EXHIBIT 10.3
NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE OFFERED
OR SOLD UNLESS A REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD THERETO, OR AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS IS AVAILABLE IN CONNECTION WITH SUCH OFFER OR SALE.
NOTWITHSTANDING THE FOREGOING, THIS SECURITY AND THE SECURITIES ISSUABLE UPON
EXERCISE HEREOF (I) MAY BE PLEDGED OR HYPOTHECATED IN CONNECTION WITH A BONA
FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES AND (II) MAY BE
TRANSFERRED OR ASSIGNED TO AN AFFILIATE OF THE HOLDER HEREOF.
WARRANT
TO PURCHASE PREFERRED STOCK
AND COMMON STOCK WARRANTS
OF
MEDIABAY, INC.
Issue Date: March __, 2005 Preferred Stock Warrant No. ____
MEDIABAY, INC., a Florida corporation (the "Company"), hereby certifies
that, for value received, [NAME] or its registered assigns (the "Holder"), is
entitled to purchase from the Company up to (i) [NUMBER] shares of Series D
Convertible Preferred Stock of the Company (the "Preferred Shares") with the
rights and privileges set forth in the form of Articles of Amendment attached
hereto as Exhibit A (the "Articles of Amendment") and (ii) warrants in the form
attached hereto as Exhibit B (the "Additional Warrants"), at any time and from
time to time beginning on the date on which this Warrant to Purchase Preferred
Stock and Common Stock Warrants (this "Preferred Warrant") is originally issued
(the "Issue Date") and ending at 6:00 p.m., eastern time, on the date that is
the ninetieth (90th) day following the Effective Date (or, if such date is not a
Business Day, on the Business Day immediately following such date) (the
"Expiration Date"). This Preferred Warrant is one of a series of similar
Preferred Warrants (collectively with this Preferred Warrant, the "Preferred
Warrants") issued pursuant to a Securities Purchase Agreement, dated as of the
date hereof, by and between the Company and each other entity named therein (the
"Purchase Agreement"). Capitalized terms used herein and not otherwise defined
shall have the respective meanings set forth in the Purchase Agreement or the
Articles of Amendment, as applicable.
1. Exercise of Preferred Warrant.
(a) The Holder may exercise this Preferred Warrant into Additional
Preferred Shares and an Additional Warrant at any time and from time to time
during the period beginning on the Issue Date and ending at 6:00 p.m., eastern
time, on the Expiration Date. Each Additional Warrant issuable hereunder upon
delivery of an Exercise Notice shall be exercisable into a number of shares of
Common Stock equal to (A) 0. 50 times (B) the number of shares of Common Stock
into which the Additional Preferred Shares issuable upon delivery of such
Exercise Notice are convertible (without regard to any limitation on such
conversion or exercise.
(b) In order to exercise this Preferred Warrant, the Holder shall
deliver to the Company (i) an exercise notice, in the form attached hereto as
Exhibit C (an "Exercise Notice"), such delivery to be made in the manner
specified in Section 6 hereof, and (ii) payment of the aggregate Stated Value of
the Additional Preferred Shares as to which this Preferred Warrant is being
exercised (the "Exercise Price") by wire transfer of immediately available
funds. The date on which the Company receives an Exercise Notice and payment of
the applicable Exercise Price is referred to herein as the "Exercise Date." The
Holder shall not be required to deliver the original of this Preferred Warrant
in order to effect an exercise hereunder.
(c) The Holder shall, for all purposes, be deemed to have become the
holder of record of the Additional Preferred Shares and Additional Warrant
specified in an Exercise Notice on the Exercise Date, irrespective of the date
of delivery of such Additional Preferred Shares and Additional Warrant.
(d) This Preferred Warrant shall be canceled upon its exercise in
full and, if this Preferred Warrant is exercised in part, the Company shall, at
the time that it delivers Additional Preferred Shares and an Additional Warrant
to the Holder pursuant to such exercise as provided herein, issue a new
Preferred Warrant, and deliver to the Holder a certificate representing such new
Preferred Warrant, with terms identical in all respects to this Preferred
Warrant (except that such new Preferred Warrant shall be exercisable into the
number of Additional Preferred Shares and Additional Warrants with respect to
which this Preferred Warrant shall remain unexercised); provided, however, that
the Holder shall be entitled to exercise all or any portion of such new
Preferred Warrant at any time following the time at which this Preferred Warrant
is exercised, regardless of whether the Company has actually issued such new
Preferred Warrant or delivered to the Holder a certificate therefor.
(e) The delivery by the Holder to the Company of an Exercise Notice
shall be deemed to be such Holder's reaffirmation of the representations and
warranties made by such Holder in Sections 2.2, 2.4, 2.5, 2.6 and 2.8 of the
Purchase Agreement.
2. Delivery of Additional Preferred Shares and Additional Warrants.
(a) Promptly upon delivery of an Exercise Notice and tender of the
Exercise Price by the Holder, and in any event within three (3) Business Days
following the Exercise Date, the Company shall deliver to the Holder (i)
certificates, in such name or names as the Holder may designate, for the
Additional Preferred Shares and Additional Warrant, respectively, issuable upon
such exercise, (ii) a certificate from an officer of the Company that each
representation and warranty of the Company set forth in Article 3 of the
Purchase Agreement is true and correct as of the Exercise Date as though made on
and as of such date, and each other condition specified in Section 5.1 of the
Purchase Agreement has been satisfied as of the Exercise Date.
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(b) The Company's obligation to issue and deliver Additional
Preferred Shares and Additional Warrants in accordance with the terms hereof is
absolute and unconditional, regardless of any action or inaction by the Holder
to enforce the same, any waiver or consent with respect to any provision hereof,
the recovery of any judgment against any Person or any action to enforce the
same, or any set-off, counterclaim, recoupment, limitation or termination, or
any breach or alleged breach by the Holder or any other Person of any obligation
to the Company or any violation or alleged violation of law by the Holder or any
other Person, and irrespective of any other circumstance which might otherwise
limit such obligation of the Company to the Holder in connection with the
issuance of Additional Preferred Shares and Additional Warrants. Nothing herein
shall limit a Holder's right to pursue any other remedies available to it
hereunder, at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief with respect to the Company's
failure to deliver certificates representing Additional Preferred Shares and an
Additional Warrant upon exercise of the Preferred Warrant at the times and in
the form required pursuant to the terms hereof.
3. Taxes and Expenses Upon Issuance. Issuance and delivery of certificates
for Additional Preferred Shares and Additional Warrants upon exercise of this
Preferred Warrant shall be made without charge to the Holder for any issue or
transfer tax, withholding tax, transfer agent fee or other incidental tax or
expense in respect of the issuance of such certificates, all of which taxes and
expenses shall be paid by the Company.
4. Replacement of Preferred Warrant. If this Preferred Warrant is
mutilated, lost, stolen or destroyed, the Company shall issue or cause to be
issued in exchange and substitution for this Preferred Warrant, a new Preferred
Warrant, upon, in the case of loss, theft or destruction, receipt of a written
statement thereof from the Holder and, if requested, a customary and reasonable
indemnity.
5. Adjustments under Preferred Shares and Additional Warrants. The
Conversion Price, Exercise Price and other respective terms of the Additional
Preferred Shares and Additional Warrants issuable upon exercise of this
Preferred Warrant shall be subject to adjustment from time to time as set forth
in the Articles of Amendment or Additional Warrants, as the case may be, and all
such terms are incorporated by reference herein. The Company will deliver to the
Holder written notice, at the same time that it is required to give such notice
under the Articles of Amendment or the Warrants of any event or transaction
potentially giving rise to an adjustment or modification of the terms and
provisions of the Additional Preferred Shares or the Additional Warrants. The
Company will take all steps reasonably necessary in order to insure that the
Holder is able to exercise this Preferred Warrant prior to the time of such
event or transaction so as to participate in or vote with respect to such event
or transaction.
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6. Any notice, demand or request required or permitted to be given by the
Company or the Holder pursuant to the terms of this Preferred Warrant shall be
in writing and shall be deemed delivered (i) when delivered personally or by
verifiable facsimile transmission, unless such delivery is made on a day that is
not a Business Day, in which case such delivery will be deemed to be made on the
next succeeding Business Day, (ii) on the next Business Day after timely
delivery to an overnight courier and (iii) on the Business Day actually received
if deposited in the U.S. mail (certified or registered mail, return receipt
requested, postage prepaid), addressed as follows:
If to the Company:
MediaBay, Inc.
0 Xxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxx Xxxxxx 00000
Attn: Chief Executive Officer and
Chief Financial Officer
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Blank Rome LLP
The Chrysler Building
000 Xxxxxxxxx Xxx.
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
and if to the Holder, to such address as the Holder shall have furnished to the
Company in writing.
7. Benefits of this Preferred Warrant. This Preferred Warrant shall be for
the sole and exclusive benefit of the Holder of this Preferred Warrant and
nothing in this Preferred Warrant shall be construed to confer upon any person
other than the Holder of this Preferred Warrant any legal or equitable right,
remedy or claim hereunder.
8. Transfer of this Preferred Warrant. The Holder may sell, transfer,
assign, pledge or otherwise dispose of this Preferred Warrant, in whole or in
part, as long as such sale or other disposition is made pursuant to an effective
registration statement or an exemption from the registration requirements of the
Securities Act. Upon such transfer or other disposition (other than a pledge),
the Holder shall deliver this Preferred Warrant to the Company together with a
written notice to the Company, substantially in the form of the Transfer Notice
attached hereto as Exhibit D (a "Transfer Notice"), indicating the person or
persons to whom this Preferred Warrant shall be transferred and, if less than
all of this Preferred Warrant is transferred, the number of Additional Preferred
Shares and Additional Warrants to be covered by the part of this Preferred
Warrant to be transferred to each such person. Within three (3) Business Days of
receiving a Transfer Notice and the original of this Preferred Warrant, the
Company shall deliver to the each transferee designated by the Holder an
Preferred Warrant or Preferred Warrants of like tenor and terms for the
appropriate number of Preferred Warrant Shares and, if less than all this
Preferred Warrant is transferred, shall deliver to the Holder an Preferred
Warrant for the remaining number of Additional Preferred Shares and Additional
Warrants.
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9. Amendment. No amendment, modification or other change to, or waiver of
any provision of, this Preferred Warrant may be made unless such amendment,
modification or change is set forth in writing and is signed by the Company and
the Holder. The Company will not, by amendment of its governing documents or
through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms of this
Preferred Warrant, but will at all times in good faith assist in the carrying
out of all such terms and in the taking of all such action as may be necessary
or appropriate in order to protect the rights of the Holder against impairment.
10. Governing Law; Jurisdiction. This Preferred Warrant shall be governed
by and construed under the laws of the State of New York applicable to contracts
made and to be performed entirely within the State of New York. Each party
hereby irrevocably submits to the non-exclusive jurisdiction of the state and
federal courts sitting in the City of New York, borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including without
limitation any dispute under or with respect to the Articles of Amendment or the
Additional Warrants), and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address in effect for
notices to it under this Preferred Warrant and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law.
11. Headings. The headings herein are for convenience only, do not
constitute a part of this Preferred Warrant and shall not be deemed to limit or
affect any of the provisions hereof.
12. Enforceability. In case any one or more of the provisions of this
Preferred Warrant shall be invalid or unenforceable in any respect, the validity
and enforceability of the remaining terms and provisions of this Preferred
Warrant shall not in any way be affected or impaired thereby and the parties
will attempt in good faith to agree upon a valid and enforceable provision which
shall be a commercially reasonable substitute therefor, and upon so agreeing,
shall incorporate such substitute provision in this Preferred Warrant.
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13. Entire Agreement. This Preferred Warrant, the Securities Purchase
Agreement, the Articles of Amendment, the Registration Rights Agreement, and the
other Transaction Documents constitute the entire agreement among the parties
hereto with respect to the subject matter hereof and thereof. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein and therein. This Preferred Warrant, the Securities
Purchase Agreement, the Articles of Amendment, the Registration Rights
Agreement, and the other Transaction Documents supersede all prior agreements
and understandings among the parties hereto with respect to the subject matter
hereof and thereof, including, without limitation, any nondisclosure or similar
agreement heretofore entered into between the Holder and the Company.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Company has caused this Preferred Warrant to be
duly executed by its authorized officer as of the date first indicated above.
MEDIABAY, INC.
By:
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Name:
Title:
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Exhibit A to
Preferred Warrant
ARTICLES OF AMENDMENT
See Exhibit No. 3.1
Exhibit B to
Preferred Warrant
FORM OF ADDITIONAL WARRANT
See Exhibit No. 10.2
Exhibit C to
Preferred Warrant
FORM OF EXERCISE NOTICE
1. The undersigned Holder of Preferred Warrant No. _______ (the "Preferred
Warrant") issued by MediaBay, Inc., a Florida corporation (the "Company"),
hereby exercises its right to purchase (i) _________________ Additional
Preferred Shares and (ii) an Additional Warrant exercisable into ________
shares of Common Stock, pursuant to the Preferred Warrant. Capitalized
terms used herein and not otherwise defined have the respective meanings
set forth in the Preferred Warrant.
2. The Holder shall pay the Exercise Price of $____________ to the Company in
accordance with the terms of the Preferred Warrant.
3. The Company shall deliver to the Holder the Additional Preferred Shares
and Additional Warrant into which this Preferred Warrant is exercised in
accordance with the terms of the Preferred Warrant.
4. Following the exercise effected hereby, the Preferred Warrant shall be
into exercisable into ______________ Additional Preferred Shares and a
commensurate number of Additional Warrants,.
Dated: _________________, 20__ [Name of Holder]
By:
------------------------------------
Name:
Title:
Exhibit D to
Preferred Warrant
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ________________________________ the right represented by the within
Preferred Warrant to purchase ______________ Additional Preferred Shares,
together with a commensurate number of Additional Warrants, and appoints
________________ attorney to transfer said right on the books of MediaBay, Inc.
with full power of substitution in the premises.
Dated: _________________, 20__
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Address of Transferee
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In the presence of:
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