EXHIBIT 4.6
-----------
WARRANT
THIS WARRANT HAS BEEN ISSUED IN REPLACEMENT OF THAT CERTAIN COMMON
STOCK PURCHASE WARRANT ISSUED TO THE HOLDER BY XXXXXXXXXXX.XXX INC. ON
JULY 30, 2001 (THE "INITIAL WARRANT"), WHICH INITIAL WARRANT HAS BEEN
CANCELED AND VOIDED CONTEMPORANEOUSLY WITH THE DELIVERY HEREOF.
THIS WARRANT AND THE SECURITIES ISSUABLE UPON ITS EXERCISE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY
STATE SECURITIES LAW, AND MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION UNDER THE ACT OR IN A TRANSACTION WHICH, IN THE
OPINION OF COUNSEL, WHICH OPINION AND WHICH COUNSEL SHALL BE REASONABLY
SATISFACTORY TO COOLSAVINGS, INC., QUALIFIES AS AN EXEMPT TRANSACTION UNDER
THE ACT AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER.
COOLSAVINGS, INC.
Common Stock Purchase Warrant
CoolSavings, Inc., a Delaware corporation (the "Company"), hereby
certifies that, for value received, Landmark Communications, Inc. or its
assigns (the "Holder"), is entitled, subject to the terms set forth below,
to purchase from the Company, at any time and from time to time during the
period beginning on November 12, 2001 and ending on July 30, 2009 (the
"Expiration Date"), in whole or in part, the Warrant Shares (defined in
Section 1.1 below) of fully paid and non-assessable shares of the Common
Stock of the Company at the Purchase Price (defined in Section 1.1 below).
The Purchase Price and the number and character of such Warrant Shares are
subject to the adjustments provided below, and the term "Common Stock"
shall mean, unless the context otherwise requires, the stock or other
securities or property at the time deliverable upon the exercise of this
Warrant. This Warrant is herein called the "Warrant."
1. EXERCISE OF WARRANT.
1.1 The Holder of this Warrant is entitled to purchase at a
purchase price of $0.50 ($0.75 from and after July 30, 2005) per share
("Purchase Price") the following number of shares of Common Stock (the
"Warrant Shares"): (a) 10,000,000 shares (the "Base Shares"); and (b) two
(2) additional shares of Common Stock (adjusted for dividends, splits,
combinations and the like) (the "PIK Shares") for every dollar of interest
accrued, compounded and added after the date hereof to the Original
Principal Amount (defined below) of the Initial Loan (defined below) on a
quarterly basis. The "Initial Loan" is the "Initial Loan" defined in and
described under that certain Xxxxxxx and Restated Loan and Security
Agreement dated July 30, 2001 between the Holder and the Company (the "Loan
Agreement"), which is further evidenced by the Senior Secured Note (as
defined in and attached to the Loan Agreement). The "Original Principal
Amount" is the Original Principal Amount of $5,000,000 as defined in the
Loan Agreement. Such PIK Shares are part of the Company's obligation to
pay the interest accruing under the Initial Loan "in kind"; specifically,
the Company is obligated to pay the interest by delivering additional notes
and warrants and, in lieu of delivering separately certificated warrants,
the Company has agreed to add the PIK Shares (as the warrant portion of the
"in kind" payment) to the Base Shares that may be purchased hereunder. The
Base Shares and all PIK Shares are collectively the "Warrant Shares"
hereunder. Within ten (10) days of each Quarterly Payment Date (as defined
1
in the Loan Agreement) through the Expiration Date, or as reasonably
requested by the Holder, the Company shall issue to the Holder a
certificate executed by the Company's chief financial officer or other
executive officer setting forth the number of PIK Shares as of such date
and the amount of the interest accrued, compounded and added to the Initial
Loan.
1.2 Until such time as this Warrant is exercised in full or
expires, the Warrant Shares issuable upon exercise and the Purchase Price
shall be subject to the further adjustments set forth below.
1.3 The purchase rights evidenced by this Warrant shall be
exercised by the Holder surrendering this Warrant, with the form of
subscription at the end hereof duly executed by the Holder, to the Company
at its office at 000 X. Xxxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxx, XX 00000,
accompanied by payment, of an amount (the "Exercise Payment") equal to the
Purchase Price multiplied by the number of shares being purchased pursuant
to such exercise, payable as follows: (a) by payment to the Company in
cash, by certified or official bank check, or by wire transfer of the
Exercise Payment, (b) by offset, at the Holder's request, of that portion
of any promissory note, indebtedness or cash obligation of the Company to
the Holder equal to the Exercise Payment, (c) by surrender to the Company
for cancellation of securities of the Company having a Market Price
(defined below) on the date of exercise equal to the Exercise Payment; or
(d) by a combination of the methods described in clauses (a), (b) and (c)
above. For purposes hereof, the term "Market Price" shall mean, with
respect to any day, the average closing price of a share of Common Stock
for the 15 consecutive trading days preceding such day on the principal
national securities exchange on which the shares of Common Stock or
securities are listed or admitted to trading or, if not listed or admitted
to trading on any national securities exchange, the average of the reported
bid and asked prices during such 15 trading day period in the
over-the-counter market as furnished by the National Quotation Bureau,
Inc., or, if such firm is not then engaged in the business of reporting
such prices, as furnished by any member of the National Association of
Securities Dealers, Inc. selected by the Company or, if the shares of
Common Stock or securities are not publicly traded, the Market Price for
such day shall be the fair market value thereof determined jointly by the
Company and the holder of this Warrant; PROVIDED, HOWEVER, that if such
parties are unable to reach agreement within a reasonable period of time,
the Market Price shall be determined in good faith by the independent
investment banking firm selected jointly by the Company and the holder of
this Warrant or, if that selection cannot be made within 15 days, by an
independent investment banking firm selected by the American Arbitration
Association in accordance with its rules. In no event may this Warrant be
exercised at any time after the Expiration Date.
Notwithstanding any provision herein to the contrary, if the
Market Price of one share of Common Stock is greater than the Purchase
Price (at the date of calculation as set forth below), the Holder may elect
to receive, without the payment by the Holder of any additional
consideration, shares of Common Stock equal to the value (as determined
below) of this Warrant or any portion hereof by the surrender of this
Warrant or such portion to the Company, with the net issue election notice
annexed hereto duly executed, at the office of the Company. Thereupon, the
Company shall issue to the Holder such number of fully paid and
nonassessable shares of Common Stock as is computed using the following
formula:
X = Y (A-B)
-------
A
where X = the number of shares of Common Stock to be issued
to the Holder.
Y = the number of shares of Common Stock covered by
this Warrant in respect of which the net issue
election is made pursuant to this Section 1.2.
2
A = the Market Price of one share of Common Stock, as
determined in accordance with the provisions of
this Section 1.2.
B = the Purchase Price in effect under this Warrant at
the time the net issue election is made pursuant to
this Section 1.2.
1.4 PARTIAL EXERCISE. This Warrant may be exercised for less
than the full number of Warrant Shares, in which case the number of shares
receivable upon the exercise of this Warrant as a whole, and the sum
payable upon the exercise of this Warrant as a whole, shall be
proportionately reduced. Upon any such partial exercise, the Company at
its expense will forthwith issue to the Holder a new Warrant or Warrants of
like tenor calling for the number of shares of Common Stock as to which
rights have not been exercised, such Warrant or Warrants to be issued in
the name of the Holder hereof or his or its nominee (upon payment by the
Holder of any applicable transfer taxes).
2. DELIVERY OF STOCK CERTIFICATES ON EXERCISE. As soon as
practicable after the exercise of this Warrant and payment of the Purchase
Price, and in any event within ten (10) days thereafter, the Company, at
its expense, will cause to be issued in the name of and delivered to the
Holder a certificate or certificates for the number of fully paid and
non-assessable shares or other securities or property to which the Holder
shall be entitled upon such exercise, plus, in lieu of any fractional share
to which the Holder would otherwise be entitled, cash in an amount
determined in accordance with Paragraph 3.9 hereof. The Company agrees
that the shares so purchased shall be deemed to be issued to the Holder as
the record owner of such shares as of the close of business on the date on
which this Warrant shall have been surrendered and payment made for such
shares as aforesaid.
3. ANTI-DILUTION PROVISIONS AND OTHER ADJUSTMENTS. In order to
prevent dilution of the rights granted hereunder, the Purchase Price shall
be subject to adjustment from time to time in accordance with this
Paragraph 3. Upon each adjustment of the Purchase Price pursuant to this
Paragraph 3, the registered Holder of this Warrant shall thereafter be
entitled to acquire upon exercise, at the Purchase Price resulting from
such adjustment, the number of shares of Common Stock obtainable by
multiplying the Purchase Price in effect immediately prior to such
adjustment by the number of shares of Common Stock acquirable immediately
prior to such adjustment and dividing the product thereof by the Purchase
Price resulting from such adjustment.
3.1 ADJUSTMENT FOR ISSUE OR SALE OF COMMON STOCK AT LESS THAN
PURCHASE PRICE. Except as provided in Paragraph 3.2 or 3.5 below, if and
whenever on or after the date hereof (the "Initial Issuance Date"), the
Company shall issue or sell or shall be deemed to have issued or sold any
shares of its Common Stock (or in case the Company at any time shall in any
manner grant (whether directly or by assumption in a merger or otherwise)
any rights to subscribe for or to purchase, or any options for the purchase
of, Common Stock or any stock or other securities convertible into or
exchangeable for Common Stock (such rights or options being herein called
"Options" and such convertible or exchangeable stock or securities being
herein called "Convertible Securities")) for a consideration per share less
than the Purchase Price in effect immediately prior to the time of such
issue or sale, then forthwith upon such issue or sale (the "Triggering
Transaction"), the Purchase Price shall be reduced to the price at which
the Common Stock, Options or Convertible Securities were issued or deemed
to have been issued in such Triggering Transaction.
3
For purposes of determining the adjusted Purchase Price under
this Paragraph 3.1, the following subsections (1) to (9), inclusive, shall
be applicable:
(1) In case the Company at any time shall in any manner
grant (whether directly or by assumption in a merger or
otherwise) any Options or Convertible Securities
(including without limitation the right to subscribe for
or purchase any such Options or Convertible Securities),
whether or not such Options or the right to convert or
exchange any such Convertible Securities are immediately
exercisable and the price per share for which the Common
Stock is issuable upon exercise, conversion or exchange
(determined by dividing (x) the total 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 such Options which relate to Convertible
Securities, the minimum aggregate amount of additional
consideration, if any, payable upon the issue 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 the conversion or exchange of such Convertible
Securities) shall be less than the Purchase Price in
effect immediately prior to the time of the granting of
such Option, then the total maximum amount of Common
Stock issuable upon the exercise of such Options, or, in
the case of Options for Convertible Securities, upon the
conversion or exchange of such Convertible Securities,
shall (as of the date of granting of such Options) be
deemed to be outstanding and to have been issued and sold
by the Company for such price per share. No adjustment
of the Purchase Price shall be made upon the actual issue
of such shares of Common Stock or such Convertible
Securities upon the exercise of such Options, except as
otherwise provided in subparagraph (3) below.
(2) In case the Company at any time shall in any manner issue
(whether directly or by assumption in a merger or
otherwise) 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 (determined by dividing (x) the total amount
received or receivable by the Company as consideration
for the issue or sale 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 total maximum
number of shares of Common Stock issuable upon the
conversion or exchange of all such Convertible
Securities) shall be less than the Purchase Price in
effect immediately prior to the time of such issue or
sale, then the total maximum number of shares of Common
Stock issuable upon conversion or exchange of all such
Convertible Securities shall (as of the date of the issue
or sale of such Convertible Securities) be deemed to be
outstanding and to have been issued and sold by the
Company for such price per share. No adjustment of the
Purchase Price shall be made upon the actual issue of
such Common Stock upon exercise of the rights to exchange
or convert under such Convertible Securities, except as
otherwise provided in subparagraph (3) below.
4
(3) If the purchase price provided for in any Option referred
to in subparagraph (1) or the rate at which any
Convertible Securities referred to in subparagraphs (1)
or (2) are convertible into or exchangeable for Common
Stock, shall be reduced at any time under or by reason of
provisions with respect thereto designed to protect
against dilution, then in case of the delivery of Common
Stock upon the exercise of any such Option or upon
conversion or exchange of any such Convertible Security,
the Purchase Price then in effect hereunder shall
forthwith be adjusted to such respective amount as would
have been obtained had such Option or Convertible
Security never been issued as to such Common Stock and
had adjustments been made upon the issuance of the shares
of Common Stock delivered as aforesaid, but only if as a
result of such adjustment the Purchase Price then in
effect hereunder is hereby reduced.
(4) On the expiration or earlier termination of any Option or
the termination of any right to convert or exchange any
Convertible Securities, the Purchase Price then in effect
hereunder shall forthwith be increased to the Purchase
Price which would have been in effect at the time of such
expiration or termination had such Option or Convertible
Securities, to the extent outstanding immediately prior
to such expiration or termination, never been issued.
(5) In case any Options shall be issued in connection with
the issue or 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 unless otherwise
recorded on the Company's financial statements in
accordance with generally accepted accounting principles.
(6) In case any shares of Common Stock, Options or
Convertible Securities shall be issued or sold or deemed
to have been issued or sold for cash, the consideration
received therefor shall be deemed to be the amount
received by the Company therefor. In case any shares of
Common Stock, Options or Convertible Securities shall be
issued or sold for a consideration other than cash, the
amount of the consideration other than cash received by
the Company shall be the fair value of such consideration
as determined in good faith by the Board of Directors of
the Company. In case 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 value of such portion of the net
assets and business of the non-surviving corporation as
shall be attributed by the Board of Directors of the
Company in good faith to such Common Stock, Options or
Convertible Securities, as the case may be.
(7) The number of shares of Common Stock outstanding at any
given time shall not include shares owned, held by or for
the account of the Company or cancelled, and the
disposition of any shares so owned or held shall be
considered an issue or sale of Common Stock for the
purpose of this Paragraph 3.1.
5
(8) In case the Company shall declare a dividend or make any
other distribution upon the stock of the Company payable
in Options or Convertible Securities, then in such case
any Options or Convertible Securities, as the case may
be, issuable in payment of such dividend or distribution
shall be deemed to have been issued or sold without
consideration.
(9) For purposes of this Paragraph 3.1, in case the Company
shall take a record of the holders of its Common Stock
for the purpose of entitling them (x) to receive a
dividend or other distribution payable in Common Stock,
Options or in Convertible Securities, or (y) to subscribe
for or purchase Common Stock, Options or Convertible
Securities, then such record date shall be deemed to be
the date of the issue or sale of the shares of Common
Stock deemed to have been issued or sold upon the
declaration of such dividend or the making of such other
distribution or the date of the granting of such right or
subscription or purchase, as the case may be.
3.2 DIVIDENDS NOT PAID OUT OF EARNINGS OR EARNED SURPLUS. In
the event the Company shall declare a dividend upon the Common Stock (other
than a dividend payable in Common Stock) payable otherwise than out of
earnings or earned surplus, determined in accordance with generally
accepted accounting principles, including the making of appropriate
deductions for minority interests, if any, in subsidiaries (herein referred
to as "Liquidating Dividends"), then, as soon as possible after the
exercise of this Warrant, the Company shall pay to the person exercising
such Warrant an amount equal to the aggregate value at the time of such
exercise of all Liquidating Dividends (including but not limited to the
Common Stock which would have been issued at the time of such earlier
exercise and all other securities which would have been issued with respect
to such Common Stock by reason of stock splits, stock dividends, mergers or
reorganizations, or for any other reason). For the purposes of this
Paragraph 3.2, a dividend other than in cash shall be considered payable
out of earnings or earned surplus only to the extent that such earnings or
earned surplus are charged an amount equal to the fair value of such
dividend as determined in good faith by the Board of Directors of the
Company.
3.3 SUBDIVISIONS AND COMBINATIONS. In case the Company shall
at any time (i) subdivide the outstanding Common Stock or (ii) issue a
stock dividend on its outstanding Common Stock, the Purchase Price in
effect immediately prior to such subdivision or dividend shall be
proportionately reduced by the same ratio as the subdivision or dividend.
In case the Company shall at any time combine its outstanding Common Stock,
the Purchase Price in effect immediately prior to such combination shall be
proportionately increased by the same ratio as the combination.
3.4 REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER
OR SALE OF ASSETS. If any capital reorganization or reclassification of
the capital stock of the Company, or consolidation or merger of the Company
with or into another corporation, or the sale of all or substantially all
of its assets to another corporation shall be effected in such a way that
holders of Common Stock shall be entitled to receive stock, securities,
cash or other property with respect to or in exchange for Common Stock,
then, as a condition of such reorganization, reclassification,
consolidation, merger or sale, lawful and adequate provision shall be made
whereby the Holder shall have the right to acquire and receive, upon
exercise of this Warrant, such shares of stock, securities, cash or other
property issuable or payable (as part of the reorganization,
reclassification, consolidation, merger or sale) with respect to or in
exchange for such number of outstanding shares of the Common Stock as would
have been received upon exercise of this Warrant at the Purchase Price then
6
in effect. The Company will not effect any such consolidation, merger or
sale, unless prior to the consummation thereof the successor corporation
(if other than the Company) resulting from such consolidation or merger or
the corporation purchasing such assets shall assume by written instrument
mailed or delivered to the Holder at the last address of the Holder
appearing on the books of the Company, the obligation to deliver to the
Holder such shares of stock, securities or assets as, in accordance with
the foregoing provisions, the Holder may be entitled to purchase. If a
purchase, tender or exchange offer is made to and accepted by the holders
of more than 50% of the outstanding shares of Common Stock of the Company,
the Company shall not effect any consolidation, merger or sale with the
person having made such offer or with any Affiliate of such person, unless
prior to the consummation of such consolidation, merger or sale the Holder
shall have been given a reasonable opportunity to then elect to receive
upon the exercise of this Warrant either the stock, securities or assets
then issuable with respect to the Common Stock or the stock, securities or
assets, or the equivalent, issued to previous holders of the Common Stock
in accordance with such offer. For purposes hereof the term "Affiliate"
with respect to any given person shall mean any person controlling,
controlled by or under common control with the given person.
3.5 NO ADJUSTMENT FOR EXERCISE OF CERTAIN OPTIONS, WARRANTS,
ETC. The provisions of this Section 3 shall not apply to any Common Stock
issued, issuable or deemed outstanding under subparagraphs 3.1(1) to (8)
inclusive in respect of: (i) options issued under any Approved Plan as such
term is defined in the Company's Certificate of Incorporation or if not so
defined therein as defined in that certain Securities Purchase Agreement,
dated as of July 30, 2001, by and among the Holder, Landmark Ventures VII,
LLC, the Company and xxxxxxxxxxx.xxx inc. (the "Securities Purchase
Agreement") (provided that when determining whether there are any options
remaining for issuance under an Approved Plan, all shares issued and
outstanding under such Approved Plan regardless of exercise price must be
considered in such calculation), (ii) Options, Convertible Securities and
conversion rights in existence on the date hereof, (iii) conversion of the
Series B Preferred Stock, the Series C Preferred Stock or this Warrant,
(iv) any issuance of additional shares of Series B Preferred Stock as a
dividend, and (v) any issuance of additional shares of Series B Preferred
Stock in accordance with Section 2.4 of the Securities Purchase Agreement.
3.6 NOTICES OF RECORD DATE, ETC. In the event that:
(1) the Company shall declare any cash dividend upon
its Common Stock, or
(2) the Company shall declare any dividend upon its
Common Stock payable in stock or make any special
dividend or other distribution to the holders of
its Common Stock, or
(3) the Company shall offer for subscription pro rata
to the holders of its Common Stock any additional
shares of stock of any class or other rights, or
(4) there shall be any capital reorganization or
reclassification of the capital stock of the
Company, including any subdivision or combination
of its outstanding shares of Common Stock, or
consolidation or merger of the Company with,
or sale of all or substantially all of its assets
to, another corporation, or
(5) there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the
Company;
7
then, in connection with such event, the Company shall give to the Holder:
(i) at least twenty (20) days' prior written notice of
the date on which the books of the Company shall close or a
record shall be taken for such dividend, distribution or
subscription rights or for determining rights to vote in
respect of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or
winding up; and
(ii) in the case of any such reorganization,
reclassification, consolidation, merger, sale, dissolution,
liquidation or winding up, at least twenty (20) days' prior
written notice of the date when the same shall take place.
Such notice in accordance with the foregoing clause (i) shall
also specify, in the case of any such dividend, distribution or
subscription rights, the date on which the holders of Common
Stock shall be entitled thereto, and such notice in accordance
with the foregoing clause (ii) shall also specify the date on
which the holders of Common Stock shall be entitled to exchange
their Common Stock for securities or other property deliverable
upon such reorganization, reclassification consolidation,
merger, sale, dissolution, liquidation or winding up, as the
case may be. Each such written notice shall be given by first
class mail, postage prepaid, addressed to the Holder at the
address of the Holder as shown on the books of the Company.
3.7 GRANT, ISSUE OR SALE OF OPTIONS, CONVERTIBLE SECURITIES,
OR RIGHTS. If at any time or from time to time on or after the date of
issuance hereof, the Company shall grant, issue or sell any Options,
Convertible Securities or rights to purchase property (the "Purchase
Rights") pro rata to the record holders of any class of Common Stock and
such grants, issuances or sales do not result in an adjustment of the
Purchase Price under Paragraph 3.1 hereof, then the Holder shall be
entitled to acquire (within thirty (30) days after the receipt by such
holder of the notice concerning Purchase Rights to which such holder shall
be entitled under Paragraph 3.6) and upon the terms applicable to such
Purchase Rights either:
(i) the aggregate Purchase Rights which the Holder
could have acquired if it had held the number of shares of
Common Stock acquirable upon exercise of this Warrant
immediately before the grant, issuance or sale of such Purchase
Rights; provided that if any Purchase Rights were distributed
to holders of Common Stock without the payment of additional
consideration by such holders, corresponding Purchase Rights
shall be distributed to the exercising Holder as soon as
possible after such exercise and it shall not be necessary for
the Holder specifically to request delivery of such rights; or
(ii) in the event that any such Purchase Rights shall
have expired or shall expire prior to the end of said thirty
(30) day period, the number of shares of Common Stock or the
amount of property which the Holder could have acquired upon
such exercise at the time or times at which the Company
granted, issued or sold such expired Purchase Rights.
8
3.8 ADJUSTMENT BY BOARD OF DIRECTORS. If any event occurs as
to which, in the opinion of the Board of Directors of the Company, the
provisions of this Section 3 are not strictly applicable or if strictly
applicable would not fairly protect the rights of the Holder in accordance
with the essential intent and principles of such provisions, then the Board
of Directors in good faith shall make an adjustment in the application of
such provisions, in accordance with such essential intent and principles,
so as to protect such rights as aforesaid, but in no event shall any
adjustment have the effect of increasing the Purchase Price as otherwise
determined pursuant to any of the provisions of this Section 3 except in
the case of a combination of shares of a type contemplated in Paragraph 3.3
and then in no event to an amount larger than the Purchase Price as
adjusted pursuant to Paragraph 3.3.
3.9 FRACTIONAL SHARES. The Company shall not issue fractions
of shares of Common Stock upon exercise of this Warrant or scrip in lieu
thereof. If any fraction of a share of Common Stock would, except for the
provisions of this Section 3.9, be issuable upon exercise of this Warrant,
the Company shall in lieu thereof pay to the person entitled thereto an
amount in cash equal to such fraction, calculated to the nearest
one-hundredth (1/100) of a share, multiplied by the Market Price for the
Common Stock, determined as of the date of exercise; provided, however,
that if the Market Price is to be determined by the Company and the Holder
and the parties are unable to reach agreement after a reasonable period of
time, the Market Price shall be determined by the Company's Board of
Directors in good faith rather than by an independent investment banking
firm.
3.10 OFFICERS' STATEMENT AS TO ADJUSTMENTS. Whenever the
Purchase Price shall be adjusted as provided in Section 3 hereof, the
Company shall forthwith file at each office designated for the exercise of
this Warrant, a statement, signed by the Chairman of the Board, the
President, any Vice President or Treasurer of the Company, showing in
reasonable detail the facts requiring such adjustment and the Purchase
Price that will be effective after such adjustment. The Company shall also
cause a notice setting forth any such adjustments to be sent by mail, first
class, postage prepaid, to the record Holder at his or its address
appearing on the stock register. If such notice relates to an adjustment
resulting from an event referred to in Paragraph 3.6, such notice shall be
included as part of the notice required to be mailed and published under
the provisions of Paragraph 3.6 hereof.
4. NO DILUTION OR IMPAIRMENT. The Company will not, by amendment
of its Certificate of Incorporation or through reorganization,
consolidation, merger, dissolution, sale of assets or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the
terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may
be necessary or appropriate in order to protect the rights of the Holder
against dilution or other impairment. Without limiting the generality of
the foregoing, the Company will not increase the par value of any shares of
stock receivable upon the exercise of this Warrant above the amount payable
therefor upon such exercise, and at all times will take all such action as
may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and non-assessable stock upon the exercise of this
Warrant.
5. RESERVATION OF STOCK, ETC., ISSUABLE ON EXERCISE OF WARRANTS.
The Company shall at all times reserve and keep available out of its
authorized but unissued stock, solely for the issuance and delivery upon
the exercise of this Warrant and other similar Warrants, such number of its
duly authorized shares of Common Stock as from time to time shall be
issuable upon the exercise of this Warrant and all other similar Warrants
at the time outstanding.
9
6. REPLACEMENT OF WARRANT. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation
of this Warrant and (in the case of loss, theft or destruction) upon
delivery of an indemnity agreement (with surety if reasonably required) in
an amount reasonably satisfactory to it, or (in the case of mutilation)
upon surrender and cancellation thereof, the Company will issue, in lieu
thereof, a new Warrant of like tenor.
7. REMEDIES. The Company stipulates that the remedies at law of
the Holder in the event of any default by the Company in the performance of
or compliance with any of the terms of this Warrant are not and will not be
adequate, and that the same may be specifically enforced.
8. NEGOTIABILITY, ETC. This Warrant is issued upon the following
terms, to all of which each taker or owner hereof consents and agrees:
(a) Subject to the legend appearing on the first page hereof
and applicable federal securities laws, title to this Warrant may be
transferred by endorsement (by the Holder executing the form of
assignment at the end hereof including guaranty of signature) and
delivery in the same manner as in the case of a negotiable instrument
transferable by endorsement and delivery.
(b) Any person in possession of this Warrant properly
endorsed is authorized to represent himself as absolute owner hereof
and is granted power to transfer absolute title hereto by endorsement
and delivery hereof to a bona fide purchaser hereof for value; each
prior taker or owner waives and renounces all of his equities or
rights in this Warrant in favor of every such bona fide purchaser,
and every such bona fide purchaser shall acquire title hereto and to
all rights represented hereby.
(c) Until this Warrant is transferred on the books of the
Company, the Company may treat the registered Holder as the absolute
owner hereof for all purposes without being affected by any notice to
the contrary.
(d) Prior to the exercise of this Warrant, the Holder shall
not be entitled to any rights of a shareholder of the Company with
respect to shares for which this Warrant shall be exercisable,
including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
(e) The Company shall not be required to pay any Federal or
state transfer tax or charge that may be payable in respect of any
transfer involved in the transfer or delivery of this Warrant or the
issuance or conversion or delivery of certificates for Common Stock
in a name other than that of the registered Holder or to issue or
deliver any certificates for Common Stock upon the exercise of this
Warrant until any and all such taxes and charges shall have been paid
by the Holder or until it has been established to the Company's
satisfaction that no such tax or charge is due.
9. SUBDIVISION OF RIGHTS. This Warrant (as well as any new
warrants issued pursuant to the provisions of this paragraph) is
exchangeable, upon the surrender hereof by the Holder, at the principal
office of the Company for any number of new warrants of like tenor and date
representing in the aggregate the right to subscribe for and purchase the
number of shares of Common Stock which may be subscribed for and purchased
hereunder.
10. MAILING OF NOTICES, ETC. All notices and other communications
from the Company to the Holder shall be mailed by first-class certified
mail, postage prepaid, to the address furnished to the Company in writing
by the last holder of this Warrant who shall have furnished an address to
the Company in writing.
10
11. HEADINGS, ETC. The headings in this Warrant are for purposes
of reference only, and shall not limit or otherwise affect the meaning
hereof.
12. CHANGE, WAIVER, ETC. Neither this Warrant nor any term hereof
may be changed, waived, discharged or terminated orally but only by an
instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought which, in the case of
holders of the Warrant, shall be evidenced by the approval of a majority of
the total Warrant Shares issued or issuable under this Warrant.
13. GOVERNING LAW. THIS WARRANT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
COOLSAVINGS, INC.
By: /s/ Xxxxxxx Xxxx
------------------------------
Title: President
------------------------------
Dated: November 12, 2001
11
[ To be signed only upon exercise of Warrant ]
EXERCISE NOTICE
---------------
CoolSavings, Inc.
000 X. Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Attention: Chief Financial Officer
The undersigned hereby elects to purchase, pursuant to the provisions of
the Common Stock Purchase Warrant to purchase shares of common stock, no
par value per share, issued by xxxxxxxxxxx.xxx inc. (the "Company") and
held by the undersigned, the original of which is attached hereto, and
(check the applicable box):
[ ] Tenders herewith payment of the Exercise Payment (as defined in the
Warrant) in full in the form of cash, certified check, official bank
check or wire transfer or check in the amount of $__________________
for _______________ such securities.
[ ] Confirms that payment of the Exercise Payment (as defined in the
Warrant) in full by means of a wire transfer in the amount of
$__________________ for _______________ such securities has been made
to the Company.
[ ] Elects to surrender to the Company for cancellation securities of the
Company having Market Price (as defined in the Warrant) on the date
hereof equal to the Exercise Payment.
The undersigned hereby represents and warrants that the undersigned
is acquiring such shares for its own account for investment purposes only,
and not for resale or with a view to distribution of such shares or any
part thereof.
The undersigned requests that the certificates for such shares be
issued in the name of, and be delivered to, ______________________, whose
address is ______________________________.
Dated: ________________________
______________________________
(Signature must conform to the
name of holder as specified on
the face of the Warrant)
______________________________
______________________________
(Address)
12
[ To be signed only upon transfer of Warrant ]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ____________________________ (the "Transferee") the right
represented by the within Warrant to purchase __________________ shares of
Common Stock of xxxxxxxxxxx.xxx inc. to which the within Warrant relates,
and appoints ____________________ attorney to transfer said right on the
books of xxxxxxxxxxx.xxx inc., with full power of substitution in the
premises.
Dated: _______________________
______________________________
(Signature must conform to the
name of holder as specified on
the face of the Warrant)
______________________________
______________________________
(Address)
In the presence of:
______________________________
Transferee hereby represents and warrants to xxxxxxxxxxx.xxx inc. that
Transferee is an "accredited investor" as defined in Rule 501(a) of the
Rules and Regulations promulgated under the Securities Act of 1933, as
amended.
_______________________________
Transferee
_______________________________
Dated
13
[ To be signed only on net issue exercise of the Warrant ]
NET ISSUE ELECTION
------------------
CoolSavings, Inc.
000 X. Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Attention: Chief Financial Officer
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise this Warrant with respect to ______________ shares of
Common Stock of xxxxxxxxxxx.xxx inc. pursuant to the net issuance
provisions set forth in Section 2.1 of this Warrant and requests that the
certificates for the number of shares of Common Stock issuance pursuant to
said Section 2.1 after application of the net issuance formula to such
__________ shares to be issued in the name of, and delivered to __________,
federal taxpayer identification number ____________________, whose address
is ________________________________________.
Dated: ________________________
______________________________
(Signature must conform to the
name of holder as specified on
the face of the Warrant)
______________________________
______________________________
(Address)
14
