EXHIBIT 4
THIS WARRANT AND THE SHARES OF COMMON STOCK PURCHASABLE HEREUNDER HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FILED UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS, UNLESS
AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
No. WLB-1 May 24, 1999
e4L, INC.
COMMON STOCK PURCHASE WARRANT
Warrant to Purchase 130,106 Shares of Common Stock
Expiring May 23, 2004
THIS CERTIFIES THAT, in consideration of the release of certain claims
by Xxxxxx Brothers Inc. ("Xxxxxx") against e4L, Inc. (formerly known as
"National Media Corporation"), a Delaware corporation (the "Company"), pursuant
to that certain Settlement Agreement, dated as of May 14, 1999 ("Settlement
Agreement"), by and between the Company and Xxxxxx ("Xxxxxx"), Xxxxxx or its
successors or assigns (collectively, the "Warrant Holder"), at any time and from
time to time, subject to the vesting schedule set forth in Section 2 hereto, on
any Business Day on or prior to 5:00 p.m., Pacific Time, on May 23, 2004 (the
"Expiration Date") is entitled to subscribe for and purchase from the Company,
one hundred thirty thousand one hundred six (130,106) shares of Common Stock at
a price per share equal to the Exercise Price (as defined below); provided that
the number of shares of Common Stock issuable upon any exercise of this Warrant
and the Exercise Price shall be adjusted and readjusted from time to time in
accordance with Section 5.
(a) CERTAIN DEFINITIONS.
The following terms, as used herein, have the following
meanings:
"Affiliate" means, with respect to any Person, any other
Person that directly or indirectly controls, is controlled by, or is under
common control with such Person.
"Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in New York City are authorized by law to
close.
"Closing Price" means, for any trading day with respect to
each share of Common Stock, (a) the last reported sale price on such day on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading or, if no such reported sale takes place on any such day,
the average of the closing bid and asked prices thereon, as reported in THE WALL
STREET JOURNAL, or (b) if such Common Stock shall not be listed or admitted to
trading on a national securities exchange, the last reported sales price on the
NASDAQ National Market System or, if no such reported sale takes place on any
such day, the average of the closing bid and asked prices thereon, as reported
in THE WALL STREET JOURNAL, or (c) if such Common Stock shall not be quoted on
such National Market System nor listed or admitted to trading on a national
securities exchange, then the average of the closing bid and asked prices, as
reported by THE WALL STREET JOURNAL for the over-the-counter market, or (d) if
there is no public market for such Common Stock the fair market value of a share
of such Common Stock as determined in good faith by the Board of Directors of
the Company after consultation with an independent investment bank of national
repute (whose report will be made available to the Warrant Holder prior to such
determination of fair market value); PROVIDED that if clause (a), (b), or (c)
applies and no price is reported in THE WALL STREET JOURNAL for any trading day,
then the price reported in THE WALL STREET JOURNAL for the most recent prior
trading day shall be deemed to be the price reported for such trading day.
"Commission" means the Securities and Exchange Commission or
any other Federal agency administering the Securities Act at the time.
"Common Stock" means the Company's currently authorized class
of common stock, $.01 par value, and stock of any other class or other
consideration into which such currently authorized class of common stock may
hereafter have been changed.
"Exchange Act" means the Securities Exchange Act of 1934, or
any successor Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. Reference to a
particular section of the Exchange Act shall include a reference to the
comparable section, if any, of any such successor Federal statute.
"Exercise Price" means $1.50 per share, as may be adjusted
from time to time pursuant to Section 5.
"Market Price" on any day means the unweighted average of the
daily Closing Prices per share of Common Stock for the 20 consecutive trading
days prior to such date; PROVIDED that for purposes of the application of
Section 5(b) to a Common Stock Distribution pursuant to a public offering
registered under the Securities Act, "Market Price" means the Closing Price per
share of Common Stock for the trading day preceding the effective date of the
registration statement with respect to such public offering.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
"Securities Act" means the Securities Act of 1933, or any
successor Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. Reference to a
particular section of the Securities Act shall include a reference to the
comparable section, if any, of any such successor Federal statute.
"Warrant Shares" means the one hundred thirty thousand one
hundred six (130,106) shares of Common Stock issued or issuable upon exercise of
this Warrant, as adjusted from time to time pursuant to Section 5.
(b) EXERCISE OF WARRANT.
The Warrant Holder may exercise this Warrant in whole or in
part, at any time or from time to time, subject to the immediately succeeding
sentence, on any Business Day on or prior to the Expiration Date, by delivering
to the Company a duly executed notice (a "Notice of Exercise") in the form of
Annex A hereto at the election of the Warrant Holder, either (a) by receiving
from the Company the number of Warrant Shares as to which this Warrant is being
exercised and paying to the Company the Exercise Price for each such Warrant
Share by wire transfer of immediately available funds to the account of the
Company in an amount equal to the product of (i) the Exercise Price times (ii)
the number of Warrant Shares as to which the Warrant is being exercised or (b)
by receiving from the Company the number of Warrant Shares equal to (i) the
number of Warrant Shares as to which this Warrant is being exercised minus (ii)
the number of Warrant Shares having a value equal to the product of (x) the
Exercise Price times (y) the number of Warrant Shares as to which this Warrant
is being exercised, divided by the average of the Closing Price on the five
conservative trading days immediately prior to the date of such exercise. This
Warrant shall vest and become exercisable on or after the Closing Date (as
defined in the Settlement Agreement).
As soon as practicable but not later than five Business Days
after the Company shall have received such Notice of Exercise and payment, the
Company shall execute and deliver or cause to be executed and delivered, in
accordance with such Notice of Exercise, a certificate or certificates
representing the number of shares of Common Stock specified in such Notice of
Exercise, issued in the name of the Warrant Holder. This Warrant shall be deemed
to have been exercised and such share certificate or certificates shall be
deemed to have been issued, and such Warrant Holder shall be deemed for all
purposes to have become a holder of record of shares of Common Stock, as of the
date that such Notice of Exercise and payment shall have been received by the
Company.
The Warrant Holder shall surrender this Warrant Certificate to
the Company when it delivers the Notice of Exercise, and in the event of a
partial exercise of the Warrant, the Company shall execute and deliver to the
Warrant Holder, at the time the Company delivers the share certificate or
certificates issued pursuant to such Notice of Exercise, a new Warrant
Certificate for the unexercised section of the Warrant, but in all other
respects identical to this Warrant Certificate.
Each certificate for Warrant Shares issued upon exercise of
this Warrant, unless at the time of exercise such Warrant Shares are registered
under the Securities Act, shall bear the following legend:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FILED UNDER SAID ACT AND ANY APPLICABLE STATE
SECURITIES LAWS, UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE.
Any certificate for Warrant Shares issued at any time in exchange or
substitution for any certificate bearing such legend (unless at that time such
Warrant Shares are registered under the Securities Act) shall also bear such
legend unless, in the written opinion of counsel selected by the holder of such
certificate (who may be an employee of such holder), which counsel and opinion
shall be reasonably acceptable to the Company, the Warrant Shares represented
thereby need no longer be subject to restrictions on resale under the Securities
Act.
The Company shall not be required to issue fractions of shares
of Common Stock upon an exercise of the Warrant. If any fraction of a share
would, but for this restriction, be issuable upon an exercise of the Warrant, in
lieu of delivering such fractional share, the Company shall pay to the Warrant
Holder, in cash, an amount equal to the same fraction times the Closing Price on
the trading day immediately prior to the date of such exercise.
The Company shall pay all expenses, taxes and owner charges
payable in connection with the preparation, issuance and delivery of
certificates for the Warrant Shares and any new Warrant Certificates, except
that if the certificates for the Warrant Shares or the new Warrant Certificates
are to be registered in a name or names other than the name of the Warrant
Holder, funds sufficient to pay all transfer taxes payable as a result of such
transfer shall be paid by the Warrant Holder at the time of its delivery of the
Notice of Exercise or promptly upon receipt of a written request by the Company
for payment.
(c) INVESTMENT REPRESENTATION.
(1) By accepting the Warrant, the Warrant Holder represents
that it is acquiring the Warrant for its own account for investment purposes and
not with the view to any sale or distribution, and that the Warrant Holder will
not offer, sell or otherwise dispose of the Warrant or the Warrant Shares except
under circumstances as will not result in a violation of applicable securities
laws.
(2) The Common Stock issuable upon exercise of this Warrant
will be registered on Form S-3 with the Commission pursuant to the terms of the
Settlement Agreement.
(d) VALIDITY OF WARRANT AND ISSUANCE OF SHARES.
The Company represents and warrants that this Warrant has been
duly authorized and is validly issued.
The Company further represents and warrants that on the date
hereof it is duly authorized and reserved, and the Company hereby agrees that it
will at all times until the Expiration Date have duly authorized and reserved,
such number of shares of Common Stock as will be sufficient to permit the
exercise in full of the Warrant, and that all such shares are and will be duly
authorized and, when issued upon exercise of the Warrant, will be validly
issued, fully paid and non-assessable, and free and clear of all security
interests, claims, liens, equities and other encumbrances.
(e) ANTIDILUTION PROVISIONS.
The Exercise Price in effect at any time, and the number of
Warrant Shares that may be purchased upon any exercise of the Warrant, shall be
subject to change or adjustment as follows:
(1) COMMON STOCK REORGANIZATION. If the Company shall
subdivide its outstanding shares of Common Stock into a greater number of
shares, by way of stock split, stock dividend or otherwise, or consolidate its
outstanding shares of Common Stock into a smaller number of shares (any such
event being herein called a "Common Stock Reorganization"), then (i) the
Exercise Price shall be adjusted, effective immediately after the effective date
of such Common Stock Reorganization, to a price determined by multiplying the
Exercise Price in effect immediately prior to such effective date by a fraction,
the numerator of which shall be the number of shares of Common Stock outstanding
on such effective date before giving effect to such Common Stock Reorganization
and the denominator of which shall be the number of shares of
Common Stock outstanding after giving effect to such Common Stock
Reorganization, and (ii) the number of shares of Common Stock subject to
purchase upon exercise of this Warrant shall be adjusted, effective at such
time, to a number determined by multiplying the number of shares of Common Stock
subject to purchase immediately before such Common Stock Reorganization by a
fraction, the numerator of which shall be the number of shares outstanding after
giving effect to such Common Stock Reorganization and the denominator of which
shall be the number of shares of Common Stock outstanding immediately before
giving effect to such Common Stock Reorganization.
(2) COMMON STOCK DISTRIBUTION.
(a) If the Company shall issue, sell or otherwise
distribute any shares of Common Stock, other than pursuant to a Common Stock
Reorganization (which is governed by Section 5(a)) (any such event, including
any event described in paragraphs (ii) and (iii) below, being herein called a
"Common Stock Distribution"), for a consideration per share less than the Market
Price immediately prior to such Common Stock Distribution then, effective upon
such Common Stock Distribution, the Exercise Price shall be reduced to a price
determined by multiplying the Exercise Price by a fraction, the numerator of
which shall be the sum of (A) the number of shares of Common Stock outstanding
immediately prior to such Common Stock Distribution multiplied by the Market
Price, plus (B) the consideration, if any, received by the Company upon such
Common Stock Distribution, and the denominator of which shall be the product of
(1) the total number of shares of Common Stock outstanding immediately after
such Common Stock Distribution multiplied by (2) the Market Price.
If any Common Stock Distribution shall require an adjustment
to the Exercise Price pursuant to the foregoing provisions of this Section 5(b),
including by operation of paragraph (ii) or (iii) below, then, effective at the
time such adjustment is made, the number of shares of Common Stock subject to
purchase upon exercise of this Warrant shall be increased to a number determined
by multiplying the number of shares of Common Stock subject to purchase
immediately before such Common Stock Distribution by a fraction, the numerator
of which shall be the Exercise Price in effect immediately prior to such event
and the denominator of which shall be the Exercise Price as adjusted in
accordance with this Section 5(b). In computing adjustments under this
paragraph, fractional interests in Common Stock shall be taken into account to
the nearest one-thousandth of a share.
Subject to Section 5(e) below, the provisions of this Section
5(b), including by operation of paragraph (ii) or (iii) below, shall not operate
to increase the Exercise Price or reduce the number of shares of Common Stock
subject to purchase upon exercise of this Warrant.
(b) If the Company shall issue, sell, distribute or
otherwise grant in any manner (including by assumption) any rights to subscribe
for or to purchase, or any warrants or options for the purchase of Common Stock
or any stock or securities convertible into or exchangeable for Common Stock
(such rights, warrants or options being herein called "Options" and such
convertible or exchangeable stock or securities being herein called "Convertible
Securities"), whether or not such Options or the rights to convert or exchange
any such Convertible Securities in respect of such Options are immediately
exercisable or exercisable prior to the Expiration Date, and the price per share
for which Common Stock is issuable upon the exercise of such Options or upon
conversion or exchange of such Convertible Securities in respect of such Options
(determined by dividing (x) the aggregate amount, if any, received or receivable
by the Company as consideration for the granting of such Options, plus the
minimum aggregate amount of additional consideration payable to the Company upon
the exercise of all such Options, plus, in the case of Options to acquire
Convertible Securities, the minimum aggregate amount of additional
consideration, if any, payable upon issuance or sale of such Convertible
Securities and
upon the conversion or exchange thereof, by (y) the total maximum number of
shares of Common Stock issuable upon the exercise of such Options or upon the
conversion or exchange of all such Convertible Securities issuable upon the
exercise of such Options at such price) shall be less than the Market Price
immediately prior to the granting of such Options then, for purposes of Section
5(b)(i), the total maximum number of shares of Common Stock issuable upon the
exercise of such Options or upon conversion or exchange of the total maximum
amount of such Convertible Securities issuable upon the exercise of such Options
shall be deemed to have been issued as of the date of granting of such Options
and thereafter shall be deemed to be outstanding and the Company shall be deemed
to have received as consideration of such price per share, determined as
provided above, therefor. Except as otherwise provided in paragraph (iv) below,
no additional adjustment of the Exercise Price shall be made upon the actual
exercise of such Options or upon conversion or exchange of such Convertible
Securities.
(c) If the Company shall issue, sell or otherwise
distribute (including by assumption) any Convertible Securities, whether or not
the rights to exchange or convert thereunder are immediately exercisable or
exercisable prior to the Expiration Date, and the price per share for which
Common Stock is issuable upon the conversion or exchange of such Convertible
Securities (determined by dividing (x) the aggregate amount received or
receivable by the Company as consideration for the issuance, sale or
distribution of such Convertible Securities, plus the minimum aggregate amount
of additional consideration, if any, payable to the Company upon the conversion
or exchange thereof, by (y) the maximum number of shares of Common Stock
issuable upon the conversion or exchange of all such Convertible Securities)
shall be less than the Market Price immediately prior to such issuance, sale or
distribution then, for purposes of Section 5(b)(i), the total maximum number of
shares of Common Stock issuable upon conversion or exchange of all such
Convertible Securities shall be deemed to have been issued as of the date of the
issuance, sale or distribution of such Convertible Securities thereafter shall
be deemed to be outstanding and the Company shall be deemed to have received as
consideration such price per share, determined as provided above, therefor.
Except as otherwise in paragraph (iv) below, no additional adjustment of the
Exercise Price shall be made upon the actual conversion or exchange of such
Convertible Securities.
(d) If (x) the purchase price provided for in any
Option referred to in Section 5(b)(ii) or the additional consideration, if any,
payable upon the conversion or exchange of any Convertible Securities referred
to in Sections 5 (b)(ii) or 5(b)(iii) or the rate at which any Convertible
Securities referred to in Sections 5(b)(ii) or 5(b)(iii) are convertible into or
exchangeable for Common Stock shall change at any time (other than under or by
reason of provisions designed to protect against dilution upon an event which
results in a related adjustment pursuant to this Section 5), or (y) any of such
Options or Convertible Securities shall have terminated, lapsed or expired, the
Exercise Price then in effect shall forthwith be readjusted (effective only with
respect to any exercise of this Warrant after such readjustment) to the Exercise
Price which would then be in effect had the adjustment made upon the issuance,
sale, distribution or grant of such Options or Convertible Securities been made
based upon such changed purchase price, additional consideration or conversion
rate, as the case may be (in the case of any event referred to in clause (x) of
this paragraph (iv)) or had such adjustment not been made (in the case of any
event referred to in clause (y) of this paragraph (iv)).
(e) If the Company shall pay a dividend or make any
other distribution upon any capital stock of the Company payable in Common
Stock, Options or Convertible Securities, other than pursuant to a Common Stock
Reorganization (which is governed by Section 5(a)), then, for purposes of this
Section 5(b), such Common Stock, Options or Convertible Securities shall be
deemed to have been issued or sold without consideration.
(f) If any shares of Common Stock, Options or
Convertible Securities shall be issued, sold or distributed for cash, the
consideration received thereof shall be deemed to be the amount received by the
Company therefor, without any deduction therefrom of any expenses incurred in
connection therewith. If any shares of Common Stock, Options or Convertible
Securities shall be issued, sold or distributed for a consideration other than
cash, the amount of the consideration other than cash received by the Company
shall be deemed to be the fair market value of such consideration at the time of
its receipt by the Company as determined in good faith by the Board of Directors
of the Company, without any deduction of any expenses incurred in connection
therewith. If any shares of Common Stock, Options or Convertible Securities
shall be issued in connection with any merger in which the Company is the
surviving corporation, the amount of consideration therefor shall be deemed to
be the fair market value of such portion of the assets and business of the
non-surviving corporation as shall be attributable to such Common Stock, Options
or Convertible Securities, as the case may be, at the time of the merger as
determined in good faith by the Board of Directors of the Company. If any
Options shall be issued in connection with the issuance and sale of other
securities of the Company, together comprising one integral transaction in which
no specific consideration is allocated to such Options by the parties thereto,
such Options shall be deemed to have been issued without consideration.
(3) SPECIAL DIVIDENDS. If the Company shall issue or
distribute to all holders of shares of Common Stock evidences of indebtedness,
any other securities of the Company or any cash, property or other assets
(excluding (i) a Common Stock Reorganization, (ii) a Common Stock Distribution,
(iii) quarterly cash dividends paid in the ordinary course of business, or (iv)
any purchase, redemption or other acquisition by the Company of shares of Common
Stock owned by any individual shareholder owning fewer than 100 shares), whether
or not accompanied by a purchase, redemption or other acquisition of shares of
Common Stock (any such nonexcluded event being herein called a "Special
Dividend"), the (x) the Exercise Price shall be decreased, effective immediately
after the effective date of such Special Dividend, to a price determined by
multiplying the Exercise Price then in effect by a fraction, the numerator of
which shall be the Market Price immediately prior to such effective date less
any cash and the then fair market value, as determined in good faith by the
Board of Directors of the Company, of any evidences of indebtedness, securities
or property or other assets issued or distributed in such Special Dividend with
respect to one share of Common Stock, and the denominator of which shall be the
Market Price immediately prior to such effective date, and (y) the number of
shares of Common Stock subject to purchase upon exercise of this Warrant shall
be increased to a number determined by multiplying the number of shares of
Common Stock subject to purchase immediately before such Special Dividend by a
fraction, the numerator of which shall be the Exercise Price in effect
immediately before such Special Dividend and the denominator of which shall be
the Exercise Price in effect immediately after such Special Dividend. A
reclassification of the Common Stock (other than a change in par value, or from
par value to no par value or from no par value to par value) into shares of
Common Stock and shares of any other class of stock shall be deemed to be a
distribution by the Company to the holders of its Common Stock of such shares of
such other class of stock and, if the outstanding shares of Common Stock shall
be changed into a larger or smaller number of shares of Common Stock as part of
such reclassification, a Common Stock Reorganization.
(4) CAPITAL REORGANIZATION. If there shall be any
consolidation or merger to which the Company is a party, other than a
consolidation or a merger of which the Company is the continuing corporation and
which does not result in any reclassification of, or change (other than a Common
Stock Reorganization) in, outstanding shares of Common Stock, or any sale or
conveyance of the property of the Company as an entirety or substantially as an
entirety, or any recapitalization of the Company (any such event being called a
"Capital Reorganization"), then, effective upon the effective date of such
Capital Reorganization, the Warrant holder shall no
longer have the right to purchase Common Stock, but shall have instead the right
to purchase, upon exercise of this Warrant, the kind and amount of shares of
stock and other securities and property (including cash) which the Warrant
Holder would have owned or have been entitled to receive pursuant to such
Capital Reorganization if the Warrant had been exercised immediately prior to
the effective date of such Capital Reorganization. As a condition to effecting
any Capital Reorganization, the Company or the successor or surviving
corporation, as the case may be, shall execute and deliver to each Warrant
Holder an agreement as to the Warrant Holder's rights in accordance with this
Section 5(d), providing, to the extent of any right to purchase equity
securities hereunder, for subsequent adjustments as nearly equivalent as may be
practicable to the adjustments provided for in this Section 5. The provisions of
this Section 5(d) shall similarly apply to successive Capital Reorganizations.
(5) ADJUSTMENT RULES.
(a) Any adjustments pursuant to this Section 5 shall
be made successively whenever any event referred to herein shall occur, except
that, notwithstanding any other provision of this Section 5, no adjustment shall
be made to the number of Warrant Shares to be delivered to the Warrant Holder
(or to the Exercise Price) if such adjustment represents less than 1% of the
number of Warrant Shares previously required to be so delivered, but any lesser
adjustment shall be carried forward and shall be made at the time and together
with the next subsequent adjustment which together with any adjustments so
carried forward shall amount to 1% or more of the number of Warrant Shares to be
so delivered.
(b) No adjustments shall be made pursuant to this
Section 5 in respect of (x) the issuance of Warrant Shares upon exercise of the
Warrant; (y) the issuance, sale or grant or exercise before or after the date
hereof by the Company to any director, officer, consultant or employee of the
Company or any Affiliate of the Company of any Common Stock or of any option,
bonus or other award exercisable into Common Stock approved by the Board of
Directors of the Company or any duly authorized committee thereof; or (z) any
securities of the Company which are issued and outstanding as at the date hereof
or are issued pursuant to the Stock Purchase Agreement (including, without
limitation, the issuance of any Series E Preferred Stock) or the Consulting
Agreement.
(c) If the Company shall take a record of the holders
of its Common Stock for any purpose referred to in this Section 5, then (x) such
record date shall be deemed to be the date of the issuance, sale, distribution
or grant in question and (y) if the Company shall legally abandon such action
prior to effecting such action, no adjustment shall be made pursuant to this
Section 5 in respect of such action.
(d) Upon the expiration without being exercised of
any rights, options, warrants or conversion or exchange of any rights, options,
warrants or conversion or exchange privileges for which an adjustment has been
made pursuant to this Warrant, the Exercise Price and the number of shares of
Common Stock purchasable upon the exercise of each Warrant shall, upon such
expiration, be readjusted and shall thereafter, upon any future exercise, be
such as they would have been had they been originally adjusted (or had the
original adjustment not been required, as the case may be) as if (A) the only
shares of Common Stock so issued were the shares of such Common Stock, if any,
actually issued or sold upon the exercise of such rights, options, warrants or
conversion or exchange rights and (B) such shares of Common Stock, if any, were
issued or sold for the consideration actually received by the Company upon such
exercise plus the consideration, if any, actually received by the Company for
issuance, sale or grant of all such rights, options, warrants or conversion or
exchange rights whether or not exercised; provided, that no such readjustment
shall have the effect of increasing the Exercise Price by an amount, or
decreasing the number of shares purchasable upon exercise of each Warrant by a
number, in
excess of the amount or number of the adjustment initially made in respect to
the issuance, sale or grant of such rights, options, warrants or conversion or
exchange rights.
(6) PROCEEDINGS PRIOR TO ANY ACTION REQUIRING ADJUSTMENT. As a
condition precedent to the taking of any action which would require an
adjustment pursuant to this Section 5, the Company shall take any action which
may be necessary, including obtaining regulatory approvals or exemptions, in
order that the Company may thereafter validly and legally issue as fully paid
and nonassessable all shares of Common Stock which the Warrant Holder is
entitled to receive upon exercise of the Warrant.
(7) NOTICE OF ADJUSTMENT. Not less than 10 days prior to the
record date or effective date, as the case may be, of any action which requires
or might require an adjustment or readjustment pursuant to this Section 5, the
Company shall give notice to each Warrant Holder of such event, describing such
event in reasonable detail and specifying the record date or effective date, as
the case may be, and, if determinable, the required adjustment and computation
thereof. If the required adjustment is not determinable as the time of such
notice, the Company shall give notice to each Warrant Holder of such adjustment
and computation as soon as reasonably practicable after such adjustment becomes
determinable.
(f) REGISTRATION OF WARRANT SHARES.
Subject to Section 3(b) hereof, neither the Warrant nor the
Warrant Shares have been registered with the Commission under the Securities Act
or qualified for sale pursuant to any state blue sky law, and neither may be
sold or transferred without such registration or qualification, except pursuant
to an exemption therefrom. No rights shall be hereby granted which are in
violation of applicable securities laws or regulations.
(g) TRANSFER OF WARRANT.
This Warrant is transferable; PROVIDED that no transfer shall
be made that (a) transfers Warrants exercisable into fewer than 10,000 Warrant
Shares, (b) does not comply with all applicable federal and state securities
laws or (c) would require registration or qualification of the Warrant pursuant
to the Securities Act or any applicable state blue sky law; and PROVIDED FURTHER
that the Warrant Holder upon transfer of the Warrant must deliver to the Company
a duly executed Warrant Assignment in the form of Annex B hereto, with funds
sufficient to pay any transfer tax imposed in connection with such assignment
(if any) and upon surrender of this Warrant Certificate to the Company. The
Company shall execute and deliver a new Warrant Certificate or Certificates in
the form of this Warrant Certificate with appropriate changes to reflect such
Assignment, in the name or names of the assignee or assignees specified in the
fully executed Warrant Assignment or other instrument of assignment and, if the
Warrant Holder's entire interest is not being transferred or assigned, in the
name of the Warrant Holder, and this Warrant Certificate shall promptly be
cancelled. Any transfer or exchange of this Warrant Certificate shall be without
charge to the Warrant Holder (except as provided above with respect to transfer
taxes, if any) and any new Warrant Certificate or Certificates issued shall be
dated the date hereof. The terms "Warrant" and "Warrant Holder" as used herein
include all Warrants into which this Warrant (or any successor Warrant) may be
exchanged or issued in connection with the transfer or assignment of this
Warrant any successor Warrant and the holders of those Warrants, respectively.
(h) REGISTRATION OF COMMON STOCK; RULE 144.
The Company hereby agrees that, in accordance with the
provisions of the Settlement Agreement, it will file any reports required to be
filed by it under the Securities Act,
the Exchange Act or the rules and regulations adopted by the Commission
thereunder and that it will use all reasonable efforts to cooperate with each
Warrant Holder and each holder of Warrant Shares in supplying such information
concerning the Company as may be necessary for such Warrant Holder or holder to
complete and file any information reporting forms currently or hereafter
required by the Commission as a condition to the availability of an exemption
from the Securities Act for the sale of any Warrants or Warrant Shares. The
Company also agrees that it will take such further action, and supply such
information (including the information specified by Rule 144A(d)(4) under the
Securities Act) as any Warrant Holder may reasonably request to the extent
required from time to time to enable the Warrant Holder to sell Warrant Shares
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144 or 144A under the Securities Act, as such Rules
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission. Upon the request of the Warrant Holder, the Company
will deliver to the Warrant Holder a written statement that it has complied with
such reporting requirements.
Any other provision of this Warrant notwithstanding, the
Company shall not be obligated under any circumstances to cause this Warrant to
be listed or quoted on NASDAQ National Market System, any national securities
exchange or any other trading system or market, or to be registered under the
Securities Act.
(i) LOST, MUTILATED OR MISSING WARRANT CERTIFICATES.
Upon receipt by the Company of evidence satisfactory to it of
the loss, theft, destruction or mutilation of any Warrant Certificate, and, in
the case of loss, theft or destruction, upon receipt of indemnification
satisfactory to the Company, or, in the case of mutilation, upon surrender and
cancellation of the mutilated Warrant Certificate, the Company shall execute and
deliver a new Warrant Certificate of like tenor and representing the right to
purchase the same aggregate number of Warrant Shares. The recipient of any such
Warrant Certificate shall reimburse the Company for all reasonable expenses
incidental to the replacement of such lost, mutilated or missing Warrant
Certificate.
(j) SUCCESSORS AND ASSIGNS.
All the provisions of this Warrant by or for the benefit of
the Company or the Warrant Holder shall bind and inure to the benefit of their
respective successors and assigns.
(k) NOTICES.
Any notice or other communication hereunder shall be in
writing and shall be sufficient if sent by first-class mail or courier, postage
prepaid, and addressed as follows: (a) if to the Company, e4L, Inc., c/o e4L
Television, 00000 Xxxxxxx Xxxx., Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000 Attention:
Xxxx X. Xxxxx, Vive Chairman and Chief Operating Officer; (b) if to the Warrant
Holder, Xxxxxx Brothers Inc., 0 Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq. and Xxxxxx Xxxxxxx; and (c) if to any party,
addressed to such address as such party may hereafter specify to the Company, in
the case of any communication to be provided by the Company, or to each Warrant
Holder, in the case of any communication to be provided by the Warrant Holder,
for the purpose of notice hereunder.
(l) WAIVERS; AMENDMENTS.
Any provision of this Warrant may be amended, modified or
waived with (but only with) the written consent of the Company and the holder or
holders of Warrants representing at least 51% of the shares of Common Stock
issuable upon exercise of all outstanding Warrants;
PROVIDED that no such amendment, modification or waiver shall, without the
written consent of the Company and each Warrant Holder, (a) change the number of
Warrant Shares issuable upon exercise of the Warrants or the Exercise Price or
(b) amend, modify or waive the provisions of this Section 12. Any amendment,
modification or waiver effected in compliance with this Section 12 shall be
binding upon the Company and each Warrant Holder. The Company shall give notice
as soon as reasonably practicable to each Warrant Holder of any amendment,
modification or waiver effected in compliance with this Section 12. No failure
or delay of the Company or any Warrant Holder in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereon or the exercise of any other right or power. No notice or demand on the
Company in any case shall entitle the Company to any other or future notice or
demand in similar or other circumstances. The rights and remedies of the Company
and each Warrant Holder hereunder are cumulative and not exclusive of any rights
or remedies which it would otherwise have.
(m) MISCELLANEOUS.
(1) The Warrant shall not entitle the Warrant Holder, prior to
the exercise of the Warrant, to any rights as a shareholder of the Company.
(2) The Company shall pay all reasonable expenses of the
Warrant Holder, including reasonable fees and disbursements of counsel, in
connection with the preparation of the Warrant, any waiver or consent hereunder
or any amendment or modification hereof.
(3) In case any one or more of the provisions contained in
this Warrant shall be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby. The parties shall
endeavor in good faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
(4) Without limiting the rights of the Company and the Warrant
Holder to pursue all other legal and equitable rights available to such party
for the other parties' failure to perform its obligations hereunder, the Company
and the Warrant Holder each hereto acknowledge and agree that the remedy at law
for any failure to perform any obligations hereunder would be inadequate and
that each shall be entitled to specific performance, injunctive relief or other
equitable remedies in the event of any such failure.
(5) THIS WARRANT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO PRINCIPLES OF CONFLICTS
OF LAW, EXCEPT AS OTHERWISE REQUIRED BY MANDATORY PROVISIONS OF LAW.
(6) Any legal suit, action or proceeding arising out of or
relating to this Warrant will be instituted exclusively in the Delaware Court of
Chancery, County of New Castle, Delaware, or in the United States District
Court, District of Delaware, Wilmington, Delaware, all parties waive any
objection which they may have now or hereafter based upon FORUM NON CONVENIENS
or to the venue of any such suit, action or proceeding, and (c) irrevocably
consents to the jurisdiction of the Delaware State Court of Chancery, County of
New Castle and the United States District Court for the District of Delaware in
any such suit, action or proceeding. The parties further agrees to accept and
acknowledge service of any and all process which may be served in any such suit,
action or proceeding in the Delaware State Court of Chancery, County
of New Castle or in the United States District Court for the District of
Delaware and agrees that service of process upon such party, mailed by certified
mail to the such party's address, will be deemed in every respect effective
service of process upon such party, in any suit, action or proceeding. FURTHER,
BOTH THE COMPANY AND THE WARRANT HOLDER HEREBY WAIVE TRIAL BY JURY IN ANY ACTION
TO ENFORCE THIS WARRANT.
(7) The section headings used herein are for convenience of
reference only and shall not be construed in any way to affect the
interpretation of any provisions of the Warrant.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed its authorized officer, and its corporate seal to be hereunto affixed,
all as of the day and year first above written.
e4L, INC.
By: /s/ Xxxx X. Xxxxx
-------------------------------------
Xxxx X. Xxxxx
Vice Chairman, Chief Operating Officer
ANNEX A
Form of Notice of Exercise
----------------------
To: e4L, Inc.
Reference is made to the Common Stock Purchase Warrant dated May __,
1999. Terms defined therein are used herein as therein defined.
The undersigned, pursuant to the provisions set forth in the Warrant,
hereby irrevocably elects and agrees to purchase _______ shares of Common Stock,
and makes payment herewith in full therefor at the Exercise Price of
$_______ in the following form:
________________________________________.
[If said number of shares is less than all of the shares purchasable hereunder,
the undersigned hereby requests that a new Warrant Certificate representing the
remaining balance of the shares be registered in the name of ___________________
, whose address is
-----------------------
-----------------------
-----------------------]
The undersigned hereby represents that it is exercising the Warrant for
its own account for investment purposes and not with the view to any sale or
distribution and that the Warrant Holder will not offer, sell or otherwise
dispose of the Warrant or any underlying Warrant Shares in violation of
applicable securities laws.
XXXXXX BROTHERS INC.
By:
------------------------------------------
Name:
Title:
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
ANNEX B
FORM OF WARRANT ASSIGNMENT
Reference is made to the Common Stock Purchase Warrant, dated May __,
1999, issued by National Media Corporation. Terms defined therein are used
herein as therein defined.
FOR VALUE RECEIVED___________________ (the "Assignor") hereby sells,
assigns and transfers all of the rights of the Assignor as set forth in the
Common Stock Purchase Warrant dated May ___, 1999, with respect to the number of
Warrant Shares covered thereby as set forth below, to the Assignee(s) as set
forth below:
Name(s) of Number of
Assignee(s) Address(es) Warrant Shares
----------- ----------- --------------
--------------- -------------------- --------------------
--------------- -------------------- --------------------
All notices to be given by the Company to the Assignor as Warrant
Holder shall be sent to the Assignee(s) at the above listed address(es), and, if
the number of shares being hereby assigned is less than all of the shares
covered by the Warrant held by the Assignor, then also to the Assignor.
In accordance with Section 7 of the Warrant Certificate, the Assignor
requests that the Company execute and deliver a new Warrant Certificate or
Warrant Certificates in the name or names of the assignee or assignees, as is
appropriate, or, if the number of shares being hereby assigned is less than all
of the shares covered by the Warrant held by the Assignor, new Warrant
Certificates in the name or names of the assignee or the assignees, as is
appropriate, and in the name of the Assignor.
The undersigned represents that the Assignee has represented to the
Assignor that the Assignee is acquiring the Warrant for its own account or the
account of an Affiliate for investment purposes and not with the view to any
sale or distribution, and that the Assignee will not offer, sell or otherwise
dispose of the Warrant or the Warrant Shares except under circumstances as will
not result in a violation of applicable securities laws.
Dated:
----------------------
XXXXXX BROTHERS INC.
By:
---------------------------------------
Name:
Title:
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
