FORM OF WARRANT
WARRANT TO PURCHASE
SHARES OF COMMON STOCK
Date
of Warrant: ______________, 2____
THIS
CERTIFIES that, for value received,
_______________________________ or his/her/its registered
assigns (“Warrantholder”), is entitled, subject to
the terms and conditions set forth in this Warrant, to
purchase from Studio One Media, Inc., a Delaware corporation
(“Company”), ____________, fully paid, duly
authorized and nonassessable shares of common stock
(“Shares”), $0.001 par value per share, of the
Company, at any time commencing on the date hereof and
continuing for two years thereafter (the “Exercise
Period”) at an exercise price of ______Dollars and
_______ Cents ($_________) per share, subject to adjustment
pursuant to Section 8 hereof.
This Warrant is subject to
the following provisions, terms and conditions:
1.
Transferability.
1.1 Registration.
The Warrants shall be issued only in registered
form.
1.2 Transfer.
This Warrant shall be transferable only on the books of
the Company maintained at its principal executive offices upon
surrender thereof for registration of transfer duly endorsed by the
Warrantholder or by its duly authorized attorney or representative,
or accompanied by proper evidence of succession, assignment or
authority to transfer. Upon any registration of
transfer, the Company shall execute and deliver a new Warrant or
Warrants in appropriate denominations to the person or persons
entitled thereto.
1.3 Common
Stock to be Issued. Upon the
exercise of any Warrants and upon receipt by the Company of a
facsimile or original of Warrantholder’s signed Election to
Exercise Warrant (See Exhibit 1), Company shall instruct its
transfer agent to issue stock certificates, subject to the
restrictive legend set forth below, in the name of Warrantholder
(or its nominee) and in such denominations to be specified by
Warrantholder representing the number of shares of Common Stock
issuable upon such exercise, as applicable. Company
warrants that no instructions, other than these instructions, have
been given or will be given to the transfer agent and that the
Common Stock shall otherwise be freely transferable on the books
and records of the Company.
1.4
It shall be the Company’s responsibility to take all
necessary actions and to bear all such costs to issue the
certificate of Common Stock as provided herein, including the
responsibility and cost for delivery of an opinion letter to the
transfer agent, if so required. The person in whose name
the certificate of Common Stock is to be registered shall be
treated as a shareholder of record on and after the exercise date.
Upon surrender of any Warrant that is to be converted in part, the
Company shall issue to the Warrantholder a new Warrant equal to the
unconverted amount, if so requested by Purchaser:
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS
AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE
REGISTRATION REQUIREMENTS OF SUCH LAWS. THE SECURITIES
ARE SUBJECT TO RESTRICTIONS OF TRANSFERABILITY AND RESALE AND MAY
NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER SUCH LAWS
PURSUANT TO REGISTRATION OR AN EXEMPTION THEREFROM. THE
SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY OTHER REGULATORY AUTHORITY, NOR HAVE
ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS
OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE OFFERING
MATERIALS. ANY REPRESENTATION TO THE CONTRARY IS
UNLAWFUL.
2. Exchange
of Warrant Certificate.
Any
Warrant certificate may be exchanged for another certificate
or certificates of like tenor entitling the Warrantholder to
purchase a like aggregate number of Shares as the certificate
or certificates surrendered then entitle such Warrantholder to
purchase. Any Warrantholder desiring to exchange a
warrant certificate shall make such request in writing
delivered to the Company, and shall surrender, properly
endorsed, the certificate evidencing the Warrant to be so
exchanged. Thereupon, the Company shall execute and
deliver to the person entitled thereto a new Warrant
certificate as so requested.
3. Terms
of Warrants: Exercise of Warrants.
3.1 Warrant
Exercise. Subject to the terms of this Warrant,
the Warrantholder shall have the right to purchase from the
Company, such number of fully paid, duly authorized and
nonassessable shares of common stock (“Shares”), $0.001
par value per share, of the Company as have been set forth in the
first paragraph of this Warrant, at any time commencing from the
date hereof and continuing for two years thereafter (the
“Exercise Period”), upon surrender to the Company at
its principal executive office, of the certificate evidencing this
Warrant to be exercised, together with the attached Election to
Exercise Warrant form duly filled in and signed, and upon payment
to the Company of the Warrant Price (as defined in and determined
in accordance with the provisions of Section 7 and 8 hereof) or as
provided in Section 3(a)(i) hereof, for the number of Shares with
respect to which such Warrant is then exercised. Payment
of the aggregate Warrant Price shall be made in cash, wire transfer
or by cashier’s check or any combination
thereof.
3.2
Common Stock
Certificates. Subject to the terms of this
Warrant, upon such surrender of this Warrant and payment of such
Warrant Price as aforesaid, the Company shall promptly issue and
cause to be delivered to the Warrantholder or to such person or
persons as the Warrantholder may designate in writing, a
certificate or certificates (in such name or names as the
Warrantholder may designate in writing) for the number of duly
authorized, fully paid and non-assessable whole Shares to be
purchased upon the exercise of this Warrant, and shall deliver to
the Warrantholder Common Stock or cash, to the extent provided in
Section 9 hereof, with respect to any fractional Shares otherwise
issuable upon such surrender. Such certificate or
certificates shall be deemed to have been issued and any person so
designated to be named therein shall be deemed to have become a
holder of such Shares as of the close of business on the date of
the surrender of this Warrant and payment of the Warrant Price,
notwithstanding that the certificates representing such Shares
shall not actually have been delivered or that the Share and
Warrant transfer books of the Company shall then be
closed. This Warrant shall be exercisable, at the sole
election of the Warrantholder, either in full or from time to time
in part and, in the event that any certificate evidencing this
Warrant (or any portion thereof) is exercised prior to the
Termination Date with respect to less than all of the Shares
specified therein at any time prior to the Termination Date, a new
certificate of like tenor evidencing the remaining portion of this
Warrant shall be issued by the Company, if so requested by the
Warrantholder.
3.3
Transfer
Agent. Upon the Company’s receipt of a
facsimile or original of Warrantholder’s signed Election to
Exercise Warrant, the Company shall instruct its transfer agent to
issue one or more stock Certificates representing that number of
shares of Common Stock which the Warrantholder is entitled to
purchase in accordance with the terms and conditions of this
Warrant and the Election to Exercise Warrant attached
hereto. The transfer agent for the Company shall act as
registrar and shall maintain an appropriate ledger containing the
necessary information with respect to each Warrant.
3.4
Exercise.
This Warrant is exercisable in whole or in part at the Exercise
Price per share of Common Stock (as defined hereafter) payable
hereunder, payable in cash or by certified or official bank check,
by means of tendering this Warrant Certificate to the
Company. Upon surrender of this Warrant Certificate with
the annexed Notice of Exercise duly executed, together with payment
of the Exercise Price for the shares of Common Stock purchased, the
Holder shall be entitled to receive a certificate or certificates
for the shares of Common Stock so purchased.
3.5
Election to
Exercise. Such exercise shall be effectuated by
surrendering to the Company, or its attorney, the Warrants to be
converted together with a facsimile or original of the signed
Election to Exercise Warrant which evidences Warrantholder’s
intention to exercise those Warrants indicated. The date
on which the Election to Exercise Warrant is effective
(“Exercise Date”) shall be deemed to be the date on
which the Warrantholder has delivered to the Company a facsimile or
original of the signed Election to Exercise Warrant, as long as the
original Warrants to be exercised are received by the Company or
its designated attorney within five (5) business days
thereafter. As long as the Warrants to be exercised are
received by the Company within five (5) business days after it
receives a facsimile or original of the signed Election to Exercise
Warrant, the Company shall deliver to the Warrantholder, or per the
Warrantholder’s instructions, the shares of Common Stock
within three (3) business days of receipt of the Warrants to be
converted.
3.6
Payment of
Interest. Nothing contained in this Warrant shall be
deemed to establish or require the payment of interest to the
Warrantholder.
3.7
Issuance of Common
Stock. It shall be the Company’s
responsibility to take all necessary actions and to bear all such
costs to issue the Certificate of Common Stock as provided herein,
including the responsibility and cost for delivery of an opinion
letter to the transfer agent, if so required. The person
in whose name the certificate of Common Stock is to be registered
shall be treated as a shareholder of record on and after the
exercise date. Upon surrender of any Warrants that are to be
converted in part, the Company shall issue to the Warrantholder new
Warrants equal to the unconverted amount, if so requested by
Warrantholder.
3.8
Exercise
Default. The Company shall at all times reserve
and have available all Common Stock necessary to meet exercise of
the Warrants by all Warrantholders of the entire amount of Warrants
then outstanding. If, at any time Warrantholder submits
an Election to Exercise Warrant and the Company does not have
sufficient authorized but unissued shares of Common Stock available
to effect, in full, a exercise of the Warrants (a “Exercise
Default”, the date of such default being referred to herein
as the “Exercise Default Date”), the Company shall
issue to the Warrantholder all of the shares of Common Stock which
are available, and the Election to Exercise Warrant as to any
Warrants requested to be converted but not converted (the
“Unconverted Warrants”), upon Warrantholder’s
sole option, may be deemed null and void. The Company
shall provide notice of such Exercise Default (“Notice of
Exercise Default”) to all existing Warrantholders of
outstanding Warrants, by facsimile, within one (1) business day of
such default (with the original delivered by overnight
or two day courier), and the Warrantholder shall give notice to the
Company by facsimile within five (5) business days of receipt of
the original Notice of Exercise Default (with the original
delivered by overnight or two day courier) of its election to
either nullify or confirm the Election to Exercise
Warrant.
3.9
Furnishing of
Prospectus. The Company shall furnish to
Warrantholder such number of prospectuses and other documents
incidental to the registration of the shares of Common Stock
underlying the Warrants, including any amendment of or supplements
thereto. Warrantholder shall acknowledge in writing the
receipt, the careful reading, and the understanding thereof, prior
to any exercise under this Section 3.
3.10
Shareholder of
Record. Each person in whose name any
certificate for shares of Common Stock shall be issued shall for
all purposes be deemed to have become the holder of record of the
Common Stock represented thereby on the date on which the Warrant
was surrendered and payment of the purchase price and any
applicable taxes was made, irrespective of date of issue or
delivery of such certificate, except that if the date of such
surrender and payment is a date when the Shares transfer books of
the Company are closed, such person shall be deemed to have become
the holder of such Shares on the next succeeding date on which such
Share transfer books are open. The Company shall not
close such Share transfer books at any one time for a period longer
than seven (7) days.
4.
Payment of
Taxes. The Company shall pay
all documentary stamp taxes, if any, attributable to the
initial issuance of the Shares; provided, however, that the
Company shall not be required to pay any tax or taxes which
may be payable, (a) with respect to any secondary transfer of
this Warrant or the Shares or (b) as a result of the issuance
of the Shares to any person other than the Warrantholder, and
the Company shall not be required to issue or deliver any
certificate for any Shares unless and until the person
requesting the issuance thereof shall have paid to the
Company the amount of such tax or shall have produced
evidence that such tax has been paid to the appropriate
taxing authority.
5.
Mutilated or
Missing Warrant. In case the certificate or
certificates evidencing this Warrant shall be mutilated, lost,
stolen or destroyed, the Company shall, at the request of the
Warrantholder, 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 of a
bond of indemnity, if requested, also satisfactory to the Company
in form and amount, and issued at the applicant’s
cost. Applicants for such substitute Warrant certificate
shall also comply with such other reasonable regulations and pay
such other reasonable charges as the Company may
prescribe.
6.
Reservation of
Shares. The issuance, sale and delivery of the
Warrants have been duly authorized by all required corporate action
on the part of the Company and when issued, sold and delivered in
accordance with the terms hereof and thereof for the consideration
expressed herein and therein, will be duly and validly issued,
fully paid, and non-assessable and enforceable in accordance with
their terms, subject to the laws of bankruptcy and creditors’
rights generally. The Company shall pay all taxes in
respect of the issue thereof. As a condition precedent
to the taking of any action that would result in the effective
purchase price per share of Common Stock upon the exercise of this
Warrant being less than the par value per share (if such shares of
Common Stock then have a par value), the Company will take such
corporate action as may, in the opinion of its counsel, be
necessary in order that the Company may comply with all its
obligations under this Agreement with regard to the exercise of
this Warrant.
7.
Warrant
Price. During the Exercise Period, the price per
Share (“Warrant price”) at which Shares shall be
purchasable upon the exercise of this Warrant shall be Four Dollars
and Fifty Cents ($4.50), subject to adjustment pursuant to Section
8 hereof (“Exercise Price”).
8.
Adjustment of
Warrant Price and Number of Shares. The number
and kind of securities purchasable upon the exercise of this
Warrant and the Warrant Price shall be subject to adjustment from
time to time after the date hereof upon the happening of certain
events, as follows:
8.1
Adjustments.
The number of Shares purchasable upon the exercise of
this Warrant shall be subject to adjustments as
follows:
