Document:

ex_105.htm

EXHIBIT 10.4

 

WARRANT NO. P-1

WARRANT TO PURCHASE SHARES

OF COMMON STOCK

OF Digi Outdoor Media, Inc.

Warrant to Purchase 50,300 Shares

(subject to adjustment as set forth herein)

Exercise Price $.70 Per Share

(subject to adjustment as set forth herein)

VOID AFTER 5 P.M., MST, August 8, 2019

THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR REGISTERED OR QUALIFIED UNDER ANY OTHER APPLICABLE FEDERAL OR STATE SECURITIES LAWS.  THESE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, OR OTHERWISE TRANSFERRED, IN WHOLE OR IN PART, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR QUALIFICATION FILED IN ACCORDANCE WITH THE ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT.

Digi Outdoor Media, Inc., 35332 S.E. Center Street, Snoqualmie, WA 98065, (the "Company"), hereby certifies that, for a purchase price of $100 in value received,

Spencer Edwards, Inc

6851 South Holly Circle, Suite 200

Centennial, CO 80112

(who, together with any subsequent holder of the Warrant, is referred to as the "Holder"), is entitled, subject to the terms and conditions set forth below, to purchase from the Company at any time before 5 p.m., MST time, on August 8, 2019 ("Expiration Date), up to

Fifty thousand three hundred (50,300)

of the Company's $.001 par value Common Stock (the "Shares") at a purchase price of seventy cents per share ($.70 per Share) (the "Exercise Price").

The term "Warrant" as used herein shall include this Warrant and any Warrants issued in substitution for or replacement of this Warrant, or any Warrants into which this Warrant may be divided or exchanged.  The number and character of the securities purchasable upon exercise of this Warrant and the Exercise Price are subject to adjustment as provided below.

This Warrant may be assigned, transferred, sold, offered for sale, or exercised, in whole or in part, by the Holder upon compliance with all the pertinent provisions hereof.

 

 

  

  

  

	
1.  

	
Definitions.

The following terms used in this agreement shall have the following meanings (unless otherwise expressly provided herein):

The “Act.”     The Securities Act of 1933, as amended.

“Cashless Exercise” The provision provided to the warrant holder whereby the warrant holder may elect to exercise the warrant by turning in a portion of the value of the shares, at the time of exercise, in payment for the shares in lieu of cash payment.

The “Commission.”  The Securities and Exchange Commission.

The “Company.”    Digi Outdoor Media, Inc.

 “Common Stock.”  The Company’s Common Stock.

"Current Market Price.”  The Current Market Price shall be determined as follows:

	 	
(a)  if the security at issue is listed on a national securities exchange or admitted to unlisted trading privileges on such an exchange or quoted on either the National Market System or the Small Cap Market of the automated quotation service operated by The NASDAQ Stock Market, Inc., the current value shall be the last reported sale price of that security on such exchange or system on the day for which the Current Market Price is to be determined or, if no such sale is made on such day, the average of the highest closing bid and lowest asked price for such day on such exchange or system; or

	 	
(b)  if the security at issue is not so listed or quoted or admitted to unlisted trading privileges, the Current Market Value shall be the last reported sale price prices quoted on the Electronic Bulletin Board operated by The NASDAQ Stock Market, Inc., or, if not so quoted, then by the National Quotation Bureau, Inc. on the last business day prior to the day for which the Current Market Price is to be determined; or

	 	
(c)  if the security at issue is not so listed or quoted or admitted to unlisted trading privileges and bid and asked prices are not reported, the current market value shall be determined in such reasonable manner as may be prescribed from time to time by the Board of Directors of the Company, subject to the objection and arbitration procedure as described in Section ­6 below.

	
  

	
“Derivative Securities” Securities which are either convertible or exercisable into the     Company’s common stock such as warrants or convertible debt.

 “Exercise Date.”   August, 8, 2014.

“Exercise Price.”    $.70 per Share, as modified in accordance with Section 4, below.

“Expiration Date.”    August, 8, 2019.

“FINRA”                              FINANCIAL INDUSTRY REGULATORY AUTHORITY

“Holder “or “Warrant holder.”    The person to whom this Warrant is issued, and any valid transferee thereof pursuant to Section 3.1 below.

 

 

  

  

 

    ”NASD.”    The National Association of Securities Dealers, Inc.

“NASDAQ.”    The automated quotation system operated by the NASDAQ Stock Market, Inc.

“Termination of Business.”    Any sale, lease or exchange of all, or substantially all, of the Company's assets or business or any dissolution, liquidation or winding up of the Company.

“Warrants.”    The warrants issued in accordance with the terms of this Agreement and any Warrants issued in substitution for or replacement of such warrants, including those evidenced by a warrant or warrants originally issued or issued upon division, exchange, substitution or transfer pursuant to this Agreement.

“Warrant Shares.”    The Common Stock purchasable upon exercise of a Warrant including the Common Stock underlying unexercised portions of a Warrant.

2.      Exercise of Warrant.

	
  

	
 

	

(a)Subject to the other terms and conditions of this Warrant, the purchase rights evidenced by this Warrant may be exercised in whole or in part at any time, and from time to time before the Expiration Date, by the Holder's presentation and surrender of this Warrant to the Company at its principal office or at the office of the Company's stock transfer agent, if any, accompanied by a duly executed Notice of Exercise, in the form attached to and by this reference incorporated in this Warrant as Exhibit A, and by payment of the aggregate Exercise Price, in immediately available funds, for that number of Warrant Securities specified in the Notice of Exercise.  In the event this Warrant is exercised in part only, as soon as is practicable after the presentation and surrender of this Warrant to the Company for exercise, the Company shall execute and deliver to the Holder a new Warrant, containing the same terms and conditions as this Warrant, evidencing the right of the Holder to purchase that number of Warrant Securities as to which this Warrant has not been exercised.

	
  

	
(b) Upon receipt of this Warrant by the Company as described in subsection (a) above, the Holder shall be deemed to be the holder of record of the Warrant Securities issuable upon such exercise, notwithstanding that the transfer books of the Company may then be closed or that certificates representing such Warrant Securities may not have been prepared or actually delivered to the Holder.

	
  

	
(c) Cashless Exercise Provision:  Notwithstanding any provisions herein to the contrary (and if months a publicly traded market for the common shares of the Company has developed on any U.S. Securities Exchange, NASDAQ, OTCBB, (excluding pink sheets) or any major foreign Securities Exchange or if in the alternative the COMPANY while being a privately held entity receives a offer to exchange its common shares, for cash or other consideration from another issuer), if the Fair Market Value of one share of Common Stock is greater than the Purchase Price (at the date of calculation as set forth below), in lieu of exercising this Warrant for cash the holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being cancelled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Subscription Form in which event the Company shall issue to the holder a number of shares of Common Stock computed using the following formula (where A is determined by the closing bid price of the common shares on the business day immediately preceding the exercise of the warrant, or in the event of a offer to exchange its common shares for cash or securities issued by an independent issuer, by dividing the aggregate cash equivalent value of the offered consideration by the fully diluted number of shares outstanding, taking into consideration all such securities or derivatives, which are calculated to be “in the money”.:

X= Y * (A-B)

  A

 

  

  

  

	
  

	
Where

	
X=

	
the number of shares of Common Stock to be issued to the holder upon conversion of the cashless exercise provision (the converted securities).

	
  

	
Y=

	
the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being exercised (at the date of such calculation)

 

	
  

	
A=

	
the Fair Market Value of one share of the Company’s Common Stock (at the date of such calculation)

 

	
  

	
B=

	
Exercise Price of the warrant (as adjusted to the date of such calculation)

3.      Exchange, Assignment or Loss of Warrant.

	
  

	
(a)

	
This Warrant may be sold, transferred or assigned at any time, in whole or in part, if (i) the transfer is by operation of law as a result of the death of any Holder to whom all or a portion of this Warrant may be transferred, (ii) the transfer is to any successor of the Holder's business and (iii) to such other persons for which transaction an exemption from the registration requirements of the Act can be established to the satisfaction of the Company.  All sales, transfers, assignments or hypothecations of this Warrant must be in compliance with Section 8 hereof.  Any assignment or transfer of this Warrant shall be made by the presentation and surrender of this Warrant to the Company at its principal office or the office of its transfer agent, if any, accompanied by a duly executed Assignment Form, in the form attached to and by this reference incorporated in this Warrant as Exhibit B.  Upon the presentation and surrender of these items to the Company, the Company, at its sole expense, shall execute and deliver to the new Holder or Holders a new Warrant or Warrants, containing the same terms and conditions as this Warrant, in the name of the new Holder or Holders as named in the Assignment Form, and this Warrant shall at that time be canceled.

	
  

	
(b)

	
This Warrant, alone or with other Warrants containing the same terms and conditions and owned by the same Holder, is exchangeable at the option of the Holder but at the Company's sole expense, at any time prior to its expiration either by its terms or by its exercise in full upon presentation and surrender to the Company at its principal office or at the office of its transfer agent, if any, for another Warrant or other Warrants, of different denominations but containing the same terms and conditions as this Warrant, entitling the Holder to purchase the same aggregate number of Warrant Securities that were purchasable pursuant to the Warrant or Warrants presented and surrendered.  At the time of presentation and surrender by the Holder to the Company, the Holder also shall deliver to the Company a written notice, signed by the Holder, specifying the denominations in which new Warrants are to be issued to the Holder.

	
  

	
(c)

	
The Company will execute and deliver to the Holder a new Warrant containing the same terms and conditions as this Warrant upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction, or mutilation of this Warrant, provided that (i) in the case of loss, theft, or destruction, the Company receives from the Holder a reasonably satisfactory indemnification, and (ii) in the case of mutilation, the Holder presents and surrenders this Warrant to the Company for cancellation.  Any new Warrant executed and delivered shall constitute an additional contractual obligation on the part of the Company regardless of whether the Warrant that was lost, stolen, destroyed, or mutilated shall be enforceable by anyone at any time.

 

 

  

  

  

 

4.      Anti-Dilution Provisions.

4.1           Stock Splits, Dividends, Etc.

	
  

	
(a)

	
If the Company shall at any time subdivide its outstanding shares of Common Stock (or other securities at the time receivable upon the exercise of the Warrant) by recapitalization, reclassification or split-up thereof, or if the Company shall declare a stock dividend or distribute shares of Common Stock to its stockholders, the number of shares of Common Stock subject to this Warrant immediately prior to such subdivision shall be proportionately increased, and if the Company shall at any time combine the outstanding shares of Common Stock by recapitalization, reclassification or combination thereof, the number of shares of Common Stock subject to this Warrant immediately prior to such combination shall be proportionately decreased.  Any such adjustment and adjustment to the Exercise Price pursuant to this section shall be effective at the close of business on the effective date of such subdivision or combination or if any adjustment is the result of a stock dividend or distribution then the effective date for such adjustment based thereon shall be the record date therefore.

	
  

	
(b)

	
Whenever the number of shares of Common Stock purchasable upon the exercise of this Warrant is adjusted, as provided in this section, the Exercise Price shall be adjusted to the nearest cent by multiplying such Exercise Price immediately prior to such adjustment by a fraction (x) the numerator of which shall be the number of shares of Common Stock purchasable upon the exercise immediately prior to such adjustment, and (y) the denominator of which shall be the number of shares of Common Stock so purchasable immediately thereafter.

	
  

	
4.2

	
Adjustment for Reorganization, Consolidation, Merger, Etc.  In case of any reorganization of the Company (or any other corporation, the securities of which are at the time receivable on the exercise of this Warrant) shall consolidate with or merge into another corporation or convey all or substantially all of its assets to another corporation, then, and in each such case, the Holder of this Warrant upon the exercise at any time after the consummation of such reorganization, consolidation, merger or conveyance, shall be entitled to receive, in lieu of the securities and property receivable upon the exercise of this Warrant prior to such consummation, the securities or property to which such Holder would have been entitled upon such consummation if such Holder had exercised this Warrant immediately prior thereto; in each such case, the terms of this Warrant shall be applicable to the securities or property received upon the exercise of this Warrant after such consummation.

	
  

	
4.3

	
Certificate as to Adjustments.  In each case of an adjustment in the number of shares of Common Stock receivable on the exercise of this Warrant, the Company at its expense shall promptly compute such adjustment in accordance with the terms of the Warrant and prepare a certificate executed by an officer of the Company setting forth such adjustment and showing the facts upon which such adjustment is based.  The Company shall forthwith mail a copy of each such certificate to each Holder.  The failure to prepare or provide such certificate shall not modify the rights of any party hereunder.

4.4           Notices of Record Date, Etc.  In case:

	
  

	
(a)

	
the Company shall take a record of the holders of its Common Stock (or other securities at the time receivable upon the exercise of the Warrant) for the purpose of entitling them to receive any dividend (other than a cash dividend at the same rate as the rate of the last cash dividend theretofore paid) or other distribution, or any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities, or to receive any other right; or

	
  

	
(b)

	
of any voluntary or involuntary dissolution, liquidation or winding-up of the Company, then, and in each such case, the Company shall mail or cause to be mailed to each Holder a notice specifying, as the case may be, (i) the date on which a record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, or (ii) the date on which such reorganization, reclassification, consolidation, merger, conveyance, dissolution, liquidation or winding-up is to take place, and the time, if any, to be fixed, as to which the holders of record of Common Stock (or such other securities at the time receivable upon the exercise of this Warrant) shall be entitled to exchange their shares of Common Stock (or such other securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, conveyance, dissolution, liquidation or winding-up.  Such notice shall be mailed at least twenty (20) days prior to the date therein specified, and this Warrant may be exercised prior to said date during the term of the Warrant.

 

 

  

  

  

 

	
  

	
4.5

	
Threshold for Adjustments.  Anything in this section to the contrary notwithstanding, the Company shall not be required to give effect to any adjustment until the cumulative resulting adjustment in the Exercise Price pursuant to Subsection 6.1.2 shall have required a change of the Exercise Price by at least $.01, but when the cumulative net effect of more than one adjustment so determined shall be to change the Exercise Price by at least $.01, such full change in the Exercise Price shall thereupon be given effect.  No adjustment shall be made by reason of the issuance of shares upon conversion rights, stock issuance rights or similar rights currently outstanding or any change in the number of treasury shares held by the Company.

	
  

	
5.

	
Reservation of Warrant Securities.  The Company hereby agrees that at all times prior to the Expiration Date, it will have authorized and will reserve and keep available for issuance and delivery to the Holder that number of Warrant Securities that may be required from time to time for issuance and delivery upon the exercise of the then unexercised portion of this Warrant and all other similar Warrants then outstanding and unexercised and upon the exercise of any Warrant Securities.

6.      Transfer to Comply With the Securities Act of 1933.

	
  

	
(a)

	
This Warrant, the Warrant Securities, and all other securities issued or issuable upon exercise of this Warrant, may not be offered, sold or transferred, in whole or in part, except in compliance with the Act, and except in compliance with all applicable state securities statutes.

	
  

	
(b)

	
The Company may cause the following legend, or its equivalent, to be set forth on each certificate representing the Warrant Securities, or any other security issued or issuable upon exercise of this Warrant, not theretofore distributed to the public or sold to underwriters, as defined by the Act, for distribution to the public pursuant to Section 7 above:

	
  

	
"The securities represented by this Certificate have not been registered under the Securities Act of 1933 ("the Act") and are 'restricted securities' as that term is defined in Rule 144 under the Act.  The securities may not be offered for sale, sold or otherwise transferred except pursuant to an effective registration statement under the Act or pursuant to an exemption from registration under the Act, the availability of which is to be established to the satisfaction of the Company."

	
  

	
7.

	
Fractional Shares.  No fractional shares or scrip representing fractional shares shall be issued upon the exercise of all or any part of this Warrant.  With respect to any fraction of a share of any security called for upon any exercise of this Warrant, the Company shall pay to the Holder an amount in money equal to that fraction multiplied by the current market value of that share.  The current market value shall be determined as follows:

	
  

	
(i)

	
if the security at issue is listed on a national securities exchange or admitted to unlisted trading privileges on such an exchange or listed on the National Association of Securities Dealers National Market System, the current value shall be the last reported sale price of that security on such exchange or system on the last business day prior to the date of the applicable exercise of this Warrant or, if no such sale is made on such day, the average of the highest closing bid and lowest asked price for such day on such exchange or system; or

	
  

	
(ii)

	
if the security at issue is not so listed or admitted to unlisted trading privileges, the current market value shall be the average of the last reported highest bid and lowest asked prices quoted on the National Association of Securities Dealers Automated Quotations System or, if not so quoted, then by the National Quotation Bureau, Inc. on the last business day prior to the day of the applicable exercise of this Warrant; or

	
  

	
(iii)

	
if the security at issue is not so listed or admitted to unlisted trading privileges and bid and asked prices are not reported, the current market value shall be determined in such reasonable manner as may be prescribed from time to time by the Board of Directors of the Company, subject to the arbitration procedure as described in Section 15 below if a Holder delivers written notice to the Company of an objection within thirty (30) days after the Board’s decision.

	
  

	
8.

	
Rights of the Holder; Restrictions on Transfer.  The Holder shall not be entitled to any rights as a shareholder in the Company by reason of this Warrant, either at law or equity, except as specifically provided for herein.  The Company covenants, however, that for so long as this Warrant is at least partially unexercised, it will furnish any Holder of this Warrant with copies of all reports and communications furnished to the shareholders of the Company.

	
  

	
The Holder agrees that prior to making any disposition of the Warrants or the Warrant Securities, the Holder shall give written notice to the Company describing briefly the manner in which any such proposed disposition is to be made (except, if transfer instructions issued by Spencer Edwards, Inc. are provided to the Company concurrent (within 7 days) with the $100 payment for the initial issuance of the Warrant with instruction to transfer the Warrant(s) to persons registered or associated with the Holder (in Spencer Edwards, Inc.’s sole determination).

 

 

  

  

 

  

	
  

	
9.

	
Charges Due Upon Exercise.  The Company shall pay any and all issue or transfer taxes, including, but not limited to, all federal or state taxes, that may be payable with respect to the transfer of this Warrant or the issue or delivery of Warrant Securities upon the exercise of this Warrant.

	
10.

	
Warrant Securities to be Fully Paid.  The Company covenants that all Warrant Securities that may be issued and delivered to a Holder of this Warrant upon the exercise of this Warrant will be, upon such delivery and exercise price of the Warrant, validly and duly issued, fully paid and non-assessable.

	
11.

	
Notices.  All notices, certificates, requests, or other similar items provided for in this Warrant shall be in writing and shall be personally delivered or deposited in the United States mail, postage prepaid, addressed to the respective party as indicated in the portions of this Warrant preceding Section 1.  All notices shall be deemed to be delivered upon personal delivery or upon the expiration of three (3) business days following deposit in the United States mail, postage prepaid.  The addresses of the parties may be changed, and addresses of other Holders and holders of Warrant Securities may be specified, by written notice delivered pursuant to this Section 13.  The Company's principal office shall be deemed to be the address provided pursuant to this Section for the delivery of notices to the Company.

	
12.

	
Applicable Law.  This Warrant shall be governed by and construed in accordance with the laws of the State of Colorado, and courts located in Colorado shall have exclusive jurisdiction over all disputes arising hereunder except as provided in Section 15 hereof.

	
13.

	
Dispute Resolution.

	
The parties shall attempt in good faith to resolve any controversy or claim arising out of or relating to this Warrant, or the breach, termination, or validity thereof (a “Dispute”) promptly by negotiation between the parties.  If a Dispute has not been resolved within thirty (30) days by negotiation, the parties shall attempt to mediate the Dispute through the selection of a mutually agreeable mediator who shall conduct such mediation in confidence.  If a Dispute is not resolved by mediation, then the Dispute shall be settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and governed by the United States Arbitration Act, 9 U.S.C. §§ 1-16, except as otherwise provided herein.  Judgment upon the award rendered by the arbitrator may be entered by any court having jurisdiction thereof.  The place of arbitration shall be Denver, Colorado.  Each party shall be responsible for his own attorney fees incurred during any phase of dispute resolution.  The arbitrator shall apply the law to the dispute in the same manner as a judge as though the dispute was before a court of law of the State of Colorado.  The arbitrator shall have the authority to award any remedy or relief that a court of the State of Colorado could order or grant, including, without limitation, specific performance of any obligation created under the Agreement, the issuance of an injunction, or the imposition of sanctions for abuse or frustration of the arbitration process.  Notwithstanding the foregoing, the arbitrator shall not have authority to award punitive damages.  The parties shall take all reasonable steps necessary to conduct a hearing no later than forty-five (45) days after submission of the matter to arbitration.  The arbitrator shall render his decision within fifteen (15) days after the close of the arbitration hearing.  The arbitration award shall be in writing and shall specify the factual and legal bases for the award.

14.           Miscellaneous Provisions.

	
  

	
(a)

	
Subject to the terms and conditions contained herein, this Warrant shall be binding on the Company and its successors and shall inure to the benefit of the original Holder, its successors and assigns and all holders of Warrant Securities and the exercise of this Warrant in full shall not terminate the provisions of this Warrant as it relates to holders of Warrant Securities.

	
  

	
(b)

	
If the Company fails to perform any of its obligations hereunder, it shall be liable to the Holder for all damages, costs and expenses resulting from the failure, including, but not limited to, all reasonable attorney's fees and disbursements.

	
  

	
(c)

	
This Warrant cannot be changed or terminated or any performance or condition waived in whole or in part except by an agreement in writing signed by the party against whom enforcement of the change, termination or waiver is sought.

	
  

	
(d)

	
If any provision of this Warrant shall be held to be invalid, illegal or unenforceable, such provision shall be severed, enforced to the extent possible, or modified in such a way as to make it enforceable, and the invalidity, illegality or unenforceability shall not affect the remainder of this Warrant.

	
  

	
(e)

	
The Company agrees to execute such further agreements, conveyances, certificates and other documents as may be reasonably requested by the Holder to effectuate the intent and provisions of this Warrant.

	
  

	
(f)

	
Paragraph headings used in this Warrant are for convenience and shall not be taken or construed to define or limit any of the terms or provisions of this Warrant.  Unless otherwise provided, or unless the context shall otherwise require, the use of the singular shall include the plural and the use of any gender shall include all genders.

	 	

Digi Outdoor Media, Inc.

	 
	 	 	 	 
	
 

	
By: 

	/s/ Shannon Doyle	 
	 	 	Shannon Doyle	 
	 	 	 	 
	 	 	 	 

	
  

	
The Remainder of this Page Intentionally Left Blank

 

 

  

  

  

 

EXHIBIT A

NOTICE OF EXERCISE

(To be executed by a Holder desiring to exercise the right to purchase Shares pursuant to a Warrant.)

The undersigned Holder of a Warrant hereby

	
(a)

	
irrevocably elects to exercise the Warrant to the extent of purchasing _______________ Shares at an exercise price of $.70 per share.;

	
(b)

	
makes payment in full of the aggregate Exercise Price for those Shares in the amount of $

	
by the delivery of immediately available funds in the amount of $

	
;

	
  

	
(c)  makes payment in full of the aggregate Exercise Price for those shares by converting common stock underlying common stock purchase warrants into payment for shares by utilizing the cashless exercise provision of the warrants paragraph 2 (c) and filling out the attached warrant conversion exercise form.

	
(d)

	
requests that certificates evidencing the securities underlying such Shares be issued in the name of the undersigned, or, if the name and address of some other person is specified below, in the name of such other person:

(Name and address of person other than the

undersigned in whose name Shares are to be registered)

	
(d)

	
requests, if the number of Shares purchased are not all the Shares purchasable pursuant to the unexercised portion of the Warrant, that a new Warrant of like tenor for the remaining Shares purchasable pursuant to the Warrant be issued and delivered to the undersigned at the address stated below.

Dated:                                                      

                 Signature

	
  

	
(This signature must conform in all respects

to the name of the Holder as specified on the

face of the Warrant.)

Social Security Number                                                                                                                                          

or Employer ID Number                                                                      Printed Name

email address:                                                                      _________________________________________

   Address:                                                                                                      _________

 

 

 

  

  

  

EXHIBIT B

ASSIGNMENT FORM

 

FOR VALUE RECEIVED, the undersigned,         , hereby sells, assigns and transfers unto (attach typed instructions if more than one transferee):

Name:                 

(Please type or print in block letters)

Address:                 

the right to purchase       Shares of Digit Outdoor Media,Inc., (the "Company") pursuant to the terms and conditions of the Warrant held by the undersigned.  The undersigned hereby authorizes and directs the Company (i) to issue and deliver to the above-named assignee at the above address a new Warrant pursuant to which the rights to purchase being assigned may be exercised, and (ii) if there are rights to purchase Shares remaining pursuant to the undersigned's Warrant after the assignment contemplated herein, to issue and deliver to the undersigned at the address stated below a new Warrant evidencing the right to purchase the number of Shares remaining after issuance and delivery of the Warrant to the above-named assignee.  Except for the number of Shares purchasable, the new Warrants to be issued and delivered by the Company are to contain the same terms and conditions as the undersigned's Warrant.  To complete the assignment contemplated by this Assignment Form, the undersigned hereby irrevocably constitutes and appoints  as the undersigned's attorney-in-fact to transfer the Warrants and the rights there-under on the books of the Company with full power of substitution for these purposes.

Dated:                                                      

Signature

(This signature must conform in all respects

 to the name of the Holder as specified on the

 face of the Warrant.)

Printed Name

   Address:                                                                                           

SS#:           _________________________________________

      Email:                      _________________________________________

  

  

  

 

WARRANT CONVERSION EXERCISE FORM

TO:           Digi Outdoor Media, Inc.

Pursuant to Section 2(c) of the Warrant, the Holder hereby irrevocably elects to convert Warrants with respect to Shares of the Company into   Shares of the Company’s Common Stock.A conversion calculation is attached hereto.

The undersigned requests that certificates for such Shares be issued as follows:

Name:                                

Address:                      

Deliver to:                      

and that a new warrant for the balance remaining of the warrants, if any, subject to the warrant be registered in the name of, and delivered to, the undersigned at the address stated above.

Signature                      Dated                                           

 

 

CALCULATION OF WARRANT CONVERSION

Converted Securities    =                      Net Value

                                                                    FMV

Fair Market Value or FMV    =                      $                                

Net Value                                 =                      Aggregate FMV - Aggregate Exercise Price

 

                                                  =                      $                                 -                                

                                                 

                                                  =                      $                                

Converted Shares                  =                      

Fractional Converted Shares      =             (1)

(1)  Digi Outdoor Media, Inc. to pay for fractional Shares in cash @ $ per Share.domi_ex107.htm

Exhibit 10.5

 

THIS NOTE AND ANY SECURITIES INTO WHICH THIS NOTE IS CONVERTIBLE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

 

DIGI OUTDOOR MEDIA, INC.

 

Form of Subordinated Convertible Promissory Note

	
Note No. 2014-____

	
October ____, 2014

	
USD $___________

	
Seattle, Washington

 

For value received, Digi Outdoor Media, Inc., a Nevada corporation (the “Company”), promises to pay to _______________________________ (“Holder”), in lawful money of the United States, the principal sum of ______________________________ and no/100 Dollars ($__________), or such lesser amount as shall equal the outstanding principal amount hereof, together with simple interest from the date of this Note on the unpaid principal balance at a rate equal to twenty-five percent (25%) per annum, computed on the basis of the actual number of days elapsed and a year of 365 days.  Accrued interest on this Note shall not compound.

 

This Subordinated Convertible Promissory Note (this “Note”) is one of a series of Convertible Promissory Notes (together with this Note, the “Notes”) having serial numbers 2014-1 et seq., with an aggregate principal amount not to exceed Four Million Five Hundred Thousand Dollars (USD $4,500,000) issued by the Company in accordance with the terms of that certain Note Purchase Agreement dated October ____, 2014 (the “Purchase Agreement”), by and among the Company, Holder and the other parties named therein.  The Notes shall rank equally without preference or priority of any kind over one another, and all payments on account of principal and interest with respect to any of the Notes shall be applied ratably and proportionately on all outstanding Notes in this series on the basis of the principal amount of outstanding indebtedness represented thereby.

 

The following is a statement of the rights of Holder and the conditions to which this Note is subject, and to which Holder, by the acceptance of this Note, agrees:

 

1.    Definitions.  As used in this Note, the following capitalized terms have the following meanings:

 

(a)    “Company” includes the company initially executing this Note and any Person who shall succeed to or assume the obligations of the Company under this Note.

 

(b)    “Event of Default” has the meaning given in Section 6 hereof.

 

  

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(c) “Holder” shall mean the Person specified in the introductory paragraph of this Note or any Person who shall at the time be the registered holder of this Note.

 

(d) “Obligations” shall mean and include all loans, advances, debts, liabilities and obligations for the payment of money owed by the Company to Holder, now existing or hereafter arising under or pursuant to the terms of this Note, payable by the Company hereunder.

 

(e) “Person” shall mean and include an individual, a partnership, a corporation (including a business trust), a joint stock company, a limited liability company, an unincorporated association, a joint venture or other entity.

 

2.           Payments on Note.

 

(a)           No monthly fixed payments of principal or interest shall be made on this Note.  In lieu of fixed monthly payments, Holder shall be entitled to receive a pro rata portion of the Company’s Net Revenues, determined and payable as follows:  commencing with the thirteenth (13th) month following the date of issuance of the Note, fifty percent (50%) of the Company’s Net Revenues each month shall be allocated and paid to the Holders of all Notes in this series of Notes, payable on the last day of each month on a pro rata basis based upon the ratio which the principal amount of each Note bears to the aggregate principal amount of all Notes in this series.  In the event any Note in this series is converted prior to the Maturity Date (as defined in Section 3 hereof), the ratio utilized for allocating 50% of the Net Revenues each month to any remaining Note Holder(s) will be proportionately adjusted.  In the event any monthly payment of Net Revenues payable to Holder exceeds the amount of accrued interest then due on this Note, the excess amount shall be applied to reduce the unpaid principal amount of this Note.  For purposes of this Note, “Net Revenues” means the net cash flow from operations available for distribution after payment of all senior debt service payments, lease payments, operating costs, and reserves.

 

(b)           The monthly amount payable to Holder from the Company’s Net Revenues shall continue until the earliest to occur of the following events: (i) the date this Note has been paid in full; (ii) the date of conversion of this Note, (iii) the Maturity Date of this Note, or (iv) the total amount of Net Revenues paid to Holder equals fifty percent (50%) of the original principal amount of this Note.

 

3.           Maturity Date.  The unpaid principal amount of this Note, together with all unpaid and accrued interest thereon, shall be due and payable in full on the second (2nd) anniversary date of this Note (the “Maturity Date”) unless this Note has been earlier converted into common stock of the Company as provided in Section 4 below.

 

4.           Prepayment; Conversion in Lieu of Prepayment.

 

(a)           At any time prior to the Maturity Date and upon not less than thirty (30) days prior written notice to Holder, the Company, in its sole discretion, may prepay this Note in full, without penalty or premium; provided, however, that Holder shall be entitled, in lieu of receiving such prepayment and upon giving the Company written notice of Holder’s election during said 30-day period, to convert all of this Note into shares of common stock of the Company at the Conversion Price set forth in Section 4(b) below.

 

  

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(b)           In the event Holder elects to convert this Note in lieu of prepayment, the conversion amount shall be equal to one hundred fifty percent (150%) of the unpaid principal amount of this Note less the aggregate amount of any payments of Net Revenues received by Holder.  The conversion price shall be equal to the greater of: (a) seventy-five cents ($0.75) per share, or (b) seventy-five percent (75%) of the per share offering price set in the Company’s most recent Equity Financing, if any (the “Conversion Price”).  For purposes of this Note, “Equity Financing” shall mean any equity financing completed by the Company after the issuance of the Notes in which the Company receives gross proceeds of not less than Three Million Dollars (USD $3,000,000).

 

5.           Optional Conversion.  At any time prior to the Maturity Date of this Note, Holder shall have the option and right to convert this Note (but not less than the entire outstanding amount of this Note) into shares of common stock of the Company.  The conversion amount shall be equal to one hundred fifty percent (150%) of the unpaid principal amount of this Note less the aggregate amount of any payments of Net Revenues received by Holder up to the date of conversion, and the Conversion Price shall be the same as set forth in Section 4(b) above.  Holder shall give the Company not less than ten (10) days’ advance written notice of Holder’s election to convert this Note.

 

6.           Events of Default.  The occurrence of any of the following events shall constitute an “Event of Default” under this Note:

 

(a)           Failure to Pay.  The Company shall fail to make any payment on the Note when due hereunder; provided, however, that in each such instance Holder shall give written notice to the Company of such failure and payment shall not have been made within ten (10) days of Company’s receipt of Holder’s written notice to the Company of such failure to pay.

 

(b)           Voluntary Bankruptcy or Insolvency Proceedings.  The Company shall: (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or substantially all of its property and assets; (ii) make a general assignment for the benefit of its creditors; (iii) be dissolved or liquidated; (iv) become insolvent (as such term may be defined or interpreted under any applicable statute); (v) commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect, or consent to any such relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it; or (vi) take any action for the purpose of effecting any of the foregoing.

 

(c)           Involuntary Bankruptcy or Insolvency Proceedings.  Proceedings for the appointment of a receiver, trustee, liquidator or custodian of the Company or of all or substantially all of the property thereof, or an involuntary case or other proceeding seeking liquidation, reorganization or other relief with respect to the Company or the debts thereof under any bankruptcy, insolvency or other similar law now or hereafter in effect shall be commenced against the Company, and such proceeding is not dismissed or discharged within sixty (60) days of commencement.

 

  

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7.           Rights of Holder upon Default.  Upon the occurrence or existence of any Event of Default described in Section 6(a) and at any time thereafter during the continuance of such Event of Default, Holder may, by written notice to the Company following the expiration of the ten (10) day cure period, declare all outstanding Obligations payable by the Company hereunder to be immediately due and payable.  Upon the occurrence or existence of any Event of Default described in Sections 6(b) and 6(c), the Holder may, upon giving thirty (30) days advance written notice to the Company, declare all outstanding Obligations payable by the Company hereunder to be immediately due and payable.

8.           Conversion at Maturity.

 

(a)           In the event this Note has not been converted pursuant to Section 4 or Section 5 above prior to the Maturity Date, this Note may be converted at the Maturity Date at the option of Holder, into shares of common stock of the Company.  The Holder must give written notice to the Company of Holder’s election to convert this Note not later than ten (10) days prior to the Maturity Date.  The conversion amount shall be equal to one hundred fifty percent (150%) of the unpaid principal amount of this Note less the aggregate amount of any payments of Net Revenues received by Holder, and the Conversion Price shall be the same as set forth in Section 4(b) above.

 

(b)           If Holder does not elect to convert this Note as provided in Section 8(a) above, on the Maturity Date the unpaid principal balance, together with all accrued and unpaid interest thereon, shall be paid in full to Holder.

 

9.           Issuance of Securities on Conversion; Lock-Up Period; Cancellation of Note.

 

(a)           Issuance of Securities.  As soon as practicable after conversion of this Note, the Company, at its expense, will cause to be issued in the name of and delivered to Holder, a certificate or certificates representing the number of fully paid and nonassessable shares of common stock to which Holder shall be entitled on such conversion.  No fractional shares will be issued on conversion of this Note.  If Holder would otherwise be entitled to a fractional share, Holder shall receive in lieu thereof a cash payment equal to the per-share price multiplied by the fraction of a share Holder would otherwise be entitled to receive.  The Company may require Holder to acknowledge in writing the extinguishment of the principal and interest obligation under this Note in exchange for the shares.

 

  

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(b)           Lock-Up Period. Upon the conversion of this Note, Holder hereby agrees that Holder will not sell, offer, pledge, contract to sell, grant any option or contract to purchase, purchase any option or contract to sell, grant any right or warrant to purchase, lend or otherwise transfer or encumber, directly or indirectly, any securities of the Company into which this Note may be converted, nor shall Holder enter into any swap, hedging or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any such securities of the Company, during the 180-day period (or such other shorter period as may be requested in writing by the managing underwriter and agreed to in writing by the Company) following the effective date of the first registration statement of the Company filed under the Securities Act of 1933, as amended (the “Securities Act”) that includes securities to be sold on behalf of the Company to the public in an underwritten public offering under the Securities Act.  In addition, Holder hereby agrees, if requested by the Company or any applicable underwriter, to again comply with each of the above transfer restrictions during the 90-day period (or such other shorter period as may be requested in writing by the managing underwriter and agreed to in writing by the Company) following the effective date of any other registration statement of the Company filed under the Securities Act within one (1) year following the effective date of the Company’s initial public offering that includes securities to be sold on behalf of the Company to the public.  Holder further agrees, if so requested by the Company or any representative of its underwriters, to enter into such underwriter’s standard form of “lockup” or “market standoff” agreement in a form satisfactory to the Company and such underwriter.  In the event that Holder refuses to execute any such agreement, Holder hereby agrees to comply with all of the transfer restrictions set forth above in this Section 9(b) for an additional thirty (30) days beyond each 180-day or 90-day period otherwise called for above.  Holder agrees that the Company may assign any or all of its rights under this Section 9(b) to the managing underwriter for any registered offering described in this Section, and that such managing underwriter shall be able to further assign such rights in its sole discretion, in each case without any notice to or consent from Holder being required.  Holder further agrees that any assignee of the Company’s rights under this Section 9(b) shall not be subject to any obligation of the Company set forth in this Agreement.  The Company may impose stop-transfer instructions with respect to securities subject to the foregoing restrictions until the end of such period.

 

(c)           Termination of Rights.  All rights with respect to this Note, except for the right to receive shares of equity securities pursuant to Section 4(b), 5, or 8(a) above, shall terminate upon the conversion of this Note, regardless of whether the Note has been surrendered to the Company for cancellation.  Notwithstanding the foregoing, Holder agrees to surrender this Note to the Company for cancellation as soon as practicable following conversion of this Note.

 

(d)           Capital Adjustments.  If this Note is converted as provided in Section 4, 5, or 8(a) subsequent to any stock dividend, forward or reverse stock split, recapitalization, combination or exchange of shares (“Capital Adjustments”) occurring after the date hereof, as a result of which shares of any class shall be issued in respect of outstanding shares of common stock, or shares shall be changed into the same or a different number of shares of the same or another class or classes, Holder shall be entitled to receive the aggregate number and class of shares which, if this Note had been converted at the date hereof (“Deemed Conversion”) and shares received upon the Deemed Conversion had not been disposed of, the Holder would be holding, at the time of actual conversion, as a result of the Deemed Conversion and such Capital Adjustments.

 

10.    Representations and Warranties of Holder.  Holder hereby represents and warrants to the Company with respect to the purchase of the Note as follows:

 

(a)           Binding Obligation.  Holder has full legal capacity, power and authority to execute and deliver this Note and to perform his/her obligations hereunder.  This Note issued to Holder is a valid and binding obligation of Holder, enforceable in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to or affecting the enforcement of creditors’ rights generally and general principles of equity.

 

  

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(b)           Investment; Accredited Investor.  Holder understands that the investment in this Note and any shares of common stock into which this Note may be converted (collectively, the “Securities”) is a speculative investment, and Holder represents that he/she is aware of the business affairs and financial condition of the Company and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Securities, and that Holder is purchasing the Securities for investment for his/her own account only and not with a view to, or for resale in connection with, any “distribution” within the meaning of the U.S. Securities Act of 1933, as amended (the “Securities Act”) or applicable state securities laws.  Holder further represents that he/she understands that the Securities have not been registered under the Securities Act or applicable state securities laws by reason of specific exemptions therefrom, which exemptions depend upon, among other things, the bona fide nature of Holder’s investment intent as expressed herein.  Holder acknowledges and understands that the Securities must be held indefinitely unless subsequently registered under the Securities Act and qualified under applicable state securities laws or unless exemptions from such registration and qualification requirements are available, and that the Company is under no obligation to register or qualify the Securities.  If Holder has not separately provided the Company with an executed Investor Questionnaire certifying whether such Investor is an “accredited investor” as such term is defined in Rule 501 of Regulation D promulgated pursuant to the Securities Act, Holder hereby represents and warrants that he/she is an “accredited investor.”

 

(c)           Access to Information.  Holder acknowledges that he/she has reviewed the terms of this Note, the Company’s 2014 Business Plan or Executive Summary, and the Risk Factors set forth in the Purchase Agreement, and that Holder has had an opportunity to discuss the Company’s business, management and financial affairs with the Company’s officers and/or directors.  Holder understands that such discussions as well as any written information issued by the Company were intended to describe the aspects of the Company’s business and prospects which it believes to be material but were not necessarily a thorough or exhaustive description.

 

(d)           Finder’s Fees.  Holder represents and warrants that no person is entitled, directly or indirectly, to compensation from Holder by reason of any contract or understanding or contact with Holder, as a finder or broker in connection with the sale and purchase of this Note.  Holder agrees to indemnify and hold the Company harmless from and against and in respect of any claim for brokerage or other commissions or similar fees relative to this Note or the transactions contemplated hereby that may arise as a result of a contract or understanding made by Holder with any such broker or finder in connection with the sale and purchase of this Note.

 

11.           Subordination.  The indebtedness evidenced by this Note is unsecured by any assets or other collateral of the Company, and in addition, is hereby expressly subordinated, to the extent and in the manner set forth below, in right of payment to the prior payment in full of all of the Company’s current and future Senior Indebtedness. For the purposes of this Section 11, “Senior Indebtedness” shall mean, unless expressly subordinated to or made on a parity with the amounts due pursuant to this Note, the principal of (and premium, if any), unpaid interest on and amounts reimbursable, fees, expenses, costs of enforcement and other amounts due in connection with, indebtedness of the Company to banks, commercial finance lenders, insurance companies, leasing or equipment financing institutions, or other lending institutions regularly engaged in the business of lending money (excluding venture capital, investment banking or similar institutions which sometimes engage in lending activities but which are primarily engaged in investments in equity securities), which is for money borrowed, for purchase or leasing of equipment in the case of lease or other equipment financing, whether or not secured, and any debentures, notes or other evidence of indebtedness issued in exchange for such Senior Indebtedness.

 

  

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(a)           Insolvency Proceedings.  If there shall occur any receivership, insolvency, assignment for the benefit of creditors, bankruptcy, reorganization, or arrangements with creditors (whether or not pursuant to bankruptcy or other insolvency laws), sale of all or substantially all of the assets, dissolution, liquidation, or any other marshalling of the assets and liabilities of the Company, (i) no amount shall be paid by the Company in respect of the principal of, interest on or other amounts due with respect to this Note at the time outstanding, unless and until the principal of and interest on the Senior Indebtedness then outstanding shall be paid in full; and (ii) no claim or proof of claim shall be filed with the Company by or on behalf of the Holder which shall assert any right to receive any payments in respect of the principal of and interest on this Note except subject to the payment in full of the principal of and interest on all of the Senior Indebtedness then outstanding.

 

(b)           Default on Senior Indebtedness.  If there shall occur an event of default which has been declared in writing with respect to any Senior Indebtedness, as defined therein or in the instrument pursuant to which it is outstanding, permitting the holder to accelerate the maturity thereof and Holder shall have received written notice thereof from the holder of such Senior Indebtedness, then, unless and until such event of default shall have been cured or waived or shall have ceased to exist, or all Senior Indebtedness shall have been paid in full, no payment shall be made in respect of the principal of or interest on this Note, unless within one hundred eighty (180) days after the happening of such event of default, the maturity of such Senior Indebtedness shall not have been accelerated.

 

(c)           Further Assurances.  By acceptance of this Note, Holder agrees to execute and deliver customary forms of subordination agreement requested from time to time by holders of Senior Indebtedness, and as a condition to Holder’s rights hereunder, the Company may require that Holder execute such forms of subordination agreement, provided that such forms shall not impose on Holder terms less favorable than those provided herein.

 

(d)           Other Indebtedness. Indebtedness that does not constitute Senior Indebtedness shall not be senior in any respect to the Indebtedness represented by this Note unless consented to in writing by Holder.

 

(e)           Subrogation.  Subject to the payment in full of all Senior Indebtedness, Holder’s rights shall be subrogated to the rights of the holder(s) of such Senior Indebtedness (to the extent of the payments or distributions made to the holder(s) of such Senior Indebtedness pursuant to the provisions of this Section 11) to receive payments and distributions of assets of the Company applicable to the Senior Indebtedness.  No such payments or distributions applicable to the Senior Indebtedness shall, as between the Company and its creditors, other than the holders of Senior Indebtedness and Holder, be deemed to be a payment by the Company to or on account of this Note; and for purposes of such subrogation, no payments or distributions to the holders of Senior Indebtedness to which Holder would be entitled except for the provisions of this Section 11 shall, as between the Company and its creditors, other than the holders of Senior Indebtedness and Holder, be deemed to be a payment by the Company to or on account of the Senior Indebtedness.

 

  

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(f)    No Impairment.  Subject to the rights, if any, of the holders of Senior Indebtedness pursuant to this Section 11 to receive cash, securities or other properties otherwise payable or deliverable to Holder, nothing contained in this Section 11 shall impair, as between Company and Holder, the obligation of the Company, subject to the terms and conditions hereof, to pay to Holder the principal hereof and interest hereon as and when the same become due and payable, or shall prevent Holder, upon default hereunder, from exercising all rights, powers and remedies otherwise provided herein or by applicable law.

 

(g)    Lien Subordination.  Any lien of Holder, whether now or hereafter existing in connection with the amounts due pursuant to this Note, on any assets or property of the Company or any proceeds or revenues therefrom which Holder may have at any time as security for any amounts due and obligations pursuant to this Note, shall be subordinate to all liens now or hereafter granted to a holder of Senior Indebtedness by the Company or by law, notwithstanding the date, order or method of attachment or perfection of any such lien or the provisions of any applicable law.

 

(h)    Reliance of Holders of Senior Indebtedness.  Holder, by its acceptance hereof, shall be deemed to acknowledge and agree that the foregoing subordination provisions are, and are intended to be, an inducement to and a consideration of each holder of Senior Indebtedness, whether such Senior Indebtedness was created or acquired before or after the creation of the indebtedness evidenced by this Note, and each such holder of Senior Indebtedness shall be deemed conclusively to have relied on such subordination provisions in acquiring and holding, or in continuing to hold, such Senior Indebtedness.

 

(i)           Right to Convert.  Notwithstanding the provisions of Sections 11(a) through 11(g) above, this Section 11 shall not in any way restrict or prevent the conversion of this Note pursuant to the provisions of Section 4, 5, or 8(a) above.

 

12.           Successors and Assigns.  Subject to the restrictions on transfer described in Section 14 below, the rights and obligations of the Company and the Holder of this Note shall be binding upon and inure to the benefit of the successors, assigns, heirs, administrators and transferees of the parties.

 

13.           Waiver and Amendment.  Any provision of this Note may be amended, waived or modified upon the written consent of the Company and the holders of a majority of the aggregate principal amount of all then outstanding Notes issued in this series of Notes pursuant to the Purchase Agreement.

 

  

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14.           Transfer of Note and Securities.  With respect to any offer, sale or other disposition of this Note or any securities into which this Note may be converted, Holder shall give written notice to the Company prior thereto, describing briefly the manner thereof, together with a written opinion of Holder’s counsel, or other evidence if reasonably satisfactory to the Company, to the effect that such offer, sale or other distribution may be effected without registration or qualification (under any applicable federal or state law then in effect).  Upon receiving such written notice and reasonably satisfactory opinion, if so requested, or other evidence, the Company, as promptly as practicable, shall notify Holder that Holder may sell or otherwise dispose of this Note or such securities, all in accordance with the terms of the notice delivered to the Company.  If a determination has been made pursuant to this Section 13 that the opinion of counsel for Holder, or other evidence, is not reasonably satisfactory to the Company, the Company shall so notify Holder promptly after such determination has been made.  Each Note thus permitted to be transferred and each certificate representing the securities thus permitted to be transferred shall bear a legend as to the applicable restrictions on transferability in order to ensure compliance with the Securities Act, unless in the opinion of counsel for the Company such legend is not required in order to ensure compliance with the Securities Act.  The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions.  Subject to the foregoing, transfers of this Note shall be registered upon the registration books maintained for such purpose by or on behalf of the Company.  Prior to presentation of this Note for registration of transfer, the Company shall treat the registered holder hereof as the owner and holder of this Note for the purpose of receiving all payments of principal and interest hereon and for all other purposes whatsoever, whether or not this Note shall be overdue, and the Company shall not be affected by notice to the contrary.

 

15.           Assignment by Company.  This Note and any of the rights, interests or obligations hereunder may be assigned, by operation of law or otherwise, in whole or in part, by the Company to any affiliate or successor in interest to the Company without the prior written consent of Holder.

 

16.           Notices.  All notices and other communications required or permitted hereunder shall be in writing.  Each such notice or other communication shall for all purposes of this Note be treated as effective or having been given: (i) if delivered personally, by messenger or by confirmed facsimile, when delivered; (ii) if sent by mail, at the earlier of its receipt or three (3) business days after same has been deposited, postage prepaid, in a regularly maintained receptacle for the deposit of the United States mail; or (iii) if sent by overnight delivery by Federal Express or similar courier, one business day after the business day of deposit with such courier, and shall be addressed (x) if to Holder, at Holder’s address as set forth on the register maintained by Company, and (y) if to Company, at the address of its principal corporate offices (Attention: CEO), or at such other address as a party may designate by ten (10) days’ advance written notice to the other parties pursuant to the provisions above.

 

17.           Usury.  In the event any interest is paid on this Note which is deemed to be in excess of the then applicable legal maximum rate, then that portion of the interest payment representing an amount in excess of the then applicable legal maximum rate shall be deemed a payment of principal and applied against the principal of this Note.

 

  

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18.           Governing Law.  This Note and all actions arising out of or in connection with this Note shall be governed by and construed in accordance with the laws of the State of Washington, without regard to the conflict of laws provisions of the State of Washington, or of any other state.

 

ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.

 

IN WITNESS WHEREOF, the Company has caused this Note to be issued as of the date first written above.

 

Digi Outdoor Media, Inc.

A Nevada Corporation

 

                    

 

_________________________________

 

By: ______________________________                                                             

 

Title: _____________________________                                                              

 

 

 

Agreed To and Acknowledged:

Holder:

_______________________________________

(Signature)

 

Print Name: ______________________________

 

Title: ___________________________________

    (If Holder is an entity)

 

 

Address: _______________________________

    ________________________________

    ________________________________

 

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