Attached files
| file | filename |
|---|---|
| 8-K - CURRENT REPORT - FUND.COM INC. | f8k032910_fund.htm |
| EX-10.5 - PLEDGE AND SECURITY AGREEMENT - FUND.COM INC. | f8k032910ex10v_fund.htm |
| EX-99.1 - PRESS RELEASE - FUND.COM INC. | f8k032910ex99i_fund.htm |
| EX-10.4 - $5,000,000 SENIOR SECURED PROMISSORY NOTE - FUND.COM INC. | f8k032910ex10iv_fund.htm |
| EX-10.2 - FIFTH AMENDED AND RESTATED OPERATING AGREEMENT - FUND.COM INC. | f8k032910ex10ii_fund.htm |
| EX-10.1 - SECURITIES PURCHASE AND RESTRUCTURING AGREEMENT - FUND.COM INC. | f8k032910ex10i_fund.htm |
Exhibit 10.3
WARRANT
TO PURCHASE
SHARES
OF CLASS A COMMON STOCK
of
FUND.COM,
INC.
Expires
September 30, 2014
| No.: ______ | Original Issue Date: March 29, 2010 |
FOR VALUE RECEIVED, the
undersigned, Fund.com,
Inc., a Delaware corporation (together with its successors and assigns,
the “Corporation”), hereby certifies that
PBC-WESTON HOLDINGS,
LLC, a Delaware limited liability company (“PBC”)
and/or its registered assigns (together with PBC, the “Holder”)
is entitled to subscribe for and purchase, during the Exercise Period (as
hereinafter defined), that number of the duly authorized, validly issued, fully
paid and non-assessable shares of Common Stock (as defined) of the Corporation,
as shall be determined by dividing (a) One Million Five Hundred Thousand Dollars
($1,500,000), by (b) the Warrant VWAP (as hereinafter defined) in effect
immediately prior to the Six Month Anniversary Date (as hereinafter defined), at
an exercise price per share equal to the Exercise Price (as hereinafter defined)
then in effect, subject, however, to the provisions and upon the terms and
conditions hereinafter set forth.
The
initial Exercise Price of this Warrant shall be equal to the Warrant
VWAP. The number of shares of Class A Common Stock of the Corporation
issuable upon exercise of this Warrant (the “Warrant
Stock”) and the Exercise Price shall be subject to adjustment as provided
herein.
Capitalized
terms used in this Warrant and not otherwise defined herein shall have the
respective meanings specified in Section
6 hereof.
1. Term. The term of
this Warrant (the “Term”) shall commence on the above
Original Issue Date and shall expire at 6:00 p.m., Eastern Time, on September
30, 2014 (the “Expiration
Date”), when this
Warrant, to the extent not exercised, shall expire.
2. Method of Exercise; Payment;
Issuance of New Warrant; Transfer and Exchange.
(a) Time of Exercise. The
purchase rights represented by this Warrant may be exercised in whole or in part
during the Exercise Period. As used herein, the term “Exercise
Period” shall mean a period which shall commence on a date which shall be
the day immediately following the Six Month Anniversary Date and shall expire on
the Expiration Date.
(b) Method of Exercise.
The Holder hereof may exercise this Warrant, in whole or in part, at any time
during the Exercise Period by the surrender of this Warrant (with the exercise
form attached hereto duly executed) at the principal office of the Corporation,
and at the option of the Holder, either (a) by the payment to the Corporation of
an amount of consideration therefor equal to the Exercise Price in effect on the
date of such exercise multiplied by the number of shares of Warrant Stock with
respect to which this Warrant is then being exercised, payable at such Holder's
option by certified or official bank check or by wire transfer to an account
designated by the Corporation or (b) by electing to receive from the Corporation
the number of Warrant Stock equal to (i) the number of Warrant Stock as to which
this Warrant is being exercised minus (ii) the number of Warrant Stock having a
value, based on the Warrant VWAP on the Trading Day immediately prior to the
date of such exercise, equal to the product of (x) the Exercise Price times (y)
the number of Warrant Stock as to which this Warrant is being
exercised.
1
(c) Issuance of Stock
Certificates. In the event of any exercise of this Warrant in accordance
with and subject to the terms and conditions hereof, certificates for the shares
of Warrant Stock so purchased shall be dated the date of such exercise and
delivered to the Holder’s Prime Broker as specified in the Holder’s exercise
form within a reasonable time, not exceeding five (5) Trading Days after such
exercise (the “Delivery
Date”) or, at the request of the Holder, issued and delivered to the
Depository Trust Company (“DTC”)
account on the Holder’s behalf via the Deposit Withdrawal Agent Commission
System (“DWAC”)
when available, within a reasonable time, not exceeding five (5) Trading Days
after such exercise, and the Holder hereof shall be deemed for all purposes to
be the holder of the shares of Warrant Stock so purchased as of the date of such
exercise. Notwithstanding the foregoing to the contrary, the Corporation or its
transfer agent shall only be obligated to issue and deliver the shares to the
DTC on a holder’s behalf via DWAC if such exercise is in connection with a sale
or other exemption from registration by which the shares may be issued without a
restrictive legend and the Corporation and its transfer agent are participating
in DTC through the DWAC system. The Holder shall deliver this original Warrant,
or an indemnification reasonably acceptable to the Corporation undertaking with
respect to such Warrant in the case of its loss, theft or destruction, at such
time that this Warrant is fully exercised. With respect to partial exercises of
this Warrant, the Corporation shall keep written records for the Holder of the
number of shares of Warrant Stock exercised as of each date of
exercise.
(d) Compensation for Buy-In on
Failure to Timely Deliver Certificates Upon Exercise. In addition to any
other rights available to the Holder, if the Corporation fails to instruct its
transfer agent to transmit to the Holder a certificate or certificates
representing the Warrant Stock pursuant to an exercise on or before the fifth
(5th)
Trading Day following the Delivery Date, and if after such date the Holder is
required by its broker to purchase (in an open market transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by the Holder of the
Warrant Stock which the Holder anticipated receiving upon such exercise (a
“Buy-In”),
then the Corporation shall (1) pay in cash to the Holder the amount by which (x)
the Holder’s total purchase price (including brokerage commissions, if any) for
the shares of Common Stock so purchased exceeds (y) the amount obtained by
multiplying (A) the number of shares of Warrant Stock that the Corporation was
required to deliver to the Holder in connection with the exercise at issue times
(B) the price at which the sell order giving rise to such purchase obligation
was executed, and (2) at the option of the Holder, either reinstate the portion
of the Warrant and equivalent number of shares of Warrant Stock for which such
exercise was not honored or deliver to the Holder the number of shares of Common
Stock that would have been issued had the Corporation timely complied with its
exercise and delivery obligations hereunder. For example, if the Holder
purchases Common Stock having a total purchase price of $11,000 to cover a
Buy-In with respect to an attempted exercise of shares of Common Stock with an
aggregate sale price giving rise to such purchase obligation of $10,000, under
clause (1) of the immediately preceding sentence the Corporation shall be
required to pay the Holder $1,000. The Holder shall provide the Corporation
written notice indicating the amounts payable to the Holder in respect of the
Buy-In, together with applicable confirmations and other evidence reasonably
requested by the Corporation. Nothing herein shall limit a Holder’s right to
pursue any other remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Corporation’s failure to timely deliver
certificates representing shares of Common Stock upon exercise of this Warrant
as required pursuant to the terms hereof.
(e) Transferability
of Warrant.This Warrant may be transferred by a
Holder, in whole or in part, without the consent of the Corporation. If
transferred pursuant to this paragraph, this Warrant may be transferred on the
books of the Corporation by the Holder hereof in person or by duly authorized
attorney, upon surrender of this Warrant at the principal office of the
Corporation, properly endorsed (by the Holder executing an assignment in the
form attached hereto) and upon payment of any necessary transfer tax or other
governmental charge imposed upon such transfer. This Warrant is exchangeable at
the principal office of the Corporation for Warrants to purchase the same
aggregate number of shares of Warrant Stock, each new Warrant to represent the
right to purchase such number of shares of Warrant Stock as the Holder hereof
shall designate at the time of such exchange. All Warrants issued on transfers
or exchanges shall be dated the Original Issue Date and shall be identical with
this Warrant except as to the number of shares of Warrant Stock issuable
pursuant thereto.
2
(f) Continuing Rights of
Holder. The Corporation will, at the time of or at any time after each
exercise of this Warrant, upon the request of the Holder hereof, acknowledge in
writing the extent, if any, of its continuing obligation to afford to such
Holder all rights to which such Holder shall continue to be entitled after such
exercise in accordance with the terms of this Warrant, provided
that if any such Holder shall fail to make any such request, the failure shall
not affect the continuing obligation of the Corporation to afford such rights to
such Holder.
3. Adjustment of Exercise
Price. For so long as this warrant shall be outstanding (the “Anti-Dilution Period”), the
Exercise Price shall be subject to adjustment from time to time as set forth in
this Section
3. The Corporation shall give the Holder written notice of any event
described below which requires an adjustment pursuant to this Section
3 in accordance with the notice provisions set forth in Section
11.
a) Adjustments for Stock
Splits, Combinations, Certain Dividends and Distributions. If
the Corporation shall, at any time or from time to time after the Original Issue
Date, effect a split of the outstanding Common Stock (or any other subdivision
of its shares of Common Stock into a larger number of shares of Common Stock),
combine the outstanding shares of Common Stock into a smaller number of shares
of Common Stock, or make or issue or set a record date for the determination of
holders of Common Stock entitled to receive a dividend or other distribution
payable in shares of Common Stock, then, in each event (i) the number of shares
of Common Stock for which this Warrant shall be exercisable immediately after
the occurrence of any such event shall be adjusted to equal the number of shares
of Common Stock that a record holder of the same number of shares of Common
Stock for which this Warrant is exercisable immediately prior to the occurrence
of such event would own or be entitled to receive after the happening of such
event, and (ii) the Exercise Price then in effect shall be adjusted to equal (A)
the Exercise Price then in effect multiplied by the number of shares of Common
Stock for which this Warrant is exercisable immediately prior to the adjustment
divided by (B) the number of shares of Common Stock for which this Warrant is
exercisable immediately after such adjustment.
(b) Adjustments for Other
Dividends and Distributions. If the Corporation shall, at any time or
from time to time after the Original Issue Date, make or issue or set a record
date for the determination of holders of Common Stock entitled to receive a
dividend or other distribution payable in (i) cash, (ii) any evidences of
indebtedness, or any other securities of the Company or any property of any
nature whatsoever, other than, in each case, shares of Common Stock; or (iii)
any warrants or other rights to subscribe for or purchase any evidences of
indebtedness, or any other securities of the Company or any property of any
nature whatsoever, other than, in each case, shares of Common Stock, then, and
in each event, (A) the number of shares of Common Stock for which this Warrant
shall be exercisable shall be adjusted to equal the product of the number of
shares of Common Stock for which this Warrant is exercisable immediately prior
to such adjustment multiplied by a fraction (1) the numerator of which shall be
the Per Share Market Value of Common Stock at the date of taking such record and
(2) the denominator of which shall be such Per Share Market Value minus the
amount allocable to one share of Common Stock of any such cash so distributable
and of the fair value (as determined in good faith by the Board and supported by
an opinion from an investment banking firm mutually agreed upon by the
Corporation and the Holder) of any and all such evidences of indebtedness,
shares of stock, other securities or property or warrants or other subscription
or purchase rights so distributable, and (B) the Exercise Price then in effect
shall be adjusted to equal (1) the Exercise Price then in effect multiplied by
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to the adjustment divided by (2) the number of shares of
Common Stock for which this Warrant is exercisable immediately after such
adjustment. A reclassification of the Common Stock (other than a change in par
value, or from par value to no par value or from no par value to par value) into
shares of Common Stock and shares of any other class of stock shall be deemed a
distribution by the Corporation to the holders of its Common Stock of such
shares of such other class of stock within the meaning of this Section
3(b) and, if the outstanding shares of Common Stock shall be changed into
a larger or smaller number of shares of Common Stock as a part of such
reclassification, such change shall be deemed a subdivision or combination, as
the case may be, of the outstanding shares of Common Stock within the meaning of
Section
3(a).
3
(c) Adjustments for
Reclassification, Exchange or Substitution. If the Common Stock for which
this Warrant is exercisable at any time or from time to time after the Original
Issue Date shall be changed to the same or different number of shares of any
class or classes of stock, whether by reclassification, exchange, substitution
or otherwise (other than by way of a stock split or combination of shares or
stock dividends provided for in Section
3(a), Section
3(b), or a reorganization, merger, consolidation, or sale of assets
provided for in Section
3(d)), then, and in each event, an appropriate revision to the Exercise
Price shall be made and provisions shall be made (by adjustments of the Exercise
Price or otherwise) so that, upon any subsequent exercise of this Warrant, the
Holder shall have the right to receive, in lieu of Warrant Stock, the kind and
amount of shares of stock and other securities receivable upon reclassification,
exchange, substitution or other change, by holders of the number of shares of
Common Stock for which this Warrant was exercisable immediately prior to such
reclassification, exchange, substitution or other change, all subject to further
adjustment as provided herein.
(d) Adjustments for
Reorganization, Merger, Consolidation or Sales of Assets. If at any time
or from time to time after the Original Issue Date there shall be a capital
reorganization of the Corporation (other than by way of a stock split or
combination of shares or stock dividends or distributions provided for in Section
3(a), and Section
3(b), or a reclassification, exchange or substitution of shares provided
for in Section
3(c)), or a merger or consolidation of the Corporation with or into
another corporation where the holders of the Corporation’s outstanding voting
securities prior to such merger or consolidation do not own over 50% of the
outstanding voting securities of the merged or consolidated entity, immediately
after such merger or consolidation, or the sale of all or substantially all of
the Corporation's properties or assets to any other person (an “Organic
Change”), then as a part of such Organic Change an appropriate revision
to the Exercise Price shall be made if necessary and provision shall be made if
necessary (by adjustments of the Exercise Price or otherwise) so that, upon any
subsequent exercise of this Warrant, the Holder shall have the right to receive,
in lieu of Warrant Stock, the kind and amount of shares of stock and other
securities or property of the Corporation or any successor corporation resulting
from the Organic Change. In any such case, appropriate adjustment shall be made
in the application of the provisions of this Section
3(d) with respect to the rights of the Holder after the Organic Change to
the end that the provisions of this Section
3(d) (including any adjustment in the Exercise Price then in effect and
the number of shares of stock or other securities deliverable upon exercise of
this Warrant) shall be applied after that event in as nearly an equivalent
manner as may be practicable. In any such case, the resulting or
surviving corporation (if not the Corporation) shall expressly assume the
obligations to deliver, upon the exercise of this Warrant, such securities or
property as the Holder shall be entitled to receive pursuant to the provisions
hereof, and to make provisions for the protection of the rights of the Holder as
provided above.
(e) Adjustments for Issuance of
Additional Shares of Common Stock. In the event that during the
Anti-Dilution Period, the Corporation shall issue or sell any additional shares
of Common Stock (otherwise than as provided in the foregoing subsections (a)
through (d) of this Section
3 or pursuant to (X) Common Stock Equivalents (as hereafter defined)
granted or issued prior to the Six Month Anniversary Date or (Y) subsection (f)
below) (“Additional
Shares of Common Stock”) at a price per share less than the
then-applicable Exercise Price or without consideration, then the Exercise Price
upon each such issuance shall be reduced to that price (rounded to the nearest
cent) determined by multiplying the Exercise Price by a fraction:
4
(1) the
numerator of which shall be equal to the sum of (A) the number of
shares of Outstanding Common Stock immediately prior to the issuance of such
Additional Shares of Common Stock plus (B) the number of shares
of Common Stock (rounded to the nearest whole share) which the aggregate
consideration for the total number of such Additional Shares of Common Stock so
issued would purchase at a price per share equal to the outstanding Exercise
Price in effect immediately prior to such issuance; and (2) the denominator of
which shall be equal to the number of shares of Outstanding Common Stock
immediately after the issuance of such Additional Shares of Common Stock. No
adjustment of the Exercise Price shall be made upon the issuance of any
Additional Shares of Common Stock which are issued pursuant to the exercise of
any warrants or other subscription or purchase rights or pursuant to the
exercise of any conversion or exchange rights in any Common Stock Equivalents,
if any such adjustment shall previously have been made upon the issuance of such
warrants or other rights or upon the issuance of such Common Stock Equivalents
(or upon the issuance of any warrant or other rights therefore).
(f) Issuance of Common Stock
Equivalents. The provisions of this Section
3(f) shall apply if the Corporation during the Anti-Dilution Period,
shall (a) issue any securities convertible into or exchangeable for, directly or
indirectly, Common Stock (“Convertible
Securities”), or (b) issue or sell any rights or warrants or options to
purchase any such Common Stock or Convertible Securities (collectively, the
“Common
Stock Equivalents”). If the price per share for which
Additional Shares of Common Stock may be issuable pursuant to any such
Convertible Securities or Common Stock Equivalent shall be less than the
applicable Exercise Price then in effect, or if, after any such issuance of
Common Stock Equivalents, the price per share for which Additional Shares of
Common Stock may be issuable thereafter is amended or adjusted, and such price
as so amended shall be less than the applicable Exercise Price in effect at the
time of such amendment or adjustment, then the applicable Exercise Price upon
each such issuance or amendment shall be adjusted as provided in Section
3(e). No adjustment shall be made to the Exercise Price upon the issuance
of any Common Stock pursuant to the exercise, conversion or exchange of any
Convertible Security or Common Stock Equivalent where an adjustment to the
Conversion Price was made as a result of the issuance or purchase of such
Convertible Security or Common Stock Equivalent.
(g) Superseding
Adjustment. If, at any time after any adjustment of the Exercise Price
then in effect shall have been made pursuant to Section
3(e) or Section
3(f) as the result of any issuance of Common Stock Equivalents, and such
Common Stock Equivalents, or the right of conversion or exchange in such Common
Stock Equivalents, shall expire, and all of such or the right of conversion or
exchange with respect to all of such Common Stock Equivalents shall not have
been converted or exercised, then such previous adjustment shall be rescinded
and annulled and the Exercise Price then in effect shall be adjusted to the
Exercise Price in effect immediately prior to the issuance of such Common Stock
Equivalents, subject to any further adjustments pursuant to this Section
3.
(h) Consideration for
Stock. In case any shares of Common Stock or Convertible Securities, or
any rights or warrants or options to purchase any such Common Stock or
Convertible Securities, shall be issued or sold:
(i) in
connection with any merger or consolidation in which the Corporation is the
surviving corporation (other than any consolidation or merger in which the
previously outstanding shares of Common Stock of the Corporation shall be
changed to or exchanged for the stock or other securities of another
corporation), the amount of consideration therefore shall be deemed to be the
fair value, as determined reasonably and in good faith by the Board, of such
portion of the assets and business of the non-surviving corporation as the Board
may determine to be attributable to such shares of Common Stock, Convertible
Securities, rights or warrants or options, as the case may be; or
5
(ii) in
the event of any consolidation or merger of the Corporation in which the
Corporation is not the surviving corporation or in which the previously
outstanding shares of Common Stock of the Corporation shall be changed into or
exchanged for the stock or other securities of another corporation, or in the
event of any sale of all or substantially all of the assets of the Corporation
for stock or other securities of any corporation, the Corporation shall be
deemed to have issued a number of shares of its Common Stock for stock or
securities or other property of the other corporation computed on the basis of
the actual exchange ratio on which the transaction was predicated, and for a
consideration equal to the fair market value on the date of such transaction of
all such stock or securities or other property of the other corporation. If any
such calculation results in adjustment of the applicable Exercise Price, or the
number of shares of Common Stock for which this Warrant is exercisable, the
determination of the applicable Exercise Price or the number of shares of Common
Stock for which this Warrant is exercisable immediately prior to such merger,
consolidation or sale, shall be made after giving effect to such adjustment of
the number of shares of Common Stock for which this Warrant is exercisable. In
the event any consideration received by the Corporation for any securities
consists of property other than cash, the fair market value thereof at the time
of issuance or as otherwise applicable shall be as determined in good faith by
the Board. In the event Common Stock is issued with other shares or securities
or other assets of the Corporation for consideration which covers both, the
consideration computed as provided in this Section
3(h) shall be allocated among such securities and assets as determined in
good faith by the Board.
(i) Record Date. In case
the Corporation shall take record of the holders of its Common Stock or any
other preferred stock for the purpose of entitling them to subscribe for or
purchase Common Stock or Convertible Securities, then the date of the issue or
sale of the shares of Common Stock shall be deemed to be such record
date.
(j) Certain Issues
Excepted. Anything herein to the contrary notwithstanding, the
Corporation shall not be required to make any adjustment to the Exercise Price
upon or in connection with the issuance of any shares of Common Stock or other
securities issued pursuant to Common Stock Equivalents that are: (i) issued
pursuant to a bona fide acquisition of another business entity or business
segment of any such entity by the Corporation pursuant to a merger, purchase of
substantially all the assets or any type of reorganization (each an “Acquisition”)
provided that (A) the Corporation will own more than twenty-five percent (25%)
of the voting power of such business entity or business segment of such entity
and (B) such Acquisition is approved by the Board; (ii) issued in connection
with bona fide strategic license agreements or other partnering arrangements so
long as such issuances are not solely for the purpose of raising capital; (iii)
issued under grants of options to purchase Common Stock pursuant to equity
incentive plans that are adopted by the Board; (iv) issued to any underwriter,
placement agent and their respective designees for the transactions contemplated
by a private placement or public offering of securities of the Corporation; (v)
issued to financial institutions or lessors in connection with reasonable
commercial credit arrangements, equipment financings or similar transactions,
provided that any such issue is approved by the Board; and (vi) issued to
vendors or customers or to other persons in similar commercial situations as the
Company, provided that any such issue is approved by the Board; in each case,
with the exception of clause (iii) above, that such issuance is not to an
affiliate of the Corporation, whether directly or indirectly.
(k) No Impairment. The
Corporation shall not, by amendment of its Articles of Incorporation 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 hereunder, but will at all times in good faith assist in the carrying
out of all the provisions of this Section
3 and in the taking of all such action as may be necessary or appropriate
in order to protect against impairment the right of the Holder to exercise this
Warrant. In the event the Holder shall elect to exercise this Warrant, in whole
or in part, as provided herein, the Corporation cannot refuse exercise based on
any claim that the Holder or anyone associated or affiliated with such holder
has been engaged in any violation of law, unless (i) the Corporation receives an
order from the Securities and Exchange Commission prohibiting such exercise or
(ii) an injunction from a court, on notice, restraining and/or adjoining
exercise of this Warrant.
6
(l) Certificates as to
Adjustments. Upon occurrence of each adjustment or readjustment of the
Exercise Price or number of shares of Common Stock for which this Warrant is
exercisable pursuant to this Section
3, the Corporation at its expense shall promptly compute such adjustment
or readjustment in accordance with the terms hereof and furnish to the Holder a
certificate setting forth such adjustment and readjustment, showing in detail
the facts upon which such adjustment or readjustment is based. The Corporation
shall, upon written request of the Holder, at any time, furnish or cause to be
furnished to the Holder a like certificate setting forth such adjustments and
readjustments, the Exercise Price in effect at the time, and the number of
shares of Common Stock and the amount, if any, of other securities or property
which at the time would be received upon the exercise of this Warrant.
Notwithstanding the foregoing, the Corporation shall not be obligated to deliver
a certificate unless such certificate would reflect an increase or decrease of
at least one percent of such adjusted amount; if the Corporation so postpones
delivering a certificate, such prior adjustment shall be carried forward and
made as soon as such adjustment, together with other adjustments required by
this Section
3 and not previously made, would result in an adjustment of one percent
or more.
(m) Issue Taxes. The
Corporation shall pay any and all issue and other taxes, excluding federal,
state or local income taxes, that may be payable in respect of any issue or
delivery of shares of Common Stock on exercise of this Warrant; provided, however, that the
Corporation shall not be obligated to pay any transfer taxes resulting from any
transfer requested by any holder in connection with any such
conversion.
(n) Fractional Shares. No
fractional shares of Common Stock shall be issued upon exercise of this
Warrant. In lieu of any fractional shares to which the Holder would
otherwise be entitled, the Holder shall round the number of shares to be issued
upon exercise (including a cashless exercise) up to the nearest whole number of
shares.
(o) Reservation of Common
Stock. The Corporation shall, during the period within which this Warrant
may be exercised, reserve and keep available out of its authorized and unissued
Common Stock, solely for the purpose of effecting the exercise of this Warrant,
such number of shares of Common Stock equal to at least one hundred ten percent
(110%) of the aggregate number of shares of Common Stock as shall from time to
time be sufficient to effect the exercise of this Warrant.
(p) Retirement of this
Warrant. Exercise of this Warrant shall be deemed to have been effected
on the date of exercise hereof. Upon exercise of this Warrant only in part, the
Corporation shall issue and deliver to the Holder, at the expense of the
Corporation, a new Warrant covering the unexercised balance of the Warrant
Stock.
(q) Regulatory
Compliance. If any shares of Common Stock to be reserved for the purpose
of exercise of this Warrant require registration or listing with or approval of
any governmental authority, stock exchange or other regulatory body under any
federal or state law or regulation or otherwise before such shares may be
validly issued or delivered upon conversion, the Corporation shall, at its sole
cost and expense, in good faith and as expeditiously as possible, endeavor to
secure such registration, listing or approval, as the case may be.
7
4. No Preemptive Rights.
The Holder shall not be entitled to rights to subscribe for, purchase or receive
any part of any new or additional shares of any class, whether now or
hereinafter authorized, or of bonds or debentures, or other evidences of
indebtedness convertible into or exchangeable for shares of any class, but all
such new or additional shares of any class, or any bond, debentures or other
evidences of indebtedness convertible into or exchangeable for shares, may be
issued and disposed of by the Board on such terms and for such consideration (to
the extent permitted by law), and to such person or persons as the Board in its
absolute discretion may deem advisable.
5. Exercise Restriction.
Notwithstanding anything to the contrary set forth in this Warrant, at no time
may the Holder exercise this Warrant, in whole or in part, if the number of
shares of Common Stock to be issued pursuant to such exercise would cause the
number of shares of Common Stock beneficially owned by the Holder and its
affiliates at such time, when aggregated with all other shares of Common Stock
beneficially owned by the Holder and its affiliates at such time, result in the
Holder beneficially owning (as determined in accordance with Section 13(d) of
the Securities Exchange Act of 1934, as amended, and the rules thereunder) in
excess of 9.99% of the then issued and outstanding shares of Common Stock
outstanding at such time; provided, however, that upon
the Holder providing the Corporation with sixty-one (61) days notice (pursuant
to Section
11 hereof) (the “Waiver
Notice”) that the Holder would like to waive Section
5 of this Warrant with regard to any or all shares of Common Stock for
which this Warrant is exercisable, this Section
5 shall be of no force or effect with regard to those shares referenced
in the Waiver Notice.
6. Definitions. For the
purposes of this Warrant, the following terms have the following
meanings:
“Articles
of Incorporation” means the Amended and Restated Certificate of
Incorporation of the Corporation as in effect on the Original Issue Date, and as
hereafter from time to time amended, modified, supplemented or restated in
accordance with the terms hereof and thereof and pursuant to applicable
law.
“Board”
shall mean the Board of Directors of the Corporation.
“Capital
Stock” means and includes (i) any and all shares, interests,
participations or other equivalents of or interests in (however designated)
corporate stock, including, without limitation, shares of preferred or
preference stock, (ii) all partnership interests (whether general or limited) in
any Person which is a partnership, (iii) all membership interests or limited
liability company interests in any limited liability company, and (iv) all
equity or ownership interests in any Person of any other type.
“Common
Stock” means the shares of Class A Common Stock, $0.001 par value per
share, of the Corporation and any other Capital Stock into which such stock may
hereafter be changed.
“Convertible
Security” means one of the Convertible Securities.
“Exercise
Period” has the meaning specified in Section
1 hereof.
“Exercise
Price” initially means the Warrant VWAP, as such price may be adjusted
from time to time as shall result from the adjustments specified in this
Warrant, including Section
3 hereto.
8
“Governmental
Authority” means any governmental, regulatory or self-regulatory entity,
department, body, official, authority, commission, board, agency or
instrumentality, whether federal, state or local, and whether domestic or
foreign.
“Holders”
mean the Persons who shall from time to time own the Warrant. The term “Holder”
means one of the Holders.
“National
Securities Exchange” means the collective reference to the FINRA OTC
Bulletin Board, the New York Stock Exchange, Inc., the New York Stock Exchange:
AMEX Exchange, or any other recognized national securities exchange in the
United States on which the Common Stock of the Corporation is then
listed.
“Original
Issue Date” means March 29, 2010.
“Other
Common” means any other Capital Stock of the Corporation of any class
which shall be authorized at any time after the date of this Warrant (other than
Common Stock) and which shall have the right to participate in the distribution
of earnings and assets of the Corporation without limitation as to
amount.
“Outstanding
Common Stock” means, at any given time, the aggregate amount of
outstanding shares of Common Stock, assuming full exercise, conversion or
exchange (as applicable) of all Common Stock Equivalents that are outstanding at
such time.
“Person”
means an individual, corporation, limited liability company, partnership, joint
stock company, trust, unincorporated organization, joint venture, Governmental
Authority or other entity of whatever nature.
“Per Share
Market Value” means on any particular date (a) the last closing bid price
per share of the Common Stock on such date on the National Securities Exchange,
or if there is no such price on such date, then the closing bid price on such
exchange or quotation system on the date nearest preceding such date, or (b) if
the Common Stock is not listed then on a National Securities Exchange, the last
closing bid price for a share of Common Stock in the market, as reported by the
National Quotation Bureau Incorporated or similar organization or agency
succeeding to its functions of reporting prices) at the close of business on
such date, or (c) if the Common Stock is not then reported by the National
Quotation Bureau Incorporated (or similar organization or agency succeeding to
its functions of reporting prices), then the average of the "Pink Sheet" quotes
for the five (5) Trading Days preceding such date of determination, or (d) if
the Common Stock is not then publicly traded the fair market value of a share of
Common Stock as determined by the Board.
“Securities”
means any debt or equity securities of the Corporation, whether now or hereafter
authorized, any instrument convertible into or exchangeable for Securities or a
Security, and any option, warrant or other right to purchase or acquire any
Security. "Security" means one of the Securities.
“Securities
Act” means the Securities Act of 1933, as amended.
“Six Month
Anniversary Date” shall mean September 29, 2010, being that date which is
six (6) months following the Original Issue Date.
“Subsidiary”
means any corporation at least 50% of whose outstanding Voting Stock shall at
the time be owned directly or indirectly by the Corporation or by one or more of
its Subsidiaries, or by the Corporation and one or more of its
Subsidiaries.
9
“Term”
has the meaning specified in Section
1 hereof.
“Trading
Day” means (a) a day on which the Common Stock is traded on a National
Securities Exchange, or (b) if the Common Stock is not traded on a National
Securities Exchange, a day on which the Common Stock is quoted in the
over-the-counter market as reported by National Quotation Bureau Incorporated
(or any similar organization or agency succeeding its functions of reporting
prices); provided,
however,
that in the event that the Common Stock is not listed or quoted as set forth in
(a) or (b) hereof, then Trading Day shall mean any day except Saturday, Sunday
and any day which shall be a legal holiday or a day on which banking
institutions in the State of New York are authorized or required by law or other
government action to close.
“Voting
Stock” means, as applied to the Capital Stock of any corporation, Capital
Stock of any class or classes (however designated) having ordinary voting power
for the election of a majority of the members of the Board of Directors (or
other governing body) of such corporation, other than Capital Stock having such
power only by reason of the happening of a contingency.
“Warrant”
means this Series A Warrant, and any other warrants of like tenor issued in
substitution or exchange for any thereof.
“Warrant
Stock Number” means at any time the aggregate number of shares of Warrant
Stock which may at such time be purchased upon exercise of a Warrant, after
giving effect to all prior adjustments and increases to such number made or
required to be made under the terms hereof.
“Warrant
VWAP” means the volume weighted average price of the Common Stock of the
Corporation, as traded on any National Securities Exchange for the twenty (20)
Trading Days immediately prior to the Six Month Anniversary Date; provided,
however, in the event the Corporation’s Common Stock is not traded on a National
Securities Exchange, the Warrant VWAP shall be equal to the fair market value of
the Common Stock on the date immediately following the date on which the Common
Stock is no longer traded on a National Securities Exchange. Such
fair market value shall be determined by an independent valuation firm mutually
agreed to by the Corporation and PBC, the cost of such independent valuation
shall be paid by the Corporation.
“Warrant
Stock” means the shares of Common Stock of the Corporation issuable upon
exercise of this Warrant.
7. Other Notices. In
case at any time:
(i) the
Corporation shall make any distributions to the holders of Common Stock;
or
(ii) the
Corporation shall authorize the granting to all holders of its Common Stock of
rights to subscribe for or purchase any shares of Capital Stock of any class or
other rights; or
(iii) there
shall be any reclassification of the Capital Stock of the Corporation;
or
(iv) there
shall be any capital reorganization by the Corporation; or
10
(v) there
shall be any (i) consolidation or merger involving the Corporation or (ii) sale,
transfer or other disposition of all or substantially all of the Corporation's
property, assets or business (except a merger or other reorganization in which
the Corporation shall be the surviving corporation and its shares of Capital
Stock shall continue to be outstanding and unchanged and except a consolidation,
merger, sale, transfer or other disposition involving a wholly-owned
Subsidiary); or
(vi) there
shall be a voluntary or involuntary dissolution, liquidation or winding-up of
the Corporation or any partial liquidation of the Corporation or distribution to
holders of Common Stock;
then, in
each of such cases, the Corporation shall give written notice to the Holder of
the date on which (i) the books of the Corporation shall close or a record shall
be taken for such dividend, distribution or subscription rights or (ii) such
reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be, shall take place.
Such notice also shall specify the date as of which the holders of Common Stock
of record shall participate in such dividend, distribution or subscription
rights, or shall be entitled to exchange their certificates for Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, disposition, dissolution, liquidation
or winding-up, as the case may be. Such notice shall be given at least twenty
(20) days prior to the action in question and not less than ten (10) days prior
to the record date or the date on which the Corporation's transfer books are
closed in respect thereto. This Warrant entitles the Holder to receive copies of
all financial and other information distributed or required to be distributed to
the holders of the Common Stock.
8. Registration
Rights.
(i) The
Corporation shall notify the Holder in writing at least thirty (30) days prior
to the filing of any registration statement under the Securities Act for
purposes of a public offering of securities of the Corporation (other than on
Form S-4 or S-8 promulgated under the Securities Act, or any successor forms
thereto) and will afford the Holder an opportunity to include in such
registration statement all or part of its Warrant Stock. The Holder
shall, within twenty (20) days after the above-described notice from the
Corporation, notify the Corporation in writing whether the Holder desires to
include in such registration statement all or part of its Warrant Stock. If the
Holder decides not to include Warrant Stock in any registration statement
thereafter filed by the Corporation, the Holder shall nevertheless continue to
have the right to include any Warrant Stock in any subsequent registration
statement or registration statements as may be filed by the Corporation with
respect to offerings of its securities, all upon the terms and conditions set
forth herein. If the underwriter determines in good faith that
marketing factors require a limitation on the number of securities to be
underwritten hereunder, the number of securities that may be included in the
underwriting shall be allocated, first, to the Corporation, second, to the
Holder, to the maximum extent of its desired participation without limiting the
securities to be registered by the Corporation, and third, to any other party
with registration rights without limiting the securities to be registered by the
Corporation or the Holder. All fees and expenses of the registration
shall be paid by the Corporation, including without limitation, all registration
and filing fees, fees and expenses of compliance with securities or blue sky
laws, underwriting discounts, fees and expenses, printing expenses, messenger
and delivery expenses, and reasonable fees and expenses of counsel for the
Corporation and a single counsel for the Holder and all independent certified
public accountants and other persons retained by the Corporation.
(ii) In the
event that the Holder shall not be able to avail itself of SEC Rule 144, the
Holder shall have the ability to request that the Corporation effect a
registration statement under the Securities Act covering the registration of no
less than all of the Warrant Stock in accordance with the terms and procedures,
as applicable, set forth in Section
8(i) above.
11
9. Amendment and Waiver.
Any term, covenant, agreement or condition in this Warrant may be amended, or
compliance therewith may be waived (either generally or in a particular instance
and either retroactively or prospectively), by a written instrument or written
instruments executed by (a) the Corporation and (b) the Initial Holder (assuming
the Initial Holder still owns all or part of this Warrant), and (c) the Holders
of twenty-five percent (25%) of the Warrants, the calculation of which shall
include the Initial Holder’s percentage of ownership of the Warrants; provided,
however,
that no such amendment or waiver shall reduce the Warrant Stock Number, increase
the Exercise Price, shorten the period during which this Warrant may be
exercised or modify any provision of this Section
9 without the consent of the Holder of this Warrant. No consideration
shall be offered or paid to any person to amend or consent to a waiver or
modification of any provision of this Warrant unless the same consideration is
also offered to all holders of the Warrants.
10. Governing Law;
Jurisdiction. This Warrant shall be governed by and construed in
accordance with the internal laws of the State of New York, without giving
effect to any of the conflicts of law principles which would result in the
application of the substantive law of another jurisdiction. This Warrant shall
not be interpreted or construed with any presumption against the party causing
this Warrant to be drafted. The Corporation and the Holder agree that venue for
any dispute arising under this Warrant will lie exclusively in the state or
federal courts located in New York County, New York, and the parties irrevocably
waive any right to raise forum
non conveniens or any other argument that New York is not the proper
venue. The Corporation and the Holder irrevocably consent to personal
jurisdiction in the state and federal courts of the state of New York. The
Corporation and the Holder consent to process being served in any such suit,
action or proceeding by mailing a copy thereof to such party at the address in
effect for notices to it under this Warrant and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing in
this Section
10 shall affect or limit any right to serve process in any other manner
permitted by law. The Corporation and the Holder hereby agree that the
prevailing party in any suit, action or proceeding arising out of or relating to
this Warrant shall be entitled to reimbursement for reasonable legal fees from
the non-prevailing party. The parties hereby waive all rights to a trial by
jury.
11. Notices. All notices
and other communications hereunder shall be in writing and shall be deemed given
if delivered personally or by facsimile or by electronic transmission or three
(3) business days following being mailed by certified or registered mail,
postage prepaid, return-receipt requested, addressed to the holder of record at
its address appearing on the books of the Corporation. The Corporation will give
written notice to the Holder at least twenty (20) calendar days prior to the
date on which the Corporation closes its books or takes a record (a) with
respect to any dividend or distribution upon the Common Stock, (b) with respect
to any pro rata subscription offer to holders of Common Stock or (c) for
determining rights to vote with respect to any Organic Change, dissolution,
liquidation or winding-up and in no event shall such notice be provided to such
holder prior to such information being made known to the public. The Corporation
will also give written notice to the Holder at least twenty (20) days prior to
the date on which any Organic Change, dissolution, liquidation or winding-up
will take place and in no event shall such notice be provided to such holder
prior to such information being made known to the public. The addresses for such
communications shall be:
Fund.com,
Inc.
14 Wall
Street
20th
floor
New York,
New York 10005
12
12. Warrant Agent. The
Corporation may, by written notice to each Holder of this Warrant, appoint an
agent having an office in New York, New York for the purpose of issuing shares
of Warrant Stock on the exercise of this Warrant pursuant to subsection (b) of
Section
2 hereof, exchanging this Warrant pursuant to subsection (d) of Section
2 hereof or replacing this Warrant pursuant to Section
13 hereof, or any of the foregoing, and thereafter any such issuance,
exchange or replacement, as the case may be, shall be made at such office by
such agent.
13. Lost or Stolen
Warrant. Upon receipt by the Company of evidence satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant, and, in
the case of loss, theft or destruction, of any indemnification undertaking by
the Holder to the Company and, in the case of mutilation, upon surrender and
cancellation of this Warrant, the Company shall execute and deliver new Warrant
of like tenor and date; provided, however, that the
Company shall not be obligated to re-issue warrant(s) if the Holder
contemporaneously exercise this Warrant to purchase shares of Common
Stock.
14. Remedies, Characterizations,
Other Obligations, Breaches and Injunctive Relief. The remedies provided
in this Warrant shall be cumulative and in addition to all other remedies
available under this Warrant, at law or in equity (including a decree of
specific performance and/or other injunctive relief), no remedy contained herein
shall be deemed a waiver of compliance with the provisions giving rise to such
remedy and nothing herein shall limit a Holder's right to pursue actual damages
for any failure by the Company to comply with the terms of this Warrant. Amounts
set forth or provided for herein with respect to payments, conversion and the
like (and the computation thereof) shall be the amounts to be received by the
Holder thereof and shall not, except as expressly provided herein, be subject to
any other obligation of the Company (or the performance thereof). The Company
acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the Holder and that the remedy at law for any such breach
may be inadequate. The Company therefore agrees that, in the event of any such
breach or threatened breach, the Holder shall be entitled, in addition to all
other available remedies, to an injunction restraining any breach, without the
necessity of showing economic loss and without any bond or other security being
required.
15. Specific Shall Not Limit
General; Construction. No specific provision contained in this Warrant
shall limit or modify any more general provision contained herein. This Warrant
shall be deemed to be jointly drafted by the Company and all initial purchasers
of the Warrant and shall not be construed against any person as the drafter
hereof.
16. Successors and
Assigns. This Warrant and the rights evidenced hereby shall inure to the
benefit of and be binding upon the successors and assigns of the Corporation,
the Holder hereof and (to the extent provided herein) the Holders of Warrant
Stock issued pursuant hereto, and shall be enforceable by any such Holder or
Holder of Warrant Stock.
17. Modification and
Severability. If, in any action before any court or agency legally
empowered to enforce any provision contained herein, any provision hereof is
found to be unenforceable, then such provision shall be deemed modified to the
extent necessary to make it enforceable by such court or agency. If any such
provision is not enforceable as set forth in the preceding sentence, the
unenforceability of such provision shall not affect the other provisions of this
Warrant, but this Warrant shall be construed as if such unenforceable provision
had never been contained herein.
18. Headings. The
headings of the Sections of this Warrant are for convenience of reference only
and shall not, for any purpose, be deemed a part of this Warrant.
REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
13
IN
WITNESS WHEREOF, the Corporation has executed this Warrant as of the day and
year first above written.
| FUND.COM, INC. | |||
|
|
By:
|
/s/ Gregory Webster | |
| Name: Gregory Webster | |||
| Title: Chief Executive Officer | |||
14
EXERCISE
FORM
FUND.COM,
INC.
The
undersigned __________, pursuant to the provisions of the accompanying Warrant,
hereby elects to purchase _____ shares of Common Stock of FUND.COM, INC. covered
by the accompanying Warrant.
| Dated: _________________ |
Signature ___________________________
Address ___________________________
|
Number of
shares of Common Stock beneficially owned or deemed beneficially owned by the
Holder on the date of Exercise: _________________________
The
undersigned is an “accredited investor” as defined in Regulation D under the
Securities Act of 1933, as amended oYesoNo
the
Holder shall pay the sum of $________ by certified or official bank check (or
via wire transfer) to the Corporation in accordance with the terms of the
Warrant.
15
ASSIGNMENT
FOR VALUE
RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the accompanying Warrant and all rights evidenced thereby and
does irrevocably constitute and appoint _____________, attorney, to transfer
said Warrant on the books of the corporation named therein.
| Dated: _________________ |
Signature ___________________________
Address ___________________________
|
PARTIAL
ASSIGNMENT
FOR VALUE
RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the right to purchase _________ shares of Warrant Stock
evidenced by the accompanying Warrant together with all rights therein, and does
irrevocably constitute and appoint ___________________, attorney, to transfer
that part of said Warrant on the books of the corporation named
therein.
| Dated: _________________ |
Signature ___________________________
Address ___________________________
|
FOR USE
BY THE ISSUER ONLY:
This
Warrant No. ________ canceled (or transferred or exchanged) this _____ day of
___________, _____, shares of Common Stock issued therefor in the name of
_______________, Warrant No. ________ issued for ____ shares of Common Stock in
the name of _______________.
16