NEITHER
THE SECURITIES REPRESENTED BY THIS WARRANT NOR THE SECURITIES
INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE
STATE SECURITIES AND BLUE SKY LAWS. THE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (1) IN THE
ABSENCE
OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”) OR FOREIGN SECURITIES LAW, OR (B) IF REASONABLY REQUESTED
BY THE COMPANY, AN OPINION OF COUNSEL REASONABLY ACCEPTABLE
TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER
SAID ACT OR FOREIGN SECURITIES LAW AND (2) IF SUCH SALE, TRANSFER
OR ASSIGNMENT VIOLATES APPLICABLE STATE SECURITIES AND BLUE
SKY LAWS.
THIS
WARRANT
AND THE UNDERLYING SECURITIES ISSUABLE UPON EXERCISE
OF THIS WARRANT ARE SUBJECT TO THE PROVISIONS OF A CERTAIN
SECURITIES PURCHASE AGREEMENT, DATED AS
OF JULY 30, 2007, INCLUDING CERTAIN RESTRICTIONS ON TRANSFER SET FORTH THEREIN,
AND
AN AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT, DATED AS
OF JULY 30, 2007. COMPLETE
AND CORRECT COPIES OF SUCH AGREEMENTS
ARE AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF
THE COMPANY AND WILL BE FURNISHED TO ANY HOLDER OF THIS WARRANT
OR ANY UNDERLYING SECURITIES ISSUABLE UPON EXERCISE OF THIS
WARRANT UPON WRITTEN REQUEST AND WITHOUT CHARGE.
TWISTBOX
ENTERTAINMENT, INC.
CLASS
A WARRANT
| Warrant No. WR-1 |
Dated:
July 30, 2007
|
Twistbox
Entertainment, Inc., a Delaware corporation (the “Company”),
hereby
certifies that,
for
value received, ValueAct SmallCap Master Fund, L.P. (together with its
transferees permitted
hereby, the “Holder”),
is
entitled to purchase from the Company up to a total of TWO MILLION
FOUR
HUNDRED ONE THOUSAND SEVEN HUNDRED FORTY SEVEN (2,401,747)
shares of common stock, $0.001 par value per share (the “Common
Stock”),
of
the
Company
(each such share, a “Warrant
Share” and
all
such shares, the “Warrant
Shares”) at
an
exercise price equal to $6.87 per share (as adjusted from time to time as
provided in Section
9,
the
“Exercise
Price”),at
any
time and from the date hereof and through and including 6:30 p.m. New
York
City Time on July 30, 2011 (the “Expiration
Date”), and
subject to the following terms
and
conditions. This Class A Warrant (this “Warrant”) is
issued
pursuant to that certain Securities Purchase Agreement, dated as of the date
hereof, by and among the Company and the Investors
identified therein (the “Securities
Purchase Agreement”) and
in
connection with the issuance
of certain of the Company's Senior Secured Notes. All such warrants are referred
to herein,
collectively, as the “Warrants.”
1.
Definitions.
In
addition
to
the
terms
defined
elsewhere
in
this
Warrant,
capitalized
terms that are not otherwise defined herein have the meanings given to such
terms in the
Securities Purchase Agreement.
2.
Registration
of Warrant.
The
Company shall register this Warrant, upon records to
be
maintained by the Company for that purpose (the
“Warrant
Register”),
in the
name of the record
Holder hereof from time to time. The Company may deem and treat the registered
Holder of
this
Warrant as the absolute owner hereof for the purpose of any exercise hereof
or
any distribution
to the Holder, and for all other purposes, absent actual notice to the
contrary.
3. Registration
of Transfers.
(a)
The
Company shall register the transfer of any portion of this Warrant in the
Warrant Register, upon surrender of this Warrant, with the Form of Assignment
attached hereto duly completed and signed, to the transfer agent or to the
Company at its address specified herein
and the payment by the Holder of any tax payable in respect of any such
transfer. Upon any
such
registration or transfer, a new warrant to purchase Common Stock, in
substantially the form
of
this Warrant (any such new warrant, a “New
Warrant”),
evidencing the portion of this Warrant
so transferred shall be issued to the transferee and a New Warrant evidencing
the remaining
portion of this Warrant not so transferred, if any, shall be issued to the
transferring Holder.
The
acceptance of the New Warrant by the transferee thereof shall be deemed the
acceptance
by such transferee of all of the rights and obligations of a holder of a
Warrant.
(b)
This
Warrant and the Warrant Shares issued upon exercise thereof may not
be
offered for sale, sold, assigned, hypothecated or otherwise transferred (i)
in
the absence of (a)
an
effective registration statement for the securities under the Securities Act
or
Foreign Securities
Law, or (b) if so requested by the Company, an opinion of counsel reasonably
acceptable
to the Company that registration is not required under said act or Foreign
Securities Law
and
(ii) if such sale, assignment, hypothecation or transfer is in violation of
applicable state securities and blue sky laws. The Holder may not sell, assign,
hypothecate or otherwise transfer any Warrant or any Warrant Shares to any
Person that the Board of Directors of the Company, in its
reasonable judgment, deems to be a competitor of the Company or an affiliate
thereof; provided, however, that
upon
the filing of an effective registration statement for the securities
under
the
Securities Act or Foreign Securities Law, such restriction shall be null and
void. Notwithstanding
anything contained herein to the contrary, any transferee of any Warrant or
Warrant
Shares shall, as a condition precedent to such Transfer, agree in writing to
be
subject to the
terms
of the Transaction Documents to the same extent as if the transferee were an
original Investor
under the Securities Purchase Agreement.
4. Exercise
and Duration of Warrants.
(a)
This
Warrant shall be exercisable by the registered Holder at any time and
from
time
to time on or after the date hereof to and including the Expiration Date.
On
the
Expiration
Date, the portion of this Warrant not exercised prior thereto shall be and
become void and of no value; provided that,
on the Expiration Date, if the Closing Price exceeds the Exercise Price,
this Warrant shall be deemed to have been exercised in full (to the extent
not
previously exercised)
on a “cashless
exercise” basis immediately prior to the expiration thereof.
(b)
A
Holder
may exercise this Warrant by delivering to the Company (i) an exercise notice,
in the form attached hereto (the “Exercise
Notice”), appropriately
completed and
duly
signed along with the Warrant, and (ii) payment of the Exercise Price for the
number of Warrant
Shares as to which this Warrant is being exercised (which may take the form
of
(w) cash,
(x)
Senior Secured Notes having a principal amount plus accrued but unpaid interest
equal to
the
Exercise Price, (y) a “cashless exercise” pursuant to Section
10 below,
or
(z) any combination
thereof, in each case as indicated in the Exercise Notice), and the date such
items are
delivered to the Company (as determined in accordance with the notice provisions
hereof) is an
“Exercise
Date.” Execution
and delivery of the Exercise Notice shall have the same effect as cancellation
of the original Warrant and issuance of a New Warrant evidencing the right
to
purchase
the remaining number of Warrant Shares.
5. Delivery
of Warrant Shares.
(a)
Upon
exercise of this Warrant, the Company shall promptly issue or cause to be issued
and cause to be delivered to or upon the written order of the Holder a
certificate for the Warrant Shares issuable upon such exercise.
(b)
This
Warrant is exercisable, either in its entirety or, from time to time, in
part.
Upon surrender of this Warrant following one or more partial exercises, the
Company shall issue
or
cause to be issued, at its expense, a New Warrant evidencing the right to
purchase the remaining
number of Warrant Shares.
(c)
The
Company's obligations to issue and deliver Warrant Shares in accordance
with the terms hereof are absolute and unconditional, irrespective of any action
or inaction
by the Holder to enforce the same, any waiver or consent with respect to any
provision hereof,
the recovery of any judgment against any Person or any action to enforce the
same, or any
setoff, counterclaim, recoupment, limitation or termination, or any breach
or
alleged breach by
the
Holder or any other Person of any obligation to the Company (other than a
failure to comply
with the provisions of this Warrant related to the exercise thereof). 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 Company's failure to timely deliver certificates representing shares
of
Common Stock
upon exercise of the Warrant as required pursuant to the terms
hereof.
6.
Charges,
Taxes and Expenses.
Initial
issuance and delivery of certificates for shares
of
Common Stock to the Holder upon exercise of this Warrant shall be made without
charge
to
the Holder for any issue or transfer tax, withholding tax, transfer agent fee
or
other incidental
tax or expense in respect of the issuance of such certificates, all of which
taxes and expenses
shall be paid by the Company; provided, however, that
the
Company shall not be required
to pay any tax which may be payable in respect of any transfer involved in
the
registration
of any certificates for Warrant Shares or Warrants in a name other than that
of
the Holder
and the Holder shall be responsible therefor. The Holder shall be responsible
for all other tax
liability that may arise as a result of holding or transferring this Warrant
or
receiving Warrant Shares upon exercise hereof.
7.
Replacement
of Warrant. If
this
Warrant is mutilated, lost, stolen or destroyed, the
Company shall issue or cause to be issued in exchange and substitution for
and
upon cancellation
hereof, or in lieu of and substitution for this Warrant, a New Warrant, but
only
upon receipt
of evidence reasonably satisfactory to the Company of such loss, theft or
destruction and customary and reasonable bond or indemnity, if requested.
Applicants for a New Warrant under such circumstances shall also comply with
such other reasonable regulations and procedures and pay
such
other reasonable third-party costs as the Company may prescribe.
8.
Reservation
of Warrant Shares. The
Company covenants that it will at all times reserve
and keep available out of the aggregate of its authorized but unissued and
otherwise unreserved
Common Stock, solely for the purpose of enabling it to issue Warrant Shares
upon
exercise
of this Warrant as herein provided, the number of Warrant Shares which are
then
issuable
and deliverable upon the exercise of this entire Warrant, free from preemptive
rights or any other contingent purchase rights of persons other than the
Holder
(after giving effect to the adjustments
and restrictions of Section
9, if
any).
The Company covenants that all Warrant Shares
so
issuable and deliverable shall, upon issuance and the payment of the applicable
Exercise
Price in accordance with the terms hereof, be duly and validly authorized,
issued and fully
paid and nonassessable.
9.
Certain
Adjustments. The
Exercise Price and number of Warrant Shares issuable upon
exercise of this Warrant are subject to adjustment from time to time as set
forth in this Section
9.
(a)
Adjustments
for Split, Subdivision or Combination of Shares. If
the
Company
at any time while this Warrant, or any portion hereof, remains outstanding
and
unexpired
shall split, subdivide or combine the Common Stock as to which purchase rights
under this
Warrant exist, into a different number of shares of Common Stock, the Exercise
Price for such
shares shall be proportionately decreased in the case of a split or subdivision
or proportionately
increased in the case of a combination or reverse split and the shares of
Common
Stock
as
to which purchase rights under this Warrant exist shall be proportionately
increased in the
case
of a split or subdivision or proportionately decreased in the case of a
combination or reverse
split.
(b)
Adjustments
for Dividends in Stock or Other Securities or Property. If
while
this Warrant, or any portion hereof, remains outstanding and unexpired, the
holders of the Common
Shares as to which purchase rights under this Warrant exist at the time shall
have received,
or, on or after the record date fixed for the determination of eligible
stockholders, shall have
become entitled to receive, without payment therefor, other or additional
stock
or other securities
or property (other than cash) of the Company by way of dividend, then and
in
each case,
this Warrant shall represent the right to acquire, in addition to the number
of
Warrant Shares
receivable upon exercise of this Warrant, and without payment of any additional
consideration
therefor, the amount of such other or additional stock or other securities
or
property
(other than cash) of the Company that such holder would have received on
the
date of such
exercise had it been the holder of record of the security receivable upon
exercise of this Warrant
on the record date for such dividend or distribution.
(c)
Adjustment
of Exercise Price Upon Issuance of Additional Shares of Common
Stock. In
the
event that any shares of Common Stock or any options to purchase shares
of
Common Stock or any stock or security convertible into or exercisable or
exchangeable for
Common Stock are issued following the date hereof (the “Additional
Shares”)
for a
price per
share
less than the Exercise Price (the “Additional
Share Price”),
then
the Exercise Price shall
be
reduced to the consideration per share of Common Stock (as calculated on
an as
converted
basis for the issuance of convertible securities and on an as exercised basis
assuming the payment in full of the exercise price for warrants or options
in
addition to any consideration paid
in
connection with the issuance of such option, warrant or other convertible
security), if any, received
or receivable by the Company upon such issuance or sale, the value of which,
if
not cash,
shall
be
as determined by the Company's Board of Directors in good faith. Notwithstanding
the foregoing, no adjustment shall be made pursuant to this Section 9(c)
in
connection
with any Additional Shares issued, issuable or deemed issued: (i) to officers,
directors
and employees of, and consultants to, the Company pursuant to any incentive
plans or arrangements
approved by the Company's Board of Directors; (ii) upon conversion of shares
of
Company
preferred stock outstanding on the date hereof; (iii) pursuant to any bona
fide
business acquisition;
provided, however, that
for
so long as the Senior Secured Notes are outstanding, the maximum
aggregate value (as determined by the Company's Board, in good faith) of
all
such Additional
Shares issued in connection with such bona fide business acquisitions for
consideration
that is less than the Exercise Price then in effect shall not exceed
$30,000,000; or (iv)
pursuant to any event for which adjustment has already been made pursuant
to
this Section 9.
(d)
Adjustment
of Exercise Price Upon an Event of Default. Upon
the
occurrence
of an Event of Default, as such term is defined in the Senior Secured Note,
the
Exercise
Price shall be permanently reduced to $4.41 per share, as the same may
thereafter be adjusted
from time to time as provided under this Section 9.
(e)
Fundamental
Transaction. If
at any
time while this Warrant, or any portion
hereof, is outstanding and unexpired there shall be (i) a reorganization
(other
than a combination,
reclassification, exchange or subdivision of shares otherwise provided for
herein), (ii)
a
merger or consolidation of the Company with or into another corporation in
which
the Company
is not the surviving entity, or a reverse triangular merger in which the
Company
is the surviving
entity but the shares of the Company's capital stock outstanding immediately
prior to the
merger are converted by virtue of the merger into other property, whether
in the
form of securities,
cash, or otherwise, or (iii) a sale or transfer of all or substantially all
the
Company's properties
and assets to another person (each of (i)-(iii)
a
“Fundamental
Transaction”),
then,
as a
part of
such reorganization, merger, consolidation, sale, or transfer, lawful provision
shall be made
so
that the holder of this Warrant shall thereafter be entitled to receive upon
exercise of this
Warrant, during the period specified herein and upon payment of the Exercise
Price then in effect,
the number of shares of stock or other securities or property of the successor
corporation resulting
from a Fundamental Transaction that a holder of the shares deliverable upon
exercise of this
Warrant would have been entitled to receive in such Fundamental Transaction
if
this Warrant
had been exercised immediately before such Fundamental Transaction, all subject
to further
adjustment as provided in this Section 9. The foregoing provisions of this
Section 9(e) shall similarly apply to successive reorganizations,
consolidations, mergers, sales and transfers and
to
the stock or securities of any other corporation that are at the time receivable
upon the exercise
of this Warrant. If the per share consideration payable to the Holder for
shares
in connection
with any such transaction is in a form other than cash or marketable securities,
then the
value
of such consideration shall be determined in good faith by the Company's
Board
of Directors.
If the per share consideration payable to the Holder for shares in connection
with any such transaction is in a form other than cash or marketable securities,
appropriate adjustment (as determined
in good faith by the Company's Board of Directors) shall be made in the
application of
the
provisions of this Warrant with respect to the rights and interests of the
Holder after the transaction
(including provisions for adjustment to the Exercise Price), to the end that
the
provisions
of this Warrant shall be applicable after that event, as near as reasonably
may
be, in relation
to any shares or other property deliverable after that event upon exercise
of
this Warrant.
(f)
Reclassifications,
etc. If
the
Company, at any time while this Warrant, or any
portion hereof, remains outstanding and unexpired by reclassification of
securities or otherwise,
shall change any of the securities as to which purchase rights under this
Warrant exist into
the
same or a different number of securities of any other class or classes, this
Warrant shall thereafter represent the right to acquire such number and kind
of
securities as would have been issuable
as the result of such change with respect to the securities that were subject
to
the purchase
rights under this Warrant immediately prior to such reclassification or other
change and the
Exercise Price therefore shall be appropriately adjusted, all subject to
further
adjustment as provided
for in this Section 9.
(g)
Calculations. All
calculations under this Section 9 shall be made to the nearest
cent or the nearest 1/100th of a share, as applicable. The disposition of
any
shares owned or
held
by or for the account of the Company shall be considered an issue or sale
of
Common Stock.
(h)
Notice
of Adjustments. Upon
the
occurrence of each adjustment pursuant to
this
Section 9, the Company at its expense will promptly compute such adjustment
in
accordance
with the terms of this Warrant and prepare a certificate setting forth such
adjustment, including
a statement of the adjusted Exercise Price and adjusted number or type of
Warrant Shares or other securities issuable upon exercise of this Warrant
(as
applicable), describing the transactions
giving rise to such adjustments and showing in detail the facts upon which
such
adjustment is based. Upon written request, the Company will promptly deliver
a
copy of each such
certificate to the Holder and to the Company's transfer agent.
(i)
Notice
of Corporate Events.
If the
Company (i) declares a dividend or any other distribution of cash, securities
or
other property in respect of its Common Stock, including without
limitation any granting of rights or warrants to subscribe for or purchase
any
capital stock
of
the Company or any Subsidiary, (ii) authorizes or approves, enters into any
agreement contemplating
or solicits stockholder approval for (x) any Fundamental Transaction, (y)
any
tender
offer or exchange offer (whether by the Company or another Person) pursuant
to
which holders of Common Stock are permitted to tender or exchange their shares
for other securities, cash
or
property, or (z) any reclassification of the Common Stock or any compulsory
share exchange
pursuant to which the Common Stock is effectively converted into or exchanged
for other
securities, cash or property or (iii) authorizes the voluntary dissolution,
liquidation or winding
up of the affairs of the Company, then the Company shall deliver to the Holder
a
notice describing the material terms and conditions of such transaction,
at
least fifteen days prior to the applicable
record or effective date on which a Person would need to hold Common Stock
in
order
to
participate in or vote with respect to such transaction.
10.
Payment
of Exercise Price. The
Holder shall pay the Exercise Price which may take
the
form of (i) cash, (ii) Senior Secured Notes having a principal amount plus
accrued but unpaid
interest equal to the Exercise Price, (iv) a “cashless exercise” or (iv) any
combination thereof.
If the Holder elects to satisfy its obligation to pay the Exercise Price
through
a "cashless exercise,"
the Company shall issue to the Holder the number of Warrant Shares determined
as
follows:
X=Y
(A-B)
A
where:
X
= the
number of Warrant Shares to be issued to the Holder.
Y
= the
number of Warrant Shares with respect to which this Warrant is being
exercised.
A
= the
Closing Price.
B
= the
Exercise Price.
For
purposes of the above calculation, “Closing
Price” shall
be
determined by the Company's Board of Directors in good faith; provided, however, that
where there exists a public market
for the Common Stock at the time of such exercise, the fair market value
per
share shall be
the
average of the closing bid and asked prices of the Common Stock quoted in
the
Over-The-Counter
Market Summary or the last reported sale price of the Common Stock or the
closing price
quoted on the Nasdaq National Market or any exchange on which the Common
Stock
is listed,
whichever is applicable, for the five (5) trading days prior to the date
of
determination of fair
market value. Notwithstanding the foregoing, in the event the Warrant is
exercised in connection
with the Company's initial public offering of Common Stock, the fair market
value per
share
shall be the per share offering price to the public of the Company's initial
public offering.
11. Compliance
with Securities Laws.
(a)
The
Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant
and
the Warrant Shares are being acquired solely for the Holder's own account
and
not as
a
nominee for any other party, and for investment, and that the Holder will
not
offer, sell or otherwise
dispose of this Warrant or any Warrant Shares except under circumstances
that
will not
result in a violation of the Securities Act or any state securities or blue
sky
laws. Upon exercise
of this Warrant, the Holder shall, if so requested by the Company, confirm
in
writing, in a
form
satisfactory to the Company, that the Warrant Shares so purchased are being
acquired solely
for Holder's own account and not as a nominee for the any other party, for
investment and not
with
a view toward distribution or sale.
(b)
This
Warrant may not be transferred or assigned in whole or in part without
compliance with all applicable federal and state securities laws by the
transferor and the transferee
(including the delivery of investment representation letters and legal opinions
reasonably satisfactory to the Company, if such are requested by the Company).
Subject to the provisions
of this Warrant with respect to compliance with the Securities Act or Foreign
Securities
Law and the provisions of the Transaction Documents with respect to the
restrictions on
transfer (including, without limitation, the requirement that any transferee
agree in writing to be subject to the terms of the Transaction Documents
to the
same extent as if the transferee were an
original Investor under the Securities Purchase Agreement), title to this
Warrant may be transferred
by endorsement (by the Holder executing the assignment form annexed hereto)
and
delivery
in the same manner as a negotiable instrument transferable by endorsement
and
delivery.
(c)
For
purposes of Rule 144 promulgated under the Securities Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction
shall be deemed to have been acquired by the Holder, and the holding period
for
the Warrant
Shares shall be deemed to have commenced, on the date this Warrant was
originally issued
pursuant to the Securities Purchase Agreement.
(d) The
Warrant Shares shall be stamped or imprinted with a legend in substantially
the following form (in addition to any legend required by state securities
laws):
THE
SECURITIES
REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF
1933, AS AMENDED, OR APPLICABLE
STATE
SECURITIES
AND
BLUE
SKY LAWS. THE SECURITIES
MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR
ASSIGNED (1) IN THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION
STATEMENT FOR THE SECURITIES
UNDER THE
SECURITIES ACT
OF 1933,
AS
AMENDED
(THE
“SECURITIES ACT”)
OR
FOREIGN
SECURITIES
LAW, OR
(B)
IF
REASONABLY REQUESTED BY THE
COMPANY, AN OPINION OF COUNSEL REASONABLY ACCEPTABLE
TO THE COMPANY THAT REGISTRATION
IS NOT
REQUIRED
UNDER SAID
ACT OR
FOREIGN SECURITIES
LAW AND
(2) IF SUCH
SALE, TRANSFER OR ASSIGNMENT VIOLATES APPLICABLE STATE
SECURITIES
AND
BLUE SKY LAWS.
THE
SECURITIES REPRESENTED HEREBY
ARE
SUBJECT TO THE PROVISIONS
OF A CERTAIN SECURITIES PURCHASE AGREEMENT, DATED
AS OF
JULY
30, 2007, INCLUDING CERTAIN RESTRICTIONS ON TRANSFER
SET FORTH THEREIN AND AN
AMENDED
AND RESTATED INVESTORS'
RIGHTS AGREEMENT, DATED AS OF JULY 30, 2007. COMPLETE
AND CORRECT COPIES OF
SUCH
AGREEMENTS ARE AVAILABLE
FOR INSPECTION AT THE PRINCIPAL OFFICE OF THE COMPANY AND
WILL
BE FURNISHED TO ANY HOLDER OF THE SECURITIES
UPON
WRITTEN REQUEST WITHOUT CHARGE.
12.
Fractional
Shares.
The
Company shall not be required to issue or cause to be issued
fractional Warrant Shares on the exercise of this Warrant. If any fraction
of a
Warrant Share
would, except for the provisions of this Section, be issuable upon exercise
of
this Warrant, the
Company shall pay the Holder an amount in cash equal to the product of (i)
such
fraction of a Warrant
Share and (ii) the excess of the Closing Price over the Exercise
Price.
13.
Notices. Any
and
all notices or other communications or deliveries hereunder (including
without limitation any Exercise Notice) shall be in writing and shall be
deemed
given and
effective on the earliest of (i) the date of transmission, if such notice
or
communication is delivered
via facsimile at the facsimile number specified in the Securities Purchase
Agreement prior
to
6:30 p.m. (New York City time) on a Business Day, (ii) the next Business
Day
after the date
of
transmission, if such notice or communication is delivered via facsimile
at the
facsimile number
specified in the Securities Purchase Agreement on a day that is not a Business
Day or later
than 6:30 p.m. (New York City time) on any Business Day, (iii) the Business
Day
following the
date
of mailing, if sent by nationally recognized overnight courier service or
(iv)
upon actual receipt
by the party to whom such notice is required to be given. The address for
such
notices or communications
shall be as set forth in the Securities Purchase Agreement.
14.
Registration
Rights.
The
Common Shares for which this Warrant is exercisable are
entitled to the benefits of registration rights as set forth in the Amended
and
Restated Investors'
Rights Agreement and subject to the limitations therein.
15. Governing
Law; Venue; Waiver Of Jury Trial.
(A)
ALL
QUESTIONS
CONCERNING
THE
CONSTRUCTION,
VALIDITY,
ENFORCEMENT AND INTERPRETATION OF THIS WARRANT SHALL BE GOVERNED
BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS
OF
THE STATE OF NEW YORK, INCLUDING, WITHOUT LIMITATION, SECTIONS
5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND
NEW
YORK CIVIL PRACTICE LAWS AND RULES 327(b). EACH PARTY HEREBY IRREVOCABLY
SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL
COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN,
FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER
OR
IN
CONNECTION
HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR
DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY
OF
THE TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND
AGREES NOT TO ASSERT IN
ANY SUIT,
ACTION OR PROCEEDING, ANY CLAIM THAT
IT
IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT,
THAT SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY HEREBY
IRREVOCABLY
WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS
TO PROCESS BEING SERVED IN
ANY
SUCH SUIT, ACTION OR PROCEEDING
BY MAILING A COPY THEREOF
VIA
REGISTERED OR CERTIFIED
MAIL
OR
OVERNIGHT DELIVERY (WITH EVIDENCE
OF DELIVERY) TO SUCH PARTY
AT
THE ADDRESS IN
EFFECT
FOR NOTICES TO IT UNDER THIS AGREEMENT
AND
AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT
SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN
SHALL BE DEEMED TO LIMIT IN
ANY
WAY
ANY RIGHT TO SERVE PROCESS
IN
ANY
MANNER PERMITTED BY LAW. THE
COMPANY HEREBY WAIVES
ALL RIGHTS TO A TRIAL BY JURY.
16. Miscellaneous.
(a)
Subject
to the restrictions on transfer set forth herein, this Warrant may be
assigned
by the Holder. This Warrant may not be assigned by the Company except to
a
successor
in the event of a Fundamental Transaction. This Warrant shall be binding
on and
inure to
the
benefit of the parties hereto and their respective successors and assigns.
Subject to the preceding
sentences, nothing in this Warrant shall be construed to give to any Person
other than the
Company and the Holder any legal or equitable right, remedy or cause of action
under this Warrant.
This Warrant may be amended only in writing signed by the Company and the
Holder
and
their
successors and assigns.
(b)
The
Company will not, by amendment of its governing documents 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 of this Warrant,
but
will at all times in good faith assist in the carrying out of all such
terms. Without limiting the generality of the foregoing, the Company (i)
will
not increase the
par
value of any Warrant Shares above the amount payable therefor on such exercise,
(ii) will take
all
such action as may be reasonably necessary or appropriate in order that the
Company may
issue
fully paid and nonassessable Warrant Shares on the exercise of this Warrant,
and
(iii) will
not
close its stockholder books or records in any manner which interferes with
the
timely exercise
of this Warrant.
(c) Nothing
contained in this Warrant shall be construed as conferring upon the
Holder any rights as a stockholder of the Company.
(d) The
headings herein are for convenience only, do not constitute a part of
this
Warrant and shall not be deemed to limit or affect any of the provisions
hereof.
(e)
In
case
any one or more of the provisions of this Warrant shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions
of this Warrant shall not in any way be affected or impaired thereby and
the
parties will
attempt in good faith to agree upon a valid and enforceable provision which
shall be a commercially
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute
provision in this Warrant.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK, SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
by its
authorized officer as of the date first indicated above.
| |
|
|
| |
TWISTBOX
ENTERTAINMENT, INC.
|
|
|
|
|
|
By: |
/s/ IAN AARON |
| |
Name:
IAN AARON
|
| |
Title:
PRES./CEO
|
|
ACCEPTED
AND AGREED TO BY:
|
| |
|
VALUEACT
SMALLCAP MASTER FUND, L.P.
|
|
By
Its General Partner, VA SmallCap Partners, LLC
|
| |
|
By:
|
/s/
DAVID LOCKWOOD
|
|
| |
|
|
Name:
|
DAVID
LOCKWOOD
|
|
| |
|
|
Title:
|
MANAGING
MEMBER
|
|
FORM
OF EXERCISE NOTICE
To
be
executed by the Holder to exercise the right to purchase shares of Common
Stock
under the
foregoing Warrant.
To:
TWISTBOX ENTERTAINMENT, INC.
The
undersigned is the Holder of Warrant No. ____________ (the
“Warrant”) issued
by
Twistbox Entertainment,
Inc., a Delaware corporation (the “Company”).
Capitalized
terms used herein and
not
otherwise defined have the respective meanings set forth in the
Warrant.
| 1. |
The
Warrant is currently exercisable to purchase a total of
_____________ Warrant
Shares.
|
| 2. |
The
undersigned Holder hereby exercises its right to purchase
___________ Warrant
Shares pursuant to the Warrant.
|
| 3. |
The
Holder intends that payment of the Exercise Price shall be made
as (check
one):
|
____
“Cash
Exercise”
under Section 10
____
“Cashless Exercise” under Section 10
____
“Senior Secured Note Due January 30, 2010” having a principal
amount plus accrued but unpaid interest equal to the Exercise
Price
| 4. |
If
the Holder has elected a Cash Exercise, the holder shall pay the
sum of
$________ to
the Company in accordance with the terms of the
Warrant.
|
|
5.
|
Pursuant
to this exercise, the Company shall deliver to the holder
__________
Warrant Shares in accordance with the terms of the
Warrant.
|
| 6. |
Following
this exercise, the Warrant shall be exercisable to purchase a
total of
_____________ Warrant
Shares.
|
| |
|
|
|
Dated: _______________,
________
|
Name
of Holder:
(Print)
|
|
|
By: |
|
| |
Name: |
|
| |
Title:
|
|
| |
|
|
| |
(Signature
must conform in all respects to name of holder
as
specified on the face of the Warrant)
|
FORM
OF ASSIGNMENT
To
be
completed and signed only upon transfer of Warrant.
FOR
VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
_______________________ the
right
represented by the within Warrant to purchase ______________
shares of Common Stock of Twistbox Entertainment, Inc. to which the within
Warrant
relates and appoints ______________ attorney
to transfer said right on the books of Twistbox
Entertainment, Inc. with full power of substitution in the
premises.
| |
|
|
|
Dated:
_____________,_____
|
|
|
|
|
|
| |
(Signature
must conform in all respects to name of holder
as
specified on the face of the Warrant)
|
| |
|
| |
Address
of Transferee
|
| |
|
| |
Security
or Taxpayer Identification Number |
| |
|
| In the presence of: |
|
| |
|
|
|