EXECUTION COPY
WARRANT AGREEMENT
Dated as of September 29, 1999
by and between
XXXXXXXXXXXXXXXXXX.XXX INC.
and
BELO ENTERPRISES, INC.
THIS WARRANT AGREEMENT (this "AGREEMENT") is made and entered into as
of September 29, 1999 by and between XXXXXXXXXXXXXXXXXX.XXX INC., a Delaware
corporation (the "COMPANY"), BELO ENTERPRISES, INC., a Delaware corporation
("BELO") and the Holders of the Warrants from time to time.
WHEREAS, the Company agrees to issue Common Stock warrants as
hereinafter described (the "WARRANTS") to purchase shares of Common Stock (as
defined below), in such number and at such price determined in accordance with
this Agreement. Each Warrant entitles the holder thereof to purchase one share
of Common Stock.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, and for the purpose of defining the respective
rights and obligations of the Company and Belo, the parties hereto agree as
follows:
Section 1. CERTAIN DEFINITIONS. As used in this Agreement, the
following terms shall have the following respective meanings:
"COMMISSION" means the Securities and Exchange Commission.
"COMMON EQUITY SECURITIES" means Common Stock and securities
convertible into, or exercisable or exchangeable for, Common Stock or rights or
options to acquire Common Stock or such other securities, excluding the
Warrants.
"COMMON STOCK" means the common stock, par value $.01 per share, of the
Company, and any other capital stock of the Company into which such common stock
may be converted or reclassified or that may be issued in respect of, in
exchange for, or in substitution for, such common stock by reason of any stock
splits, stock dividends, distributions, mergers, consolidations or other like
events.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
or any successor statute, and the rules and regulations promulgated thereunder.
"EXERCISE PRICE" means the purchase price per share of Common Stock to
be paid upon the exercise of each Warrant in accordance with the terms hereof,
which price shall initially be $3,150.00 per share, subject to adjustment from
time to time pursuant to SECTION 11 hereof.
"EXPIRATION DATE" means September 29, 2004, as the same may be extended
pursuant to SECTION 6 hereof.
"HOLDER" or "WARRANT HOLDER" means a Person who is the owner as shown
on the Warrant register maintained by the Company.
"ISSUE DATE" means the date of the initial issuance of the Warrants,
which shall be the date of this Agreement.
"REGISTRABLE SECURITIES" means any of (i) the Warrant Shares and (ii)
any other securities issued or issuable with respect to any Warrant Shares by
way of stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization or
otherwise, unless, in each case, such Warrant Shares and securities, if any,
have been offered and sold to the Holders pursuant to an effective Registration
Statement under the Securities Act declared effective prior to the date of
exercisability of the Warrants or the date such Warrant Shares and securities,
if any, may be sold to the public pursuant to Rule 144 without any restriction
on the amount of securities which may be sold by such Holders or the
satisfaction of any condition. As to any particular Registrable Securities held
by a Holder, such securities shall cease to be Registrable Securities when (i) a
Registration Statement with respect to the exercise or offering of such
securities by the Holder thereof shall have been declared effective under the
Securities Act and such securities shall have been exercised and/or disposed of
by such Holder pursuant to such Registration Statement, (ii) such securities may
at the time of determination be sold to the public pursuant to Rule 144 without
any restriction on the amount of securities which may be sold by such Holder (or
any similar provision then in force, but not Rule 144A) without the lapse of any
further time or the satisfaction of any condition, (iii) such securities shall
have been otherwise transferred by such Holder and new certificates for such
securities not bearing a legend restricting further transfer shall have been
delivered by the Company or its transfer agent and subsequent disposition of
such securities shall not require registration or qualification under the
Securities Act or any similar state law then in force or (iv) such securities
shall have ceased to be outstanding.
"REGISTRATION RIGHTS AGREEMENT" means the registration rights
agreement, dated as of the date hereof by and between the Company, Belo, Young &
Rubicam Inc., and certain investors and initial investors, under which
registration rights agreement the Warrant Shares constitute registrable
securities.
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"RULE 144" shall mean Rule 144 promulgated under the Securities Act, as
such Rule may be amended from time to time, or any similar rule (other than Rule
144A) or regulation hereafter adopted by the Commission providing for offers and
sales of securities made in compliance therewith resulting in offers and sales
by subsequent holders that are not affiliates of an issuer of such securities
being free of the registration and prospectus delivery requirements of the
Securities Act.
"RULE 144A" shall mean Rule 144A promulgated under the Securities Act,
as such Rule may be amended from time to time, or any similar rule (other than
Rule 144) or regulation hereafter adopted by the Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
successor statute and the rules and regulations promulgated thereunder.
"WARRANT HOLDER" or "HOLDER" means a Person who is the owner as shown
on the Warrant register maintained by the Company.
"WARRANT SHARES" means the shares of Common Stock issued or issuable
upon the exercise of the Warrants.
Section 2. ISSUANCE OF WARRANTS; WARRANT CERTIFICATES.
(a) The Warrants will be issued in the form of definitive certificates,
substantially in the form of Exhibit A (the "WARRANT CERTIFICATES"). Each
Warrant shall provide that it shall represent the aggregate amount of
outstanding Warrants from time to time endorsed thereon and that the aggregate
amount of outstanding Warrants represented thereby may from time to time be
reduced or increased, as appropriate.
(b) The Warrants shall be initially issued on the Issue Date in the
aggregate amount of 198 shares of Common Stock, subject to adjustment as herein
provided, and shall be issued under one Warrant Certificate.
Section 3. EXECUTION OF WARRANT CERTIFICATES. Warrant Certificates
shall be signed on behalf of the Company by the Company's President or a Vice
President and by its Secretary or an Assistant Secretary under its corporate
seal. Each such signature upon the Warrant Certificates may be in the form of a
facsimile signature of the present or any future President, Vice President,
Secretary or Assistant Secretary and may be imprinted or otherwise reproduced on
the Warrant Certificates and for that purpose the Company may adopt and use the
facsimile signature of any person who shall have been President, Vice President,
Secretary or Assistant Secretary, notwithstanding the fact that at the time the
Warrant Certificates shall be countersigned and delivered or disposed of, such
person shall have ceased to hold such office. The seal of the Company may be in
the form of a facsimile thereof and may be impressed, affixed, imprinted or
otherwise reproduced on the Warrant Certificates.
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In case any officer of the Company who shall have signed any of the
Warrant Certificates shall cease to be such officer before the Warrant
Certificates so signed shall have been disposed of by the Company, such Warrant
Certificates nevertheless may be countersigned and delivered or disposed of as
though such person had not ceased to be such officer of the Company; and any
Warrant Certificate may be signed on behalf of the Company by any person who, at
the actual date of the execution of such Warrant Certificate, shall be a proper
officer of the Company to sign such Warrant Certificate, although at the date of
the execution of this Warrant Agreement any such person was not such officer.
Section 4. REGISTRATION. The Company shall number and register the
Warrant Certificates in a register as they are issued by the Company.
The Company may deem and treat the person in whose name any Warrant is
registered as the absolute owner(s) thereof, for all purposes, and the Company
shall not be affected by any notice to the contrary.
Section 5. REGISTRATION OF TRANSFERS AND EXCHANGES.
(a) TRANSFER AND EXCHANGE OF WARRANTS AND REGISTRABLE SECURITIES. When
Warrants or Registrable Securities are presented to the Company with a request
to register their transfer; or to exchange such Warrants for an equal number of
Warrants of other authorized denominations, the Company shall register the
transfer or make the exchange as requested if the following requirements are
met:
(i) the Warrants presented or surrendered for registration of
transfer or exchange shall be duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Company, duly
executed by the Holder thereof or by his attorney-in-fact, duly
authorized in writing; and
(ii) in the case of Registrable Securities, such request shall
be accompanied by the following additional information and documents
(all of which may be submitted by facsimile), as applicable:
(A) if such Registrable Security is being delivered
to the Company by a Holder for registration in the name of
such Holder, without transfer, a certification from such
Holder to that effect (in substantially the form of Exhibit B
hereto);
(B) if such Registrable Security is being transferred
(1) to a "qualified institutional buyer" (as defined in Rule
144A) in accordance with Rule 144A or (2) pursuant to an
exemption from registration in accordance with Rule 144 (and
based on an opinion of counsel if the Company so requests) or
(3) pursuant to an
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effective registration statement under the Securities Act,
a certification to that effect (in substantially the form
of Exhibit B hereto);
(C) if such Registrable Security is being transferred
pursuant to an exemption from registration in accordance with
Rule 904 under the Securities Act (and based on an opinion of
counsel if the Company so requests), a certification to that
effect (in substantially the form of Exhibit B hereto); or
(D) if such Registrable Security is being transferred
in reliance on another exemption from the registration
requirements of the Securities Act (and based on an opinion of
counsel if the Company so requests), a certification to that
effect (in substantially the form of Exhibit B hereto).
(b) LEGENDS.
(i) Except for any Registrable Security sold or transferred as
discussed in clause (ii) below, each Warrant Certificate (and all
Warrants issued in exchange therefor or substitution thereof) and each
certificate representing the Warrant Shares shall bear a legend in
substantially the following form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX
XXXXXX XXXXXX SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THE SECURITY EVIDENCED HEREBY AND THE SECURITIES DELIVERED
UPON EXERCISE THEREOF MAY NOT BE EXERCISED, OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY
AND THE SECURITIES DELIVERED UPON THE EXERCISE THEREOF IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A.
THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF
THE ISSUER THAT (A) SUCH SECURITY AND THE SECURITIES DELIVERED UPON
EXERCISE HEREOF MAY BE EXERCISED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (1)(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
(b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A PERSON THAT IS NOT A
U.S. PERSON (AS DEFINED IN RULE 902 UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES
ACT, OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION
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FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (IN THE
CASE OF (b), (c) or (d), UPON AN OPINION OF COUNSEL AND WRITTEN
CERTIFICATION IF THE ISSUER, REGISTRAR OR TRANSFER AGENT FOR THE
SECURITIES SO REQUESTS), (2) TO THE ISSUER OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL,
AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM
IT OF THE SECURITY EVIDENCED HEREBY AND THE SECURITIES DELIVERED
UPON EXERCISE HEREOF OF THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE."
(ii) Upon any sale or transfer of a Registrable Security
pursuant to an effective registration statement under the Securities
Act, pursuant to Rule 144(A) or pursuant to an opinion of counsel
reasonably satisfactory to the Company that no legend is required, the
Holder thereof shall be permitted to exchange such Registrable Security
for a Warrant that does not bear the legend set forth in clause (i)
above and rescind any restriction on the transfer of such Registrable
Security.
(c) OBLIGATIONS WITH RESPECT TO TRANSFERS AND EXCHANGES OF
WARRANTS.
(i) To permit registrations of transfers and exchanges, the
Company shall execute in accordance with the provisions of SECTION 4
and this SECTION 5, Warrants as required pursuant to the provisions of
this SECTION 5. Notwithstanding anything to the contrary contained
herein, the Company shall refuse to register any transfer of the
Warrants not made in accordance with Regulation S, pursuant to
registration under the Securities Act or pursuant to an available
exemption from the registration requirements of the Securities Act;
provided, however, that if a foreign law prevents the Company from
refusing to register securities transfers, the Company shall implement
other reasonable measures designed to prevent transfers of the Warrants
not made in accordance with Regulation S, pursuant to registration
under the Securities Act or pursuant to an available exemption from the
registration requirements of the Securities Act.
(ii) All Warrants issued upon any registration of transfer or
exchange of Warrants shall be the valid obligations of the Company,
entitled to the same benefits under this Warrant Agreement, as the
Warrants surrendered upon such registration of transfer or exchange.
(iii) Prior to due presentment for registration of transfer of
any Warrant, the Company may deem and treat the person in whose name
any Warrant is registered as the absolute owner of such Warrant and the
Company shall not be affected by notice to the contrary.
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(iv) No service charge shall be made to a Holder for any
registration of transfer or exchange.
Section 6. TERMS OF WARRANTS; EXERCISE OF WARRANTS. Subject to the
terms of this Agreement, each Warrant Holder shall have the right, which may be
exercised at any time and from time to time, in whole or in part, commencing on
the date hereof and ending at 4:00 p.m., Dallas, Texas, time, on the Expiration
Date, to receive from the Company the number of fully paid and nonassessable
Warrant Shares which the Holder may at the time be entitled to receive on
exercise of such Warrants and payment of the Exercise Price then in effect for
such Warrant Shares; provided, however, that no Warrant Holder shall be entitled
to exercise such Holder's Warrants at any time, unless, at the time of exercise,
(i) a registration statement under the Securities Act relating to the Warrant
Shares has been filed with, and declared effective by, the Commission, and no
stop order suspending the effectiveness of such registration statement has been
issued by the Commission or (ii) the issuance of the Warrant Shares is permitted
pursuant to an exemption from the registration requirements of the Securities
Act. Subject to the provisions of the following paragraph of this SECTION 6,
each Warrant not exercised prior to 4:00 p.m., Dallas, Texas, time, on the
Expiration Date shall become void and all rights thereunder and all rights in
respect thereof under this Agreement shall cease as of such time. No adjustments
as to dividends will be made upon exercise of the Warrants.
A Warrant may be exercised upon surrender to the Company of the
certificate or certificates evidencing the Warrant to be exercised with the form
of election to purchase on the reverse thereof properly completed and signed,
which signature shall be guaranteed by a bank or trust company having an office
or correspondent in the United States or a broker or dealer which is a member of
a registered securities exchange or the National Association of Securities
Dealers, Inc., and upon payment to the Company of the Exercise Price as adjusted
as herein provided, for each of the Warrant Shares in respect of which such
Warrants are then exercised. Payment of the aggregate Exercise Price shall be
made in cash or by certified or official bank check, payable to the order of the
Company. In the alternative, each Holder may exercise its right to receive
Warrant Shares (i) on a net basis, such that without the exchange of any funds,
the Holder receives that number of Warrant Shares otherwise issuable upon
exercise of its Warrants less that number of Warrant Shares having a fair market
value equal to the aggregate Exercise Price that would otherwise have been paid
by the Holder for the Warrant Shares being issued, (ii) by any Holder to whom
the Company is indebted, by tendering indebtedness having an aggregate principal
amount, plus accrued but unpaid interest, if any, thereon, to the date of
exercise equal to the aggregate Exercise Price that would otherwise have been
paid by the Holder for the Warrant Shares being issued, or (iii) by a
combination of the procedures in clauses (i) and (ii). For purposes of the
foregoing sentence, "fair market value" of the Warrant Shares shall be as
determined by the Board of Directors of the Company in good faith and evidenced
by a resolution thereof. The Company shall notify the Holders in writing of any
such determination of fair market value.
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Subject to the provisions of SECTION 7 hereof, upon surrender of
Warrants and payment of the Exercise Price as provided above, the Company
shall promptly transfer to the Holder of such Warrant a certificate or
certificates for the appropriate number of Warrant Shares or other securities
or property (including any money) to which the Holder is entitled, registered
or otherwise placed in, or payable to the order of, such name or names as may
be directed in writing by the Holder, and shall deliver such certificate or
certificates representing the Warrant Shares and any other securities or
property (including any money) to the Person or Persons entitled to receive
the same, together with an amount in cash in lieu of any fraction of a share
as provided in SECTION 13. Any such certificate or certificates representing
the Warrant Shares shall be deemed to have been issued and any Person so
designated to be named therein shall be deemed to have become a Holder of
record of such Warrant Shares as of the later of the date of the surrender of
such Warrants and payment of the Exercise Price.
The Warrants shall be exercisable commencing on the Issue Date, at the
election of the Holders thereof, either in full or from time to time in part
and, in the event that a certificate evidencing Warrants is exercised in respect
of fewer than all of the Warrant Shares issuable on such exercise at any time
prior to the date of expiration of the Warrants, a new certificate evidencing
the remaining Warrant or Warrants will be issued and delivered pursuant to the
provisions of this SECTION and of SECTION 3 hereof.
All Warrant Certificates surrendered upon exercise of Warrants shall be
canceled. Such canceled Warrant Certificates shall then be disposed of in
accordance with customary procedures.
Section 7. PAYMENT OF TAXES. The Company will pay all documentary stamp
taxes, if any, attributable to the issuance of the Warrant Certificates or the
initial issuance of Warrant Shares upon the exercise of Warrants; provided,
however, that the Company shall not be required to pay any tax or taxes which
may be payable in respect of any transfer involved in the issue of any
certificates for Warrant Shares in a name other than that of the Holder of a
Warrant Certificate surrendered upon the exercise of a Warrant.
Section 8. MUTILATED OR MISSING WARRANT CERTIFICATES. In case any of
the Warrant Certificates shall be mutilated, lost, stolen or destroyed, the
Company may in its discretion issue in exchange and substitution for and upon
cancellation of the mutilated Warrant Certificate, or in lieu of and
substitution for the Warrant Certificate lost, stolen or destroyed, a new
Warrant Certificate of like tenor and representing an equivalent number of
Warrants, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction of such Warrant Certificate and, if
requested, indemnity reasonably satisfactory to them. Applicants for such
substitute Warrant Certificates shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Company may prescribe.
Section 9. RESERVATION OF WARRANT SHARES. The Company will at all times
reserve and keep available, free from any preemptive rights, out of the
aggregate of its authorized but unissued Common Stock or its authorized and
issued Common Stock held in its treasury, for the purpose
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of enabling it to satisfy any obligation to issue Warrant Shares upon
exercise of Warrants, the maximum number of shares of Common Stock which may
then be deliverable upon the exercise of all outstanding Warrants.
The transfer agent for the Common Stock (the "TRANSFER AGENT") and
every subsequent transfer agent for any shares of the Company's capital stock
issuable upon the exercise of any of the rights of purchase aforesaid will be
irrevocably authorized and directed at all times to reserve such number of
authorized shares as shall be required for such purpose. The Company will keep a
copy of this Agreement on file with the Transfer Agent and with every subsequent
transfer agent for any shares of the Company's capital stock issuable upon the
exercise of the rights of purchase represented by the Warrants. The Company will
supply such Transfer Agent with duly executed certificates for such purposes and
will provide or otherwise make available any cash which may be payable as
provided in SECTION 13. The Company will furnish such Transfer Agent a copy of
all notices of adjustments and certificates related thereto, transmitted to each
Holder of the Warrants pursuant to SECTION 14 hereof.
Before taking any action which would cause an adjustment pursuant to
SECTION 11 hereof that would reduce the Exercise Price below the then par value
(if any) of the Warrant Shares, the Company will take any corporate action which
may, in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable Warrant Shares at the
Exercise Price as so adjusted.
The Company covenants that all Warrant Shares which may be issued upon
exercise of Warrants in accordance with the terms of this Agreement (including
the payment of the Exercise Price) will, upon issue, be duly and validly issued,
fully paid, nonassessable, and free of preemptive rights and Liens.
Section 10. OBTAINING STOCK EXCHANGE LISTINGS. The Company will from
time to time take all action which may be necessary so that the Warrant Shares,
immediately upon their issuance upon the exercise of Warrants, will be listed on
the principal securities exchanges and markets (including, without limitation,
the Nasdaq National or SmallCap Markets) within the United States of America, if
any, on which other shares of Common Stock are then listed. Upon the listing of
such Warrant Shares, the Company shall notify the Holders in writing. The
Company will obtain and keep all required permits and records in connection with
such listing.
Section 11. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES
ISSUABLE. The number and kind of shares purchasable upon the exercise of
Warrants and the Exercise Price shall be subject to adjustment from time to time
(as set forth in the notices required by SECTION 14 hereof) as follows:
(a) STOCK SPLITS, COMBINATIONS, ETC. In case the Company shall
hereafter (A) pay a dividend or make a distribution on its Common Stock in
shares of its capital stock (whether shares of Common Stock or of capital stock
of any other class), (B) subdivide its outstanding shares of
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Common Stock, (C) combine its outstanding shares of Common Stock into a
smaller number of shares, or (D) issue by reclassification of its shares of
Common Stock any shares of capital stock of the Company, the Exercise Price
in effect and the number of Warrant Shares issuable upon exercise of each
Warrant immediately prior to such action shall be adjusted so that the Holder
of any Warrant thereafter exercised shall be entitled to receive the number
of shares of capital stock of the Company which such Holder would have owned
immediately following such action had such Warrant been exercised immediately
prior thereto. Any adjustment made pursuant to this paragraph shall become
effective immediately after the record date in the case of a dividend and
shall become effective immediately after the effective date in the case of a
subdivision, combination or reclassification. If, as a result of an
adjustment made pursuant to this paragraph, the Holder of any Warrant
thereafter exercised shall become entitled to receive shares of two or more
classes of capital stock of the Company, the Board of Directors of the
Company (whose determination shall be conclusive and evidenced by a Board
resolution) shall determine the allocation of the adjusted Exercise Price
between or among shares of such classes of capital stock.
(b) RECLASSIFICATION, COMBINATIONS, MERGERS, ETC. In case of any
reclassification or change of outstanding shares of Common Stock issuable upon
exercise of the Warrants (other than as set forth in PARAGRAPH (a) above and
other than a change in par value, or from par value to no par value, or from no
par value to par value or as a result of a subdivision or combination), or in
case of any consolidation or merger of the Company with or into another
corporation (other than a merger in which the Company is the continuing
corporation and which does not result in any reclassification or change of the
then outstanding shares of Common Stock or other capital stock issuable upon
exercise of the Warrants) or in case of any sale or conveyance to another
corporation of all or substantially all of the assets of the Company, then, as a
condition of such reclassification, change, consolidation, merger, sale or
conveyance, the Company or such a successor or purchasing corporation, as the
case may be, shall forthwith make lawful and adequate provision whereby the
Holder of each Warrant then outstanding shall have the right thereafter to
receive on exercise of such Warrant the kind and amount of shares of stock and
other securities and property receivable upon such reclassification, change,
consolidation, merger, sale or conveyance by a Holder of the number of shares of
Common Stock issuable upon exercise of such Warrant immediately prior to such
reclassification, change, consolidation, merger, sale or conveyance and enter
into a supplemental warrant agreement so providing. Such provisions shall
include provision for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this SECTION 11. If the issuer of
securities deliverable upon exercise of Warrants under the supplemental warrant
agreement is an affiliate of the formed, surviving or transferee corporation,
that issuer shall join in the supplemental warrant agreement. The above
provisions of this PARAGRAPH (b) shall similarly apply to successive
reclassifications and changes of shares of Common Stock and to successive
consolidations, mergers, sales or conveyances.
(c) ISSUANCE OF ADDITIONAL SHARES OF COMMON STOCK. In the event the
Company shall, at any time or from time to time after the date hereof, issue,
sell, distribute or otherwise grant in any manner (including by assumption) any
additional shares of Common Stock (other than shares pursuant to the
Corporation's Stock Option Plan in any amount less than twelve percent (12%)
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of the fully diluted capital stock of the Company) without consideration or
for a price per share less than the current market price per share of Common
Stock on the date of the issuance, sale, distribution or granting of such
additional shares, then, effective upon such issuance or sale, (I) the
Exercise Price shall be reduced to the price (calculated to the nearest
1/1,000 of one cent) determined by multiplying the Exercise Price in effect
immediately prior to such issuance or sale by a fraction, the numerator of
which shall be the sum of (i) the number of shares of Common Stock
outstanding (exclusive of any treasury shares) immediately prior to such
issuance or sale multiplied by the current market price per share of Common
Stock on the date of such issuance or sale plus (ii) the consideration, if
any, received by the Company in respect of such issuance or sale, and the
denominator of which shall be the product of (A) the total number of shares
of Common Stock outstanding (exclusive of any treasury shares) immediately
after such issuance or sale multiplied by (B) the current market price per
share of Common Stock on the record date for such issuance or sale and (II)
the number of shares of Common Stock purchasable upon the exercise of each
Warrant shall be increased to a number determined by multiplying the number
of shares of Common Stock so purchasable immediately prior to the record date
for such issuance or sale by a fraction, the numerator of which shall be the
Exercise Price in effect immediately prior to the adjustment required by
clause (I) of this sentence and the denominator of which shall be the
Exercise Price in effect immediately after such adjustment.
(d) ISSUANCE OF OPTIONS OR CONVERTIBLE SECURITIES. In the event the
Company shall, at any time or from time to time after the date hereof, 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 (other than shares pursuant to the Corporation's Stock
Option Plan in any amount less than twelve percent (12%) of the fully diluted
capital stock of the Company) or any stock or securities convertible into or
exchangeable for Common Stock (any such rights, warrants or options being herein
called "OPTIONS" and any such convertible or exchangeable stock or securities
being herein called "CONVERTIBLE SECURITIES") or any Convertible Securities
(other than upon exercise of any Option), whether or not such Options or the
rights to convert or exchange such Convertible Securities are immediately
exercisable, and if the price per share at which Common Stock is issuable upon
the exercise of such Options or upon the conversion or exchange of such
Convertible Securities (determined by dividing (i) the aggregate amount, if any,
received or receivable by the Company as consideration for the issuance, sale,
distribution or granting of such Options or any such Convertible Security, plus
the minimum aggregate amount of additional consideration, if any, payable to the
Company upon the exercise of all such Options or upon conversion or exchange of
all such Convertible Securities, plus, in the case of Options to acquire
Convertible Securities, the minimum aggregate amount of additional
consideration, if any, payable upon the conversion or exchange of all such
Convertible Securities, by (ii) the total maximum number of shares of Common
Stock issuable upon the exercise of all such Options or upon the conversion or
exchange of all such Convertible Securities or upon the conversion or exchange
of all Convertible Securities issuable upon the exercise of all such Options)
shall be less than the current market price per share of Common Stock on the
date for the issuance, sale, distribution or granting of such Options or
Convertible Securities (any such event being herein called a "DISTRIBUTION"),
then, effective upon such Distribution, (I) the Exercise
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Price shall be reduced to the price (calculated to the nearest 1/1,000 of one
cent) determined by multiplying the Exercise Price in effect immediately
prior to such Distribution by a fraction, the numerator of which shall be the
sum of (i) the number of shares of Common Stock outstanding (exclusive of any
treasury shares) immediately prior to such Distribution multiplied by the
current market price per share of Common Stock on the date of such
Distribution plus (ii) the consideration, if any, received by the Company in
respect of such Distribution, and the denominator of which shall be the
product of (A) the total number of shares of Common Stock outstanding
(exclusive of any treasury shares) immediately after such Distribution
multiplied by (B) the current market price per share of Common Stock on the
record date for such Distribution and (II) the number of shares of Common
Stock purchasable upon the exercise of each Warrant shall be increased to a
number determined by multiplying the number of shares of Common Stock so
purchasable immediately prior to the record date for such Distribution by a
fraction, the numerator of which shall be the Exercise Price in effect
immediately prior to the adjustment required by clause (I) of this sentence
and the denominator of which shall be the Exercise Price in effect
immediately after such adjustment. For purposes of the foregoing, the total
maximum number of shares of Common Stock issuable upon exercise of all such
Options or upon conversion or exchange of all such Convertible Securities or
upon the conversion or exchange of the total maximum amount of the
Convertible Securities issuable upon the exercise of all such Options shall
be deemed to have been issued as of the date of such Distribution and
thereafter shall be deemed to be outstanding and the Company shall be deemed
to have received as consideration therefor such price per share, determined
as provided above. Except as provided in PARAGRAPHS (j) AND (k) below, no
additional adjustment of the Exercise Price shall be made upon the actual
exercise of such Options or upon conversion or exchange of the Convertible
Securities or upon the conversion or exchange of the Convertible Securities
issuable upon the exercise of such Options.
(e) DIVIDENDS AND DISTRIBUTIONS. In the event the Company shall, at any
time or from time to time after the date hereof, distribute to all the holders
of Common Stock any dividend or other distribution of cash, evidences of its
indebtedness, other securities or other properties or assets (in each case other
than (i) dividends payable in Common Stock, Options or Convertible Securities
and (ii) any cash dividend that, when added to all other cash dividends paid
with respect to Common Stock in the one year prior to the declaration date of
such dividend (excluding any such other dividend included in a previous
adjustment of the Exercise Price pursuant to this PARAGRAPH (e) and excluding
any cash dividends or other cash distributions from current or retained
earnings), does not exceed 5% of the current market price per share of Common
Stock on such declaration date), or any options, warrants or other rights to
subscribe for or purchase any of the foregoing, then (A) the Exercise Price
shall be decreased to a price determined by multiplying the Exercise Price then
in effect by a fraction, the numerator of which shall be the current market
price per share of Common Stock on the record date for such distribution less
the sum of (X) the cash portion, if any, of such distribution per share of
Common Stock outstanding (exclusive of any treasury shares) on the record date
for such distribution plus (Y) the then fair market value (as determined in good
faith by the Board of Directors of the Company) per share of Common Stock
outstanding (exclusive of any treasury shares) on the record date for such
distribution of that portion, if any, of such distribution consisting of
evidences of indebtedness,
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other securities, properties, assets, options, warrants or subscription or
purchase rights, and the denominator of which shall be such current market
price per share of Common Stock and (B) the number of shares of Common Stock
purchasable upon the exercise of each Warrant shall be increased to a number
determined by multiplying the number of shares of Common Stock so purchasable
immediately prior to the record date for such distribution by a fraction, the
numerator of which shall be the Exercise Price in effect immediately prior to
the adjustment required by clause (A) of this sentence and the denominator of
which shall be the Exercise Price in effect immediately after such
adjustment. The adjustments required by this PARAGRAPH (e) shall be made
whenever any such distribution occurs retroactive to the record date for the
determination of stockholders entitled to receive such distribution.
(f) CURRENT MARKET PRICE. For the purpose of any computation of current
market price under this SECTION 11 and SECTION 13, the current market price per
share of Common Stock at any date shall be (x) for purposes of SECTION 13, the
closing price on the business day immediately prior to the exercise of the
applicable Warrant pursuant to SECTION 6 and (y) in all other cases, the daily
closing price the last full trading day on the exchange or market specified in
the second succeeding sentence prior to the Time of Determination (as defined
below). The term "TIME OF DETERMINATION" as used herein shall be the time and
date of the earlier to occur of (A) the date as of which the current market
price is to be computed and (B) the last full trading day on such exchange or
market before the commencement of "ex-dividend" trading in the Common Stock
relating to the event giving rise to the adjustment required by PARAGRAPH (a),
(b), (c), (d) OR (e) above. The closing price for any day shall be the last
reported sale price regular way or, in case no such reported sale takes place on
such day, the average of the closing bid and asked prices regular way for such
day, in each case (1) on the principal national securities exchange on which the
shares of Common Stock are listed or to which such shares are admitted to
trading or (2) if the Common Stock is not listed or admitted to trading on a
national securities exchange, in the over-the-counter market as reported by
Nasdaq National or SmallCap Markets or any comparable system or (3) if the
Common Stock is not listed on Nasdaq National or SmallCap Markets or a
comparable system but a public market for the Common Stock exists, as furnished
by two members of the NASD selected from time to time in good faith by the Board
of Directors of the Company for that purpose. In the absence of all of the
foregoing, or if for any other reason the current market price per share cannot
be determined pursuant to the foregoing provisions of this PARAGRAPH (f), the
current market price per share shall be the fair market value thereof as
determined in good faith by the Board of Directors of the Company and evidenced
by a resolution of such Board, subject to the following dispute resolution right
of the Holders of the Warrants. In the event that Holders of a majority of the
Warrants dispute the determination of the Board of Directors, such Holders shall
notify the Company and the current market price shall be determined in a
reasonably prompt manner as follows:
(1) The Company and Holders of a majority of the Warrants shall each
appoint an independent, experienced appraiser who is a member of a
recognized professional association of business appraisers. The two
appraisers shall determine the value of shares of Common Stock at the
relevant date, assuming a sale between a willing buyer and a
13
willing seller, both of whom have full knowledge of the financial
and other affairs of the Company, and neither of whom is under any
compulsion to sell or to buy.
(2) If the higher of the two appraisals is not more than 20% more
than the lower of the appraisals, the current market price per share
shall be the average of the two appraisals. If the higher of the two
appraisals is 20% or more than the lower of the two appraisals, then
a third appraiser shall be appointed by the two appraisers, and if
they cannot agree on a third appraiser, the American Arbitration
Association shall appoint the third appraiser. The third appraiser,
regardless of who appoints him or her, shall have the same
qualifications as the first two appraisers.
(3) The current market price per share after the appointment of the
third appraiser shall be the average of the two appraisals that are
closest in value to each other.
(4) The fees and expenses of the appraisers shall be paid one-half by
the Company and one-half by the Holders.
(g) CERTAIN DISTRIBUTIONS. If the Company shall pay a dividend or make
any other distribution payable in Options or Convertible Securities, then, for
purposes of PARAGRAPH (d) above, such Options or Convertible Securities shall be
deemed to have been initially issued or sold on such date without consideration.
(h) CONSIDERATION RECEIVED. 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 in respect thereof shall be deemed to be the then fair market value of
such consideration (as determined in good faith by the Board of Directors of the
Company and evidenced by a Board resolution). 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; provided, however, that if
such Options have an exercise price equal to or greater than the current market
price of the Common Stock on the date of issuance of such Options, then such
Options shall be deemed to have been issued for consideration equal to such
exercise price.
(i) DEFERRAL OF CERTAIN ADJUSTMENTS. No adjustment to the Exercise
Price (including the related adjustment to the number of shares of Common Stock
purchasable upon the exercise of each Warrant) shall be required hereunder
unless such adjustment, together with other adjustments carried forward as
provided below, would result in an increase or decrease of at least one percent
of the Exercise Price; provided that any adjustments which by reason of this
PARAGRAPH (i) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. No adjustment need be made for a
change in the par value of the Common Stock. All calculations under this SECTION
shall be made to the nearest 1/1,000 of one cent or to the nearest 1/1000 of a
share, as the case may be.
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(j) CHANGES IN OPTIONS AND CONVERTIBLE SECURITIES. If the exercise
price provided for in any Options referred to in PARAGRAPH (d) above, the
additional consideration, if any, payable upon the conversion or exchange of
any Convertible Securities referred to in PARAGRAPH (d) OR (e) above, or the
rate at which any Convertible Securities referred to in PARAGRAPH (d) OR (e)
above 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 11), the Exercise Price then in effect and the number of
shares of Common Stock purchasable upon the exercise of each Warrant shall
forthwith be readjusted (effective only with respect to any exercise of any
Warrant after such readjustment) to the Exercise Price and number of shares
of Common Stock so purchasable that would then be in effect had the
adjustment made upon the issuance, sale, distribution or granting of such
Options or Convertible Securities been made based upon such changed purchase
price, additional consideration or conversion rate, as the case may be, but
only with respect to such Options and Convertible Securities as then remain
outstanding.
(k) EXPIRATION OF OPTIONS AND CONVERTIBLE SECURITIES. If, at any time
after any adjustment to the number of shares of Common Stock purchasable upon
the exercise of each Warrant shall have been made pursuant to PARAGRAPH (d), (e)
OR (j) above or this PARAGRAPH (k), any Options or Convertible Securities shall
have expired unexercised, the number of such shares so purchasable shall, upon
such expiration, be readjusted and shall thereafter 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 (i) the only shares of Common Stock deemed
to have been issued in connection with such Options or Convertible Securities
were the shares of Common Stock, if any, actually issued or sold upon the
exercise of such Options or Convertible Securities and (ii) such shares of
Common Stock, if any, were issued or sold for the consideration actually
received by the Company upon such exercise plus the aggregate consideration, if
any, actually received by the Company for the issuance, sale, distribution or
granting of all such Options or Convertible Securities, whether or not
exercised; provided that no such readjustment shall have the effect of
decreasing the number of such shares so purchasable by an amount (calculated by
adjusting such decrease to account for all other adjustments made pursuant to
this SECTION 11 following the date of the original adjustment referred to above)
in excess of the amount of the adjustment initially made in respect of the
issuance, sale, distribution or granting of such Options or Convertible
Securities.
(l) OTHER ADJUSTMENTS. In the event that at any time, as a result of an
adjustment made pursuant to this SECTION 11, the Holders shall become entitled
to receive any securities of the Company other than shares of Common Stock,
thereafter the number of such other securities so receivable upon exercise of
the Warrants and the Exercise Price applicable to such exercise shall be subject
to adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the shares of Common Stock
contained in this SECTION 11.
15
Section 12. STATEMENT ON WARRANTS. Irrespective of any adjustment in
the number or kind of shares issuable upon the exercise of the Warrants or the
Exercise Price, Warrants theretofore or thereafter issued may continue to
express the same number and kind of shares as are stated in the Warrants
initially issuable pursuant to this Agreement.
Section 13. FRACTIONAL INTEREST. The Company shall not be required
to issue fractional shares of Common Stock on the exercise of Warrants. If
more than one Warrant shall be presented for exercise in full at the same
time by the same Holder, the number of full shares of Common Stock which
shall be issuable upon such exercise shall be computed on the basis of the
aggregate number of shares of Common Stock acquirable on exercise of the
Warrants so presented. If any fraction of a share of Common Stock would,
except for the provisions of this SECTION, be issuable on the exercise of any
Warrant (or specified portion thereof), the Company shall direct the Transfer
Agent to pay an amount in cash calculated by it equal to (i) the then current
market price per share multiplied by such fraction computed to the nearest
whole cent, less (ii) an amount equal to the Exercise Price multiplied by
such fraction computed to the nearest whole cent. The Holders, by their
acceptance of the Warrant Certificates, expressly waive any and all rights to
receive any fraction of a share of Common Stock or a stock certificate
representing a fraction of a share of Common Stock.
Section 14. NOTICES TO WARRANT HOLDERS. Upon any adjustment of the
Exercise Price pursuant to SECTION 11, the Company shall promptly thereafter
cause to be given to each of the registered Holders by first-class mail, postage
prepaid, a certificate executed by the Chief Financial Officer of the Company
setting forth the Exercise Price after such adjustment and setting forth in
reasonable detail the method of calculation and the facts upon which such
calculations are based and setting forth the number of Warrant Shares (or
portion thereof) issuable after such adjustment in the Exercise Price, upon
exercise of a Warrant and payment of the adjusted Exercise Price, which
certificate shall be conclusive evidence, absent manifest error, of the
correctness of the matters set forth therein.
In case:
(a) the Company shall authorize the issuance to all holders of
shares of Common Stock of rights, options or warrants to subscribe for
or purchase shares of Common Stock or of any other subscription rights
or warrants; or
(b) the Company shall authorize the distribution to all
holders of shares of Common Stock of evidences of its indebtedness or
assets (other than cash dividends or cash distributions payable out of
consolidated earnings or earned surplus or dividends payable in shares
of Common Stock or distributions referred to in SECTION 11 hereof); or
(c) of any consolidation or merger to which the Company is a
party for which approval of any shareholders of the Company is required
and following which the shareholders of the Company before such
consolidation or merger no longer hold at least
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50% of the outstanding capital stock of the Company following the
merger or consolidation, or of the conveyance or transfer of all or
substantially all of the properties and assets of the Company, or of
any reclassification or change of Common Stock issuable upon
exercise of the Warrants (other than a change in par value, or from
par value to no par value, or from no par value to par value, or as
a result of a subdivision or combination), or a tender offer or
exchange offer for shares of Common Stock, or other transaction that
would result in a change in control; or
(d) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company; or
(e) the Company proposes to take any other action that would
require an adjustment of the Exercise Price or the number of Warrant
Shares pursuant to SECTION 11; then the Company shall cause to be given
to each of the registered Holders of the Warrants at such Holder's
address appearing on the Warrant register, at least 20 days (or 10 days
in any case specified in clauses (a) or (b) above) prior to the
applicable record date hereinafter specified, or promptly in the case
of events for which there is no record date, by first-class mail,
postage prepaid, a written notice stating (i) the date as of which the
holders of record of shares of Common Stock to be entitled to receive
any such rights, options, warrants or distribution are to be
determined, or (ii) the initial expiration date set forth in any tender
offer or exchange offer for shares of Common Stock, or (iii) the date
on which any such consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding up or change of control is expected
to become effective or consummated, and the date as of which it is
expected that holders of record of shares of Common Stock shall be
entitled to exchange such shares for securities or other property, if
any, deliverable upon such reclassification, consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding up or change
of control. The failure to give the notice required by this SECTION 14
or any defect therein shall not affect the legality or validity of any
distribution, right, option, warrant, consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding up, or change
of control or the vote upon any action. Nothing contained in this
Agreement or in any of the Warrant Certificates shall be construed as
conferring upon the Holders thereof the right to vote or to consent or
to receive notice as shareholders in respect of the meetings of
shareholders or the election of Directors of the Company or any other
matter, or any rights whatsoever as shareholders of the Company.
Section 15. REGISTRATION. The Company acknowledge that Holders of
Warrants shall have the registration rights set forth in the Registration Rights
Agreement.
Section 16. REPORTS. For each fiscal quarter and each fiscal year of
the Company, the Company will transmit by mail to all Warrant Holders, as their
names and addresses appear in the register, without cost to such Warrant
Holders, unaudited quarterly and audited annual financial statements of the
Company prepared in accordance with GAAP. Beginning with the
17
initial public offering of the Company and thereafter, whether or not the
Company is subject to Section 13(a) or 15(d) of the Exchange Act, or any
successor provision thereto, the Company shall prepare the annual and
quarterly reports and other information, and documents ("SEC REPORTS") as the
Commission shall prescribe pursuant to such Section 13(a) or 15(d) and which
the Company is or would be (if they were so subject) required to file with
the Commission pursuant to such Section 13(a) or 15(d) or any successor
provision thereto (on or prior to the respective dates (the "REQUIRED FILING
DATES") by which the Company is or would (if they were so subject) be
required so to file such SEC Reports) and shall, within 15 days of the
Required Filing Date transmit by mail to all Warrant Holders, as their names
and addresses appear in the register, without cost to such Warrant Holders,
copies of such annual and quarterly reports.
Section 17. RULE 144A. The Company hereby agrees with each Holder, for
so long as any Registrable Securities remain outstanding and the Company is not
subject to Section 13(a) or 15(d) of the Exchange Act, to make available, upon
request of any Holder of Registrable Securities, to any Holder or beneficial
owner of Registrable Securities in connection with any sale thereof and any
prospective purchaser of such Registrable Securities designated by such Holder
or beneficial owner, the information required by Rule 144A(d)(4) under the
Securities Act in order to permit resales of such Registrable Securities
pursuant to Rule 144A.
Section 18. NOTICES TO COMPANY. Any notice or demand authorized by this
Agreement to be given or made by the Holder of any Warrants to or on the Company
shall be sufficiently given or made when and if deposited in the mail,
first-class or registered, postage prepaid, addressed (until another address is
filed in writing by the Company), as follows:
Digital Xxxxxxxxxxx.Xxx Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attn: Chief Financial Officer
Any notice pursuant to this Agreement to be given by the Company to the
Holders shall be sufficiently given when and if deposited in the mail,
first-class or registered, postage prepaid, addressed (until another address is
filed in writing with the Company) to the addresses of the Holders provided to
the Company from time to time.
Section 19. SUPPLEMENTS AND AMENDMENTS. The Company and Belo may from
time to time supplement or amend this Agreement without the approval of any
Holders of Warrants in order to cure any ambiguity or to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provision herein, or to make any other provisions in regard to matters or
questions arising hereunder which the Company and Belo may deem necessary or
desirable and which shall not in any way adversely affect the interests of the
Holders of Warrants. Any amendment or supplement to this Agreement that has a
material adverse effect
18
on the interests of Holders shall require the written consent of Holders
representing a majority of the then outstanding Warrants (excluding Warrants
held by the Company or any of its Affiliates); provided, however, that the
consent of each Holder of a Warrant affected shall be required for any
amendment pursuant to which the Exercise Price would be increased or the
number of Warrant Shares purchasable upon exercise of Warrants would be
decreased (other than pursuant to adjustments provided for in SECTION 11
hereof). Belo shall be entitled to receive and shall be fully protected in
relying upon an officer's certificate and opinion of counsel as conclusive
evidence that any such amendment or supplement is authorized or permitted
hereunder, that it does or does not, as the case may be, require the written
consent of Holders to be effective hereunder, that it is not inconsistent
herewith, and that it will be valid and binding upon the Company in
accordance with its terms.
Section 20. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company shall bind and inure to the
benefit of its respective successors and assigns hereunder.
Section 21. TERMINATION. This Agreement (other than any party's
obligations with respect to Warrants previously exercised and with respect to
indemnification) shall terminate at 4:00 p.m., Dallas, Texas, time on the
Expiration Date.
Section 22. GOVERNING LAW. THIS AGREEMENT AND EACH WARRANT CERTIFICATE
ISSUED HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE
STATE OF TEXAS AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF SAID STATE, WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS
PRINCIPLES THEREOF.
Section 23. BENEFITS OF THIS AGREEMENT.
(a) The Holders are the third-party beneficiaries of this Agreement.
Nothing in this Agreement shall be construed to give to any Person other than
the Company, Belo and the Holders of the Warrants any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, Belo and the Holders of the Warrants from
time to time.
(b) Prior to the exercise of the Warrants, no Holder of a Warrants, as
such, shall be entitled to any rights of a stockholder of a Company, including,
without limitation, the right to receive dividends or subscription rights, the
right to vote, to consent, to exercise any preemptive right, to receive any
notice of or to participate in meetings of stockholders for the election of
directors of the Company or any other matter or to receive any notice of any
proceedings of the Company, except as may be specifically and expressly provided
for herein. The Holders of the Warrants are not entitled to share in the assets
of the Company in the event of the liquidation, dissolution or winding up of the
Company's affairs.
19
(c) All rights of action in respect of this Agreement are vested in the
Holders of the Warrants, and any Holder of any Warrant, without the consent of
the Holder of any other Warrant, may, on such Holder's own behalf and for such
Holder's own benefit, enforce, and may institute and maintain any suit, action
or proceeding against the Company suitable to enforce, or otherwise in respect
of, such Holder's rights hereunder, including the right to exercise, exchange or
surrender for purchase such Holder's Warrants in the manner provided in this
Agreement.
Section 24. REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company made in that certain Stock Purchase Agreement dated as
of September 29, 1999 among the Company, Belo, Young & Rubicam Inc. and certain
other investors (the "Stock Purchase Agreement") are hereby incorporated herein
by reference and deemed made by the Company to Belo with respect to this
Agreement; PROVIDED, that all references in such representations and warranties
to "Preferred Shares" shall be deemed references to the Warrants and the Warrant
Certificates, all references to the "Series A Preferred" shall be deemed
references to the Warrants, all references to "this Agreement" shall be deemed
references to this Agreement.
Section 25. COUNTERPARTS. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
XXXXXXXXXXXXXXXXXX.XXX INC.
By: /s/ J. Xxxxx Xxxxxxx
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
BELO ENTERPRISES, INC.
By: /s/ Xxxx X. Xxxx
-------------------------------
Name: Xxxx X. Xxxx
-------------------------------
Title: President
-------------------------------
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