or such securities into which such stock shall hereafter be
reclassified.
"Company Required Items" has the meaning ascribed to it in Section
2.2(a) hereof.
"Condition Satisfaction Date" has the meaning ascribed to it in Section
6.1 hereof.
"Effective Date" means the date on which the Commission first declares
effective a Registration Statement meeting the requirements of the Registration
Rights Agreement and registering the resale by the Investor of the Put Shares.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"GAAP" has the meaning ascribed to it in Section 4.7 hereof.
"Intellectual Property Rights" has the meaning ascribed to it in
Section 4.12 hereof.
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"Investment Amount" means the dollar amount to be invested by the
Investor to purchase Put Shares in connection with a Put.
"Issuance Deadline" has the meaning ascribed to it in Section 2.2(c)
hereof.
"Market Price" means the lowest Bid Price during the Valuation Period.
"Material Permits" has the meaning ascribed to it in Section 4.13
hereof.
"Payment Deadline" has the meaning ascribed to it in Section 2.2(c)
hereof.
"Person" means an individual, a corporation, a partnership, a limited
liability company, an association, a trust or other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"Placement Agent" has the meaning ascribed to it in the recitals
hereto.
"Placement Agent Agreement" means that certain Placement Agent
Agreement, dated the date hereof, by and among the Company, the Investor and the
Placement Agent, in the form of Exhibit D hereto.
"Placement Agent Fee Shares" has the meaning ascribed to it in Section
2.5(c) hereof.
"Principal Market" means whichever of the OTC Bulletin Board, Nasdaq
National Market, Nasdaq SmallCap Market, American Stock Exchange or New York
Stock Exchange that is then the principal trading exchange, market or quotation
system for the Common Stock.
"Purchase Price" means with respect to Put Shares, an amount equal to
95% of the Market Price for the applicable Valuation Period.
"Put" means the exercise by the Company of its right to require the
Investor to purchase Put Shares pursuant to the terms of this Agreement.
"Put Date" means the date that a Put Notice is deemed delivered in
accordance with Section 2.1(a).
"Put Notice" means the written notice of the Company, in the form of
Exhibit A hereto, which is delivered to the Investor pursuant to Section 2.1(a)
hereof.
"Put Shares" means the number of shares of Common Stock that will be
issued and sold to the Investor pursuant to a Put.
"Registrable Securities" shall include all Put Shares and, for purposes
of Section 6(e) of the Registration Rights Agreement only (Piggy-Back
Registrations), shall also include the Placement Agent Fee Shares.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated the date hereof, by and between the Company and the Investor,
in the form of Exhibit C hereto.
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"Registration Statement" shall have the meaning set forth in the
Registration Rights Agreement.
"Securities" means, collectively, the Put Shares and the Placement
Agent Fee Shares.
"SEC Documents" has the meaning ascribed to it in Section 4.7 hereof.
"Subsidiaries" has the meaning ascribed to it in Section 4.1 hereof.
"Trading Day" means (a) a day on which the Common Stock is traded on
the Principal Market on which the Common Stock is then listed or quoted, or (b)
if the Common Stock is not listed or quoted for trading on a Principal Market, a
day on which the Common Stock is traded in the over-the-counter market, as
reported by the National Quotation Bureau Incorporated (or any similar
organization or agency succeeding its functions of reporting prices); provided,
that in the event that the Common Stock is not listed or quoted as set forth in
(a) or (b) hereof, then Trading Day shall mean any Business Day.
"Transaction Documents" has the meaning ascribed to it in Section 4.1
hereof.
"Valuation Period" means the period of five (5) Trading Days commencing
on the first Trading Day following the Put Date.
ARTICLE II
PURCHASE AND SALE OF COMMON STOCK
Section 2.1 Investments.
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(a) Put Notice. Subject to the conditions and limitations
set forth herein, the Company may make a Put at any time during the
Commitment Period by the delivery of a duly completed Put Notice.
(i) Delivery. At least five (5) Trading Days
must have elapsed since the immediately preceding Put Date
before the Company delivers a new Put Notice to the Investor
pursuant to this Section 2.1. A Put Notice shall be deemed
delivered on: (A) the Trading Day it is received by facsimile
or otherwise by the Investor if such notice is received prior
to the close of business on such days, or (B) the immediately
succeeding Trading Day if it is received by facsimile or
otherwise after close of business on a Trading Day or at any
time on a day which is not a Trading Day.
(ii) Content. Each Put Notice shall state the
following information: (A) the Put Date, (B) the Closing Date
for the Put, including the first and last dates of the
Valuation Period applicable to such Closing, and (C) the
Investment Amount that the Company intends to sell to the
Investor.
(b) Limitations on Puts and Common Stock Issuable.
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(i) The maximum Investment Amounts for all Puts
is an aggregate of Ten Million Dollars ($10,000,000).
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(ii) The Investment Amount for each Put shall be
equal to the amount specified by the Company in its Put
Notice; provided, however, that such amount shall not exceed
Five Hundred Thousand Dollars ($500,000) per Put.
(iii) The Company's right to deliver a Put Notice
is subject to the satisfaction by the Company, or waiver by
the Investor, of the conditions set forth in Section 6.1(d)
through (g) hereof.
Section 2.2 Closings.
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(a) Company Obligations. Subject to the satisfaction of
the conditions set forth in Section 6.1 of this Agreement, the closing
of the purchase by the Investor of Put Shares hereunder (a "Closing")
shall occur on the first (1st) Business Day following the end of a
Valuation Period for such Put (a "Closing Date"). The Investment Amount
shall be funded in full on the Closing Date. The number of Put Shares
issuable on the Closing Date of a Put shall be equal to the Investment
Amount divided by the Purchase Price. On the Closing Date, the Company
shall (x) deliver (or cause to be delivered) to the Investor the
calculation notice in the form of Exhibit B hereto setting forth the
calculation of the total number of Put Shares that are to be issued and
sold at such Closing for the specified Investment Amount; (y) deliver
(or cause to be delivered) by 1:00 p.m. EST to the Investor's account
through the Depository Trust Company DWAC system, per written account
instructions delivered by the Investor to the Company at least three
(3) Business Days preceding the Closing, the Put Shares to be issued
and sold to the Investor at such Closing; and (z) deliver (or cause to
be delivered) to the Investor all other documents, instruments and
writings required to be delivered by it pursuant to the Transaction
Documents (as defined herein) in order to effect a Closing hereunder
(the items contemplated by clauses (x) through (z) above are
collectively referred to as the "Company Required Items").
The Company acknowledges that the Investor may sell the Put Shares
purchased pursuant to a Put Notice during the corresponding Valuation
Period.
(b) Investor Obligations. Upon receipt of the Company
Required Items and subject to the satisfaction by the Company, or
waiver by the Investor, of the conditions to the Investor's obligation
to purchase Put Shares set forth in Section 6.1, on each Closing Date
the Investor shall deliver (or cause to be delivered) to the Company,
the Investment Amount for the Put Shares to be issued and sold at such
Closing, less any cash fee to which the Investor pursuant to Section
2.5(c) hereof, or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP pursuant to Section 2.5(a)
hereof, is entitled with respect to such Closing, no later than the
close of business on the Closing Date.
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(c) Delay or Cancellation of Closing. In the event that
(i) the Company delivers the Company Required Items on the Closing
Date, (ii) the conditions to the Investor's obligation to purchase the
Put Shares set forth in Section 6.1 are either satisfied or waived on
the Closing Date and (iii) Investor's account is credited with the Put
Shares after 1:00 p.m. EST on the Closing Date but prior to the close
of business on the Closing Date (the "Issuance Deadline"), the Investor
shall deliver (or cause to be delivered) to the Company, the Investment
Amount for the Put Shares to be issued and sold at such Closing, less
any cash fee to which the Investor pursuant to Section 2.5(b) hereof,
or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP pursuant to Section 2.5(a) hereof, is entitled
with respect to such Closing, no later than the close of business on
the Business Day following the initially scheduled Closing Date (the
"Payment Deadline"). In the event that: (i) any Company Required Item
shall not have been delivered, (ii) any condition set forth in Section
6.1 shall not have been fulfilled by the Company or waived by the
Investor, (iii) the Investor's account shall not have been credited
with the Put Shares to be issued and sold to the Investor by the
Issuance Deadline or (iv) the Investor shall for any reason fail to
make payment of the Investment Amount to the Company by the Payment
Deadline, such Closing shall be canceled and any Company Required Items
delivered to the Investor and any Put Shares credited to the Investors
account, in both cases, in connection with such Closing, shall be
returned to, or as directed by, the Company.
(d) Damages. In the event the Investor sells the Common
Stock as contemplated by the last sentence of Section 2.2(a) above and
the Company fails to perform its obligations as mandated in Sections
2.2(a) and (c) above, and specifically fails to provide the Investor
with the shares of Common Stock for the applicable Put, the Company
acknowledges that the Investor shall suffer financial hardship and
therefore shall be liable for any and all out-of-pocket expenses,
commissions or fees incurred by the Investor as a result thereof, but
not for lost profits or other consequential damages.
Section 2.3 Termination of Investment Obligation.
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(a) The obligation of the Investor to purchase Put Shares
shall, at the Investor's option, terminate permanently (including with
respect to a Closing Date that has not yet occurred) in the event that:
(i) the Company shall at any time breach in any material respect its
obligations under the Transaction Documents (as hereinafter defined)
and such breach is not cured by the twentieth (20th) day following
notice thereof, (ii) the Registration Statement shall not have become
effective by the expiration of the one hundred eightieth (180th) day
following the date of this Agreement or (iii) if, after the Effective
Date, the Registration Statement ceases to be effective as to all
Registrable Securities then owned by or issuable to the Investor, or
the prospectus thereunder is not available for use by the Investor to
sell Registrable Securities, in either case, for an aggregate of forty
five (45) Trading Days.
(b) The obligation of the Company to sell Put Shares to
the Investor following delivery of a Put Notice shall terminate if the
Investor fails to honor such Put Notice under circumstances where the
conditions to the Closing of such Put have been satisfied, and the
Company notifies Investor of such termination. Notwithstanding any such
termination, the Company shall maintain the Registration Statement in
effect (and shall permit the Investor to use the prospectus thereunder
to sell Registrable Securities) for not less than forty five (45)
Trading Days following the date of any such termination.
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(c) The Company shall have the right, by giving five (5)
days' prior notice, to terminate this Agreement in its sole discretion
at any time on or after the ninety (90) day anniversary of the
Effective Date without any liability to the Investor; provided,
however, that in the event of a termination of the Agreement pursuant
to this Section 2.3(c), the Placement Agent Fee Shares pursuant to
Section 2.5 (c) hereof, if not delivered, shall be immediately issued
and delivered to the Placement Agent and the piggy-back registration
rights granted to the Placement Agent with respect to the Placement
Agent Fee Shares pursuant to Section 6(e) of the Registration Rights
Agreement shall continue in full force and effect.
Section 2.4 Deliveries. (a) Concurrently with their execution and
delivery of this Agreement, the each party hereto shall deliver or cause to be
delivered to the other executed original copies of this Agreement, the
Registration Rights Agreement and the Placement Agent Agreement
(b) On the Effective Date, the Company shall deliver to
the Investor and the Placement Agent an opinion letter from counsel to
the Company substantially in the form of Exhibit E hereto.
Section 2.5 Fees and Expenses. The Company hereby agrees to pay
the following fees:
(a) Legal Fees. The Company shall pay on the first (1st)
Closing Date hereunder a one-time legal fee of Seven Thousand Five
Hundred Dollars ($7,500) to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP for services rendered
to the Investor in connection with the preparation and negotiation of
the Transaction Documents, which fee may be deducted by the Investor
from the gross proceeds due and payable to the Company hereunder.
(b) Cash Fee. On each Closing Date, the Company shall pay
to the Investor a cash fee in an amount equal to five percent (5%) of
the Investment Amount for such Closing, which cash fee may be deducted
by the Investor from the gross proceeds due and payable to the Company
hereunder.
(c) Placement Agent Fee Shares.
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(i) The Company shall deliver to the Placement
Agent, or its designee, within three (3) Business Days
following the Effective Date, a stock certificate for 10,000
shares of Common Stock issued in the name of the Placement
Agent or its designee, as the case may be, (the "Placement
Agent Fee Shares").
(ii) The Placement Agent Fee Shares shall be
deemed fully earned upon execution of this Agreement. If (x)
the Registration Statement registering the resale by the
Placement Agent of the Placement Agent Shares is not declared
effective by the Commission within 180 calendar days following
the date of this Agreement or (y) the Company terminates this
Agreement pursuant to Section 2.3(c) hereof prior to the
issuance of a stock certificate for the Placement Agent Fee
Shares, then the Company shall immediately issue and deliver
to the Placement Agent a stock certificate for the Placement
Agent Fee Shares which bears the following restrictive legend:
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"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
STATE SECURITIES LAWS, AND NO TRANSFER OF THESE SECURITIES MAY BE MADE
EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
ACT OR (B) PURSUANT TO AN EXEMPTION THEREFROM WITH RESPECT TO WHICH THE
COMPANY MAY REQUIRE AN OPINION OF COUNSEL FOR THE HOLDER THAT SUCH
TRANSFER IS EXEMPT FROM THE REQUIREMENTS OF THE ACT."
(iii) The Company agrees to grant to the Placement
Agent piggy-back registration rights with respect to the
Placement Agent Fee Shares pursuant to the terms and
conditions of the Registration Rights Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF INVESTOR
The Investor represents and warrants to the Company as follows:
Section 3.1 Intent. The Investor is acquiring the Investor Shares
for its own account for investment purposes and not with a view towards their
distribution and has no present arrangement (whether or not legally binding) at
any time to sell or distribute the Put Shares to or through any Person or
entity; provided, however, that by making the representations herein, the
Investor does not agree to hold Securities for any minimum or other specific
term and reserves the right to dispose of the Securities at any time in
accordance with federal and state securities laws applicable to such disposition
and the terms and conditions, if any, relating thereto as set forth in this
Agreement and the Registration Rights Agreement.
Section 3.2 Sophisticated Investor. The Investor is a
sophisticated investor (as described in Rule 506(b)(2)(ii) of Regulation D) and
an accredited investor (as defined in Rule 501 of Regulation D), and Investor
has such experience in business and financial matters that it has the capacity
to protect its own interests in connection with this transaction and is capable
of evaluating the merits and risks of an investment in the Securities. The
Investor acknowledges that an investment in the Securities is speculative and
involves a high degree of risk.
Section 3.3 Authority. The Investor has the requisite corporate
power and authority to enter into and to consummate the transactions
contemplated by this Agreement and the Registration Rights Agreement and
otherwise to carry out its obligations thereunder. The execution and delivery of
each of this Agreement and the Registration Rights Agreement by the Investor and
the consummation by it of the transactions contemplated thereby have been duly
authorized by all necessary corporate action on the part of the Investor. Each
of this Agreement and the Registration Rights Agreement has been duly executed
by the Investor and, when delivered in accordance with the terms hereof, will
constitute the valid and binding obligation of the Investor enforceable against
the Investor in accordance with its terms.
Section 3.4 Organization and Standing. Investor validly exists,
and is in good standing under the laws of the jurisdiction of its organization.
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Section 3.5 Manner of Sale. At no time was Investor presented
with or solicited by or through any leaflet, public promotional meeting,
television advertisement or any other form of general solicitation or
advertising in connection with its investment in the Securities.
Section 3.6 Financial Capacity. Investor currently has the
financial capacity to meet its obligations to the Company hereunder, and the
Investor has no present knowledge of any circumstances which could cause it to
become unable to meet such obligations in the future.
Section 3.7 Underwriter Liability. Investor understands that it
is the position of the Commission that with respect to any disposition of
Securities through a Registration Statement the Investor will be treated as an
underwriter within the meaning of Section 2(11) of the Act. The Investor agrees
to be identified as an underwriter of the Registrable Securities sold by it in
the Registration Statement.
Section 3.8 Access to Information. Investor acknowledges that it
has reviewed the SEC Documents and has been afforded: (i) the opportunity to ask
such questions as it has deemed necessary of, and to receive answers from,
representatives of the Company concerning the terms and conditions of the
offering of the Securities and the merits and risks of investing in the
Securities; (ii) access to information about the Company and the Company's
financial condition, results of operations, business, properties, management and
prospects sufficient to enable it to evaluate its investment; and (iii) the
opportunity to obtain such additional information which the Company possesses or
can acquire without unreasonable effort or expense that is necessary to make an
informed investment decision with respect to the investment and to verify the
accuracy and completeness of the information contained in the SEC Documents.
Neither such inquiries nor any other investigation conducted by or on behalf of
such Purchaser or its representatives or counsel shall modify, amend or affect
Investor's right to rely on the truth, accuracy and completeness of the SEC
Documents and the Company's representations and warranties contained in the
Transaction Documents.
The Company acknowledges and agrees that the Investor has not made and
does not make any representations or warranties with respect to the transactions
contemplated hereby other than as specifically set forth in this Article III.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Investor as follows:
Section 4.1 Organization and Qualification. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Nevada, with the requisite corporate power and authority to
own and use its properties and assets and to carry on its business as currently
conducted. The Company has no subsidiaries other than JAG Media LLC, a Delaware
limited liability company, JAG Company Voice LLC, a Delaware limited liability
company and its subsidiary in England which is in the process of being dissolved
(the "Subsidiaries"). The Company is duly qualified to do business and is in
good standing as a foreign corporation in each jurisdiction in which the nature
of the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as
the case may be, would not reasonably be expected to, individually or in the
aggregate, (x) adversely affect the legality, validity or enforceability of the
Securities or any of this Agreement, the Registration Rights Agreement and the
Placement Agent Agreement (collectively, the "Transaction Documents"), (y) have
or result in a material adverse effect on the results of operations, assets,
prospects, or condition (financial or otherwise) of the Company, taken as a
whole, or (z) adversely impair the Company's ability to perform fully on a
timely basis its obligations under any of the Transaction Documents (any of (x),
(y) or (z), a "Material Adverse Effect").
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Section 4.2 Authorization; Enforcement. The Company has the
requisite corporate power and authority to enter into and to consummate the
transactions contemplated by each of the Transaction Documents and otherwise to
carry out its obligations thereunder. The execution and delivery of each of the
Transaction Documents by the Company and the consummation by it of the
transactions contemplated thereby have been duly authorized by all necessary
corporate action on the part of the Company. Each of the Transaction Documents
has been duly executed by the Company and, when delivered (or filed, as the case
may be) in accordance with the terms hereof, will constitute the valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms. The Company is not in violation of any of the provisions of its
articles of incorporation or by-laws or other organizational documents.
Section 4.3 Capitalization. As of April 9, 2002, the Company had
200,000,000 shares of all classes of stock authorized, which includes
155,000,000 shares of Class A common stock, 30,000,000 shares of Series 1 Class
B common stock and 15,000,000 shares of preferred stock. As of the Effective
Date there will be approximately 27,352,953 shares of Class A common stock and
approximately 2,735,292 shares of Series 1 Class B common stock issued and
outstanding. The Company owns all of the capital stock of its Subsidiaries. No
shares of Common Stock are entitled to preemptive or similar rights, nor is any
holder of securities of the Company entitled to preemptive or similar rights
arising out of any agreement or understanding with the Company by virtue of any
of the Transaction Documents. The issue and sale of the Securities hereunder
will not obligate the Company to issue shares of Common Stock or other
securities to any Person other than to the Investor and will not result in any
right of any holder of the Company's securities to adjust the exercise,
conversion or reset price under such securities.
Section 4.4 Issuance of the shares of Common Stock. When issued
and paid for in accordance with the terms hereof, the Securities will be duly
and validly issued, fully paid and nonassessable, free and clear of all liens,
encumbrances and rights of first refusal of any kind (collectively, "Liens").
The Company has on the date hereof and will, at all times during the Commitment
Period maintain an adequate reserve of duly authorized shares of Common Stock,
reserved for issuance to the Investor to enable it to perform its exercise and
other obligations under this Agreement.
Section 4.5 Filings, Consents and Approvals. The Company is not
required to obtain any consent, waiver, authorization or order of, give any
notice to, or make any filing or registration with, any court or other federal,
state, local or other governmental authority or other Person in connection with
the execution, delivery and performance by the Company of the Transaction
Documents, other than (i) the filing of the Registration Statement with the
Commission, (ii) filings as may be required under state securities laws, and
(iii) in all other cases where the failure to obtain such consent, waiver,
authorization or order, or to give such notice or make such filing or
registration would not reasonably be expected to have or result in, individually
or in the aggregate, a Material Adverse Effect (collectively, the "Required
Approvals").
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Section 4.6 No Default or Violation. Except as described in the
SEC Documents, the Company (i) is not in default under or in violation of (and
no event has occurred which has not been waived which, with notice or lapse of
time or both, would result in a default by the Company under), nor has the
Company received notice of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement or any other agreement or
instrument to which it is a party or by which it or any of its properties is
bound, (ii) is not in violation of any order of any court, arbitrator or
governmental body, and (iii) is not in violation of any statute, rule or
regulation of any governmental authority, in each case of clauses (i), (ii) or
(iii) above, except as would not reasonably be expected to individually or in
the aggregate, have or result in a Material Adverse Effect.
Section 4.7 SEC Documents; Financial Statements. Since January 5,
2000, the Company has filed all reports required to be filed by it under the
Exchange Act including pursuant to Section 13(a) or 15(d) thereof (the foregoing
materials being collectively referred to herein as the "SEC Documents") on a
timely basis or has received a valid extension of such time of filing and has
filed any such SEC Documents prior to the expiration of any such extension. As
of their respective dates, the SEC Documents complied in all material respects
with the requirements of the Act and the Exchange Act and the rules and
regulations of the Commission promulgated thereunder, and none of the SEC
Documents, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. All material agreements to which the Company is
a party or to which the property or assets of the Company are subject have been
filed as exhibits to the SEC Documents as required unless properly excused from
filing by Commission regulation. The financial statements of the Company
included in the SEC Documents comply in all material respects with applicable
accounting requirements and the rules and regulations of the Commission with
respect thereto as in effect at the time of filing. Such financial statements
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis during the periods involved ("GAAP"), except as
may be otherwise specified in such financial statements or the notes thereto,
and fairly present in all material respects the financial position of the
Company and its consolidated subsidiaries as of and for the dates thereof and
the results of operations and cash flows for the periods then ended, subject, in
the case of unaudited statements, to normal, immaterial, year-end audit
adjustments. Since January 31, 2002, except as specifically disclosed in the SEC
Documents, (a) there has been no event, occurrence or development that has
resulted or that could result in a Material Adverse Effect, (b) the Company has
not incurred any liabilities (contingent or otherwise) other than (x)
liabilities incurred in the ordinary course of business consistent with past
practice and (y) liabilities not required to be reflected in the Company's
financial statements pursuant to GAAP or otherwise required to be disclosed in
filings made with the Commission, (c) the Company has not altered its method of
accounting or the identity of its auditors and (d) the Company has not declared
or made any payment or distribution of cash or other property to its
stockholders or officers or directors (other than in compliance with existing
compensation agreements or Company stock option plans) with respect to its
capital stock, or purchased, redeemed (or made any agreements to purchase or
redeem) any shares of its capital stock.
11
Section 4.8 Investment Company. The Company is not, and is not an
Affiliate of, an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
Section 4.9 Certain Fees. Other than fees payable to the
Investor, or its designee, pursuant to Section 2.5 of this Agreement, no fees or
commissions will be payable by the Company to any broker, financial advisor or
consultant, finder, placement agent, investment banker, bank or other similar
Person with respect to the transactions contemplated by this Agreement.
Section 4.10 Solicitation Materials. Neither the Company nor any
Person acting on the Company's behalf has solicited any offer to buy or sell the
Securities by means of any form of general solicitation or advertising.
Section 4.11 Listing and Maintenance Requirements Compliance. The
Common Stock has not, during the two years preceding the date of this Agreement,
been delisted from any securities market or trading facility. The Company has
not, in the two years preceding the date of this Agreement received notice
(written or oral) from its Principal Market to the effect that the Company is
not in compliance with the listing or maintenance requirements of such exchange
or market.
Section 4.12 Patents and Trademarks. The Company has, or has
rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, licenses and rights which
are necessary or material for use in connection with its business as described
in the SEC Documents and which the failure to so have would have a Material
Adverse Effect (collectively, the "Intellectual Property Rights"). The Company
has not received a written notice that the Intellectual Property Rights used by
the Company violates or infringes upon the rights of any Person, to the best
knowledge of the Company. To the Company's knowledge, all such Intellectual
Property Rights are enforceable and there is no existing infringement by another
Person of any of the Intellectual Property Rights.
Section 4.13 Regulatory Permits The Company possesses all
certificates, authorizations and permits issued by the appropriate Federal,
state or foreign regulatory authorities necessary to conduct its business as
described in the SEC Documents, except where the failure to possess such permits
would not reasonably be expected to, individually or in the aggregate, have or
result in a Material Adverse Effect ("Material Permits"), and the Company has
not received any notice of proceedings relating to the revocation or
modification of any Material Permit.
Section 4.14 Title. The Company has good and marketable title in
fee simple to all real property owned by it which is material to the business of
the Company and good and marketable title in all personal property owned by it
which is material to the business of the Company, in each case free and clear of
all Liens, except for Liens as do not materially affect the value of such
property and do not interfere with the use made and proposed to be made of such
property by the Company.
12
Section 4.15 Litigation. Except as set forth on Schedule 4.15
hereto, there is no action, suit, inquiry, notice of violation, proceeding or
investigation pending or, to the knowledge of the Company, threatened against or
affecting the Company or any of its properties before or by any court,
arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an "Action") which
challenges the legality, validity or enforceability of any of the Transaction
Documents or the Securities.
Section 4.16 Taxes. All Federal, state, local and foreign tax
returns, information returns, reports and estimated Tax returns have been timely
filed on behalf of the Company and all Taxes shown on any such return or report
have been paid on a timely basis. There is no action, suit, proceeding,
investigation, audit or claim now proposed or pending with respect to any Tax of
the Company and the Company is not aware of any threatened claim for Tax
deficiencies. There are no outstanding agreements or waivers for the extension
of time for assessment of any Tax payable by the Company, nor has any such
waiver or agreement been requested by the Internal Revenue Service or any other
taxing authority. The Company has not filed or been included in a consolidated,
unitary or combined Tax return with another person. The Company has collected or
withheld all material amounts required to be collected or withheld by it for any
Taxes, and all such material amounts have been paid to the appropriate
governmental agencies or set aside in appropriate accounts for future payment
when due. The Company is in material compliance with, and its records contain
all material information and documents necessary to comply with, all applicable
information reporting and Tax withholding requirements. As used herein, the
terms "Tax" and "Taxes" shall mean (i) any income, alternative or add-on minimum
tax, gross income, gross receipts, franchise, profits, including estimated taxes
relating to any of the foregoing, or other similar tax or other like assessment
or charge of similar kind whatsoever, (ii) any sales, use, ad valorem, business
license, withholding, payroll, employment, excise, stamp, transfer, recording,
occupation, premium, property, value added, custom duty, severance, windfall
profit tax, license, or other tax, governmental fee or other similar assessment
or charge, and (iii) any interest and any penalty, addition to tax or additional
amount imposed by any federal, state, local or foreign governmental authority
responsible for the imposition of any such tax (domestic or foreign).
Section 4.17 No Conflicts. The execution, delivery and performance
of the Transaction Documents by the Company and the consummation by the Company
of the transactions contemplated thereby do not and will not (i) conflict with
or violate any provision of the Company's certificate or articles of
incorporation, bylaws or other charter documents (each as amended through the
date hereof), or (ii) subject to obtaining the Required Approvals (as defined
below), conflict with, or constitute a default (or an event which with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company debt or otherwise) or other understanding to
which the Company is a party or by which any property or asset of the Company is
bound or affected, or (iii) result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or
governmental authority to which the Company is subject (including federal and
state and foreign securities laws and regulations), or by which any property or
asset of the Company is bound or affected; except in the case of each of clauses
(ii) and (iii), as could not, individually or in the aggregate, have or result
in a Material Adverse Effect. The business of the Company is not being conducted
in violation of any law, ordinance or regulation of any governmental authority,
except for violations which, individually or in the aggregate, could not have or
result in a Material Adverse Effect.
13
Section 4.18 Disclosure. All disclosure provided to the Investor
regarding the Company, its business and the transactions contemplated hereby,
furnished by or on behalf of the Company are true and correct in all material
respects and do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading.
Section 4.19 Absence of Certain Proceedings. None of the following
has occurred to the Company:
(a) A filing by or against the Company of a petition
under federal bankruptcy or state insolvency laws, or the appointment
by a governmental authority (with or without consent) of a receiver,
trustee, fiscal agent or similar Person for the business or property of
the Company, or any partnership in which it was a general partner or
corporation or business association in which it was an executive
officer or director either at the time of such petition or appointment
or during the two years prior to that time.
(b) A conviction in a criminal Action or being named a
subject of a pending criminal Action (excluding traffic violations and
other minor offenses).
(c) Being found or otherwise judged by a court of
competent jurisdiction in a non-criminal Action or by the Commission, a
stock market or another self-regulatory organization, to have violated
any securities law or to have breached a fiduciary duty, where such
finding or judgment has not been subsequently reversed, suspended, or
vacated.
(d) Being subject to any order, judgment or decree (not
subsequently reversed, suspended or vacated) of any court of competent
jurisdiction, stock market authority or other self-regulatory
organization, permanently or temporarily enjoining, barring, suspending
or otherwise limiting, any of the then material activities of the
Company.
ARTICLE V
OTHER AGREEMENTS OF THE PARTIES
Section 5.1 Listing of Common Stock. The Common Stock is traded
on the OTC Bulletin Board. The Company does not currently intend to list the
Common Stock on another Principal Market. The Company agrees that if the Company
applies to have the Common Stock traded on any other Principal Market, it will
include in such application the issued and issuable Securities.
14
Section 5.2 Exchange Act Registration; Rule 144 Compliance. The
Company will cause its Common Stock to continue to be registered under Section
12(g) or 12(b) of the Exchange Act, will use its best efforts to timely comply
in all respects with its reporting and filing obligations under the Exchange
Act, and will not take any action or file any document (whether or not permitted
by Exchange Act or the rules thereunder) to terminate or suspend such
registration or to terminate or suspend its reporting and filing obligations
thereunder. During the Commitment Period, the Company will notify the Investor
immediately following each filing by the Company under the Exchange Act. As long
as the Investor owns Securities, if the Company is not required to file reports
pursuant to such sections, it will prepare and furnish to the Investor and make
publicly available in accordance with Rule 144(c) promulgated under the Act such
information as is required for the Investor to sell the Securities under Rule
144 promulgated under the Act. The Company further covenants that it will take
such further action as any holder of Securities may reasonably request, all to
the extent required from time to time to enable such Person to sell such
Securities without registration under the Act within the limitation of the
exemptions provided by Rule 144 promulgated under the Act, including causing its
attorneys to render and deliver any legal opinion required in order to permit
such Person to sell its Securities under Rule 144 upon notice of an intention to
sell on Form 144 or other form of notice having a similar effect. Upon the
request of any such Person, the Company shall deliver to such Person a written
certification of a duly authorized officer as to whether it has complied with
such requirements.
Section 5.3 Notice of Certain Events Affecting Registration;
Suspension of Right to Make a Put. The Company will immediately notify the
Investor upon the occurrence of any of the following events in respect of a
Registration Statement or related prospectus in respect of an offering of
Registrable Securities; (i) receipt of any request for additional information
from the Commission or any other federal or state governmental authority during
the period of effectiveness of the Registration Statement the response to which
would require any amendments or supplements to the registration statement or
related prospectus; (ii) the issuance by the Commission or any other federal or
state governmental authority of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any proceedings for that
purpose; (iii) receipt of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose; (iv) the happening of any event that makes any
statement made in the Registration Statement or related prospectus or any
document incorporated by reference untrue in any material respect or that
requires the making of any changes in the Registration Statement, related
prospectus or documents so that, in the case of the Registration Statement, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of the related prospectus, it will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; and (v) the Company's reasonable determination that a post-effective
amendment to the prospectus or Registration Statement, as the case may be, would
be appropriate; and the Company will promptly make available to the Investor any
such supplement or amendment to the related prospectus or Registration
Statement.
15
Section 5.4 Certain Securities Laws Disclosures; Publicity. The
Company may in its sole discretion issue a press release acceptable to the
Investor disclosing the transactions contemplated hereby, and shall file with
the Commission a Current Report on Form 8-K disclosing the transactions
contemplated hereby within 15 calendar days after the date of this Agreement.
The Company and the Investor shall consult with each other in issuing any other
press releases or otherwise making public statements or filings and other
communications with the Commission or any regulatory agency or stock market or
trading facility with respect to the transactions contemplated hereby and
neither party shall issue any such press release or otherwise make any such
public statement, filings or other communications without the prior consent of
the other, except that if such disclosure is required by law or stock market
regulation, in which such case the disclosing party shall promptly provide the
other party with prior notice of such public statement, filing or other
communication. Notwithstanding the foregoing, the Company shall not publicly
disclose the name of the Investor, or include the names of the Investor in any
filing with the Commission, or any regulatory agency, trading facility or stock
market without the prior written consent of the Investor, except to the extent
such disclosure (but not any disclosure as to the controlling Persons thereof)
is required by law or stock market regulations, in which case the Company shall
provide the Investor with prior notice of such disclosure.
Section 5.5 Use of Proceeds. The Company shall use the net
proceeds from the sale of the Securities for working capital purposes and not
for the satisfaction of any portion of the Company's debt (other than payment of
trade payables in the ordinary course of the Company's business and prior
practices) or to redeem any securities of the Company.
Section 5.6 Market Activity. The Investor agrees that it will not
engage, and will not induce any of its Affiliates to engage, in (a) short sales
of the Common Stock it purchases hereunder and (b) any activity that manipulates
the price of the Common Stock in violation of Regulation M promulgated under the
Exchange Act.
ARTICLE VI
CONDITIONS PRECEDENT TO THE RIGHT OF THE COMPANY TO DELIVER A
PUT NOTICE AND THE OBLIGATION OF THE INVESTOR TO CLOSE
Section 6.1 Conditions Precedent to the Obligation of the
Investor to Close. In addition to the limitations contained in Section 2.1(b),
the obligation of Investor hereunder to perform its obligations at any Closing
hereunder is subject to the satisfaction, on the applicable Closing Date (a
"Condition Satisfaction Date"), of each of the following conditions, or the
waiver by the Investor of such conditions:
(a) Representations and Warranties. The representations
and warranties of the Company in the Transaction Documents shall be
true and correct in all material respects as of the date when made and
as of the applicable Condition Satisfaction Date as though first made
at that time (except for representations and warranties that speak of a
specific date, which need only be true and correct in all material
respects as of such date).
(b) Performance by the Company. The Company shall have
performed, satisfied and complied in all material respects with all
covenants and agreements required by the Transaction Documents to be
performed, satisfied or complied with by the Company at or prior to
each Condition Satisfaction Date.
16
(c) Delivery of Closing Items. The Company shall have
transmitted the Put Shares and the Company Required Items required to
be delivered pursuant to Section 2.2.
(d) Registration Statement.
----------------------
(i) The Registration Statement shall have been
declared effective by the Commission and the
prospectus thereunder shall be available to
the Investor to resell all of the
Registrable Securities thereunder.
(ii) Neither the Company nor the Investor shall
have received notice that the Commission has
issued or intends to issue a stop order with
respect to the Registration Statement or
that the Commission otherwise has suspended
or withdrawn the effectiveness of the
Registration Statement, either temporarily
or permanently.
(iii) The Registration Statement (including the
information or documents incorporated by
reference therein) and any amendments or
supplements thereto shall not contain any
untrue statement of material fact or omit to
state any material fact required to be state
d therein or necessary to make the
statements therein not misleading.
(e) No Suspension of Trading In or Delisting of Common
Stock. The Put Shares issuable at the Closing shall be authorized for
trading or quotation on the Principal Market and trading in the Common
Stock shall not have been suspended by the Commission or the Principal
Market at any time from the Put Date through the Closing Date. The
Company shall not have received any notice from the Principal Market
threatening to delist the Common Stock from the Principal Market.
(f) Principal Market Requirements; Compliance. The
issuance of the Put Shares with respect to the applicable Closing, if
any, shall not violate the rules and regulations of the Principal
Market.
(g) Illegality. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of
competent jurisdiction or by the Principal Market that prohibits or
materially impairs the transactions contemplated by this Agreement.
(h) Market for Common Stock. On the Closing Date, there
shall be at least one bid for the Common Stock on the Principal Market.
ARTICLE VII
DUE DILIGENCE REVIEW; NON-DISCLOSURE OF NON-PUBLIC INFORMATION.
Section 7.1 Non-Disclosure of Non-Public Information.
----------------------------------------
(a) The Company shall not disclose non-public information
to the Investor or its advisors or representatives unless prior to
disclosure of such information the Company identifies such information
as being non-public information and the Investor enter into a
non-disclosure agreement in form mutually acceptable to the Company and
the Investor.
17
(b) The Company shall notify the Investor of any event or
the existence of any circumstance (without any obligation to disclose
the specific event or circumstance) of which it becomes aware, (whether
or not requested of the Company specifically or generally during the
course of due diligence by such persons or entities), which, if not
disclosed in the prospectus included in the Registration Statement
would cause such prospectus to include a material misstatement or to
omit a material fact required to be stated therein in order to make the
statements, therein in light of the circumstances in which they were
made, not misleading.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Governing Law. All questions concerning the
construction, validity, enforcement and interpretation of the Transaction
Documents shall be governed by and construed and enforced in accordance with the
internal laws of the State of New York, without regard to the principles of
conflicts of law thereof. Each party agrees that all legal proceedings
concerning the interpretations, enforcement and defense of the transactions
contemplated by this Agreement and any other Transaction Documents (whether
brought against a party hereto or its respective Affiliates, directors,
officers, shareholders, employees or agents) shall be commenced in the state and
federal courts sitting in the City of New York, Borough of Manhattan (the "New
York Courts"). Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the New York Courts for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein (including with respect to the enforcement of the any of the
Transaction Documents). Nothing contained herein shall be deemed to limit in any
way any right to serve process in any manner permitted by law.
Section 8.2 Notices. All notices, demands, requests, consents,
approvals, and other communications required or permitted hereunder shall be in
writing and, unless otherwise specified herein, shall be (i) personally served,
(ii) deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a Business Day during normal business hours where such notice is to
be received), or the first Business Day following such delivery (if delivered
other than on a Business Day during normal business hours where such notice is
to be received) or (b) on the second Business Day following the date of mailing
by reputable courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be:
If to the Company: JAG Media Holdings, Inc.
▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: Executive Vice President
18
With copies to: ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: W. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
If to the Investor: To the address set forth under the
Investor's name on the signature page
hereto.
With copies to: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ # ▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
A party may from time to time change its address or facsimile number for notices
under this Section by giving at least ten days' prior written notice of such
changed address or facsimile number to the other party hereto.
Section 8.3 Reporting Entity for the Common Stock. The reporting
entity relied upon for the determination of the trading price or trading volume
of the Common Stock on any given Trading Day for the purposes of this Agreement
shall be Bloomberg, L.P. or any successor to its function of reporting share
prices. The written mutual consent of the Investor and the Company shall be
required to employ any other reporting entity.
Section 8.4 Replacement of Certificates. Upon (i) receipt of
evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of a certificate representing any Securities and (ii) in the case
of any such loss, theft or destruction of such certificate, upon delivery of an
indemnity agreement or security reasonably satisfactory in form and amount to
the Company (which shall not exceed that required by the Company's transfer
agent in the ordinary course) or (iii) in the case of any such mutilation, on
surrender and cancellation of such certificate, the Company will execute and
deliver, in lieu thereof, a new certificate.
Section 8.5 Execution. This Agreement may be executed in two or
more counterparts, all of which when taken together shall be considered one and
the same agreement and shall become effective when counterparts have been signed
by each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.
19
Section 8.6 Entire Agreement. The Transaction Documents, together
with the exhibits and schedules thereto contain the entire understanding of the
parties with respect to the subject matter hereof and supersede all prior
agreements and understandings, oral or written, with respect to such matters,
which the parties acknowledge have been merged into such documents, exhibits and
schedules; provided, however, that the Equity Line Purchase Agreement, dated
August 17, 2001, by and between the parties hereto shall remain in full force
and effect until the Effective Date at which time such agreement shall be
superseded by this Agreement.
Section 8.7 Amendments; Waivers. No provision of this Agreement
may be waived or amended except in a written instrument signed, in the case of
an amendment, by the Company and the Investor or, in the case of a waiver, by
the party against whom enforcement of any such waiver is sought. No waiver of
any default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any other provision, condition or requirement hereof, nor shall any delay or
omission of either party to exercise any right hereunder in any manner impair
the exercise of any such right accruing to it thereafter.
Section 8.8 Survival. The representations, warranties and
agreements contained herein shall survive each Closing hereunder and shall cease
to be of further force and effect upon the expiration of the Commitment Period.
Section 8.9 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties and their successors and
permitted assigns. Neither the Investor nor the Company may assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the other party hereto, provided, that the Investor shall be
prohibited from assigning its obligation to purchase Put Shares hereunder.
Section 8.10 Remedies. In addition to being entitled to exercise
all rights provided herein or granted by law, including recovery of damages, the
Investor will be entitled to specific performance of the obligations of the
Company under the Transaction Documents. The Company and the Investor agree that
monetary damages may not be adequate compensation for any loss incurred by
reason of any breach of its obligations described in the foregoing sentence and
hereby agree to waive in any action for specific performance of any such
obligation the defense that a remedy at law would be adequate.
Section 8.11 Severability. In case any one or more of the
provisions of this Agreement shall be invalid or unenforceable in any respect,
the validity and enforceability of the remaining terms and provisions of this
Agreement shall not in any way be affected or impaired thereby and the parties
will attempt to agree upon a valid and enforceable provision which shall be a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement such substitute provision to have the
same force and effect as if it were part of this Agreement as of the date
hereof.
Section 8.12 Headings. The headings herein are for convenience
only, do not constitute a part of this Agreement and shall not be deemed to
limit or affect any of the provisions hereof.
20
Section 8.13 Fees and Expenses. Except as otherwise set forth in
Section 2.5 hereof and the Registration Rights Agreement, each party shall pay
the fees and expenses of its advisers, counsel, accountants and other experts,
if any, and all other expenses incurred by such party incident to the
negotiation, preparation, execution, delivery and performance of this Agreement.
Section 8.14 No Third-Party Beneficiaries. This Agreement is
intended for the benefit of the parties hereto and their respective successors
and permitted assigns and is not for the benefit of, nor may any provision
hereof be enforced by, any other Person.
[REMAINDER OF PAGE INTENTIONALLY BLANK SIGNATURE PAGES FOLLOW]
21
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by the undersigned, thereunto duly authorized, as of the date first set
forth above.
JAG MEDIA HOLDINGS, INC.
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK SIGNATURE PAGE FOR INVESTOR FOLLOWS]
CORNELL CAPITAL PARTNERS, LP
By: Yorkville Advisors, LLC
Its: General Partner
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Portfolio Manager
Address for Notice:
Cornell Capital Partners, LP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇--▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
EXHIBIT A
---------
PUT NOTICE
To: Cornell Capital Partners, L.P.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇--▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
JAG Media Holdings, Inc., a Nevada corporation (the "Company"), hereby
irrevocably elects to exercise its right pursuant to the Equity Line Purchase
Agreement, dated as of April 9, 2002 (the "Agreement"), to require Cornell
Capital Partners, LP to purchase Put Shares pursuant to terms of the Agreement.
Terms used and not defined herein shall have the meaning ascribed to them in the
Agreement
The Company hereby certifies that:
1. The requested Investment Amount is: $_______________, but not
to exceed $___________.
2. The Put Date is ____________.
3. The Closing Date is ____________ using a Valuation Period that
runs from _________ to __________.
By its delivery of this Put Notice, the Company hereby certifies that
as of the date of this Put Notice, it has satisfied all of the conditions set
forth in paragraphs 6.1(a), (b), (d), (e), (f) and (g) of the Agreement and
that, to the best of its knowledge, no statute, rule, regulation, executive
order, decree, ruling or injunction has been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction or by
the Principal Market that prohibits or materially impairs the transactions
contemplated hereby.
The undersigned has executed this Put Notice as of this _____ day of
______, _______.
JAG MEDIA HOLDINGS, INC.
By:
--------------------------------
Name:
Title:
EXHIBIT B
---------
CALCULATION NOTICE
To: Cornell Capital Partners, LP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇--▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
In connection with the Put Notice delivered on ___________ by JAG Media
Holdings, Inc. a Nevada corporation (the "Company"), pursuant to the Equity Line
Purchase Agreement, dated as of April 9, 2002 (the "Agreement"), the Company
hereby certifies that:
1. The total Investment Amount is: $_______________("IA").
2. The Valuation Period for this Closing runs from _________ to
__________.
3. 95% of the lowest Bid Price (subject to adjustment) during the
applicable Valuation Period is: $________ ("PP").
4. The number of Put Shares (IA/PP) issuable on this Closing Date
is:______________.
The undersigned has executed this Calculation Notice as of this
_____ day of ______, _______.
JAG MEDIA HOLDINGS, INC.
By:
--------------------------------
Name:
Title:
EXHIBIT C
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(Registration Rights Agreement)
EXHIBIT D
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(Placement Agent Agreement)
Exhibit E
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(Form of Legal Opinion)
(1) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Nevada and has all requisite
power and authority (corporate and other) to carry on its business and to own,
lease and operate its properties and assets as described in the SEC Documents.
The Company is duly qualified as a foreign corporation to do business and is in
good standing in every jurisdiction in which the Company owns or leases
property, other than those jurisdictions in which the failure so to qualify
would not have a Material Adverse Effect.
(2) When issued and paid for, the Put Shares and the Placement
Agent Fee Shares will be duly and validly issued, fully paid and nonassessable,
and free of any liens, encumbrances and preemptive or similar rights contained
in the Company's Certificate of Incorporation or Bylaws or in any agreement to
which the Company is party which is filed as an attachment to an SEC Document.
(3) The Company has the requisite corporate power and authority to
enter into and perform its obligations under the Transaction Documents and to
issue the Put Shares and the Placement Agent Fee Shares. The execution and
delivery of the Transaction Documents by the Company and the consummation by it
of the transactions contemplated thereby have been duly authorized by all
necessary corporate action and no further consent or authorization of the
Company, its Board of Directors or stockholders is required. Each of the
Transaction Documents has been duly executed and delivered by the Company and
each of the Transaction Documents constitutes valid and binding obligations of
the Company enforceable against the Company in accordance with their respective
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws relating to, or affecting generally the enforcement
of creditors' rights and remedies or by other equitable principles of general
application.
(4) The execution, delivery and performance of the Transaction
Documents by the Company and the consummation by the Company of the transactions
contemplated thereby, including, without limitation, the issuance of the Put
Shares and Placement Agent Fee Shares, do not and will not (i) conflict with or
violate any provision of the Company's Articles of Incorporation or Bylaws, (ii)
conflict with, or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, (A) any agreement,
indenture or other written instrument of the Company or instrument to which the
Company is a party attached as an exhibit to the SEC Documents and (B) to
counsel's knowledge, any other agreement, indenture or other written instrument
relating to indebtedness of the Company or instrument to which the Company is a
party, (iii) result in a violation of any law, rule or regulation of any
governmental authority, regulatory body, stock market or trading facility to
which the Company is subject, or by which any property or asset of the Company
is bound or affected, or (iv) result in any violation of any order, judgment,
injunction, decree or other restriction of which we have knowledge of any court
or governmental authority.
Schedule 4.15
(Litigation)
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1. May ▇▇▇▇▇ Group, Inc., plaintiff v. ▇▇▇▇▇▇▇▇.▇▇▇ Inc., defendant,
Supreme Court of the State of New York, County of New York (Index No.
125761/00), commenced December 27, 2000.
2. Reliant Limited v. ▇▇▇▇▇▇▇▇.▇▇▇ Inc. & American Securities Transfer,
commenced on February 19, 2002 in Superior Court of the State of New
Jersey, County of Monmouth. ▇▇▇▇▇▇▇▇.▇▇▇ Inc. has since removed the
matter to U.S. District Court for the District of New Jersey.