Exhibit 4.11
THIS WARRANT AND THE SHARES OF CAPITAL STOCK ISSUED UPON ANY EXERCISE HEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY APPLICABLE STATE SECURITIES OR "BLUE-SKY" LAWS AND
MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM.
No. ____ For the Purchase
of 10,000 shares
of Common Stock
WARRANT TO PURCHASE COMMON STOCK
OF
ALLOY, INC.
(A DELAWARE CORPORATION)
ALLOY, INC., a Delaware corporation (the "COMPANY"), for value
received, hereby certifies that Xxxx X. Xxxxxxx (the "Holder"), is entitled,
subject to the terms set forth below, to purchase from the Company, at any time
or from time to time on or before the first to occur of 5:00 p.m. Eastern
Standard Time on November 1, 2004 and the termination of this Warrant as
provided in Section 7 hereof, up to an aggregate of Ten Thousand (10,000) shares
of Common Stock, par value $0.01 per share, of the Company (the "COMMON STOCK"),
at a purchase price equal to $9.62 per share, as may be adjusted upon the
occurrence of certain events as set forth in Section 3 of this Warrant. The
shares of stock issuable upon exercise of this Warrant, and the purchase price
per share, are hereinafter referred to as the "WARRANT STOCK" and the "PURCHASE
PRICE," respectively.
1. EXERCISE.
1.1 MANNER OF EXERCISE; PAYMENT IN CASH. This Warrant may be
exercised by the Holder, in whole or in part, by surrendering this
Warrant, with the purchase form appended hereto as EXHIBIT A duly
executed by the Holder, at the principal office of the Company, or at
such other place as the Company may designate, accompanied by payment
in full of the Purchase Price payable in respect of the number of
shares of Warrant Stock purchased upon such exercise. Payment of the
Purchase Price shall be in cash or by certified or official bank check
payable to the order of the Company.
1.2 EFFECTIVENESS. Each exercise of this Warrant shall be
deemed to have been effected immediately prior to the close of business
on the day on which this Warrant shall have been surrendered to the
Company as provided in Section 1.1 above. At such time, the person or
persons in whose name or names any certificates for Warrant Stock shall
be issuable upon such exercise as provided in Section 1.3 below shall
be deemed to have become the holder or holders of record of the Warrant
Stock represented by such certificates.
1.3 DELIVERY OF CERTIFICATES. As soon as practicable after the
exercise of this Warrant in whole or in part, and in any event within
twenty (20) days thereafter, the Company at its sole expense will cause
to be issued in the name of, and delivered to, the Holder, or, subject
to the terms and conditions hereof, as such Holder (upon payment by
such Holder of any applicable transfer taxes) may direct:
(a) a certificate or certificates for the number of
full shares of Warrant Stock to which such Holder shall be
entitled upon such exercise plus, in lieu of any fractional
share to which such Holder would otherwise be entitled, cash
in an amount determined pursuant to Section 2 hereof, and
(b) if such exercise is in part only, a new warrant
or warrants (dated the date hereof) of like tenor, calling in
the aggregate on the face or faces thereof for the number of
shares of Warrant Stock (without giving effect to any
adjustment therein) equal to the number of such shares called
for on the face of this Warrant minus the number of such
shares purchased by the Holder upon such exercise as provided
in Section 1.1 above.
2. FRACTIONAL SHARES. No fractional shares of Common Stock are to be
issued upon the exercise of this Warrant, but rather the number of shares of
Common Stock issued upon exercise of this Warrant shall be rounded down to the
nearest whole number, and in lieu of any fractional share to which any holder
would otherwise be entitled upon such exercise, the Company shall pay cash equal
to such fraction multiplied by the closing sale price of the Company`s Common
Stock on the NASDAQ National Market on the trading day immediately preceding the
date the Warrant is exercised.
3. CERTAIN ADJUSTMENTS.
3.1 CHANGES IN COMMON STOCK. If the Company shall (i)
combine the outstanding shares of Common Stock into a lesser number of
shares, (ii) subdivide the outstanding shares of Common Stock into a
greater number of shares or (iii) issue additional shares of Common
Stock as a dividend or other distribution with respect to the Common
Stock, the number of shares of Warrant Stock shall be equal to the
number of shares which the Holder would have been entitled to receive
after the happening of any of the events described above if such shares
had been issued immediately prior to the happening of such event, such
adjustment to become effective concurrently with the effectiveness of
such event. The Purchase Price in effect immediately prior to any such
combination of Common Stock shall, upon the effectiveness of such
combination, be proportionately increased. The Purchase Price in effect
immediately prior to any such subdivision of Common Stock or at the
record date of such dividend shall upon the effectiveness of such
subdivision or immediately after the record date of such dividend be
proportionately reduced.
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3.2 REORGANIZATIONS AND RECLASSIFICATIONS. If there shall
occur any capital reorganization or reclassification of the Common
Stock (other than a change in par value or a subdivision or combination
as provided for in Section 3.1), then, as part of any such
reorganization or reclassification, lawful provision shall be made so
that the Holder shall have the right thereafter to receive upon the
exercise hereof the kind and amount of shares of stock or other
securities or property which such Holder would have been entitled to
receive if, immediately prior to any such reorganization or
reclassification, such Holder had held the number of shares of Common
Stock which were then purchasable upon the exercise of this Warrant. In
any such case, appropriate adjustment (as reasonably determined by the
Board of Directors of the Company) shall be made in the application of
the provisions set forth herein with respect to the rights and
interests thereafter of the Holder such that the provisions set forth
in this Section 3 (including provisions with respect to adjustment of
the Purchase Price) shall thereafter be applicable, as nearly as is
reasonably practicable, in relation to any shares of stock or other
securities or property thereafter deliverable upon the exercise of this
Warrant.
3.3 MERGER, CONSOLIDATION OR SALE OF ASSETS. Subject to the
provisions of Section 7, if there shall be a merger or consolidation of
the Company with or into another corporation (other than a merger or
reorganization involving only a change in the state of incorporation of
the Company or the acquisition by the Company of other businesses where
the Company survives as a going concern), or the sale of all or
substantially all of the Company`s capital stock or assets to any other
person, then as a part of such transaction, provision shall be made so
that the Holder shall thereafter be entitled to receive the number of
shares of stock or other securities or property of the Company, or of
the successor corporation resulting from the merger, consolidation or
sale, to which the Holder would have been entitled if the Holder had
exercised its rights pursuant to the Warrant immediately prior thereto.
In any such case, appropriate adjustment shall be made in the
application of the provisions of this Section 3 to the end that the
provisions of this Section 3 shall be applicable after that event in as
nearly equivalent a manner as may be practicable.
3.4 CERTIFICATE OF ADJUSTMENT. When any adjustment is required
to be made in the Purchase Price, the Company shall mail to the Holder
a certificate setting forth the Purchase Price after such adjustment
and setting forth a brief statement of the facts requiring such
adjustment. Delivery of such certificate shall be deemed to be a final
and binding determination with respect to such adjustment unless
challenged by the Holder within twenty (20) days of receipt thereof.
Such certificate shall also set forth the kind and amount of stock or
other securities or property into which this Warrant shall be
exercisable following the occurrence of any of the events specified in
this Section 3.
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4. COMPLIANCE WITH SECURITIES ACT.
4.1 UNREGISTERED SECURITIES. The Holder acknowledges that this
Warrant and the Warrant Stock have not been registered under the
Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any successor legislation (the "SECURITIES ACT"), and
agrees not to sell, pledge, distribute, offer for sale, transfer or
otherwise dispose of this Warrant or any Warrant Stock except in
accordance with the provisions of the Securities Act or pursuant to an
exemption therefrom. The Company covenants to effect the registration
of the Warrant Stock under the Securities Act on its next registration
statement on which such securities are able to be registered, but in
any event on or prior to November 1, 2003.
4.2 INVESTMENT LETTER. Without limiting the generality of
Section 4.1, unless the offer and sale of any shares of Warrant Stock
shall have been effectively registered under the Securities Act, the
Company shall be under no obligation to issue the Warrant Stock unless
and until the Holder shall have executed an investment letter in form
and substance reasonably satisfactory to the Company, including a
warranty at the time of such exercise that the Holder is acquiring such
shares for its own account, for investment and not with a view to, or
for sale in connection with, the distribution of any such shares.
4.3 LEGEND. Certificates delivered to the Holder pursuant to
Section 1.3 shall bear the following legend or a legend in
substantially similar form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE
SECURITIES OR "BLUE-SKY" LAWS. THESE SECURITIES MAY NOT BE
SOLD, TRANSFERRED, ASSIGNED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREFROM.
5. RESERVATION OF STOCK. The Company will at all times reserve and keep
available, solely for issuance and delivery upon the exercise of this Warrant,
such shares of Warrant Stock and other stock, securities and property, as from
time to time shall be issuable upon the exercise of this Warrant. The Company
covenants that all shares of Warrant Stock so issuable will, when issued, be
duly and validly issued and fully paid and nonassessable, and the Company shall
pay all taxes in respect of the issuance thereof, other than any income tax or
property tax imposed on the holder thereof or any tax imposed in connection with
any transfer included in the issuance of a certificate for shares of Warrant
Stock or any other securities in any name other than that of the holder hereof.
6. REPLACEMENT OF WARRANTS. 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 and the holder hereof is
other than the original holder) in an amount reasonably satisfactory to the
Company, or (in the case of mutilation) upon surrender and cancellation of this
Warrant, the Company will issue, in lieu thereof, a new Warrant of like tenor.
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7. TERMINATION UPON CERTAIN EVENTS. If there shall be a merger or
consolidation of the Company with or into another corporation (other than a
merger or reorganization involving only a change in the state of incorporation
of the Company or the acquisition by the Company of other businesses where the
Company survives as a going concern), or the sale of all or substantially all of
the Company`s capital stock or assets to any other person, or the liquidation or
dissolution of the Company, then as a part of such transaction, at the Company`s
option, either:
(a) provision shall be made so that the Holder shall
thereafter be entitled to receive the number of shares of stock or
other securities or property of the Company, or of the successor
corporation resulting from the merger, consolidation or sale, to which
the Holder would have been entitled if the Holder had exercised its
rights pursuant to the Warrant immediately prior thereto (and, in such
case, appropriate adjustment shall be made in the application of the
provisions of this Section 7(a) to the end that the provisions of this
Section 3 shall be applicable after that event in as nearly equivalent
a manner as may be practicable); or
(b) this Warrant shall terminate on the effective date of such
merger, consolidation or sale (the "TERMINATION DATE") and become null
and void, PROVIDED that if this Warrant shall not have otherwise
terminated or expired, (1) the Company shall provide the Holder written
notice of such Termination Date at least ten (10) days prior to the
occurrence thereof and (2) this Warrant shall then become immediately
exercisable by the Holder with respect to all of the shares of Common
Stock for which this Warrant is then exercisable, and the Holder shall
have the right until 5:00 p.m., Eastern Standard Time, on the day
immediately prior to the Termination Date to exercise its rights
hereunder to the extent not previously exercised.
8. TRANSFERABILITY. Without the prior written consent of the Company,
this Warrant shall not be assigned, pledged or hypothecated in any way (whether
by operation of law or otherwise) and shall not be subject to execution,
attachment or similar process; PROVIDED THAT, this Warrant may be transferred by
the Holder as a dividend, distribution upon liquidation of the Holder or bona
fide gift without consideration or in connection with a transfer not involving a
change in beneficial ownership. Any attempted transfer, assignment, pledge,
hypothecation or other disposition of the Warrant or of any rights granted
hereunder contrary to the provisions of this Section 8, or the levy of any
attachment or similar process upon the Warrant or such rights, shall be null and
void.
9. NO RIGHTS AS STOCKHOLDER. Until the exercise of this Warrant, the
Holder shall not have or exercise any rights by virtue hereof as a stockholder
of the Company.
10. NOTICES. All notices, requests and other communications hereunder
shall be in writing, shall be either (i) delivered by hand, (ii) made by
facsimile transmission, (iii) sent by overnight courier, or (iv) sent by
registered mail, postage prepaid, return receipt requested. In the case of
notices from the Company to the Holder, they shall be sent to the address
furnished to the Company in writing by the last Holder who shall have furnished
an address to the Company in writing. All notices from the Holder to the Company
shall be delivered to the Company at its offices at 000 Xxxx 00xx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn: Chief Executive Officer or such other
address as the Company shall so notify the Holder. All notices, requests and
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other communications hereunder shall be deemed to have been given (i) by hand,
at the time of the delivery thereof to the receiving party at the address of
such party described above, (ii) if made by facsimile transmission, at the time
that receipt thereof has been acknowledged by electronic confirmation or
otherwise, (iii) if sent by overnight courier, on the next business day
following the day such notice is delivered to the courier service, or (iv) if
sent by registered mail, on the fifth business day following the day such
mailing is made.
11. WAIVERS AND MODIFICATIONS. Any term or provision of this Warrant
may be waived only by written document executed by the party entitled to the
benefits of such terms or provisions. The terms and provisions of this Warrant
may be modified or amended only by written agreement executed by the parties
hereto.
12. HEADINGS. The headings in this Warrant are for convenience of
reference only and shall in no way modify or affect the meaning or construction
of any of the terms or provisions of this Warrant.
13. GOVERNING LAW. This Warrant will be governed by and construed in
accordance with and governed by the laws of New York, without giving effect to
the conflict of law principles thereof.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, this Warrant has be executed by the undersigned as
of the 1st day of November, 2002.
ALLOY, INC.
By: /S/ XXXX X. XXXXXXX
------------------------------
Name: Xxxx X. XxXxxxx
Title: VP/General Counsel
[SIGNATURE PAGE TO WARRANT]
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EXHIBIT A
PURCHASE FORM
To: ALLOY, INC.
The undersigned, pursuant to the provisions set forth in the attached
Warrant (No. ____), hereby irrevocably elects to purchase ________ shares of the
Common Stock, par value $0.01 per share (the "COMMON STOCK") of ALLOY, INC.,
covered by such Warrant and herewith makes payment of $__________, representing
the full purchase price for such shares at the price per share provided for in
such Warrant. The Common Stock for which the Warrant may be exercised shall be
known herein as the "Warrant Stock".
[INCLUDE IF SHARES ARE NOT REGISTERED AT TIME OF EXERCISE] The
undersigned is aware that the Warrant Stock has not been and will not be
registered under the Securities Act of 1933, as amended (the "SECURITIES ACT")
or any state securities laws. The undersigned understands that reliance by the
Company on exemptions under the Securities Act is predicated in part upon the
truth and accuracy of the statements of the undersigned in this Purchase Form.
The undersigned represents and warrants that (1) it has been furnished
with all information which it deems necessary to evaluate the merits and risks
of the purchase of the Warrant Stock, (2) it has had the opportunity to ask
questions concerning the Warrant Stock and the Company and all questions posed
have been answered to its satisfaction, (3) it has been given the opportunity to
obtain any additional information it deems necessary to verify the accuracy of
any information obtained concerning the Warrant Stock and the Company and (4) it
has such knowledge and experience in financial and business matters that it is
able to evaluate the merits and risks of purchasing the Warrant Stock and to
make an informed investment decision relating thereto.
The undersigned hereby represents and warrant that it is purchasing the
Warrant Stock for its own account for investment and not with a view to the sale
or distribution of all or any part of the Warrant Stock.
[INCLUDE IF SHARES ARE NOT REGISTERED AT TIME OF EXERCISE] The
undersigned understands that because the Warrant Stock has not been registered
under the Securities Act, it must continue to bear the economic risk of the
investment for an indefinite period of time and the Warrant Stock cannot be sold
unless it is subsequently registered under applicable federal and state
securities laws or an exemption from such registration is available.
The undersigned agrees that it will in no event sell or distribute or
otherwise dispose of all or any part of the Warrant Stock unless (1) there is an
effective registration statement under the Securities Act and applicable state
securities laws covering any such transaction involving the Warrant Stock, or
(2) the Company receives an opinion satisfactory to the Company of the
undersigned`s legal counsel stating that such transaction is exempt from
registration.
[INCLUDE IF SHARES ARE NOT REGISTERED AT TIME OF EXERCISE] The
undersigned consents to the placing of a legend on its certificate for the
Warrant Stock stating that the Warrant Stock has not been registered and setting
forth the restriction on transfer contemplated hereby and to the placing of a
stop transfer order on the books of the Company and with any transfer agents
against the Warrant Stock until the Warrant Stock may be legally resold or
distributed without restriction.
The undersigned has considered the federal and state income tax
implications of the exercise of the Warrant and the purchase and subsequent sale
of the Warrant Stock.
--------------------------------
Dated:
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