f10q0609ex10iii_adex.htm


    Exhibit
10.3

     

     

    THIS
WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR UNDER ANY
STATE SECURITIES LAWS.  THIS WARRANT AND THE COMMON STOCK ISSUABLE
UPON EXERCISE OF THIS WARRANT MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
APPLICABLE SECURITIES LAWS OR UNLESS OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE
LAWS.  THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT
TO RESTRICTIONS ON TRANSFER PURSUANT TO AN AGREEMENT BETWEEN THE HOLDER AND THE
CORPORATION, A COPY OF WHICH MAY BE OBTAINED FROM THE CORPORATION.

     

    WARRANT
TO PURCHASE COMMON STOCK

    OF

    ADEX
MEDIA, INC.

     

    Date of
Issuance:  __________,
2009                                                                                                                                                 
       Number of Warrant: WC-
_____

     

    THIS WARRANT (“Warrant”)
certifies that, for value received,  _____________, a/an individual or
corporation, or its permitted assigns registered on the books (collectively, the
“Holder”)
of Adex Media, Inc., a Delaware corporation (the “Company”),
having its principal place of business at 883 N. Shoreline Boulevard, Suite
A-200, California 94043, is entitled to purchase at any time during the Exercise
Period (as defined below), _____________ whole shares (the “Warrant
Shares”)
of the Company’s common stock, par value $0.0001 per share (the “Common
Stock”) at an exercise price per share equal to $1.56  (the
“Exercise
Price”).

     

    This Warrant is issued
pursuant to, and is subject to the terms and conditions of a Series A
Convertible Preferred Stock and Warrant Purchase Agreement (the “Purchase
Agreement”) dated ____________ between the Company and Holder, a copy of
which is attached hereto as Exhibit
A.  Capitalized terms not defined herein shall have the
meanings set forth in the Purchase Agreement.

     

    1. Exercise.

     

    1.1 Manner
of Exercise. Pursuant to the terms and conditions set forth in this
Warrant, the Holder may exercise this Warrant at any time during the Exercise
Period, at the option of the Holder, upon surrender of this Warrant to the
Company together with a duly completed Notice of Exercise, in the form attached
hereto as Exhibit
B, and payment of an amount equal to the Exercise Price multiplied by the
number of Warrant Shares to be exercised.  Subject to Section 1.2, in the case of exercise of less than
all the Warrant Shares represented by this Warrant, the Company shall cancel
this Warrant upon the surrender thereof and shall execute and deliver a new
warrant for the balance of such Warrant Shares.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    1.2 Mandatory
Exercise. At the option of the Company, this Warrant shall automatically
be deemed to have been exercised fifteen trading days after delivery to the
Holder of written notice of such deemed exercise; provided, that the
volume-weighted average closing price of the Company’s Common Stock over the ten
trading days immediately preceding the date of such notice is at least $2.50 per
share.  Notwithstanding the foregoing, if such deemed exercise would
cause any Holder’s beneficial ownership, as defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”), of Common Stock to exceed 4.99% of the Company’s Common Stock
outstanding, then the amount of such Holder’s Warrant that will be deemed to
have been exercised shall be reduced such that such Holder’s beneficial
ownership would not exceed 4.99%.  In order to facilitate the
automatic conversion of this Warrant, the Holder acknowledges that the Company
will hold this Warrant on behalf of the Holder until the expiration of the
Exercise Period.

     

    1.3 Effective
Time of Exercise.  Each exercise of this Warrant shall be
deemed to have been effected immediately prior to the close of business on the
day on which this Warrant shall have been surrendered to the Company as provided
in Section 1.1 above.  At such
time, the person or persons in whose name or names any certificates for Warrant
Shares shall be issuable upon such exercise as provided in Section 1.4 below shall be deemed to have become
the holder or holders of record of the Warrant Shares for which this Warrant has
been exercised.

     

    1.4 Delivery
to Holder.  As soon as practicable after the exercise of this
Warrant in whole or in part, and in any event within twenty days thereafter, the
Company will cause to be issued in the name of, and delivered to, the Holder, or
as such Holder (upon payment by such Holder of any applicable transfer taxes)
may direct:

     

    1.5 a
certificate or certificates for the Warrant Shares to which such Holder shall be
entitled, and

     

    1.6 in case
such exercise is in part only, a new warrant or warrants (dated the date hereof)
of like tenor, calling in the aggregate on the face or faces thereof for the
number of shares of Warrant Shares equal (without giving effect to any
adjustment therein) to the number of such shares called for on the face of this
Warrant minus the number of such shares purchased by the Holder upon such
exercise.

     

    2. Exercise
Period.  The “Exercise
Period” means a period beginning on the date of issuance and ending on
the fifth anniversary thereof, or if such ending date shall be a holiday or a
day on which banks are authorized to close, then the next following date which
is not a holiday or a day on which banks are not authorized to close (the “Termination
Date”).  If the Holder does not exercise this Warrant with
respect to all Warrant Shares during the Exercise Period, if any, this Warrant
will automatically expire on the Termination Date.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    3. Agreement
of Holder.  The Holder acknowledges that this Warrant and the
Warrant Shares represented by this Warrant have not been registered under the
Securities Act of 1933, as amended (the “Securities
Act”) or any applicable state securities laws and accordingly that they
will not be transferred or sold except pursuant to (i) an effective registration
statement or qualification under the Securities Act or any applicable state
securities law, or (ii) an opinion of counsel, satisfactory to the Company and
Company’s counsel, that such registration and qualification are not
required.

     

    4. Loss
or Mutilation.  Upon receipt by the Company of reasonable
evidence of the ownership of and the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to the Company, or, in the case of mutilation, upon
surrender and cancellation of the mutilated Warrant, the Company shall execute
and deliver in lieu thereof a new warrant representing an equal number of
Warrant Shares.

     

    5. Adjustment
of Exercise Price and Number of Warrant Shares.  The number and
kind of Warrant Shares purchasable upon the exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time upon the
occurrence of certain events, as follows:

     

    5.1 Splits,
Combinations, Reclassifications.  If, during the Exercise
Period, the Company (i) pays a dividend in shares of the Warrant Shares or makes
a distribution in Warrant Shares to the holders of the outstanding shares of
Warrant Shares, (ii) subdivides its outstanding shares of Warrant Shares through
stock split or otherwise, (iii) combines its outstanding shares of Warrant
Shares into a smaller number of shares of Warrant Shares, or (iv) issues by
reclassification of the Warrant Shares (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
corporation) other securities of the Company, then the number and/or nature of
Warrant Shares purchasable upon exercise of this Warrant immediately prior
thereto shall be adjusted so that the Holder shall be entitled to receive the
kind and number of Warrant Shares or other securities of the Company which
Holder would have owned or have been entitled to receive after the happening of
any of the events described above, had this Warrant been exercised immediately
prior to the effective date of such event or any record date with respect
thereto.  Upon each adjustment in the number of Warrant Shares
purchasable hereunder pursuant to this Section 5.1, the Exercise Price shall be
proportionately increased or decreased, as the case may be, in a manner that is
the inverse of the manner in which the number of Warrant Shares purchasable
hereunder shall be adjusted, as determined in good faith by the Board of
Directors of the Company.

     

    5.2 Dilutive
Issuances.

     

    5.2.1 Adjustment
of Exercise Price. If, at any time during the period beginning on the
date of issuance and ending six months thereafter, the Company closes on the
sale or issuance of (A) Common Stock at a price, or (B) any securities
convertible into or exchangeable for, directly or indirectly, Common Stock
(“Convertible
Securities”), or any rights or warrants or options to purchase any such
Common Stock or Convertible Securities (collectively, the “Additional
Issuances”) with an exercise price or conversion price, which is less
than the then current Exercise Price, then the Exercise Price shall be reduced
concurrently with such issue or sale, according to the following formula
(calculated to the nearest one-hundredth of a cent):

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

     

    P2 = P1 × (A + B)
÷ (A + C)

     

    For
purposes of the foregoing formula, the following definitions shall
apply:

     

    
      	
               
      

            	
              “P2”

            	
              means
      the Exercise Price in effect immediately after such Additional
      Issuances;

            


    

     

    
      	
               
      

            	
              “P1”

            	
              means
      the Exercise Price in effect immediately prior to such Additional
      Issuances;

            


    

     

    
      	
               
      

            	
              “A”

            	
              means
      the number of shares of Common Stock outstanding immediately prior to such
      Additional Issuances (treating for this purpose as outstanding all shares
      of Common Stock issuable upon exercise of options outstanding immediately
      prior to such issue or upon conversion or exchange of Convertible
      Securities (including the Series A Preferred Stock, prior to any
      adjustment, if any, to the conversion price thereof by reason of the
      Additional Issuance) outstanding (assuming exercise of any outstanding
      options therefor) immediately prior to such
  issue);

            


    

     

    
      	
               
      

            	
              “B”

            	
              means
      the number of shares of Common Stock that would have been issued if such
      Additional Issuances had been issued at a price per share equal to P1
      (determined by dividing the aggregate consideration received by the
      Company in respect of such issue by P1);
and

            


    

     

    
      	
               
      

            	
              “C”

            	
              means
      the number of Additional Issuances issued in such
      transactions.

            


    

     

    5.2.2 Adjustment
of Number of Warrant Shares.  Upon each adjustment of the
Exercise Price pursuant to Section 5.2.1 above, the number of Warrant Shares
issuable upon exercise of this Warrant shall be increased according to the
following formula:

     

    S2 = S1 × (P1 ÷ P2)

     

    For
purposes of the foregoing formula, the following definitions shall
apply:

     

    
      	
               
      

            	
              “S2”

            	
              means
      the adjusted number of Warrant Shares issuable upon exercise of this
      Warrant and payment of the adjusted Exercise
  Price;

            


    

     

    
      	
               
      

            	
              “S1”

            	
              means
      the number of Warrant Shares previously issuable upon exercise of this
      Warrant and payment of the Exercise Price prior to
    adjustment;

            


    

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    
      	
               
      

            	
              “P2”

            	
              means the Exercise
      Price in effect immediately after such Additional Issuances, as calculated
      pursuant to Section 5.2.1 above;
      and

            


    

     

    
      	
               
      

            	
              “P1”

            	
              means
      the Exercise Price in effect immediately prior to such Additional
      Issuances.

            


    

     

    5.2.3 Excluded
Issuances.  Notwithstanding anything to the contrary set forth
in Sections 5.2.1 or 5.2.2 above, no adjustment shall be made to
the Exercise Price or the number of Warrant Shares issuable upon exercise of
this Warrant with regard to (a) securities issued (other than for cash) in
connection with a strategic merger, acquisition, consolidation, licensing or
partnering agreement, the primary purpose of which, as reasonably determined by
the Company’s Board of Directors, is not to raise additional capital; (b)
securities issued pursuant to a bona fide firm underwritten public offering of
the Company’s securities yielding gross proceeds to the Company of not less than
$20,000,000; (c) Common Stock issued and grants of options to purchase Common
Stock pursuant to an equity compensation plan approved by the Company’s Board of
Directors; (d) securities issued pursuant to the conversion or exercise of
convertible or exercisable securities issued or outstanding on the issue date
hereof, issued pursuant to the Purchase Agreement; and (e) any warrants, shares
of Common Stock or other securities issued to a placement agent and its
designees for the transactions contemplated by the Purchase
Agreement.

     

    5.3 Notice
of Capital Changes.  If at any time the Company shall effect
any of the events described in Section 5.1 or any Additional Issuances described
in Section 5.2 above, or there
shall be a voluntary or involuntary dissolution, liquidation or winding up of
the Company, then, in any one or more of said cases, the Company shall give the
Holder written notice, by registered or certified mail, postage prepaid, of the
date on which (i) a record shall be taken for such dividends, distributions and
the like, (ii) the Additional Issuances shall close, or (ii) such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding up shall take place, as the case may be.  Such
written notice shall be given at least ten days prior to the relevant
event.

     

    5.4 Certificates
of Adjustments.  Whenever the Exercise Price or the number of
Warrant Shares purchasable hereunder shall be adjusted pursuant to this Section
5, the Company shall prepare a
certificate signed by the Chief Financial Officer of the Company setting forth,
in reasonable detail, the event requiring the adjustment, the amount of the
adjustment, the method by which such adjustment was calculated, and the Exercise
Price and the number of Warrant Shares purchasable hereunder after giving effect
to such adjustment, and shall cause copies of such certificate to be mailed, by
first class mail, postage prepaid, to the Holder.

     

    6. No
Rights as Shareholder.  Until the exercise of this Warrant, the
Holder of this Warrant shall not have or exercise any rights by virtue hereof as
a shareholder of the Company.  This Warrant shall not be deemed to
confer upon the Holder any right to vote or to consent to or receive notice as a
shareholder of the Company, in respect of any matters whatsoever, prior to the
exercise hereof.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    7. Transfers.

     

    7.1 Unregistered
Security.  Each holder of this Warrant acknowledges that this
Warrant and the Warrant Shares of the Company have not been registered under the
Securities Act or any applicable state securities law, and agrees not to sell,
pledge, distribute, offer for sale, transfer or otherwise dispose of this
Warrant or any Warrant Shares issued upon its exercise in the absence of (i) an
effective registration statement under the Securities Act as to this Warrant or
such Warrant Shares and registration or qualification of this Warrant or such
Warrant Shares under any applicable U.S. federal or state securities law then in
effect, or (ii) an opinion of counsel, satisfactory to the Company, that such
registration and qualification are not required.  Each certificate or
other instrument for Warrant Shares issued upon the exercise of this Warrant
shall bear a legend substantially to the foregoing effect.  The
foregoing notwithstanding, Holder may transfer this Warrant for bona fide estate
planning purposes in which no consideration is paid for such transfer, either
during Holder’s lifetime or on death, by will or intestacy, to Holder’s spouse,
children, parents, or siblings, or any custodian or trustee of any trust,
partnership or limited liability company for the benefit of, or the ownership
interests of which are wholly owned by, Holder or any such family members,
provided that Holder shall deliver prior written notice to the Company of any
such transfer and this Warrant shall at all times remain subject to the terms
and restrictions set forth in this Agreement and each transferee, shall, as a
condition to such transfer, deliver a counterpart signature page to the Purchase
Agreement as confirmation that such transferee shall be bound by all the terms
and conditions thereof.

     

    7.2 Transferability.  Subject
to the provision of Section 7.1 hereof,
this Warrant and all rights hereunder are transferable, in whole or in part,
only upon surrender of this Warrant with a properly executed assignment (in the
form of Exhibit
C hereto) at the principal office of the Company.

     

    7.3 Warrant
Register.  The Company will maintain a register containing the
names and addresses of the Holders of this Warrant.  Until any
transfer of this Warrant is made in the warrant register, the Company may treat
the Holder of this Warrant as the absolute owner hereof for all purposes; provided,
however, that if this Warrant is properly assigned in blank, the Company
may (but shall not be required to) treat the bearer hereof as the absolute owner
hereof for all purposes, notwithstanding any notice to the
contrary.  Any Holder may change such Holder’s address as shown on the
warrant register by written notice to the Company requesting such
change.

     

    8. Fractional
Shares.  Notwithstanding that the number of Warrant Shares
purchasable upon the exercise of this Warrant may have been adjusted pursuant to
the terms hereof, the Company shall nonetheless not be required to issue
fractions of shares upon the exercise of the Warrants or to distribute
certificates that evidence fractional shares nor shall the Company be required
to make any cash payments in lieu thereof upon exercise of the
Warrants.  Holder hereby waives any right to receive fractional
shares.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    9. Notices.  Except
as otherwise expressly provided herein, all notices and other communications
required or permitted hereunder shall be effective upon receipt and shall be in
writing and may be delivered in person, by telecopy, overnight delivery service
or United States mail, in which event it may be mailed by first-class, certified
or registered, postage prepaid, addressed (i) if to a Holder, to the address
appearing on the books of the Company, or at such other address as the Holder
shall have furnished to the Company in writing, or (ii) if to the Company, at
883 N. Shoreline Boulevard, Suite A-200, Mountain View, California 94043,
attention: Chief Financial Officer; or at such other address as the Company
shall have furnished to the Investor in writing, with a copy to Eric K. Ferraro,
Bullivant Houser Bailey PC, 601 California Street, Suite 1800, San Francisco,
California 94108, Fax (415) 352-2701.

     

    10. Successors
and Assigns.  This Warrant shall be binding on and inure to the
benefit of the heirs, executors, administrators, successors, and assigns of the
respective parties.

     

    11. Amendment
or Waiver.  Any term of this Warrant may be amended or waived
only by an instrument in writing signed by the Company and the Holders of at
least a majority in interest of the then-outstanding Warrants. Any amendment or
waiver affected in accordance with this Section 11 shall be binding upon the Company, the
Holders of the Warrants and each transferee of a Warrant.

     

    12. Governing
Law.  This Warrant shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to the
conflicts of law provisions of the State of Delaware or of any other
state.

     

    13. Severability.  If
any provision of the Warrant is determined to be invalid, illegal or
unenforceable, in whole or in part, the validity, legality and enforceability of
any of the remaining provisions or portions of the Warrant shall not in any way
be affected or impaired thereby and the Warrant shall nevertheless be binding
between the Company and the Holder.

     

    14. Headings.
The descriptive headings in the Warrant are inserted for convenience only and do
not constitute a part of the Warrant.

     

    15. Entire
Agreement.  This Warrant and the Purchase Agreement constitute
the full and complete agreement of the parties with respect to the subject
matter hereof, and supersede any prior agreements between the parties with
respect thereto.

     

    [Signature
on following page]

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

     

    IN WITNESS WHEREOF, this
Warrant has been executed as of ________________,
2009.

     

     

    ADEX MEDIA,
INC.

    a Delaware
corporation

     

     

    By:           __________________________

                                                                                                                                                                                                   
Name: __________________________

    Title:          __________________________

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

     

     

    EXHIBIT
A

     

    SERIES
A CONVERTIBLE PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT

     

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

     

     

    EXHIBIT
B

     

    NOTICE
OF EXERCISE

     

     

     

    To:  Adex
Media, Inc.

     

    The undersigned, pursuant
to the provisions set forth in the attached Warrant No. _____, hereby
irrevocably elects to purchase _______ shares of Common Stock of the Company
covered by such Warrant and herewith makes payment of $_________, representing
the full purchase price for such shares at the price per share provided for in
such Warrant.

     

     

    Date:
__________________

     

    ____________________________

    Name of
Holder

     

    ____________________________

    Signature

     

    ___________________________

    Address

    ____________________________

     

    ____________________________

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

     

    EXHIBIT
C

     

    ASSIGNMENT
FORM

     

    FOR VALUE RECEIVED,
_________________________________________ hereby sells, assigns and transfers
all of the rights of the undersigned under the attached Warrant with respect to
the number of shares of Common Stock of the Company covered thereby set forth
below, unto:

     

    Name of
Assignee:              __________________________

    Address
of
Assignee:          __________________________

                                                    
__________________________

    Facsimile
Number:                __________________________

    No. of
Shares:                        __________________________