Document:

ex_146648.htm

Exhibit 4.4

 

 

NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS WHICH, IN THE OPINION OF COUNSEL FOR THE COMPANY, IS AVAILABLE.

 

Void after 5:00 P.M. San Francisco time on the last day of the Exercise Period,

as defined in the Warrant

 

COMMON STOCK PURCHASE WARRANT

OF

SALON MEDIA GROUP, INC.

Warrant No.: 2

 

This is to certify that, FOR VALUE RECEIVED, Jordan Hoffner (“Holder”), is entitled to purchase, subject to the provisions of this warrant (“Warrant”), from Salon Media Group, Inc., a Delaware corporation (the “Company”), at an exercise price per share of $0.01, subject to adjustment as provided in this Warrant (the “Warrant Exercise Price”), 6,372,600 shares of common stock, par value $0.001 per share (“Common Stock”). The shares of Common Stock deliverable upon such exercise, and as adjusted from time to time (including shares issued as dividends or upon any stock split or recapitalization), are hereinafter sometimes referred to as “Warrant Shares.”

 

1.     ISSUANCE OF WARRANT. This Warrant is being issued pursuant to is being issued pursuant to the terms and conditions of that certain Subscription Agreement dated of even date herewith by and among Holder, Company and the other subscribers set forth therein (the “Agreement”). Capitalized terms used herein and not otherwise defined shall have the meanings ascribed thereto in the Agreement, as the case may be. In addition, the following terms have the meanings set forth below:

 

 “Convertible Securities” shall mean evidences of indebtedness, shares of stock or other securities, which are convertible into or exchangeable, with or without payment of additional consideration in cash or property, for shares of Common Stock, either immediately or upon the occurrence of a specified date or a specified event.

 

 “Exercise Period” shall mean the period commencing on the date hereof and ending at 5 p.m., Eastern Time on December 7, 2023.

 

 “Permitted Issuances” shall mean (i) Common Stock issued pursuant to a stock split or subdivision, or (ii) Common Stock issuable or issued to employees, consultants or directors of the Company directly or pursuant to a stock plan or other compensation arrangement (including upon exercise of options or warrants) approved by the Board of Directors of the Company at the then fair market value, or (iii) capital stock, debt instruments convertible into capital stock or warrants or options to purchase capital stock issued in connection with bona fide acquisitions, mergers, purchases, corporate partnering agreements, consulting agreements, joint ventures or similar transactions, the terms of which are approved by the Board of Directors of the Company, or (iv) Common Stock or any other securities exercisable or exchangeable for, or convertible into shares of Common Stock outstanding as of December 7, 2018.

 

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2.     EXERCISE OF WARRANT. This Warrant may be exercised in whole or in part at any time or from time to time from the date hereof until the end of the Exercise Period by presentation and surrender hereof to the Company at its principal office, or at the office of its stock transfer agent, if any, with the Purchase Form annexed hereto duly executed and accompanied by payment of the Warrant Exercise Price for the number of shares of Common Stock specified in such form. If this Warrant should be exercised in part only, the Company shall, upon surrender of this Warrant for cancellation, execute and deliver a new Warrant evidencing the rights of the Holder hereof to purchase the balance of the shares of Common Stock purchasable hereunder. Upon receipt by the Company of this Warrant at its office, or by the stock transfer agent of the Company at its office, in proper form for exercise, the Holder shall be deemed to be the holder of record of the shares of Common Stock issuable upon such exercise, notwithstanding that the stock transfer books of the Company shall then be closed or that certificates representing such shares of Common Stock shall not then be actually delivered to the Holder. As soon as practicable after each exercise of this Warrant, in whole or in part, and in any event within five (5) days thereafter, the Company at its expense (including the payment by it of any applicable issue or transfer taxes and transfer agent fees or opinions of counsel) will cause to be issued in the name of and delivered to the Holder hereof or, subject to Section 6 hereof, as the Holder may direct a certificate or certificates (with appropriate restrictive legends, as applicable) for the number of duly authorized, validly issued, fully paid and non-assessable shares of Common Stock to which the Holder shall be entitled upon exercise plus, in lieu of any fractional share to which the Holder would otherwise be entitled, all issuances of Common Stock shall be rounded up to the nearest whole share.

 

 

3.    RESERVATION OF SHARES/FRACTIONAL SHARES. The Company hereby agrees that at all times there shall be reserved for issuance and/or delivery upon exercise of this Warrant such number of shares of Common Stock as shall be required for issuance and delivery upon exercise of this Warrant. No fractional shares or script representing fractional shares shall be issued upon the exercise of this Warrant. Instead, the Company will round up to the nearest whole share.

 

4.     EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT. This Warrant is exchangeable, without expense, at the option of the Holder, upon presentation and surrender hereof to the Company for other Warrants of different denominations entitling the holder thereof to purchase in the aggregate the same number of shares of Common Stock purchasable hereunder. Upon surrender of this Warrant to the Company or at the office of its stock transfer agent, if any, with the Assignment Form annexed hereto duly executed and funds sufficient to pay any transfer tax, the Company shall, without charge, execute and deliver a new Warrant in the name of the assignee named in such instrument of assignment and this Warrant shall promptly be canceled. This Warrant may be divided or combined with other Warrants which carry the same rights upon presentation hereof at the office of the Company or at the office of its stock transfer agent, if any, together with a written notice specifying the names and denominations in which new Warrants are to be issued and signed by the Holder hereof. The term “Warrant” as used herein includes any Warrants into which this Warrant may be divided or exchanged. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and (in the case of loss, theft or destruction) of reasonably satisfactory indemnification, and upon surrender and cancellation of this Warrant, if mutilated, the Company will execute and deliver a new Warrant of like tenor. Any such new Warrant executed and delivered shall constitute an additional contractual obligation on the part of the Company, whether or not this Warrant so lost, stolen, destroyed, or mutilated shall be at any time enforceable by anyone.

 

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5.     RIGHTS AND OBLIGATIONS OF THE HOLDER. The Holder shall not, by virtue of this Warrant, be entitled to any rights of a stockholder in the Company, either at law or equity, and the rights of the Holder are limited to those expressed in the Warrant and are not enforceable against the Company except to the extent set forth herein. In addition, no provision hereof, in the absence of affirmative action by Holder to purchase shares of Common Stock, and no enumeration herein of the rights or privileges of Holder hereof, shall give rise to any liability of such Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

 

6.     ANTI-DILUTION PROVISIONS. The Warrant Exercise Price in effect at any time and the number and kind of securities purchasable upon exercise of each Warrant shall be subject to adjustment as follows and the Company shall give each Holder notice of any event described below which requires an adjustment pursuant to this Section 6 at the time of such event:

 

 (a)     Stock Dividends, Subdivisions and Combinations. If at any time the Company shall:

 

(i)     take a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend payable in, or other distribution of, shares of Common Stock,

 

(ii)    subdivide or reclassify its outstanding shares of Common Stock into a larger number of shares of Common Stock, or

 

(iii)   combine or reclassify its outstanding shares of Common Stock into a smaller number of shares of Common Stock or otherwise effect a reverse stock split,

 

then (i) the number of shares of Common Stock for which this Warrant is exercisable immediately after the occurrence of any such event shall be adjusted to equal the number of shares of Common Stock which 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, or the record date therefor, whichever is earlier, would own or be entitled to receive after the happening of such event, and (ii) the Warrant Exercise Price(s) shall be adjusted to equal (A) the Warrant Exercise Price immediately prior to such event 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 for which this Warrant is exercisable immediately after such adjustment.

 

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 (b)     Certain Other Distributions and Adjustments.

 

(i)     If at any time the Company shall take a record of the holders of its Common Stock for the purpose of entitling them to receive any dividend or other distribution of:

 

 (A)     cash,

 

 (B)     any evidences of its indebtedness, any shares of its stock or any other securities or property of any nature whatsoever (other than Convertible Securities or shares of Common Stock), or

 

 (C)     any warrants or other rights to subscribe for or purchase any evidences of its indebtedness, any shares of its stock or any other securities or property of any nature whatsoever (other than Convertible Securities or shares of Common Stock),

 

then, upon exercise of this Warrant, Holder shall be entitled to receive such dividend or distribution with respect to the amount of Common Stock received on such exercise, and, if such dividend or distribution shall have been securities, any property subsequently distributed with respect thereto. However, in the event that at the time the Company has taken a record of the holders of its Common Stock for the purposes described above: (i) the resale of the shares of Common Stock issuable upon exercise of this Warrant is not registered with the SEC for resale to the public under an effective registration statement; and (ii) the Common Stock issuable upon exercise of this Warrant is not quoted on the OTC Markets or a similar electronic quotation system or stock exchange, Holder shall be entitled to receive such dividend or distribution as if Holder had exercised this Warrant.

 

(ii)     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 Company to the holders of its Common Stock of such shares of such other class of stock and in such event, upon exercise of this Warrant, Holder shall be entitled to receive such distribution with respect to the amount of Common Stock received on such exercise, and, if such dividend or distribution shall have been securities, any property subsequently distributed with respect thereto, 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 6(a). However, in the event that at the time the Company has reclassified its Common Stock, as described above: (i) the resale of the shares of Common Stock issuable upon exercise of this Warrant is not registered with the SEC for resale to the public under an effective registration statement; and (ii) the Common Stock issuable upon exercise of this Warrant is not quoted on the OTC Markets or a similar electronic quotation system or stock exchange, Holder shall be entitled to receive such distribution, and, if such dividend or distribution shall have been securities, any property subsequently distributed with respect thereto, as if Holder had exercised this Warrant.

 

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 (c)     Issuance of Additional Shares of Common Stock.

 

(i)     If the Company at any time shall sell shares of Common Stock (or securities convertible into shares of Common Stock) at a price per share (or having a conversion price per share, if a security convertible into Common Stock) which is less than the then applicable exercise price of the Warrants (a “Subsequent Offering Price”), other than Permitted Issuances, then the Warrant Exercise Price shall be reduced to equal the Subsequent Offering Price.

 

(ii)     The provisions of paragraph (i) of this Section 6(c) shall not apply to any issuance of shares of Common Stock for which an adjustment is provided under Section 6(a) or 6(b). No adjustment of the number of shares of Common Stock for which this Warrant shall be exercisable shall be made under paragraph (i) of this Section 6(c) upon the issuance of any 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 Convertible Securities, if any such adjustment shall previously have been made upon the issuance of such warrants or other rights or upon the issuance of such Convertible Securities (or upon the issuance of any warrant or other rights therefor) pursuant to Section 6(d) or Section 6(e).

 

 (d)     Issuance of Warrants or Other Rights. If at any time the Company shall: (i) take a record of the holders of its Common Stock for the purpose of entitling them to receive a distribution of, or (ii) in any manner issue or sell, any warrants or other rights to subscribe for or purchase any shares of Common Stock or any Convertible Securities, whether or not the rights to exchange or convert thereunder are immediately exercisable, and the price per share for which Common Stock is issuable upon the exercise of such warrants or other rights or upon conversion or exchange of such Convertible Securities shall be less than the Warrant Exercise Price, then the number of shares for which this Warrant is exercisable and the Warrant Exercise Price shall be adjusted as provided in Section 6(c) on the basis that the maximum number of shares of Common Stock issuable pursuant to all such warrants or other rights or necessary to effect the conversion or exchange of all such Convertible Securities shall be deemed to have been issued and outstanding and the Company shall be deemed to have received all the consideration payable therefor, if any, as of the date of issuance of such warrants or other rights. No further adjustment of the Warrant Exercise Price(s) shall be made upon the actual issue of such Common Stock or of such Convertible Securities upon exercise of such warrants or other rights or upon the actual issuance of such Common Stock upon such conversion or exchange of such Convertible Securities.

 

 (e)     Issuance of Convertible Securities. If at any time the Company shall take a record of the holders of its Common Stock for the purpose of entitling them to receive a distribution of, or shall in any manner (whether directly or by assumption in a merger in which the Company is the surviving corporation) issue or sell, any Convertible Securities, whether or not the rights to exchange or convert thereunder are immediately exercisable, and the price per share for which Common Stock is issuable upon such conversion or exchange shall be less than the Warrant Exercise Price, then the number of shares of Common Stock for which this Warrant is exercisable and the Warrant Exercise Price shall be adjusted as provided in Section 6(c) on the basis that the maximum number of shares of Common Stock necessary to effect the conversion or exchange of all such Convertible Securities shall be deemed to have been issued and outstanding and the Company shall have received all of the consideration payable therefor, if any, as of the date of issuance of such Convertible Securities. If any issue or sale of Convertible Securities is made upon exercise of any warrant or other right to subscribe for or to purchase any such Convertible Securities for which adjustments of the number of shares of Common Stock for which this Warrant is exercisable and the Warrant Exercise Price have been or are to be made pursuant to Section 6(d), no further adjustment of the number of shares of Common Stock for which this Warrant is exercisable and the Warrant Exercise Price shall be made by reason of such record, issue or sale.

 

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 (f)     Superseding Adjustment. If at any time after any adjustment of the number of shares of Common Stock for which this Warrant is exercisable and the Warrant Exercise Price(s) shall have been made pursuant to Section 6(d) or Section 6(e) as the result of any issuance of warrants, rights or Convertible Securities,

 

(i)     such warrants or rights, or the right of conversion or exchange in such other Convertible Securities, shall expire, and all or a portion of such warrants or rights, or the right of conversion or exchange with respect to all or a portion of such other Convertible Securities, as the case may be, shall not have been exercised, or

 

(ii)   the consideration per share for which shares of Common Stock are issuable pursuant to such warrants or rights, or the terms of such other Convertible Securities, shall be increased solely by virtue of provisions therein contained for an automatic increase in such consideration per share upon the occurrence of a specified date or event,

 

then for each outstanding Warrant such previous adjustment shall be rescinded and annulled and the shares of Common Stock which were deemed to have been issued by virtue of the computation made in connection with the adjustment so rescinded and annulled shall no longer be deemed to have been issued by virtue of such computation made in connection with the adjustment so rescinded and annulled shall no longer be deemed to have been issued by virtue of such computation. Thereupon, a re-computation shall be made of the effect of such rights or options or other Convertible Securities on the basis of:

 

  (A)     treating the number of shares of Common Stock or other property, if any, theretofore actually issued or issuable pursuant to the previous exercise of any such warrants or rights or any such right of conversion or exchange, as having been issued on the date or dates of any such exercise and for the consideration actually received and receivable therefor, and

 

  (B)     treating any such warrants or rights or any such other Convertible Securities which then remain outstanding as having been granted or issued immediately after the time of such increase of the consideration per share for which shares of Common Stock or other property are issuable under such warrants or rights or other convertible Securities; whereupon a new adjustment of the number of shares of Common Stock for which this Warrant is exercisable and the Warrant Exercise Price(s) shall be made, which new adjustment shall supersede the previous adjustment so rescinded and annulled.

 

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(g)     No adjustment in the Warrant Exercise Price shall be required unless such adjustment would require an increase or decrease of at least one cent ($0.01) in such price; provided, however, that any adjustments which by reason of this Section 6(g) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 6(g) shall be made to the nearest cent or to the nearest one-hundredth of a share, as the case may be.

 

(h)      The Company may retain a firm of independent public accountants of recognized standing selected by the Board (who may be the regular accountants employed by the Company) to make any computation required by this Section 6.

 

(i)       In the event that at any time, as a result of an adjustment made pursuant to Section 6(a), (b) or (c) of this Warrant, the Holder of any Warrant thereafter shall become entitled to receive any shares of the Company, other than Common Stock, thereafter the number of such other shares so receivable upon exercise of any Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Common Stock contained in Sections 6(a) through (h), inclusive, of this Warrant.

 

(j)       Notwithstanding the foregoing, no adjustment shall be effected due to, or as a result of, any Permitted Issuances except for Common Stock issued pursuant to a stock split or subdivision.

 

(k)      Other Action Affecting Common Stock. In case at any time or from time to time the Company shall take any action in respect of its Common Stock, other than any action described in this Section 6, then, unless such action will not have a materially adverse effect upon the rights of the Holders, the number of shares of Common Stock or other stock for which this Warrant is exercisable and/or the purchase price thereof shall be adjusted in such manner as may be equitable in the circumstances.

 

7.     OFFICER’S CERTIFICATE. Whenever the Warrant Exercise Price(s) shall be adjusted as required by the provisions of Section 6 of this Warrant, the Company shall forthwith file in the custody of its Secretary or an Assistant Secretary at its principal office and with its stock transfer agent, if any, an officer’s certificate showing the adjusted Warrant Exercise Price(s) and the adjusted number of shares of Common Stock issuable upon exercise of each Warrant, determined as herein provided, setting forth in reasonable detail the facts requiring such adjustment, including a statement of the number of additional shares of Common Stock, if any, and such other facts as shall be necessary to show the reason for and the manner of computing such adjustment. Each such officer’s certificate shall be forwarded to Holder as provided in Section 14.

 

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8.     NOTICES TO WARRANT HOLDERS. So long as this Warrant shall be outstanding, (1) if the Company shall pay any dividend or make any distribution upon Common Stock, or (2) if the Company shall offer to the holders of Common Stock for subscription or purchase by them any share of any class or any other rights, or (3) if any capital reorganization of the Company, reclassification of the capital stock of the Company, consolidation or merger of the Company with or into another entity, tender offer transaction for the Company’s Common Stock, sale, lease or transfer of all or substantially all of the property and assets of the Company, or voluntary or involuntary dissolution, liquidation or winding up of the Company shall be effected, or (4) if the Company shall file a registration statement under the Securities Act of 1933, as amended (the “Act”), on any form other than on Form S-4 or S-8 or any successor form, then in any such case, the Company shall cause to be mailed by certified mail to the Holder, at least ten days prior to the date specified in clauses (1), (2), (3) or (4), as the case may be, of this Section 10 a notice containing a brief description of the proposed action and stating the date on which (i) a record is to be taken for the purpose of such dividend, distribution or rights, or (ii) such reclassification, reorganization, consolidation, merger, tender offer transaction, conveyance, lease, dissolution, liquidation or winding up is to take place and the date, if any is to be fixed, as of which the holders of Common Stock or other securities shall receive cash or other property deliverable upon such reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation or winding up, or (iii) such registration statement is to be filed with the SEC.

 

11.   RECLASSIFICATION, REORGANIZATION OR MERGER. In case of any reclassification, capital reorganization or other change of outstanding shares of Common Stock of the Company, or in case of any consolidation or merger of the Company with or into another corporation (other than a merger with a subsidiary in which merger the Company is the continuing or surviving corporation and which does not result in any reclassification, capital reorganization or other change of outstanding shares of Common Stock of the class issuable upon exercise of this Warrant) or in case of any sale, lease or conveyance of all or substantially all of the assets of the Company, the Company shall, as a condition precedent to such transaction, cause effective provisions to be made so that (i) the Holder shall have the right thereafter by exercising this Warrant, to purchase the kind and amount of shares of stock and other securities and property receivable upon such reclassification, capital reorganization and other change, consolidation, merger, sale or conveyance by a holder of the number of shares of Common Stock which could have been purchased upon exercise of this Warrant immediately prior to such reclassification, change, consolidation, merger, sale or conveyance, and (ii) the successor or acquiring entity shall expressly assume the due and punctual observance and performance of each covenant and condition of this Warrant to be performed and observed by the Company and all obligations and liabilities hereunder (including but not limited to the provisions of Section 3 regarding the increase in the number of shares of Warrant Shares potentially issuable hereunder). Any such provision shall include provision for adjustments which shall be as nearly equivalent as possible to the adjustments provided for in this Warrant. The foregoing provisions of this Section 11 shall similarly apply to successive reclassifications, capital reorganizations and changes of shares of Common Stock and to successive consolidations, mergers, sales or conveyances. In the event that in connection with any such capital reorganization or reclassification, consolidation, merger, sale or conveyance, additional shares of Common Stock shall be issued in exchange, conversion, substitution or payment, in whole in part, for a security of the Company other than Common Stock, any such issue shall be treated as an issuance of Common Stock covered by the provisions of Section 6 of this Warrant.

 

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12.   TRANSFER TO COMPLY WITH THE SECURITIES ACT OF 1933; REGISTRATION RIGHTS. This Warrant or the Warrant Shares or any other security issued or issuable upon exercise of this Warrant may not be sold or otherwise disposed of except as follows:

 

(i)     to a person who, in the opinion of counsel for the Company, is a person to whom this Warrant or Warrant Shares may legally be transferred without registration and without the delivery of a current prospectus under the Act with respect thereto and then only against receipt of an agreement of such person to comply with the provisions of this Section 12 with respect to any resale or other disposition of such securities which agreement shall be satisfactory in form and substance to the Company and its counsel; or

 

(ii)     to any person upon delivery of a prospectus then meeting the requirements of the Act relating to such securities and the offering thereof for such sale or disposition.

 

(iii)   The Holder of this Warrant shall be entitled to the registration rights as described in the Subscription Agreement with respect to the Warrant Shares.

 

13.   GOVERNING LAW; JURISDICTION. The corporate laws of the State of Delaware shall govern all issues concerning the relative rights of the Company and its stockholders. All issues concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to the principles of conflicts of law thereof. The parties hereto agree that venue in any and all actions and proceedings related to the subject matter of this Warrant shall be in the state and federal courts in and for Delaware, which courts shall have exclusive jurisdiction for such purpose, and the parties hereto irrevocably submit to the exclusive jurisdiction of such courts and irrevocably waive the defense of an inconvenient forum to the maintenance of any such action or proceeding. Service of process may be made in any manner recognized by such courts. This Warrant and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought.

 

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14.   NOTICES. Any and all notices or other communications or deliveries required or permitted to be provided hereunder 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 telephone number specified in this Section prior to 6:30 p.m. (San Francisco time) on a Business Day, (ii) the Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Agreement later than 6:30 p.m. (San Francisco time) on any date and earlier than 11:59 p.m. (San Francisco time) on such date, (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 and communications shall be as follows:

 

	 	If to the Company:	
			 

				
			Salon Media Group, Inc.

			
	 	 	 	Attention: Jordan Hoffner
	 	 	 	870 Market Street
	 	 	 	San Francisco, CA 94102
	 	 	 	 
	 	If to the Holder:	 	To the Address Set Forth In the Records of the Company

 

15.  PAYMENT OF TAXES. The Company will pay all documentary stamp taxes attributable to the issuance of shares of Common Stock underlying this Warrant upon exercise of this Warrant; 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 certificate for shares of Common Stock underlying this Warrant in a name other that of the Holder. The Holder is responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving shares of Common Stock underlying this Warrant upon exercise hereof.

 

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, this Warrant has been duly executed as of December 7, 2018.

 

 

	 	SALON MEDIA GROUP, INC.	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	By:	/s/ Richard MacWilliams	 
	 	 	 	Name: Richard MacWilliams	 
	 	 	 	Title: Chairman	 

 

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PURCHASE FORM

 

 

 

To Salon Media Group, Inc.:

 

In accordance with the Warrant enclosed with this Form of Election to Purchase, the undersigned hereby irrevocably elects to purchase _____________ shares of common stock (“Common Stock”), $0.001 par value per share, of Shumate Industries, Inc. The undersigned herewith makes payment of $____________, representing the full purchase price for such shares at the Exercise Price provided for in such Warrant, together with any applicable taxes payable by the undersigned pursuant to the Warrant. Such payment takes the form of (check applicable box or boxes):

 

	
			☐

				
			$______ in lawful money of the United States; and/or

			

 

	
			☐

				
			Cancellation of Outstanding Promissory Notes issued to Holder in the amount of $________.

			

 

The undersigned requests that certificates for the shares of Common Stock issuable upon this exercise be issued in the name of:

 

_________________________________

 (Name)

 

_________________________________

 

_________________________________

 (Address)

 

_________________________________

 (SSN or Tax ID No.)

 

 

 

 

ASSIGNMENT FORM

 

 

 

FOR VALUE RECEIVED, _______________________________________ hereby sells, assigns and transfer unto:

 

Name:_______________________________________________

(Please typewrite or print in block letters)

 

Address:_____________________________________________

 

Social Security or Employer Identification No.:__________________________

 

The right to purchase Common Stock represented by this Warrant to the extent of shares as to which such right is exercisable and does hereby irrevocably constitute and appoint attorney to transfer the same on the books of the Company with full power of substitution.

 

Dated: _________________, 200_.

 

 

 

Signature:________________________________

 

 

Signature Guaranteed:

 

 

___________________________________ex_146742.htm

 

Exhibit 10.15

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (“Agreement”) is made as of the _________ day of June, 2016 between Salon Media Group, Inc., a Delaware corporation (the “Company”), and Jordan Hoffner (the “Executive”).

 

WHEREAS, the Company desires to employ the Executive and the Executive desires to be employed by the Company beginning on the date this Agreement is signed and dated by all parties (the “Commencement Date”) on the terms contained herein.

 

NOW, THEREFORE, in consideration of the mutual covenants and Agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

 

1.     Employment.

 

(a)     Term. This Agreement is not for any specified term, and the Executive’s employment is at-will. Either the Executive or the Company may terminate this Agreement at any time with or without notice for any reason or no reason at all.

 

(b)     Position and Duties; Indemnification. The Executive shall serve as the Chief Executive Officer of the Company, and shall have supervision and control over and responsibility for the day-to-day business and affairs of the Company and shall have such other powers as may from time to time be prescribed by the Chairman of the Board of Directors of the Company (the “Board”), provided that such duties are consistent with the Executive’s position. Upon commencement of employment, the Executive shall be appointed to serve as a member of the Board and shall be recommended for reelection to the Board for so long as he serves as Chief Executive Officer. In addition, the Executive may serve on other boards of directors, advisory boards or engage in religious, charitable or other community activities as long as such services and activities are disclosed to the Board; provided that in the case of the Executive’s serving on the board of directors of any organization that is competitive with the Company, the Board must approve of such activity in advance of the Executive joining such board. The Company shall enter into an indemnification agreement with the Executive containing mutually agreeable indemnification language consistent with CA Labor Code Section 2802.

 

2.     Compensation and Related Matters.

 

(a)     Base Salary. During the Term, the Executive’s annual base salary shall be $300,000. The Executive’s base salary shall be redetermined annually by the Board or the Compensation Committee. The base salary in effect at any given time is referred to herein as “Base Salary.” The Base Salary shall be payable in a manner that is consistent with the Company’s usual payroll practices for senior executives.

 

(b)     Incentive Compensation. During the Term, the Executive shall be eligible to receive cash incentive compensation as determined by the Board or the Compensation Committee from time to time.

 

 

 

 

	 	
			(i)

				
			EBITDA Bonus. Executive shall be paid an annual cash bonus of no less than 15% of the EBITDA (determined in accordance with the Company’s financial statements) in excess of $1 million of EBITDA (after taking into account bonuses paid to Company employees) as determined by the Compensation Committee. Any such incentive compensation shall not be prorated for partial years and shall be paid no later than 60 days following the last day of the fiscal year to which such bonus relates.

			

 

	 	
			(ii)

				
			Discretionary Bonus. The Board or the Compensation Committee may also pay the Executive additional cash bonuses in its sole discretion.

			

 

(c)     Equity Compensation. As a material inducement to the Executive accepting employment with the Company, effective on the Commencement Date, the Executive shall be granted an option to purchase 12,654,318 shares 1 of Common Stock of the Company (which equates to 15% of the Company’s fully diluted capitalization post grant and post option pool increase) (the “Option”). The Option shall be granted pursuant to the terms and conditions of the Company’s 2014 Stock Incentive Plan and/or outside of such equity plan as an “inducement award.” The shares subject to the Option shall vest in equal monthly installments over a four-year period commencing on the Commencement Date.  The Option shall have a per share exercise price equal to the fair market value of a share of Common Stock on the date of grant. In the event of a Change in Control (save and except for a Change in Control resulting from a sale of the Company’s shares by John Warnock to William Hambrecht’’2), such Option (and any other equity awards then held by the Executive) shall accelerate and vest in full immediately prior to such Change in Control. The Executive shall be eligible to receive additional equity compensation in the future under the Company’s equity incentive plan as determined by the Board or the Compensation Committee from time to time. In addition, the Executive shall be granted an additional option to purchase shares of the Company’s Common Stock as soon as possible following the Company’s first completed equity financing that occurs after the Commencement Date, subject to the Board’s approval of the price at which the Company’s equity securities are sold in such financing transaction, such that the goal of the Executive’s beneficial ownership of the Company following such financing will be for the Executive to have the right to purchase no less than 15% of the Company’s fully diluted capitalization post grant. Any such new option shall have an exercise price equal to the then fair market value of the Common Stock on the date of grant and shall be subject to the terms of the Company’s 2014 Stock Incentive Plan.

 

(d)     Expenses. The Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by him during the Term in performing services hereunder, in accordance with the policies and procedures then in effect and established by the Company.

 

 

2 For the avoidance of doubt, a sale of the Company’s shares by John Warnock to William Hambrecht will not constitute a Change in Control and will not result in any acceleration or vesting of the Executive’s equity award.

 

 

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(e)     Other Benefits. During his employment, the Executive shall be eligible to participate in or receive benefits under the Company’s employee benefit plans in effect from time to time, subject to the terms of such plans.

 

(f)     Paid Time Off. The Executive shall be entitled to unlimited paid time off in accordance with the terms of the Company’s PTO policy in effect. For the avoidance of doubt, the Executive will not be entitled to accrue any vacation.

 

3.     Compensation Upon Termination.

 

(a)     For the purpose of this Agreement, “Date of Termination” shall mean:

 

	 	
			(i)

				
			if the Executive’s employment is terminated by his death, the date of his death;

			

 

	 	
			(ii)

				
			if the Executive’s employment is terminated on account of disability or, involuntarily by the Company, the date on which notice of termination is given;

			

 

	 	
			(iii)

				
			if the Executive’s employment is terminated by the Executive, the date on which a notice of termination is given to the Company.

			

 

(b)     For the purpose of this Agreement, “Change in Control” shall mean:

 

	 	
			(i)

				
			any person or entity becoming the beneficial owner, directly or indirectly, of securities of the Company representing more than fifty (50%) percent of the total voting power of all its then outstanding voting securities;

			

 

	 	
			(ii)

				
			a merger or consolidation of the Company in which its voting securities immediately prior to the merger or consolidation do not represent, or are not converted into securities that represent, a majority of the voting power of all voting securities of the surviving entity immediately after the merger or consolidation; or

			

 

	 	
			(iii)

				
			a sale of all of the assets of the Company.

			

 

(c)     Termination Generally. If the Executive’s employment with the Company is terminated for any reason, the Company shall pay or provide to the Executive (or to his authorized representative or estate) (i) any Base Salary earned through the Date of Termination, unpaid expense reimbursements (subject to, and in accordance with, Section 2(c) of this Agreement) and (ii) any vested benefits the Executive may have under any employee benefit plan of the Company through the Date of Termination, which vested benefits shall be paid and/or provided in accordance with the terms of such employee benefit plans (collectively, the “Accrued Benefit”).

 

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(d)     Involuntarily Termination related to a Change in Control. In addition to the payments described in Section 3(c), in the event the Executive’s employment is terminated on account of a Change in Control of the Company as defined in Section 3(b), Executive will be (i) paid a lump sum cash severance amount equal to one year’s Base Salary and (ii) will be reimbursed for one year’s payments of COBRA premiums to the extent the Executive elects to continue participating in Company benefits.

 

4.     Section 409A.

 

(a)     Anything in this Agreement to the contrary notwithstanding, if at the time of the Executive’s separation from service within the meaning of Section 409A of the Code, the Company determines that the Executive is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, then to the extent any payment or benefit that the Executive becomes entitled to under this Agreement on account of the Executive’s separation from service would be considered deferred compensation otherwise subject to the 20 percent additional tax imposed pursuant to Section 409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, such payment shall not be payable and such benefit shall not be provided until the date that is the earlier of (A) six months and one day after the Executive’s separation from service, or (B) the Executive’s death. If any such delayed cash payment is otherwise payable on an installment basis, the first payment shall include a catch-up payment covering amounts that would otherwise have been paid during the six-month period but for the application of this provision, and the balance of the installments shall be payable in accordance with their original schedule.

 

(b)     All in-kind benefits provided and expenses eligible for reimbursement under this Agreement shall be provided by the Company or incurred by the Executive during the time periods set forth in this Agreement. All reimbursements shall be paid as soon as administratively practicable, but in no event shall any reimbursement be paid after the last day of the taxable year following the taxable year in which the expense was incurred. The amount of in-kind benefits provided or reimbursable expenses incurred in one taxable year shall not affect the in-kind benefits to be provided or the expenses eligible for reimbursement in any other taxable year (except for any lifetime or other aggregate limitation applicable to medical expenses). Such right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

 

(c)     To the extent that any payment or benefit described in this Agreement constitutes “non-qualified deferred compensation” under Section 409A of the Code, and to the extent that such payment or benefit is payable upon the Executive’s termination of employment, then such payments or benefits shall be payable only upon the Executive’s “separation from service.” The determination of whether and when a separation from service has occurred shall be made in accordance with the presumptions set forth in Treasury Regulation Section 1.409A-1(h).

 

(d)     The parties intend that this Agreement will be administered in accordance with Section 409A of the Code. To the extent that any provision of this Agreement is ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in such a manner so that all payments hereunder comply with Section 409A of the Code. Each payment pursuant to this Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2). The parties agree that this Agreement may be amended, as reasonably requested by either party, and as may be necessary to fully comply with Section 409A of the Code and all related rules and regulations in order to preserve the payments and benefits provided hereunder without additional cost to either party.

 

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5.     Section 280G. In the event that any amount of compensation paid or provided by the Company to or for the benefit of the Executive, calculated in a manner consistent with Section 280G of the Code (the “Aggregate Payments”) would be subject to the excise tax imposed by Section 4999 of the Code, then the Aggregate Payments will be reduced (but not below zero) so that the sum of such Aggregate Payments shall be $1.00 less the amount at which the Executive becomes subject to the excise tax imposed by Section 4999 of the Code; provided that such reduction shall only occur if it would result in the Executive receiving a higher After Tax Amount (as defined below) than the Executive would receive if the Aggregate Payments were not subject to such reduction. In such event, the Aggregate Payments will be reduced in the following order (in reverse chronological order): (1) cash payments not subject to Section 409A of the Code; (2) cash payments subject to Section 409A of the Code; (3) non-cash forms of benefits; and (4) equity-based payments and acceleration. For purposes hereof, “After Tax Amount” means the amount of the Aggregate Payments less all federal, state and local income, excise and employment taxes imposed on the Executive’s receipt of the Aggregate Payments. The determination of whether the Aggregate Payments will be reduced pursuant to this section shall be made by a nationally recognized accounting firm selected by the Company and consented to by the Executive.

 

6.     Arbitration. The parties agree that any dispute arising out of or relating to the Executive’s employment or the termination thereof, or this Agreement or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules. Any such arbitration will be held in San Francisco, California. Judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.

 

7.     Legal Fees. The Company shall reimburse the Executive for up to $2,500 for any legal fees incurred by the Executive in connection with the negotiation of this Agreement.

 

8.     Integration. This Agreement constitutes the entire Agreement between the parties with respect to the subject matter hereof and supersedes all prior Agreements between the parties concerning such subject matter.

 

9.     Withholding. All payments made by the Company to the Executive under this Agreement shall be subject to any tax or other amounts required to be withheld by the Company under applicable law.

 

10.     Successor to the Executive. This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal representatives, executors, administrators, heirs, distributees, devisees and legatees. In the event of the Executive’s death after the termination of his employment but prior to the completion by the Company of all payments due him under this Agreement, the Company shall continue such payments to the Executive’s beneficiary designated in writing to the Company prior to his death (or to his estate, if the Executive fails to make such designation).

 

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11.     Enforceability. If any portion or provision of this Agreement (including, without limitation, any portion or provision of any section of this Agreement) shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

 

12.     Survival. The provisions of this Agreement shall survive the termination of this Agreement and/or the termination of the Executive’s employment to the extent necessary to effectuate the terms contained herein.

 

13.     Waiver. No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party. The failure of any party to require the performance of any term or obligation of this Agreement, or the waiver by any party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.

 

14.     Notices. Any notices, requests, demands and other communications provided for by this Agreement shall be sufficient if in writing and delivered in person or sent by a nationally recognized overnight courier service or by registered or certified mail, postage prepaid, return receipt requested, to the Executive at the last address the Executive has filed in writing with the Company or, in the case of the Company, at its main offices, attention of the Board.

 

15.     Amendment. This Agreement may be amended or modified only by a written instrument signed by the Executive and by a duly authorized representative of the Company.

 

16.     Governing Law. This is a California contract and shall be construed under and be governed in all respects by the laws of the State of California, without giving effect to the conflict of laws principles of such State. With respect to any disputes concerning federal law, such disputes shall be determined in accordance with the law as it would be interpreted and applied by the United States Court of Appeals for the Ninth Circuit.

 

17.     Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be taken to be an original; but such counterparts shall together constitute one and the same document.

 

18.     Successor to Company. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company expressly to assume and agree to perform this Agreement to the same extent that the Company would be required to perform it if no succession had taken place. Failure of the Company to obtain an assumption of this Agreement at or prior to the effectiveness of any succession shall be a material breach of this Agreement.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement effective on the date and year first above written.

 

	
			 

				
			SALON MEDIA GROUP, INC. 

			
	
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

			
	 	 	 
	
			 

				
			By: 

				
			 

			
	
			 

				
			Its: 

				
			 

			
	
			 

				
			 

				
			 

			
	 	 	 
	 	 	 
	 	 	 
	 	EXECUTIVE
	 	 	 
	 	 	 
	 	 	 
	 	 
	 	Jordan Hoffner

 

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