Exhibit 4.1
WARRANT AGREEMENT
AGREEMENT, dated as of the 10th day of February, 1997, by and
among INFOSAFE SYSTEMS, INC., a Delaware corporation (the "Company"),
AMERICAN STOCK TRANSFER & TRUST COMPANY, as Warrant Agent (the "Warrant
Agent"), and X.X. XXXXX INVESTMENT BANKING CORP., a New York
corporation ("Xxxxx").
W I T N E S S E T H :
WHEREAS, in connection with a private placement (the "Private
Placement") of a minimum of twenty (20) and a maximum of one hundred
(100) units ("Units"), each unit consisting of units identical to those
sold by the Company in its initial public offering ("IPO") in January
1995 ("IPO Units"), each IPO Unit consisting of one (1) share of the
Company's Class A Common Stock, $.01 par value ("Class A Common
Stock"), one (1) redeemable Class A Warrant ("Class A Warrants") and
one (1) redeemable Class B Warrant ("Class B Warrants") pursuant to an
agency agreement (the "Agency Agreement") dated as of February 10, 1997
between the Company and Xxxxx and the issuance to Xxxxx or its
designees of Unit Purchase Options to purchase additional Units (the
"Private Placement Unit Purchase Options"), the Company may issue up to
such number of Class A Warrants and Class B Warrants (collectively
referred to as the "Warrants") as shall be determined in accordance
with the Confidential Term Sheet relating to the Private Placement; and
WHEREAS, the Company has granted Xxxxx the option to sell an
additional twenty (20) Units in the Private Placement (the "Over-
allotment Option"); and
WHEREAS, each Class A Warrant initially entitles the
Registered Holder thereof to purchase one (1) share of Class A Common
Stock and one (1) Class B Warrant, and accordingly, the Company may
issue additional Class B Warrants on exercise of the Class A Warrants;
and
WHEREAS, each Class B Warrant initially entitles the
Registered Holder thereof to purchase one (1) share of Class A Common
Stock; and
WHEREAS, the Company desires the Warrant Agent to act on
behalf of the Company, and the Warrant Agent is willing to so act, in
connection with the issuance, registration, transfer exchange and
redemption of the Warrants, the issuance of certificates representing
the Warrants, the exercise of the Warrants, and the rights of the
holders thereof;
NOW THEREFORE, in consideration of the premises and the
mutual agreements hereinafter set forth and for the purpose of defining
the terms and provisions of the Warrants and the certificates
representing the Warrants and the respective rights and obligations
thereunder of the Company, the holders of certificates representing the
Warrants and the Warrant Agent, the parties hereto agree as follows:
SECTION 1. Definitions.
As used herein, the following terms shall have the following meanings,
unless the context shall otherwise require:
(a) "Common Stock" shall mean stock of the Company of any
class, whether now or hereafter authorized, which has the right to
participate in the distribution of earnings and assets of the Company
without limit as to amount or percentage, which at the date hereof
consists of 20,000,000 shares of Class A Common' Stock, $.01 par value,
2,000,000 shares of Class B Common Stock, $.01 par value, 2,000,000
shares of Class E-1 Common Stock, $.01 par value and 2,000,000 shares
of Class E-2 Common Stock, $.01 par value.
(b) "Corporate Office" shall mean the office of the Warrant
Agent (or its successor) at which at any particular time its principal
business shall be administered, which office is located at the date
hereof at 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
(c) "Exercise Date" shall mean, as to any Warrant, the date
on which the Warrant Agent shall have received both (a) the Warrant
Certificate representing such Warrant, with the exercise form thereon
duly executed by the Registered Holder thereof or his attorney duly
authorized in writing, and (b) payment in cash, or by official bank or
certified check made payable to the Company, of an amount in lawful
money of the United States of America equal to the applicable Purchase
Price.
(d) "Initial Warrant Exercise Date" shall mean as to each
Class A Warrant and Class B Warrant, January 18, 1995, or such earlier
date as Xxxxx may designate.
(e) "Purchase Price" shall mean the purchase price to be
paid upon exercise of each Class A Warrant or Class B Warrant in
accordance with the terms hereof, which price shall be $6.50 as to the
Class A Warrants and $8.75 as to the Class B Warrants, subject to
adjustment from time to time pursuant to the provisions of Section 9
hereof, and subject to the Company's right to reduce the Purchase Price
upon notice to all warrantholders.
(f) "Redemption Price" shall mean the price at which the
Company may, at its option in accordance with the terms hereof, redeem
the Class A Warrants and/or Class B Warrants, which price shall be
$0.05 per Warrant.
(g) "Registered Holder" shall mean as to any Warrant and as
of any particular date, the person in whose name the certificate
representing the Warrant shall be registered on that date on the books
maintained by the Warrant Agent pursuant to Section 6.
(h) "Transfer Agent" shall mean American Stock Transfer &
Trust Company, as the Company's transfer agent, or its authorized
successor, as such.
(i) "Warrant Expiration Date" shall mean 5:00 P.M. (New
York time) on February 18, 2002 or, with respect to Warrants which are
outstanding as of the applicable Redemption Date, the Redemption Date
as defined in Section 8, whichever is earlier; provided that if such
date shall in the State of New York be a holiday or a day on which
banks are authorized or required to close, then 5:00 P.M. (New York
time) on the next following day which in the State of New York is not a
holiday or a day on which banks are authorized or required to close.
Upon notice to all warrantholders the Company shall have the right to
extend the warrant expiration date.
SECTION 2. Warrants and Issuance of Warrant Certificates.
(a) A Class A Warrant initially shall entitle the Registered
Holder of the Warrant Certificate representing such Warrant to purchase
one share of Class A Common Stock and one Class B Warrant upon the
exercise thereof, in accordance with the terms hereof, subject to
modification and adjustment as provided in Section 9.
(b) A Class B Warrant initially shall entitle the Registered
Holder of the Warrant Certificate representing such Warrant to purchase
one share of Class A Common Stock upon the exercise thereof, in
accordance with the terms hereof, subject to modification and
adjustment as provided in Section 9.
(c) The Class B Warrants will be detachable and separately
transferable immediately from the shares of Class A Common Stock issued
upon exercise of the Class A Warrants.
(d) Upon execution of this Agreement, Warrant Certificates
representing the number of Class A Warrants sold pursuant to the Agency
Agreement shall be executed by the Company and delivered to the Warrant
Agent. Upon written order of the Company signed by its President or
Chairman or a Vice President and by its Secretary, an Assistant
Secretary or its Treasurer, the Warrant Certificates shall be
countersigned, issued and delivered by the Warrant Agent as part of the
Units.
(e) From time to time, up to the Warrant Expiration Date,
the Transfer Agent shall countersign and deliver stock certificates in
required whole number denominations representing up to the number of
shares of Class A Common Stock as shall be issuable on exercise of the
Class A Warrants and the Class B Warrants included in the Units issued
pursuant to the Private Placement and the Private Placement Unit
Purchase Option and the Class B Warrants issuable on exercise of the
Class A Warrants, subject to adjustment as described herein, upon the
exercise of Warrants in accordance with this Agreement.
(f) From time to time, up to the Warrant Expiration Date,
the Warrant Agent shall countersign and deliver Warrant Certificates in
required whole number denominations to the persons entitled thereto in
connection with any transfer or exchange permitted under this
Agreement; provided that no Warrant Certificates shall be issued except
(i) those initially issued hereunder, (ii) those issued on or after the
Initial Warrant Exercise Date, upon the exercise of fewer than all
Warrants represented by any Warrant Certificate, to evidence any
unexercised Warrants held by the exercising Registered Holder, (iii)
those issued upon any transfer or exchange pursuant to Section 6; (iv)
those issued in replacement of lost, stolen, destroyed or mutilated
Warrant Certificates pursuant to Section 7; (v) those issued pursuant
to Xxxxx'x Private Placement Unit Purchase Options; (vi) those issued
pursuant to the Over-allotment Option; (vii) at the option of the
Company, in such form as may be approved by its Board of Directors, to
reflect any adjustment or change in the Purchase Price, the number of
shares of Class A Common Stock purchasable upon exercise of the
Warrants or the Redemption Price therefor made pursuant to Section 9
hereof; and (viii) those Class B Warrants issued upon exercise of Class
A Warrants.
(g) Pursuant to the terms of the Private Placement Unit
Purchase Options, the Company shall issue to Xxxxx a number of Units
equal to 35% of the number of Class A Warrants sold in the Private
Placement. Notwithstanding anything to the contrary contained herein,
the Warrants underlying the Private Placement Unit Purchase Options
shall not be subject to redemption by the Company except under the
terms and conditions set forth in the Private Placement Unit Purchase
Options.
SECTION 3. Form and Execution of Warrant Certificates.
(a) The Warrant Certificates shall be substantially in the
form annexed hereto as Exhibit A as to the Class A Warrants and Exhibit
B as to the Class B Warrants (the provisions of which are hereby
incorporated herein) and may have such letters, numbers or other marks
of identification or designation and such legends, summaries or
endorsements printed, lithographed or engraved thereon as the Company
may deem appropriate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any law or with
any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Class A Warrants or Class
B Warrants may be listed, or to conform to usage or to the requirements
of Section 2(b). The Warrant Certificates shall be dated the date of
issuance thereof (whether upon initial issuance, transfer, exchange or
in lieu of mutilated, lost, stolen, or destroyed Warrant Certificates)
and issued in registered form. Warrant Certificates shall be numbered
serially with the letter AW on Class A Warrants of all denominations
and the letters BW on Class B Warrants of all denominations.
(b) Warrant Certificates shall be executed on behalf of the
Company by its Chairman of the Board, President or any Vice President
and by its Secretary, an Assistant Secretary or its Treasurer, by
manual signatures or by facsimile signatures printed thereon, and shall
have imprinted thereon a facsimile of the Company's seal. Warrant
Certificates shall be manually countersigned by the Warrant Agent and
shall not be valid for any purpose unless so countersigned. In case
any officer of the Company who shall have signed any of the Warrant
Certificates shall cease to be an officer of the Company or to hold the
particular office referenced in the Warrant Certificate before the date
of issuance of the Warrant Certificates or before countersignature by
the Warrant Agent and issue and delivery thereof, such Warrant
Certificates may nevertheless be countersigned by the Warrant Agent,
issued and delivered with the same force and effect as though the
person who signed such Warrant Certificates had not ceased to be an
officer of the Company or to hold such office. After countersignature
by the Warrant Agent, Warrant Certificates shall be delivered by the
Warrant Agent to the Registered Holder without further action by the
Company, except as otherwise provided by Section 4(a) hereof.
SECTION 4. Exercise.
(a) Each Warrant may be exercised by the Registered Holder
thereof at any time on or after the Initial Exercise Date, but not
after the Warrant Expiration Date, upon the terms and subject to the
conditions set forth herein and in the applicable Warrant Certificate.
A Warrant shall be deemed to have been exercised immediately prior to
the close of business on the Exercise Date and the person entitled to
receive the securities deliverable upon such exercise shall be treated
for all purposes as the holder of those securities upon the exercise of
the Warrant as of the close of business on the Exercise Date. As soon
as practicable on or after the Exercise Date the Warrant Agent shall
deposit the proceeds received from the exercise of a Warrant and shall
notify the Company in writing of the exercise of the Warrants.
Promptly following, and in any event within five days after the date of
such notice from the Warrant Agent, the Warrant Agent, on behalf of the
Company, shall cause to be issued and delivered by the Transfer Agent,
to the person or persons entitled to receive the same, a certificate or
certificates for the securities deliverable upon such exercise, (plus a
certificate for any remaining unexercised Warrants of the Registered
Holder) unless prior to the date of issuance of such certificates the
Company shall instruct the Warrant Agent to refrain from causing such
issuance of certificates pending clearance of checks received in
payment of the Purchase Price pursuant to such Warrants.
Notwithstanding the foregoing, in the case of payment made in the form
of a check drawn on an account of Xxxxx or such other investment banks
and brokerage houses as the Company shall approve in writing to the
Warrant Agent, certificates shall immediately be issued without prior
notice to the Company or any delay. Upon the exercise of any Warrant
and clearance of the funds received, the Warrant Agent shall promptly
remit the payment received for the Warrant (the "Warrant Proceeds") to
the Company or as the Company may direct in writing, subject to the
provisions of Sections 4(b) and 4(c) hereof.
(b) If, at the Exercise Date in respect of the exercise of
any Warrant, (i) the market price of the Company's Class A Common Stock
is greater than the then Purchase Price of the Warrant, (ii) the
exercise of the Warrant was solicited by a member of the National
Association of Securities Dealers, Inc. ("NASD") as designated in
writing on the warrant Certificate Subscription Form, (iii) the Warrant
was not held in a discretionary account, (iv) disclosure of
compensation arrangements was made both at the time of the original
offering and at the time of exercise; and (v) the solicitation of the
exercise of the Warrant was not in violation of Regulation M which was
recently adopted to replace Rule 10b-6 and certain other rules
promulgated under the Securities Exchange Act of 1934, as amended, then
the Warrant Agent, simultaneously with the distribution of the Warrant
Proceeds to the Company shall, on behalf of the Company, pay from the
Warrant Proceeds, a fee of 5% (the "Xxxxx Fee") of the Purchase Price
to Xxxxx (of which a portion may be reallowed to the dealer who
solicited the exercise, which may also be Xxxxx or X.X. Xxxxx & Co.,
Inc.). In the event the Xxxxx Fee is not received within five days of
the date on which the Company receives Warrant Proceeds, then the Xxxxx
Fee shall begin accruing interest at an annual rate of prime plus four
(4)`, payable by the Company to Xxxxx at the time Xxxxx receives the
Xxxxx Fee. Within five days after exercise the Warrant Agent shall
send Xxxxx a copy of the reverse side of each Warrant exercised. Xxxxx
shall reimburse the Warrant Agent, upon request, for its reasonable
expenses relating to compliance with this section 4(b). In addition,
Xxxxx and the Company may at any time during business hours, examine
the records of the Warrant Agent, including its ledger of original
Warrant Certificates returned to the Warrant Agent upon exercise of
Warrants. The provisions of this paragraph may not be modified,
amended or deleted without the prior written consent of Xxxxx.
(c) In order to enforce the provisions of Section 4(b)
above, in the event there is any dispute or question as to the amount
or payment of the Xxxxx Fee, the Warrant Agent is hereby expressly
authorized to withhold payment to the Company of the Warrant Proceeds
unless and until the Company establishes an escrow account for the
purpose of depositing the entire amount of the Xxxxx Fee, which amount
will be deducted from the net Warrant Proceeds to be paid to the
Company. The funds placed in the escrow account may not be released to
the Company without a written agreement from Xxxxx that the required
Xxxxx Fee has been received by Xxxxx.
SECTION 5. Reservation of Shares: Listing: Payment of Taxes: etc.
(a) The Company covenants that it will at all times reserve
and keep available out of its authorized Class A Common Stock, solely
for the purpose of issue upon exercise of Warrants, such number of
shares of Class A Common Stock as shall then be issuable upon the
exercise of all outstanding Warrants. The Company covenants that all
shares of Class A Common Stock which shall be issuable upon exercise of
the Warrants shall, at the time of delivery, be duly and validly
issued, fully paid, nonassessable and free from all taxes, liens and
charges with respect to the issue thereof, (other than those which the
Company shall promptly pay or discharge) and that upon issuance such
shares shall be listed on each national securities exchange, including
the Nasdaq National Market, or eligible for inclusion on the Nasdaq
SmallCap Market on which the other shares of outstanding Class A Common
Stock of the Company are then listed or eligible for inclusion.
(b) The Company covenants that if any securities to be
reserved for the purpose of exercise of Warrants hereunder require
registration with, or approval of, any governmental authority under any
federal securities law before such securities may be validly issued or
delivered upon such exercise, then the Company will in good faith and
as expeditiously as reasonably possible, endeavor to secure such
registration or approval. The Company will use reasonable efforts to
obtain appropriate approvals or registrations under state "blue sky"
securities laws. With respect to any such securities, however,
Warrants may not be exercised by, or shares of Class A Common Stock
issued to, any Registered Holder in any state in which such exercise
would be unlawful.
(c) The Company shall pay all documentary, stamp or similar
taxes and other governmental charges that may be imposed with respect
to the issuance of Warrants, or the issuance or delivery of any shares
of Class A Common Stock or Class B Warrants upon exercise of the Class
A Warrants, or the issuance or delivery of any shares of Class A Common
Stock upon exercise of the Class B Warrants; provided, however, that if
the shares of Class A Common Stock or Class B Warrants, as the case may
be, are to be delivered in a name other than the name of the Registered
Holder of the Warrant Certificate representing any Warrant being
exercised, then no such delivery shall be made unless the person
requesting the same has paid to the Warrant Agent the amount of
transfer taxes or charges incident thereto, if any.
(d) The Warrant Agent is hereby irrevocably authorized to
requisition the Company's Transfer Agent from time to time for
certificates representing shares of Class A Common Stock issuable upon
exercise of the Warrants, and the Company will authorize the Transfer
Agent to comply with all such proper requisitions. The Company will
file with the Warrant Agent a statement setting forth the name and
address of the Transfer Agent of the Company for shares of Class A
Common Stock issuable upon exercise of the Warrants.
SECTION 6. Exchange and Registration of Transfer.
(a) Warrant Certificates may be exchanged for other Warrant
Certificates representing an equal aggregate number of Warrants of the
same class or may be transferred in whole or in part. Warrant
Certificates to be exchanged shall be surrendered to the Warrant Agent
at its Corporate Office, and upon satisfaction of the terms and
provisions hereof, the Company shall execute and the Warrant Agent
shall countersign, issue and deliver in exchange therefor the Warrant
Certificate or Certificates which the Registered Holder making the
exchange shall be entitled to receive.
(b) The Warrant Agent shall keep at its office books in
which, subject to such reasonable regulations as it may prescribe, it
shall register Warrant Certificates and the transfer thereof in
accordance with its regular practice. Upon due presentment for
registration of transfer of any Warrant Certificate at such office, the
Company shall execute and the Warrant Agent shall issue and deliver to
the transferee or transferees a new Warrant Certificate or Certificates
representing an equal aggregate number of Warrants.
(c) With respect to all Warrant Certificates presented for
registration or transfer, or for exchange or exercise, the subscription
form on the reverse thereof shall be duly endorsed, or be accompanied
by a written instrument or instruments of transfer and subscription, in
form satisfactory to the Company and the Warrant Agent, duly executed
by the Registered Holder or his or her attorney-in-fact duly authorized
in writing.
(d) A service charge may be imposed by the Warrant Agent for
any exchange or registration of transfer of Warrant Certificates. In
addition, the Company may require payment by such holder of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith.
(e) All Warrant Certificates surrendered for exercise or for
exchange in case of mutilated Warrant Certificates shall be promptly
cancelled by the Warrant Agent and thereafter retained by the Warrant
Agent until termination of this Agreement or resignation as Warrant
Agent, or, with the prior written consent of Xxxxx, disposed of or
destroyed, at the direction of the Company.
(f) Prior to due presentment for registration of transfer
thereof, the Company and the Warrant Agent may deem and treat the
Registered Holder of any Warrant Certificate as the absolute owner
thereof and of each Warrant represented thereby (notwithstanding any
notations of ownership or writing thereon made by anyone other than a
duly authorized officer of the Company or the Warrant Agent) for all
purposes and shall not be affected by any notice to the contrary. The
Warrants, which are being offered in the Private Placement Units with
the Notes pursuant to the Agency Agreement, will be immediately
detachable from the Notes and transferable separately therefrom.
SECTION 7. Loss or Mutilation.
Upon receipt by the Company and the Warrant Agent of evidence satisfactory
to them of the ownership of and loss, theft, destruction or mutilation of any
Warrant Certificate and (in case of loss, theft or destruction) of indemnity
satisfactory to them, and (in the case of mutilation) upon surrender
and cancellation thereof, the Company shall execute and the Warrant
Agent shall (in the absence of notice to the Company and/or Warrant
Agent that the Warrant Certificate has been acquired by a bona fide
purchaser) countersign and deliver to the Registered Holder in lieu
thereof a new Warrant Certificate of like tenor representing an equal
aggregate number of Class A Warrants or Class B Warrants, as the case
may be. Applicants for a substitute Warrant Certificate shall comply
with such other reasonable regulations and pay such other reasonable
charges as the Warrant Agent may prescribe.
SECTION 8. Redemption.
(a) Subject to the provisions of paragraph 2(e) hereof,
commencing one year from the Final Closing Date of the Private
Placement, on not less than thirty (30) days notice to Registered
Holders of the Warrants being redeemed at any time the Warrants may be
redeemed, at the option of the Company, at a redemption price of $0.05
per Warrant, provided the Market Price of the Common Stock receivable
upon exercise of such Warrants shall exceed $9.10 with respect to the
Class A Warrants and $12.25 with respect to the Class B Warrants (the
"Target Prices"), subject to adjustment as set forth in Section 8(f),
below. Market Price for the purpose of this Section 8 shall mean (i)
the average closing bid price, for thirty (30) consecutive business
days (or such other period as Xxxxx may consent to), ending within 15
days of the date of the notice of redemption, which notice shall be
mailed no later than five days thereafter, of the Common Stock as
reported by Nasdaq or (ii) the last reported sale price, for thirty
(30) consecutive business days (or such other period as Xxxxx may
consent to), ending within 15 days of the date of the notice of
redemption, which notice shall be mailed no later than five days
thereafter, on the primary exchange on which the Common Stock is
traded, if the Common Stock is traded on a national securities
exchange, including the Nasdaq National Market. All Warrants of a
class must be redeemed if any of that class are redeemed, provided that
the Warrants underlying the Private Placement Unit Purchase Options may
be redeemed only in compliance with and subject to the terms and
conditions of the Private Placement Unit Purchase Options. The date
fixed for redemption of the Warrants is referred to herein as the
"Redemption Date." The Class B Redemption Date may not be earlier than
thirty-one (31) days after the Class A Redemption Date.
(b) If the conditions set forth in Section 8(a) are met, and
the Company desires to exercise its right to redeem the Warrants, it
shall request Xxxxx to mail a notice of redemption to each of the
Registered Holders of the Warrants to be redeemed, first class, postage
prepaid, not later than the thirtieth day before the date fixed for
redemption, at their last address as shall appear on the records
maintained pursuant to Section 6(b). Any notice mailed in the manner
provided herein shall be conclusively presumed to have been duly given
whether or not the Registered Holder receives such notice.
(c) The notice of redemption shall specify (i) the
redemption price, (ii) the Redemption Date, (iii) the place where the
Warrant Certificates shall be delivered and the redemption price paid,
(iv) that Xxxxx will assist each Registered Holder of a Warrant in
connection with the exercise thereof and (v) that the right to exercise
the Warrant shall terminate at 5:00 P.M. (New York time) on the
business day immediately preceding the Redemption Date. No failure to
mail such notice nor any defect therein or in the mailing thereof shall
affect the validity of the proceedings for such redemption except as to
a Registered Holder (a) to whom notice was not mailed or (b) whose
notice was defective. An affidavit of the Warrant Agent or of the
Secretary or an Assistant Secretary of Xxxxx or the Company that notice
of redemption has been mailed shall, in the absence of fraud, be prima
facie evidence of the facts stated therein.
(d) Any right to exercise a Warrant shall terminate at 5:00
P.M. (New York time) on the business day immediately preceding the
Redemption Date. On and after the Redemption Date, Holders of the
Warrants shall have no further rights except to receive, upon surrender
of the Warrant, the Redemption Price.
(e) From and after the Redemption Date, the Company shall,
at the place specified in the notice of redemption, upon presentation
and surrender to the Company by or on behalf of the Registered Holder
thereof of one or more Warrant Certificates evidencing Warrants to be
redeemed, deliver or cause to be delivered to or upon the written order
of such Holder a sum in cash equal to the redemption price of each such
Warrant. From and after the Redemption Date and upon the deposit or
setting aside by the Company of a sum sufficient to redeem all the
Warrants called for redemption, such Warrants shall expire and become
void and all rights hereunder and under the Warrant Certificates,
except the right to receive payment of the redemption price, shall
cease.
(f) If the shares of the Company's Class A Common Stock are
subdivided or combined into a greater or smaller number of shares of
Class A Common Stock, the Target Price shall be proportionally adjusted
by the ratio which the total number of shares of Class A Common Stock
outstanding immediately prior to such event bears to the total number
of shares of Class A Common Stock to be outstanding immediately after
such event.
(g) So long as any Warrants are outstanding, the Company
shall use its best efforts to cause post-effective amendments to the
Registration Statement to become effective in compliance with the Act
and without any lapse of time between the effectiveness of any such
post-effective amendments and cause a copy of each Prospectus, as then
amended, to be delivered to each holder of record of a Warrant and to
furnish to Xxxxx and each dealer as many copies of each such Prospectus
as Xxxxx or such dealer may reasonably request. The Company shall not
call for redemption any of the Warrants unless a registration statement
covering the securities underlying the Warrants has been declared
effective by the Commission and remains current at least until the date
fixed for redemption. In addition, for so long as any Warrant is
outstanding, the Company will promptly notify Xxxxx of any material
change in the business, financial condition or prospects of the
Company.
SECTION 9. Adjustment of Exercise Price and Number of
Shares of Common Stock or Warrants.
(a) Subject to the exceptions referred to in Section 9(g)
below, in the event the Company shall, at any time or from time to time
after the date hereof, sell any shares of Common Stock for a
consideration per share less than the Market Price of the Class A
Common Stock (as defined in Section 8(a)) on the date of the sale or
issue any shares of Common Stock as a stock dividend to the holders of
Common Stock, or subdivide or combine the outstanding shares of Common
Stock into a greater or lesser number of shares (any such sale,
issuance, subdivision or combination being herein called a "Change of
Shares"), then, and thereafter upon each further Change of Shares, the
Purchase Price in effect immediately prior to such Change of Shares
shall be changed to a price (including any applicable fraction of a
cent) determined by multiplying the Purchase Price in effect
immediately prior thereto by a fraction, the numerator of which shall
be the sum of the number of shares of Common Stock outstanding
immediately prior to the issuance of such additional shares and the
number of shares of Common Stock which the aggregate consideration
received (determined as provided in subsection 9(f)(F) below) for the
issuance of such additional shares would purchase at the Market Price
and the denominator of which shall be the sum of the number of shares
of Common Stock outstanding immediately after the issuance of such
additional shares. Such adjustment shall be made successively whenever
such an issuance is made.
Upon each adjustment of the Purchase Price pursuant to this
Section 9, the total number of shares of Class A Common Stock and Class
B Warrants purchasable upon the exercise of each Class A Warrant or the
total number of shares of Class A Common Stock purchasable upon
exercise of each Class B Warrant, as applicable, shall (subject to the
provisions contained in Section 9(b) hereof) be such number of shares
(and Class B Warrants, if applicable) (calculated to the nearest tenth)
purchasable at the Purchase Price in effect immediately prior to such
adjustment multiplied by a fraction, the numerator of which shall be
the Purchase Price in effect immediately prior to such adjustment and
the denominator of which shall be the Purchase Price in effect
immediately after such adjustment.
(b) The Company may elect, upon any adjustment of the
Purchase Price hereunder, to adjust the number of Class A Warrants or
Class B Warrants outstanding, in lieu of the adjustment in the number
of shares of Common Stock (and Class B Warrants, if applicable)
purchasable upon the exercise of each Warrant as hereinabove provided,
so that each Class A Warrant outstanding after such adjustment shall
represent the right to purchase one share of Class A Common Stock and
one Class B Warrant, and each Class B Warrant outstanding after such
adjustment shall represent the right to purchase one share of Class A
Common Stock. Each Warrant held of record prior to such adjustment of
the number of Warrants shall become that number of Warrants (calculated
to the nearest tenth) determined by multiplying the number one by a
fraction, the numerator of which shall be the Purchase Price in effect
immediately prior to such adjustment and the denominator of which shall
be the Purchase Price in effect immediately after such adjustment.
Upon each adjustment of the number of Warrants pursuant to this Section
9, the Company shall, as promptly as practicable, cause to be
distributed to each Registered Holder of Warrant Certificates on the
date of such adjustment Warrant Certificates evidencing, subject to
Section 11 hereof, the number of additional Warrants to which such
Holder shall be entitled as a result of such adjustment or, at the
option of the Company, cause to be distributed to such Holder in
substitution and replacement for the Warrant Certificates held by him
prior to the date of adjustment (and upon surrender thereof, if
required by the Company) new Warrant Certificates evidencing the number
of Warrants to which such Holder shall be entitled after such
adjustment.
(c) In case of any reclassification, capital reorganization
or other change of outstanding shares of Common Stock, or in case of
any consolidation or merger of the Company with or into another
corporation (other than a consolidation or merger in which the Company
is the continuing corporation and which does not result in any
reclassification, capital reorganization or other change of outstanding
shares of Common Stock), or in case of any sale or conveyance to
another corporation of the property of the Company as, or substantially
as, an entirety (other than a sale/leaseback, mortgage or other
financing transaction), the Company shall cause effective provision to
be made so that each holder of a Warrant then outstanding shall have
the right thereafter, by exercising such Warrant, to purchase the kind
and number of shares of stock or other securities or property
(including cash) receivable upon such reclassification, capital
reorganization or other change, consolidation, merger, sale or
conveyance by a holder of the number of shares of Common Stock that
might have been purchased upon exercise of such Warrant immediately
prior to such reclassification, capital reorganization or other change,
consolidation, merger, sale or conveyance. Any such provision shall
include provision for adjustments that shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Section 9.
The Company shall not effect any such consolidation, merger or sale
unless prior to or simultaneously with the consummation thereof the
successor (if other than the Company) resulting from such consolidation
or merger or the corporation purchasing assets or other appropriate
corporation or entity shall assume, by written instrument executed and
delivered to the Warrant Agent, the obligation to deliver to the holder
of each Warrant such shares of stock, securities or assets as, in
accordance with the foregoing provisions, such holders may be entitled
to purchase and the other obligations under this Agreement. The
foregoing provisions shall similarly apply to successive
reclassifications, capital reorganizations and other changes of
outstanding shares of Common Stock and to successive consolidations,
mergers, sales or conveyances.
(d) Irrespective of any adjustments or changes in the
Purchase Price or the number of shares of Class A Common Stock
purchasable upon exercise of the Warrants, the Warrant Certificates
theretofore and thereafter issued shall, unless the Company shall
exercise its option to issue new Warrant Certificates pursuant to
Section 2(d) hereof, continue to express the Purchase Price per share,
the number of shares purchasable thereunder and the Redemption Price
therefor as the Purchase Price per share, and the number of shares
purchasable and the Redemption Price therefore were expressed in the
Warrant Certificates when the same were originally issued.
(e) After each adjustment of the Purchase Price pursuant to
this Section 9, the Company will promptly prepare a certificate signed
by the Chairman or President, and by the Treasurer or an Assistant
Treasurer or the Secretary or an Assistant Secretary, of the Company
setting forth: (i) the Purchase Price as so adjusted, (ii) the number
of shares of Class A Common Stock purchasable upon exercise of each
Warrant after such adjustment, and, if the Company shall have elected
to adjust the number of Warrants, the number of Warrants to which the
registered holder of each Warrant shall then be entitled, and the
adjustment in Redemption Price resulting therefrom, and (iii) a brief
statement of the facts accounting for such adjustment. The Company
will promptly file such certificate with the Warrant Agent and cause a
brief summary thereof to be sent by ordinary first class mail to Xxxxx
and to each registered holder of Warrants at his last address as it
shall appear on the registry books of the Warrant Agent. No failure to
mail such notice nor any defect therein or in the mailing thereof shall
affect the validity thereof except as to the holder to whom the Company
failed to mail such notice, or except as to the holder whose notice was
defective. The affidavit of an officer of the Warrant Agent or the
Secretary or an Assistant Secretary of the Company that such notice has
been mailed shall, in the absence of fraud, be prima facie evidence of
the facts stated therein.
(f) For purposes of Section 9(a) and 9(b) hereof, the
following provisions (A) to (F) shall also be applicable:
(A) The number of shares of Common Stock outstanding at
any given time shall include shares of Common Stock owned or
held by or for the account of the Company and the sale or
issuance of such treasury shares or the distribution of any
such treasury shares shall not be considered a Change of
Shares for purposes of said sections.
(B) No adjustment of the Purchase Price shall be made
unless such adjustment would require an increase or decrease
of at least $.10 in such price; provided that any adjustments
which by reason of this clause (B) are not required to be
made shall be carried forward and shall be made at the time
of and together with the next subsequent adjustment which,
together with any adjustment(s) so carried forward, shall
require an increase or decrease of at least $.10 in the
Purchase Price then in effect hereunder.
(C) In case of (1) the sale by the Company for cash (or
as a component of a unit being sold for cash) of any rights
or warrants to subscribe for or purchase, or any options for
the purchase of, Common Stock or any securities convertible
into or exchangeable for Common Stock without the payment of
any further consideration other than cash, if any (such
securities convertible, exercisable or exchangeable into
Common Stock being herein called "Convertible Securities"),
or (2) the issuance by the Company, without the receipt by
the Company of any consideration therefor, of any rights or
warrants to subscribe for or purchase, or any options for the
purchase of, Common Stock or Convertible Securities, in each
case, if (and only if) the consideration payable to the
Company upon the exercise of such rights, warrants or options
shall consist of cash, whether or not such rights, warrants
or options, or the right to convert or exchange such
Convertible Securities, are immediately exercisable, and the
price per share for which Common Stock is issuable upon the
exercise of such rights, warrants or options or upon the
conversion or exchange of such Convertible Securities
(determined by dividing (x) the minimum aggregate
consideration payable to the Company upon the exercise of
such rights, warrants or options, plus the consideration
received by the Company for the issuance or sale of such
rights, warrants or options, plus, in the case of such
Convertible Securities, the minimum aggregate amount of
additional consideration, if any, other than such Convertible
Securities, payable upon the conversion or exchange thereof,
by (y) the total maximum number of shares of Common Stock
issuable upon the exercise of such rights, warrants or
options or upon the conversion or exchange of such
Convertible Securities issuable upon the exercise of such
rights, warrants or options) is less than the Market Price of
the Common Stock on the date of the issuance or sale of such
rights, warrants or options, then the total maximum number of
shares of Common Stock issuable upon the exercise of such
rights, warrants or options or upon the conversion or
exchange of such Convertible Securities (as of the date of
the issuance or sale of such rights, warrants or options)
shall be deemed to be outstanding shares of Common Stock for
purposes of Sections 9(a) and 9(b) hereof and shall be deemed
to have been sold for cash in an amount equal to such price
per share.
(D) In case of the sale by the Company for cash of any
Convertible Securities, whether or not the right of
conversion or exchange thereunder is immediately exercisable,
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 total amount of
consideration received by the Company for the sale of such
Convertible Securities, plus the minimum aggregate amount of
additional consideration, if any, other than such Convertible
Securities, payable upon the conversion or exchange thereof,
by (y) the total maximum number of shares of Common Stock
issuable upon the conversion or exchange of such Convertible
Securities) is less than the Market Price of the Common Stock
on the date of the sale of such Convertible Securities, then
the total maximum number of shares of Common Stock issuable
upon the conversion or exchange of such Convertible
Securities (as of the date of the sale of such Convertible
Securities) shall be deemed to be outstanding shares of
Common Stock for purposes of Sections 9(a) and 9(b) hereof
and shall be deemed to have been sold for cash in an amount
equal to such price per share.
(E) In case the Company shall modify the rights of
conversion, exchange or exercise of any of the securities
referred to in (C) above or any other securities of the
Company convertible, exchangeable or exercisable for shares
of Common Stock, for any reason other than an event that
would require adjustment to prevent dilution, so that the
consideration per share received by the Company after such
modification is less than the Market Price on the date prior
to such modification, the Purchase Price to be in effect
after such modification shall be determined by multiplying
the Purchase Price in effect immediately prior to such event
by a fraction, of which the numerator shall be the number of
shares of Common Stock outstanding multiplied by the Market
Price on the date prior to the modification plus the number
of shares of Common Stock which the aggregate consideration
receivable by the Company for the securities affected by the
modification would purchase at the Market Price and of which
the denominator shall be the number of shares of Common Stock
outstanding on such date plus the number of shares of Common
Stock to be issued upon conversion, exchange or exercise of
the modified securities at the modified rate. Such
adjustment shall become effective as of the date upon which
such modification shall take effect. On the expiration of
any such right, warrant or option or the termination of any
such right to convert or exchange any such Convertible
Securities referred to in Paragraph (C) or (D) above, the
Purchase Price then in effect hereunder shall forthwith be
readjusted to such Purchase Price as would have obtained (a)
had the adjustments made upon the issuance or sale of such
rights, warrants, options or Convertible Securities been made
upon the basis of the issuance of only the number of shares
of Common Stock theretofore actually delivered (and the total
consideration received therefor) upon the exercise of such
rights, warrants or options or upon the conversion or
exchange of such Convertible Securities and (b) had
adjustments been made on the basis of the Purchase Price as
adjusted under clause (a) for all transactions (which would
have affected such adjusted Purchase Price) made after the
issuance or sale of such rights, warrants, options or
Convertible Securities.
(F) In case of the sale for cash of any shares of
Common Stock, any Convertible Securities, any rights or
warrants to subscribe for or purchase, or any options for the
purchase of, Common Stock or Convertible Securities, the
consideration received by the Company therefor shall be
deemed to be the gross sales price therefor without deducting
therefrom any expense paid or incurred by the Company or any
underwriting discounts or commissions or concessions paid or
allowed by the Company in connection therewith.
(g) No adjustment to the Purchase Price of the Warrants or
to the number of shares of Class A Common Stock purchasable upon the
exercise of each Warrant will be made, however,
(i) upon the exercise of any of the options presently
outstanding under the Company's 1992 Stock Option Plan and
the 1994 Stock Option Plan (collectively, the "Plans") for
officers, directors and certain other key personnel of the
Company; or
(ii) upon-the issuance or exercise of any other securities
which may hereafter be granted or exercised under the Plans
or under any other employee benefit plan of the Company; or
(iii) upon the sale or exercise of the Warrants or any
currently outstanding warrants, including, but not limited
to, those issued in connection with the IPO and upon the sale
or exercise of the Unit Purchase Options issued in connection
with the IPO or securities issuable thereunder; or
(iv) upon the sale of any shares of Common Stock or
Convertible Securities in a firm commitment underwritten
public offering, including, without limitation, shares sold
upon the exercise of any over-allotment option granted to the
underwriters in connection with such offering; or
(v) upon the issuance or sale of Common Stock or
Convertible Securities upon the exercise of any rights or
warrants to subscribe for or purchase, or any options for the
purchase of, Common Stock or Convertible Securities, whether
or not such rights, warrants or options were outstanding on
the date of the original sale of the Warrants or were
thereafter issued or sold; or
(vi) upon the issuance or sale of Common Stock upon
conversion or exchange of any Convertible Securities, whether
or not any adjustment in the Purchase Price was made or
required to be made upon the issuance or sale of such
Convertible Securities and whether or not such Convertible
Securities were outstanding on the date of the original sale
of the Warrants or were thereafter issued or sold.
(h) As used in this Section 9, the term "Common Stock" shall
mean and include the Company's Common Stock authorized on the date of
the original issue of the Units and shall also include any capital
stock of any class of the Company thereafter authorized which shall not
be limited to a fixed sum or percentage in respect of the rights of the
holders thereof to participate in dividends and in the distribution of
assets upon the voluntary liquidation, dissolution or winding up of the
Company; provided, however, that the shares issuable upon exercise of
the Warrants shall include only shares of such class designated in the
Company's Certificate of Incorporation as Common Stock on the date of
the original issue of the Units or (i), in the case of any
reclassification, change, consolidation, merger, sale or conveyance of
the character referred to in Section 9(c) hereof, the stock, securities
or property provided for in such section or (ii), in the case of any
reclassification or change in the outstanding shares of Common Stock
issuable upon exercise of the Warrants as a result of a subdivision or
combination or consisting of a change in par value, or from par value
to no par value, or from no par value to par value, such shares of
Common Stock as so reclassified or changed.
(i) Any determination as to whether an adjustment in the
Purchase Price in effect hereunder is required pursuant to Section 9,
or as to the amount of any such adjustment, if required, shall be
binding upon the holders of the Warrants and the Company if made in
good faith by the Board of Directors of the Company.
(j) If and whenever the Company shall grant to the holders
of Common Stock, as such, rights or warrants to subscribe for or to
purchase, or any options for the purchase of, Common Stock or
securities convertible into or exchangeable for or carrying a right,
warrant or option to purchase Common Stock, the Company shall
concurrently therewith grant to each Registered Holder as of the record
date for such transaction of the Warrants then outstanding, the rights,
warrants or options to which each Registered Holder would have been
entitled if, on the record date used to determine the stockholders
entitled to the rights, warrants or options being granted by the
Company, the Registered Holder were the holder of record of the number
of whole shares of Common Stock then issuable upon exercise (assuming,
for purposes of this section 9(j), that exercise of Warrants is
permissible during periods prior to the Initial Warrant Exercise Date)
of his Warrants. Such grant by the Company to the holders of the
Warrants shall be in lieu of any adjustment which otherwise might be
called for pursuant to this Section 9.
SECTION 10. Registration Under The Securities Act of 1933.
The Company agrees to register for resale the Warrants and the shares
of Class A Common Stock issued or issuable upon exercise of the
Warrants under the Securities Act of 1933, as amended (the "Act") no
later than June 18, 1997, as more fully set forth in Section IV of the
Subscription Agreement between the Company and each of the investors in
the Private Placement, subject to certain contractual restrictions
applicable to the Holder.
SECTION 11. Fractional Warrants and Fractional Shares.
(a) If the number of shares of Class A Common Stock
purchasable upon the exercise of each Warrant is adjusted pursuant to
Section 9 hereof, the Company nevertheless shall not be required to
issue fractions of shares, upon exercise of the Warrants or otherwise,
or to distribute certificates that evidence fractional shares. With
respect to any fraction of a share called for upon any exercise hereof,
the Company shall pay to the Holder an amount in cash equal to such
fraction multiplied by the current market value of such fractional
share, determined as follows:
(1) If the Class A Common Stock is listed on a National
Securities Exchange or admitted to unlisted trading
privileges on such exchange or listed for trading on the
Nasdaq National Market, the current market value shall be the
last reported sale price of the Common Stock on such exchange
or market on the last business day prior to the date of
exercise of this Warrant or if no such sale is made on such
day, the average of the closing bid and asked prices for such
day on such exchange or market; or
(2) If the Class A Common Stock is not listed or
admitted to unlisted trading privileges, the current market
value shall be the mean of the last reported bid and asked
prices reported by the Nasdaq Small Cap Market or, if not
traded thereon, by the National Quotation Bureau, Inc. on
the last business day prior to the date of the exercise of
this Warrant; or
(3) If the Class A Common Stock is not so listed or
admitted to unlisted trading privileges and bid and asked
prices are not so reported, the current market value shall be
an amount determined in such reasonable manner as may be
prescribed by the Board of Directors of the Company.
SECTION 12. Warrant Holders Not Deemed Stockholders.
No holder of Warrants shall, as such, be entitled to vote or to receive
dividends or be deemed the holder of Class A Common Stock that may at
any time be issuable upon exercise of such Warrants for any purpose
whatsoever, nor shall anything contained herein be construed to confer
upon the holder of Warrants, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action
(whether upon any recapitalization, issue or reclassification of stock,
change of par value or change of stock to no par value, consolidation,
merger or conveyance or otherwise), or to receive notice of meetings,
or to receive dividends or subscription rights, until such Holder shall
have exercised such Warrants and been issued shares of Class A Common
Stock in accordance with the provisions hereof.
SECTION 13. Rights of Action.
All rights of action with respect to this Agreement are vested in the
respective Registered Holders of the Warrants, and any Registered Holder of
a Warrant, without consent of the Warrant Agent or of the holder of any other
Warrant, may, in his own behalf and for his own benefit, enforce
against the Company his right to exercise his Warrants for the purchase
of shares of Class A Common Stock in the manner provided in the Warrant
Certificate and this Agreement.
SECTION 14. Agreement of Warrant Holders.
Every holder of a Warrant, by his acceptance thereof, consents and agrees
with the Company, the Warrant Agent and every other holder of a Warrant that:
(a) The Warrants are transferable only on the registry books
of the Warrant Agent by the Registered Holder thereof in person or by
his attorney duly authorized in writing and only if the Warrant
Certificates representing such Warrants are surrendered at the office
of the Warrant Agent, duly endorsed or accompanied by a proper
instrument of transfer satisfactory to the Warrant Agent and the
Company in their sole discretion, together with payment of any
applicable transfer taxes; and
(b) The Company and the Warrant Agent may deem and treat the
person in whose name the Warrant Certificate is registered as the
holder and as the absolute, true and lawful owner of the Warrants
represented thereby for all purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice or knowledge to the
contrary, except as otherwise expressly provided in Section 7 hereof.
SECTION 15. Cancellation of Warrant Certificates.
If the Company shall purchase or acquire any Warrant or Warrants, the Warrant
Certificate or Warrant Certificates evidencing the same shall thereupon
be delivered to the Warrant Agent and cancelled by it and retired. The
Warrant Agent shall also cancel the Warrant Certificate or Warrant
Certificates following exercise of any or all of the Warrants
represented thereby or delivered to it for transfer, split-up,
combination or exchange.
SECTION 16. Concerning the Warrant Agent.
The Warrant Agent acts hereunder as agent and in a ministerial capacity for
the Company, and its duties shall be determined solely by the provisions
hereof. The Warrant Agent shall not, by issuing and delivering Warrant
Certificates or by any other act hereunder be deemed to make any
representations as to the validity, value or authorization of the
Warrant Certificates or the Warrants represented thereby or of any
securities or other property delivered upon exercise of any Warrant or
whether any stock issued upon exercise of any Warrant is fully paid and
nonassessable.
The Warrant Agent shall not at any time be under any duty or
responsibility to any holder of Warrant Certificates to make or cause
to be made any adjustment of the Purchase Price or the Redemption Price
provided in this Agreement, or to determine whether any fact exists
which may require any such adjustments, or with respect to the nature
or extent of any such adjustment, when made, or with respect to the
method employed in making the same. It shall not (i) be liable for any
recital or statement of facts contained herein or for any action taken,
suffered or omitted by it in reliance on any Warrant Certificate or
other document or instrument believed by it in good faith to be genuine
and to have been signed or presented by the proper party or parties,
(ii) be responsible for any failure on the part of the Company to
comply with any of its covenants and obligations contained in this
Agreement or in any Warrant Certificate, or (iii) be liable for any act
or omission in connection with this Agreement except for its own
negligence or wilful misconduct.
The Warrant Agent may at any time consult with counsel
satisfactory--to it (who may be counsel for the Company) and shall
incur no liability or responsibility for any action taken, suffered or
omitted by it in good faith in accordance with the opinion or advice of
such counsel.
Any notice, statement, instruction, request, direction, order
or demand of the Company shall be sufficiently evidenced by an
instrument signed by the Chairman of the Board, President, any Vice
President, its Secretary, or Assistant Secretary, (unless other
evidence in respect thereof is herein specifically prescribed). The
Warrant Agent shall not be liable for any action taken, suffered or
omitted by it in accordance with such notice, statement, instruction,
request, direction, order or demand believed by it to be genuine.
The Company agrees to pay the Warrant Agent reasonable
compensation for its services hereunder and to reimburse it for its
reasonable expenses hereunder; it further agrees to indemnify the
Warrant Agent and save it harmless against any and all losses, expenses
and liabilities, including judgments, costs and counsel fees, for
anything done or omitted by the Warrant Agent in the execution of its
duties and powers hereunder except losses, expenses and liabilities
arising as a result of the Warrant Agent's negligence or wilful
misconduct.
The Warrant Agent may resign its duties and be discharged
from all further duties and liabilities hereunder (except liabilities
arising as a result of the Warrant Agent's own negligence or wilful
misconduct), after giving 30 days' prior written notice to the Company.
At least 15 days prior to the date such resignation is to become
effective, the Warrant Agent shall cause a copy of such notice of
resignation to be mailed to the Registered Holder of each Warrant
Certificate at the Company's expense. Upon such resignation, or any
inability of the Warrant Agent to act as such hereunder, the Company
shall appoint a new warrant agent in writing. If the Company shall
fail to make such appointment within a period of 15 days after it has
been notified in writing of such resignation by the resigning Warrant
Agent, then the Registered Holder of any Warrant Certificate may apply
to any court of competent jurisdiction for the appointment of a new
warrant agent. Any new warrant agent, whether appointed by the Company
or by such a court, shall be a bank or trust company having a capital
and surplus, as shown by its last published report to its stockholders,
of not less than $10,000,000 or a stock transfer company. After
acceptance in writing of such appointment by the new warrant agent is
received by the Company, such new warrant agent shall be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named herein as the Warrant Agent, without any further
assurance, conveyance, act or deed; but if for any reason it shall be
necessary or expedient to execute and deliver any further assurance,
conveyance, act or deed, the same shall be done at the expense of the
Company and shall be legally and validly executed and delivered by the
resigning Warrant Agent. Not later than the effective date of any such
appointment the Company shall file notice thereof with the resigning
Warrant Agent and shall forthwith cause a copy of such notice to be
mailed to the Registered Holder of each Warrant Certificate.
Any corporation into which the Warrant Agent or any new
warrant agent may be converted or merged or any corporation resulting
from any consolidation to which the Warrant Agent or any new warrant
agent shall be a party or any corporation succeeding to the trust
business of the Warrant Agent shall be a successor warrant agent under
this Agreement without any further act, provided that such corporation
is eligible for appointment as successor to the Warrant Agent under the
provisions of the preceding paragraph. Any such successor warrant
agent shall promptly cause notice of its succession as warrant agent to
be mailed to the Company and to the Registered Holder of each Warrant
Certificate.
The Warrant Agent, its subsidiaries and affiliates, and any
of its or their officers or directors, may buy and hold or sell
Warrants or other securities of the Company and otherwise deal with the
Company in the same manner and to the same extent and with like effects
as though it were not Warrant Agent. Nothing herein shall preclude the
Warrant Agent from acting in any other capacity for the Company or for
any other legal entity.
SECTION 17. Modification of Agreement.
Subject to the provisions of Section 4(b), the parties hereto and the Company
may by supplemental agreement make any changes or corrections in this
Agreement (i) that they shall deem appropriate to cure any ambiguity or
to correct any defective or inconsistent provision or manifest mistake
or error herein contained; (ii) to reflect an increase in the number of
Class A or Class B Warrants which are to be governed by this Agreement
resulting from a subsequent public offering of Company securities which
includes Class A or Class B Warrants having the same terms and
conditions as the Class A or Class B Warrants, respectively, originally
covered by or subsequently added to this Agreement under this Section
17; or (iii) that they may deem necessary or desirable and which shall
not adversely affect the interests of the holders of Warrant
Certificates; provided, however, that this Agreement shall not
otherwise be modified, supplemented or altered in any respect except
with the consent in writing of the Registered Holders of Warrant
Certificates representing not less than 50` of the Warrants then
outstanding; and provided, further, that no change in the number or
nature of the securities purchasable upon the exercise of any Warrant,
or the Purchase Price therefor, or the acceleration of the Warrant
Expiration Date, shall be made without the consent in writing of the
Registered Holder of the Warrant Certificate representing such Warrant,
other than such changes as are specifically prescribed by this
Agreement as originally executed or are made in compliance with
applicable law.
SECTION 18. Notices.
All notices, requests, consents and other communications hereunder shall be
in writing and shall be deemed to have been made when delivered or mailed
first class registered or certified mail, postage prepaid as follows:
if to the Registered Holder of a Warrant Certificate, at the address of such
holder as shown on the registry books maintained by the Warrant Agent; if to
the Company, at Infosafe Systems, Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, attention: President, or at such other address as may have
been furnished to the Warrant Agent in writing by the Company; if to
the Warrant Agent, at its Corporate Office; if to Xxxxx, at X.X. Xxxxx
Investment Banking Corp., 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
SECTION 19. Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without reference to principles of conflict
of laws.
SECTION 20. Binding Effect.
This Agreement shall be binding upon and inure to the benefit of the Company
and, the Warrant Agent and their respective successors and assigns, and the
holders from time to time of Warrant Certificates.. Nothing in this Agreement
is intended or shall be construed to confer upon any other person any right,
remedy or claim, in equity or at law, or to impose upon any other person any
duty, liability or obligation.
SECTION 21. Termination.
This Agreement shall terminate at the close of business on the earlier of
the Warrant Expiration Date or the date upon which all Warrants (including
the warrants issuable upon exercise of the Underwriter's Option) have been
exercised, except that the Warrant Agent shall account to the Company for
cash held by it and the provisions of Section 16 hereof shall survive such
termination.
SECTION 22. Counterparts.
This Agreement may be executed in several counterparts, which taken together
shall constitute a single document.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
INFOSAFE SYSTEMS, INC.
By: _/s/ Xxxxxx X. Medici______
Authorized Officer
AMERICAN STOCK TRANSFER & TRUST COMPANY
By: _/s/ Xxxxxxx Lemmer________
Authorized Officer
X.X. XXXXX INVESTMENT BANKING CORP.
By: _/s/ Xxxxxx X. Bell________
Xxxxxx X. Xxxx, Vice Chairman
and General Counsel
EXHIBIT A
[FORM OF FACE OF CLASS A WARRANT CERTIFICATE]
No. AW Class A Warrants
VOID AFTER __________, 2002
CLASS A WARRANT CERTIFICATE FOR PURCHASE OF
CLASS A COMMON STOCK AND REDEEMABLE CLASS B WARRANTS
INFOSAFE SYSTEMS, INC.
This certifies that FOR VALUE RECEIVED _____ or registered
assigns (the "Registered Holder") is the owner of the number of Class A
Warrants ("Class A Warrants") specified above. Each Class A Warrant
represented hereby initially entitles the Registered Holder to
purchase, subject to the terms and conditions set forth in this Warrant
Certificate and the Warrant Agreement (as hereinafter defined), one
fully paid and nonassessable share of Class A Common Stock, $.01 value
("Class A Common Stock"), of Infosafe Systems, Inc., a Delaware
corporation (the "Company"), and one Class B Warrant of the Company at
any time between January 18, 1995 and the Expiration Date (as
hereinafter defined), upon the presentation and surrender of this
Warrant Certificate with the Subscription Form on the reverse hereof
duly executed, at the corporate office of American Stock Transfer &
Trust Company, as Warrant Agent, or its successor (the "Warrant
Agent"), accompanied by payment of $6.50 (the "Purchase Price") in
lawful money of the United States of America in cash or by official
bank or certified check made payable to Infosafe Systems, Inc.
This Warrant Certificate and each Class A Warrant represented
hereby are issued pursuant to and are subject in all respects to the
terms and conditions set forth either in the Warrant Agreement, dated
February 10, 1997, or the Warrant Agreement dated January 25, 1995, as
amended, by and among the Company, the Warrant Agent and X.X. Xxxxx
Investment Banking Corp. (which agreements may each be referred to
interchangeably as the "Warrant Agreement"), except as set forth below.
In the event of certain contingencies provided for in the
Warrant Agreement, the Purchase Price or the number of shares of Class
A Common Stock and Class B Warrants subject to purchase upon the
exercise of each Class A Warrant represented hereby are subject to
modification or adjustment.
Each Class A Warrant represented hereby is exercisable at the
option of the Registered Holder, but no fractional shares of Class A
Common Stock will be issued. In the case of the exercise of less than
all the Class A Warrants represented hereby, the Company shall cancel
this Warrant Certificate upon the surrender hereof and shall execute
and deliver a new Warrant Certificate or Warrant Certificates of like
tenor, which the Warrant Agent shall countersign, for the balance of
such Class A Warrants.
The term "Expiration Date" shall mean 5:00 P.M. (New York
time) on February 18, 2002 or such earlier date as the Class A Warrants
shall be redeemed. If such date shall in the State of New York be a
holiday or a day on which banks are authorized to close, then the
Expiration Date shall mean 5:00 P.M. (New York time) the next following
day which in the State of New York is not a holiday or a day on which
banks are authorized to close.
The Company shall not be obligated to deliver any securities
pursuant to the exercise of the Class A Warrants represented hereby
unless a registration statement under the Securities Act of 1933, as
amended, with respect to such securities is effective. The Company has
covenanted and agreed that it will file a registration statement and
will use its best efforts to cause the same to become effective and to
keep such registration statement current while any of the Class A
Warrants are outstanding. The Class A Warrants represented hereby
shall not be exercisable by a Registered Holder in any state where such
exercise would be unlawful.
This Warrant Certificate is exchangeable, upon the surrender
hereof by the Registered Holder at the corporate office of the Warrant
Agent, for a new Warrant Certificate or Warrant Certificates of like
tenor representing an equal aggregate number of Class A Warrants, each
of such new Warrant Certificates to represent such number of Class A
Warrants as shall be designated by such Registered Holder at the time
of such surrender. Upon due presentment with any applicable transfer
fee per certificate in addition to any tax or other governmental charge
imposed in connection therewith, for registration of transfer of this
Class A Warrant Certificate at such office, a new Warrant Certificate
or Warrant Certificates representing an equal aggregate number of Class
A Warrants will be issued to the transferee in exchange therefor,
subject to the limitations provided in the Warrant Agreement.
Prior to the exercise of any Class A Warrant represented
hereby, the Registered Holder shall not be entitled to any rights of a
stockholder of the Company, including, without limitation, the right to
vote or to receive dividends or other distributions, and shall not be
entitled to receive any notice of any proceedings of the Company,
except as provided in the Warrant Agreement.
The Class A Warrants represented hereby may be redeemed at
the option of the Company, at a redemption price of $.05 per Class A
Warrant at any time, provided the Market Price (as defined in the
Warrant Agreement) for the Class A Common Stock shall exceed $9.10 per
share. Notice of redemption shall be given not later than the
thirtieth day before the date fixed for redemption, all as provided in
the Warrant Agreement. On and after the date fixed for redemption, the
Registered Holder shall have no rights with respect to the Class A
Warrants represented hereby except to receive the $.05 per Class A
Warrant upon surrender of this Warrant Certificate.
Prior to due presentment for registration of transfer hereof,
the Company and the Warrant Agent may deem and treat the Registered
Holder as the absolute owner hereof and of each Class A Warrant
represented hereby (notwithstanding any notations of ownership or
writing hereon made by anyone other than a duly authorized officer of
the Company or the Warrant Agent) for all purposes and shall not be
affected by any notice to the contrary.
The Company has agreed to pay a fee of five (5)% of the
Purchase Price upon certain conditions as specified in the Warrant
Agreement upon the exercise of the Class A Warrants represented hereby.
This Warrant Certificate shall be governed by and construed
in accordance with the laws of the State of New York.
This Warrant Certificate is not valid unless countersigned by
the Warrant Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly executed, manually or in facsimile, by two of
its officers thereunto duly authorized and a facsimile of its corporate
seal to be imprinted hereon.
INFOSAFE SYSTEMS, INC.
Dated:__________________ By:_______________________________
By:_______________________________
[seal]
Countersigned:
AMERICAN STOCK TRANSFER & TRUST COMPANY
as Warrant Agent
By:_____________________________
Authorized Officer
[FORM OF REVERSE OF WARRANT CERTIFICATE]
TRANSFER FEE: $ PER CERTIFICATE ISSUED
SUBSCRIPTION FORM
To Be Executed by the Registered Holder
in Order to Exercise Warrants
The undersigned Registered Holder hereby irrevocably elects
to exercise ______________________________ Class A Warrants represented
by this Warrant Certificate, and to purchase the securities issuable
upon the exercise of such Class A Warrants, and requests that
certificates for such securities shall be issued in the name of
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
________________________________________
________________________________________
________________________________________
________________________________________
[please print or type name and address]
and be delivered to
________________________________________
________________________________________
________________________________________
________________________________________
[please print or type name and address]
and if such number of Class A Warrants shall not be all the Class A
Warrants evidenced by this Warrant Certificate, that a new Class A
Warrant Certificate for the balance of such Class A Warrants be
registered in the name of, and delivered to, the Registered Holder at
the address stated below.
The undersigned represents that the exercise of the within
Class A Warrant was solicited by a member of the National Association
of Securities Dealers, Inc. If not solicited by an NASD member, please
write "unsolicited" in the space below.
_______________________________
(Name of NASD Member)
Dated:_________________________ X _______________________________
_______________________________
_______________________________
Address
_______________________________
Taxpayer Identification Number
_______________________________
Signature Guaranteed
_______________________________
ASSIGNMENT
To Be Executed by the Registered Holder
in Order to Assign Warrants
FOR VALUE RECEIVED, ________________________________ hereby sells,
assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
________________________________________
________________________________________
________________________________________
________________________________________
[please print or type name and address]
______________________________ of the Class A Warrants represented by
this Warrant Certificate, and hereby irrevocably constitutes and
appoints Attorney to transfer this Warrant Certificate on the books of
the Company, with full power of substitution in the premises.
Dated:_________________________ X _______________________________
Signature Guaranteed
_______________________________
THE SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST
CORRESPOND TO THE NAME AS WRITTEN UPON THE FACE OF THIS WARRANT
CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR
ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A MEMBER OF THE
MEDALLION STAMP PROGRAM.
EXHIBIT B
[FORM OF FACE OF CLASS B WARRANT CERTIFICATE]
No. BW Class B Warrants
VOID AFTER _________, 2002
CLASS B WARRANT CERTIFICATE FOR
PURCHASE OF CLASS A COMMON STOCK
INFOSAFE SYSTEMS, INC.
This certifies that FOR VALUE RECEIVED ______ or registered
assigns (the "Registered Holder") is the owner of the number of Class B
Warrants specified above. Each Class B Warrant represented hereby
initially entitles the Registered Holder to purchase, subject to the
terms and conditions set forth in this Warrant Certificate and the
Warrant Agreement (as hereinafter defined), one fully paid and
nonassessable share of Class Common Stock, $.01 par value ("Class A
Common Stock"), of Infosafe Systems, Inc., a Delaware corporation (the
"Company"), at any time between January 18, 1995 and the Expiration
Date (as hereinafter defined), upon the presentation and surrender of
this Warrant Certificate with the Subscription Form on the reverse
hereof duly executed, at the corporate office of American Stock
Transfer & Trust Company, as Warrant Agent, or its successor (the
"Warrant Agent"), accompanied by payment of $8.75 (the "Purchase
Price") in lawful money of the United States of America in cash or by
official bank or certified check made payable to Infosafe Systems, Inc.
This Warrant Certificate and each Class B Warrant represented
hereby are issued pursuant to and are subject in all respects to the
terms and conditions set forth either in the Warrant Agreement, dated
February 10, 1997, or the Warrant Agreement dated January 25, 1995, as
amended, by and among the Company, the Warrant Agent and X.X. Xxxxx
Investment Banking Corp. (which agreements may each be referred to
interchangeably as the "Warrant Agreement"), except as set forth below.
In the event of certain contingencies provided for in the
Warrant Agreement, the Purchase Price or the number of shares of Class
A Common Stock subject to purchase upon the exercise of each Class B
Warrant represented hereby are subject to modification or adjustment.
Each Class B Warrant represented hereby is exercisable at the
option of the Registered Holder, but no fractional shares of Class A
Common Stock will be issued. In the case of the exercise of less than
all the Class B Warrants represented hereby, the Company shall cancel
this Warrant Certificate upon the surrender hereof and shall execute
and deliver a new Warrant Certificate or Warrant Certificates of like
tenor, which the Warrant Agent shall countersign, for the balance of
such Class B Warrants.
The term "Expiration Date" shall mean 5:00 P.M. (New York
time) on February 18, 2002, or such earlier date as the Class B
Warrants shall be redeemed. If such date shall in the State of New
York be a holiday or a day on which banks are authorized to close, then
the Expiration Date shall mean 5:00 P.M. (New York time) the next
following day which in the State of New York is not a holiday or a day
on which banks are authorized to close.
The Company shall not be obligated to deliver any securities
pursuant to the exercise of the Class B Warrants represented hereby
unless a registration statement under the Securities Act of 1933, as
amended, with respect to such securities is effective. The Company has
covenanted and agreed that it will file a registration statement and
will use its best efforts to cause the same to become effective and to
keep such registration statement current while any of the Class B
Warrants are outstanding. The Class B Warrants represented hereby
shall not be exercisable by a Registered Holder in any state where such
exercise would be unlawful.
This Warrant Certificate is exchangeable, upon the surrender
hereof by the Registered Holder at the corporate office of the Warrant
Agent, for a new Warrant Certificate or Warrant Certificates of like
tenor representing an equal aggregate number of Class B Warrants, each
of such new Warrant Certificates to represent such number of Class B
Warrants as shall be designated by such Registered Holder at the time
of such surrender. Upon due presentment with any applicable transfer
fee in addition to any tax or other governmental charge imposed in
connection therewith, for registration of transfer of this Warrant
Certificate at such office, a new Warrant Certificate or Warrant
Certificates representing an equal aggregate number of Class B Warrants
will be issued to the transferee in exchange therefor, subject to the
limitations provided in the Warrant Agreement.
Prior to the exercise of any Class B Warrant represented
hereby, the Registered Holder shall not be entitled to any rights of a
stockholder of the Company, including, without limitation, the right to
vote or to receive dividends or other distributions, and shall not be
entitled to receive any notice of any proceedings of the Company,
except as provided in the Warrant Agreement.
The Class B Warrants represented hereby may be redeemed at
the option of the Company, at a redemption price of $.05 per Class B
Warrant at any time provided the Market Price (as defined in the
Warrant Agreement) for the Class A Common Stock shall exceed $12.25 per
share. Notice of redemption shall be given not later than the
thirtieth day before the date fixed for redemption, all as provided in
the Warrant Agreement. On and after the date fixed for redemption, the
Registered Holder shall have no rights with respect to the Class B
Warrants represented hereby except to receive the $.05 per Class B
Warrant upon surrender of this Warrant Certificate.
Prior to due presentment for registration of transfer hereof,
the Company and the Warrant Agent may deem and treat the Registered
Holder as the absolute owner hereof and of each Class B Warrant
represented hereby (notwithstanding any notations of ownership or
writing hereon made by anyone other than a duly authorized officer of
the Company or the Warrant Agent) for all purposes and shall not be
affected by any notice to the contrary.
The Company has agreed to pay a fee of 5% of the Purchase
Price upon certain conditions as specified in the Warrant Agreement
upon the exercise of the Class B Warrants represented hereby.
This Warrant Certificate shall be governed by and construed
in accordance with the laws of the State of New York.
This Warrant Certificate is not valid unless countersigned by
the Warrant Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly executed, manually or in facsimile, by two of
its officers thereunto duly authorized and a facsimile of its corporate
seal to be imprinted hereon.
INFOSAFE SYSTEMS, INC.
Dated:__________________________ By:_________________________________
By:_________________________________
[seal]
Countersigned:
AMERICAN STOCK TRANSFER & TRUST COMPANY
as Warrant Agent
By:___________________________________
Authorized Officer
[FORM OF REVERSE OF WARRANT CERTIFICATE]
SUBSCRIPTION FORM
To Be Executed by the Registered Holder
in Order to Exercise Warrants
The undersigned Registered Holder hereby irrevocably elects
to exercise ____________________ Class B Warrants represented by this
Warrant Certificate, and to purchase the securities issuable upon the
exercise of such Class B Warrants, and requests that certificates for
such securities shall be issued in the name of
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
________________________________________
________________________________________
________________________________________
________________________________________
[please print or type name and address]
and be delivered to
________________________________________
________________________________________
________________________________________
________________________________________
[please print or type name and address]
and if such number of Class B Warrants shall not be all the Class B
Warrants evidenced by this Warrant Certificate, that a new Warrant
Certificate for the balance of such Class B Warrants be registered in
the name of, and delivered to, the Registered Holder at the address
stated below.
The undersigned represents that the exercise of the within
Warrant was solicited by a member of the National Association of
Securities Dealers, Inc. If not solicited by an NASD member, please
write "unsolicited in the space below.
______________________________
(Name of NASD Member)
Dated:_________________________ X _______________________________
_______________________________
_______________________________
Address
_______________________________
Taxpayer Identification Number
_______________________________
Signature Guaranteed
_______________________________
ASSIGNMENT
To Be Executed by the Registered Holder
in Order to Assign Warrants
FOR VALUE RECEIVED, __________________________________ hereby
sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
________________________________________
________________________________________
________________________________________
________________________________________
[please print or type name and address]
___________________________ of the Class A Warrants represented by this
Warrant Certificate, and hereby irrevocably constitutes and appoints
__________________________ ___________________________________ Attorney
to transfer this Warrant Certificate on the books of the Company, with
full power of substitution in the premises.
Dated:_________________________ X _______________________________
Signature Guaranteed
_______________________________
THE SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST
CORRESPOND TO THE NAME AS WRITTEN UPON THE FACE OF THIS WARRANT
CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR
ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A MEMBER OF THE
MEDALLION STAMP PROGRAM.
