EXHIBIT 4.4
VOID AFTER 5:00 P.M. CENTRAL STANDARD TIME, ON
NOVEMBER 10, 1998.
NEITHER THIS WARRANT NOR THE WARRANT STOCK HAS
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THE
COMPANY WILL NOT TRANSFER THIS WARRANT OR THE
WARRANT STOCK UNLESS (i) THERE IS AN EFFECTIVE
REGISTRATION COVERING SUCH WARRANT OR SUCH
WARRANT STOCK, AS THE CASE MAY BE, UNDER THE
SECURITIES ACT OF 1933 AND APPLICABLE STATES
SECURITIES LAWS, (ii) IT FIRST RECEIVES A LETTER FROM AN
ATTORNEY, ACCEPTABLE TO THE BOARD OF DIRECTORS OR
ITS AGENTS, STATING THAT IN THE OPINION OF THE
ATTORNEY THE PROPOSED TRANSFER IS EXEMPT FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933 AND
UNDER ALL APPLICABLE STATE SECURITIES LAWS, OR (iii)
THE TRANSFER IS MADE PURSUANT TO RULE 144 UNDER THE
SECURITIES ACT OF 1933.
ILLUMINATED MEDIA INC.
(a Minnesota corporation)
Warrant for the Purchase of 7,000 Shares
of Common Stock
par value $.01 per share
FOR VALUE RECEIVED, Illuminated Media Inc. (the "Company"), a
Minnesota corporation, hereby certifies that ("Holder"), is
entitled, subject to the provisions of this Warrant, to purchase from the
Company at any time, or from time to time during the period commencing
on the date hereof and expiring at 5:00 p.m. Central Standard Time, on
November 10, 1998 ("Expiration Date"), up to fully
paid and non-assessable shares of Common Stock at a per share price of
one-half of the per share offering price of the common stock issued in the
initial public offering of the Common Stock of the Company to take place
on or after December 31, 1995, or at times prior to such offering but after
January 31, 1996, at $.50 (the "Exercise Price").
The term "Common Stock" means the Common Stock, par value $.01 per
share, of the Company as constituted on September 10, 1996 (the "Base
Date"), together with any other equity securities that may be issued by the
Company in respect thereof or in substitution therefor. The number of
shares of Common Stock to be received upon the exercise of this Warrant
may be adjusted from time to time as hereinafter set forth. The shares of
Common Stock deliverable or delivered upon such exercise, as adjusted
from time to time, are hereinafter referred to as "Warrant Stock."
Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant certificate, and (in
the case of loss, theft or destruction) of satisfactory indemnification, and
upon surrender and cancellation of this Warrant certificate, if mutilated,
the Company shall execute and deliver a new Warrant certificate of like
tenor and date.
Section 1. Exercise of Warrant. This Warrant may be exercised,
subject to the requirements set forth below, in whole, or in part, at any
time during the period commencing on the date hereof and expiring at
5:00 p.m. Central Standard Time on the Expiration Date set forth above,
or, if such day is a day on which banking institutions in Minneapolis,
Minnesota are authorized by law to close, then on the next succeeding day
that shall not be such a day, by presentation and surrender of this Warrant
certificate to the Company at its principal office, or at the office of its
stock transfer agent, if any, with the Warrant Exercise Form attached
hereto duly executed and accompanied by payment (either in cash or by
certified or official bank check, payable to the order of the Company) of
the aggregate Exercise Price for the number of shares specified in such
form and instruments of transfer, if appropriate, duly executed by the
Holder. If this Warrant should be exercised in part only, the Company
shall, upon surrender of this Warrant certificate for cancellation, execute
and deliver a new Warrant certificate evidencing the rights of the Holder
thereof to purchase the balance of the shares purchasable hereunder. Upon
receipt by the Company of this Warrant certificate, together with the
Exercise Price, at its office, or by the stock transfer agent of the Company
at its office, if any, in proper form for exercise as described above,
together with an agreement to comply with the restrictions on transfer and
related covenants contained herein and a representation as to investment
intent and any other matter required by counsel to the Company, signed by
the Holder (and if other than the original Holder accompanied by proof,
satisfactory to counsel for the Company, of the right of such person or
persons to exercise the Warrant), the Holder shall be deemed to be the
holder of record of the shares of Common Stock issuable upon such
exercise, even if the stock transfer books of the Company shall then be
closed or certificates representing such shares of Common Stock shall not
have been delivered to the Holder. The Holder shall pay any and all
documentary stamp or similar issue or transfer taxes payable in respect of
the issue or delivery of shares of Common Stock on exercise of this
Warrant. The Company shall promptly thereafter issue certificate(s)
evidencing the Common Stock so purchased.
Section 2. Reservation of Shares. The Company shall at all times
reserve for issuance and delivery upon exercise of this Warrant all shares
of Common Stock or other shares of capital stock of the Company (and
other securities) from time to time receivable upon exercise of this
Warrant. All such shares (and other securities) shall be duly authorized
and, when issued upon exercise, shall be validly issued, fully paid and
non-assessable.
Section 3. No Fractional Shares. No fractional shares or script
representing fractional shares shall be issued upon the exercise of this
Warrant, but the Company shall pay the Holder an amount equal to the fair
market value of such fractional share of Common Stock in lieu of each
fraction of a share otherwise called for upon any exercise of this Warrant.
For purposes of this Warrant, the fair market value of a share of Common
Stock shall equal the closing sale price (or if not available the average of
the closing bid and asked prices) on the business day prior to exercise of
this Warrant, or, if the Common Stock is then not publicly traded, then the
price determined in good faith by the Board of Directors of the Company.
Section 4. Transfer.
4.1 Securities Laws. Neither this Warrant nor the Warrant Stock have
been registered under the Securities Act of 1933. The Company will not
transfer this Warrant or the Warrant Stock unless (i) there is an effective
registration covering such Warrant or such shares, as the case may be,
under the Securities Act of 1933 and applicable states securities laws, (ii)
it first receives a letter from an attorney, acceptable to the Company's
board of directors or its agents, stating that in the opinion of the attorney
the proposed transfer is exempt from registration under the Securities Act
of 1933 and under all applicable state securities laws, or (iii) the transfer is
made pursuant to Rule 144 under the Securities Act of 1933.
4.2 Conditions to Transfer. Prior to any such proposed transfer, and as
a condition thereto, if such transfer is not made pursuant to an effective
registration statement under the Securities Act, the Holder will, if
requested by the Company, deliver to the Company (i) an investment
covenant signed by the proposed transferee, (ii) an agreement by such
transferee that the restrictive investment legend set forth above be placed
on the certificate or certificates representing the securities acquired by
such transferee, (iii) an agreement by such transferee that the Company
may place a "stop transfer order" with its transfer agent or registrar, and
(iv) an agreement by the transferee to indemnify the Company to the same
extent as set forth in the next succeeding paragraph.
4.3 Indemnity. The Holder acknowledges that the Holder understands
the meaning and legal consequences of this Section, and the Holder hereby
agrees to indemnify and hold harmless the Company, its representatives
and each officer and director thereof from and against any and all loss,
damage or liability (including all attorneys' fees and costs incurred in
enforcing this indemnity provision) due to or arising out of (a) the
inaccuracy of any representation or the breach of any warranty of the
Holder contained in, or any other breach of, this Warrant, (b) any transfer
of any of this Warrant or the Warrant Stock in violation of the Securities
Act, the Securities Exchange Act of 1934, as amended, or the rules and
regulations promulgated under either of such acts, (c) any transfer of this
Warrant or any of the Warrant Stock not in accordance with this Warrant
or (d) any untrue statement or omission to state any material fact in
connection with the investment representations or with respect to the facts
and representations supplied by the Holder to counsel to the Company
upon which its opinion as to a proposed transfer shall have been based.
4.4 Holdback Period and Transfer. Except as specifically restricted
hereby, this Warrant and the Warrant Stock issued may be transferred by
the Holder in whole or in part at any time or from time to time. In the
event that the Company publicly offers shares of its Common Stock, the
Warrant Stock may not be sold from the date of the Company's initial
public offering of securities for a period ending six months after the
conclusion of such initial public offering. Upon surrender of this Warrant
certificate to the Company or at the office of its stock transfer agent, if
any, with the Assignment Form annexed hereto duly executed and funds
sufficient to pay any transfer tax, and upon compliance with the foregoing
provisions, the Company shall, without charge, execute and deliver a new
Warrant certificate in the name of the assignee named in such instrument
of assignment, and this Warrant certificate shall promptly be canceled.
Any assignment, transfer, pledge, hypothecation or other disposition of
this Warrant attempted contrary to the provisions of this Warrant, or any
levy of execution, attachment or other process attempted upon this
Warrant, shall be null and void and without effect.
Section 4.5. Transfer to Trust. Notwithstanding the foregoing, the
Holder shall be entitled to transfer the entire Warrant, on or prior to
February 28, 1996, to a Trust, the beneficiaries of which are descendants
of the Holder, which Trust shall succeed to all rights and related
obligations of the Holder under this Warrant, and shall thereafter be
considered the Holder for all purposes hereof.
Section 5. Rights of the Holder. The Holder shall not, by virtue
hereof, be entitled to any rights of a stockholder in the Company, either at
law or in equity, and the rights of the Holder are limited to those expressed
in this Warrant.
Section 6. Anti-Dilution Provisions.
6.1 Stock Splits, Dividends, Etc.
6.1.1 If the Company shall at any time subdivide its outstanding
shares of Common Stock (or other securities at the time receivable upon
the exercise of the Warrant) by recapitalization, reclassification or split-up
thereof, or if the Company shall declare a stock dividend or distribute
shares of Common Stock to its stockholders, the number of shares of
Common Stock subject to this Warrant immediately prior to such
subdivision shall be proportionately increased, and if the Company shall at
any time combine the outstanding shares of Common Stock by
recapitalization, reclassification or combination thereof, the number of
shares of Common Stock subject to this Warrant immediately prior to such
combination shall be proportionately decreased. Any such adjustment and
adjustment to the Exercise Price pursuant to this Section shall be effective
at the close of business on the effective date of such subdivision or
combination or if any adjustment is the result of a stock dividend or
distribution then the effective date for such adjustment based thereon shall
be the record date therefor.
6.1.2 Whenever the number of shares of Common Stock
purchasable upon the exercise of this Warrant is adjusted, as provided in
this Section, 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 immediately prior to such
adjustment, and (y) the denominator of which shall be the number of
shares of Common Stock so purchasable immediately thereafter.
6.2 Adjustment for Reorganization, Consolidation, Merger, Etc. In
case of any reorganization of the Company (or any other corporation, the
securities of which are at the time receivable on the exercise of this
Warrant) after the Base Date or in case after such date the Company (or
any such other corporation) shall consolidate with or merge into another
corporation or convey all or substantially all of its assets to another
corporation, then, and in each such case, the Holder of this Warrant upon
the exercise as provided in Section 1 at any time after the consummation
of such reorganization, consolidation, merger or conveyance, shall be
entitled to receive,d in lieu of the securities and property receivable upon
the exercise of this Warrant prior to such consummation, the securities or
property to which such Holder would have been entitled upon such
consummation if such Holder had exercised this Warrant immediately
prior thereto; in each such case, the terms of this Warrant shall be
applicable to the securities or property received upon the exercise of this
Warrant after such consummation.
6.3 Certificate as to Adjustments. In each case of an adjustment in the
number of shares of Common Stock receivable on the exercise of this
Warrant, the Company at its expense shall promptly compute such
adjustment in accordance with the terms of the Warrant and prepare a
certificate executed by an officer of the Company setting forth such
adjustment and showing the facts upon which such adjustment is based.
The Company shall forthwith mail a copy of each such certificate to each
Holder.
6.4 Notices of Record Date, Etc. In case:
6.4.1 the Company shall take a record of the holders of its
Common Stock (or other securities at the time receivable upon the
exercise of the Warrant) for the purpose of entitling them to receive any
dividend (other than a cash dividend at the same rate as the rate of the last
cash dividend theretofore paid) or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any
class or any other securities, or to receive any other right; or
6.4.2 of any voluntary or involuntary dissolution, liquidation or
winding-up of the Company, then, and in each such case, the Company
shall mail or cause to be mailed to each Holder a notice specifying, as the
case may be, (A) the date on which a record is to be taken for the purpose
of such dividend, distribution or right, and stating the amount and
character of such dividend, distribution or right, or (B) the date on which
such reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up is to take place, and the time, if any,
to be fixed, as to which the holders of record of Common Stock (or such
other securities at the time receivable upon the exercise of this Warrant)
shall be entitled to exchange their shares of Common Stock (or such other
securities) for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up. Such notice shall be mailed at least
twenty (20) days prior to the date therein specified, and this Warrant may
be exercised prior to said date during the term of the Warrant.
Section 7. Legend and Stop Transfer Orders. Unless the shares of
Warrant Stock have been registered under the Securities Act, upon
exercise of any of this Warrant and the issuance of any of the shares of
Warrant Stock, the Company shall instruct its transfer agent, if any, to
enter stop transfer orders with respect to such shares, and all certificates
representing shares of Warrant Stock shall bear on the face thereof
substantially the following legend, insofar as is consistent with Minnesota
law:
This certificate has not been registered under the Securities
Act of 1933. The Company will not transfer this certificate
unless (i) there is an effective registration covering the
shares represented by this certificate under the Securities
Act of 1933 and all applicable state securities laws, (ii) it
first receives a letter from an attorney, acceptable to the
board of directors or its agents, stating that in the opinion of
the attorney the proposed transfer is exempt from
registration under the Securities Act of 1933 and under all
applicable state securities laws, (iii) the transfer is made
pursuant to Rule 144 under the Securities Act of 1933.
Section 8. Registration. Upon demand of holders of a majority of the
Warrants (or Warrant Stock issued upon the exercise thereof) issued as
part of this Warrant, at any time after six months after the closing of an
initial public offering of the Company's securities registered under the
Securities Act of 1933, as amended, the Company shall, on one occasion,
register for sale under such Act the Warrants and Warrant Stock. The
Company shall use reasonable efforts to keep such registration effective
for twelve months.
Section 9. Officer's Certificate. Whenever the number or kind of
securities purchasable upon exercise of this Warrant or the Exercise Price
shall be adjusted as required by the provisions hereof, the Company shall
forthwith file with its Secretary or Assistant Secretary at its principal
office and with its stock transfer agent, if any, an officer's certificate
showing the adjusted number of kind of securities purchasable upon
exercise of this Warrant and the adjusted Exercise Price determined as
herein provided and setting forth in reasonable detail such facts as shall be
necessary to show the reason for and the manner of computing such
adjustments. Each such officer's certificate shall be made available at all
reasonable times for inspection by the Holder and the Company shall,
forthwith after each such adjustment, mail by certified mail a copy of such
certificate to the Holder.
Section 10. Notice. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be mailed by
certified mail, return receipt requested, or delivered against receipt, if to
the Holder, at his address as shown on the books of the Company, and if to
the Company, at its principal office, Suite 715, 15 South 5th Street,
Minneapolis, Minnesota 55402. Any notice or other communication given
by certified mail shall be deemed given at the time of certification thereof,
except for a notice changing a party's address which shall be deemed given
at the time of receipt thereof.
Section 11. Binding Effect. The provisions of this Warrant shall be
binding upon and inure to the benefit of (1) the parties hereto, (2) the
successors and assigns of the Company, (3) if the Holder is a corporation,
partnership, or other business entity, the successors and assignee of the
Holder, and (4) if the Holder is a natural person, the assignees, heirs, and
personal representative of the Holder.
Section 12. Pronouns. Any masculine personal pronoun shall be
considered to mean the corresponding feminine or neuter personal
pronoun, as the context requires.
Date:
ILLUMINATED MEDIA INC.
by:
Its:
WARRANT EXERCISE FORM
The undersigned hereby irrevocably elects to exercise the within Warrant
to the extent of purchasing shares of Common Stock of Illuminated
Media Inc. and hereby makes payment of $ in payment
therefor.
Date:
Signature: