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EXHIBIT H
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (the "ACT"). THIS WARRANT AND
SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION
OR AN EXEMPTION THEREFROM UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS.
For the Purchase
of 26,785 Shares
of Common Stock
No. W-98-9
WARRANT FOR THE PURCHASE OF
SHARES OF COMMON STOCK
OF
2d INTERACTIVE, INC.
(A Delaware Corporation)
VOID AFTER 12:00 NOON, EASTERN STANDARD TIME, ON MARCH 26, 2003
2d Interactive, Inc., a Delaware corporation (the "Company") hereby
certifies that ▇▇▇▇▇▇▇ & Co., as nominee of The Manufacturers Life Insurance
Company (U.S.A.), or its registered assigns (the "Registered Holder"), is
entitled, subject to the terms set forth below, to purchase from the Company, at
any time or from time to time on or before the earlier of March 26, 2003 at not
later than 12:00 NOON (Eastern Standard time) and the termination of this
Warrant as provided in Section 8 below, 26,785 shares of Common Stock, $.01 par
value, of the Company ("Common Stock"), at a purchase price of $28 per share.
The number of shares purchasable upon exercise of this Warrant, and the purchase
price per share, each as adjusted from time to time pursuant to the provisions
of this Warrant, are hereinafter referred to as the "Warrant Stock" and the
"Purchase Price," respectively.
1. EXERCISE.
(a) This Warrant may be exercised by the Registered Holder, in whole
or in part, by surrendering this Warrant, with the purchase form appended hereto
as Exhibit I duly executed by such Registered Holder, at the principal office of
the Company, or at such other office or agency as the Company may designate,
accompanied by payment in full, in lawful money of the United States, of the
Purchase Price payable in respect of the number of shares of Warrant Stock
purchased upon such exercise.
(b) Each exercise of this Warrant shall be deemed to have been
effected immediately prior to the close of business on the day on which this
Warrant shall have been surrendered to the Company as provided in subsection
1(a) above. At such time, the person or
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persons in whose name or names any certificates for Warrant Stock shall be
issuable upon such exercise as provided in subsection 1(c) below shall be deemed
to have become the holder or holders of record of the Warrant Stock represented
by such certificates.
(c) As soon as practicable after the exercise of this Warrant in full
or in part, and in any event within 10 days thereafter, the Company at its
expense will cause to be issued in the name of, and delivered to, the Registered
Holder, or, subject to the terms and conditions hereof, as such Registered
Holder (upon payment by such Registered Holder of any applicable transfer taxes)
may direct:
(i) a certificate or certificates for the number of full shares
of Warrant Stock to which such Registered Holder shall be entitled upon such
exercise plus, in lieu of any fractional share to which such Registered Holder
would otherwise be entitled, cash in an amount determined pursuant to Section 3
hereof, and
(ii) in case such exercise is in part only, a new warrant or
warrants (dated the date hereof) of like tenor, calling in the aggregate on the
face or faces thereof for the number of shares of Warrant Stock equal (without
giving effect to any adjustment therein) to the number of such shares called for
on the face of this Warrant minus the number of such shares purchased by the
Registered Holder upon such exercise as provided in subsection 1(a) above.
2. FRACTIONAL SHARES. The Company shall not be required upon the exercise
of this Warrant to issue any fractional shares, but shall make an adjustment
therefor in cash on the basis of the mean between the low bid and high asked
prices of the Warrant Stock on the over-the-counter market as reported by the
National Association of Securities Dealers Automated Quotations System or the
closing market price of the Warrant Stock on a national securities exchange on
the trading day immediately prior to the date of exercise, whichever is
applicable, or if neither is applicable, then on the basis of the then market
value of the Warrant Stock as shall be reasonably determined by the Board of
Directors of the Company.
3. LIMITATION ON SALES, ETC. Each holder of this Warrant acknowledges that
this Warrant and the Warrant Stock have not been registered under the Securities
Act of 1933, as now in force or hereafter amended, or any successor legislation
(the "Act"), and agrees not to sell, pledge, distribute, offer for sale,
transfer or otherwise dispose of this Warrant or any Warrant Stock issued upon
its exercise in the absence of (a) an effective registration statement under the
Act as to this Warrant or such Warrant Stock and registration or qualification
of this Warrant or such Warrant Stock under any applicable Blue Sky or state
securities law then in effect, or (b) an opinion of counsel, satisfactory to the
Company, that such registration and qualification are not required.
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Without limiting the generality of the foregoing, unless the offering and
sale of the Warrant Stock to be issued upon the particular exercise of the
Warrant shall have been effectively registered under the Act, the Company shall
be under no obligation to issue the shares covered by such exercise unless and
until the Registered Holder shall have executed an investment letter in form and
substance satisfactory to the Company, including a warranty at the time of such
exercise that it is acquiring such shares for its own account, for investment
and not with a view to, or for sale in connection with, the distribution of any
such shares, in which event the Registered Holder shall be bound by the
provisions of the following legend or a legend in substantially similar form
which shall be endorsed upon the certificate(s) evidencing the Warrant Stock
issued pursuant to such exercise:
"The shares represented by this certificate have been taken for
investment and they may not be sold or otherwise transferred by any
person, including a pledgee, in the absence of an effective
registration statement for the shares under the Securities Act of
1933, as amended, or an opinion of counsel satisfactory to the Company
that an exemption from registration is then available."
In addition, without limiting the generality of the foregoing, the Company
may delay issuance of the Warrant Stock until completion of any action or
obtaining of any consent, which the Company deems necessary under any applicable
law (including without limitation state securities or "blue sky" laws).
4. DILUTIVE ISSUANCES.
4.1 ADJUSTMENTS UPON DILUTIVE ISSUANCES OF COMMON STOCK OR CONVERTIBLE
SECURITIES. If the Company shall issue or sell any shares of Common Stock or
Common Stock Equivalents (as hereinafter defined), except for shares issued
pursuant to employee stock options or stock purchase plans as set forth more
particularly in Section 4.3(a), without consideration or at a price per share
which is less than the Purchase Price in effect immediately prior to such
issuance or sale, then in each case the Purchase Price shall be reduced,
concurrently with such issuance or sale, to the price per share determined by
multiplying the then current Purchase Price by a fraction, the numerator of
which is the sum of (i) the number of shares of Common Stock outstanding
immediately prior to such issuance (assuming the conversion into Common Stock of
all outstanding Common Stock Equivalents), plus (ii) the number of shares of
Common Stock which the aggregate consideration received for such issuance would
purchase at the Purchase Price, and the denominator of which shall be the number
of shares of Common Stock outstanding immediately after such issuance (assuming
the conversion into Common Stock of all outstanding Common Stock Equivalents).
In the event of such an adjustment of the Purchase Price, the number of shares
of Warrant Stock issuable upon exercise of the Warrant shall be increased to a
number determined by multiplying the number of shares subject to this Warrant by
a fraction the numerator of which is the Purchase Price in effect immediately
before the foregoing adjustment and the denominator of which is the Purchase
Price in effect immediately after the foregoing adjustment. Each such adjustment
of
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the Purchase Price shall be calculated to the nearest cent, and adjustments to
the number of warrant shares shall be calculated to the nearest whole share.
As used herein, the term "Common Stock Equivalents" includes any securities
convertible into or exchangeable for shares of Common Stock, or any warrants,
options, subscriptions or purchase rights with respect to such convertible or
exchangeable securities, in any case the sum of the consideration for which
received by the Company upon both issuance and exercise thereof on a per share
basis is equal to an amount which is less than the Purchase Price at the
applicable time.
4.2 CONSIDERATION. In case the Company shall issue shares of its
Common Stock or Common Stock Equivalents for a consideration wholly or partly
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 as
determined reasonably and in good faith by the Board of Directors of the
Company. The determination of the Board shall be conclusive unless challenged by
the Registered Holder within thirty (30) days of receipt of notification of such
determination.
In case Common Stock shall be deemed to have been issued upon the issuance
by the Company of any right to acquire such Common Stock in connection with the
issue or sale of other securities or assets of the Company, together comprising
one integrated transaction, such rights shall be deemed to have been issued for
such portion of the consideration received as may be reasonably determined in
good faith by the Board of Directors to be allocable thereto.
4.3 EXCEPTIONS TO ANTI-DILUTION. Anything herein notwithstanding, no
adjustments in the Purchase Price or number of shares of Warrant Stock as set
forth in this Section 4 shall be made by reason of or in connection with the
issuance of shares of Common Stock (including options to purchase such shares
whether such options are issued before, at the same time as or after the
issuance of the Warrant) up to an aggregate of two percent of the outstanding
stock of the Company calculated on a fully diluted basis pursuant to employee
stock option agreements, or employee stock option or stock purchase plans
adopted by the Board of Directors of the Company for the issuance of shares of
Common Stock to employees, directors or consultants.
4.4 CHANGES IN COMMON STOCK. If the Company shall (i) combine the
outstanding shares of Common Stock into a lesser number of shares, (ii)
subdivide the outstanding shares of Common Stock into a greater number of
shares, or (iii) issue additional shares of Common Stock as a dividend or other
distribution with respect to the Common Stock, the number of shares of Warrant
Stock shall be equal to the number of shares which the Registered Holder would
have been entitled to receive after the happening of any of the events described
above if such shares had been issued immediately prior to the happening of such
event, such adjustment to become effective concurrently with the effectiveness
of such event. The Purchase Price in effect immediately prior to any such
combination of Common Stock shall, upon the effectiveness of such combination,
be proportionately increased. The Purchase Price in effect immediately prior to
any such subdivision of Common Stock or at the record date of such dividend
shall upon the effectiveness of such subdivision or immediately after the record
date of such dividend be proportionately reduced.
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4.5 REORGANIZATIONS AND RECLASSIFICATIONS. If there shall occur any
capital reorganization or reclassification of the Common Stock (other than a
change in par value or a subdivision or combination as provided for in Section
4.4), then, as part of any such reorganization or reclassification, lawful
provision shall be made so that the Registered Holder shall have the right
thereafter to receive upon the exercise hereof the kind and amount of shares of
stock or other securities or property which such Registered Holder would have
been entitled to receive if, immediately prior to any such reorganization or
reclassification, such Registered Holder had held the number of shares of Common
Stock which were then purchasable upon the exercise of this Warrant. In any such
case, appropriate adjustment (as reasonably determined by the Board of Directors
of the Company) shall be made in the application of the provisions set forth
herein with respect to the rights and interests thereafter of the Registered
Holder such that the provisions set forth in this Section 4 (including
provisions with respect to adjustment of the Purchase Price) shall thereafter be
applicable, as nearly as is reasonably practicable, in relation to any shares of
stock or other securities or property thereafter deliverable upon the exercise
of this Warrant.
4.6 CERTIFICATE OF ADJUSTMENT. When any adjustment is required to be
made in the Purchase Price, the Company shall promptly mail to the Registered
Holder a certificate setting forth the Purchase Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment. Delivery
of such certificate shall be deemed to be a final and binding determination with
respect to such adjustment unless challenged by the Registered Holder within ten
(10) days of receipt thereof. If the Company and the Registered Holder cannot
reach agreement with respect to the determination of any particular adjustment
to the Purchase Price, the parties hereby agree to accept the determination of a
certified public accounting firm of national stature, selected by mutual
agreement of the parties. The costs of the accounting firm shall be paid (i) by
the Company if the calculation of the adjustment in the original certificate is
determined to be incorrect; (ii) by the Registered Holder if such calculation is
determined to be correct or (iii) ratably apportioned between the Company and
Registered Holder as determined by the certified public accounting firm. Such
certificate shall also set forth the kind and amount of stock or other
securities or property into which this Warrant shall be exercisable following
the occurrence of any of the events specified in this Section 4.
5. NOTICES OF RECORD DATE, ETC. In case:
(a) the Company shall take a record of the holders of its Common Stock
(or other stock or securities at the time deliverable upon the exercise of this
Warrant) for the purpose of entitling or enabling them to receive any dividend
or other distribution, or to receive any right to subscribe for or purchase any
shares of stock of any class or any other securities, or to receive any other
right, or
(b) of any capital reorganization of the Company, any reclassification
of the capital stock of the Company, any consolidation or merger of the Company
with or into another
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corporation (other than a consolidation or merger in which the Company is the
surviving entity), or any transfer of all or substantially all of the assets of
the Company, or
(c) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company, then, and in each such case, the Company will mail or
cause to be mailed to the Registered Holder of this Warrant a notice specifying,
as the case may be, (i) the date on which a record is to be taken for the
purpose of such dividend, distribution or right, and stating the amount and
character of such dividend, distribution or right, or (ii) the effective date on
which such reorganization, reclassification, consolidation, merger, transfer,
dissolution, liquidation or winding-up is to take place, and the time, if any is
to be fixed, as of which the holders of record of Common Stock (or such other
stock or securities at the time deliverable upon the exercise of this Warrant)
shall be entitled to exchange their shares of Common Stock (or such other stock
or securities) for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, transfer, dissolution,
liquidation or winding-up. Such notice shall be mailed at least ten (10) days
prior to the record date or effective date for the event specified in such
notice.
6. RESERVATION OF STOCK. The Company will at all times reserve and keep
available, solely for issuance and delivery upon the exercise of this Warrant,
such shares of Warrant Stock and other stock, securities and property, as from
time to time shall be issuable upon the exercise of this Warrant.
7. REPLACEMENT OF WARRANTS. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and (in the case of loss, theft or destruction) upon delivery of an
indemnity agreement (with surety if reasonably required) in an amount reasonably
satisfactory to the Company, or (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will issue, in lieu thereof, a new
Warrant of like tenor.
8. TERMINATION IN CERTAIN EVENTS
In the event of a sale of substantially all the assets of the Company
or a merger or consolidation of the Company with or into any other entity (other
than a merger the sole purpose of which is to change the state of incorporation
of the Company) or a dissolution or the adoption of a plan of liquidation of the
Company, this Warrant shall terminate on the effective date of such sale,
merger, consolidation, dissolution or adoption (the "Effective Date") and become
null and void, PROVIDED, HOWEVER, that if this Warrant shall not have otherwise
terminated or expired, the Registered Holder hereof shall have the right until
5:00 p.m Eastern Standard time on the day immediately prior to the Effective
Date to exercise its rights hereunder to the extent not previously exercised.
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9. TRANSFERS, ETC.
(a) The Company will maintain a register containing the names and
addresses of the Registered Holders of this Warrant. Any Registered Holder may
change its, his or her address as shown on the warrant register by written
notice to the Company requesting such change.
(b) Without the prior written consent of the Company, the Warrant
shall not be assigned, pledged, transferred or hypothecated in any way (whether
by operation of law or otherwise) and shall not be subject to execution,
attachment or similar process. In the event that the Warrant is transferred with
the consent of the Company, the transferee shall remain subject to the terms of
this Warrant, and the transferee shall so acknowledge in writing as a condition
precedent to the effectiveness of such transfer. Any attempted transfer,
assignment, pledge, hypothecation or other disposition of the Warrant or of any
rights granted hereunder contrary to the provisions of this Paragraph, or the
levy of any attachment or similar process upon the Warrant or such rights, shall
be null and void. This Warrant shall be exercisable only by the Registered
Holder.
(c) Until any transfer of this Warrant is made in the warrant
register, the Company may treat the Registered Holder of this Warrant as the
absolute owner hereof for all purposes; provided, however, that if and when this
Warrant is properly assigned in blank, the Company may (but shall not be
obligated to) treat the bearer hereof as the absolute owner hereof for all
purposes, notwithstanding any notice to the contrary.
10. MAILING OF NOTICES, ETC. All notices and other communications from the
Company to the Registered Holder of this Warrant shall be mailed by first-class
certified or registered mail, postage prepaid, to the address furnished to the
Company in writing by the last Registered Holder of this Warrant who shall have
furnished an address to the Company in writing. All notices and other
communications from the Registered Holder of this Warrant or in connection
herewith to the Company shall be mailed by first-class certified or registered
mail, postage prepaid, to the Company at its offices at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or such other address as the Company shall so notify the
Registered Holder.
11. NO RIGHTS AS STOCKHOLDER. Until the exercise of this Warrant, the
Registered Holder of this Warrant shall not have or exercise any rights by
virtue hereof as a stockholder of the Company.
12. CHANGE OR WAIVER. Any term of this Warrant may be changed or waived
only by an instrument in writing signed by the party against which enforcement
of the change or waiver is sought.
13. HEADINGS. The headings in this Warrant are for purposes of reference
only and shall not limit or otherwise affect the meaning of any provision of
this Warrant.
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14. GOVERNING LAW. This Warrant will be governed by and construed in
accordance with the laws of the State of Massachusetts.
2d Interactive, Inc.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
[Corporate Seal]
ATTEST
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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EXHIBIT I
PURCHASE FORM
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To: 2d Interactive, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Dated:
The undersigned pursuant to the provisions set forth in the attached
Warrant (No. ___), hereby irrevocably elects to purchase ______ shares of the
Common Stock (the "Common Stock") covered by such Warrant and herewith makes
payment of $ ______, representing the full purchase price for such shares at the
price per share provided for in such Warrant.
The undersigned is aware that the Common Stock has not been registered
under the Securities Act of 1933, as amended (the "1933 Act") or any state
securities laws. The undersigned understands that the reliance by the Company on
exemptions under the 1933 Act is predicated in part upon the truth and accuracy
of the statements of the undersigned in this Purchase Form.
The undersigned represents and warrants that (1) it has been furnished with
all information which it deems necessary to evaluate the merits and risks of the
purchase of the Common Stock; (2) it has had the opportunity to ask questions
concerning the Common Stock and the Company and all questions posed have been
answered to its satisfaction; (3) it has been given the opportunity to obtain
any additional information it deems necessary to verify the accuracy of any
information obtained concerning the Common Stock and the Company; and (4) it has
such knowledge and experience in financial and business matters that it is able
to evaluate the merits and risks of purchasing the Common Stock and to make an
informed investment decision relating thereto.
The undersigned hereby represents and warrant that it is purchasing the
Common Stock for its own account for investment and not with a view to the sale
or distribution of all or any part of the Common Stock.
The undersigned understands that because the Common Stock have not been
registered under the 1933 Act, it must continue to bear the economic risk of the
investment for an indefinite time and the Common Stock cannot be sold unless the
Common Stock is subsequently registered under applicable federal and state
securities laws or an exemption from such registration is available.
The undersigned agrees that it will in no event sell or distribute or
otherwise dispose of all or any part of the Common Stock unless (1) there is an
effective registration statement under the 1933 Act and applicable state
securities laws covering any such transaction involving the Common Stock or (2)
the Company receives an opinion of its legal counsel (concurred in by legal
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counsel for the Company) stating that such transaction is exempt from
registration or the Company otherwise satisfies itself that such transaction is
exempt from registration.
The undersigned consents to the placing of a legend on its certificate for
the Common Stock stating that the Common Stock has not been registered and
setting forth the restriction on transfer contemplated hereby and to the placing
of a stop transfer order on the books of the Company and with any transfer
agents against the Common Stock until the Common Stock may be legally resold or
distributed without restriction.
The undersigned understands that the Company has no obligation to the
undersigned to register the Common Stock with the SEC and has not represented
that it will register the Common Stock.
The undersigned understands the terms and restrictions on the right to
dispose of the Common Stock set forth in the Note Purchase Agreement, Note and
Warrant dated March ____, 1998 which the undersigned has carefully reviewed. The
undersigned consents to the placing of a legend on its certificate for the
Common Stock referring to such restrictions and the placing of stop transfer
orders until the Common Stock may be transferred in accordance with the terms of
such restrictions.
The undersigned has considered the Federal and state income tax
implications of the exercise of the Warrant and the purchase and subsequent sale
of the Common Stock.
▇▇▇▇▇▇▇ & CO., AS NOMINEE OF THE
MANUFACTURERS LIFE INSURANCE
COMPANY (U.S.A.)
By:
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Title:
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Dated:
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