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EXHIBIT 4.9
NO. ____
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE
SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.
WARRANT TO PURCHASE SHARES
OF CAPITAL STOCK OF
BAM! ENTERTAINMENT, INC.
This certifies that Transcap Associates, Inc., an Illinois corporation,
or its successors or assigns (the "HOLDER"), for value received, is entitled to
purchase from BAM! Entertainment, Inc., a Delaware corporation (the "COMPANY"),
having a place of business at 333 W. Santa Clara Blvd., San Jose, CA 95113, up
to 100,000 shares ("Warrant Shares") of the Company's Common Stock (the "Common
Stock"), at a purchase price equal to the per share price concurrent with the
closing of the Company's initial public offering (the "IPO")(the "Per Share
Price"). The Warrant Shares may be purchased no sooner than one hundred eighty
(180) days after the IPO (the "Exercise Date"). Notwithstanding the provisions
of the previous sentence, in the event the Company proposes to sell
substantially all of its assets or to undertake a reorganization where the
shareholders of the Company immediately prior to the reorganization hold less
than 50% of the securities of the surviving entity after such reorganization,
the Company shall provide notice to the Holder at least fifteen days before the
closing of such transaction and give Holder the opportunity to purchase the
Warrant Shares prior to the closing of such transaction. The right to purchase
the Warrant Shares shall terminate at 5 p.m. December 31, 2001, Pacific Standard
Time if the IPO has not occurred by such date. If the IPO has occurred by such
date, the right to purchase the Warrant Shares shall terminate at 5 p.m. Pacific
Daylight Savings Time on August 30, 2004 (collectively the "Expiration Date") To
purchase the Warrant Shares the Holder shall surrender to the Company at its
principal office (or at such other location as the Company may advise the Holder
in writing) this Warrant properly endorsed with the Form of Subscription
attached hereto duly filled in and signed and, if applicable, upon payment in
cash or by check of the aggregate Per Share Price for the number of the Warrant
Shares for which this Warrant is being exercised determined in accordance with
the provisions hereof. The Per Share Price and the number of Warrant Shares
purchasable hereunder are subject to adjustment as provided in Section 3 of this
Warrant. This Warrant is subject to the following terms and conditions:
1. EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES.
1.1 EXERCISE DATE. This Warrant is exercisable at the option of
the holder of record hereof, at any time or from time to time, from the Exercise
Date up to the Expiration Date for all or any part of the shares of Warrant
Shares (but not for a fraction of a share) which may be purchased hereunder by
the surrender of this Warrant, together with the Subscription Form attached
hereto as Exhibit A, duly completed and executed at the principal office of the
Company specifying the portion of the Warrant to be exercised and accompanied by
payment in full in cash or by check with respect to the Shares of the Warrant
Stock being purchased. The Company agrees that the shares of Warrant Shares
purchased under this Warrant shall be and are 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, properly endorsed,
together with the completed, executed Form of Subscription delivered and payment
made for such shares. Certificates for the shares of Warrant Shares so
purchased, together with any other securities or property to which the Holder
hereof is entitled upon such exercise, shall be delivered to the Holder hereof
by the Company at the Company's expense within a reasonable time after the
rights represented by this Warrant have been so exercised. In case of a purchase
of less than all the shares which may be purchased under this Warrant, the
Company shall cancel this Warrant and execute and deliver a new Warrant or
Warrants of like tenor for the balance of the shares purchasable under the
Warrant surrendered upon such purchase to the Holder hereof within a reasonable
time. Each stock certificate so delivered shall be in such denominations of
Warrant Shares as may be requested by the Holder hereof and shall be registered
in the name of such Holder.
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1.2 NET ISSUE EXERCISE. Notwithstanding any provisions herein to
the contrary, if prior to the Expiration the average trading price of one share
of the Company's Common Stock for a period of five days immediately prior to the
"Surrender" (as defined below) (the "FMV"), is greater than the Per Share Price
for one share of the Warrant Shares, in lieu of exercising this Warrant for
cash, the Holder may elect to receive shares of Common Stock equal to the value
(as determined below) of this Warrant (or the portion thereof being canceled) by
surrender of this Warrant at the principal office of the Company (the
"Surrender"), properly endorsed with the Form of Subscription attached hereto
duly filled in and signed, in which event the Company shall issue to the Holder
that number of shares of Common Stock computed using the following formula:
WS = WCS (FMV-PSP)
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FMV
WHERE:
WS equals the number of Warrant Shares to be issued to the Holder
WCS equals the number of shares of Common Stock purchasable under
this Warrant or, if only a portion of the Warrant is being
exercised, the portion of the Warrant being canceled (at the date
of such calculation)
FMV Defined above
PSP equals the Per Share Price of this Warrant
2. SHARES TO BE FULLY PAID; RESERVATION OF SHARES. The Company covenants
and agrees that all shares of Warrant Shares which may be issued upon the
exercise of the rights represented by this Warrant will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable and free from all
preemptive rights of any shareholder and free of all taxes, liens and charges
with respect to the issue thereof. The Company further covenants and agrees
that, during the period within which the rights represented by this Warrant may
be exercised, the Company will at all times have authorized and reserved, for
the purpose of issue or transfer upon exercise of the subscription rights
evidenced by this Warrant, a sufficient number of shares of authorized but
unissued Warrant Shares, or other securities and property, when and as required
to provide for the exercise of the rights represented by this Warrant.
3. ADJUSTMENT OF PER SHARE PRICE AND NUMBER OF SHARES. The Per Share
Price and the number of shares purchasable upon the exercise of this Warrant
shall be subject to adjustment from time to time upon the occurrence of certain
events described in this Section 3.
3.1 SUBDIVISION OR COMBINATION OF STOCK. In case the Company
shall at any time subdivide its outstanding shares of Warrant Shares into a
greater number of shares, the Per Share Price in effect immediately prior to
such subdivision shall be proportionately reduced, and conversely, in case the
outstanding shares of Warrant Shares of the Company shall be combined into a
smaller number of shares, the Per Share Price in effect immediately prior to
such combination shall be proportionately increased.
3.2 DIVIDENDS IN WARRANT SHARES, OTHER STOCK, PROPERTY,
RECLASSIFICATION. If at any time or from time to time the Holders of Warrant
Shares (or any shares of stock or other securities at the time receivable upon
the exercise of this Warrant) shall have received or become entitled to receive,
without payment therefor,
(a) Warrant Shares or any shares of stock or other
securities which are at any time directly or indirectly convertible into or
exchangeable for Warrant Shares, or any rights or options to subscribe for,
purchase or otherwise acquire any of the foregoing by way of dividend or other
distribution,
(b) Any cash paid or payable otherwise than as a cash
dividend, or
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(c) Warrant Shares or additional stock or other securities
or property (including cash) by way of spinoff, split-up, reclassification,
combination of shares or similar corporate rearrangement, (other than shares of
Warrant Shares issued as a stock split or adjustments in respect of which shall
be covered by the terms of Section 3.1 above),
then and in each such case, the Holder hereof shall, upon the exercise of this
Warrant, be entitled to receive, in addition to the number of shares of Warrant
Shares receivable thereupon, and without payment of any additional consideration
therefor, the amount of stock and other securities and property (including cash
in the cases referred to in clause (b) above and this clause (c)) which such
Holder would hold on the date of such exercise had he been the holder of record
of such Warrant Shares as of the date on which holders of Warrant Shares
received or became entitled to receive such shares or all other additional stock
and other securities and property.
3.3 NO IMPAIRMENT. Except and to the extent as waived or
consented to by the Holder, the Company will not, by amendment of its
Certificate of Incorporation 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 to be observed or performed hereunder by the Company, but will at all
times in good faith assist in the carrying out of all the provisions of this
Warrant and in the taking of all such action as may be necessary or appropriate
in order to protect the exercise rights of the Holder against impairment.
3.4 NOTICES OF CHANGE.
(a) Immediately upon any adjustment in the number or class
of shares subject to this Warrant and of the Per Share Price, the Company shall
give written notice thereof to the Holder, setting forth in reasonable detail
and certifying the calculation of such adjustment.
(b) The Company shall give written notice to the Holder at
least ten (10) business days prior to the date on which the Company closes its
books or takes a record for determining rights to receive any dividends or
distributions.
(c) The Company shall give written notice to the Holder at
least thirty (30) business days prior to the date on which an Organic Change or
an Qualified Public Offering shall take place.
4. ISSUE TAX. The issuance of certificates for shares of Warrant Shares
upon the exercise of the Warrant shall be made without charge to the Holder of
the Warrant for any issue tax (other than any applicable income taxes) in
respect thereof; provided, however, that the Company shall not be required to
pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of any certificate in a name other than that of the then
Holder of the Warrant being exercised.
5. CLOSING OF BOOKS. The Company will at no time close its transfer
books against the transfer of any warrant or of any shares of Warrant Shares
issued or issuable upon the exercise of any warrant in any manner which
interferes with the timely exercise of this Warrant.
6. NO VOTING OR DIVIDEND RIGHTS; LIMITATION OF LIABILITY. Nothing
contained in this Warrant shall be construed as conferring upon the Holder
hereof the right to vote or to consent or to receive notice as a shareholder of
the Company or any other matters or any rights whatsoever as a shareholder of
the Company. No dividends or interest shall be payable or accrued in respect of
this Warrant or the interest represented hereby or the shares purchasable
hereunder until, and only to the extent that, this Warrant shall have been
exercised. No provisions hereof, in the absence of affirmative action by the
holder to purchase shares of Warrant Shares, and no mere enumeration herein of
the rights or privileges of the holder hereof, shall give rise to any liability
of such Holder for the Per Share Price or as a shareholder of the Company,
whether such liability is asserted by the Company or by its creditors.
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7. RIGHTS AND OBLIGATIONS SURVIVE EXERCISE OF WARRANT. The rights and
obligations of the Company, of the holder of this Warrant and of the holder of
shares of Warrant Shares issued upon exercise of this Warrant, shall survive the
exercise of this Warrant.
8. MODIFICATION AND WAIVER. This Warrant and any provision hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
9. NOTICES. Any notice, request or other document required or permitted
to be given or delivered to the holder hereof or the Company shall be delivered
or shall be sent by certified mail, postage prepaid, to each such holder at its
address as shown on the books of the Company or to the Company at the address
indicated therefor in the first paragraph of this Warrant or such other address
as either may from time to time provide to the other.
10. BINDING EFFECT ON SUCCESSORS. This Warrant shall be binding upon any
corporation succeeding the Company by merger, consolidation or acquisition of
all or substantially all of the Company's assets. All of the obligations of the
Company relating to the Warrant Shares issuable upon the exercise of this
Warrant shall survive the exercise and termination of this Warrant. This Warrant
may not be assigned without the prior written consent of the Company.
11. DESCRIPTIVE HEADINGS AND GOVERNING LAW. The description headings of
the several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the laws of the State of California.
12. LOST WARRANTS. The Company represents and warrants to the Holder
hereof that upon 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, upon receipt of an indemnity reasonably
satisfactory to the Company, or in the case of any such mutilation upon
surrender and cancellation of such Warrant, the Company, at its expense, will
make and deliver a new Warrant, of like tenor, in lieu of the lost, stolen,
destroyed or mutilated Warrant.
13. FRACTIONAL SHARES. No fractional shares shall be issued upon
exercise of this Warrant. The Company shall, in lieu of issuing any fractional
share, pay the holder entitled to such fraction a sum in cash equal to such
fraction multiplied by the then effective Per Share Price.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its officers, thereunto duly authorized this ____ day of
_______________, 2001.
BAM! ENTERTAINMENT, INC., a Delaware
corporation
By:
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Raymond C. Musci, President
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EXHIBIT A
SUBSCRIPTION FORM
Date: _________________, 200_
BAM! Entertainment, Inc.
333 W. Santa Clara Blvd.
San Jose, CA 95113
Attn: President
Ladies and Gentlemen:
The undersigned hereby elects to exercise the warrant issued to it by
BAM! Entertainment, Inc. (the "Company") and dated _____________, 2001
Warrant No. ___ (the "Warrant") and to purchase thereunder
__________________________________ shares of the Warrant Shares of the
Company (the "Shares") at a purchase price of
___________________________________________ Dollars ($__________) per
Share or an aggregate purchase price of
__________________________________ Dollars ($__________) (the "Purchase
Price").
Pursuant to the terms of the Warrant the undersigned has delivered the
Purchase Price herewith in full in cash or by certified check or wire transfer.
Very truly yours,
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By:
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Title:
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