First Look Studios S-1 IPO registration

Form 8-K/A


FIRST LOOK MEDIA INC - FRSTW&
Filed: July 01, 2002 (period: May 20, 2002)

Amendment to a previously filed 8-K

Exhibit 4.8

Note Warrant

THE REGISTERED HOLDER OF THIS WARRANT, BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS WARRANT EXCEPT AS HEREIN PROVIDED.

VOID AFTER 5:00 P.M. EASTERN TIME, JUNE 25, 2007

WARRANT

For the Purchase of

291,285 Shares of Common Stock

of

FIRST LOOK MEDIA, INC.

1.           Warrant.

          THIS CERTIFIES THAT, for good and valuable consideration, duly given by or on behalf of Seven Hills Pictures, LLC, a Connecticut limited liability company (“Holder”), as registered owner of this Warrant, to First Look Media, Inc., a Delaware corporation (“Company”), Holder is entitled, at any time or from time to time at or after the date that the Secured Convertible Promissory Note, dated of even date herewith, made by the Company to Holder in the principal amount of $2,000,000 (together with any renewal or replacement thereof, the “Convertible Note”) is initially converted in whole or part (“Commencement Date”), and at or before 5:00 p.m., Eastern Time, June 25, 2007 (“Expiration Date”), but not thereafter, to purchase and receive, in whole or in part, that portion of Two Hundred Ninety-One Thousand Two Hundred Eighty-Five (291,285) shares of Common Stock of the Company, $.001 par value (“Common Stock”) determined by multiplying the Vested Percentage by the total number of shares of Common Stock then remaining for purchase under this Warrant. The “Vested Percentage” shall be determined at any time by dividing the principal amount of the Convertible Note being converted by the then unconverted principal amount of the Converted Note (including such principal amount to be converted). If the Expiration Date is a day on which banking institutions are authorized by law to close, then this Warrant may be exercised on the next succeeding day which is not such a day in accordance with the terms herein. During the period ending on the Expiration Date, the Company agrees not to take any action that would terminate this Warrant. This Warrant is initially exercisable at $3.40 per share of Common Stock purchased; provided, however, that upon the occurrence of any of the events specified in Section 6 hereof, the rights granted by this Warrant, including the exercise price and the number of shares of Common Stock to be received upon such exercise, shall be adjusted as therein specified. The term “Exercise Price” shall mean the initial exercise price or the adjusted exercise price, depending on the context, of a share of Common Stock issuable upon exercise of this Warrant. The term “Securities” shall mean the shares of Common Stock issuable upon exercise of this Warrant.

2.           Exercise.

          2.1 Exercise Form. In order to exercise this Warrant, the exercise form attached hereto must be duly executed and completed and delivered to the Company, together with this Warrant and payment of the Exercise Price for the Securities being purchased.

          2.2 Legend. Each certificate for Securities purchased under this Warrant shall bear a legend as follows, unless such Securities have been registered under the Securities Act of 1933, as amended (“Securities Act”):

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“SECURITIES ACT”) OR APPLICABLE STATE LAW. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE LAW.”

      2.3 Conversion Right.

                 2.3.1 Determination of Amount. In lieu of the payment of the Exercise Price in cash, the Holder shall have the right (but not the obligation) to convert this Warrant, in whole or in part, into Common Stock (“Conversion Right”), as follows: upon exercise of the Conversion Right, the Company shall deliver to the Holder (without payment by the Holder of any of the Exercise Price) that number of shares of Common Stock equal to the quotient obtained by dividing (x) the “Value” (as defined below) of the portion of the Warrant being converted at the time the Conversion Right is exercised by (y) the Market Price. The “Value” of the portion of the Warrant being converted shall equal the remainder derived from subtracting (a) the Exercise Price multiplied by the number of shares of Common Stock being converted from (b) the Market Price of the Common Stock multiplied by the number of shares of Common Stock being converted. As used herein, the term “Market Price” at any date shall be deemed to be the last reported sale price of the Common Stock on such date, or, in case no such reported sale takes place on such day, the average of the last reported sale prices for the immediately preceding three trading days, in either case as officially reported by the principal securities exchange on which the Common Stock is listed or admitted to trading, or, if the Common Stock is not listed or admitted to trading on any national securities exchange or if any such exchange on which the Common Stock is listed is not its principal trading market, the last reported sale price as furnished by the National Association of Securities Dealers, Inc. (“NASD”) through the Nasdaq National Market or SmallCap Market, or, if applicable, the OTC Bulletin Board or BBX, or if the Common Stock is not listed or admitted to trading on any of the foregoing markets, or similar organization, as determined in good faith by resolution of the Board of Directors of the Company, based on the best information available to it.

                 2.3.2 Exercise of Conversion Right. The Conversion Right may be exercised by the Holder on any business day on or after the Commencement Date and not later than the Expiration Date by delivering the Warrant with a duly executed exercise form attached hereto with the conversion section completed to the Company, exercising the Conversion Right and specifying the total number of shares of Common Stock the Holder will purchase pursuant to such conversion.

3.           Transfer.

          3.1 General Restrictions. The registered Holder of this Warrant, by its acceptance hereof, agrees that it will not sell, transfer, assign or hypothecate this Warrant to anyone except upon compliance with, or pursuant to exemptions from, applicable securities laws. This Warrant shall not be transferred to any person or entity operating in the film distribution or home DVD or video entertainment industry without the prior written consent of the Company. In order to make any permitted assignment, the Holder must deliver to the Company the assignment form attached hereto duly executed and completed, together with this Warrant and payment of all transfer taxes, if any, payable in connection therewith. The Company shall immediately transfer this Warrant on the books of the Company and shall execute and deliver a new Warrant or Warrants of like tenor to the appropriate assignee(s) expressly evidencing the right to purchase the aggregate number of shares of Common Stock purchasable hereunder or such portion of such number as shall be contemplated by any such assignment. Notwithstanding the foregoing, Holder may distribute the Warrant to its members owning limited liability company interests of Holder, subject to such transferee executing documents reasonably acceptable to the Company to insure compliance with all applicable federal and state securities laws.

          3.2 Restrictions Imposed by the Securities Act. This Warrant and the Securities underlying this Warrant shall not be transferred unless and until (i) the Company has received the opinion of counsel for the Holder that such securities may be sold pursuant to an exemption from registration under the Securities Act, and applicable state law, the availability of which is established to the reasonable satisfaction of the Company, or (ii) a registration statement relating to such Securities has been filed by the Company and declared effective by the Securities and Exchange Commission and compliance with applicable state law.

4.           New Warrants to be Issued.

          4.1 Partial Exercise or Transfer. Subject to the restrictions in Section 3 hereof, this Warrant may be exercised or assigned in whole or in part. In the event of the exercise or assignment hereof in part only, upon surrender of this Warrant for cancellation, together with the duly executed exercise or assignment form and funds sufficient to pay any Exercise Price and/or transfer tax, the Company shall cause to be delivered to the Holder without charge a new Warrant of like tenor to this Warrant in the name of the Holder evidencing the right of the Holder to purchase the aggregate number of shares of Common Stock and Warrants purchasable hereunder as to which this Warrant has not been exercised or assigned.

          4.2 Lost Certificate. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Warrant and of reasonably satisfactory indemnification, the Company shall execute and deliver a new Warrant of like tenor and date. Any such new Warrant executed and delivered as a result of such loss, theft, mutilation or destruction shall constitute a substitute contractual obligation on the part of the Company.

5.           [Reserved]

6.           Adjustments.

           6.1 Structural Adjustments to Exercise Price and Number of Securities. The Exercise Price and the number of shares of Common Stock underlying this Warrant shall be subject to adjustment from time to time as hereinafter set forth:

                 6.1.1 Stock Dividends — Recapitalization, Reclassification, Split-Ups. If, after the date hereof, the number of outstanding shares of Common Stock is increased by a stock dividend on the Common Stock payable in shares of Common Stock or by a split-up, recapitalization or reclassification of shares of Common Stock or other similar event, then, on the effective date thereof, the number of shares of Common Stock issuable on exercise of this Warrant shall be increased in proportion to such increase in outstanding shares.

                 6.1.2 Aggregation of Shares. If, after the date hereof, the number of outstanding shares of Common Stock is decreased by a reverse split, consolidation, combination or reclassification of shares of Common Stock or other similar event, then, upon the effective date thereof, the number of shares of Common Stock issuable on exercise of this Warrant shall be decreased in proportion to such decrease in outstanding shares.

                 6.1.3 Adjustments in Exercise Price. Whenever the number of shares of Common Stock purchasable upon the exercise of this Warrant is adjusted, as provided in this Section 6.1, 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 of this Warrant immediately prior to such adjustment, and (y) the denominator of which shall be the number of shares of Common Stock so purchasable immediately thereafter.

                 6.1.4 Replacement of Securities upon Reorganization, etc. In case of any split up, recapitalization or reclassification of the outstanding shares of Common Stock other than a change covered by Section 6.1.1 or 6.1.2 hereof or which solely affects the par value of such shares of Common Stock, or in the case of any merger or consolidation of the Company with or into another corporation (other than a consolidation or merger in which the Company is the continuing corporation and which does not result in any split up, recapitalization or reclassification of the outstanding shares of Common Stock), or in the case of any sale or conveyance to another corporation or entity of the property of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the Holder of this Warrant shall have the right thereafter (until the expiration of the right of exercise of this Warrant) to receive upon the exercise hereof, for the same aggregate Exercise Price payable hereunder immediately prior to such event, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such split-up, reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or other transfer, by a Holder of the number of shares of Common Stock of the Company obtainable upon exercise of this Warrant immediately prior to such event; and if any reclassification also results in a change in shares of Common Stock covered by Section 6.1.1 or 6.1.2, then such adjustment shall be made pursuant to Sections 6.1.1, 6.1.2, 6.1.3 and this Section 6.1.4. The provisions of this Section 6.1.4 shall similarly apply to successive split-ups, reclassifications, reorganizations, mergers or consolidations, sales or other transfers.

          6.2 Adjustment upon Issuances of Securities for Cash.

           (i) Until December 25, 2004, if the Company shall issue (“Subject Issuance”) any Additional Stock (as defined below) for cash at an Effective Price (as defined in subsection (ix) below) of less than $2.30:

                (a) the Exercise Price in effect immediately prior to the Subject Issuance (“Original Exercise Price”) shall be adjusted to a price (“New Exercise Price”) determined by multiplying the Original Exercise Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to the Subject Issuance plus the number of shares of Common Stock that the aggregate cash consideration received by the Company in the Subject Issuance would purchase at the Original Exercise Price, and the denominator of which shall be the number of shares of Common Stock outstanding immediately prior to the Subject Issuance plus the number of shares of Additional Stock issued in the Subject Issuance; and

                (b) the number of shares of Common Stock purchasable under this Warrant shall be adjusted to a number determined by multiplying the aggregate number of shares of Common Stock purchasable hereunder immediately prior to the Subject Issuance by a fraction, the numerator of which is the Original Exercise Price and the denominator of which is the New Exercise Price.

           (ii) For the purpose of the calculation in subsection (i), the number of shares of Common Stock outstanding immediately prior to the Subject Issuance shall be the sum of (1) the number of shares of Common Stock actually outstanding, (2) the number of shares of Common Stock then issuable upon the exercise of this Warrant (and the related Warrant, of even date herewith, in favor of the Holder) and (3) the number of shares of Common Stock, if any, deemed issued pursuant to Section 6.2(v) below.

          (iii) For the purpose of the calculation in subsection (i), the cash consideration received by the Company for any issue or sale of Additional Stock shall be computed at the net amount of cash received by the Company after deduction of any underwriting or similar commissions, compensation or concessions paid or allowed by the Company in connection with such issue or sale but without deduction of any expenses payable by the Company.

           (iv) If Additional Stock or Convertible Securities (as defined in subsection (v) below) are sold together with other stock or securities or other assets of the Company for a consideration which covers both, the cash consideration received by the Company shall be computed as the portion of such consideration that may be reasonably determined in good faith by the Board of Directors of the Company to be allocable to such Additional Stock and Convertible Securities.

           (v) For the purpose of the calculation in subsection (i), if the Company issues or sells any (a) stock or other securities convertible into, Additional Stock (such convertible stock or securities being hereinafter referred to as “Convertible Securities”) or (b) rights or options for the purchase of Additional Stock or Convertible Securities, and if the exercise price for such Additional Stock is less than the Original Exercise Price, in each case the Company shall be deemed to have issued at the time of the issuance of such rights or options or Convertible Securities the maximum number of shares of Additional Stock issuable upon exercise or conversion thereof and to have received as consideration for the issuance of such shares an amount equal to the total amount of the consideration, if any, received by the Company for the issuance of such rights or options or Convertible Securities, plus, in the case of such rights or options, the minimum amounts of consideration, if any, payable to the Company upon the exercise of such rights or options, plus, in the case of Convertible Securities, the minimum amounts of consideration, if any, payable to the Company (other than by cancellation of liabilities or obligations evidenced by such Convertible Securities) upon the conversion thereof.

           (vi) If, in the case of Convertible Securities, the minimum amounts of such consideration cannot be ascertained, but are a function of anti-dilution or similar protective clauses, the Company shall be deemed to have received the minimum amounts of consideration without reference to such clauses; provided, further, that if the minimum amount of consideration payable to the Company upon the exercise or conversion of rights, options or Convertible Securities is reduced over time or on the occurrence or non-occurrence of specified events other than by reason of anti-dilution adjustments, the Effective Price shall be recalculated using the figure to which such minimum amount of consideration is reduced; and provided, further, that if the minimum amount of consideration payable to the Company upon the exercise or conversion of such rights, options or Convertible Securities is subsequently increased, the Effective Price shall be again recalculated using the increased minimum amount of consideration payable to the Company upon the exercise or conversion of such rights, options or Convertible Securities.

           (vii) No further adjustment of the Original Exercise Price, as adjusted upon the issuance of such rights, options or Convertible Securities, shall be made as a result of the actual issuance of Additional Stock on the exercise of any such rights or options or the conversion of any such Convertible Securities. If any such rights or options or the conversion privilege represented by any such Convertible Securities shall expire without having been exercised, the Original Exercise Price, as adjusted upon the issuance of such rights, options or Convertible Securities shall be readjusted to the Original Exercise Price which would have been in effect had an adjustment been made on the basis that the only Additional Stock so issued were the Additional Stock, if any, actually issued or sold on the exercise of such rights or options or rights of conversion of such Convertible Securities, and such Additional Stock, if any, were issued or sold for the consideration actually received by the Company upon such exercise, plus the consideration, if any, actually received by the Company for the granting of all such rights or options, whether or not exercised, plus the consideration received for issuing or selling the Convertible Securities actually converted, plus the consideration, if any, actually received by the Company (other than by cancellation of liabilities or obligations evidenced by such Convertible Securities) on the conversion of such Convertible Securities.

           (viii) “Additional Stock” shall mean all shares of Common Stock issued by the Company or deemed to be issued pursuant to this subsection after the date of this Warrant, whether or not subsequently reacquired or retired by the Company other than (a) shares of Common Stock (or options, warrants or other Common Stock purchase rights issued pursuant to such options, warrants or other rights) issued or to be issued to employees, officers or directors of, or consultants or advisors to the Company or any subsidiary, pursuant to stock purchase or stock option plans or other arrangements that are approved by the Board of Directors of the Company; (b) stock issued pursuant to any rights, options and warrants outstanding as of the date of this Warrant; (c) shares of Common Stock issued in connection with any stock split, stock dividend or recapitalization by the Company; (d) shares of Common Stock issued upon exercise or conversion of this Warrant; (e) any securities issued by the Company in a firm commitment underwriting pursuant to a registration statement filed under the Securities Act; and (f) any options or warrants for the purchase or shares of Common Stock issued in connection with the acquisition of business or assets of another Person (other than an “affiliate” of the Company (as that term is defined in Rule 405 promulgated under the Securities Act)) or other strategic transactions, such as joint ventures or marketing or distribution arrangements, involving the Company and another such Person.

           (ix) The “Effective Price” of Additional Stock shall mean the quotient determined by dividing the total number of shares of Additional Stock issued or sold, or deemed to have been issued or sold by the Company under this subsection, into the aggregate cash consideration received, or deemed to have been received by the Company for such issue under this subsection, for such Additional Stock.

          6.3 Changes in Form of Warrant. This form of Warrant need not be changed because of any change pursuant to this Section, and Warrants issued after such change may state the same Exercise Price and the same number of shares of Common Stock and Warrants as are stated in the Warrants initially issued pursuant to this Agreement. The acceptance by any Holder of the issuance of new Warrants reflecting a required or permissive change shall not be deemed to waive any rights to a prior adjustment or the computation thereof.

          6.4 Elimination of Fractional Interests. The Company shall not be required to issue certificates representing fractions of shares of Common Stock upon the exercise of this Warrant, nor shall it be required to issue scrip or pay cash in lieu of any fractional interests, it being the intent of the parties that all fractional interests shall be eliminated by rounding any fraction up to the nearest whole number of shares of Common Stock or other securities, properties or rights.

7.           Reservation of Shares. The Company shall at all times reserve and keep available out of its authorized shares of Common Stock, solely for the purpose of issuance upon exercise of this Warrant, such number of shares of Common Stock or other securities, properties or rights as shall be issuable upon the exercise thereof. The Company covenants and agrees that, upon exercise of the Warrants and payment of the Exercise Price therefor, all shares of Common Stock and other securities issuable upon such exercise shall be duly and validly issued, fully paid and non-assessable and not subject to preemptive rights of any stockholder.

8.           Certain Notice Requirements.

          8.1 Holder’s Right to Receive Notice. Nothing herein shall be construed as conferring upon the Holders the right to vote or consent or to receive notice as a stockholder for the election of directors or any other matter, or as having any rights whatsoever as a stockholder of the Company. If, however, at any time prior to the expiration of the Warrants and their exercise, any of the events described in Section 8.2 shall occur, then, in one or more of said events, the Company shall give written notice of such event at least ten days prior to the date fixed as a record date or the date of closing the transfer books for the determination of the stockholders entitled to such dividend, distribution, conversion or exchange of securities or subscription rights, or entitled to vote on such proposed dissolution, liquidation, winding up or sale. Such notice shall specify such record date or the date of the closing of the transfer books, as the case may be.

          8.2 Events Requiring Notice. The Company shall be required to give the notice described in this Section 8 upon one or more of the following events: (i) if the Company shall take a record of the holders of its shares of Common Stock for the purpose of entitling them to receive a dividend or distribution, or (ii) the Company shall offer to all the holders of its Common Stock any additional shares of capital stock of the Company or securities convertible into or exchangeable for shares of capital stock of the Company, or any option, right or warrant to subscribe therefor, or (iii) a merger or reorganization in which the Company is not the surviving party, or (iv) a dissolution, liquidation or winding up of the Company (other than in connection with a consolidation or merger) or a sale of all or substantially all of its property, assets and business shall be proposed.

          8.3 Notice of Change in Exercise Price. The Company shall, promptly after an event requiring a change in the Exercise Price pursuant to Section 6 hereof, send notice to the Holders of such event and change (“Price Notice”). The Price Notice shall describe the event causing the change and the method of calculating same and shall be certified as being true and accurate by two officers of the Company.

          8.4 Transmittal of Notices. All notices, requests, consents and other communications under this Warrant shall be in writing and shall be deemed to have been duly made on the date of delivery if delivered personally or sent by overnight courier, with acknowledgment of receipt by the party to which notice is given, or on the fifth day after mailing if mailed to the party to whom notice is to be given, by registered or certified mail, return receipt requested, postage prepaid and properly addressed as follows: (i) if to the registered Holder of this Warrant, to the address of such Holder as shown on the books of the Company, or (ii) if to the Company, to its principal executive office.

9.           Miscellaneous.

          9.1 Headings. The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the meaning or interpretation of any of the terms or provisions of this Warrant.

          9.2 Entire Agreement. This Warrant (together with the other agreements and documents being delivered pursuant to or in connection with this Warrant) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof.

          9.3 Binding Effect. This Warrant shall inure solely to the benefit of and shall be binding upon, the Holder and the Company and their respective successors, legal representatives and assigns, and no other person shall have or be construed to have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Warrant or any provisions herein contained.

          9.4 Governing Law. This Warrant shall be governed by and construed and enforced in accordance with the law of the State of Delaware, without giving effect to conflict of laws.

          9.5 Waiver, Etc. The failure of the Company or the Holder to at any time enforce any of the provisions of this Warrant shall not be deemed or construed to be a waiver of any such provision, nor to in any way affect the validity of this Warrant or any provision hereof or the right of the Company or any Holder to thereafter enforce each and every provision of this Warrant. No waiver of any breach, non-compliance or non-fulfillment of any of the provisions of this Warrant shall be effective unless set forth in a written instrument executed by the party or parties against whom or which enforcement of such waiver is sought; and no waiver of any such breach, non-compliance or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent breach, non-compliance or non-fulfillment.

          IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly authorized officer as of the 25th day of June, 2002.

FIRST LOOK MEDIA, INC.


By:/s/ Christopher Cooney
      Christopher Cooney
      Chief Executive Officer

Form to be used to exercise Warrant:

First Look Media, Inc.

_________________

_________________

Date: _____________________, 200___

          The undersigned hereby elects irrevocably to exercise the within Warrant and to purchase ________ shares of Common Stock of First Look Media, Inc. and hereby makes payment of $____________ (at the rate of $_________ per share of Common Stock) in payment of the Exercise Price pursuant thereto. Please issue the Common Stock as to which this Warrant is exercised in accordance with the instructions given below.

or

          The undersigned hereby elects irrevocably to convert its right to purchase ____________ shares of Common Stock purchasable under the within Warrant into __________ shares of Common Stock of __________________________________________ (based on a “Market Price” of $________ per share of Common Stock). Please issue the Common Stock in accordance with the instructions given below.

___________________
Signature

          NOTICE: The signature to this form must correspond with the name as written upon the face of the within Warrant in every particular without alteration or enlargement or any change whatsoever.

INSTRUCTIONS FOR REGISTRATION OF SECURITIES

Name                                                     
(Print in Block Letters)

Address                                                   

Form to be used to assign Warrant:

ASSIGNMENT

          (To be executed by the registered Holder to effect a transfer of the within Warrant):

          FOR VALUE RECEIVED, ________________________________ does hereby sell, assign and transfer unto _________________________________ the right to purchase _____________________ shares of Common Stock of First Look Media, Inc. (“Company”) evidenced by the within Warrant and does hereby authorize the Company to transfer such right on the books of the Company.

Dated:____________________, 200___

_________________
Signature

________________________
Signature Guaranteed

          NOTICE: The signature to this form must correspond with the name as written upon the face of the within Warrant in every particular without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank, other than a savings bank, or by a trust company or by a firm having membership on a registered national securities exchange.