Exhibit 10.44

 

THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE HEREOF
HAVE BEEN ISSUED AND SOLD WITHOUT REGISTRATION IN RELIANCE UPON EXEMPTIONS FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933 (THE “1933 ACT”) AND APPLICABLE
STATE SECURITIES LAWS (THE “STATE ACTS”). SUCH SECURITIES MAY NOT BE OFFERED FOR
SALE, SOLD, OR TRANSFERRED OTHER THAN PURSUANT TO AN EFFECTIVE REGISTRATION OR
AN EXEMPTION THEREFROM UNDER THE 1933 ACT AND THE STATE ACTS.

 

WARRANT TO PURCHASE COMMON STOCK

OF

ZOO ENTERTAINMENT, INC.

Exercisable Only

upon Conditions Herein Specified

 

Holder: MMB Holdings LLC   Initial Shares: 10,952,775  

1. Grant of Warrants. Zoo Entertainment, Inc., a Delaware corporation (the
“Corporation”), hereby certifies that the above-named Holder (“holder”), its
registered successors and permitted assigns registered on the books of the
Corporation maintained for such purposes as the registered holder hereof, for
value received, is entitled to purchase from the Corporation Ten Million Nine
Hundred Fifty Two Thousand Seven Hundred Seventy-Five (10,952,775) fully paid
and nonassessable shares (the “Shares”) of common stock of the Corporation (the
“Common Stock”), at the purchase price of $0.40 per Share (the “Exercise
Price”). The Exercise Price and the number of Shares are subject to adjustment
(as hereinafter provided) upon the terms and conditions provided in this warrant
(the “Warrant” or “Warrant Certificate”).

 

This Warrant is issued in connection with a Loan and Security Agreement among
the Holder, the Corporation and the subsidiaries of the Corporation.

 

2. Exercise of Warrant.

 

(a) This Warrant may be exercised in whole or in part at any time prior to March
31, 2017. Upon presentation and surrender of this Warrant Certificate and a
Notice of Exercise in the form attached hereto as Exhibit “A” at the principal
office of the Corporation at 11258 Cornell Park Drive, Suite 608, Blue Ash, Ohio
45242, or at such other place as the Corporation may designate by notice to the
Holder hereof, together with a check payable to the order of the Corporation in
the amount of the Exercise Price times the number of Shares being purchased, the
Corporation shall deliver to the Holder hereof, as promptly as practicable,
certificates representing the Shares being purchased. This Warrant may be
exercised in whole or in part in minimum increments of the lesser of 100 Shares
or the number of Shares then represented by this Warrant which have not been
previously exercised. In case of exercise hereof in part only, the Corporation,
upon surrender hereof, will deliver to the Holder a new Warrant Certificate or
Warrant Certificates of like tenor entitling the Holder to purchase the number
of Shares as to which this Warrant has not been exercised.

 

 

 

 

 

(b) All or any part of the Exercise Price per share may be paid by offset
against indebtedness owed by the Corporation, or any other corporation of which
the Corporation owns at least 50% of the voting stock, to the Holder.

 

The Exercise Price may also be paid by surrendering the right to a number of
shares issuable upon exercise of the Warrant that have a fair market value equal
to or greater than the Exercise Price. The fair market value shall be the last
reported price on the most recent date of trading in the Common Stock. If the
Common Stock is not traded, fair market value shall be as determined by the
board of directors of the Corporation.

 

3. Exchange and Transfer of Warrant. This Warrant Certificate at any time prior
to the exercise hereof, upon presentation and surrender to the Corporation and
compliance with Section 6 below, may be exchanged, alone or with other Warrant
Certificates of like tenor registered in the name of the Holder, for another
Warrant Certificate or Warrant Certificates of like tenor in the name of such
Holder or its assignee or transferee exercisable for the same aggregate number
of Shares as the Warrant Certificate or Warrant Certificates surrendered.

 

4. Rights and Obligations of Warrant Holder.

 

(a) The Holder of this Warrant Certificate shall not, by virtue hereof, be
entitled to any rights of a shareholder in the Corporation, either at law or in
equity; provided, however, that in the event that any certificate representing
the Shares is issued to the Holder hereof upon exercise of this Warrant, such
Holder shall, for all purposes, be deemed to have become the holder of record of
such Shares on the date on which this Warrant Certificate, together with a duly
executed purchase form, was surrendered and payment of the Exercise Price was
made, irrespective of the date of delivery of such Share certificate. The rights
of the Holder of this Warrant are limited to those expressed herein and the
Holder of this Warrant, by its acceptance hereof, consents to and agrees to be
bound by and to comply with all the provisions of this Warrant Certificate. In
addition, the Holder of this Warrant Certificate, by accepting the same, agrees
that the Corporation may deem and treat the person in whose name this Warrant
Certificate is registered on the books of the Corporation maintained for such
purpose as the absolute, true and lawful owner for all purposes whatsoever.

 

(b) The Holder of this Warrant Certificate, as such, shall not be entitled to
vote or receive dividends or to be deemed the holder of Shares for any purpose,
nor shall anything contained in this Warrant Certificate be construed to confer
upon the Holder of this Warrant Certificate, as such, any of the rights of a
shareholder of the Corporation including but not limited to any right to vote,
give or withhold consent to any action by the Corporation, whether upon any
recapitalization, issue of stock, reclassification of stock, consolidation,
merger, share exchange, conveyance or otherwise, receive notice of meetings or
other action affecting shareholders (except for the notices provided for
herein), or receive subscription rights, until this Warrant shall have been
exercised and the Shares purchasable upon the exercise hereof shall have become
deliverable as provided herein.

 

 

 

 

 

5. Shares Underlying Warrant. The Corporation covenants and agrees that all
Shares delivered upon exercise of this Warrant shall, upon delivery and payment
therefor, be duly and validly authorized and issued, fully paid and
nonassessable, and free from all liens, encumbrances and charges with respect to
the purchase thereof.

 

6. Disposition of Warrants or Shares. The Holder of this Warrant Certificate and
any transferee hereof or of the Shares issuable upon the exercise of this
Warrant, by their acceptance hereof or thereof, hereby understand and agree that
this Warrant, and the Shares issuable upon the exercise hereof, have not been
registered under either the Securities Act of 1933 (the “1933 Act”) or
applicable state securities laws (the “State Acts”) and shall not be sold,
pledged, hypothecated, donated or otherwise transferred (whether or not for
consideration) except upon the issuance to the Corporation of a favorable
opinion of counsel or submission to the Corporation of such evidence as may be
reasonably satisfactory to counsel to the Corporation, in each such case, to the
effect that any such transfer shall not be in violation of the Act and the State
Acts. It shall be a condition to the transfer of this Warrant that any
transferee hereof deliver to the Corporation its written agreement to accept and
be bound by all of the terms and conditions of this Warrant Certificate.

 

7. Adjustments. The Exercise Price and the number of Shares for which this
Warrant is exercisable as hereinabove provided shall be subject to adjustments
as follows:

 

(a) In case the Corporation shall (i) pay a dividend on its Common Stock in
shares of its Common Stock, (ii) subdivide its outstanding shares of Common
Stock into a greater number of shares, (iii) combine its outstanding shares of
Common Stock into a lesser number of shares, or (iv) issue by reclassification
of its shares of Common Stock any shares of its capital stock, the number of
Shares purchasable upon the exercise of this Warrant in effect immediately prior
thereto and the Exercise Price, in each case, shall be adjusted so that the
Holder shall be entitled to receive, upon exercise of this Warrant, the
aggregate number of Shares which such Holder would have owned or have been
entitled to receive after the happening of such event, at the aggregate Exercise
Price that such Holder would have paid, in each case, had such Holder exercised
this Warrant immediately prior to the record date in the case of such dividend
or the effective date in the case of any such subdivision, combination or
reclassification. In addition, in the case (x) the Corporation shall pay a
dividend on the Common Stock in assets (other than cash or Common Stock) or (y)
the Common Stock is or becomes converted into any other security or asset, then
the Shares to which the Holder is entitled shall include such other security or
assets that the Holder would have owned or have been entitled to receive after
the happening of such event had such Holder exercised this Warrant immediately
prior to the record date in the case of such dividend or the effective date in
the case of any such conversion. An adjustment made pursuant to this subsection
(a) shall be made whenever any such events shall happen, but shall become
effective retroactively after such record date or such effective date, as the
case may be, as to portion of this Warrant exercised between such record date or
effective date and the date of happening of any such event.

 

(b) All adjustments under this Section 7 shall be made to the nearest cent.

 

(c) In case at any time conditions arise by reason of action taken by the
Corporation which, in the opinion of its board of directors or in the opinion of
the Holder, are not adequately covered by the other provisions of this Section 7
and which might materially and adversely affect the rights of the Holder, then
the board of directors of the Corporation shall appoint a firm of independent
certified public accountants of recognized national standing, who may be the
accountants then auditing the books of the Corporation. Such accountant shall
determine the adjustment, if any, on a basis consistent with the standards
established in the other provisions of this Section 5, necessary with respect to
the Exercise Price or adjusted Exercise Price, as so to preserve, without
dilution, the exercise rights of the Holder. Upon receipt of such opinion, the
board of directors of the Corporation shall forthwith make the adjustments
described in such report. In this regard, the Corporation shall be deemed to
have undertaken a fiduciary duty with respect to the Holder.

 

 

 

 

 

(d) Whenever the Exercise Price or the number of Shares is adjusted as herein
provided, the Corporation shall prepare a certificate signed by the chief
financial officer of the Corporation setting forth the adjusted Exercise Price
and the adjusted number of Shares and showing in reasonable detail the facts
upon which such adjustment is based. As promptly as practicable, the Corporation
shall cause a copy of the certificate referred to in this subsection (d) to be
mailed to the Holder.

 

8. Merger, Consolidation, Etc. In case the Corporation shall execute any
agreement providing for the consolidation of the Corporation with or merger of
the Corporation into another corporation or any sale, transfer or lease to
another corporation of all or substantially all the property of the Corporation
(each of the foregoing are referred to as a “Corporate Transaction”), the
Corporation shall mail by first class mail, postage prepaid, to each holder of
this Warrant, notice of the execution of such agreement. The holders of this
Warrant shall then have ten (10) days to exercise this Warrant and participate
as a stockholder of the Corporation in any such Corporate Transaction. Any
purported exercise of this Warrant under this Section 8 shall be conditioned on
the consummation of such Corporate Transaction.

 

(a) If such Corporate Transaction is not consummated, the Warrant and the
Exercise Price paid by the holders shall be returned to the holders.

 

(b) After the consummation of any Corporate Transaction, this Warrant (or any
portion thereof) that has not been exercised shall terminate and shall
thereafter be rendered null and void.

 

9. Taxes. The Corporation shall pay all taxes that may be payable in respect of
the issue or delivery of Common Stock on exercise of this Warrant, but shall not
pay any tax which may be payable in respect of any transfer involved in the
issue and delivery of the Common Stock in a name other than that in which this
Warrant was registered, and no such issue or delivery shall be made unless and
until the person requesting such issue has paid to the Corporation the amount of
any such tax, or has established, to the satisfaction of the Corporation, that
such tax has been paid.

 

10. Rule 144 Information. At any time and from time-to-time after the earlier of
the close of business on such date as a registration statement filed by the
Corporation under the Securities Act of 1933 becomes effective, the Corporation
registers a class of securities under Section 12 of the Securities Exchange Act
of 1934 or the Corporation issues an offering circular meeting the requirements
of Regulation A under the Securities Act of 1933, the Corporation shall
undertake to make publicly available and available to holders of the Warrants
and the shares of Common Stock issued thereunder, such information as is
necessary to enable the holders thereof to make sales of Warrants or Common
Stock issued or issuable upon exercise of the Warrants pursuant to Rule 144
promulgated under the Securities Act of 1933.

 

 

 

11. Fractional Shares. No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant. If the exercise of
this Warrant results in a fraction, an amount equal to such fraction multiplied
by the Exercise Price of the Shares on the day of exercise shall be paid to the
Holder in cash by the Corporation.

 

12. Preservation of Holder’s Rights.

 

(a) The Corporation covenants and agrees that it shall at all times reserve and
keep available, free from preemptive rights, out of its authorized Common Stock,
solely for the purpose of effecting the exercise of this Warrant, the full
number of shares of Common Stock then deliverable in the event and upon the
exercise of this Warrant. All shares of Common Stock which may be issued upon
exercise of this Warrant shall be fully paid.

 

(b) Notwithstanding anything to the contrary elsewhere in this Warrant, the
Corporation shall not, by amendment of its Certificate 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 of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such action as may be necessary or appropriate in order
to protect the rights of the holder of this Warrant against dilution. Without
limiting the generality of the foregoing, the Corporation (i) will not increase
the par value of any shares of stock receivable on the exercise of this Warrant
above the amount payable therefor on such exercise, (ii) will take all such
action as may be necessary or appropriate in order that the Corporation may
validly and legally issue fully paid and non-assessable shares of stock on the
exercise of this Warrant from time to time outstanding, and (iii) will not issue
any capital stock of any class which is preferred as to dividends or as to the
distribution of assets upon voluntary or involuntary dissolution, liquidation or
winding up, unless the rights of the holders thereof shall be limited to a fixed
sum or percentage of par value in respect of participation in dividends and in
any such distribution of assets.

 

13. Loss or Destruction. Upon receipt of evidence satisfactory to the
Corporation of the loss, theft, destruction or mutilation of this Warrant
Certificate and, in the case of any such loss, theft or destruction, upon
delivery of an indemnity agreement or bond satisfactory in form, substance and
amount to the Corporation or, in the case of any such mutilation, upon surrender
and cancellation of this Warrant Certificate, the Corporation at its expense
will execute and deliver, in lieu thereof, a new Warrant Certificate of like
tenor.

 

14. Survival/Permitted Assigns. The various rights and obligations of the Holder
hereof as set forth herein shall survive the exercise of this Warrant at any
time or from time to time and the surrender of this Warrant Certificate. The
permitted assigns of the Holder shall consist of the equityholders from time to
time of the Holder.

 

 

 

15. Notices. Whenever any notice, payment of any purchase price or other
communication is required to be given or delivered under the terms of this
Warrant, it shall be in writing and delivered by hand delivery or registered or
certified United States mail, postage prepaid, and will be deemed to have been
given or delivered on the date such notice, purchase price or other
communication is so delivered, and, if to the Corporation, it will be addressed
to the address specified in Section 2(a) hereof, and if to the Holder, it will
be addressed to the registered Holder at his address as it appears on the books
of the Corporation.

 

16 Governing Law. This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of Delaware.

 

Dated as of the ___ day of _______, 2012.

  ZOO ENTERTAINMENT, INC.       By:      Title:   

 

 

 

Signature Page - Warrant

 

 

EXHIBIT “A”

 

NOTICE OF EXERCISE

 

(To be Executed by the Registered Holder

in order to Exercise the Warrant)

 

The undersigned hereby irrevocably elects to exercise the Warrant held by the
undersigned to acquire shares of common stock (“Common Stock”) of Zoo
Entertainment, Inc. (the “Company”) according to the conditions of the Warrant,
as of the date written below. If shares are to be issued in the name of a person
other than the undersigned, the undersigned will pay all transfer taxes payable
with respect thereto. No fee will be charged to the Holder for any exercise,
except for transfer taxes, if any. A copy of the Warrant is attached hereto.*

 

The undersigned acknowledges that all offers and sales by the undersigned of the
shares of Common Stock issuable to the undersigned upon exercise of the Warrant
must be made pursuant to registration of the Common Stock under the Securities
Act of 1933, as amended (the “Act”) or pursuant to an exemption from
registration under the Act.

  

  Expiration of Warrant:   Date of Exercise:     Applicable Exercise Price:    
Number of Shares of Common Stock to be Issued:     Signature:     Name:    
Address:  

 

* No Shares of Common Stock will be issued until the Warrant to be exercised and
the Notice of Exercise are received by the Company or its Transfer Agent.