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
subjec
