Contract
Exhibit
4.2(e)
THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “1933 SECURITIES ACT”) OR ANY STATE
SECURITIES LAWS. THIS WARRANT MAY NOT BE EXERCISED IN THE UNITED
STATES (AS DEFINED IN REGULATION S UNDER THE 1933 SECURITIES ACT),
OR MAY THIS WARRANT OR THE COMMON SHARES ISSUABLE UPON EXERCISE OF
THIS WARRANT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED, UNLESS THE WARRANT AND THE COMMON SHARES ISSUABLE UPON
EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE 1933 SECURITIES ACT
AND ANY APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION
FROM SUCH REGISTRATION IS AVAILABLE AND THE CORPORATION RECEIVES AN
OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO IT TO SUCH
EFFECT.
THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT ARE
SUBJECT TO A VOTING PROXY GRANTED TO [*], AND TO A RIGHT OF FIRST
REFUSAL GRANTED TO COMPANY, AS FURTHER SET FORTH
HEREIN.
Right
to Purchase [*] Common Shares of Dolphin Digital Media, Inc.
(subject to adjustment as provided herein)
FORM OF COMMON STOCK PURCHASE WARRANT
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No.
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Issue Date:
[*]
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DOLPHIN DIGITAL MEDIA, INC., a
corporation organized under the laws of the State of Nevada (the
“Company”),
hereby certifies that, for value received, [*], or its permitted
assigns (the “Holder”), is entitled, subject to
the terms set forth below, to purchase from the Company at any time
commencing on the issue date of this Warrant (the
“Issue Date”)
until [*], [*] time on [*] (the “Expiration Date”), [*] ([*]) fully
paid and non-assessable Common Shares of the Company, at a per
share purchase price of US$[*]. The purchase price per share, as
adjusted from time to time as herein provided, is referred to
herein as the “Purchase
Price.” The number and character of such Common Shares
and the Purchase Price are subject to adjustment as provided
herein. The Company may reduce the Purchase Price or extend the
Expiration Date without the consent of the Holder.
Within
seven (7) days hereof, Holder shall pay $[*] to Company as
consideration for the issuance of this Warrant.
As used
herein the following terms, unless the context otherwise requires,
have the following respective meanings:
(a) The
term “Company”
shall include Dolphin Digital Media, Inc. and any corporation which
shall succeed or assume the obligations of Dolphin Digital Media,
Inc. hereunder.
(b) The
term “Common
Shares” includes (a) the Company’s Common
Shares, no par value per share and (b) any other securities
into which or for which any of the securities described in (a) may
be converted or exchanged pursuant to a plan of recapitalization,
reorganization, merger, sale of assets or otherwise.
(c) The
term “Other
Securities” refers to any stock (other than Common
Shares) and other securities of the Company or any other person
(corporate or otherwise) which the holder of the Warrant at any
time shall be entitled to receive, or shall have received, on the
exercise of the Warrant, in lieu of or in addition to Common
Shares, or which at any time shall be issuable or shall have been
issued in exchange for or in replacement of Common Shares or Other
Securities pursuant to Section 5 herein or otherwise.
(d) The
term “Warrant
Shares” shall mean the Common Shares issuable upon
exercise of this Warrant.
1. Exercise of
Warrant.
1.1 Number of Shares Issuable upon
Exercise. From and after the Issue Date through and
including the Expiration Date, the Holder hereof shall be entitled
to receive, upon exercise of this Warrant in whole in accordance
with the terms of subsection 1.2 or upon exercise of this Warrant
in part in accordance with subsection 1.3, Common Shares of the
Company, subject to adjustment pursuant to Section 4.
1.2 Full Exercise. This Warrant may
be exercised in full by the Holder hereof by delivery of an
original or facsimile copy of the form of subscription attached as
Exhibit A hereto (the “Subscription Form”) duly executed
by such Holder and surrender of the original Warrant within four
(4) days of exercise, to the Company at its principal office or at
the office of its Warrant Agent (as provided hereinafter),
accompanied by payment, in cash, wire transfer or by certified or
official bank check payable to the order of the Company, in the
amount obtained by multiplying the number of Common Shares for
which this Warrant is then exercisable by the Purchase Price then
in effect (the “Aggregate
Purchase Price”).
1.3 Partial Exercise. This Warrant
may be exercised in part (but not for a fractional share) by
surrender of this Warrant in the manner and at the place provided
in subsection 1.2 except that the amount payable by the Holder on
such partial exercise shall be the amount obtained by multiplying
(a) the number of whole shares designated by the Holder in the
Subscription Form by (b) the Purchase Price then in effect. On
any such partial exercise, the Company, at its expense, will
forthwith issue and deliver to or upon the order of the Holder
hereof a new Warrant of like tenor, in the name of the Holder
hereof or as such Holder (upon payment by such Holder of any
applicable transfer taxes) may request, the whole number of Common
Shares for which such Warrant may still be exercised.
1.4 Cashless Exercise. Subject to
the conditions contained in this Section 1.4, the Holder may,
in its sole discretion, exercise this Warrant in whole or in part
and, in lieu of making the cash payment otherwise contemplated to
be made to the Company upon such exercise in payment of the
Aggregate Purchase Price, elect instead to receive upon such
exercise the “Net
Number” of Common Shares determined according to the
following formula (a “Cashless Exercise”):
Net
Number = (B-C) x
A
B
For
purposes of the foregoing formula:
A
=
the total number of
shares with respect to which this Warrant is then being
exercised.
B
=
the Fair Market
Value of a Common Share as of the date of exercise.
C
=
the Purchase Price
then in effect for the applicable Warrant Shares at the time of
such exercise.
The
holder of this Warrant agrees not to elect a Cashless Exercise for
a period so long as the Purchase Price of this warrant is above
$[*] per share.
1.5 Fair Market Value. Fair Market
Value of a Common Share as of a particular date (the
“Determination
Date”) shall mean:
(a) If the
Company’s Common Shares are traded on a national stock
exchange, then the average of the closing or last sale price
reported for each of the last 5 business days immediately preceding
the Determination Date;
(b) If the
Company’s Common Shares are not traded on a national stock
exchange, but are traded in the over-the-counter market, then the
average of the closing bid and ask prices reported for each of the
last 5 business days immediately preceding the Determination
Date;
(c) Except as provided
in clause (d) below, if the Company’s Common Shares are not
publicly traded, then as the Holder and the Company agree, or in
the absence of such an agreement, by arbitration in accordance with
the rules then standing of the American Arbitration Association,
before a single arbitrator to be chosen from a panel of persons
qualified by education and training to pass on the matter to be
decided; or
(d) If the
Determination Date is the date of a liquidation, dissolution or
winding up, or any event deemed to be a liquidation, dissolution or
winding up pursuant to the Company’s charter, then all
amounts to be payable per share to holders of the Common Shares
pursuant to the charter in the event of such liquidation,
dissolution or winding up, plus all other amounts to be payable per
share in respect of the Common Shares in liquidation under the
charter, assuming for the purposes of this clause (d) that all of
the shares of Common Shares then issuable upon exercise of all of
the Warrants are outstanding at the Determination
Date.
1.6 Company Acknowledgment. The
Company will, at the time of the exercise of the Warrant, upon the
request of the Holder hereof acknowledge in writing its continuing
obligation to afford to such Holder any rights to which such Holder
shall continue to be entitled after such exercise in accordance
with the provisions of this Warrant. If the Holder shall fail to
make any such request, such failure shall not affect the continuing
obligation of the Company to afford to such Holder any such
rights.
1.7 Delivery of Stock Certificates, etc.
on Exercise. The Company agrees that the Common Shares
purchased upon exercise of this Warrant shall be deemed to be
issued to the Holder hereof as the record owner of such shares as
of the close of business on the date on which this Warrant shall
have been surrendered and payment made for such shares as
aforesaid. As soon as practicable after the exercise of this
Warrant in full or in part, and in any event within five (5)
business days thereafter, the Company at its expense (including the
payment by it of any applicable issue taxes) will cause to be
issued in the name of and delivered to the Holder hereof, or as
such Holder (upon payment by such Holder of any applicable transfer
taxes) may direct in compliance with applicable securities laws, a
certificate or certificates for the number of duly and validly
issued, fully paid and non-assessable Common Shares (or Other
Securities) to which such Holder shall be entitled on such
exercise, plus, in lieu of any fractional share to which such
Holder would otherwise be entitled, cash equal to such fraction
multiplied by the then Fair Market Value of one full Common Share,
together with any other stock or other securities and property
(including cash, where applicable) to which such Holder is entitled
upon such exercise pursuant to Section 1 or otherwise.
1.8 Right of First Refusal. Prior
to any sale, assignment, transfer (including by purchase,
inter-spousal disposition pursuant to a domestic relations
proceeding or otherwise by operation of law), pledge, encumbrance
or otherwise disposition of any of the Common Shares issuable upon
exercise of this Warrant, Holder shall provide [*], for as long as
he shall remain alive and not incapacitated, with 10 business days
prior written notice of same (a “Sale Notice”), which Sale Notice
shall contain a description of the material terms of the proposed
sale transaction, including the names of any parties involved,
price per share, etc. Upon receipt of a Sale Notice, [*] shall have
5 business days to provide Holder with written notice of his
election to purchase said Common Shares (a “Purchase Notice”). Any such
purchase shall be made at the higher of the Fair Market Value of
the Common Shares or the price per share of the proposed sale
transaction, as set forth in Section 1.5 above, with the
Determination Date being the date of said Purchase Notice, and
shall be payable in cash at closing, which closing shall occur as
soon as possible and in any event within 30 days of the date of
said Purchase Notice. The certificates evidencing the Common Shares
issuable upon exercise of this Warrant shall contain a restrictive
legend setting forth, or cross-referencing, the provisions of this
Section 1.8.
1.9 Limitation on Exercise.
Notwithstanding any provision of this Warrant to the contrary, this
Warrant is only exercisable to the extent the Company has available
for issuance that number of authorized and unissued Common Shares
necessary to cover said exercise. To the extent the Company at any
time fails to have that number of authorized and unissued Common
Shares necessary to enable the full exercise of this Warrant, the
Company shall promptly take all reasonable steps necessary to
increase the Company’s authorized and unissued Common Shares
to enable the full exercise of this Warrant, including, but not
limited to, filing a proxy statement or information statement with
the Securities and Exchange Commission, scheduling and holding a
meeting of the Company’s shareholders to the extent
necessary, and filing Articles of Amendment to the Company’s
Articles of Incorporation.
1.10 Proxy.
Holder hereby irrevocably grants to, and appoints, [*], for as long
as he shall remain alive and not incapacitated, as its proxy and
attorney-in-fact (with full power of substitution), for and in its
name, place and stead, to vote the Common Shares underlying this
Warrant, upon issuance, at any meeting of the shareholders of the
Company or otherwise. Holder understands and acknowledges that the
Company is entering into this Warrant in reliance upon the proxy
set forth in this Section 1.10. Holder hereby (i) affirms that
the irrevocable
proxy is coupled with an interest and may under no circumstances be
revoked, (ii) ratifies and confirms all that the
proxies appointed hereunder may lawfully do or cause to be done by
virtue hereof, and (iii) affirms that such irrevocable proxy is executed
and intended to be irrevocable in accordance with the provisions of
Section 78.355(5) of the Nevada General Corporation
Law.
2. Adjustment
for Reorganization, Consolidation, Merger, etc.
2.1 Reorganization, Consolidation, Merger,
etc. In case at any time or from time to time, the Company
shall (a) effect a reorganization, (b) consolidate with
or merge into any other person or (c) transfer all or
substantially all of its properties or assets to any other person
under any plan or arrangement contemplating the dissolution of the
Company, then, in each such case, as a condition to the
consummation of such a transaction, proper and adequate provision
shall be made by the Company whereby the Holder of this Warrant, on
the exercise hereof as provided in Section 1, at any time after the
consummation of such reorganization, consolidation or merger or the
effective date of such dissolution, as the case may be, shall
receive, in lieu of the Common Shares (or Other Securities)
issuable on such exercise prior to such consummation or such
effective date, the stock and other securities and property
(including cash) to which such Holder would have been entitled upon
such consummation or in connection with such dissolution, as the
case may be, if such Holder had so exercised this Warrant,
immediately prior thereto, all subject to further adjustment
thereafter as provided in Section 3.
2.2 Dissolution. In the event of
any dissolution of the Company following the transfer of all or
substantially all of its properties or assets, the Company, prior
to such dissolution, shall at its expense deliver or cause to be
delivered the stock and other securities and property (including
cash, where applicable) receivable in accordance with Section 2.1
by the Holder of the Warrants upon their exercise after the
effective date of such dissolution pursuant to this Section
2.
2.3 Continuation of Terms. Upon any
reorganization, consolidation, merger or transfer (and any
dissolution following any transfer) referred to in this Section 2,
this Warrant shall continue in full force and effect and the terms
hereof shall be applicable to the Other Securities and property
receivable on the exercise of this Warrant after the consummation
of such reorganization, consolidation or merger or the effective
date of dissolution following any such transfer, as the case may
be, and shall be binding upon the issuer of any Other Securities,
including, in the case of any such transfer, the person acquiring
all or substantially all of the properties or assets of the
Company, whether or not such person shall have expressly assumed
the terms of this Warrant as provided in Section 3. In the event
this Warrant does not continue in full force and effect after the
consummation of the transaction described in this Section 2, then
only in such event will the Company’s securities and property
(including cash, where applicable) receivable by the Holder of the
Warrants be delivered to the Trustee as contemplated by Section
2.2.
3. Extraordinary Events Regarding Common
Stock. In the event that the Company shall (a) issue
additional Common Shares as a dividend or other distribution on
outstanding Common Shares, (b) subdivide its outstanding
Common Shares, or (c) combine its outstanding Common Shares
into a smaller number of Common Shares, then, in each such event,
the Purchase Price shall, simultaneously with the happening of such
event, be adjusted by multiplying the then Purchase Price by a
fraction, the numerator of which shall be the number of Common
Shares outstanding immediately prior to such event and the
denominator of which shall be the number of Common Shares
outstanding immediately after such event, and the product so
obtained shall thereafter be the Purchase Price then in effect. The
Purchase Price, as so adjusted, shall be readjusted in the same
manner upon the happening of any successive event or events
described herein in this Section 3. The number of Common Shares
that the Holder of this Warrant shall thereafter, on the exercise
hereof as provided in Section 1, be entitled to receive shall be
adjusted to a number determined by multiplying the number of Common
Shares that would otherwise (but for the provisions of this Section
3) be issuable on such exercise by a fraction of which (a) the
numerator is the Purchase Price that would otherwise (but for the
provisions of this Section 3) be in effect, and (b) the
denominator is the Purchase Price in effect on the date of such
exercise.
4. Certificate as to Adjustments.
In each case of any adjustment in the Common Shares (or Other
Securities) issuable on the exercise of the Warrants, the Company
at its expense will promptly cause its Chief Financial Officer or
other appropriate designee to compute such adjustment or
readjustment in accordance with the terms of the Warrant and
prepare a certificate setting forth such adjustment or readjustment
and showing in detail the facts upon which such adjustment is
based. The Company will forthwith mail a copy of each such
certificate to the Holder of the Warrant.
5. Reservation of Stock, etc. Issuable on
Exercise of Warrant; Financial Statements. The Company will,
after amendment of its articles of Inc., at all times reserve and
keep available, solely for issuance and delivery on the exercise of
the Warrants, all Common Shares (or Other Securities) from time to
time issuable on the exercise of the Warrant.
6. Assignment; Exchange of
Warrant. Subject to compliance with applicable securities
laws, and the terms contained herein, this Warrant, and the rights
evidenced hereby, may be transferred by any registered holder
hereof (a “Transferor”). On the surrender for
exchange of this Warrant, with the Transferor’s endorsement
in the form of Exhibit B attached hereto (the “Transferor Endorsement Form”) and
together with an opinion of counsel reasonably satisfactory to the
Company that the transfer of this Warrant will be in compliance
with applicable securities laws, the Company at its expense, twice,
only, but with payment by the Transferor of any applicable transfer
taxes, will issue and deliver to or on the order of the Transferor
thereof a new Warrant or Warrants of like tenor, in the name of the
Transferor and/or the transferee(s) specified in such Transferor
Endorsement Form (each a “Transferee”), calling in the
aggregate on the face or faces thereof for the number of Common
Shares called for on the face or faces of the Warrant so
surrendered by the Transferor. No such transfers shall result in a
public distribution of the Warrant.
7. Replacement of Warrant. On
receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction or mutilation of this Warrant and, in the
case of any such loss, theft or destruction of this Warrant, on
delivery of an indemnity agreement or security reasonably
satisfactory in form and amount to the Company or, in the case of
any such mutilation, on surrender and cancellation of this Warrant,
the Company at its expense, twice only, will execute and deliver,
in lieu thereof, a new Warrant of like tenor.
8. Transfer on the Company’s
Books. Until this Warrant is transferred on the books of the
Company, the Company may treat the registered holder hereof as the
absolute owner hereof for all purposes, notwithstanding any notice
to the contrary.
9. Notices. All notices, demands,
requests, consents, approvals, and other communications required or
permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served,
(ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by
reputable air courier service with charges prepaid, or
(iv) transmitted by hand delivery, telegram, or facsimile,
addressed as set forth below or to such other address as such party
shall have specified most recently by written notice. Any notice or
other communication required or permitted to be given hereunder
shall be deemed effective (a) upon hand delivery or delivery
by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated
below (if delivered on a business day during normal business hours
where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day
during normal business hours where such notice is to be received)
or (b) on the second business day following the date of
mailing by express courier service, fully prepaid, addressed to
such address, or upon actual receipt of such mailing, whichever
shall first occur or (c) three business days after deposited
in the mail if delivered pursuant to subsection (ii) above. The
addresses for such communications shall be: (i) if to the
Company to: 0000 XxXxxxx Xxxx, Xxxxx 000, Xxxxx Xxxxxx, Xxxxxxx
00000, facsimile (000) 000-0000; and (ii) if to the Holder,
to: [*]. The Company and the Holder may change their respective
addresses for notices by like notice to the other
party.
10. Reduction of Exercise Price.
The Holder may over the term of the Warrant make a payment to the
Company for an equivalent amount of money to reduce the Purchase
Price of this Warrant until such time as the Purchase Price of this
Warrant is able to be exercised via a cashless provision per
Section 1.4 of this agreement. Each time a payment by the Holder is
made to the Company, a side letter will be executed by both parties
that states the new effective Purchase Price of the Warrant at that
time.
11. Miscellaneous. This Warrant and
any term hereof may be changed, waived, discharged or terminated
only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is
sought. This Warrant shall be construed and enforced in accordance
with and governed by the laws of Utah without regard to the
conflicts of laws provisions thereof. The headings in this Warrant
are for purposes of reference only, and shall not limit or
otherwise affect any of the terms hereof. The invalidity or
unenforceability of any provision hereof shall in no way affect the
validity or enforceability of any other provision.
IN
WITNESS WHEREOF, the Company has executed this Warrant as of the
date first written first written above.
DOLPHIN
DIGITAL MEDIA, INC.
By:
Name:
Title:
Exhibit A
FORM OF
SUBSCRIPTION
(to be
signed only on exercise of Warrant)
TO:
DOLPHIN DIGITAL MEDIA, INC.
The
undersigned, pursuant to the provisions set forth in the attached
Warrant, hereby irrevocably elects to purchase ____ Common Shares
covered by such Warrant.
The
undersigned herewith (check applicable box):
makes payment
of the full purchase price for such shares at the price per share
provided for in such Warrant, which is $____________, in lawful
money of the United States; or
elects a
Cashless Exercise.
The
undersigned requests that the certificates for such shares be
issued in the name of, and delivered to ______________________
whose address is _____________________________
___________________________________________________________________________
____________________________________________________________________________
The
undersigned represents and warrants that all offers and sales by
the undersigned of the securities issuable upon exercise of the
within Warrant shall be made pursuant to registration of the Common
Shares under the Securities Act of 1933, as amended (the
“Securities Act”), or pursuant to an exemption from
registration under the Securities Act.
Dated:
________________ _______
(Signature must
conform to name of holder as specified on the fact of the
Warrant.)
(Address)
Exhibit B
FORM OF
TRANSFEROR ENDORSEMENT
(To be
signed only on transfer of Warrant)
For
value received, the undersigned hereby sells, assigns, and
transfers unto the person(s) named below under the heading
“Transferees” the right represented by the within
Warrant to purchase the percentage and number of Common Shares of
DOLPHIN DIGITAL MEDIA, INC. to which the within Warrant relates
specified under the headings “Percentage Transferred”
and “Number Transferred,” respectively, opposite the
name(s) of such person(s) and appoints each such person Attorney to
transfer its respective right on the books of DOLPHIN DIGITAL
MEDIA, INC. with full power of substitution in the
premises.
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Transferees
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Percentage
Transferred
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Number
Transferred
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Dated:
___________, _______
(Signature must
conform to name of holder as specified on the fact of the
Warrant.)
(Address)
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Signed
in the presence of:
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______________________________________
(Name)
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__________________________________________________
__________________________________________________
(address)
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ACCEPTED
AND AGREED: [TRANSFEREE]
_______________________________________
(Name)
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__________________________________________________
__________________________________________________
(address)
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