THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. EXCEPT AS OTHERWISE SET FORTH HEREIN OR IN A SECURITIES PURCHASE AGREEMENT DATED AS OF AUGUST 30, 2007,...
Exhibit
4.4
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THIS
WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT
HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. EXCEPT AS OTHERWISE SET FORTH HEREIN OR IN A
SECURITIES PURCHASE AGREEMENT DATED AS OF AUGUST 30, 2007, NEITHER
THIS
WARRANT NOR ANY OF SUCH SHARES MAY BE SOLD, TRANSFERRED OR ASSIGNED
IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES
UNDER SAID ACT OR, AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND
SCOPE,
CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT
TO
RULE 144 OR REGULATION S UNDER SUCH ACT.
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Right
to
Purchase 704,000 Shares of Common Stock, $.001 par value per share
STOCK
PURCHASE WARRANT
THIS
CERTIFIES THAT, for value received, AJW PARTNERS, LLC or its registered
assigns, is entitled to purchase from Pacificap Entertainment Holdings, Inc.,
a
Nevada corporation (the “Company”), at any time or from time to time during the
period specified in Paragraph 2 hereof, 704,000 fully paid and
nonassessable shares of the Company’s Common Stock, $.001 par value per share
(the “Common Stock”), at an exercise price per share equal to $.005 (the
“Exercise Price”). The term “Warrant Shares,” as used herein, refers
to the shares of Common Stock purchasable hereunder. The Warrant
Shares and the Exercise Price are subject to adjustment as provided in Paragraph
4 hereof. The term “Warrants” means this Warrant and the other
warrants issued pursuant to that certain Securities Purchase Agreement, dated
August 30, 2007, by and among the Company and the Buyers listed on the execution
page thereof (the “Securities Purchase Agreement”), including any additional
warrants issuable pursuant to Section 4(l) thereof.
This
Warrant is subject to the following terms, provisions, and
conditions:
1. Manner
of
Exercise; Issuance of Certificates; Payment for Shares.Subject to
the provisions hereof, this Warrant may be exercised by the holder hereof,
in
whole or in part, by the surrender of this Warrant, together with a completed
exercise agreement in the form attached hereto (the “Exercise Agreement”), to
the Company during normal business hours on any business day at the Company’s
principal executive offices (or such other office or agency of the Company
as it
may designate by notice to the holder hereof), and upon (i) payment to the
Company in cash, by certified or official bank check or by wire transfer
for the account of the Company of the Exercise Price for the Warrant Shares
specified in the Exercise Agreement or (ii) if the resale of the Warrant Shares
by the holder is not then registered pursuant to an effective registration
statement under the Securities Act of 1933, as amended (the “Securities Act”),
delivery to the Company of a written notice of an election to effect a “Cashless
Exercise” (as defined in Section 11(c) below) for the Warrant Shares specified
in the Exercise Agreement. The Warrant Shares so purchased shall be
deemed to be issued to the holder hereof or such holder’s designee, as the
record owner of such shares, as of the close of business on the date on which
this Warrant shall have been surrendered, the completed Exercise Agreement
shall
have been delivered, and payment shall have been made for such shares as
set forth above. Certificates for the Warrant Shares so
purchased, representing the aggregate number of shares specified in the Exercise
Agreement, shall be delivered to the holder hereof within a reasonable time,
not
exceeding three (3) business days, after this Warrant shall have been so
exercised. The certificates so delivered shall be in such
denominations as may be requested by the holder hereof and shall be registered
in the name of such holder or such other name as shall be designated by such
holder. If this Warrant shall have been exercised only in part, then,
unless this Warrant has expired, the Company shall, at its expense, at the
time
of delivery of such certificates, deliver to the holder a new Warrant
representing the number of shares with respect to which this Warrant shall
not
then have been exercised. In addition to all other available remedies
at law or in equity, if the Company fails to deliver certificates for the
Warrant Shares within three (3) business days after this Warrant is exercised,
then the Company shall pay to the holder in cash a penalty (the “Penalty”) equal
to 2% of the number of Warrant Shares that the holder is entitled to multiplied
by the Market Price (as hereinafter defined) for each day that the Company
fails
to deliver certificates for the Warrant Shares. For example, if the
holder is entitled to 100,000 Warrant Shares and the Market Price is $2.00,
then
the Company shall pay to the holder $4,000 for each day that the Company fails
to deliver certificates for the Warrant Shares. The Penalty shall be
paid to the holder by the fifth day of the month following the month in which
it
has accrued.
Notwithstanding
anything in this Warrant to the contrary, in no event shall the holder of this
Warrant be entitled to exercise a number of Warrants (or portions thereof)
in
excess of the number of Warrants (or portions thereof) upon exercise of which
the sum of (i) the number of shares of Common Stock beneficially owned by the
holder and its affiliates (other than shares of Common Stock which may be deemed
beneficially owned through the ownership of the unexercised Warrants and the
unexercised or unconverted portion of any other securities of the Company
(including the Notes (as defined in the Securities Purchase Agreement)) subject
to a limitation on conversion or exercise analogous to the limitation contained
herein) and (ii) the number of shares of Common Stock issuable upon exercise
of
the Warrants (or portions thereof) with respect to which the determination
described herein is being made, would result in beneficial ownership by the
holder and its affiliates of more than 4.9% of the outstanding shares of Common
Stock. For purposes of the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended, and Regulation 13D-G thereunder, except as
otherwise provided in clause (i) of the preceding
sentence. Notwithstanding anything to the contrary contained herein,
the limitation on exercise of this Warrant set forth herein may not be amended
without (i) the written consent of the holder hereof and the Company and (ii)
the approval of a majority of shareholders of the Company.
2. Period
of
Exercise. This Warrant is exercisable at any time or from time to
time on or after the date on which this Warrant is issued and delivered pursuant
to the terms of the Securities Purchase Agreement and before 6:00 p.m., New
York, New York time on the fifth (5th) anniversary
of
the date of issuance (the “Exercise Period”).
1
3. Certain
Agreements of the Company. The Company hereby covenants and agrees
as follows:
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(a)
|
Shares
to be
Fully Paid. All Warrant Shares
will, upon issuance in accordance with the terms of this Warrant,
be
validly issued, fully paid, and nonassessable and free from all taxes,
liens, and charges with respect to the issue
thereof.
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(b)
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Reservation
of
Shares. Subject to the
Stockholder Approval (as defined in Section 4(n) the Securities Purchase
Agreement), during the Exercise Period, the Company shall at all
times
have authorized, and reserved for the purpose of issuance upon exercise
of
this Warrant, a sufficient number of shares of Common Stock to
provide for the exercise of this
Warrant.
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(c)
|
Listing. The
Company shall promptly secure the listing of the shares of Common
Stock
issuable upon exercise of the Warrant upon each national securities
exchange or automated quotation system, if any, upon which shares
of
Common Stock are then listed (subject to official notice of issuance
upon
exercise of this Warrant) and shall maintain, so long as any other
shares
of Common Stock shall be so listed, such listing of all shares of
Common
Stock from time to time issuable upon the exercise of this Warrant;
and
the Company shall so list on each national securities exchange or
automated quotation system, as the case may be, and shall maintain
such
listing of, any other shares of capital stock of the Company issuable
upon
the exercise of this Warrant if and so long as any shares of the
same
class shall be listed on such national securities exchange or automated
quotation system.
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(d)
|
Certain
Actions
Prohibited. The Company will not,
by amendment of its charter 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
by it hereunder, 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 reasonably be requested by the holder of this
Warrant in order to protect the exercise privilege of the holder
of this
Warrant against dilution or other impairment, consistent with the
tenor and purpose of this Warrant. Without limiting the
generality of the foregoing, the Company (i) will not increase the
par value of any shares of Common Stock receivable upon the exercise
of
this Warrant above the Exercise Price then in effect, and (ii) will
take
all such actions as may be necessary or appropriate in order that
the
Company may validly and legally issue fully paid and nonassessable
shares
of Common Stock upon the exercise of this
Warrant.
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(e)
|
Successors
and
Assigns. This Warrant will be
binding upon any entity succeeding to the Company by merger,
consolidation, or acquisition of all or substantially all the
Company’s assets.
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4. Antidilution
Provisions. During
the Exercise Period, the Exercise Price and the number of Warrant Shares shall
be subject to adjustment from time to time as provided in this Paragraph
4.
2
In
the
event that any adjustment of the Exercise Price as required herein results
in a
fraction of a cent, such Exercise Price shall be rounded up to the nearest
cent.
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(a)
|
Adjustment
of
Exercise Price and Number of Shares upon Issuance of Common
Stock. Except as otherwise provided in Paragraphs
4(c) and 4(e) hereof, if and whenever on or after the date of issuance
of
this Warrant, the Company issues or sells, or in accordance with
Paragraph
4(b) hereof is deemed to have issued or sold, any shares of Common
Stock
for no consideration or for a consideration per share (before deduction
of
reasonable expenses or commissions or underwriting discounts or allowances
in connection therewith) less than the Market Price on the date of
issuance (a “Dilutive Issuance”), then immediately upon the Dilutive
Issuance, the Exercise Price will be reduced to a price determined
by
multiplying the Exercise Price in effect immediately prior to the
Dilutive
Issuance by a fraction, (i) the numerator of which is an amount equal
to
the sum of (x) the number of shares of Common Stock actually outstanding
immediately prior to the Dilutive Issuance, plus (y) the quotient
of the
aggregate consideration, calculated as set forth in Paragraph 4(b)
hereof,
received by the Company upon such Dilutive Issuance divided by the
Market
Price in effect immediately prior to the Dilutive Issuance, and (ii)
the
denominator of which is the total number of shares of Common Stock
Deemed
Outstanding (as defined below) immediately after the Dilutive
Issuance.
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(b)
|
Effect
on
Exercise Price of Certain
Events. For purposes of
determining the adjusted Exercise Price under Paragraph 4(a) hereof,
the
following will be applicable:
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(i)
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Issuance
of
Rights or Options. If the Company
in any manner issues or grants any warrants, rights or options, whether
or
not immediately exercisable, to subscribe for or to purchase Common
Stock
or other securities convertible into or exchangeable for Common Stock
(“Convertible Securities”) (such warrants, rights and options to purchase
Common Stock or Convertible Securities are hereinafter referred to
as
“Options”) and the price per share for which Common Stock is issuable upon
the exercise of such Options is less than the Market Price on the
date of
issuance or grant of such Options, then the maximum total number
of shares
of Common Stock issuable upon the exercise of all such Options will,
as of
the date of the issuance or grant of such Options, be deemed to be
outstanding and to have been issued and sold by the Company for such
price
per share. For purposes of the preceding sentence, the “price
per share for which Common Stock is issuable upon the exercise of
such
Options” is determined by dividing (i) the total amount, if any, received
or receivable by the Company as consideration for the issuance or
granting
of all such Options, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the exercise of
all
such Options, plus, in the case of Convertible Securities issuable
upon
the exercise of such Options, the minimum aggregate amount of additional
consideration payable upon the conversion or exchange thereof at
the time
such Convertible Securities first become convertible or exchangeable,
by
(ii) the maximum total number of shares of Common Stock issuable
upon the
exercise of all such Options (assuming full conversion of Convertible
Securities, if applicable). No further adjustment to the
Exercise Price will be made upon the actual issuance of such Common
Stock
upon the exercise of such Options or upon the conversion or exchange
of
Convertible Securities issuable upon exercise of such
Options.
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3
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(ii)
|
Issuance
of
Convertible Securities. If the Company in any
manner issues or sells any Convertible Securities, whether or not
immediately convertible (other than where the same are issuable upon
the
exercise of Options) and the price per share for which Common Stock
is
issuable upon such conversion or exchange is less than the Market
Price on
the date of issuance, then the maximum total number of shares of
Common
Stock issuable upon the conversion or exchange of all such Convertible
Securities will, as of the date of the issuance of such Convertible
Securities, be deemed to be outstanding and to have been issued and
sold
by the Company for such price per share. For the purposes of
the preceding sentence, the “price per share for which Common Stock is
issuable upon such conversion or exchange” is determined by dividing (i)
the total amount, if any, received or receivable by the Company as
consideration for the issuance or sale of all such Convertible Securities,
plus the minimum aggregate amount of additional consideration, if
any,
payable to the Company upon the conversion or exchange thereof at
the time
such Convertible Securities first become convertible or exchangeable,
by
(ii) the maximum total number of shares of Common Stock issuable
upon the
conversion or exchange of all such Convertible Securities. No
further adjustment to the Exercise Price will be made upon the actual
issuance of such Common Stock upon conversion or exchange of such
Convertible Securities.
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(iii)
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Change
in Option Price or Conversion Rate. If there is a
change at any time in (i) the amount of additional consideration
payable
to the Company upon the exercise of any Options; (ii) the amount
of
additional consideration, if any, payable to the Company upon the
conversion or exchange of any Convertible Securities; or (iii) the
rate at
which any Convertible Securities are convertible into or exchangeable
for
Common Stock (other than under or by reason of provisions designed
to
protect against dilution), the Exercise Price in effect at the time
of
such change will be readjusted to the Exercise Price which would
have been
in effect at such time had such Options or Convertible Securities
still
outstanding provided for such changed additional consideration or
changed
conversion rate, as the case may be, at the time initially granted,
issued
or sold.
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(iv)
|
Treatment
of Expired Options and Unexercised Convertible
Securities. If, in any case, the total number of
shares of Common Stock issuable upon exercise of any Option or upon
conversion or exchange of any Convertible Securities is not, in fact,
issued and the rights to exercise such Option or to convert or exchange
such Convertible Securities shall have expired or terminated, the
Exercise
Price then in effect will be readjusted to the Exercise Price which
would
have been in effect at the time of such expiration or termination
had such
Option or Convertible Securities, to the extent outstanding immediately
prior to such expiration or termination (other than in respect of
the
actual number of shares of Common Stock issued upon exercise or conversion
thereof), never been issued.
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(v)
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Calculation
of Consideration Received. If any Common Stock,
Options or Convertible Securities are issued, granted or sold for
cash,
the consideration received therefor for purposes of this Warrant
will be
the amount received by the Company therefor, before deduction of
reasonable commissions, underwriting discounts or allowances or other
reasonable expenses paid or incurred by the Company in connection
with
such issuance, grant or sale. In case any Common Stock, Options
or Convertible Securities are issued or sold for a consideration
part or
all of which shall be other than cash, the amount of the consideration
other than cash received by the Company will be the fair value of
such
consideration, except where such consideration consists of securities,
in
which case the amount of consideration received by the Company will
be the
Market Price thereof as of the date of receipt. In case any
Common Stock, Options or Convertible Securities are issued in connection
with any acquisition, merger or consolidation in which the Company
is the
surviving corporation, the amount of consideration therefor will
be deemed
to be the fair value of such portion of the net assets and business
of the
non-surviving corporation as is attributable to such Common Stock,
Options
or Convertible Securities, as the case may be. The fair value
of any consideration other than cash or securities will be determined
in
good faith by the Board of Directors of the
Company.
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4
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(vi)
|
Exceptions
to Adjustment of Exercise Price. No adjustment to
the Exercise Price will be made (i) upon the exercise of any warrants,
options or convertible securities granted, issued and outstanding
on the
date of issuance of this Warrant; (ii) upon the grant or exercise
of any
stock or options which may hereafter be granted or exercised under
any
employee benefit plan, stock option plan or restricted stock plan
of the
Company now existing or to be implemented in the future, so long
as the
issuance of such stock or options is approved by a majority of the
independent members of the Board of Directors of the Company or a
majority
of the members of a committee of independent directors established
for
such purpose; or (iii) upon the exercise of the
Warrants.
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(c)
|
Subdivision
or Combination of Common Stock. If the Company at
any time subdivides (by any stock split, stock dividend, recapitalization,
reorganization, reclassification or otherwise) the shares of Common
Stock
acquirable hereunder into a greater number of shares, then, after
the date
of record for effecting such subdivision, the Exercise Price in effect
immediately prior to such subdivision will be proportionately
reduced. If the Company at any time combines (by reverse stock
split, recapitalization, reorganization, reclassification or otherwise)
the shares of Common Stock acquirable hereunder into a smaller number
of
shares, then, after the date of record for effecting such combination,
the
Exercise Price in effect immediately prior to such combination will
be
proportionately increased.
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(d)
|
Adjustment
in Number of Shares. Upon each adjustment of the
Exercise Price pursuant to the provisions of this Paragraph 4, the
number
of shares of Common Stock issuable upon exercise of this Warrant
shall be
adjusted by multiplying a number equal to the Exercise Price in effect
immediately prior to such adjustment by the number of shares of Common
Stock issuable upon exercise of this Warrant immediately prior to
such
adjustment and dividing the product so obtained by the adjusted Exercise
Price.
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(e)
|
Consolidation,
Merger or Sale. In case of any consolidation of
the Company with, or merger of the Company into any other corporation,
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, 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 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 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 Paragraph 4 hereof
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 corporation (if other than the Company) assumes by written
instrument the obligations under this Paragraph 4 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.
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5
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(f)
|
Distribution
of Assets. In case the Company shall declare or
make any distribution of its assets (including cash) to holders of
Common
Stock as a partial liquidating dividend, by way of return of capital
or
otherwise, then, after the date of record for determining shareholders
entitled to such distribution, but prior to the date of distribution,
the
holder of this Warrant shall be entitled upon exercise of this Warrant
for
the purchase of any or all of the shares of Common Stock subject
hereto,
to receive the amount of such assets which 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 shareholders entitled to
such
distribution
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(g)
|
Notice
of Adjustment. Upon the occurrence of any event
which requires any adjustment of the Exercise Price, then, and in
each
such case, the Company shall give notice thereof to the holder of
this
Warrant, which notice shall state the Exercise Price resulting from
such
adjustment and the increase or decrease in the number of Warrant
Shares
purchasable at such price upon exercise, setting forth in reasonable
detail the method of calculation and the facts upon which such calculation
is based. Such calculation shall be certified by the Chief
Financial Officer of the Company.
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(h)
|
Minimum
Adjustment of Exercise Price. No adjustment of the
Exercise Price shall be made in an amount of less than 1% of the
Exercise
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 Exercise Price.
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(i)
|
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
Market Price of a share of Common Stock on the date of such
exercise.
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(j)
|
Other
Notices. In case at any
time:
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(i)
|
the
Company shall declare any dividend upon the Common Stock payable
in shares
of stock of any class or make any other distribution (including dividends
or distributions payable in cash out of retained earnings) to the
holders
of the Common Stock;
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(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;
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(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 its assets
to, another corporation or entity;
or
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(iv)
|
there
shall be a voluntary or involuntary dissolution, liquidation or
winding up of the Company;
|
6
then,
in
each such case, the Company shall give to the holder of this Warrant (a) notice
of the 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 approximation 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 thirty (30) 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.
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(k)
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Certain
Events. If any event occurs of the type
contemplated by the adjustment provisions of this Paragraph 4 but
not
expressly provided for by such provisions, the Company will give
notice of
such event as provided in Paragraph 4(g) hereof, and the Company’s Board
of Directors will make an appropriate adjustment in the Exercise
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.
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(I)
|
Certain
Definitions.
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(i)
|
“Common
Stock Deemed Outstanding” shall mean the number of shares of
Common Stock actually outstanding (not including shares of Common
Stock
held in the treasury of the Company), plus (x) pursuant to Paragraph
4(b)(i) hereof, the maximum total number of shares of Common Stock
issuable upon the exercise of Options, as of the date of such issuance
or
grant of such Options, if any, and (y) pursuant to Paragraph 4(b)(ii)
hereof, the maximum total number of shares of Common Stock issuable
upon
conversion or exchange of Convertible Securities, as of the date
of
issuance of such Convertible Securities, if
any.
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(ii)
|
“Market
Price,” as of any date, (i) means the average of the last
reported sale prices for the shares of Common Stock on the OTCBB
for the
five (5) Trading Days immediately preceding such date as reported
by
Bloomberg, or (ii) if the OTCBB is not the principal trading market
for
the shares of Common Stock, the average of the last reported sale
prices
on the principal trading market for the Common Stock during the same
period as reported by Bloomberg, or (iii) if market value cannot
be
calculated as of such date on any of the foregoing bases, the Market
Price
shall be the fair market value as reasonably determined in good faith
by
(a) the Board of Directors of the Company or, at the option of a
majority-in-interest of the holders of the outstanding Warrants by
(b) an
independent investment bank of nationally recognized standing in
the
valuation of businesses similar to the business of the corporation.
The
manner of determining the Market Price of the Common Stock set forth
in
the foregoing definition shall apply with respect to any other security
in
respect of which a determination as to market value must be made
hereunder.
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(iii)
|
“Common
Stock,” for purposes of this Paragraph 4, includes the Common
Stock, par value $.001 per share, 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 shares of Common Stock, par value $.001 per share,
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 Paragraph 4(e) hereof, the stock or other
securities or property provided for in such
Paragraph.
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7
5. Issue
Tax. The issuance of certificates for Warrant 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.
6. No
Rights
or Liabilities as a Shareholder. This Warrant shall not
entitle the holder hereof to any voting rights or other rights as a shareholder
of the Company. No provision of this Warrant, in the absence of
affirmative action by the holder hereof to purchase 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 Exercise Price or as a shareholder
of the Company, whether such liability is asserted by the Company or by
creditors of the Company.
7. Transfer,
Exchange, and Replacement of Warrant.
|
(a)
|
Restriction
on Transfer. This Warrant and the rights granted
to the holder hereof are transferable, in whole or in part, upon
surrender
of this Warrant, together with a properly executed assignment in
the form
attached hereto, at the office or agency of the Company referred
to in
Paragraph 7(e) below, provided, however, that any transfer or
assignment shall be subject to the conditions set forth in Paragraph
7(f)
hereof and to the applicable provisions of the Securities Purchase
Agreement. Until due presentment for registration of transfer
on the books of the Company, the Company may treat the registered
holder
hereof as the owner and holder hereof for all purposes, and the Company
shall not be affected by any notice to the
contrary. Notwithstanding anything to the contrary
contained herein, the registration rights described in Paragraph
8 are
assignable only in accordance with the provisions of that certain
Registration Rights Agreement, dated August 30, 2007, by and among
the
Company and the other signatories thereto (the “Registration Rights
Agreement”).
|
|
(b)
|
Warrant
Exchangeable for Different
Denominations. This Warrant is
exchangeable, upon the surrender hereof by the holder hereof at the
office or agency of the Company referred to in Paragraph 7(e) below,
for
new Warrants of like tenor representing in the aggregate the right
to
purchase the number of shares of Common Stock which may be purchased
hereunder, each of such new Warrants to represent the right to purchase
such number of shares as shall be designated by the holder hereof
at the
time of such surrender
|
.
|
(c)
|
Replacement
of Warrant. 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 delivery of an indemnity agreement reasonably
satisfactory in form and amount to the Company, or, in the case of
any
such mutilation, upon surrender and cancellation of this Warrant,
the
Company, at its expense, will execute and deliver, in lieu thereof,
a new
Warrant of like tenor.
|
8
|
(d)
|
Cancellation;
Payment of Expenses. Upon the surrender of this
Warrant in connection with any transfer, exchange, or replacement as
provided in this Paragraph 7, this Warrant shall be promptly canceled
by
the Company. The Company shall pay all taxes (other than
securities transfer taxes) and all other expenses (other than legal
expenses, if any, incurred by the holder or transferees) and charges
payable in connection with the preparation, execution, and delivery
of
Warrants pursuant to this Paragraph
7.
|
|
(e)
|
Register. The
Company shall maintain, at its principal executive offices (or such
other
office or agency of the Company as it may designate by notice to
the
holder hereof), a register for this Warrant, in which the Company
shall
record the name and address of the person in whose name this Warrant
has
been issued, as well as the name and address of each transferee and
each
prior owner of this Warrant.
|
|
(f)
|
Exercise
or Transfer Without Registration. If, at the time
of the surrender of this Warrant in connection with any exercise,
transfer, or exchange of this Warrant, this Warrant (or, in the case
of
any exercise, the Warrant Shares issuable hereunder), shall not be
registered under the Securities Act and under applicable state securities
or blue sky laws, the Company may require, as a condition of allowing
such
exercise, transfer, or exchange, (i) that the holder or transferee
of this
Warrant, as the case may be, furnish to the Company a written opinion
of
counsel, which opinion and counsel are acceptable to the Company,
to the
effect that such exercise, transfer, or exchange may be made without
registration under said Act and under applicable state securities
or blue
sky laws, (ii) that the holder or transferee execute and deliver
to the
Company an investment letter in form and substance acceptable to
the
Company and (iii) that the transferee be an “accredited investor” as
defined in Rule 501(a) promulgated under the Securities Act; provided
that
no such opinion, letter or status as an “accredited investor” shall be
required in connection with a transfer pursuant to Rule 144 under
the
Securities Act. The first holder of this Warrant, by taking and
holding the same, represents to the Company that such holder is acquiring
this Warrant for investment and not with a view to the distribution
thereof.
|
8. Registration
Rights.The
initial holder of this Warrant (and certain assignees thereof) is entitled
to
the benefit of such registration rights in respect of the Warrant Shares as
are
set forth in Section 2 of the Registration Rights
Agreement.
9
9. Notices. All
notices, requests, and other communications required or permitted to be given
or
delivered hereunder to the holder of this Warrant shall be in writing, and
shall
be personally delivered, or shall be sent by certified or registered mail or
by
recognized overnight mail courier, postage prepaid and addressed, to such holder
at the address shown for such holder on the books of the Company, or at such
other address as shall have been furnished to the Company by notice from such
holder. All notices, requests, and other communications required or
permitted to be given or delivered hereunder to the Company shall be in writing,
and shall be personally delivered, or shall be sent by certified or registered
mail or by recognized overnight mail courier, postage prepaid and addressed,
to
the office of the Company at 0000 Xxxxxx Xxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx
00000, Attention: President, or at such other address as shall have
been furnished to the holder of this Warrant by notice from the
Company. Any such notice, request, or other communication may be sent
by facsimile, but shall in such case be subsequently confirmed by a writing
personally delivered or sent by certified or registered mail or by recognized
overnight mail courier as provided above. All notices, requests, and
other communications shall be deemed to have been given either at the time
of
the receipt thereof by the person entitled to receive such notice at the
address of such person for purposes of this Paragraph 9, or, if mailed by
registered or certified mail or with a recognized overnight mail courier upon
deposit with the United States Post Office or such overnight mail courier,
if
postage is prepaid and the mailing is properly addressed, as the case may
be.
10. Governing
Law.THIS WARRANT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS
MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES
OF CONFLICT OF LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE
EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK,
NEW YORK WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS WARRANT, THE AGREEMENTS
ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY
OR
THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM
TO
THE MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER
AGREE THAT SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL
BE
DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY
SUCH
SUIT OR PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY’S RIGHT
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES
AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL
BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH
JUDGMENT OR IN ANY OTHER LAWFUL MANNER. THE PARTY WHICH DOES NOT
PREVAIL IN ANY DISPUTE ARISING UNDER THIS WARRANT SHALL BE RESPONSIBLE FOR
ALL
FEES AND EXPENSES, INCLUDING ATTORNEYS’ FEES, INCURRED BY THE PREVAILING PARTY
IN CONNECTION WITH SUCH DISPUTE.
11. Miscellaneous.
|
(a)
|
Amendments. This
Warrant and any provision hereof may only be amended by an instrument
in
writing signed by the Company and the holder
hereof.
|
10
|
(b)
|
Descriptive
Headings. The descriptive headings of the several
paragraphs of this Warrant are inserted for purposes of reference
only, and shall not affect the meaning or construction of any of
the
provisions hereof.
|
|
(d)
|
Remedies. The
Company acknowledges that a breach by it of its obligations hereunder
will
cause irreparable harm to the holder, by vitiating the intent and
purpose
of the transaction contemplated hereby. Accordingly, the
Company acknowledges that the remedy at law for a breach of its
obligations under this Warrant will be inadequate and agrees, in
the event
of a breach or threatened breach by the Company of the provisions
of this
Warrant, that the holder shall be entitled, in addition to all other
available remedies at law or in equity, and in addition to the penalties
assessable herein, to an injunction or injunctions restraining, preventing
or curing any breach of this Warrant and to enforce specifically
the terms
and provisions thereof, without the necessity of showing economic
loss and
without any bond or other security being
required.
|
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
11
IN
WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer.
|
PACIFICAP
ENTERTAINMENT
HOLDINGS,
INC.
|
|||
|
Dated
as of August
30, 2007
|
By:
|
/s/ | |
| Xxxx Xxxxxxxxxx | |||
| President | |||
12
FORM
OF EXERCISE AGREEMENT
|
Dated:
|
To:
The
undersigned, pursuant to the provisions set forth in the within Warrant, hereby
agrees to purchase ________ shares of Common Stock covered by such Warrant,
and
makes payment herewith in full therefor at the price per share provided by
such Warrant in cash or by certified or official bank check in the amount of,
or, if the resale of such Common Stock by the undersigned is not currently
registered pursuant to an effective registration statement under the Securities
Act of 1933, as amended, by surrender of securities issued by the Company
(including a portion of the Warrant) having a market value (in the case of
a
portion of this Warrant, determined in accordance with Section 11(c) of the
Warrant) equal to $_________. Please issue a certificate or
certificates for such shares of Common Stock in the name of and pay any
cash for any fractional share to:
| Name: | ||
| Signature: | ||
| Address: | ||
|
|
Note:
|
The
above signature should correspond exactly with the name on the face
of the
within Warrant, if applicable.
|
and,
if
said number of shares of Common Stock shall not be all the shares purchasable
under the within Warrant, a new Warrant is to be issued in the name of said
undersigned covering the balance of the shares purchasable thereunder less
any
fraction of a share paid in cash.
13
FORM
OF ASSIGNMENT
FOR
VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers
all the rights of the undersigned under the within Warrant, with respect to
the
number of shares of Common Stock covered thereby set forth hereinbelow,
to:
|
Name
of
Assignee
|
Address | No of Shares |
,
and
hereby irrevocably constitutes and appoints ___________________________________
as agent and attorney-in-fact to transfer said Warrant on the books of the
within-named corporation, with full power of substitution in the
premises.
|
Dated:
|
|||
|
|
|||
|
In
the presence
of:
|
By:
|
/s/ | |
| Name | |||
| Title of Signing Officer or Agent (if any): | |||
| Address: | |||
|
|
Note:
|
The
above signature should correspond exactly with the name on the face
of the
within Warrant, if
applicable.
|
