EXHIBIT 4.8
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT FILED UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT.
May 24, 2004
WARRANT
TO SUBSCRIBE FOR AND PURCHASE COMMON STOCK OF
BAM! ENTERTAINMENT, INC.
VOID AFTER 5:00 P.M., CALIFORNIA TIME, ON MAY 24, 2009,
OR IF NOT A BUSINESS DAY, AS DEFINED HEREIN, AT 5:00 P.M.,
CALIFORNIA TIME, ON THE IMMEDIATELY PRECEDING BUSINESS DAY
No. MCP-1
THIS CERTIFIES that, for good and valuable consideration, Milestone
Capital Partners Ltd. ("MCP"), or registered assigns (the "Warrantholder"), is
entitled to subscribe for and purchase from BAM! ENTERTAINMENT, INC., a Delaware
corporation (the "Company"), at an exercise price per share equal to $0.594
(such price, as from time to time to be adjusted as hereinafter provided, being
hereinafter called the "Warrant Price"), at any time and from time to time prior
to the Expiration Date (as defined below), up to 12,048 fully paid,
nonassessable shares of Common Stock, $0.001 par value, of the Company ("Common
Stock"), subject, however, to the provisions and upon the terms and conditions
hereinafter set forth, including without limitation the provisions of Section 2
hereof. "Expiration Date" shall mean 5:00 P.M., California time, on May 24,
2009, or if not a Business Day, as defined herein, at 5:00 P.M., California
time, on the immediately preceding business day. "Business Day" shall mean a day
other than a Saturday, Sunday or other day on which banks in the State of
California are authorized by law to remain closed.
SECTION 1. EXERCISE OF WARRANT
(a) CASH EXERCISE
This Warrant may be exercised, at any time and from time to time prior to
the Expiration Date, by the Warrantholder, in whole or in part (but not as to a
fractional share of Common Stock and in no event for less than 500 shares
(unless less than an aggregate of 500 shares are then purchasable under all
outstanding Warrants held by a Warrantholder), by the completion of the
subscription form attached hereto and by the surrender of this Warrant (properly
endorsed) at the Company's offices at 333 West Santa Clara Street, Suite 716,
San Jose, CA 95113 (or at such other location in the United States as the
Company may designate by notice in writing to the Warrantholder at the address
of the Warrantholder appearing on the books of the Company), and by payment to
the Company of the Warrant Price, in cash, by wire transfer for the account of
the Company or by certified or official bank check, for each share being
purchased.
(b) NET EXERCISE
Notwithstanding anything to the contrary contained in Section 1(a) and
subject to the last sentence of this Section 1(b), the Warrantholder may elect
to exercise this Warrant and receive shares on a "net exercise" basis in an
amount equal to the value of this Warrant by delivery of the subscription form
attached hereto and surrender of this Warrant at the principal office of the
Company, in which event the Company shall issue to Holder a number of shares
computed using the following formula:
X = (P)(Y)(A-B)
-----------
A
Where: X = the number of shares of Common Stock to be issued to
Holder.
P = the portion of the Warrant being exercised.
Y = the number of shares of Common Stock issuable upon
exercise of this Warrant if the Warrant were exercised
for cash.
A = the Current Market Price (as determined pursuant to
Section 1(d)) of one share of Common Stock.
B = Warrant Price.
Notwithstanding anything in this Warrant to the contrary, the provisions of this
Section 1(b) shall not be applicable if, at the time of exercise of this
Warrant, a registration statement under the Securities Act of 1933 covering the
resale of the shares issued upon such exercise is in effect.
(c) PROCEDURE FOR EXERCISE
In the event of any exercise of the rights represented by this Warrant, a
certificate or certificates for the total number of whole shares of Common Stock
so purchased, registered in the name of the Warrantholder, shall be delivered to
the Warrantholder within a reasonable time, not exceeding five Business Days,
after the rights represented by this Warrant shall have been so exercised; and,
unless this Warrant has expired, a new Warrant representing the number of shares
(except a remaining fractional share), if any, with respect to which this
Warrant shall not then have been exercised shall also be issued to the
Warrantholder within such time. With respect to any such exercise, the
Warrantholder shall for all purposes be deemed to have become the holder of
record of the number of shares of Common Stock evidenced by such certificate or
certificates from the date on which this Warrant was surrendered and if exercise
is pursuant to Section 1(a), payment of the Warrant Price was made, irrespective
of the date of delivery of such certificate, except that, if the date of such
surrender and payment is a date on which the stock transfer books of the Company
are closed, such person shall be deemed to have become the holder of such shares
at the close of business on the next succeeding date on which the stock transfer
books are open. No fractional shares shall be issued upon exercise of this
Warrant and no payment or adjustment shall be made upon any exercise on account
of any cash dividends on the Common Stock issued upon such exercise. If any
fractional interest in a share of Common Stock would, except for the provisions
of this Section 1, be delivered upon any such exercise, the Company, in lieu of
delivering the fractional share thereof, shall pay to the Warrantholder an
amount in cash equal to the Current Market Price of such fractional interest, as
determined below.
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(d) CURRENT MARKET PRICE
For any computation hereunder, the "Current Market Price" per share of
Common Stock on any date shall be deemed to be the average of the daily Market
Price per share for the 30 consecutive Trading Days commencing 45 Trading Days
before the date in question. "Market Price" is defined as the closing bid price
of such security on the principal United States securities exchange or trading
market on which such security is listed or traded as reported by the Research
Service of Nasdaq Trading and Market Services (or a comparable reporting service
of national reputation), or if the foregoing does not apply, the last reported
sale price of such security in the over-the-counter market on the electronic
bulletin board for such security as reported by Nasdaq, or, if no sale price is
reported for such security by Nasdaq, the average of the bid prices of any
market makers for such security as reported in the "pink sheets" by Pink Sheets
LLC (formerly the National Quotation Bureau, Inc.). If Market Price cannot be
established as described above, Market Price shall be the fair market value of
the Common Stock as determined in good faith by the Board of Directors. The term
"Trading Day" shall mean a day on which Nasdaq or the principal national
securities exchange on which the Common Stock is listed or admitted to trading
is open for the transaction of business.
SECTION 2. ADJUSTMENTS
The Warrant Price and the number and kind of shares issuable hereunder
shall be subject to adjustment from time to time upon the happening of certain
events as provided in this Section 2.
In the event that any adjustment of the Warrant Price as required herein
results in a fraction of a cent, such Warrant Price shall be rounded up or down
to the nearest cent; provided that, in no event shall the Warrant Price per
share be reduced below $0.01.
(a) Subdivision or Combination of Common Stock. If the Company, at
any time prior to the Expiration Date, subdivides (by any stock split, stock
dividend, recapitalization, reorganization, reclassification or otherwise) its
shares of Common Stock into a greater number of shares, then, after the date of
record for effecting such subdivision, the Warrant Price in effect immediately
prior to such subdivision will be proportionately reduced. If the Company, at
any time prior to the Expiration Date, combines (by reverse stock split,
recapitalization, reorganization, reclassification or otherwise) its shares of
Common Stock into a smaller number of shares, then, after the date of record for
effecting such combination, the Warrant Price in effect immediately prior to
such combination will be proportionately increased.
(b) Adjustment in Number of Shares. Upon each adjustment of the
Warrant Price pursuant to the provisions of this Section 2 other than a Company
Reduction as defined in Section 2(k), the number of shares of Common Stock
issuable upon exercise of this Warrant shall be increased or decreased to equal
the quotient obtained by dividing (i) the product of (A) the Warrant Price in
effect immediately prior to such adjustment, multiplied by (B) the number of
shares of Common Stock issuable upon exercise of this Warrant immediately prior
to such adjustment, by (ii) the adjusted Warrant Price .
(c) Consolidation, Merger or Sale. In case of any consolidation of
the Company with, or merger of the Company into, any other entity, or in case of
any sale or conveyance of all or substantially all of the assets of the Company
other than in connection with a plan of complete liquidation of the Company at
any time prior to the Expiration Date, then as a condition of such
consolidation, merger or sale or conveyance, adequate provision will be made
whereby the holder of this Warrant will have the right to acquire and receive
upon exercise of this Warrant in lieu of the shares of Common Stock immediately
theretofore acquirable upon the exercise of this Warrant, such shares of stock,
securities, cash or assets as may be issued or payable with respect to or in
exchange for the number of shares of Common Stock immediately theretofore
acquirable and receivable upon exercise of this Warrant had such
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consolidation, merger or sale or conveyance not taken place. In any such case,
the Company will make appropriate provision to insure that the provisions of
this Section 2 will thereafter be applicable as nearly as may be in relation to
any shares of stock or securities thereafter deliverable upon the exercise of
this Warrant. The Company will not effect any consolidation, merger or sale or
conveyance unless prior to the consummation thereof, the successor entity (if
other than the Company) assumes by written instrument the obligations under this
Warrant and the obligations to deliver to the holder of this Warrant such shares
of stock, securities or assets as, in accordance with the foregoing provisions,
the holder may be entitled to acquire.
(d) Distribution of Assets. In case the Company shall declare or
make any distribution of its assets (other than cash) (or rights to acquire its
assets (other than cash)) to all holders of Common Stock as a partial
liquidating dividend, stock repurchase, by way of return of capital or otherwise
(including any dividend or distribution to the Company's stockholders of shares
(or rights to acquire shares) of capital stock of a subsidiary) (a
"Distribution"), at any time prior to the Expiration Date, then, upon exercise
of this Warrant for the purchase of any or all of the shares of Common Stock
subject hereto, the holder of this Warrant shall be entitled to receive its
pro-rata amount of such assets (or such rights) as would have been payable to
the holder had such holder been the holder of such shares of Common Stock on the
record date for the determination of stockholders entitled to such Distribution.
(e) Notice of Adjustment. Upon the occurrence of any event which
requires any adjustment of the Warrant Price other than a Company Reduction as
defined in Section 2(k), then, and in each such case, the Company shall give
notice thereof to the holder of this Warrant, which notice shall state the
Warrant Price resulting from such adjustment and the increase or decrease in the
number of Warrant Shares issuable upon exercise of this Warrant, setting forth
in reasonable detail the method of calculation and the facts upon which such
calculation is based. The Chief Financial Officer of the Company shall certify
such calculation.
(f) Minimum Adjustment of the Warrant Price. No adjustment of the
Warrant Price shall be made in an amount of less than 1% of the Warrant Price in
effect at the time such adjustment is otherwise required to be made, but any
such lesser adjustment shall be carried forward and shall be made at the time
and together with the next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to not less than 1% of such Warrant
Price.
(g) No Fractional Shares. No fractional shares of Common Stock are
to be issued upon the exercise of this Warrant, but the Company shall pay a cash
adjustment in respect of any fractional share which would otherwise be issuable
in an amount equal to the same fraction of the closing bid price of a share of
Common Stock on the Principal Market on the date of such exercise.
(h) Other Notices. In case at any time:
(i) the Company shall declare any dividend upon the Common
Stock payable in shares of stock of any class or make any other
distribution (other than dividends or distributions payable in cash out of
retained earnings consistent with the Company's past practices with
respect to declaring dividends and making distributions) to the holders of
the Common Stock;
(ii) the Company shall offer for subscription pro rata to the
holders of the Common Stock any additional shares of stock of any class or
other rights;
(iii) there shall be any capital reorganization of the
Company, or reclassification of the Common Stock, or consolidation or
merger of the Company with or into, or sale of all or substantially all of
its assets to, another corporation or entity; or
(iv) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
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then, in each such case, the Company shall give to the holder of this Warrant
(a) notice of the date or estimated date on which the books of the Company shall
close or a record shall be taken for determining the holders of Common Stock
entitled to receive any such dividend, distribution, or subscription rights or
for determining the holders of Common Stock entitled to vote in respect of any
such reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up and (b) in the case of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up, notice of the date (or, if not then known, a reasonable estimate
thereof by the Company) when the same shall take place. Such notice shall also
specify the date on which the holders of Common Stock shall be entitled to
receive such dividend, distribution, or subscription rights or to exchange their
Common Stock for stock or other securities or property deliverable upon such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, or winding-up, as the case may be. Such notice shall be given at
least fifteen (15) days prior to the record date or the date on which the
Company's books are closed in respect thereto. Failure to give any such notice
or any defect therein shall not affect the validity of the proceedings referred
to in clauses (i), (ii), (iii) and (iv) above. Notwithstanding the foregoing,
the Company may publicly disclose the substance of any notice delivered
hereunder prior to delivery of such notice to the holder of this Warrant.
(i) Certain Events. If, at any time prior to the Expiration Date, any
event occurs of the type contemplated by the adjustment provisions of this
Section 2 but not expressly provided for by such provisions, the Company will
give notice of such event as provided in Section 2(e) hereof, and the Company's
Board of Directors will make an appropriate adjustment in the Warrant Price and
the number of shares of Common Stock acquirable upon exercise of this Warrant so
that the rights of the holder shall be neither enhanced nor diminished by such
event.
(j) Certain Definitions.
(i) "Business Day" means any day, other than a Saturday or
Sunday or a day on which banking institutions in the State of New York are
authorized or obligated by law, regulation or executive order to close.
(ii) "Common Stock," for purposes of this Section 2, includes
the Common Stock and any additional class of stock of the Company having
no preference as to dividends or distributions on liquidation, provided
that the shares purchasable pursuant to this Warrant shall include only
Common Stock in respect of which this Warrant is exercisable, or shares
resulting from any subdivision or combination of such Common Stock, or in
the case of any reorganization, reclassification, consolidation, merger,
or sale of the character referred to in Section 2(c) hereof, the stock or
other securities or property provided for in such Section.
(iii) "Principal Market" means the Nasdaq Stock Market or, if
the Common Stock is not traded on the Nasdaq Stock Market, then the
principal securities exchange or trading market for the Common Stock.
(k) Adjustment of Warrant Price by the Company. To the extent permitted by
applicable law, the Company at any time shall have the right to reduce the
Warrant Price (a "Company Reduction") by any amount for any period of time;
provided that the conditions of this Section 2(k) are satisfied. The Company may
exercise its right to Company Reduction by delivering to the holder of this
Warrant written notice (a "Company Reduction Notice") at least 15 Business Days
prior to the first day of the Company Reduction Period (as defined below). The
Company Reduction Notice shall state the reduced Warrant Price (the "Alternative
Warrant Price") and the period (the "Company Reduction Period") during which the
Alternative Warrant Price will be in effect, which Company Reduction Period must
be at least 15 Business Days in duration. A Company Reduction Notice shall be
irrevocable. The Warrant Price shall be adjusted upon the expiration of the
Company Reduction Period to the Warrant Price that otherwise would then be in
effect if the Company Reduction had not occurred. Notwithstanding anything to
the contrary in this Section 2(k), the Alternative Warrant Price shall at no
time be greater than the Warrant
5
Price that otherwise would be in effect during such Company Reduction Period if
such Company Reduction had not occurred.
SECTION 3 LOCKUP; MARKET STANDOFF
(a) Notwithstanding whether or not the securities issuable upon exercise
of this Warrant become registered or otherwise tradeable without restriction,
the Warrantholder hereby agrees that, for a period of 180 days from the date
hereof, it shall not directly or indirectly sell, offer to sell, contract to
sell (including, without limitation, any short sale), grant any option to
purchase or otherwise transfer or dispose of this Warrant or any securities of
the Company issuable upon exercise of this Warrant during such period. In order
to enforce the foregoing covenant, the Company may impose stop-transfer
instructions with respect to this Warrant and the securities issuable upon
exercise of this Warrant until the end of such period.
(b) The Warrantholder hereby agrees that, during the period of duration
(up to, but not exceeding 180 days or the period agreed to by the Company's
officers and directors, whichever is less) specified by the Company and an
underwriter of Common Stock or other equity securities of the Company, following
the effective date of a registration statement of the Company filed under the
Securities Act, it shall not, to the extent requested by the Company and such
underwriter, directly or indirectly sell, offer to sell, contract to sell
(including, without limitation, any short sale), grant any option to purchase or
otherwise transfer or dispose of (other than to donees who agree to be similarly
bound) any securities of the Company held by it at any time during such period
except Common Stock included in such registration. In order to enforce the
foregoing covenant, the Company may impose stop-transfer instructions with
respect to the securities of the Warrantholder until the end of such period, and
the Warrantholder agrees that, if so requested, the Warrantholder will execute
an agreement in the form provided by the underwriter containing terms which are
essentially consistent with the provisions of this Section.
SECTION 4. REGISTRATION RIGHTS
The Company and the Warrantholder hereby adopt, incorporate and make a
part of this Agreement each of the provisions, rights, duties, obligations,
representations, conditions and responsibilities of the respective parties to
that certain Warrant Shares Registration Rights Agreement dated as of May 24,
2004 (the "Registration Rights Agreement") by and between the Company and the
Initial Investors (as defined in the Registration Rights Agreement) as though
Warrantholder was party to the Registration Rights Agreement as an Initial
Investor and as though such Registration Rights Agreement were fully set forth
herein with the following exceptions:
(a) As used in the Registration Rights Agreement
(i) "Investors" shall mean Warrantholder;
(ii) "Registrable Securities" shall mean the shares of Common
Stock issuable upon exercise of this Warrant and any shares of capital stock
issued or issuable, from time to time (with adjustments), as a distribution on
or in exchange for or otherwise with respect to thereto.
SECTION 5. NO STOCKHOLDERS RIGHTS OR LIABILITIES
This Warrant shall not entitle the Warrantholder to any voting rights or
other rights as a stockholder of the Company. No provision hereof, in the
absence of affirmative action by the Warrantholder to purchase shares of Common
Stock, and no mere enumeration herein of the rights or privileges of the
Warrantholder shall give rise to any liability of such Warrantholder for the
Warrant Price
6
or as a stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.
SECTION 6. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT
In case this Warrant shall be mutilated, lost, stolen or destroyed, the
Company shall, at the request of the holder, issue and deliver in exchange and
substitution for and upon cancellation of the mutilated certificate or
certificates, or in lieu of and substitution for the certificate or certificates
lost, stolen or destroyed, a new Warrant certificate or certificates of like
tenor and representing an equivalent right or interest, but only upon receipt of
evidence satisfactory to the Company of such loss, theft or destruction of such
Warrant and an agreement of indemnity, if requested.
SECTION 7. NOTICES
All notices, requests and other communications required or permitted to be
given or delivered hereunder shall be in writing, and shall be delivered, or
shall be sent by certified or registered mail or overnight courier, postage
prepaid, or by facsimile,
(a) If to a Warrantholder or a holder of shares issued upon exercise
of this Warrant, addressed to
Milestone Capital Partners
__________________________
__________________________
Telephone No.: (____) ___________
Facsimile No.: (____) ___________
Attention: Charles Prast
Director
(b) If to the Company addressed to it:
BAM! Entertainment, Inc.
333 West Santa Clara Street, Suite 716
San Jose, CA 95113
Telephone No.: (408) 298-7500
Facsimile No.: (408) 298-9600
Attention: Raymond Musci
President
With a copy to:
Kirkpatrick & Lockhart LLP
10100 Santa Monica Blvd, 7th Floor
Los Angeles, California 90067
Telephone (310) 552-5000
Fax (310) 552-5001
Attention: Thomas Poletti, Esq.
Each party may from time to time change the address to which notices to it
are to be delivered or mailed hereunder by notice in accordance herewith to the
other party.
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SECTION 8. Representations and Warranties of Warrantholder.
(a) Acquisition for Own Account. Warrantholder is acquiring the
Warrant and the shares of Common Stock upon exercise thereof ("Securities") for
Warrantholder's own account and not with a present view towards the distribution
thereof. Warrantholder understands that Warrantholder must bear the economic
risk of this investment indefinitely, unless the Securities are registered
pursuant to the Securities Act and any applicable state securities or blue sky
laws or an exemption from such registration is available, and that the Company
has no present intention of registering any of the Securities other than as
contemplated by the Registration Rights Agreement. Notwithstanding anything in
this Section 8(a) to the contrary, by making the foregoing representation,
Warrantholder does not agree to hold the Securities for any minimum or other
specific term and reserves the right to dispose of the Securities at any time in
accordance with or pursuant to a registration statement or an exemption from
registration under the Securities Act and any applicable state securities laws.
(b) Information. Warrantholder has been furnished all materials
relating to the business, finances and operations of the Company and materials
relating to the issuance of the Securities, which have been requested by
Warrantholder. Warrantholder has been afforded the opportunity to ask questions
of the Company and has received what Warrantholder believes to be satisfactory
answers to any such inquiries. Warrantholder understands that its investment in
the Securities involves a high degree of risk.
(c) Governmental Review. Warrantholder understands that no United
States federal or state agency or any other government or governmental agency
has passed upon or made any recommendation or endorsement of the Securities.
(d) Authorization; Enforcement. Warrantholder has the requisite
power and authority to enter into and perform its obligations under this Warrant
and to purchase the shares in accordance with the terms hereof. This Warrant has
been duly and validly authorized, executed and delivered on behalf of
Warrantholder and is a valid and binding agreement of Warrantholder enforceable
against Warrantholder in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
other laws affecting creditors' rights and remedies generally and to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
(e) Transfer or Resale. Warrantholder understands that (i) except as
provided in the Registration Rights Agreement, the Securities have not been and
are not being registered under the Securities Act or any state securities laws,
and may not be transferred unless (A) subsequently registered thereunder, or (B)
Warrantholder shall have delivered to the Company an opinion of counsel
reasonably acceptable to the Company (which opinion shall be in form, substance
and scope customary for opinions of counsel in comparable transactions) to the
effect that the Securities to be sold or transferred may be sold or transferred
under an exemption from such registration, or (C) sold under Rule 144
promulgated under the Securities Act (or a successor rule), or (D) sold or
transferred to an employee or other affiliate of Warrantholder pursuant to an
exemption under the Securities Act; and (ii) neither the Company nor any other
person is under any obligation to register such Securities under the Securities
Act or any state securities laws or to comply with the terms and conditions of
any exemption thereunder, in each case, other than pursuant to the Registration
Rights Agreement.
(f) Legend. Warrantholder understands that this Warrant and the
shares of Common Stock issuable upon exercise of this Warrant and, until such
time as the shares of Common Stock issuable upon exercise of this Warrant have
been registered under the Securities Act as contemplated by the Registration
Rights Agreement or otherwise may be sold by Warrantholder under Rule 144, the
certificates for the shares may bear a restrictive legend in substantially the
following form:
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These securities have not been registered under the Securities Act of
1933, as amended, or the securities laws of any state of the United
States. The securities represented hereby may not be offered or sold in
the absence of an effective registration statement for the securities
under applicable securities laws unless offered, sold or transferred under
an available exemption from the registration requirements of those laws.
The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of any Security upon which it is
stamped, if (a) the sale of such Security is registered under the Securities Act
or (b) in connection with the resale of such Security, such holder provides the
Company with an opinion of counsel, in form, substance and scope customary for
opinions of counsel in comparable transactions, to the effect that a public sale
or transfer of such Security may be made without registration under the
Securities Act or (c) such holder provides the Company with reasonable
assurances that such Security can be sold under Rule 144(k). Warrantholder
agrees to sell all Securities, including those represented by a certificate(s)
from which the legend has been removed, pursuant to an effective registration
statement or under an exemption from the registration requirements of the
Securities Act.
(g). Accredited Investor Status. Warrantholder is an "accredited
investor" as that term is defined in Rule 501(a) of Regulation D.
SECTION 9. AMENDMENTS AND WAIVERS
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.
SECTION 10. SEVERABILITY
If one or more provisions of this Warrant are held to be unenforceable
under applicable law, such provisions shall be excluded from this Warrant, and
the balance of this Warrant shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.
SECTION 11. GOVERNING LAW
This Warrant shall be governed by and construed in accordance with the
laws of the State of California applicable to contracts made and to be performed
in the State of California.
SECTION 12. HEADINGS
The headings in this Warrant are for purposes of reference only and shall
not limit or otherwise affect any of the terms hereof.
SECTION 13. COUNTERPARTS
This Warrant may be executed in any number of counterparts, each of which
shall be deemed an original but all of which together shall constitute one and
the same instrument.
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SECTION 14. ISSUE TAX.
The issuance of certificates for shares upon the exercise of this Warrant
shall be made without charge to the holder of this Warrant or such shares for
any issuance tax or other costs in respect thereof, provided 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 the holder of this Warrant.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Company and WP have executed this Warrant on and
as of the day and year first above written.
BAM! ENTERTAINMENT, INC.,
a Delaware corporation
By: /s/ Stephen Ambler
__________________________________
Stephen Ambler
___________________________________
Its: CFO/VP Finance
___________________________________
Attest:
__________________
MILESTONE CAPITAL PARTNERS LTD.
By: ____________________________________
______________________________
Its:___________________________________
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SUBSCRIPTION FORM
(To be executed upon exercise of this Warrant)
BAM! Entertainment, Inc.
333 West Santa Clara Street, Suite 716
San Jose, CA 95113
Attention: ________________
The undersigned hereby irrevocably elects to exercise the right of
purchaser represented by the within Warrant for, and to purchase thereunder,
______________ shares of Common Stock, as provided for therein, and either
tenders herewith payment of the purchase price in full in the form of cash or a
certified or official bank check in the amount of $_____________ or, if the
undersigned elects pursuant to Section 1(b) of the within Warrant to convert
such Warrant into Common Stock a net issuance basis, the undersigned exercises
the within Warrant by exchange under the terms of Section 1(b).
Please issue a certificate or certificates for such Common Stock in the
name of, and pay any cash for any fractional share to:
Name:______________________________
Address:
Social
Security No:
If said number of shares shall not be all the shares purchasable under the
within Warrant, a new Warrant is to be issued in the name of said undersigned
for the balance remaining of the shares purchasable thereunder rounded up to the
next higher number of shares.
Name_______________________________
Signature____________________________
Note: The above signature must correspond
exactly with the name on the first
page of this Warrant or with the
name of the assignee appearing in the
assignment form below.
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ASSIGNMENT
(To be executed only upon assignment of Warrant)
For value received, _______________________________ hereby sells, assigns
and transfers unto _______________________ the within Warrant Certificate,
together with all right, title and interest therein, and does hereby irrevocably
constitute and appoint ____________________ attorney, to transfer said Warrant
on the books of the within-named Company with respect to the number of Warrants
set forth below, with full power of substitution in the premises:
Name(s) of
Assignee(s)/Address No. of Warrants
And if said number of Warrants shall not be all the Warrants represented by the
Warrant, a new Warrant is to be issued in the name of said undersigned for the
balance remaining of the Warrants registered by said Warrant.
Name_______________________
Dated: __________________ Signature____________________
Note: The above signature must correspond
exactly with the name on the face of
this Warrant
13