EXHIBIT 10.11
WARRANT
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
(THE "ACT") OR UNDER ANY STATE SECURITIES LAW, HAS BEEN ACQUIRED FOR INVESTMENT
AND MAY NOT BE SOLD, TRANSFERRRED, PLEDGED, HYPOTHECATED OR ASSIGNED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT THERETO UNDER THE
ACT AND ANY APPLICABLE STATE SECURITIES LAW, OR THE COMPANY RECEIVES AN OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED.
News Communications, Inc. (the "Company") hereby grants to X.X. Xxxxx
Investment Banking Corp. (the "Holder") the right, privilege, and option to
purchase up to 150,000 shares of its common stock, par value $.01 per share
("Common Stock"), at the purchase price of $1.00 per share, subject to
adjustment as hereinafter provided (the "Warrant Price") in the manner and
subject to the conditions hereinafter provided.
1. Time of Exercise of Warrant. This Warrant may be exercised at any
time or from time to time beginning on June 4, 2001 through 5:00 p.m., Eastern
Time, on June 4, 2006. The Company in its sole discretion may extend the
duration of the period in which this Warrant may be exercised.
2. Method of Exercise. This Warrant shall be exercised in whole at any
time or in part from time to time, by delivery of this Warrant with the Purchase
Form attached hereto duly completed and executed to the Company at its principal
executive offices accompanied by a certified or cashier's check payable to the
order of the Company in payment of the Warrant Price, for the number of whole
shares specified, together with appropriate endorsements or transfer documents,
if any, and a check for payment of any applicable transfer or similar tax, if
required. Upon clearance of the check, the Company shall make immediate delivery
of a stock certificate evidencing the number of whole shares to which the Holder
may be entitled. The Company shall not be required to make any cash or other
adjustment in respect of any fraction of a share to which the holder would
otherwise be entitled. The Holder, by acceptance of this Warrant, expressly
waives any right to receive a certificate for any fraction of a share or cash
payment upon the exercise of this Warrant. In case of the purchase of less than
all the shares purchasable under this Warrant, the Company shall cancel this
Warrant upon surrender hereof and shall execute and deliver a new Warrant of
like tenor and date for the balance of the shares purchasable hereunder. The
Company agrees at all times to reserve or hold available a sufficient number of
shares of Common Stock to cover the number of shares issuable upon the exercise
of this and all other Warrants of like tenor then outstanding. All shares of
Common stock issued hereunder and in conformity herewith upon payment of the
Warrant Price shall be validly issued, fully paid and non-assessable.
3. Anti-Dilution Provisions. If and to the extent that the number of
issued shares of Common Stock of the Company shall be increased or reduced by
change in par value, split up, stock split, reclassification, distribution of a
dividend payable in stock, or the like, the number of shares subject to this
Warrant and the Warrant Price shall be proportionately adjusted so that the
Holder, upon exercise hereof shall be entitled to receive the number of shares
of Common Stock which the Holder would have owned immediately following such
action had this Warrant been exercised immediately prior thereto.
In case of any reorganization or any consolidation or merger to which
the Company is a party other than a merger or consolidation in which the Company
is the continuing corporation, or in case of any sale or conveyance to another
entity of the property of the Company as an entirety or substantially as an
entirety, or in the case of any statutory exchange of securities with another
corporation (including any exchange effected in connection with a merger of a
third corporation into the Company) (any such reorganization, reclassification,
consolidation, merger, statutory exchange, sale or conveyance, a "Restructuring
Event"), this Warrant shall terminate upon the effective time of such
Restructuring Event unless provision is made in connection with the transaction
in the sole discretion of the parties thereto for the continuation or assumption
of this Warrant, or the substitution of this Warrant with new warrants of the
surviving or successor entity or a parent thereof. In the event of such
termination, the holder of this Warrant will be permitted for a period of at
least 20 days prior to the effective time of the Restructuring Event, to
exercise this Warrant, in whole or in part; provided, however, that any such
exercise of this Warrant shall be deemed to have occurred immediately prior to
the effective time of such Restructuring Event. If so exercised, the Holder of
this Warrant shall have the right thereafter to receive the kind and amount of
securities, cash or other property which he would have owned or have been
entitled to receive immediately after such Restructuring Event had this Warrant
been exercised immediately prior to the effective date of such Restructuring
Event. The issuer of any shares of stock or other securities or property
thereafter deliverable on the exercise of this Warrant shall be responsible for
all of the agreements and obligations of the Company hereunder.
In case the Company shall sell any shares of Common Stock for a
consideration per share less than then-current Warrant Price, the Warrant Price
in effect immediately prior to such sale shall be changed to a price (including
any applicable fraction of a cent) determined by multiplying the Warrant 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 for the issuance of such
additional shares would purchase at the Warrant Price in effect immediately
prior to such sale and the denominator of which shall be the number of shares of
Common Stock outstanding immediately after the issuance of such additional
shares; provided, however, that no such adjustment shall be made upon (i) the
exercise of any options, warrants or other rights to acquire Common Stock
outstanding on the date of issuance of this Warrant or (ii) the exercise of any
options, warrants or other rights to acquire Common stock granted pursuant to
any employee benefit plan of the Company, whether such plan is in effect on the
date of issuance of this Warrant or thereafter adopted or (iii) the issuance of
any equity securities contemplated by that certain Letter Agreement dated May 8,
2001 and consummated on the date hereof by and among the Holder, Xxxxx
Xxxxxxxxxxx, Xxxxx Xxxxxxxxxxx, The Xxxxxxxxxxx Foundation, Inc., Xxxxxxx
Xxxxxxxxxxx, Xxxxxx X. Xxxx, Xx., Xxxxxx X. Xxxxx, M&B Xxxxx Family Partnership,
X. Xxxxxx Xxxxx, Rivkalex Corporation and Xxxxxxxx Xxxxxxxxxx.
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No adjustment in the Warrant Price shall be required unless such
adjustment would require an increase or decrease of at least $0.05 per share of
Common Stock; provided, however, that any adjustments which by reason of this
paragraph are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 3
shall be made to the nearest cent or to the nearest 1/100th of a share, as the
case may be. The Company shall not issue fractional shares of Common Stock upon
exercise of this Warrant.
Upon the happening of any event requiring an adjustment of the Warrant
Price, the Company shall forthwith give written notice thereto to the Holder of
this Warrant stating the adjusted Warrant Price and the adjusted number of
shares purchasable upon the exercise hereof resulting from such event and
setting forth in reasonable detail the method of calculation and the facts upon
which such calculation is based.
4. Rights Prior to and Subsequent to Exercise of Warrant. This Warrant
does not entitle the Holder to any of the rights of a stockholder of the
Company, including, without limitation, the right to receive dividends or other
distributions, to exercise any preemptive rights, to vote, or to consent or to
receive notice as a stockholder of the Company. If, however, at any time prior
to its expiration or redemption of this Warrant and prior to its exercise, any
of the following events shall occur:
(a) the Company shall declare any dividend payable in any
securities upon its shares of Common Stock or make any distribution (other than
a regular cash dividend) to the holders of its shares of Common Stock; or
(b) the Company shall offer to the holders of its shares of
Common Stock any additional shares of Common Stock or securities convertible
into or exchangeable for shares of Common stock or any right to subscribe for or
purchase any thereof; or
(c) a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation, merger, sale, transfer or lease
of all or substantially all of its property, assets, and business as an
entirety) shall be proposed,
then in any one or more of said events the Company shall give notice in
writing of such event to the Holder at his last address as it shall appear on
the Company's records at least twenty (20) days' prior to the date fixed as a
record date or the date of closing the transfer books for the determination of
stockholders entitled to such dividends, distribution, or subscription rights,
or for the determination of stockholders entitled to vote on such proposed
dissolution, liquidation or winding up. Such notice shall specify such record
date or the date of closing the transfer books, as the case may be. Failure to
publish, mail or receive such notice or any defect therein or in the publication
or mailing thereof shall not affect the validity of any action taken in
connection with such dividend, distribution or subscription rights, or such
proposed dissolution, liquidation or winding up. Each person in whose name any
certificate for shares of Common Stock is to be issued shall for all purposes be
deemed to have become the holder of record of such shares on the date on which
this instrument was surrendered and payment of the Warrant Price was made,
irrespective of the date of delivery of such stock certificate, except that, if
the date of such surrender and payment is a date when the stock transfer books
of the Company are closed, such
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person shall be deemed to have become the holder of such shares of Common Stock
at the close of business on the next succeeding date on which the stock transfer
books are open.
5. Condition of Exercise of Warrant. In order to enable the Company to
comply with the Securities Act of 1933, as amended (the "Securities Act"), and
relevant state law, the Company may require the Holder as a condition of the
exercising of this Warrant, to give written assurance satisfactory to the
Company that the shares subject to this Warrant are being acquired for his own
account, for investment only, with no view to the distribution of same, and that
any subsequent resale of any such shares either shall be made pursuant to a
registration statement under the Securities Act which has become effective and
is current with regard to the shares being sold, or shall be pursuant to an
exemption from registration under the Securities Act. If the shares of Common
Stock purchased pursuant to the exercise of this Warrant are not subject to an
effective registration statement under the Securities Act, the certificate(s)
evidencing shares of Common Stock purchased upon exercise of this Warrant shall
bear the following restrictive legend or a similar legend to the same effect:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR UNDER ANY STATE
SECURITIES LAW, HAS BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR ASSIGNED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT WITH RESPECT THERETO UNDER THE ACT AND
ANY APPLICABLE STATE SECURITIES LAW, OR THE COMPANY RECEIVES AN OPINION
OF COUNSEL, SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT
REQUIRED.
6. Loss, etc. of Warrant. Upon receipt of evidence satisfactory to the
Company, of the loss, theft, destruction or mutilation of this Warrant, and of
indemnity reasonably satisfactory to the Company, if lost, stolen, or destroyed,
and upon reimbursement to the Company of all reasonable expenses incidental
thereto, and upon surrender and cancellation of this Warrant, if mutilated, the
Company shall execute, and deliver to the Holder a new Warrant of like date,
tenor and denomination.
7. Governing Law. This Warrant and any dispute, disagreement, or issue
of construction or interpretation arising hereunder whether relating to its
execution, its validity, the obligations provided herein or performance shall be
governed or interpreted according to the law of the State of New York.
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IN WITNESS WHEREOF, News Communications, Inc. has caused this Warrant
to be executed on the 4th day of June, 2001.
NEWS COMMUNICATIONS, INC.
By: /s/ Xxxxx Xxxxxxxxxxx
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Xxxxx Xxxxxxxxxxx
Chairman
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PURCHASE
The undersigned ____________________, pursuant to the provisions of the
foregoing Warrant, hereby agrees to subscribe for and purchase
____________________ shares of the Common Stock of NEWS COMMUNICATIONS, INC.
covered by said Warrant, and makes payment therefor in full at the price per
share provided by said Warrant.
The undersigned represents that the exercise of the foregoing warrant
was solicited by ______________________. If not solicited by ___________, please
write "unsolicited" in the space below. Unless otherwise indicated, it will be
assumed that the exercise was solicited by ____________________.
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(Write "unsolicited" on above line if not solicited
by )
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Dated: Signature:
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Address:
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FULL ASSIGNMENT
FOR VALUE RECEIVED ____________________ hereby sells, assigns and
transfers unto ___________________ the foregoing Warrant and all rights
evidenced thereby, and does irrevocably constitute and appoint
_________________, attorney, to transfer said Warrant on the books of NEWS
COMMUNICATIONS, INC.
Dated: Signature:
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Address:
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PARTIAL ASSIGNMENT
FOR VALUE RECEIVED __________________ hereby assigns and transfers unto
________________________ the right to purchases ____________________ shares of
Common Stock of NEWS COMMUNICATIONS, INC. by the foregoing Warrant, and a
proportionate part of said Warrant and the rights evidenced hereby, and does
irrevocably constitute and appoint ________________________, attorney to
transfer that part of said Warrant on the books of NEWS COMMUNICATIONS, INC.
Dated: Signature:
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Address:
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