Exhibit
4.1
FORM
OF WARRANT
WARRANT
TO PURCHASE
SHARES
OF COMMON STOCK
Date
of
Warrant: ______________, 2____
THIS
CERTIFIES that, for value received, _______________________________ or
his/her/its registered assigns (“Warrantholder”), is entitled, subject to the
terms and conditions set forth in this Warrant, to purchase from Studio One
Media, Inc., a Delaware corporation (“Company”), ____________, fully paid, duly
authorized and nonassessable shares of common stock (“Shares”), $0.001 par value
per share, of the Company, at any time commencing on the date hereof and
continuing for two years thereafter (the “Exercise Period”) at an exercise price
of ______Dollars and _______ Cents ($_________) per share, subject to adjustment
pursuant to Section 8 hereof.
This
Warrant is subject to the
following provisions, terms and conditions:
1.
Transferability.
1.1 Registration.
The
Warrants shall be issued only in registered form.
1.2 Transfer.
This
Warrant shall be transferable only on the books of the Company maintained
at its
principal executive offices upon surrender thereof for registration of transfer
duly endorsed by the Warrantholder or by its duly authorized attorney or
representative, or accompanied by proper evidence of succession, assignment
or
authority to transfer. Upon any registration of transfer, the Company
shall execute and deliver a new Warrant or Warrants in appropriate denominations
to the person or persons entitled thereto.
1.3 Common
Stock to be Issued.
Upon the exercise of any Warrants and
upon receipt by the Company of a facsimile or original of Warrantholder’s signed
Election to Exercise Warrant (See Exhibit 1), Company shall instruct its
transfer agent to issue stock certificates, subject to the restrictive legend
set forth below, in the name of Warrantholder (or its nominee) and in such
denominations to be specified by Warrantholder representing the number of
shares
of Common Stock issuable upon such exercise, as applicable. Company
warrants that no instructions, other than these instructions, have been given
or
will be given to the transfer agent and that the Common Stock shall otherwise
be
freely transferable on the books and records of the Company.
1.4
It
shall be the Company’s responsibility to take all necessary actions and to bear
all such costs to issue the certificate of Common Stock as provided herein,
including the responsibility and cost for delivery of an opinion letter to
the
transfer agent, if so required. The person in whose name the
certificate of Common Stock is to be registered shall be treated as a
shareholder of record on and after the exercise date. Upon surrender of any
Warrant that is to be converted in part, the Company shall issue to the
Warrantholder a new Warrant equal to the unconverted amount, if so requested
by
Purchaser:
THE
SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND ARE BEING OFFERED AND
SOLD IN
RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SUCH
LAWS. THE SECURITIES ARE SUBJECT TO RESTRICTIONS OF TRANSFERABILITY
AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER
SUCH
LAWS PURSUANT TO REGISTRATION OR AN EXEMPTION THEREFROM. THE
SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING
AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY
OR ADEQUACY OF THE OFFERING MATERIALS. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
2. Exchange
of Warrant Certificate.
Any
Warrant certificate may be exchanged for another certificate or certificates
of
like tenor entitling the Warrantholder to purchase a like aggregate number
of
Shares as the certificate or certificates surrendered then entitle such
Warrantholder to purchase. Any Warrantholder desiring to exchange a
warrant certificate shall make such request in writing delivered to the Company,
and shall surrender, properly endorsed, the certificate evidencing the Warrant
to be so exchanged. Thereupon, the Company shall execute and deliver
to the person entitled thereto a new Warrant certificate as so
requested.
3. Terms
of Warrants: Exercise of Warrants.
3.1 Warrant
Exercise.
Subject to the terms of this Warrant, the
Warrantholder shall have the right to purchase from the Company, such number
of
fully paid, duly authorized and nonassessable shares of common stock (“Shares”),
$0.001 par value per share, of the Company as have been set forth in the
first
paragraph of this Warrant, at any time commencing from the date hereof and
continuing for two years thereafter (the “Exercise Period”), upon surrender to
the Company at its principal executive office, of the certificate evidencing
this Warrant to be exercised, together with the attached Election to Exercise
Warrant form duly filled in and signed, and upon payment to the Company of
the
Warrant Price (as defined in and determined in accordance with the provisions
of
Section 7 and 8 hereof) or as provided in Section 3(a)(i) hereof, for the
number
of Shares with respect to which such Warrant is then
exercised. Payment of the aggregate Warrant Price shall be made in
cash, wire transfer or by cashier’s check or any combination
thereof.
3.2
Common
Stock Certificates.
Subject to the terms of this Warrant,
upon such surrender of this Warrant and payment of such Warrant Price as
aforesaid, the Company shall promptly issue and cause to be delivered to
the
Warrantholder or to such person or persons as the Warrantholder may designate
in
writing, a certificate or certificates (in such name or names as the
Warrantholder may designate in writing) for the number of duly authorized,
fully
paid and non-assessable whole Shares to be purchased upon the exercise of
this
Warrant, and shall deliver to the Warrantholder Common Stock or cash, to
the
extent provided in Section 9 hereof, with respect to any fractional Shares
otherwise issuable upon such surrender. Such certificate or
certificates shall be deemed to have been issued and any person so designated
to
be named therein shall be deemed to have become a holder of such Shares as
of
the close of business on the date of the surrender of this Warrant and payment
of the Warrant Price, notwithstanding that the certificates representing
such
Shares shall not actually have been delivered or that the Share and Warrant
transfer books of the Company shall then be closed. This Warrant
shall be exercisable, at the sole election of the Warrantholder, either in
full
or from time to time in part and, in the event that any certificate evidencing
this Warrant (or any portion thereof) is exercised prior to the Termination
Date
with respect to less than all of the Shares specified therein at any time
prior
to the Termination Date, a new certificate of like tenor evidencing the
remaining portion of this Warrant shall be issued by the Company, if so
requested by the Warrantholder.
3.3
Transfer
Agent.
Upon the Company’s receipt of a facsimile or original
of Warrantholder’s signed Election to Exercise Warrant, the Company shall
instruct its transfer agent to issue one or more stock Certificates representing
that number of shares of Common Stock which the Warrantholder is entitled
to
purchase in accordance with the terms and conditions of this Warrant and
the
Election to Exercise Warrant attached hereto. The transfer agent for
the Company shall act as registrar and shall maintain an appropriate ledger
containing the necessary information with respect to each Warrant.
3.4
Exercise.
This
Warrant is exercisable in whole or in part at the Exercise Price per share
of
Common Stock (as defined hereafter) payable hereunder, payable in cash or
by
certified or official bank check, by means of tendering this Warrant Certificate
to the Company. Upon surrender of this Warrant Certificate with the
annexed Notice of Exercise duly executed, together with payment of the Exercise
Price for the shares of Common Stock purchased, the Holder shall be entitled
to
receive a certificate or certificates for the shares of Common Stock so
purchased.
3.5
Election
to Exercise.
Such exercise shall be effectuated by
surrendering to the Company, or its attorney, the Warrants to be converted
together with a facsimile or original of the signed Election to Exercise
Warrant
which evidences Warrantholder’s intention to exercise those Warrants
indicated. The date on which the Election to Exercise Warrant is
effective (“Exercise Date”) shall be deemed to be the date on which the
Warrantholder has delivered to the Company a facsimile or original of the
signed
Election to Exercise Warrant, as long as the original Warrants to be exercised
are received by the Company or its designated attorney within five (5) business
days thereafter. As long as the Warrants to be exercised are received
by the Company within five (5) business days after it receives a facsimile
or
original of the signed Election to Exercise Warrant, the Company shall deliver
to the Warrantholder, or per the Warrantholder’s instructions, the shares of
Common Stock within three (3) business days of receipt of the Warrants to
be
converted.
3.6
Payment
of Interest.
Nothing contained in this Warrant shall be deemed to
establish or require the payment of interest to the Warrantholder.
3.7
Issuance
of Common Stock.
It shall be the Company’s responsibility to
take all necessary actions and to bear all such costs to issue the Certificate
of Common Stock as provided herein, including the responsibility and cost
for
delivery of an opinion letter to the transfer agent, if so
required. The person in whose name the certificate of Common Stock is
to be registered shall be treated as a shareholder of record on and after
the
exercise date. Upon surrender of any Warrants that are to be converted in
part,
the Company shall issue to the Warrantholder new Warrants equal to the
unconverted amount, if so requested by Warrantholder.
3.8
Exercise
Default.
The Company shall at all times reserve and have
available all Common Stock necessary to meet exercise of the Warrants by
all
Warrantholders of the entire amount of Warrants then outstanding. If,
at any time Warrantholder submits an Election to Exercise Warrant and the
Company does not have sufficient authorized but unissued shares of Common
Stock
available to effect, in full, a exercise of the Warrants (a “Exercise Default”,
the date of such default being referred to herein as the “Exercise Default
Date”), the Company shall issue to the Warrantholder all of the shares of Common
Stock which are available, and the Election to Exercise Warrant as to any
Warrants requested to be converted but not converted (the “Unconverted
Warrants”), upon Warrantholder’s sole option, may be deemed null and
void. The Company shall provide notice of such Exercise Default
(“Notice of Exercise Default”) to all existing Warrantholders of outstanding
Warrants, by facsimile, within one (1) business day of such
default (with the original delivered by overnight or two day
courier), and the Warrantholder shall give notice to the Company by facsimile
within five (5) business days of receipt of the original Notice of Exercise
Default (with the original delivered by overnight or two day courier) of
its
election to either nullify or confirm the Election to Exercise
Warrant.
3.9
Furnishing
of Prospectus.
The Company shall furnish to Warrantholder
such number of prospectuses and other documents incidental to the registration
of the shares of Common Stock underlying the Warrants, including any amendment
of or supplements thereto. Warrantholder shall acknowledge in writing
the receipt, the careful reading, and the understanding thereof, prior to
any
exercise under this Section 3.
3.10
Shareholder
of Record.
Each person in whose name any certificate for
shares of Common Stock shall be issued shall for all purposes be deemed to
have
become the holder of record of the Common Stock represented thereby on the
date
on which the Warrant was surrendered and payment of the purchase price and
any
applicable taxes was made, irrespective of date of issue or delivery of such
certificate, except that if the date of such surrender and payment is a date
when the Shares transfer books of the Company are closed, such person shall
be
deemed to have become the holder of such Shares on the next succeeding date
on
which such Share transfer books are open. The Company shall not close
such Share transfer books at any one time for a period longer than seven
(7) days.
4.
Payment
of Taxes.
The Company shall pay all documentary
stamp taxes, if any, attributable to the initial issuance of the Shares;
provided, however, that the Company shall not be required to pay any tax
or
taxes which may be payable, (a) with respect to any secondary transfer of
this
Warrant or the Shares or (b) as a result of the issuance of the Shares to
any
person other than the Warrantholder, and the Company shall not be required
to
issue or deliver any certificate for any Shares unless and until the person
requesting the issuance thereof shall have paid to the Company the amount
of
such tax or shall have produced evidence that such tax has been paid to the
appropriate taxing authority.
5.
Mutilated
or Missing Warrant.
In case the certificate or certificates
evidencing this Warrant shall be mutilated, lost, stolen or destroyed, the
Company shall, at the request of the Warrantholder, issue and deliver in
exchange and substitution for and upon cancellation of the mutilated certificate
or certificates, or in lieu of and substitution for the certificate or
certificates lost, stolen or destroyed, a new Warrant certificate or
certificates of like tenor and representing an equivalent right or interest,
but
only upon receipt of evidence satisfactory to the Company of such loss, theft
or
destruction of such Warrant and of a bond of indemnity, if requested, also
satisfactory to the Company in form and amount, and issued at the applicant’s
cost. Applicants for such substitute Warrant certificate shall also
comply with such other reasonable regulations and pay such other reasonable
charges as the Company may prescribe.
6.
Reservation
of Shares.
The issuance, sale and delivery of the Warrants
have been duly authorized by all required corporate action on the part of
the
Company and when issued, sold and delivered in accordance with the terms
hereof
and thereof for the consideration expressed herein and therein, will be duly
and
validly issued, fully paid, and non-assessable and enforceable in accordance
with their terms, subject to the laws of bankruptcy and creditors’ rights
generally. The Company shall pay all taxes in respect of the issue
thereof. As a condition precedent to the taking of any action that
would result in the effective purchase price per share of Common Stock upon
the
exercise of this Warrant being less than the par value per share (if such
shares
of Common Stock then have a par value), the Company will take such corporate
action as may, in the opinion of its counsel, be necessary in order that
the
Company may comply with all its obligations under this Agreement with regard
to
the exercise of this Warrant.
7.
Warrant
Price.
During the Exercise Period, the price per Share
(“Warrant price”) at which Shares shall be purchasable upon the exercise of this
Warrant shall be Four Dollars and Fifty Cents ($4.50), subject to adjustment
pursuant to Section 8 hereof (“Exercise Price”).
8.
Adjustment
of Warrant Price and Number of Shares.
The number and kind
of securities purchasable upon the exercise of this Warrant and the Warrant
Price shall be subject to adjustment from time to time after the date hereof
upon the happening of certain events, as follows:
8.1
Adjustments.
The
number of Shares purchasable upon the exercise of this Warrant shall be subject
to adjustments as follows:
(a) In
case the Company shall (i) pay a dividend on Common Stock in Common Stock
or
securities convertible into, exchangeable for or otherwise entitling a holder
thereof to receive Common Stock, (ii) declare a dividend payable in cash
on its
Common Stock and at substantially the same time offer its shareholders a
right
to purchase new Common Stock (or securities convertible into, exchangeable
for
or other entitling a holder thereof to receive Common Stock) from the proceeds
of such dividend (all Common Stock so issued shall be deemed to have been
issued
as a stock dividend), (iii) subdivide its outstanding shares of Common Stock
into a greater number of shares of Common Stock, (iv) combine its outstanding
shares of Common Stock into a smaller number of shares of Common Stock, or
(v)
issue by reclassification of its Common Stock any shares of Common Stock
of the
Company, the number of shares of Common Stock issuable upon exercise of the
Warrants immediately prior thereto shall be adjusted so that the holders
of the
Warrants shall be entitled to receive after the happening of any of the events
described above that number and kind of shares as the holders would have
received had such Warrants been converted immediately prior to the happening
of
such event or any record date with respect thereto.
(b) In
case the Company shall distribute, without receiving consideration therefor,
to
all holders of its Common Stock evidences of its indebtedness or assets
(excluding cash dividends other than as described in Section (8)(a)(ii)),
then
in such case, the number of shares of Common Stock thereafter issuable upon
exercise of the Warrants shall be determined by multiplying the number of
shares
of Common Stock theretofore issuable upon exercise of the Warrants, by a
fraction, of which the numerator shall be the closing bid price per share
of
Common Stock on the record date for such distribution, and of which the
denominator shall be the closing bid price of the Common Stock less the then
fair value (as determined by the Board of Directors of the Company, whose
determination shall be conclusive) of the portion of the assets or evidences
of
indebtedness so distributed per share of Common Stock. Such
adjustment shall be made whenever any such distribution is made and shall
become
effective immediately after the record date for the determination of
stockholders entitled to receive such distribution.
(c) Any
adjustment in the number of shares of Common Stock issuable hereunder otherwise
required to be made by this Section 8 will not have to be adjusted if such
adjustment would not require an increase or decrease in one percent (1%)
or more
in the number of shares of Common Stock issuable upon exercise of the
Warrant. No adjustment in the number of Shares purchasable upon
exercise of this Warrant will be made for the issuance of shares of capital
stock to directors, employees or independent Warrantors pursuant to the
Company’s or any of its subsidiaries’ stock option, stock ownership or other
benefit plans or arrangements or trusts related thereto or for issuance of
any
shares of Common Stock pursuant to any plan providing for the reinvestment
of
dividends or interest payable on securities of the Company and the investment
of
additional optional amounts in shares of Common Stock under such
plan.
(d) Whenever
the number of shares of Common Stock issuable upon the exercise of the Warrants
is adjusted, as herein provided the Warrant Price shall be adjusted (to the
nearest cent) by multiplying such Warrant Price immediately prior to such
adjustment by a fraction, of which the numerator shall be the number of shares
of Common Stock issuable upon the exercise of each share of the Warrants
immediately prior to such adjustment, and of which the denominator shall
be the
number of shares of Common Stock issuable immediately thereafter.
(e) The
Company from time to time by action of its Board of Directors may decrease
the
Warrant Price by any amount for any period of time if the period is
at least twenty (20) days, the decrease is irrevocable during the period
and the
Board of Directors of the Company in its sole discretion shall have made
a
determination that such decrease would be in the best interest of the Company,
which determination shall be conclusive. Whenever the Warrant Price is decreased
pursuant to the preceding sentence, the Company shall mail to holders of
record
of the Warrants a notice of the decrease at least fifteen (15) days prior
to the
date the decreased Warrant Price takes effect, and such notice shall state
the
decreased Warrant Price and the period it will be in effect.
8.2
Mergers,
Etc.
In the case of any (i) consolidation or merger of the
Company into any entity (other than a consolidation or merger that does not
result in any reclassification, exercise, exchange or cancellation of
outstanding shares of Common Stock of the Company), (ii) sale, transfer,
lease
or conveyance of all or substantially all of the assets of the Company as
an
entirety or substantially as an entirety, or (iii) reclassification, capital
reorganization or change of the Common Stock (other than solely a change
in par
value, or from par value to no par value), in each case as a result of which
shares of Common Stock shall be converted into the right to receive stock,
securities or other property (including cash or any combination thereof),
each
holder of Warrants then outstanding shall have the right thereafter to exercise
such Warrant only into the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, sale, transfer, capital
reorganization or reclassification by a holder of the number of shares of
Common
Stock of the Company into which such Warrants would have been converted
immediately prior to such consolidation, merger, sale, transfer, capital
reorganization or reclassification, assuming such holder of Common Stock
of the
Company (A) is not an entity with which the Company consolidated or into
which
the Company merged or which merged into the Company or to which such sale
or
transfer was made, as the case may be (“constituent entity”), or an affiliate of
a constituent entity, and (B) failed to exercise his or her rights of election,
if any, as to the kind or amount of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer (provided that
if
the kind or amount of securities, cash and other property receivable upon
such
consolidation, merger, sale or transfer is not the same for each share of
Common
Stock of the Company held immediately prior to such consolidation, merger,
sale
or transfer by other than a constituent entity or an affiliate thereof and
in
respect of which such rights or election shall not have been exercised
(“non-electing share”), then for the purpose of this Section 8.2 the kind and
amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer by each non-electing share shall
be
deemed to be the kind and amount so receivable per share by a plurality of
the
non-electing shares). If necessary, appropriate adjustment shall be
made in the application of the provision set forth herein with respect to
the
rights and interests thereafter of the holder of Warrants, to the end that
the
provisions set forth herein shall thereafter correspondingly be made applicable,
as nearly as may reasonably be, in relation to any shares of stock or other
securities or property thereafter deliverable on the exercise of the
Warrants. The above provisions shall similarly apply to successive
consolidations, mergers, sales, transfers, capital reorganizations and
reclassifications. The Company shall not effect any such
consolidation, merger, sale or transfer unless prior to or simultaneously
with
the consummation thereof the successor company or entity (if other than the
Company) resulting from such consolidation, merger, sale or transfer assumes,
by
written instrument, the obligation to deliver to the holder of Warrants such
shares of stock, securities or assets as, in accordance with the foregoing
provision, such holder may be entitled to receive under this Section
8.2.
8.3
Statement
of Warrants.
Irrespective of any adjustments in the Warrant
Price of the number or kind of shares purchasable upon the exercise of this
Warrant, this Warrant certificate or certificates hereafter issued may continue
to express the same price and number and kind of shares as are stated in
this
Warrant.
9.
Fractional Shares.
Any fractional shares of Common
Stock issuable upon exercise of the Warrants shall be rounded to the nearest
whole share or, at the election of the Company, the Company shall pay the
holder
thereof an amount in cash equal to the closing bid price
thereof. Whether or not fractional shares are issuable upon exercise
shall be determined on the basis of the total number of Warrants the holder
is
at the time exercising and the number of shares of Common Stock issuable
upon
such exercise.
10.
No
Rights as Stockholders: Notices to
Warrantholders.
Nothing contained in this Warrant shall be
construed as conferring upon the Warrantholder or its transferees any rights
as
a stockholder of the Company, including the right to vote, receive dividends,
consent or receive notices as a stockholder with respect to any meeting of
stockholders for the election of directors of the Company or any other
matter. If, however, at any time prior to the Expiration Time and
prior to the exercise of this Warrant, any of the following events shall
occur:
(a) any
action which would require an adjustment pursuant to Section 8.1;
or
(b) a
dissolution, liquidation or winding up of the Company or any consolidation,
merger or sale of its property, assets and business as an entirety; then
in any
one or more of said events, the Company shall give notice in writing of such
event to the Warrantholder at least ten (10) days prior to the date fixed
as a
record date or the date of closing the transfer books for the determination
of
the shareholders entitled to any relevant dividend, distribution, subscription
rights, or other rights or for the effective date of any dissolution,
liquidation of winding up or any merger, consolidation, or sale of substantially
all assets, but failure to mail or receive such notice or any defect therein
or
in the mailing thereof shall not affect the validity of any such action
taken. Such notice shall specify such record date or the effective
date, as the case may be.
11.
Registration
Rights.
11.1
Piggyback
Registration
|
|
(a)
|
Each
time that the Company proposes to Register a public offering solely
of its
Common Stock (not including an offering of Common stock issuable
upon
conversion or exercise of other securities), other than pursuant
to a
Registration Statement on Form S-4 or Form S-8 or similar or successor
forms (collectively,"Excluded Forms"), the Company shall promptly
give
written
notice of such proposed Registration to all holders of Shares,
which shall
offer such holders the right to request inclusion of any Registrable
Securities in the proposed
Registration.
|
|
|
(b)
|
Each
holder of Shares shall have ten (10) days or such longer period
as shall
be set forth in the notice from the receipt of such notice to deliver
to
the Company a written request specifying the number of shares of
Registrable Securities such holder intends to sell and the holder's
intended plan of disposition.
|
|
|
(c)
|
In
the event that the proposed Registration by the Company is, in
whole or in
part, an underwritten public offering of securities of the Company,
any
request under Section 11.1 (b) may specify that the Registrable
Securities
be included in the underwriting on the same terms and conditions
as the
shares of Common Stock, if any, otherwise being sold through underwriters
under such Registration.
|
|
|
(d)
|
Upon
receipt of a written request pursuant to Section 11.1 (b), the
Company
shall promptly use its best efforts to cause all such Registrable
Securities to be Registered, to the extent required to permit sale
or
disposition as set forth in the written
request.
|
|
|
(e)
|
Notwithstanding
the foregoing, if the managing underwriter of an underwritten public
offering, determines and advises in writing that the inclusion
of all
Registrable Securities proposed to be included in the underwritten
public
offering, together with any other issued and outstanding shares
of Common
Stock proposed to be included therein by holders other than the
holders of
Registrable Securities (such other shares hereinafter collectively
referred to as the "Other Shares"), would interfere with the successful
marketing of the securities proposed to be included in the underwritten
public offering, then the number of such shares to be included
in such
underwritten public offering shall be reduced, and shares shall
be
excluded from such underwritten public offering in a number deemed
necessary by such managing underwriter, first by excluding shares
held by
the directors, officers, employees and founders of the Company,
and then,
to the extent necessary, by excluding Registrable Securities participating
in such underwritten public offering, pro rata based on the
number of shares of Registrable Securities each such holder proposed
to
include.
|
|
|
(f)
|
All
Shares that are not included in the underwritten public offering
shall be
withheld from the market by the holders thereof for a period, not
to
exceed 12 months following a public offering, that the managing
underwriter reasonably determines as necessary in order to effect
the
underwritten public offering. The holders of such Shares shall
execute such documentation as the managing underwriter reasonably
requests
to evidence this lock-up.
|
12.
Miscellaneous.
12.1
Benefits
of this Agreement.
Nothing in this Warrant shall be
construed to give to any person or corporation other than the Company and
the
Warrantholder any legal or equitable right, remedy or claim under this Warrant,
and this Warrant shall be for the sole and exclusive benefit of the Company
and
the Warrantholder.
12.2
Rights
Cumulative; Waivers.
The rights of each of the parties under
this Warrant are cumulative. The rights of each of the parties
hereunder shall not be capable of being waived or varied other than by an
express waiver or variation in writing. Any failure to exercise or
any delay in exercising any of such rights shall not operate as a waiver
or
variation of that or any other such right. However, the holders of a
majority in principal amount of the Warrants may waive a default or rescind
the
declaration of an Exercise Default and its consequences except for a default
in
the exercise into Common Stock. Any defective or partial exercise of
any of such rights shall not preclude any other or further exercise of that
or
any other such right. No act or course of conduct or negotiation on
the part of any party shall in any way preclude such party from exercising
any
such right or constitute a suspension or any variation of any such
right.
12.3
Benefit;
Successors Bound.
This Warrant and the terms, covenants,
conditions, provisions, obligations, undertakings, rights, and benefits hereof,
shall be binding upon, and shall inure to the benefit of, the parties hereto
and
their heirs, executors, administrators, representatives, successors, and
permitted assigns.
12.4
Entire
Agreement.
This Warrant contains the entire agreement
between the parties with respect to the subject matter hereof. There
are no promises, agreements, conditions, undertakings, understandings,
warranties, covenants or representations, oral or written, express or implied,
between them with respect to this Warrant or the matters described in this
Warrant, except as set forth in this Warrant. Any such negotiations,
promises, or understandings shall not be used to interpret or constitute
this
Warrant.
12.5
Assignment.
This
Warrant may be assigned if the Assignment of Warrant, attached as Exhibit
2 to
this Warrant, is properly completed, executed and delivered to the
Company.
12.6
Amendment.
This
Warrant may be amended only by an instrument in writing executed by the parties
hereto.
12.7
Severability.
Each
part of this Warrant is intended to be severable. In the event that
any provision of this Warrant is found by any court or other authority of
competent jurisdiction to be illegal or unenforceable, such provision shall
be
severed or modified to the extent necessary to render it enforceable and
as so
severed or modified, this Warrant shall continue in full force and
effect.
12.8
Notices.
Notices
required or permitted to be given hereunder shall be in writing and shall
be
deemed to be sufficiently given when personally delivered (by hand, by courier,
by telephone line facsimile transmission, receipt confirmed, or other means)
or
sent by certified mail, return receipt requested, properly addressed and
with
proper postage pre-paid (i) if to the Company, at its executive office (ii)
if
to the Warrantholder, at the address set forth under its name in the
subscription agreement for this Warrant, with a copy to its designated attorney
and (iii) if to any other Warrantholder, at such address as such Warrantholder
shall have provided in writing to the Company, or at such other address as
each
such party furnishes by notice given in accordance with this section, and
shall
be effective, when personally delivered, upon receipt and, when so sent by
certified mail, four (4) business days after deposit with the United States
Postal Service.
12.9
Governing
Law.
This Agreement shall be governed by the interpreted in
accordance with the laws of the State of Arizona without reference to its
conflicts of laws rules or principles.
12.10
Forum
Selection and Consent to Jurisdiction.
Any litigation based
thereon, or arising out of, under, or in connection with, this agreement
or any
course of conduct, course of dealing, statements (whether oral or written)
or
actions of the Company or Warrantholder shall be brought and maintained
exclusively in the federal courts of the State of Arizona without reference
to
its conflicts of laws rules or principles. The Company hereby
expressly and irrevocably submits to jurisdiction exclusively with the federal
Courts of the State of Arizona for the purpose of any such litigation as
set
forth above and irrevocably agrees to be bound by any final judgment rendered
thereby in connection with such litigation. The Company further
irrevocably consents to the service of process by registered mail, postage
prepaid, or by personal service within or without the State of
Arizona. The Company hereby expressly and irrevocably waives, to the
fullest extent permitted by law, any objection which it may have or hereafter
may have to the laying of venue of any such litigation brought in any such
court
referred to above and any claim that any such litigation has been brought
in any
inconvenient forum. To the extent that the Company has or hereafter
may acquire any immunity from jurisdiction of any court or from any legal
process (whether through service or notice, attachment prior to judgment,
attachment in aid of execution or otherwise) with respect to itself or its
property. The Company hereby irrevocably waives such immunity in
respect of its obligations under this agreement and the other loan
documents.
12.11
Waiver
of Jury Trial.
The Warrantholder and the Company hereby
knowingly, voluntarily and intentionally waive any rights they 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 course of conduct, course
of dealing, statements (whether oral or written) or actions of the Warrantholder
or the Company. The Company acknowledges and agrees that it has
received full and sufficient consideration for this provision and that this
provision is a material inducement for the Warrantholder entering into this
agreement.
12.12
Consents.
The
person signing this Warrant on behalf of the Company hereby represents and
warrants that he has the necessary power, consent and authority to execute
and
deliver this Warrant on behalf of the Company.
12.13
Further
Assurances.
In addition to the instruments and documents to
be made, executed and delivered pursuant to this Warrant, the parties hereto
agree to make, execute and deliver or cause to be made, executed and delivered,
to the requesting party such other instruments and to take such other actions
as
the requesting party may reasonably require to carry out the terms of this
Warrant and the transactions contemplated hereby.
12.14
Section
Headings.
The Section headings in this Warrant are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Warrant.
12.15
Construction.
Unless
the context otherwise requires, when used herein, the singular shall be deemed
to include the plural, the plural shall be deemed to include each of the
singular, and pronouns of one or no gender shall be deemed to include the
equivalent pronoun of the other or no gender.
IN
WITNESS WHEREOF, the parties have caused this Warrant to be duly executed,
all
as of the day and year first above written.
|
|
COMPANY:
|
|
|
|
|
|
|
|
Studio
One Media, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Preston
J. Shea
|
|
|
|
|
Preston
J. Shea,
President
|
|
|
|
|
|
|
|
|
|
|
|
EXHIBIT
1
ELECTION
TO EXERCISE WARRANT
The
undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant for, and to purchase thereunder, _______shares
of Common Stock of Studio One Media, Inc., a Delaware corporation (“Shares”)
provided for therein, and requests that certificates for the Shares be issued
in
the name of:*
Name:___________________________________________________________
Address:_________________________________________________________
Social
Security No.________________________________________________
or
Tax ID
Number:_________________________________________________
and,
if
such number of Shares shall not be all of the Shares purchasable under the
Warrant, that a new Warrant certificate for the balance of the Shares
purchasable under the within Warrant be registered in the name of the
undersigned Warrantholder or his Assignee* as indicated below and delivered
to
the address stated below:
Dated:
_________________, 20___
Name
of
Warrantholder of
Assignee
(Please Print)_____________________________________________
Address:_________________________________________________________
Signature:________________________________________________________
Signature
Guaranteed:______________________________________________
Signature
of Guarantor
*
The Warrant contains restrictions on sale, assignment or transfer.
** Note: The
above signature must correspond with the name as written onthe face of this
Warrant certificate in every particular, without alteration or enlargement
or
any change whatever, unless this warrant has been assigned.
EXHIBIT
2
ASSIGNMENT
OF WARRANT
(
To
be
signed only upon assignment of Warrant
)*
FOR
VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
________________________________________________________________
________________________________________________________________
(Name,
Address and S.S./E.I. No. of Assignee must be Printed or
Typewritten)
the
within Warrant issued by Studio One Media, Inc., a Delaware corporation,
hereby
irrevocably constituting and appointing _______________________________ Attorney
to transfer said Warrant on the books of the Company, with full power of
substitution in the premises.
Dated:
___________________, 20____
_______________________________________**
Signature
of Registered
Holder
Signature
Guaranteed: ________________________________________
Signature
of Guarantor
* The
Warrant contains restrictions on sale, assignment or transfer.
**
Note: The
signature of this
assignment must correspond with the name as it appears upon the face of the
Warrant certificate in every particular, without alteration or enlargement
or
any change whatever.
Exhibit
10.1
STOCK
PURCHASE AGREEMENT
THIS
AGREEMENT made and entered into as of the 29th day of March, 2006, by and
between Dimensional Visions Incorporated, a Delaware corporation (hereinafter
called “DVSO”), and Studio One Entertainment, Inc., an Arizona corporation
(hereinafter called “SOE”).
WITNESSETH
THAT:
A. DVSO
is a publicly traded company.
B. SOE
is a private company based in Scottsdale, Arizona that is engaged in the design
and manufacturing of a proprietary, self contained interactive audio/video
recording and conferencing studio designed for installation in shopping malls
and other high traffic public areas. The Studio One Kiosk will enable the
public, for a fee, to record their video and voice images in a portable
state-of-the-art recording studio environment and enter their performances
in
music, modeling and other talent related contests.
C. Subject
to the approval of the Board of Directors of DVSO and SOE and the consent of
a
majority of the shareholders of DVSO and SOE, DVSO and SOE shall enter into
an
Agreement of Exchange (hereinafter called the “Exchange Agreement”) in
substantially the form attached hereto and made apart hereof as Exhibit A,
which
provides, among other things, for the issuance by DVSO of approximately six
million five hundred thousand (6,500,000) of its common stock shares to the
shareholders of SOE (the “Exchange”).
D. Following
the Exchange under the Exchange Agreement, SOE will be a wholly-owned subsidiary
of DVSO.
E. It
is intended that the transactions contemplated by this Agreement shall
constitute an exchange conforming to the provisions of Section 368(a)(2) of
the
Internal Revenue Code of 1954.
NOW
THEREFORE, in consideration of the mutual covenants and agreements and the
benefits to be realized by each of the parties, the following transactions
are
hereby agreed to, subject to the conditions hereinafter stated:
1. The
Exchange
(a) In
accordance with the Exchange Agreement, on the Closing Date hereinafter referred
to, and in exchange for all of the then issued and outstanding shares of capital
stock of SOE (the “SOE Common Stock”), DVSO shall issue the number of fully paid
and nonassessable shares of voting DVSO common stock (hereinafter called “DVSO
Common Stock”) in order to permit the Exchange to be effected in accordance with
the terms of the Exchange Agreement, on the basis of one (1) share of DVSO
Common Stock for each one (1) share of SOE Common Stock.
If
between the date hereof and the Closing Date, DVSO shall effect any
reclassification, recapitalization, subdivision, combination or exchange of
shares, in respect of the outstanding shares of common stock of DVSO or a stock
dividend thereon shall be declared with a record date within said period, the
per share amounts of DVSO Common Stock to be issued and delivered in the
Exchange shall be appropriately adjusted.
(b) DVSO
shall issue and deliver as and when required by the Exchange Agreement,
certificates representing the shares of DVSO Common Stock for which the shares
of SOE Common Stock outstanding immediately prior to the effective time of
the
Exchange shall have been exchanged as provided in the Exchange
Agreement.
(c) SOE
shall submit this Agreement and the Exchange Agreement to its shareholders
for
approval, in accordance with Arizona General Corporation Law, at a meeting
called and held on the date to be fixed by its Board of Directors. SOE shall
use
its best efforts to obtain the affirmative vote of shareholders required to
approve this Agreement, the Exchange Agreement and the transactions contemplated
herein and therein.
1. The
Exchange -
continued
(d) DVSO
shall use it best efforts to obtain the affirmative consent of shareholders
required to approve the issues set forth in paragraph 14(e) below at a meeting
or by written consent.
(e) Following
the approval of the Exchange Agreement by the stockholders of DVSO and SOE,
and
upon execution of the Exchange Agreement by the officers of DVSO and SOE, a
Certificate of Exchange containing the information required by the corporate
law
of Delaware and Arizona shall be executed by the appropriate officers of DVSO
and SOE.
2. Closing
(a) The
closing of the transaction contemplated hereby (herein called the “Closing” or
the “Closing Date”) shall take place at the offices of DVSO in Arizona at 9:00
a.m. on a date within five (5) business days after all of the conditions
described in paragraphs 12 and 13 hereof have been satisfied or, to the extent
permitted in paragraph 15 hereof, their satisfaction has been waived. DVSO
and
SOE will use their best efforts to obtain the approvals specified in paragraph
6
hereof and any other of the consents, waivers or approvals necessary or
desirable to accomplish the transactions contemplated by this Agreement and
the
Exchange Agreement. All documents required to be delivered by each of the
parties shall be duly delivered to the respective recipient thereof at or prior
to the Closing. In no event shall the Closing Date be later than June 30, 2007,
and if it is delayed beyond said date then either party shall have the right
to
terminate this Agreement upon notice to that effect.
(b) At
the Closing, DVSO and SOE shall jointly direct that the Certificate of Exchange
be duly filed, and it shall in accordance with such direction be filed, if
required, in the office of the Secretary of State of the State of Delaware
and
the Arizona Corporation Commission so that the Exchange shall be effective
on
the Closing Date.
3.
Investigation
by the Parties
DVSO
and
SOE each may, prior to the Closing Date, make or cause to be made such
investigation of the properties of the other and its subsidiaries and of its
financial and legal condition as the party making such investigation deems
necessary or advisable to familiarize itself with such properties and other
matters, provided, that such shall not interfere with normal operations. DVSO
and SOE each agrees to permit the other and its authorized agents or
representatives to have, after the date of execution hereof, full access to
its
premises and to all of its books and records at reasonable hours, and its
subsidiaries and officers will furnish the party making such investigation
with
such financial and operating data and other information with respect to the
business and properties of its and its subsidiaries as the party making such
investigation shall from time to time reasonably request. No investigation
by
DVSO or SOE shall affect the representations and warranties of the other and
each such representation and warranty shall survive any such investigation.
Each
party further agrees that in the event that the transactions contemplated by
this Agreement shall not be consummated it and its officers, employees,
accountants, attorneys, engineers and other representatives will not disclose
or
make available to any other person or use for any purpose unrelated to the
consummation of this Agreement any information, whether written or oral, with
respect to the other party and its subsidiaries or their business which it
obtained pursuant to this Agreement. Such information shall remain the property
of the party providing it and shall not be reproduced or copied without the
consent of such party. In the event that the transaction contemplated by this
Agreement shall not be consummated, all such written information shall be
returned to the party providing it.
DVSO
and
SOE will each take such steps as may be necessary on their respective parts
to
comply with any state securities or so-called Blue Sky laws applicable to the
action to be taken by them in connection with the Exchange and the delivery
by
DVSO to SOE shareholders of the DVSO Common Stock pursuant to this Agreement
and
the Exchange Agreement.
5. Business
Pending the Closing
(a) From
the date of this Agreement to and including the Closing Date, except as may
be
first approved by SOE or as is otherwise permitted or contemplated by this
Agreement or in furtherance of the objectives of this Agreement: (i) DVSO (which
term shall, where applicable in this paragraph 5, also refer to the subsidiaries
of DVSO specified in paragraph 9 hereof) shall conduct its business only in
the
usual and ordinary course without the creation of any additional indebtedness;
(ii) no change shall be made in the authorized capitalization of DVSO except
as
contemplated by this Agreement; (iii) no shares of capital stock of DVSO shall
be authorized for issuance or issued and no agreement or commitment for the
issuance thereof shall be entered into in excess of the number of shares set
forth for DVSO in the Exchange Agreement; (iv) no rights or elections shall
be
created or granted to purchase stock under any employee stock bonus, thrift
or
purchase plan or otherwise, to the extent such rights shall result in the
commitment for the issuance of shares in excess of the number set forth for
DVSO
in the Exchange Agreement; (v) no amendment shall be made to DVSO’s Articles of
Incorporation or Bylaws, except as contemplated by this Agreement; (vi) no
modifications shall be made in DVSO’s present employee benefit programs or in is
present policies in regard to the payment of salaries or compensation to its
personnel and no increase shall be made in the compensation of its personnel;
(vii) no contract or commitment shall be entered into by or on behalf of DVSO
and no sale or purchase of assets shall be made except in the ordinary course
of
business; (viii) DVSO will use all reasonable and proper efforts to preserve
its
business organization intact, to keep available the services of its present
employees and to maintain satisfactory relationships between DVSO and its
suppliers, customers, regulatory agencies, and others having business relations
with it; (ix) DVSO shall make no amendments or contributions to any profit
sharing plans; and (x) the Board of Directors of DVSO will not declare any
dividends on, or otherwise make any distributions in respect of, its outstanding
shares of capital stock;
(b)
From the date of this Agreement to and including the Closing Date, except
as may be first approved by DVSO or as is otherwise permitted or contemplated
by
this Agreement: (i) SOE (which term shall, where applicable in this paragraph
5,
also refer to the subsidiaries of SOE specified in paragraph 10 hereof) shall
conduct its business only in the usual and ordinary course without the creation
of any additional indebtedness exceeding $10,000 for money borrowed maturing
in
more than one year, except for the lease of capital equipment pursuant to
leasing company commitments outstanding prior to the date of this Agreement;
(ii) no change shall be made in the authorized capitalization of SOE except
as
contemplated by this Agreement; (iii) no shares of capital stock of SOE shall
be
authorized for issuance or issued and no agreement or commitment for the
issuance thereof shall be entered into in excess of the number of shares set
forth for SOE in the Exchange Agreement; (iv) no rights or elections shall
be
created or granted to purchase stock under any employee stock bonus, thrift
or
purchase plan or otherwise; (v) no amendment shall be made to SOE’s Articles of
Incorporation or Bylaws, except as contemplated by this Agreement; (vi) no
modifications shall be made in SOE’s present employee benefit programs or in is
present policies in regard to the payment of salaries or compensation to its
personnel and no increase shall be made in the compensation of its personnel
and
no increase shall be made in the compensation of its personnel, provided that
nothing herein shall preclude (1) the continuation of SOE’s present practices of
periodically reviewing the salaries of its personnel and granting normal
increases in such salaries or compensation to such personnel, or (2) the hiring
of new personnel at a salary or compensation deemed reasonable in the ordinary
course of business; (vii) no contract or commitment shall be entered into by
or
on behalf of SOE and no sale or purchase of assets shall be made except in
the
ordinary course of business; (viii) SOE will use all reasonable and proper
efforts to preserve its business organization intact, to keep available the
services of its present employees and to maintain satisfactory relationships
between SOE and its suppliers, customers, regulatory agencies, and others having
business relations with it; (ix) SOE shall make no amendments or contributions
to any profit sharing plans; and (x) the Board of Directors of SOE will not
declare any dividends on, or otherwise make any distributions in respect of,
its
outstanding shares of capital stock.
5. Business
Pending the Closing
-
continued
(c) The
parties hereto agree that SOE is extending to DVSO an exclusive option to
purchase the shares of SOE. As such, SOE agrees not to solicit or entertain
offers to purchase its shares or assets from a third party prior to the Closing
or termination of this Agreement. As consideration for this exclusivity,
subsequent to the date of this Agreement but prior to Closing, SOE shall
continue its research and development program relating to the entertainment
Kiosk. SOE agrees that all intellectual property that may be protected by
patents, copyrights and trademarks will become the subject of patent
applications filed with the U.S. Patent and Trademark office, together with
appropriate assignments to SOE of all rights by any persons claiming or who
may
have the right to claim status of an inventor or creator of the intellectual
property being the subject of each such application. All intellectual property
of SOE shall remain unencumbered and free of any liens or claims of whatsoever
nature prior to the Closing. Except as set forth in formal patents, copyrights
and trademarks, or applications for same, SOE makes no representations or
warranties with respect to its intellectual property.
DVSO
understands and agrees that it will conduct its own independent investigations
with respect to the assets and liabilities of SOE, including but not limited
to
items of intellectual property of SOE. Provided DVSO shall not have theretofore
issued written notice of termination of this Agreement, as provided herein,
DVSO
will advance or reimburse all costs incurred by SOE in connection with the
kiosk
development program including, but not limited to, consulting fees, professional
fees, prototype construction costs, engineering and design fees, and
administrative and overhead expenses. Such costs will be either paid directly
by
DVOS or remitted to SOE upon written invoice therefore. In the event this
transaction shall fail to close, for any reason whatsoever, SOE shall be
liable
to DVSO for all monies theretofore advanced to or for the benefit of the
SOE
research and development program and shall execute and deliver to DVSO a
promissory note in such principal amount evidencing such indebtedness. Such
Promissory Note shall (i) provide for a maturity date two years from the
date it
is executed, (ii) bear interest at the rate of three percent over the prime
rate
as set by Bank of America from time to time, and (iii) permit repayment at
any
time without penalty. The principal of the note, together with all accrued
interest, shall be due and payable at maturity. Upon execution and delivery
of
the aforementioned promissory note, DVSO (i) shall have no rights, liens
against
the intellectual property of SOE or any other claims against SOE except as
provided in the promissory note, and (ii) shall not be entitled to reimbursement
of any monies advanced, paid or remitted to or on behalf of SOE to any person
or
entity pursuant to this Agreement except as provided in the promissory note.
All
intellectual property developed or created by SOE prior to this Agreement
or
during the term hereof, shall remain the property of SOE.
6. Efforts
to Obtain Approvals and Consents
In
addition to DVSO and SOE obtaining the requisite shareholder approval as
described in paragraph 1 hereof, DVSO and SOE will use all reasonable and proper
efforts to obtain the following: (i) approval or consent of any other
governmental authorities having jurisdiction over the transactions contemplated
in this Agreement; and (ii) approval or consent of such other persons whose
consent is required to the transactions contemplated by this
Agreement.
7. Cooperation
Between Parties
DVSO
and
SOE shall fully cooperate with each other and with their respective counsel
and
accountants in connection with any steps required to be taken as part of their
obligations under this Agreement, including the preparation of financial
statements and the supplying of information.
8. No
Tax Ruling
DVSO
and
SOE agree that they will not attempt to obtain ruling from the United States
Internal Revenue Service to the effect that for Federal Income Tax purposes
no
gain or loss will be recognized to the holders of SOE Common Stock upon the
receipt of DVSO Common Stock in exchange for their SOE shares in accordance
with
the provisions of this Agreement. In lieu of such a ruling from the Internal
Revenue Service, SOE may request an opinion of its counsel to the foregoing
effects, which opinion shall be a condition to both parties’ obligations to
consummate the Exchange.
9. Representations
of DVSO
DVSO
represents, warrants and agrees that:
(a)
DVSO is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and it and its subsidiaries
are
duly qualified to do business and in good standing in every jurisdiction in
which the nature of its business or the character of its properties makes such
qualification necessary. DVSO’s subsidiaries and a list of jurisdictions in
which DVSO or its subsidiaries is so qualified is set forth in a memorandum
to
be prepared by DVSO and furnished to SOE. DVSO owns 100% of the outstanding
capital stock of each of its subsidiaries.
(b)
As of December 31, 2005, the capitalization of DVSO and its subsidiaries
is as set forth in the financial statements previously furnished to SOE. The
outstanding capital stock of DVSO has been duly authorized and issued and is
fully paid and nonassessable. DVSO has no commitments to issue nor will it
issue
any shares of its capital stock or any securities or obligations convertible
into or exchangeable for, or giving any person any right to acquire from DVSO,
any shares of its capital stock, except for those shares issued in conformity
with paragraph 5(a)(iii) above or otherwise described in prior filings with
the
SEC.
9. Representations
of DVSO
-
continued
(c)
The shares of DVSO Common Stock which are to be issued and delivered to
the SOE shareholders pursuant to the terms of this Agreement and the Exchange
Agreement, when so issued and delivered, will be validly authorized and issued
and will be fully paid and nonassessable. No stockholder of DVSO, or other
person, will have any preemptive rights in respect to the DVSO Common
Stock.
(d)
DVSO has furnished SOE with copies of its 2005 Financial Statements
together with the Auditors report for its fiscal year ending June 30, 2005,
consisting of the consolidated balance sheet of DVSO and its subs idiaries
as of
June 30, 2005, and related statements of consolidated income, stockholders’
equity and changes in financial position for the year then ended. DVSO has
also
furnished SOE with copies of its unaudited financial statements for the six
months ending December 31, 2005, consisting of the consolidated balance sheet
of
DVSO and its subsidiaries as of December 31, 2005, and related statements of
consolidated income, stockholders’ equity and changes in financial position for
the six months then ended. All of the above-described financial statements
present fairly the consolidated financial position of DVSO and its subsidiaries,
at the periods indicated, and the consolidated results of their operations
and
changes in their financial position for the year and periods then ended in
conformity with generally accepted accounting principles applied on a consistent
basis. DVSO has no material liabilities or commitments other than as listed
or
noted in the aforesaid financial statements, or as incurred in the ordinary
course of business since the date of such financial statements Since December
31, 2005, to the date of this Agreement, there has been no material adverse
change in the assets or liabilities or in the business or condition, financial
or otherwise, of DVSO or its subsidiaries, except in the ordinary course of
business or as contemplated by this Agreement, nor has DVSO or its subsidiaries,
except in the ordinary course of business or as contemplated by this Agreement,
incurred any indebtedness for money borrowed. All tax returns and reports of
DVSO and its subsidiaries required by law to be filed have been duly filed
and
all taxes, assessments and other governmental charges now due (other than any
still payable without penalty) upon DVSO and its subsidiaries or upon any of
their properties or assets, have been paid. All amounts which have been
reflected as liabilities on the books of DVSO and its subsidiaries in respect
of
taxes are considered adequate and DVSO does not know of any actual or proposed
additional assessments in respect of taxes, against either it or its
subsidiaries.
(e)
Subsequent to December 31, 2005, DVSO has not declared or paid any
dividends on its outstanding shares of common stock or declared or made any
distribution on, or directly or indirectly redeemed, purchased or otherwise
acquired any of its outstanding stock except as described in its prior filings
with the SEC, or authorized the creation or issuance of, or issued any
additional shares of stock, or agreed to take any such action, except as
expressly provided for in paragraph 5(a)(iii) above in this Agreement. Except
as
permitted by paragraph 5(a)(iii), DVSO will not take any such action during
the
period between the date hereof and the Closing Date except as provided
herein.
(f)
Neither DVSO nor any of its subsidiaries is engaged in or a party to, or
to the knowledge of DVSO threatened with, any material legal action or other
proceeding before any court or administrative agency, except as set forth and
described in a memorandum to be prepared by DVSO and furnished to
SOE.
(g) There
has not been, since December 31, 2005, and will not be prior to the Closing
Date, a purchase or sale or any other acquisition, transfer or distribution
of
any assets or properties on the part of DVSO or its subsidiaries except in
the
ordinary course of business.
(h) Except
in each case as set forth in a memorandum to be prepared by DVSO and furnished
to SOE, as of the date of this Agreement neither DVSO nor any of its
subsidiaries is a holder of or a party to any: (1) written or oral contract
for
the employment of any officer or any other person, (ii) bonus, pension, profit
sharing, retirement, stock purchase, stock option, insurance, or similar plan
or
practice in effect with respect to its employees or other person, (iii) lease
or
other commitment for the rental of office space, storage, or other facilities,
(iv) contract or lease agreement for the acquisition or lease of motor vehicles,
(v) insurance policy covering its properties, buildings, machinery, equipment,
furniture, fixtures or operations, or the life of any person; (vi) material
contract or commitment not made in the ordinary course of
business.
9. Representations
of DVSO
-
continued
(i) The
execution and carrying out of this Agreement and compliance with the terms
and
provisions hereof by DVSO will not conflict with or result in any material
breach of any of the terms, conditions, or provisions of, or constitute a
default under, or result in the creation of, any lien, charge or encumbrance
upon any of the property or assets of DVSO or any of its subsidiaries pursuant
to any corporate charter, bylaw, indenture, mortgage, agreement (other than
that
which is created by virtue of this Agreement), or other instrument to which
DVSO
or any of its subsidiaries is a party or by which they are bound or
affected.
(j) This
Agreement and the memoranda and documents to be furnished hereunder on behalf
of
DVSO do not and will not contain any untrue statement of a material fact nor
omit to state a material fact necessary to be stated in order to make the
statements contained herein and therein not misleading; and there is not fact
which materially adversely affects or in the future (so far as DVSO can now
foresee) will materially adversely affect the business operations, affairs
or
condition of DVSO or its subsidiaries or any of the properties or assets which
has not been set forth in this Agreement and other documents and papers
furnished hereunder.
10. Representations
of SOE
SOE
represents, warrants and agrees that:
(a)
SOE is a corporation duly organized, validly existing and in good standing
under the laws of the State of Arizona. SOE has the corporate power and any
necessary governmental authority to own or lease its properties now owned or
leased and to carry on its business as now being conducted. SOE is duly
qualified to do business and in good standing in every jurisdiction in which
the
nature of its business or the character of its properties makes such
qualification necessary.
(b)
As of September 24, 2004, the capitalization of SOE and its subsidiaries
is as set forth in the financial statements previously furnished to DVSO. The
outstanding capital stock of SOE has been duly authorized and issued and is
fully paid and nonassessable. SOE has no commitments to issue nor will it issue
any shares of its capital stock or any securities or obligations convertible
into or exchangeable for, or giving any person any right to acquire from SOE,
any shares of its capital stock, except for those shares issued in conformity
with paragraph 5(b)(iii) above.
(c)
SOE has furnished DVSO with copies of its 2005 Financial Statements
together with the Auditors report for its fiscal year ending December 31, 2005,
consisting of the consolidated balance sheet of SOE and its subsidiaries as
of
December 31, 2005, and related statements of consolidated income, stockholders’
equity and changes in financial position for the year then ended. All of the
above-described financial statements present fairly the consolidated financial
position of SOE and its subsidiaries, at the periods indicated, and the
consolidated results of their operations and changes in their financial position
for the year and periods then ended in conformity with generally accepted
accounting principles applied on a consistent basis. SOE has no material
liabilities or commitments other than as listed or noted in the aforesaid
financial statements, or as incurred in the ordinary course of business since
the date of such financial statements, except under agreements described in
the
memorandum described in paragraph 10(i) hereof. Since December 31, 2005, to
the
date of this Agreement, there has been no material adverse change in the assets
or liabilities or in the business or condition, financial or otherwise, of
SOE
or its consolidated subsidiaries, except in the ordinary course of business
or
as contemplated by this Agreement. All tax returns and reports of SOE and its
subsidiaries required by law to be filed have been duly filed and all taxes,
assessments and other governmental charges now due (other than any still payable
without penalty) upon SOE and its subsidiaries or upon any of their properties
or assets, have been paid. All amounts which have been reflected as liabilities
on the books of SOE and its subsidiaries in respect of taxes are considered
adequate and SOE does not know of any actual or proposed additional assessments
in respect of taxes, against either it or its subsidiaries.
(d)
Subsequent to December 31, 2005, SOE has not declared or paid any
dividends on its outstanding shares of common stock or declared or made any
distribution on, or directly or indirectly redeemed, purchased or otherwise
acquired any of its outstanding stock or authorized the creation or issuance
of,
or issued any additional shares of stock, or agreed to take any such action,
except as expressly provided for in paragraph 5(a)(iii) above in this Agreement.
SOE will not take any such action during the period between the date hereof
and
the Closing Date except as provided herein.
10. Representations
of SOE
-
continued
(e)
Neither SOE nor any of its subsidiaries is engaged in or a party to, or to
the knowledge of SOE threatened with, any material legal action or other
proceeding before any court or administrative agency.
(f)
There has not been, since December 31, 2005, and will not be prior to the
Closing Date, a purchase or sale or any other acquisition, transfer or
distribution of any assets or properties on the part of SOE or its subsidiaries
except in the ordinary course of business.
(g)
Except in each case as set forth in a memorandum to be prepared by SOE and
furnished to DVSO, as of the date of this Agreement neither SOE nor any of
its
subsidiaries is a holder of or a party to any: (1) written or oral contract
for
the employment of any officer or any other person, (ii) bonus, pension, profit
sharing, retirement, stock purchase, stock option, insurance, or similar plan
or
practice in effect with respect to its employees or other person, (iii)
continuing contract for future purchase, sales, lease or distribution of
materials, services, supplies, products, or equipment involving annual payments
in excess of $10,000, (iv) lease or other commitment for the rental of office
space, storage, or other facilities, (v) contract or lease agreement for the
acquisition or lease of motor vehicles, (vi) contracts in force with employees
or others relating in whole or in part to disclosure, assignment or patenting
of
any inventions, discoveries, improvements, shop rights, processes, formulae
or
other know-how, presently owned or held, in whole or in part, by SOE or its
subsidiaries, (vii) insurance policy covering its properties, buildings,
machinery, equipment, furniture, fixtures or operations, or the life of any
person; (vi) material contract or commitment not made in the ordinary course
of
business.
(h)
SOE has the corporate power to enter into this Agreement, the execution
and delivery and performance of this Agreement have been duly authorized by
all
requisite corporate action, and this Agreement constitutes the valid and binding
obligation of SOE.
(i)
The execution and carrying out of this Agreement and compliance with the
terms and provisions hereof by SOE will not conflict with or result in any
material breach of any of the terms, conditions, or provisions of, or constitute
a default under, or result in the creation of, any lien, charge or encumbrance
upon any of the property or assets of SOE or any of its subsidiaries pursuant
to
any corporate charter, bylaw, indenture, mortgage, agreement (other than that
which is created by virtue of this Agreement), or other instrument to which
SOE
or any of its subsidiaries is a party or by which they are bound or
affected.
(j) This
Agreement and the
memoranda and documents to be furnished hereunder on behalf of SOE do not and
will not contain any untrue statement of a material fact nor omit to state
a
material fact necessary to be stated in order to make the statements contained
herein and therein not misleading; and there is not fact which materially
adversely affects or in the future (so far as SOE can now foresee) will
materially adversely affect the business operations, affairs or condition of
SOE
or its subsidiaries or any of the properties or assets which has not been set
forth in this Agreement and other documents and papers furnished
hereunder.
11. Survival
of Warranties
The
representations and warranties made herein by DVSO and SOE shall survive the
Closing hereunder.
12. Conditions
to the Obligations of DVSO
The
obligations of DVSO hereunder are subject to the satisfaction on or before
Closing Date of the following conditions:
(a)
This Agreement and the transactions contemplated hereby shall have been
approved by the requisite vote of the outstanding shares of SOE Common
Stock.
(b)
SOE shall have furnished DVSO with (1) a certified copy of resolutions
duly adopted by the holders of more than fifty percent (50%) of its issued
and
outstanding shares of SOE Common Stock entitled to vote, evidencing approval
of
this Agreement and the Exchange Agreement and the transactions contemplated
hereby and thereby; (2) one certified copy of resolutions duly adopted by the
Board of Directors of SOE approving the execution and delivery of this Agreement
and the Exchange Agreement and authorizing all necessary or proper corporate
action to enable SOE to comply with the terms hereof and thereof; and (3) a
certificate of SOE’s President or Secretary that each of SOE’s officers and
directors have resigned, as of the effective date subsequent to the actions
indicted in subparagraphs (1) and (2) of this paragraph 12(b).
12. Conditions
to the Obligations of DVSO
-
continued
(c)
The representation and warranties of SOE contained in this Agreement shall
be true in all material respects on and as of the Closing Date with the same
effect as though such representations and warranties had been made on and as
of
such date, except for changes permitted by this Agreement or those incurred
in
the ordinary course of business, and DVSO shall have received from SOE at the
Closing a certificate, dated the Closing Date, of the President or Vice
President of SOE to that effect.
(d)
Each and all of the respective agreements of SOE to be performed on or
before the Closing Date pursuant to the terms hereof shall in all material
respects have been duly performed and SOE shall have delivered to DVSO a
certificate date the Closing Date, of the President or Vice President of SOE
to
that effect.
(e)
SOE shall have furnished DVSO with copies of its audited Financial
Statements together with the Auditor’s report for all fiscal years ended prior
to the Closing Date and for the current year from its beginning to the Closing
Date. Such financial statements shall consist of the balance sheet, the income
statement, statement of stockholder’s equity and changes in financial position
for the year or period then ended.
13.
Conditions
to the Obligations of SOE
The
obligations of SOE hereunder are subject to the satisfaction on or before
Closing Date of the following conditions:
(a) This
Agreement and the transactions contemplated hereby shall have been approved
by
the requisite vote of the outstanding shares of SOE Common Stock.
(b) All
the terms and covenants of this Agreement to be complied with or performed
by
DVSO shall have been fully complied with and performed in all material
respects.
(c) The
representation and warranties of DVSO contained in this Agreement shall be
true
in all material respects on and as of the Closing Date with the same effect
as
though such representations and warranties had been made on and as of such
date,
and DVSO shall have delivered to SOE at the Closing a certificate, dated the
Closing Date, of the President or Vice President of SOE to that
effect.
(d) The
necessary approvals described in paragraph 6 hereof shall have been
granted.
(e) On
the Closing Date, DVSO shall have furnished SOE with (1) a certified copy of
resolutions duly adopted by the holders of more than fifty percent (50%) of
its
issued and outstanding shares of DVSO Common Stock entitled to vote, evidencing
approval of this Agreement and the Exchange Agreement and the transactions
contemplated hereby and thereby; and (2) a certified copy of DVSO approving
the
execution and delivery of this Agreement and authorizing all necessary and
proper corporate action to enable DVSO to comply with the terms and conditions
of this Agreement.
14. Termination
and Modification of Rights
(a) This
Agreement (except for the last three sentences of paragraph 3 hereof) may be
terminated at any time prior to the Closing Date by (1) mutual consent of the
parties hereto authorized by their respective Boards of Directors, or (2) upon
written notice to the other party, by either party, upon authorization of its
Board of Directors:
(i) if
in its reasonably exercised judgment there shall have occurred a material
adverse change in the financial condition or business of the other party or
the
other party shall have suffered a material loss or damage to any of its property
or assets, which change, loss or damage materially affects or impairs the
ability of the other party to conduct its business, or if any previously
undisclosed condition which materially adversely affects the earning power
or
assets of either party comes to the attention of the other
party;
14. Termination
and Modification of Rights
-
continued
(ii) if
the terms, covenants or conditions of this Agreement to be complied with or
performed by one of the other parties at or before the Closing Date shall not
have been materially complied with or performed at the time required for such
compliance or performance and such noncompliance or nonperformance shall not
have been waived by the party giving notice of termination;
(iii) if
any action or proceeding
shall have been instituted or threatened before a court or other governmental
body or by any public authority to restrain or prohibit the transaction
contemplated by this Agreement or if the consummation of such transaction would
subject either of such parties to liability for breach of any law or regulation;
or
(b)
As provided in paragraph 2(a) this Agreement may be terminated by either
party hereto upon notice to the other in the event the Closing shall not beheld
by June 30, 2007.
(c)
Any terms or conditions of this Agreement may be waived at any time by the
party hereto which is entitled to the benefit thereof, by action taken by the
Board of Directors of such party; and any such term or condition may be amended
at any time, by an agreement in writing executed by the chairman of the Board,
the President or any Vice President of each of the parties pursuant to
authorization by the respective Board of Directors; provided, however, that
no
amendment of any principal term of the Exchange Agreement shall be effected
after approval of this Agreement by the shareholders of SOE, unless such
amendment is approved by such shareholders in accordance with the respective
state corporation law.
15.
Expenses
Except
to
the extent otherwise provided in paragraph 5(c) of this Agreement, in the event
this Agreement is terminated without consummation at the Closing, DVSO and
SOE
shall each pay all of its respective expenses incurred for the purpose of
carrying this Agreement into effect.
16.
Finders
Each
of
the parties represents that no broker, agent, finder or similar person has
been
retained or paid and that no brokerage fee or other commission has been agreed
to be paid for or on account of this Agreement.
17.
Governing
Law and Venue
This
Agreement shall be governed by and interpreted in accordance with the laws
of
the State of Arizona, United States of America. The parties hereby expressly
agree that the proper venue for any claim or cause of action by the parties
shall be the district Court for Maricopa, Arizona, and each party upon execution
of this Agreement consents to the service of process from such
court.
18.
Notices
All
notices or other communications required or permitted hereunder shall be
sufficiently given if sent by certified mail, postage prepaid, addressed as
follows:
If
to
DVSO: Dimensional
Visions Incorporated
8777
N. Gainey Center Dr., Suite
191
Scottsdale,
AZ 85281
With
a copy to:
Kenneth
R. Pinckard, Esq.
3104
E. Camelback Rd., Suite
245
Phoenix,
AZ 85016
If
to
SOE: Studio
One Entertainment, Inc.
Attn:
Larry Ryckman
13470
N. 85
th
Place
Scottsdale,
AZ 85260
19.
Binding
Nature and Assignment
This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors, but it may not be assigned by any party without
the consent of the other.
20.
Assignment
Rights
ad
obligations of a party to this Agreement may not be assigned or transferred
without the other party’s prior written consent.
21.
Modification
No
modification or amendment of this Agreement shall be valid unless it is in
writing and signed by both parties hereto.
22.
Complete
Agreement
This
Agreement constitutes the entire agreement between the parties and supersedes
all prior agreements and understandings between the parties.
23.
Waiver
The
waiver by either party of a breach of any term in this Agreement shall not
operate as, or be construed as, a waiver of any subsequent breach.
24.
Headings
The
headings in this Agreement are inserted for convenience only and shall not
be
considered in interpreting the provisions hereof.
25.
Counterparts
This
Agreement may be executed in two or more counterparts by the parties hereto
by
their respective officers thereunto duly authorized by a majority of their
directors as of the date first above written.
IN
WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto
by
their respective officers thereto duly authorized by a majority of their
directors as of the date first above written.
|
DIMENSIONAL
VISIONS
INCORPORATED
|
|
|
|
|
By:
|
/s/ Preston
J.
Shea
|
|
|
Preston
J.
Shea
|
|
|
Title:
President
|
|
|
|
|
STUDIO
ONE ENTERTAINMENT,
INC.
|
|
|
|
|
By:
|
/s/ Lawrence
H.
Ryckman
|
|
|
Lawrence
H.
Ryckman
|
|
|
Title:
Chairman and Chief
Executive Officer
|
|
|
|
EXHIBIT
“A”
AGREEMENT
OF EXCHANGE
OF
DIMENSIONAL
VISIONS INCORPORATED
AND
STUDIO
ONE ENTERTAINMENT, INC.
AGREEMENT
OF EXCHANGE made as of the _____ day of ________________, 20__, by and between
Dimensional Visions Incorporated, a Delaware corporation (herein, “DVSO”), and
Studio One Entertainment, Inc., an Arizona corporation (herein, “SOE”). DVSO and
SOE are sometimes hereinafter collectively referred to as the “Constituent
Corporations”.
RECITALS:
DVSO
is a
Delaware corporation organized on May 12, 1988, and its authorized capital
stock
consists of 100,000,000 shares of common stock, $.001 par value (the “DVSO
Common Stock”) of which no more than 4,000,000 shares of DVSO Common Stock will
be issued and outstanding as of the Closing Date.
SOE
is an
Arizona corporation organized on September 24, 2004 and its authorized capital
stock consists of 100,000,000 shares of common stock, no par value (the “SOE
Common Stock”) of which approximately 6,500,000 shares of SOE Common Stock will
be issued and outstanding as of the Closing Date and no shares of SOE Common
Stock are reserved for issuance upon exercise of any outstanding common stock
purchase warrants or options except as described in the Stock Purchase
Agreement.
DVSO
and
SOE have entered into an Stock Purchase Agreement dated March 29, 2006 (the
“Stock Purchase Agreement”) setting forth certain representations, warranties,
agreements and conditions in connection with the exchange provided for
herein.
The
respective Board of Directors of DVSO and SOE have, by resolution, duly approved
the execution of and the transaction contemplated by the Stock Purchase
Agreement and this Agreement of Exchange and directed that they be submitted
to
the shareholders of SOE for adoption and approval.
NOW,
THEREFORE, in consideration of the premises and of the mutual covenants and
agreements herein contained, the parties hereto have agreed and do hereby agree,
subject to the terms and conditions hereinafter set forth, as
follows:
I
EXCHANGE
1.1
In
accordance with the provisions of this Agreement and Section 1(a) of Stock
Purchase Agreement, each of the shares of SOE Common Stock outstanding as the
Effective Date of the Exchange shall be exchanged for one (1) share of DVSO
Common Stock to be issued upon the Effective Date of the Exchange. DVSO shall
be
and is herein sometimes referred to as the “Acquiring Corporation”.
1.2
Upon
the Effective Date of the Exchange (as defined in Article III hereof) SOE shall
become a wholly-owned subsidiary of DVSO, (i) shall continue to possess all
of
its rights and property as constituted immediately prior to the Effective Date
of the Exchange and (ii) shall continue subject to all of its debts and
liabilities as the same shall have exited immediately prior to the Effective
Date of the Exchange. All rights of creditors and all liens upon the property
of
each of the Constituent Corporations shall be preserved unimpaired.
1.4
The Exchange shall not become effective until the
following actions shall have been completed: (i) this Agreement of Exchange
shall have been adopted and approved by the shareholders of SOE in accordance
with the requirements of Arizona corporate law; and (ii) all of the other
conditions precedent to the consummation of the Exchange specified in the Stock
Purchase Agreement shall have been satisfied or duly waived by the party
entitled to satisfaction thereof.
II
EXCHANGE
OF SHARES
The
manner and basis of exchanging shares of SOE Common Stock for the Exchange
Shares and the exchange of certificates therefore, shall be as
follows:
2.1
Each
one (1) share of SOE Common Stock which shall be issued and outstanding
immediately prior to the Effective Date of the Exchange shall, by virtue of
the
Exchange and without any action on the part of the holder thereof other than
that set forth in the Stock Purchase Agreement, be exchanged on or before the
fifteenth (15
th
) day after
the Board of Directors of DVSO shall have approved and
authorized the consummation of the transaction contemplated by the Acquisition
Documents (the “Effective Date of the Exchange”) into One (1) share of the
Exchange Shares. If between the date hereof and the Effective Date of the
Exchange, DVSO or SOE shall either effect any reclassification,
recapitalization, subdivision, combination or exchange or shares, in respect
of
their respective outstanding common stock, or a stock divided thereon shall
be
declared with a record date within said period, the per share amounts of the
Exchange Shares to be issued and delivered as provided in this Agreement shall
be appropriately adjusted.
2.2
After
the Effective Date of the Exchange certificates evidencing outstanding shares
of
SOE Common Stock shall evidence the right of the holder thereof to receive
certificates for shares of the Exchange Shares at the applicable rate as
aforesaid. Each holder of SOE Common Stock, upon surrender of the certificate
or
certificates, which prior thereto represented shares of SOE Common Stock, to
DVSO’s stock transfer agent, which shall act as the exchange agent (the
“Exchange Agent”) for such shareholder to effect the exchange of certificates on
their behalf, shall be entitled upon such surrender to receive in exchange
therefore a certificate or certificates representing the number of whole shares
of the Exchange Shares into which the shares of SOE Common Stock therefore
represented by the certificate or certificates so surrendered shall have been
exchanged as aforesaid. Until so surrendered, each outstanding certificate
for
shares of SOE Common Stock shall be deemed for all corporate purposes, including
voting rights, subject to the future provisions of this Article II, to evidence
the ownership of the shares of the Exchange Shares into which such shares have
been so exchanged. No dividends or distributions will be paid to persons
entitled to receive certificates for shares of the Exchange Shares pursuant
hereto until such persons shall have surrendered their certificates which prior
to the Effective Date of the Exchange represented shares of SOE Common Stock;
but there shall be paid to the record holder of each such certificates, with
respect to the number of whole shares of the Exchange Shares issued in exchange
therefore (i) upon such surrender, the amount of any dividends or distributions
with a record date subsequent to the Effective Date of the Exchange and prior
to
surrender which shall have become payable thereon since the Effective Date
of
the Exchange, without interest, and (ii) after such surrender, the amount of
any
dividends thereon with a record date subsequent to the Effective Date of the
Exchange and prior to surrender and the payment date of which shall be
subsequent to surrender; such amount to be paid on such payment
date.
2.3
No
certificates representing a fraction of a share of the Exchange Shares will
be
issued and no right to vote or receive any distribution or any other right
of a
shareholder shall attach to any fractional interest in a share of the Exchange
Shares to which any holder of shares of SOE Common Stock would otherwise be
entitled hereunder. In lieu thereof, each holder of shares of SOE Common Stock
entitled to a fraction of a share of the Exchange Shares shall receive one
whole
share of DVSO Common Stock if the fraction of a share is equal to or greater
than one-half share (.50); otherwise, the holder of the fraction of a share
shall receive cash on the basis of $.50 per share.
EXCHANGE
OF SHARES
-
continued
2.4
If
any certificate for shares of the Exchange Shares is to be issued in a name
other than that in which the certificate surrendered in exchange therefore
is
registered, it shall be a condition of the issuance thereof that the certificate
so surrendered shall be properly endorsed and otherwise be in proper form for
transfer and that the person requesting such exchange pay to the Exchange Agent
any transfer or other taxes required by reason of the issuance of a certificate
for shares of the Exchange Shares in any name other than that of the registered
holder of the certificate surrendered, or establish to the satisfaction of
the
Exchange Agent that such tax has been paid or is not payable.
2.5
At
the Effective Date of the Exchange, all shares of SOE Common Stock which shall
then be held in its treasury, if any, shall cease to exist, and all certificates
representing such shares shall be canceled.
III
MISCELLANEOUS
3.1
For
the convenience of the parties hereto and to facilitate the filing of this
Agreement of Exchange, any number of counterparts hereof may be executed; and
each such counterpart shall be deemed to be an original instrument.
3.2
At
any time prior to the Effective Date of the Exchange the parties hereto may,
by
written agreement, (a) extend the time for the performance of any of the
obligations or other acts of the parties hereto, (b) waive (in the manner
specified in Paragraph 14 of the Stock Purchase Agreement) any breach or
inaccuracy in the representations and warranties contained in this Agreement
of
Exchange or in the Stock Purchase Agreement or in any document delivered
pursuant thereto, or (c) waive (in the manner specified in Paragraph 14 of
the
Stock Purchase Agreement) compliance with any of the covenants, conditions
or
agreements contained in this Agreement of Exchange or in the Stock Purchase
Agreement.
3.3
The
corporation parties to this Agreement are also parties to the Stock Purchase
Agreement. The two agreements are intended to be construed together in order
to
effectuate their purposes, and said agreements are intended as a plan or
reorganization within the meaning of Section 368 of the Internal Revenue Code
of
1954, as amended.
IN
WITNESS WHEREOF, each of the undersigned corporations has caused this Agreement
of Exchange to be signed in its corporate name by its duly authorized officers
and its corporate seal to be affixed hereto, all as of the date first above
written.
|
DIMENSIONAL
VISIONS
INCORPORATED
|
|
|
|
|
By:
|
/s/ Preston
J.
Shea
|
|
|
Preston
J.
Shea
|
|
|
President
|
|
|
|
|
STUDIO
ONE ENTERTAINMENT,
INC.
|
|
|
|
|
By:
|
/s/ Lawrence
H.
Ryckman
|
|
|
Lawrence
H.
Ryckman
|
|
|
Chairman
and Chief Executive
Officer
|
|
|
|
EXHIBIT
10.2
AGREEMENT
OF EXCHANGE
OF
STUDIO
ONE MEDIA, INC.
AND
STUDIO
ONE ENTERTAINMENT, INC.
AGREEMENT
OF EXCHANGE made as of the 17th day of April, 2007, by and between Studio One
Media, Ic., (fka Dimensional Visions Incorporated), a Delaware corporation
(herein, “SOMD”), and Studio One Entertainment, Inc., an Arizona corporation
(herein, “SOE”). SOMD and SOE are sometimes hereinafter collectively referred to
as the “Constituent Corporations”.
RECITALS:
SOMD
is a
Delaware corporation organized on May 12, 1988, and its authorized capital
stock
consists of 100,000,000 shares of common stock, $.001 par value (the “SOMD
Common Stock”) of which no more than 4,000,000 shares of SOMD Common Stock will
be issued and outstanding as of the Closing Date.
SOE
is an
Arizona corporation organized on September 24, 2004 and its authorized capital
stock consists of 100,000,000 shares of common stock, no par value (the “SOE
Common Stock”) of which 7,000,000 shares of SOE Common Stock will be issued and
outstanding as of the Closing Date and no shares of SOE Common Stock are
reserved for issuance upon exercise of any outstanding common stock purchase
warrants or options except as described in the Stock Purchase
Agreement.
SOMD
and
SOE have entered into an Stock Purchase Agreement dated March 29, 2006 (the
“Stock Purchase Agreement”) setting forth certain representations, warranties,
agreements and conditions in connection with the exchange provided for
herein.
The
respective Board of Directors of SOMD and SOE have, by resolution, duly approved
the execution of and the transaction contemplated by the Stock Purchase
Agreement and this Agreement of Exchange and directed that they be submitted
to
the shareholders of SOE for adoption and approval.
A
majority of the shareholders of SOMD and a majority of the shareholders of
SOE
have approved the transaction contemplated by the Stock Purchase Agreement
and
this Agreement of Exchange.
NOW,
THEREFORE, in consideration of the premises and of the mutual covenants and
agreements herein contained, the parties hereto have agreed and do hereby agree,
subject to the terms and conditions hereinafter set forth, as
follows:
I
EXCHANGE
1.1
In
accordance with the provisions of this Agreement and Section 1(a) of Stock
Purchase Agreement, each of the shares of SOE Common Stock outstanding as the
Effective Date of the Exchange shall be exchanged for one (1) share of SOMD
Common Stock to be issued upon the Effective Date of the Exchange. SOMD shall
be
and is herein sometimes referred to as the “Acquiring Corporation”.
1.2
Upon
the Effective Date of the Exchange (as defined in Article III hereof) SOE shall
become a wholly-owned subsidiary of SOMD, (i) shall continue to possess all
of
its rights and property as constituted immediately prior to the Effective Date
of the Exchange and (ii) shall continue subject to all of its debts and
liabilities as the same shall have exited immediately prior to the Effective
Date of the Exchange. All rights of creditors and all liens upon the property
of
each of the Constituent Corporations shall be preserved
unimpaired.
EXCHANGE
-
continued
1.3
SOMD
hereby agrees that at and after the times when the Exchange shall become
effective and as and when required by the provisions of the Stock Purchase
Agreement, SOMD will issue certificates representing that number of shares
of
common stock, $.001 par value per share, or SOMD (collectively, “Exchange
Shares”) for which shares of SOMD Common Stock issued and outstanding
immediately prior to the Effective Date of the Exchange and by virtue of the
Exchange, be exchanged as hereinafter provided.
1.4
The
Exchange shall not become effective until the following actions shall have
been
completed: (i) this Agreement of Exchange shall have been adopted and approved
by the shareholders of SOE in accordance with the requirements of Arizona
corporate law; and (ii) all of the other conditions precedent to the
consummation of the Exchange specified in the Stock Purchase Agreement shall
have been satisfied or duly waived by the party entitled to satisfaction
thereof.
II
EXCHANGE
OF SHARES
The
manner and basis of exchanging shares of SOE Common Stock for the Exchange
Shares and the exchange of certificates therefore, shall be as
follows:
2.1
Each
one (1) share of SOE Common Stock which shall be issued and outstanding
immediately prior to the Effective Date of the Exchange shall, by virtue of
the
Exchange and without any action on the part of the holder thereof other than
that set forth in the Stock Purchase Agreement, be exchanged on or before the
fifteenth (15
th
) day after
the Board of Directors of SOMD shall have approved and
authorized the consummation of the transaction contemplated by the Acquisition
Documents (the “Effective Date of the Exchange”) into One (1) share of the
Exchange Shares. If between the date hereof and the Effective Date of the
Exchange, SOMD or SOE shall either effect any reclassification,
recapitalization, subdivision, combination or exchange or shares, in respect
of
their respective outstanding common stock, or a stock divided thereon shall
be
declared with a record date within said period, the per share amounts of the
Exchange Shares to be issued and delivered as provided in this Agreement shall
be appropriately adjusted.
2.2
After
the Effective Date of the Exchange certificates evidencing outstanding shares
of
SOE Common Stock shall evidence the right of the holder thereof to receive
certificates for shares of the Exchange Shares at the applicable rate as
aforesaid. Each holder of SOE Common Stock, upon surrender of the certificate
or
certificates, which prior thereto represented shares of SOE Common Stock, to
SOMD’s stock transfer agent, which shall act as the exchange agent (the
“Exchange Agent”) for such shareholder to effect the exchange of certificates on
their behalf, shall be entitled upon such surrender to receive in exchange
therefore a certificate or certificates representing the number of whole shares
of the Exchange Shares into which the shares of SOE Common Stock therefore
represented by the certificate or certificates so surrendered shall have been
exchanged as aforesaid. Until so surrendered, each outstanding certificate
for
shares of SOE Common Stock shall be deemed for all corporate purposes, including
voting rights, subject to the future provisions of this Article II, to evidence
the ownership of the shares of the Exchange Shares into which such shares have
been so exchanged. No dividends or distributions will be paid to persons
entitled to receive certificates for shares of the Exchange Shares pursuant
hereto until such persons shall have surrendered their certificates which prior
to the Effective Date of the Exchange represented shares of SOE Common Stock;
but there shall be paid to the record holder of each such certificates, with
respect to the number of whole shares of the Exchange Shares issued in exchange
therefore (i) upon such surrender, the amount of any dividends or distributions
with a record date subsequent to the Effective Date of the Exchange and prior
to
surrender which shall have become payable thereon since the Effective Date
of
the Exchange, without interest, and (ii) after such surrender, the amount of
any
dividends thereon with a record date subsequent to the Effective Date of the
Exchange and prior to surrender and the payment date of which shall be
subsequent to surrender; such amount to be paid on such payment
date.
EXCHANGE
OF SHARES -
continued
2.3
No
certificates representing a fraction of a share of the Exchange Shares will
be
issued and no right to vote or receive any distribution or any other right
of a
shareholder shall attach to any fractional interest in a share of the Exchange
Shares to which any holder of shares of SOE Common Stock would otherwise be
entitled hereunder. In lieu thereof, each holder of shares of SOE Common Stock
entitled to a fraction of a share of the Exchange Shares shall receive one
whole
share of SOMD Common Stock if the fraction of a share is equal to or greater
than one-half share (.50); otherwise, the holder of the fraction of a share
shall receive cash on the basis of $.50 per share.
2.4
If
any certificate for shares of the Exchange Shares is to be issued in a name
other than that in which the certificate surrendered in exchange therefore
is
registered, it shall be a condition of the issuance thereof that the certificate
so surrendered shall be properly endorsed and otherwise be in proper form for
transfer and that the person requesting such exchange pay to the Exchange Agent
any transfer or other taxes required by reason of the issuance of a certificate
for shares of the Exchange Shares in any name other than that of the registered
holder of the certificate surrendered, or establish to the satisfaction of
the
Exchange Agent that such tax has been paid or is not payable.
2.5
At
the Effective Date of the Exchange, all shares of SOE Common Stock which shall
then be held in its treasury, if any, shall cease to exist, and all certificates
representing such shares shall be canceled.
III
CONDITION
SUBSEQUENT
SOE
shall, within thirty days of the date hereof, furnish SOMD with copies of its
audited Financial Statements together with the Auditor’s report for all fiscal
years ended December 31, 2004, 2005, and 2006 and for the current year through
and at the Closing Date. Such financial statements shall consist of the balance
sheet, the income statement, statement of stockholder’s equity and changes in
financial position for the year or period then ended.
IV
MISCELLANEOUS
3.1
For
the convenience of the parties hereto and to facilitate the filing of this
Agreement of Exchange, any number of counterparts hereof may be executed; and
each such counterpart shall be deemed to be an original instrument.
3.2
At
any time prior to the Effective Date of the Exchange the parties hereto may,
by
written agreement, (a) extend the time for the performance of any of the
obligations or other acts of the parties hereto, (b) waive (in the manner
specified in Paragraph 14 of the Stock Purchase Agreement) any breach or
inaccuracy in the representations and warranties contained in this Agreement
of
Exchange or in the Stock Purchase Agreement or in any document delivered
pursuant thereto, or (c) waive (in the manner specified in Paragraph 14 of
the
Stock Purchase Agreement) compliance with any of the covenants, conditions
or
agreements contained in this Agreement of Exchange or in the Stock Purchase
Agreement.
3.3
The
corporation parties to this Agreement are also parties to the Stock Purchase
Agreement. The two agreements are intended to be construed together in order
to
effectuate their purposes, and said agreements are intended as a plan or
reorganization within the meaning of Section 368 of the Internal Revenue Code
of
1954, as amended.
IN
WITNESS WHEREOF, each of the undersigned corporations has caused this Agreement
of Exchange to be signed in its corporate name by its duly authorized officers
and its corporate seal to be affixed hereto, all as of the date first above
written.
|
STUDIO
ONE MEDIA, INC.
|
|
|
|
By:
/s/
Preston J.
Shea
|
|
/s/
Preston J. Shea
|
|
President
|
|
|
|
|
|
STUDIO
ONE ENTERTAINMENT,
INC.
|
|
|
|
By:
/s/
Lawrence G.
Ryckman
|
|
Lawrence
G. Ryckman
|
|
Chairman
and Chief Executive Officer
|
4