EXHIBIT 4.2
Warrant
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THIS WARRANT AND THE SHARES OF COMMON STOCK PURCHASABLE HEREUNDER HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FILED UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS, UNLESS
AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
August 11, 1998
NATIONAL MEDIA CORPORATION
COMMON STOCK PURCHASE WARRANT
Warrant to Purchase 1,912,500 Shares of Common Stock
Expiring August 11, 2003
THIS CERTIFIES THAT, for value received, Temporary Media Co.,
LLC, a Delaware limited liability company or its successors or assigns
(collectively, the "Warrant Holder"), at any time and from time to time, subject
to the vesting schedule set forth in Section 2 hereto, on any Business Day on or
prior to 5:00 p.m., Pacific Time, on August 11, 2003 (the "Expiration Date") is
entitled to subscribe for and purchase from National Media Corporation, a
Delaware corporation (the "Company"), 1,912,500 shares of Common Stock at a
price per share equal to the Exercise Price (s defined below); provided that the
number of shares of Common Stock issuable upon any exercise of this Warrant and
the Exercise Price shall be adjusted and readjusted from time to time in
accordance with Section 5.
1. Certain Definitions.
The following terms, as used herein, have the following
meanings:
"Affiliate" means, with respect to any Person, any other
Person that directly or indirectly controls, is controlled by, or is under
common control with such Person.
"Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in New York City are authorized by law to
close.
"Closing Price" means, for any trading day with respect to
each share of Common Stock, (a) the last reported sale price on such day on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading or, if no such reported sale takes place on any such day,
the average of the closing bid and asked prices thereon, as
reported in The Wall Street Journal, or (b) if such Common Stock shall not be
listed or admitted to trading on a national securities exchange, the last
reported sales price on the NASDAQ National Market System or, if no such
reported sale takes place on any such day, the average of the closing bid and
asked prices thereon, as reported in The Wall Street Journal, or (c) if such
Common Stock shall not be quoted on such National Market System nor listed or
admitted to trading on a national securities exchange, then the average of the
closing bid and asked prices, as reported by The Wall Street Journal for the
over-the-counter market, or (d) if there is no public market for such Common
Stock the fair market value of a share of such Common Stock as determined in
good faith by the Board of Directors of the Company after consultation with an
independent investment bank of national repute (whose report will be made
available to the Warrant Holder prior to such determination of fair market
value); provided that if clause (a), (b), or (c) applies and no price is
reported in The Wall Street Journal for any trading day, then the price reported
in The Wall Street Journal for the most recent prior trading day shall be deemed
to be the price reported for such trading day.
"Commission" means the Securities and Exchange Commission or
any other Federal agency administering the Securities Act at the time.
"Common Stock" means the Company's currently authorized class
of common stock, $.01 par value, and stock of any other class or other
consideration into which such currently authorized class of common stock may
hereafter have been changed.
"Exchange Act" means the Securities Exchange Act of 1934, or
any successor Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. Reference to a
particular section of the Exchange Act shall include a reference to the
comparable section, if any, of any such successor Federal statute.
"Exercise Price" means $1.32 per share, as may be adjusted
from time to time pursuant to Section 5.
"Market Price" on any day means the unweighted average of the
daily Closing Prices per share of Common Stock for the 20 consecutive trading
days prior to such date; provided that for purposes of the application of
Section 5(b) to a Common Stock Distribution pursuant to a public offering
registered under the Securities Act, "Market Price" means the Closing Price per
share of Common Stock for the trading day preceding the effective date of the
registration statement with respect to such public offering.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
"Securities Act" means the Securities Act of 1933, or any
successor Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. Reference to a
particular section of the Securities Act shall include a reference
to the comparable section, if any, of any such successor Federal statute.
"Warrant Shares" means the 1,912,500 shares of Common Stock
issued or issuable upon exercise of this Warrant, as adjusted from time to time
pursuant to Section 5.
2. Exercise of Warrant.
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The Warrant Holder may exercise this Warrant in whole or in
part, at any time or from time to time, subject to the immediately succeeding
sentence, on any Business Day on or prior to the Expiration Date, by delivering
to the Company a duly executed notice (a "Notice of Exercise") in the form of
Annex A hereto at the election of the Warrant Holder, either (a) by receiving
from the Company the number of Warrant Shares as to which this Warrant is being
exercised and paying to the Company the Exercise Price for each such Warrant
Share by wire transfer of immediately available funds to the account of the
Company in an amount equal to the product of (i) the Exercise Price times (ii)
the number of Warrant Shares as to which the Warrant is being exercised or (b)
by receiving from the Company the number of Warrant Shares equal to (i) the
number of Warrant Shares as to which this Warrant is being exercised minus (ii)
the number of Warrant Shares having a value equal to the product of (x) the
Exercise Price times (y) the number of Warrant Shares as to which this Warrant
is being exercised, divided by the average of the Closing Price on the five
conservative trading days immediately prior to the date of such exercise. This
Warrant shall vest and become exercisable on or after the Closing Date (as
defined in that certain Stock Purchase Agreement dated August 11, 1998 by and
between the Company and NM Acquisition, Co., LLC.
As soon as practicable but not later than five Business Days
after the Company shall have received such Notice of Exercise and payment, the
Company shall execute and deliver or cause to be executed and delivered, in
accordance with such Notice of Exercise, a certificate or certificates
representing the number of shares of Common Stock specified in such Notice of
Exercise, issued in the name of the Warrant Holder. This Warrant shall be deemed
to have been exercised and such share certificate or certificates shall be
deemed to have been issued, and such Warrant Holder shall be deemed for all
purposes to have become a holder of record of shares of Common Stock, as of the
date that such Notice of Exercise and payment shall have been received by the
Company.
The Warrant Holder shall surrender this Warrant Certificate to
the Company when it delivers the Notice of Exercise, and in the event of a
partial exercise of the Warrant, the Company
shall execute and deliver to the Warrant Holder, at the time the Company
delivers the share certificate or certificates issued pursuant to such Notice of
Exercise, a new Warrant Certificate for the unexercised section of the Warrant,
but in all other respects identical to this Warrant Certificate.
Each certificate for Warrant Shares issued upon exercise of
this Warrant, unless at the time of exercise such Warrant Shares are registered
under the Securities Act, shall bear the following legend:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER SAID
ACT AND ANY APPLICABLE STATE SECURITIES LAWS, UNLESS
AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
Any certificate for Warrant Shares issued at any time in exchange or
substitution for any certificate bearing such legend (unless at that time such
Warrant Shares are registered under the Securities Act) shall also bear such
legend unless, in the written opinion of counsel selected by the holder of such
certificate (who may be an employee of such holder), which counsel and opinion
shall be reasonably acceptable to the Company, the Warrant Shares represented
thereby need no longer be subject to restrictions on resale under the Securities
Act.
The Company shall not be required to issue fractions of shares
of Common Stock upon an exercise of the Warrant. If any fraction of a share
would, but for this restriction, be issuable upon an exercise of the Warrant, in
lieu of delivering such fractional share, the Company shall pay to the Warrant
Holder, in cash, an amount equal to the same fraction times the Closing Price on
the trading day immediately prior to the date of such exercise.
The Company shall pay all expenses, taxes and owner charges
payable in connection with the preparation, issuance and delivery of
certificates for the Warrant Shares and any new Warrant Certificates, except
that if the certificates for the Warrant Shares or the new Warrant Certificates
are to be registered in a name or names other than the name of the Warrant
Holder, funds sufficient to pay all transfer taxes payable as a result of such
transfer shall be paid by the Warrant Holder at the time of its delivery of the
Notice of Exercise or promptly upon receipt of a written request by the Company
for payment.
3. Investment Representation.
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By accepting the Warrant, the Warrant Holder represents that
it is acquiring the Warrant for its own account for investment purposes and not
with the view to any sale or
distribution, and that the Warrant Holder will not offer, sell or otherwise
dispose of the Warrant or the Warrant Shares except under circumstances as will
not result in a violation of applicable securities laws.
4. Validity of Warrant and Issuance of Shares.
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The Company represents and warrants that this Warrant has been
duly authorized and is validly issued.
The Company further represents and warrants that on the date
hereof it is duly authorized and reserved, and the Company hereby agrees that it
will at all times until the Expiration Date have duly authorized and reserved,
such number of shares of Common Stock as will be sufficient to permit the
exercise in full of the Warrant, and that all such shares are and will be duly
authorized and, when issued upon exercise of the Warrant, will be validly
issued, fully paid and non-assessable, and free and clear of all security
interests, claims, liens, equities and other encumbrances.
5. Antidilution Provisions.
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The Exercise Price in effect at any time, and the number of
Warrant Shares that may be purchased upon any exercise of the Warrant, shall be
subject to change or adjustment as follows:
(a) Common Stock Reorganization. If the Company
shall subdivide its outstanding shares of Common Stock into a greater number of
shares, by way of stock split, stock dividend or otherwise, or consolidate its
outstanding shares of Common Stock into a smaller number of shares (any such
event being herein called a "Common Stock Reorganization"), then (i) the
Exercise Price shall be adjusted, effective immediately after the effective date
of such Common Stock Reorganization, to a price determined by multiplying the
Exercise Price in effect immediately prior to such effective date by a fraction,
the numerator of which shall be the number of shares of Common Stock outstanding
on such effective date before giving effect to such Common Stock Reorganization
and the denominator of which shall be the number of shares of Common Stock
outstanding after giving effect to such Common Stock Reorganization, and (ii)
the number of shares of Common Stock subject to purchase upon exercise of this
Warrant shall be adjusted, effective at such time, to a number determined by
multiplying the number of shares of Common Stock subject to purchase immediately
before such Common Stock Reorganization by a fraction, the numerator of which
shall be the number of shares outstanding after giving effect to such Common
Stock Reorganization and the denominator of which shall be the number of shares
of Common Stock outstanding immediately before giving effect to such Common
Stock Reorganization.
(b) Common Stock Distribution.
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(i) If the Company shall issue, sell or
otherwise distribute any shares of Common Stock, other than pursuant to a Common
Stock Reorganization (which is governed by Section 5(a)) (any such event,
including any event described in paragraphs (ii) and (iii) below, being herein
called a "Common Stock Distribution"), for a consideration per share less than
the Market Price immediately prior to such Common Stock Distribution then,
effective upon such Common Stock Distribution, the Exercise Price shall be
reduced to a price determined by multiplying the Exercise Price by a fraction,
the numerator of which shall be the sum of (A) the number of shares of Common
Stock outstanding immediately prior to such Common Stock Distribution multiplied
by the Market Price, plus (B) the consideration, if any, received by the Company
upon such Common Stock Distribution, and the denominator of which shall be the
product of (1) the total number of shares of Common Stock outstanding
immediately after such Common Stock Distribution multiplied by (2) the Market
Price.
If any Common Stock Distribution shall require an adjustment
to the Exercise Price pursuant to the foregoing provisions of this Section 5(b),
including by operation of paragraph (ii) or (iii) below, then, effective at the
time such adjustment is made, the number of shares of Common Stock subject to
purchase upon exercise of this Warrant shall be increased to a number determined
by multiplying the number of shares of Common Stock subject to purchase
immediately before such Common Stock Distribution by a fraction, the numerator
of which shall be the Exercise Price in effect immediately prior to such event
and the denominator of which shall be the Exercise Price as adjusted in
accordance with this Section 5(b). In computing adjustments under this
paragraph, fractional interests in Common Stock shall be taken into account to
the nearest one-thousandth of a share.
Subject to Section 5(e) below, the provisions of this Section
5(b), including by operation of paragraph (ii) or (iii) below, shall not operate
to increase the Exercise Price or reduce the number of shares of Common Stock
subject to purchase upon exercise of this Warrant.
(ii) If the Company shall issue, sell,
distribute or otherwise grant in any manner (including by assumption) any rights
to subscribe for or to purchase, or any warrants or options for the purchase of
Common Stock or any stock or securities convertible into or exchangeable for
Common Stock (such rights, warrants or options being herein called "Options" and
such convertible or exchangeable stock or securities being herein called
"Convertible Securities"), whether or not such Options or the rights to convert
or exchange any such Convertible Securities in respect of such Options are
immediately exercisable or exercisable prior to the Expiration Date, and the
price per share for which Common Stock is issuable upon the exercise of such
Options or upon conversion or exchange of such Convertible Securities in respect
of such Options (determined by dividing (x) the aggregate amount, if any,
received or receivable by the Company as consideration for the granting of such
Options, plus the minimum aggregate amount of additional consideration
payable to the Company upon the exercise of all such Options, plus, in the case
of Options to acquire Convertible Securities, the minimum aggregate amount of
additional consideration, if any, payable upon issuance or sale of such
Convertible Securities and upon the conversion or exchange thereof, by (y) the
total maximum number of shares of Common Stock issuable upon the exercise of
such Options or upon the conversion or exchange of all such Convertible
Securities issuable upon the exercise of such Options at such price) shall be
less than the Market Price immediately prior to the granting of such Options
then, for purposes of Section 5(b)(i), the total maximum number of shares of
Common Stock issuable upon the exercise of such Options or upon conversion or
exchange of the total maximum amount of such Convertible Securities issuable
upon the exercise of such Options shall be deemed to have been issued as of the
date of granting of such Options and thereafter shall be deemed to be
outstanding and the Company shall be deemed to have received as consideration of
such price per share, determined as provided above, therefor. Except as
otherwise provided in paragraph (iv) below, no additional adjustment of the
Exercise Price shall be made upon the actual exercise of such Options or upon
conversion or exchange of such Convertible Securities.
(iii) If the Company shall issue, sell or
otherwise distribute (including by assumption) any Convertible Securities,
whether or not the rights to exchange or convert thereunder are immediately
exercisable or exercisable prior to the Expiration Date, and the price per share
for which Common Stock is issuable upon the conversion or exchange of such
Convertible Securities (determined by dividing (x) the aggregate amount received
or receivable by the Company as consideration for the issuance, sale or
distribution of such Convertible Securities, plus the minimum aggregate amount
of additional consideration, if any, payable to the Company upon the conversion
or exchange thereof, by (y) the maximum number of shares of Common Stock
issuable upon the conversion or exchange of all such Convertible Securities)
shall be less than the Market Price immediately prior to such issuance, sale or
distribution then, for purposes of Section 5(b)(i), the total maximum number of
shares of Common Stock issuable upon conversion or exchange of all such
Convertible Securities shall be deemed to have been issued as of the date of the
issuance, sale or distribution of such Convertible Securities thereafter shall
be deemed to be outstanding and the Company shall be deemed to have received as
consideration such price per share, determined as provided above, therefor.
Except as otherwise in paragraph (iv) below, no additional adjustment of the
Exercise Price shall be made upon the actual conversion or exchange of such
Convertible Securities.
(iv) If (x) the purchase price provided for
in any Option referred to in Section 5(b)(ii) or the additional consideration,
if any, payable upon the conversion or exchange of any Convertible Securities
referred to in Sections 5 (b)(ii) or 5(b)(iii) or the rate at which any
Convertible Securities referred to in Sections 5(b)(ii) or 5(b)(iii) are
convertible into or exchangeable for Common Stock shall change at any time
(other than under or by reason of provisions designed to protect against
dilution upon an event which results in a related adjustment pursuant to this
Section 5), or (y) any of such Options or Convertible Securities shall have
terminated, lapsed or expired, the Exercise Price then in effect shall forthwith
be readjusted (effective only with respect
to any exercise of this Warrant after such readjustment) to the Exercise Price
which would then be in effect had the adjustment made upon the issuance, sale,
distribution or grant of such Options or Convertible Securities been made based
upon such changed purchase price, additional consideration or conversion rate,
as the case may be (in the case of any event referred to in clause (x) of this
paragraph (iv)) or had such adjustment not been made (in the case of any event
referred to in clause (y) of this paragraph (iv)).
(v) If the Company shall pay a dividend
or make any other distribution upon any capital stock of the Company payable in
Common Stock, Options or Convertible Securities, other than pursuant to a Common
Stock Reorganization (which is governed by Section 5(a)), then, for purposes of
this Section 5(b), such Common Stock, Options or Convertible Securities shall be
deemed to have been issued or sold without consideration.
(vi) If any shares of Common Stock, Options
or Convertible Securities shall be issued, sold or distributed for cash, the
consideration received thereof shall be deemed to be the amount received by the
Company therefor, without any deduction therefrom of any expenses incurred in
connection therewith. If any shares of Common Stock, Options or Convertible
Securities shall be issued, sold or distributed for a consideration other than
cash, the amount of the consideration other than cash received by the Company
shall be deemed to be the fair market value of such consideration at the time of
its receipt by the Company as determined in good faith by the Board of Directors
of the Company, without any deduction of any expenses incurred in connection
therewith. If any shares of Common Stock, Options or Convertible Securities
shall be issued in connection with any merger in which the Company is the
surviving corporation, the amount of consideration therefor shall be deemed to
be the fair market value of such portion of the assets and business of the
non-surviving corporation as shall be attributable to such Common Stock, Options
or Convertible Securities, as the case may be, at the time of the merger as
determined in good faith by the Board of Directors of the Company. If any
Options shall be issued in connection with the issuance and sale of other
securities of the Company, together comprising one integral transaction in which
no specific consideration is allocated to such Options by the parties thereto,
such Options shall be deemed to have been issued without consideration.
(c) Special Dividends. If the Company shall
issue or distribute to all holders of shares of Common Stock evidences of
indebtedness, any other securities of the Company or any cash, property or other
assets (excluding (i) a Common Stock Reorganization, (ii) a Common Stock
Distribution, (iii) quarterly cash dividends paid in the ordinary course of
business, or (iv) any purchase, redemption or other acquisition by the Company
of shares of Common Stock owned by any individual shareholder owning fewer than
100 shares), whether or not accompanied by a purchase, redemption or other
acquisition of shares of Common Stock (any such nonexcluded event being herein
called a "Special Dividend"), the (x) the Exercise Price shall be decreased,
effective immediately after the effective date of such Special Dividend, to a
price determined by multiplying the Exercise Price then in effect by a fraction,
the numerator of which shall be the Market Price
immediately prior to such effective date less any cash and the then fair market
value, as determined in good faith by the Board of Directors of the Company, of
any evidences of indebtedness, securities or property or other assets issued or
distributed in such Special Dividend with respect to one share of Common Stock,
and the denominator of which shall be the Market Price immediately prior to such
effective date, and (y) the number of shares of Common Stock subject to purchase
upon exercise of this Warrant shall be increased to a number determined by
multiplying the number of shares of Common Stock subject to purchase immediately
before such Special Dividend by a fraction, the numerator of which shall be the
Exercise Price in effect immediately before such Special Dividend and the
denominator of which shall be the Exercise Price in effect immediately after
such Special Dividend. 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 to be a distribution by the Company to the holders of its Common
Stock of such shares of such other class of stock and, if the outstanding shares
of Common Stock shall be changed into a larger or smaller number of shares of
Common Stock as part of such reclassification, a Common Stock Reorganization.
(d) Capital Reorganization. If there shall be
any consolidation or merger to which the Company is a party, other than a
consolidation or a merger of which the Company is the continuing corporation and
which does not result in any reclassification of, or change (other than a Common
Stock Reorganization) in, outstanding shares of Common Stock, or any sale or
conveyance of the property of the Company as an entirety or substantially as an
entirety, or any recapitalization of the Company (any such event being called a
"Capital Reorganization"), then, effective upon the effective date of such
Capital Reorganization, the Warrant holder shall no longer have the right to
purchase Common Stock, but shall have instead the right to purchase, upon
exercise of this Warrant, the kind and amount of shares of stock and other
securities and property (including cash) which the Warrant Holder would have
owned or have been entitled to receive pursuant to such Capital Reorganization
if the Warrant had been exercised immediately prior to the effective date of
such Capital Reorganization. As a condition to effecting any Capital
Reorganization, the Company or the successor or surviving corporation, as the
case may be, shall execute and deliver to each Warrant Holder an agreement as to
the Warrant Holder's rights in accordance with this Section 5(d), providing, to
the extent of any right to purchase equity securities hereunder, for subsequent
adjustments as nearly equivalent as may be practicable to the adjustments
provided for in this Section 5. The provisions of this Section 5(d) shall
similarly apply to successive Capital Reorganizations.
(e) Adjustment Rules.
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(i) Any adjustments pursuant to this
Section 5 shall be made successively whenever any event referred to herein shall
occur, except that, notwithstanding any other provision of this Section 5, no
adjustment shall be made to the number of Warrant Shares to be delivered to the
Warrant Holder (or to the Exercise Price) if such adjustment represents less
than
1% of the number of Warrant Shares previously required to be so delivered, but
any lesser adjustment shall be carried forward and shall be made at the time and
together with the next subsequent adjustment which together with any adjustments
so carried forward shall amount to 1% or more of the number of Warrant Shares to
be so delivered.
(ii) No adjustments shall be made pursuant
to this Section 5 in respect of (x) the issuance of Warrant Shares upon exercise
of the Warrant; (y) the issuance, sale or grant or exercise before or after the
date hereof by the Company to any director, officer, consultant or employee of
the Company or any Affiliate of the Company of any Common Stock or of any
option, bonus or other award exercisable into Common Stock approved by the Board
of Directors of the Company or any duly authorized committee thereof; or (z) any
securities of the Company which are issued and outstanding as at the date hereof
or are issued pursuant to the Stock Purchase Agreement (including, without
limitation, the issuance of any Series E Preferred Stock) or the Consulting
Agreement.
(iii) If the Company shall take a record of
the holders of its Common Stock for any purpose referred to in this Section 5,
then (x) such record date shall be deemed to be the date of the issuance, sale,
distribution or grant in question and (y) if the Company shall legally abandon
such action prior to effecting such action, no adjustment shall be made pursuant
to this Section 5 in respect of such action.
(iv) Upon the expiration without being
exercised of any rights, options, warrants or conversion or exchange of any
rights, options, warrants or conversion or exchange privileges for which an
adjustment has been made pursuant to this Warrant, the Exercise Price and the
number of shares of Common Stock purchasable upon the exercise of each Warrant
shall, upon such expiration, be readjusted and shall thereafter, upon any future
exercise, be such as they would have been had they been originally adjusted (or
had the original adjustment not been required, as the case may be) as if (A) the
only shares of Common Stock so issued were the shares of such Common Stock, if
any, actually issued or sold upon the exercise of such rights, options, warrants
or conversion or exchange rights and (B) such shares of Common Stock, if any,
were issued or sold for the consideration actually received by the Company upon
such exercise plus the consideration, if any, actually received by the Company
for issuance, sale or grant of all such rights, options, warrants or conversion
or exchange rights whether or not exercised; provided, that no such readjustment
shall have the effect of increasing the Exercise Price by an amount, or
decreasing the number of shares purchasable upon exercise of each Warrant by a
number, in excess of the amount or number of the adjustment initially made in
respect to the issuance, sale or grant of such rights, options, warrants or
conversion or exchange rights.
(f) Proceedings Prior to Any Action Requiring
Adjustment. As a condition precedent to the taking of any action which would
require an adjustment pursuant to this Section 5, the Company shall take any
action which may be necessary, including obtaining
regulatory approvals or exemptions, in order that the Company may thereafter
validly and legally issue as fully paid and nonassessable all shares of Common
Stock which the Warrant Holder is entitled to receive upon exercise of the
Warrant.
(g) Notice of Adjustment. Not less than 10 days prior
to the record date or effective date, as the case may be, of any action which
requires or might require an adjustment or readjustment pursuant to this Section
5, the Company shall give notice to each Warrant Holder of such event,
describing such event in reasonable detail and specifying the record date or
effective date, as the case may be, and, if determinable, the required
adjustment and computation thereof. If the required adjustment is not
determinable as the time of such notice, the Company shall give notice to each
Warrant Holder of such adjustment and computation as soon as reasonably
practicable after such adjustment becomes determinable.
6. Registration of Warrant Shares.
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Neither the Warrant nor the Warrant Shares have been
registered with the Commission under the Securities Act or qualified for sale
pursuant to any state blue sky law, and neither may be sold or transferred
without such registration or qualification, except pursuant to an exemption
therefrom. No rights shall be hereby granted which are in violation of
applicable securities laws or regulations.
7. Transfer of Warrant.
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This Warrant is not transferable until the Closing Date of the
Stock Purchase Agreement. After such date, this Warrant is only transferable to
directors, officers, employees and consultants of the Company; provided that no
transfer shall be made that (a) transfers Warrants exercisable into fewer than
5,000 Warrant Shares, (b) does not comply with all applicable federal and state
securities laws or (c) would require registration or qualification of the
Warrant pursuant to the Securities Act or any applicable state blue sky law; and
provided further that the Warrant Holder upon transfer of the Warrant must
deliver to the Company a duly executed Warrant Assignment in the form of Annex B
hereto, with funds sufficient to pay any transfer tax imposed in connection with
such assignment (if any) and upon surrender of this Warrant Certificate to the
Company. The Company shall execute and deliver a new Warrant Certificate or
Certificates in the form of this Warrant Certificate with appropriate changes to
reflect such Assignment, in the name or names of the assignee or assignees
specified in the fully executed Warrant Assignment or other instrument of
assignment and, if the Warrant Holder's entire interest is not being transferred
or assigned, in the name of the Warrant Holder, and this Warrant Certificate
shall promptly be cancelled. Any transfer or exchange of this Warrant
Certificate shall be without charge to the Warrant Holder (except as provided
above with respect to transfer taxes, if any) and any new Warrant Certificate or
Certificates issued shall be dated the date hereof. The terms "Warrant" and
"Warrant Holder" as used herein include all Warrants into which this Warrant (or
any successor
Warrant) may be exchanged or issued in connection with the transfer or
assignment of this Warrant any successor Warrant and the holders of those
Warrants, respectively.
8. Registration of Common Stock; Rule 144.
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The Company hereby agrees that, in accordance with the
provisions of the Registration Rights Agreement (as defined in the Stock
Purchase Agreement) it will file any reports required to be filed by it under
the Securities Act, the Exchange Act or the rules and regulations adopted by the
Commission thereunder and that it will use all reasonable efforts to cooperate
with each Warrant Holder and each holder of Warrant Shares in supplying such
information concerning the Company as may be necessary for such Warrant Holder
or holder to complete and file any information reporting forms currently or
hereafter required by the Commission as a condition to the availability of an
exemption from the Securities Act for the sale of any Warrants or Warrant
Shares. The Company also agrees that, in accordance with the provisions of the
Registration Rights Agreement (as defined in the Stock Purchase Agreement) it
will take such further action, and supply such information (including the
information specified by Rule 144A(d)(4) under the Securities Act) as any
Warrant Holder may reasonably request to the extent required from time to time
to enable the Warrant Holder to sell Warrant Shares without registration under
the Securities Act within the limitation of the exemptions provided by Rule 144
or 144A under the Securities Act, as such Rules may be amended from time to
time, or any similar rule or regulation hereafter adopted by the Commission.
Upon the request of the Warrant Holder, the Company will deliver to the Warrant
Holder a written statement that it has complied with such reporting
requirements.
Any other provision of this Warrant notwithstanding, the
Company shall not be obligated under any circumstances to cause this Warrant to
be listed or quoted on NASDAQ National Market System, any national securities
exchange or any other trading system or market, or to be registered under the
Securities Act.
9. Lost, Mutilated or Missing Warrant Certificates.
------------------------------------------------
Upon receipt by the Company of evidence satisfactory to it of
the loss, theft, destruction or mutilation of any Warrant Certificate, and, in
the case of loss, theft or destruction, upon receipt of indemnification
satisfactory to the Company, or, in the case of mutilation, upon surrender and
cancellation of the mutilated Warrant Certificate, the Company shall execute and
deliver a new Warrant Certificate of like tenor and representing the right to
purchase the same aggregate number of Warrant Shares. The recipient of any such
Warrant Certificate shall reimburse the Company for all reasonable expenses
incidental to the replacement of such lost, mutilated or missing Warrant
Certificate.
10. Successors and Assigns.
------------------------
All the provisions of this Warrant by or for the benefit of
the Company or the Warrant Holder shall bind and inure to the benefit of their
respective successors and assigns, provided, however, TMC may not assign any of
its rights, duties or obligations hereunder, except as specifically provided
herein without the prior written consent of the Company.
11. Notices.
--------
Any notice or other communication hereunder shall be in
writing and shall be sufficient if sent by first-class mail or courier, postage
prepaid, and addressed as follows: (a) if to the Company, National Media
Corporation, 0000 Xxxxxx Xxxxxx, 00 xxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxxxx, XX
00000 Attention: General Counsel; (b) if to the Warrant Holder, Temporary Media
Co., LLC, 00000 Xxxxxxx Xxxx., Xxxxx 000, Xxxxxxx Xxxx, XX 00000-0000; and (c)
if to any party, addressed to such address as such party may hereafter specify
to the Company, in the case of any communication to be provided by the Company,
or to each Warrant Holder, in the case of any communication to be provided by
the Warrant Holder, for the purpose of notice hereunder.
12. Waivers; Amendments.
--------------------
Any provision of this Warrant may be amended, modified or
waived with (but only with) the written consent of the Company and the holder or
holders of Warrants representing at least 51% of the shares of Common Stock
issuable upon exercise of all outstanding Warrants; provided that no such
amendment, modification or waiver shall, without the written consent of the
Company and each Warrant Holder, (a) change the number of Warrant Shares
issuable upon exercise of the Warrants or the Exercise Price or (b) amend,
modify or waive the provisions of this Section 12. Any amendment, modification
or waiver effected in compliance with this Section 12 shall be binding upon the
Company and each Warrant Holder. The Company shall give notice as soon as
reasonably practicable to each Warrant Holder of any amendment, modification or
waiver effected in compliance with this Section 12. No failure or delay of the
Company or any Warrant Holder in exercising any power or right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereon or the
exercise of any other right or power. No notice or demand on the Company in any
case shall entitle the Company to any other or future notice or demand in
similar or other circumstances. The rights and remedies of the Company and each
Warrant Holder hereunder are cumulative and not exclusive of any rights or
remedies which it would otherwise have.
13. Miscellaneous.
--------------
(a) The Warrant shall not entitle the Warrant
Holder, prior to the exercise of the Warrant, to any rights as a shareholder of
the Company.
(b) The Company shall pay all reasonable
expenses of the Warrant Holder, including reasonable fees and disbursements of
counsel, in connection with the preparation of the Warrant, any waiver or
consent hereunder or any amendment or modification hereof.
(c) In case any one or more of the provisions
contained in this Warrant shall be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby. The
parties shall endeavor in good faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
(d) Without limiting the rights of the Company
and the Warrant Holder to pursue all other legal and equitable rights available
to such party for the other parties' failure to perform its obligations
hereunder, the Company and the Warrant Holder each hereto acknowledge and agree
that the remedy at law for any failure to perform any obligations hereunder
would be inadequate and that each shall be entitled to specific performance,
injunctive relief or other equitable remedies in the event of any such failure.
(e) THIS WARRANT SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW, EXCEPT AS OTHERWISE
REQUIRED BY MANDATORY PROVISIONS OF LAW.
(f) Any legal suit, action or proceeding arising
out of or relating to this Warrant will be instituted exclusively in the
Delaware Court of Chancery, County of New Castle, Delaware, or in the United
States District Court, District of Delaware, Wilmington, Delaware, all parties
waive any objection which they may have now or hereafter based upon forum non
conveniens or to the venue of any such suit, action or proceeding, and (c)
irrevocably consents to the jurisdiction of the Delaware State Court of
Chancery, County of New Castle and the United States District Court for the
District of Delaware in any such suit, action or proceeding. The parties further
agrees to accept and acknowledge service of any and all process which may be
served in any such suit, action or proceeding in the Delaware State Court of
Chancery, County of New Castle or in the United States District Court for the
District of Delaware and agrees that service of process upon such party, mailed
by certified mail to the such party's address, will be deemed in every respect
effective service of process upon such party, in any suit, action or proceeding.
FURTHER, BOTH THE COMPANY
AND THE WARRANT HOLDER HEREBY WAIVE TRIAL BY JURY IN
ANY ACTION TO ENFORCE THIS WARRANT.
(g) The section headings used herein are for
convenience of reference only and shall not be construed in any way to affect
the interpretation of any provisions of the Warrant.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
duly executed its authorized officer, and its corporate seal to be hereunto
affixed, and attested by its Secretary, all as of the day and year first above
written.
NATIONAL MEDIA CORPORATION
By: ______________________________________
Name:
Title:
[Seal]
Attest:
----------------------------------
Asst. Secretary
ANNEX A
Form of Notice of Exercise
, 19
-------------------- ---
To: National Media Corporation
Reference is made to the Common Stock Purchase Warrant dated August ,
--
1998. Terms defined therein are used herein as therein defined.
The undersigned, pursuant to the provisions set forth in the Warrant,
hereby irrevocably elects and agrees to purchase shares of Common Stock,
-------
and makes payment herewith in full therefor at the Exercise Price of
$ in the following form:
---------------
-----------------------------------------------------------.
[If said number of shares is less than all of the shares purchasable hereunder,
the undersigned hereby requests that a new Warrant Certificate representing the
remaining balance of the shares be registered in the name of
, whose address is
------------------------------ -----------------------
-----------------------
-----------------------]
The undersigned hereby represents that it is exercising the Warrant for its
own account for investment purposes and not with the view to any sale or
distribution and that the Warrant Holder will not offer, sell or otherwise
dispose of the Warrant or any underlying Warrant Shares in violation of
applicable securities laws.
TEMPORARY MEDIA CO., LLC
By:
---------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Co-Managing Member
00000 Xxxxxxx Xxxx., Xxxxx 000
Xxxxxxx Xxxx, XX 00000-0000
ANNEX B
Form of Warrant Assignment
Reference is made to the Common Stock Purchase Warrant dated August ,
---
1998, issued by National Media Corporation. Terms defined therein are used
herein as therein defined.
FOR VALUE RECEIVED (the "Assignor") hereby sells,
--------------------
assigns and transfers all of the rights of the Assignor as set forth in the
Common Stock Purchase Warrant dated August , 1998, with respect to the number
--
of Warrant Shares covered thereby as set forth below, to the Assignee(s) as set
forth below:
Name(s) of Number of
Assignee(s) Address(es) Warrant Shares
----------- ----------- --------------
--------------- -------------------- --------------------
--------------- -------------------- --------------------
All notices to be given by the Company to the Assignor as Warrant Holder
shall be sent to the Assignee(s) at the above listed address(es), and, if the
number of shares being hereby assigned is less than all of the shares covered by
the Warrant held by the Assignor, then also to the Assignor.
In accordance with Section 7 of the Warrant Certificate, the Assignor
requests that the Company execute and deliver a new Warrant Certificate or
Warrant Certificates in the name or names of the assignee or assignees, as is
appropriate, or, if the number of shares being hereby assigned is less than all
of the shares covered by the Warrant held by the Assignor, new Warrant
Certificates in the name or names of the assignee or the assignees, as is
appropriate, and in the name of the Assignor.
The undersigned represents that the Assignee has represented to the
Assignor that the Assignee is acquiring the Warrant for its own account or the
account of an Affiliate for investment
purposes and not with the view to any sale or distribution, and that the
Assignee will not offer, sell or otherwise dispose of the Warrant or the Warrant
Shares except under circumstances as will not result in a violation of
applicable securities laws.
Dated: , 19
----------------- ---
TEMPORARY MEDIA CO., LLC
By:
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Co-Managing Member
00000 Xxxxxxx Xxxx., Xxxxx 000
Xxxxxxx Xxxx, XX 00000-0000
