Exhibit 10 (a) (13)
WARRANT AGREEMENT
Dated as of
December 15, 1999
between
INTER*ACT ELECTRONIC MARKETING, INC.
and
AMERICAN STOCK TRANSFER & TRUST COMPANY,
as the Warrant Agent
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Warrants for
Common Stock of
Inter*Act Electronic Marketing, Inc.
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TABLE OF CONTENTS
Page
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ARTICLE I - DEFINITIONS................................................... 1
SECTION 1.01. Definitions....................................... 1
SECTION 1.02. Other Definitions................................. 5
SECTION 1.03. Rules of Construction............................. 5
ARTICLE II - WARRANT CERTIFICATES......................................... 6
SECTION 2.01. Form of Warrant Certificates...................... 6
SECTION 2.02. Legends........................................... 7
SECTION 2.03. Execution and Delivery of Warrant Certificates.... 7
SECTION 2.04. Loss or Mutilation................................ 9
ARTICLE III - EXERCISE TERMS.............................................. 9
SECTION 3.01. Exercise Price; Number of Shares.................. 9
SECTION 3.02. Exercise Periods.................................. 9
SECTION 3.03. Expiration........................................ 10
SECTION 3.04. Manner of Exercise................................ 10
SECTION 3.05. Issuance of Warrant Shares........................ 10
SECTION 3.06. Fractional Warrant Shares......................... 11
SECTION 3.07. Reservation of Warrant Shares..................... 11
SECTION 3.08. Compliance with Law............................... 11
ARTICLE IV - ANTIDILUTION PROVISIONS...................................... 12
SECTION 4.01. Changes in Common Stock........................... 12
SECTION 4.02. Cash Dividends and Other Distributions............ 12
SECTION 4.03. Rights Issue...................................... 13
SECTION 4.04. Combination; Liquidation.......................... 14
SECTION 4.05. Other Events...................................... 14
SECTION 4.06. Superseding Adjustment............................ 15
SECTION 4.07. Minimum Adjustment................................ 15
SECTION 4.08. Notice of Adjustment.............................. 15
SECTION 4.09. Notice of Certain Transactions.................... 16
SECTION 4.10. Adjustment to Warrant Certificate................. 16
SECTION 4.11. Issuance of Due Bills............................. 17
(i)
Page
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ARTICLE V - TRANSFERABILITY................................................ 17
SECTION 5.01. Transfer and Exchange.............................. 17
SECTION 5.02. Registration, Registration of Transfer and Exchange 18
SECTION 5.03. Book-Entry Provisions for the Rule ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ and Regulation S Global Warrant............ 18
SECTION 5.04. Special Transfer Provisions........................ 20
SECTION 5.05. Surrender of Warrant Certificates.................. 22
ARTICLE VI - OTHER RIGHTS.................................................. 22
SECTION 6.01. Registration Rights............................. 22
ARTICLE VII - WARRANT AGENT................................................ 23
SECTION 7.01. Appointment of Warrant Agent....................... 23
SECTION 7.02. Rights and Duties of Warrant Agent................. 23
SECTION 7.03. Individual Rights of Warrant Agent................. 24
SECTION 7.04. Warrant Agent's Disclaimer......................... 24
SECTION 7.05. Compensation and Indemnity......................... 24
SECTION 7.06. Successor Warrant Agent............................ 24
ARTICLE VIII - MISCELLANEOUS............................................... 26
SECTION 8.01. Company Resales.................................... 26
SECTION 8.02. SEC Reports and Other Information.................. 26
SECTION 8.03. Rule 144A.......................................... 26
SECTION 8.04. Persons Benefitting................................ 27
SECTION 8.05. Rights of Holders.................................. 27
SECTION 8.06. Amendment.......................................... 27
SECTION 8.07. Notices............................................ 27
SECTION 8.08. Governing Law...................................... 28
SECTION 8.09. Successors......................................... 28
SECTION 8.10. Multiple Originals................................. 28
SECTION 8.11. Table of Contents.................................. 28
SECTION 8.12. Severability....................................... 29
(ii)
EXHIBIT A Form of Face of Warrant Certificate
EXHIBIT B Certificate To Be Delivered upon Exchange or Registration of
Transfer of Warrants
EXHIBIT C Form of Investor Letter To Be Delivered in Connection with
Transfers to Non-QIB Institutional Accredited Investors
(iii)
WARRANT AGREEMENT dated as of December 15, 1999, between INTER*ACT
ELECTRONIC MARKETING, INC., a North Carolina corporation (the "Company"), and
AMERICAN STOCK TRANSFER & TRUST COMPANY, as Warrant Agent (the "Warrant Agent").
In connection with the exchange offering (the "Exchange Offering")
pursuant to which, in exchange for the surrender of at least 80% of the
Company's issued and outstanding 14% Senior Discount Notes Due 2003 (the "Old
Notes"), the Company shall issue or cause to be issued, as the case may be, (y)
up to $70,000,000 aggregate principal amount of Senior Pay-in-Kind Notes Due
2003 (the "Subsidiary Notes") of Inter*Act Operating Co., Inc. ("New Sub") and
(z) up to 140,000 shares of 14% Series B Senior Mandatorily Convertible
Preferred Stock of the Company (the "Preferred Stock"), the Company desires to
issue the warrants (the "Warrants") described herein. The Warrants will
initially entitle the holders thereof (the "Holders") to purchase, in the
aggregate, up to 2,506,812 shares of Common Stock, no par value, of the Company
(the "Common Stock"). Each Warrant will entitle the Holder thereof to purchase
the number of shares of Common Stock equal to the Warrant Exercise Amount (as
herein defined), subject to adjustment as provided herein.
The Warrants will trade separately from the Subsidiary Notes.
The Company further desires the Warrant Agent to act on behalf of the
Company in connection with the issuance of the Warrants as provided herein and
the Warrant Agent is willing to so act.
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the holders of Warrants:
ARTICLE I - DEFINITIONS
SECTION 1.01. Definitions. "Affiliate" of any specified Person means
(i) any other Person which, directly or indirectly, is controlling or controlled
by or under direct or indirect common control with such specified Person, or
(ii) any other Person who is a director or executive officer (A) of such Person,
(B) of any subsidiary of such specified Person or (C) of any Person described in
clause (i) above. For purposes of this definition, "control", when used with
respect to any specified Person, means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing. Affiliate shall also
mean any beneficial owner of shares representing 10% or more of the total voting
power of the Voting Stock (on a fully diluted basis) of the Company or warrants
to purchase such Voting Stock (whether or not currently exercisable) and any
Person who would be an Affiliate of any such beneficial owner pursuant to the
first sentence hereof.
"Board" means the Board of Directors of the Company or any committee
thereof duly authorized to act on behalf of such Board of Directors.
"Business Day" means each day that is not a Saturday, a Sunday or a day
on which banking institutions are not required to be open in New York City or in
the city where the Warrant Agent's principal corporate trust office is located.
"Certificated Warrants" means certificated Warrants in fully
registered definitive form.
"Change of Control" has the meaning ascribed thereto in the Articles of
Incorporation of the Company, as from time to time amended, restated,
supplemented or otherwise modified.
"Combination" means an event in which the Company consolidates with,
merges with or into, or sells all or substantially all its property and assets
to another Person.
"Common Stock" has the meaning ascribed thereto in the preamble to this
Agreement.
"DTC" means The Depository Trust Company.
"Exchange Offering" has the meaning ascribed thereto in the preamble
to this Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer Registration Statement" means the Exchange Offer
Registration Statement as defined in the Registration Rights Agreement.
"Extraordinary Cash Dividend" means that portion, if any, of the
aggregate amount of all dividends paid by the Company on its Common Stock in any
fiscal year that exceeds $10 million.
"Fair Market Value" means, with respect to any asset or Property, the
price which could be negotiated in an arm's-length free market transaction, for
cash, between a willing seller and a willing buyer, neither of whom is under
undue pressure or compulsion to complete the transaction. Fair Market Value will
be determined, except as otherwise provided, (i) if such property or asset has a
Fair Market Value of less than $5 million, by any Officer of the Company or (ii)
if such property or asset has a Fair Market Value in excess of $5 million, by a
majority of the Board of Directors of the Company and evidenced by a Board
Resolution, dated within 30 days of the relevant transaction.
2
"Indenture" means the Indenture dated as of December 15, 1999 between
the Company and State Street Bank and Trust Company, as Trustee, as the same may
be amended, restated, supplemented or otherwise modified from time to time.
"Initial Public Offering" means the initial underwritten public
offering of Common Stock (not constituting Redeemable Stock) pursuant to a
registration statement filed with the SEC in accordance with the Securities Act.
"Issue Date" means the date on which Warrants are initially issued.
"Market Price" means, in respect of one share of the Common Stock of
the Company (i) the average closing price per share for such Common Stock for
the thirty consecutive trading days immediately prior to the Triggering Date on
the New York Stock Exchange or such other United States national securities
exchange on which such Common Stock is listed and principally traded or, if such
securities are not listed on any national securities exchange, as reported by
the Nasdaq Stock Market, Inc. or, if not so reported by the Nasdaq Stock Market,
Inc., the average of the high bid and low asked quotations for one share of such
Common Stock as reported by the National Quotations Bureau Incorporated or
similar organization or (ii) if the closing price for such Common Stock cannot
be calculated in the manner specified in clause (i) at the relevant time, the
Fair Market Value of one share of such Common Stock (without giving effect to
any discount for lack of liquidity or to the fact that shares of such Common
Stock may not be registered under the Exchange Act) as of the Business Day
immediately preceding the Triggering Date as determined in an opinion letter
delivered and addressed to the Warrant Agent by an independent appraisal firm
appointed by the Company (or by a majority of the holders of the Warrants or
related Warrant Shares, as the case may be, if the Company fails to appoint one)
reasonably acceptable to the Warrant Agent.
"New Sub" has the meaning ascribed thereto in the preamble to this
Agreement.
"Non-U.S. Person" means a person who is not a U.S. person, as
defined in Regulation S.
"Officer" means the Chairman of the Board, the Chief Executive Officer,
the President, the Chief Financial Officer or the Treasurer of the Company.
"Old Notes" has the meaning ascribed thereto in the preamble to this
Agreement.
"Optional Redemption" means the exercise by New Sub of the rights
granted to it pursuant to Section 1101(b) of the Indenture to redeem any or all
of the Subsidiary Notes.
"Parent" means any Person who beneficially owns, directly or
indirectly, all the Voting Stock of the Company.
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"Person" means any individual, corporation, company (including any
limited liability company), partnership, joint venture, trust, unincorporated
organization, government or any agency or political subdivision thereof.
"Pre-Redemption Value" has the meaning ascribed thereto in the
definition of Warrant Exercise Amount.
"Public Equity Offering" means an underwritten public offering of
common stock of the Company pursuant to an effective registration statement
under the Securities Act.
"Public Market" means, in respect of the Common Stock of the Company, a
time when (x) a Public Equity Offering has been consummated in respect of at
least 10% of the total issued and outstanding shares of such Common Stock and
(y) such Common Stock is registered under Section 13(a) or 15(d)(A) of the
Exchange Act and the Company is current in its reporting thereunder.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Redeemable Stock" means, with respect to any Person, any capital stock
that by its terms (or by the terms of any security into which it is convertible
or exchangeable) or otherwise (i) matures or is mandatorily redeemable pursuant
to a sinking fund obligation or otherwise, (ii) is or may become redeemable or
repurchasable at the option of the holder thereof, in whole or in part, or (iii)
is convertible or exchangeable for indebtedness.
"Registration Rights Agreement" means the Exchange and Registration
Rights Agreement by and between the Company and the Holders named therein, dated
as of December 15, 1999, relating to the Warrants and other securities.
"Regulation S" means Regulation S under the Securities Act.
"Restricted Warrant" means a Rule ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or a Restricted
Certificated Warrant.
"Rule 144A" means Rule 144A under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Stockholders Agreement" means the Stockholders Agreement dated as of
December 15, 1999 by and among the Company and the shareholders party thereto,
as from time to time amended, restated, supplemented or otherwise modified.
"Subsidiary Notes" has the meaning ascribed thereto in the preamble
to this Agreement.
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"Voting Stock" means all classes of capital stock of such corporation
then outstanding and normally entitled to vote in the election of directors.
"Warrant Exercise Amount" initially means 17.96 shares of Common Stock.
Thereafter, immediately upon and concurrently with each Optional Redemption, if
any, "Warrant Exercise Amount" shall mean that number of shares of Common Stock
equal to the difference between (i) the number of Shares of Common Stock for
which the Warrants were exercisable immediately prior to such Optional
Redemption (the "Pre-Redemption Value") minus (ii) the product of (y) the
Pre-Redemption Value multiplied by (z) the aggregate principal amount of
Subsidiary Notes redeemed pursuant to such Optional Redemption as a percentage
of the aggregate principal amount of all Subsidiary Notes outstanding
immediately prior to such Optional Redemption; provided, however, that at all
times the Warrant Exercise Amount shall be subject to adjustment as provided in
this Agreement.
"Warrant Shares" means the Common Stock (and other securities) issuable
upon the exercise of the Warrants, taking into account at all times the Warrant
Exercise Amount then in effect.
SECTION 1.02. Other Definitions.
Defined in
Term Section
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"Company"..................................................... Recitals
"Exercisability Date"......................................... 3.02
"Exercise Price".............................................. 3.01
"Expiration Date"............................................. 3.02
"Global Warrants"............................................. 2.03
"Holders"..................................................... Recitals
"Offering".................................................... Recitals
"Preferred Stock"............................................. Recitals
"Registrar"................................................... 3.07
"Regulation S Global Warrant"................................. 2.03
"Repurchase Notice"........................................... 5.02
"Restricted Certificated Warrant.............................. 2.03
"Rule 144A Global Warrant".................................... 2.03
"Successor Company"........................................... 4.04(a)
"Stock Transfer Agent"........................................ 3.05
"Warrants".................................................... Recitals
"Warrant Agent"............................................... Recitals
"Warrant Certificates"........................................ 2.01
SECTION 1.03. Rules of Construction. Unless the text otherwise
requires:
(i) a term has the meaning assigned to it;
5
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;
(iii) or" is not exclusive;
(iv) "including" means including, without limitation; and
(v) words in the singular include the plural and words in the
plural include the singular.
ARTICLE II - WARRANT CERTIFICATES
SECTION 2.01. Form of Warrant Certificates. Certificates representing
the Warrants (the "Warrant Certificates") shall be in registered form only and
substantially in the form attached hereto as Exhibit A. The Warrant Certificates
shall be dated the date on which countersigned by the Warrant Agent and shall
have such insertions as are appropriate or required or permitted by this
Agreement and may have such letters, numbers or other marks of identification
and such legends and endorsements typed, stamped, printed, lithographed or
engraved thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
law or with any rule or regulation pursuant thereto, or to conform to usage. The
Company shall approve the form of the Warrant Certificates and any notation,
legend or endorsement on them.
The terms and provisions contained in the forms of the Warrant
Certificates annexed hereto as Exhibit A shall constitute, and are hereby
expressly made, a part of this Agreement.
The definitive Warrant Certificates shall be typed, printed,
lithographed or engraved or produced by any combination of these methods, all as
determined by the officer of the Company executing such Warrant Certificates, as
evidenced by such officer's execution of such Warrant Certificates.
Pending the preparation of definitive Warrant Certificates, temporary
Warrant Certificates may be issued, which may be printed, lithographed,
typewritten, mimeographed or otherwise produced, and which will be substantially
of the tenor of the definitive Warrant Certificates in lieu of which they are
issued.
If temporary Warrant Certificates are issued, the Company will cause
definitive Warrant Certificates to be prepared without unreasonable delay. After
the preparation of definitive Warrant Certificates, the temporary Warrant
Certificates shall be exchangeable for definitive Warrant Certificates upon
surrender of the temporary Warrant Certificates to the Warrant Agent, without
charge to the Holder. Until so exchanged the temporary Warrant
6
Certificates shall in all respects be entitled to the same benefits under this
Agreement as definitive Warrant Certificates.
SECTION 2.02. Legends. Unless and until a Warrant or Warrant Share is
sold under an effective registration statement and except for Warrant
Certificates delivered pursuant to Section 5.04(c)(ii) of this Agreement, each
Warrant Certificate evidencing the Global Warrants and the Certificated Warrants
(and all Warrant Certificates issued in exchange therefor or substitution
thereof) and each certificate representing the Warrant Shares shall bear a
legend in substantially the following form (with any appropriate modification
for the Warrant Shares):
"THE WARRANTS AND THE WARRANT SHARES (THE "SECURITIES") HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), OR
ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT
TO, REGISTRATION AND SUBJECT TO COMPLIANCE WITH OTHER APPLICABLE LAWS.
THE HOLDER HEREOF, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY, UNLESS PREVIOUSLY REGISTERED UNDER
THE SECURITIES ACT, ONLY (A) TO THE COMPANY; (B) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE
144 THEREUNDER (IF APPLICABLE); (C) TO A PERSON IT REASONABLY BELIEVES
IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A; OR (D) PURSUANT TO AN
OFFSHORE TRANSACTION COMPLYING WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT."
SECTION 2.03. Execution and Delivery of Warrant Certificates. Warrant
Certificates evidencing Warrants to purchase initially an aggregate of up to
2,506,812 Warrant Shares may be executed, on or after the Issue Date, by the
Company and delivered to the Warrant Agent for countersignature, and the Warrant
Agent shall thereupon countersign and deliver such Warrant Certificates upon the
order and at the direction of the Company to the purchasers thereof on the date
of issuance. The Warrant Agent is hereby authorized to countersign and deliver
Warrant Certificates as required by this Section 2.03 or by Section 2.04, 3.04,
5.03 or 5.04.
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The Warrant Certificates shall be executed on behalf of the Company by
its President or any Vice President, either manually or by facsimile signature
printed thereon. The Warrant Certificates shall be countersigned manually by the
Warrant Agent and shall not be valid for any purpose unless so countersigned. In
case any officer of the Company whose signature shall have been placed upon any
of the Warrant Certificates shall cease to be such officer of the Company before
countersignature by the Warrant Agent and issuance and delivery thereof, such
Warrant Certificates may, nevertheless, be countersigned by the Warrant Agent
and issued and delivered with the same force and effect as though such person
had not ceased to be such officer of the Company.
Warrants offered and sold in reliance on Rule 144A shall be issued
initially in the form of a single, permanent global Warrant Certificate in
definitive, fully registered form, substantially in the form set forth in
Exhibit A (the "Rule 144A Global Warrant"), deposited with the Warrant Agent, as
custodian for DTC, duly executed by the Company and countersigned by the Warrant
Agent. The aggregate number of Warrants represented by the Rule 144A Global
Warrant may from time to time be increased or decreased by adjustments made on
the records of the Warrant Agent, as custodian for DTC, or its nominee, as
hereinafter provided.
Warrants offered and sold in offshore transactions in reliance on
Regulation S shall be issued initially in the form of a single, permanent global
Warrant Certificate in definitive, fully registered form, substantially in the
form set forth in Exhibit A (the "Regulation S Global Warrant"), deposited with
the Warrant Agent. The aggregate number of Warrants represented by the
Regulation S Global Warrant may from time to time be increased or decreased by
adjustments made on the records of the Warrant Agent, as custodian for DTC, or
its nominee, as hereinafter provided. The Rule ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and the
Regulation S Global Warrant are sometimes collectively referred to herein as the
"Global Warrants".
Warrants offered and sold in their initial distribution to a limited
number of institutions that are accredited investors (which are not QIBs) within
the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act (and
institutions in which all the equity owners are such accredited investors)
(together referred to as "Institutional Accredited Investors") in transactions
exempt from registration under the Securities Act will be delivered in
certificated fully registered form (a "Restricted Certificated Warrant")
substantially in the form set forth in Exhibit A. Such Warrants shall be
delivered to such Institutional Accredited Investors only upon the execution and
delivery to the Company and the Initial Purchasers of an institutional
accredited investor transferee compliance letter (an "Investor Letter")
substantially in the form of Exhibit C hereto. Restricted Certificated Warrants
may not be transferred or exchanged for interests in Global Warrants or another
Restricted Certificated Warrant except as provided in Sections 5.03 and 5.04
hereof.
Warrants issued pursuant to Section 5.03(b) in exchange for interests
in the Regulation S Global Warrant shall be issued in the form of permanent
Warrant Certificates in registered form in substantially the form set forth in
Exhibit A (the "Offshore Certificated
8
Warrants"). The Offshore Certificated Warrants and the Restricted Certificated
Warrants are sometimes collectively herein referred to as the "Certificated
Warrants".
SECTION 2.04. Loss or Mutilation. Upon receipt by the Company and the
Warrant Agent of evidence satisfactory to them of the ownership and the loss,
theft, destruction or mutilation of any Warrant Certificate and of indemnity
satisfactory to them and (in the case of mutilation) upon surrender and
cancellation thereof, then, in the absence of notice to the Company or the
Warrant Agent that the Warrants represented thereby have been acquired by a bona
fide purchaser, the Company shall execute and the Warrant Agent shall
countersign and deliver to the registered Holder of the lost, stolen, destroyed
or mutilated Warrant Certificate, in exchange for or in lieu thereof, a new
Warrant Certificate of the same tenor and for a like aggregate number of
Warrants, subject to adjustment for any change in the Warrant Exercise Amount.
Upon the issuance of any new Warrant Certificate under this Section 2.04, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and other expenses
(including the reasonable fees and expenses of the Warrant Agent and of counsel
to the Company) in connection therewith. Every new Warrant Certificate executed
and delivered pursuant to this Section 2.04 in lieu of any lost, stolen or
destroyed Warrant Certificate shall constitute a contractual obligation of the
Company, whether or not the allegedly lost, stolen or destroyed Warrant
Certificates shall be at any time enforceable under applicable law, and shall be
entitled to the benefits of this Agreement equally and proportionately with any
and all other Warrant Certificates duly executed and delivered hereunder. The
provisions of this Section 2.04 are exclusive and shall preclude (to the extent
lawful) all other rights or remedies with respect to the replacement of
mutilated, lost, stolen or destroyed Warrant Certificates.
ARTICLE III - EXERCISE TERMS
SECTION 3.01. Exercise Price; Number of Shares. Subject to adjust
pursuant to the terms of this Agreement, each Warrant shall entitle the Holder
thereof to purchase the number of shares of Common Stock equal to the Warrant
Exercise Amount, for a per share exercise price (the "Exercise Price") of $0.01.
SECTION 3.02. Exercise Periods.
(a) Subject to the terms and conditions set forth herein, the
Warrants shall be exercisable at any time or from time to time on any Business
Day on or after December 31, 2002 (the "Exercisability Date"). The Company shall
notify the Warrant Agent of the occurrence of the Exercisability Date.
(b) No Warrant shall be exercisable after December 31, 2009
(the "Expiration Date").
9
SECTION 3.03. Expiration. A Warrant shall terminate and become void as
of the earlier of (i) the close of business on the Expiration Date, (ii) the
date such Warrant is exercised, or (iii) the date, if any, on which New Sub
consummates an Optional Redemption of all of the Subsidiary Notes outstanding at
the time of such Optional Redemption. If any Warrants are to terminate and
become void pursuant to clause (i) of this Section 3.03, the Company shall give
notice not less than 90, and not more than 120, days prior to the Expiration
Date to the Holders of all then outstanding Warrants to the effect that the
Warrants will terminate and become void as of the close of business on the
Expiration Date; provided, however, that notwithstanding that the Company may
fail to give notice as provided in this Section 3.03, the Warrants will
terminate and become void on the Expiration Date.
SECTION 3.04. Manner of Exercise. Warrants may be exercised upon
surrender to the Warrant Agent of the Warrant Certificates, together with the
form of election to purchase Common Stock on the reverse thereof duly filled in
and signed by the Holder thereof, and payment of the Exercise Price. Subject to
Sections 3.02 and 3.03, the rights represented by the Warrants shall be
exercisable at the election of the Holders thereof either in full at any time,
up to the Warrant Exercise Amount then in effect, or from time to time in part.
In the event that a Warrant Certificate is surrendered for exercise in respect
of less than all the Warrant Shares purchasable on such exercise at any time
prior to the expiration of the Exercise Period a new Warrant Certificate
exercisable for the remaining Warrant Shares will be issued. The Warrant Agent
shall countersign and deliver the required new Warrant Certificates, and the
Company, at the Warrant Agent's request, shall supply the Warrant Agent with
Warrant Certificates duly signed on behalf of the Company for such purpose.
SECTION 3.05. Issuance of Warrant Shares. Upon the surrender of Warrant
Certificates, as set forth in Section 3.04, the Company shall issue and cause
the Warrant Agent or, if appointed, a transfer agent for the Common Stock
("Stock Transfer Agent") to countersign and deliver to or upon the written order
of the Holder and in such name or names as the Holder may designate, a
certificate or certificates for the number of full Warrant Shares so purchased
upon the exercise of such Warrants or other securities or property to which it
is entitled, registered or otherwise, to the Person or Persons entitled to
receive the same, together with cash as provided in Section 3.06 in respect of
any fractional Warrant Shares otherwise issuable upon such exercise. Such
certificate or certificates 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 date of the surrender of such Warrant
Certificates and payment of the per share Exercise Price, as aforesaid;
provided, however, that if, at such date, the transfer books for the Warrant
Shares shall be closed, the certificates for the Warrant Shares in respect of
which such Warrants are then exercised shall be issuable as of the date on which
such books shall next be opened and until such date the Company shall be under
no duty to deliver any certificates for such Warrant Shares; provided further,
however, that such transfer books, unless otherwise required by law, shall not
be closed at any one time for a period longer than 20 calendar days.
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SECTION 3.06. Fractional Warrant Shares. The Company shall not be
required to issue fractional Warrant Shares on the exercise of Warrants. If more
than one Warrant shall be exercised in full at the same time by the same Holder,
the number of full Warrant Shares which shall be issuable upon such exercise
shall be computed on the basis of the aggregate number of Warrant Shares
purchasable pursuant thereto. If any fraction of a Warrant Share would, except
for the provisions of this Section 3.06, be issuable on the exercise of any
Warrant (or specified portion thereof), the Company shall pay an amount in cash
equal to the Market Price for one Warrant Share on the trading day immediately
preceding the date the Warrant is exercised, multiplied by such fraction,
computed to the nearest whole cent.
SECTION 3.07. Reservation of Warrant Shares. The Company shall at all
times keep reserved out of its authorized shares of Common Stock, a number of
shares of Common Stock sufficient to provide for the exercise of all outstanding
Warrants. The registrar for the Common Stock (the "Registrar") shall at all
times until the expiration of the Exercise Period 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 Stock Transfer Agent. The Company will
supply such Stock Transfer Agent with duly executed stock certificates for such
purpose and will itself provide or otherwise make available any cash which may
be payable as provided in Section 3.06. The Company will furnish to such Stock
Transfer Agent a copy of all notices of adjustments and certificates related
thereto transmitted to each Holder.
Before taking any action which would cause an adjustment pursuant to
Article IV to reduce the Exercise Price below the then par value (if any) of the
Common Stock, the Company shall take any and all 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 shares of Common Stock at the
Exercise Price as so adjusted.
The Company covenants that all shares of Common Stock which may be
issued upon exercise of Warrants will, upon issue, be fully paid, nonassessable,
free of preemptive rights, free from all taxes and free from all liens, charges
and security interests, created by or through the Company, with respect to the
issue thereof.
SECTION 3.08. Compliance with Law.
(a) Notwithstanding anything in this Agreement to the
contrary, in no event shall a Holder be entitled to exercise a Warrant unless
(i) a registration statement filed under the Securities Act in respect of the
issuance of the Warrant Shares is then effective or (ii) in the opinion of
counsel to the Company addressed to the Warrant Agent an exemption from the
registration requirements is available under the Securities Act for the issuance
of the Warrant Shares (and the delivery of any other securities for which the
Warrants may at the time be exercisable) at the time of such exercise.
(b) If any shares of Common Stock required to be reserved for
purposes of exercise of Warrants require, under any other Federal or state law
or applicable governing
11
rule or regulation of any national securities exchange, registration with or
approval of any governmental authority, or listing on any such national
securities exchange before such shares may be issued upon exercise, the Company
will in good faith and as expeditiously as possible endeavor also to cause such
shares to be duly registered or approved by such governmental authority or
listed on the relevant national securities exchange, as the case may be.
ARTICLE IV - ANTIDILUTION PROVISIONS
SECTION 4.01. Changes in Common Stock. In the event that at any time or
from time to time the Company shall (i) pay a dividend or make a distribution on
its Common Stock in shares of its Common Stock or other shares of capital stock,
(ii) subdivide its outstanding shares of Common Stock into a larger number of
shares of Common Stock, (iii) combine its outstanding shares of Common Stock
into a smaller number of shares of Common Stock or (iv) increase or decrease the
number of shares of Common Stock outstanding by reclassification of its Common
Stock, then the number of shares of Common Stock purchasable upon exercise of
each Warrant immediately prior to the happening of such event shall be adjusted
so that, after giving effect to such adjustment, the holder of each Warrant
shall be entitled to receive the number of shares of Common Stock upon exercise
of such Warrant that such holder would have owned or have been entitled to
receive had such Warrants been exercised immediately prior to the happening of
the events described above (or, in the case of a dividend or distribution of
Common Stock, immediately prior to the record date therefor). An adjustment made
pursuant to this Section 4.01 shall become effective immediately after the
effective date, retroactive to the record date therefor in the case of a
dividend or distribution in shares of Common Stock, and shall become effective
immediately after the effective date in the case of a subdivision, combination
or reclassification.
SECTION 4.02. Cash Dividends and Other Distributions. In case at any
time or from time to time the Company shall distribute to holders of Common
Stock (i) any dividend or other distribution (including any dividend or
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation) of cash, evidences of its indebtedness,
shares of its capital stock or any other properties or securities or (ii) any
options, warrants or other rights to subscribe for or purchase any of the
foregoing (other than, in the case of clause, (i) and (ii) above, (x) any
dividend or distribution described in Section 4.01, (y) any rights, options,
warrants or securities described in Section 4.03 and (z) any cash dividends or
distributions from current or retained earnings other than Extraordinary Cash
Dividends), then the number of shares of Common Stock purchasable upon the
exercise of each Warrant immediately after the record date for the determination
of stockholders entitled to receive such dividend or distribution shall be
increased to a number determined by multiplying the number of shares of Common
Stock purchasable upon the exercise of such Warrant immediately prior to such
record date for any such dividend or distribution by a fraction, the numerator
of which shall be the Market Price per share of Common Stock as of the record
date for such distribution plus the fair market value (as
12
determined by the Board of Directors of the Company acting in good faith, whose
determination shall be evidenced by a board resolution) as of such record date
of such Extraordinary Cash Dividend, the evidences of indebtedness, shares of
capital stock or other assets, properties or securities, or any options,
warrants or rights to subscribe for or purchase any of the foregoing, to be
dividend or distributed in respect of one share of Common Stock, and the
denominator of which shall be such Market Price per share of Common Stock as of
such record date; and the Exercise Price shall be adjusted to a number
determined by dividing the Exercise Price immediately prior to such record date
by the above fraction. Such adjustments shall be made, and shall only become
effective, whenever any dividend or distribution is made; provided, however,
that the Company is not required to make an adjustment pursuant to this Section
4.02 if at the time of such distribution the Company makes the same distribution
to Holders of Warrants as it makes to holders of Common Stock pro rata based on
the number of shares of Common Stock for which such Warrants are exercisable
(whether or not currently exercisable). No adjustment shall be made pursuant to
this Section 4.02 which shall have the effect of decreasing the number of shares
of Common Stock purchasable upon exercise of each Warrant or increasing the
Exercise Price.
SECTION 4.03. Rights Issue. In the event that at any time or from time
to time the Company shall issue rights, options or warrants to acquire, or
securities convertible or exchangeable into, Common Stock to all holders of
Common Stock without any charge, entitling such holders to subscribe for or
purchase shares of Common Stock at a price per share that is less than the
Market Price per share of Common Stock as of the record date for the
determination of stockholders entitled to receive such rights, options, warrants
or securities, the number of shares of Common Stock purchasable upon the
exercise of each Warrant immediately after such record date shall be determined
by multiplying the number of shares of Common Stock purchasable upon exercise of
each Warrant immediately prior to such record date by a fraction, the numerator
of which shall be the number of shares of Common Stock outstanding as of the
close of business on the record date for the issuance of such rights, options,
warrants or securities plus the number of additional shares of Common Stock
offered for subscription or purchase or into which such securities are
convertible or exchangeable, and the denominator of which shall be the number of
shares of Common Stock outstanding as of the close of business on the record
date for the issuance of such rights, options, warrants or securities plus the
total number of shares of Common Stock which the aggregate consideration
expected to be received by the Company upon the exercise, conversion or exchange
of such rights, options, warrants or securities (as determined by the Board of
Directors of the Company acting in good faith, whose determination shall be
evidenced by a board resolution) would purchase at the Market Price per share of
Common Stock as of the record date. In the event of any such adjustment, the
Exercise Price shall be adjusted to a number determined by dividing the Exercise
Price immediately prior to such date of issuance by the aforementioned fraction.
Such adjustment shall be made, and shall only become effective, whenever such
rights, options, warrants or securities are issued. No adjustment shall be made
pursuant to this Section 4.03 which shall have the effect of decreasing the
number of shares of Common Stock purchasable upon exercise of each Warrant or of
increasing the Exercise Price.
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SECTION 4.04. Combination; Liquidation.
(a) Except as provided in Section 4.04(b), in the event of a
Combination, the Holders shall have the right to receive upon exercise of the
Warrants such number of shares of capital stock or other securities or property
which such Holder would have been entitled to receive upon or as a result of
such Combination had such Warrant been exercised immediately prior to such
event. Unless paragraph (b) is applicable to a Combination, the Company shall
provide that the surviving or acquiring Person (the "Successor Company") in such
Combination will enter into an agreement with the Warrant Agent confirming the
Holders' rights pursuant to this Section 4.04(a) and providing for adjustments,
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Article IV. The provisions of this Section 4.04(a) shall
similarly apply to successive Combinations involving any Successor Company.
(b) In the event of (i) a Combination where consideration to
the holders of Common Stock in exchange for their shares is payable solely in
cash, or (ii) the dissolution, liquidation or winding-up of the Company, then
the holders of the Warrants will be entitled to receive distributions on an
equal basis with the holders of Common Stock or other securities issuable upon
exercise of the Warrants, as if the Warrants had been exercised immediately
prior to such event.
In case of any Combination described in this Section 4.04(b), the
surviving or acquiring Person and, in the event of any dissolution, liquidation
or winding-up of the Company, the Company shall deposit promptly with the
Warrant Agent the funds, if any, necessary to pay to the holders of the Warrants
the amounts to which they are entitled as described above. After such funds and
the surrendered Warrant Certificates are received, the Warrant Agent shall make
payment to the Holders by delivering a check in such amount as is appropriate
(or, in the case of consideration other than cash, such other consideration as
is appropriate) to such Person or Persons as it may be directed in writing by
the holders surrendering such Warrants.
SECTION 4.05. Other Events. If any event occurs as to which the
foregoing provisions of this Article IV are not strictly applicable or, if
strictly applicable, would not, in the good faith judgment of the Board, fairly
and adequately protect the purchase rights of the Warrants in accordance with
the essential intent and principles of such provisions, then such Board shall
make such adjustments in the application of such provisions, in accordance with
such essential intent and principles, as shall be reasonably necessary, in the
good faith opinion of such Board, to protect such purchase rights as aforesaid,
but in no event shall any such adjustment have the effect of increasing the
Exercise Price or decreasing the number of shares of Common Stock subject to
purchase upon exercise of this Warrant.
SECTION 4.06. Superseding Adjustment. Upon the expiration of any
rights, options, warrants or conversion or exchange privileges which resulted in
the adjustments pursuant to this Article IV, if any thereof shall not have been
exercised, the number of Warrant Shares purchasable upon the exercise of each
Warrant shall be readjusted as if (A)
14
the only shares of Common Stock issuable upon exercise of such rights, options,
warrants, conversion or exchange privileges were the shares of Common Stock, if
any, actually issued upon the exercise of such rights, options, warrants or
conversion or exchange privileges and (B) shares of Common Stock actually
issued, if any, were issuable 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 or grant of all such rights,
options, warrants or conversion or exchange privileges whether or not exercised
and the Exercise Price shall be readjusted inversely; provided, however, that no
such readjustment shall (except by reason of an intervening adjustment under
Section 4.01) have the effect of decreasing the number of Warrant Shares
purchasable upon the exercise of each Warrant or increasing the Exercise Price
by an amount in excess of the amount of the adjustment initially made in respect
of the issuance, sale or grant of such rights, options, warrants or conversion
or exchange privileges.
SECTION 4.07. Minimum Adjustment. The adjustments required by the
preceding Sections of this Article IV shall be made whenever and as often as any
specified event requiring an adjustment shall occur, except that no adjustment
of the Exercise Price or the number of shares of Common Stock purchasable upon
exercise of Warrants that would otherwise be required shall be made (except in
the case of a subdivision or combination of shares of Common Stock, as provided
for in Section 4.01) unless and until such adjustment either by itself or with
other adjustments not previously made increases or decreases by at least 1% of
the number of shares of Common Stock purchasable upon exercise of Warrants
immediately prior to the making of such adjustment; provided, however, that any
adjustment pursuant to this Article IV (including those that require an increase
or decrease in the Exercise Price or the number of shares of Common Stock
purchasable upon exercise of Warrants of less than 1%) shall be made no later
than the earlier of three years from the date of the transaction that mandates
such adjustment and the Expiration Date. Any adjustment representing a change of
less than such minimum amount shall be carried forward and made as soon as such
adjustment, together with other adjustments required by this Article IV and not
previously made, would result in a minimum adjustment. For the purpose of any
adjustment, any specified event shall be deemed to have occurred at the close of
business on the date of its occurrence. In computing adjustments under this
Article IV, fractional interests in Common Stock shall be taken into account to
the nearest one-hundredth of a share.
SECTION 4.08. Notice of Adjustment. Whenever the Exercise Price or the
number of shares of Common Stock and other property, if any, purchasable upon
exercise of Warrants is adjusted, as herein provided, the Company shall deliver
to the Warrant Agent a certificate of a firm of independent accountants selected
by the Board (who may be the regular accountants employed by the Company)
setting forth, in reasonable detail, the event requiring the adjustment and the
method by which such adjustment was calculated (including a description of the
basis on which the Board of Directors of the Company determined the fair market
value of any evidences of indebtedness, other securities or property or warrants
or other subscription or purchase rights), and specifying the Exercise Price and
the number of shares of Common Stock purchasable upon exercise of Warrants after
giving effect to such
15
adjustment. The Company shall promptly cause the Warrant Agent to mail a copy of
such certificate to each Holder in accordance with Section 7.06. The Warrant
Agent shall be entitled to rely on such certificate and shall be under no duty
or responsibility with respect to any such certificate, except to exhibit the
same from time to time, to any Holder desiring an inspection thereof during
reasonable business hours. The Warrant Agent shall not at any time be under any
duty or responsibility to any Holder to determine whether any facts exist which
may require any adjustment of the Exercise Price or the number of shares of
Common Stock or other stock or property, purchasable on exercise of the
Warrants, or with respect to the nature or extent of any such adjustment when
made, or with respect to the method employed in making such adjustment or the
validity or value of any shares of Common Stock.
SECTION 4.09. Notice of Certain Transactions. In the event that the
Company shall propose (a) to pay any dividend payable in securities of any class
to the holders of its Common Stock or to make any other distribution to the
holders of its Common Stock, (b) to offer the holders of its Common Stock rights
to subscribe for or to purchase any securities convertible into shares of Common
Stock or shares of stock of any class or any other securities, rights or
options, (c) to effect any capital reorganization, consolidation or merger or
(d) to effect the voluntary or involuntary dissolution, liquidation or
winding-up of the Company, the Company shall within 5 days send to the Warrant
Agent and the Warrant Agent shall within 5 days send the Holders a notice (in
such form as shall be furnished to the Warrant Agent by the Company) of such
proposed action or offer, such notice to be mailed by the Warrant Agent to the
Holders at their addresses as they appear in the Certificate Register, which
shall specify the record date for the purposes of such dividend, distribution or
rights, or the date such issuance or event is to take place and the date of
participation therein by the holders of Common Stock, if any such date is to be
fixed, and shall briefly indicate the effect of such action on the Common Stock
and on the number and kind of any other shares of stock and on other property,
if any, and the number of shares of Common Stock and other property, if any,
purchasable upon exercise of each Warrant and the Exercise Price after giving
effect to any adjustment which will be required as a result of such action. Such
notice shall be given as promptly as possible and, in the case of any action
covered by clause (a) or (b) above, at least 10 days prior to the record date
for determining holders of the Common Stock for purposes of such action and, in
the case of any other such action, at least 20 days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of Common Stock, whichever shall be the earlier.
SECTION 4.10. Adjustment to Warrant Certificate. The form of Warrant
Certificate need not be changed because of any adjustment made pursuant to this
Article IV or any adjustment of the Warrant Exercise Amount, and Warrant
Certificates issued after such adjustment may state the same Exercise Price and
the same number of shares of Common Stock as are stated in the Warrant
Certificates initially issued pursuant to this Agreement. The Company, however,
may at any time in its sole discretion make any change in the form of Warrant
Certificate that it may deem appropriate to give effect to such adjustments and
that does not affect the substance of the Warrant Certificate, and any Warrant
Certificate
16
thereafter issued or countersigned, whether in exchange or substitution for an
outstanding Warrant Certificate or otherwise, may be in the form as so changed.
SECTION 4.11. Issuance of Due Bills. In any case in which this Article
IV shall require that adjustment in the Exercise Price be made as of the record
date for a specified event, (x) the Company may elect to defer until the
occurrence of such event the issuance to the holder of any Warrant exercised
after such record date the shares of Common Stock and other capital stock of the
Company, if any, issuable upon such exercise over and above the shares of Common
Stock and other capital stock of the Company, if any, issuable upon such
exercise upon the basis of the Exercise Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such holder a
due ▇▇▇▇ or other appropriate instrument evidencing such holder's right to
receive such additional shares upon the effectiveness of the event requiring
such adjustment and (y) the Common Stock transfer books of the Company shall be
deemed to have been opened immediately prior to such record date, whether or not
such transfer books were in fact open.
ARTICLE V - TRANSFERABILITY
SECTION 5.01. Transfer and Exchange. The Warrant Certificates shall be
issued in registered form only. The Company shall cause to be kept at the office
of the Warrant Agent a register in which, subject to such reasonable regulations
as it may prescribe, the Company shall provide for the registration of Warrant
Certificates and transfers or exchanges of Warrant Certificates as herein
provided. All Warrant Certificates issued upon any registration of transfer or
exchange of Warrant Certificates shall be the valid obligations of the Company,
evidencing the same obligations, and entitled to the same benefit under this
Agreement, as the Warrant Certificates surrendered for such registration of
transfer or exchange.
A Holder may transfer its Warrants only by complying with the terms of
this Agreement. No such transfer shall be effected until, and such transferee
shall succeed to the rights of a Holder only upon, final acceptance and
registration of the transfer by the Warrant Agent in the register. Prior to the
registration of any transfer of Warrants by a Holder as provided herein, the
Company, the Warrant Agent, any agent of the Company or the Warrant Agent may
treat the Person in whose name the Warrants are registered as the owner thereof
for all purposes and as the Person entitled to exercise the rights represented
thereby, any notice to the contrary notwithstanding. Furthermore, any Holder of
a Global Warrant, shall, by acceptance of such Global Warrant, agree that
transfers of beneficial interests in such Global Warrant may be effected only
through a book-entry system maintained by the Holder of such Global Warrant (or
its agent), and that ownership of a beneficial interest in the Warrants
represented thereby shall be required to be reflected in a book entry. When
Warrant Certificates are presented to the Warrant Agent with a request to
register the transfer or to exchange them for an equal amount of Warrants of
other authorized denominations, the Warrant Agent shall register the transfer or
make the exchange in accordance with the provisions hereof.
17
SECTION 5.02. Registration, Registration of Transfer and Exchange. When
Certificated Warrants are presented to the Warrant Agent with a request from the
Holder of such Warrants to register the transfer or to exchange them for an
equal number of Warrants of other authorized denominations, the Warrant Agent
shall register the transfer or make the exchange as requested; provided,
however, that every Warrant presented and surrendered for registration of
transfer or exchange shall be duly endorsed and be accompanied by a written
instrument of transfer in form satisfactory to the Company, duly executed by the
Holder thereof or the Holder's attorneys duly authorizing in writing.
To permit registrations of transfer and exchanges, the Company shall
make available to the Warrant Agent a sufficient number of executed Warrant
Certificates to effect such registrations of transfers and exchanges. No service
charge shall be made to the Holder for any registration of transfer or exchange
of Warrants, but the Company may require from the transferring or exchanging
Holder payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable upon exchanges pursuant to Section 2.04 and
exchanges in respect of portions of Warrants not exercised and the Company may
deduct such taxes from any payment of money to be made and such transfer or
exchange shall not be consummated (if such taxes are not deducted in full)
unless or until the Holder shall have paid to the Company the amount of such tax
or shall have established to the satisfaction of the Company and the Warrant
Agent that such tax has been paid.
SECTION 5.03. Book-Entry Provisions for the Rule ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
and Regulation S Global Warrant.
(a) The Rule 144A Global Warrant and Regulation S Global
Warrant initially shall (i) be registered in the name of DTC or the nominee of
DTC, (ii) be delivered to the Warrant Agent as custodian for DTC and (iii) bear
legends as set forth in Section 2.02 hereof. Members of, or participants in, DTC
("Agent Members") shall have no rights under this Agreement with respect to the
Rule ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or Regulation S Global Warrant, as the case may be,
held on their behalf by DTC or the Warrant Agent as its custodian, and DTC may
be treated by the Company, the Warrant Agent and any agent of the Company or the
Warrant Agent as the absolute owner of such Rule ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or
Regulation S Global Warrant, as the case may be, for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Warrant Agent or any agent of the Company or the Warrant Agent from giving
effect to any written certification, proxy or other authorization furnished by
DTC or impair, as between DTC and its Agent Members, the operation of customary
practices governing the exercise of the right of a beneficial owner of any
Warrants.
(b) Transfers of the Rule ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and the
Regulation S Global Warrant shall be limited to transfers of such Rule ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or Regulation S Global Warrant in whole, but not in part, to DTC,
its successors or their respective nominees. Interests of beneficial owners in
the Rule ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and the Regulation S Global Warrant may be
transferred in accordance with the rules and procedures of DTC and the
provisions of Section 5.04 hereof. Restricted Certificated Warrants and
18
Offshore Certificated Warrants shall be transferred to all beneficial owners in
exchange for their beneficial interests in the Rule ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or the
Regulation S Global Warrant, respectively, if DTC notifies the Company that it
is unwilling or unable to continue as Depositary for the Rule ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ or the Regulation S Global Warrant, as the case may be, or DTC ceases to
be a "Clearing Agency" registered under the Exchange Act and a successor
depositary is not appointed by the Company within 90 days.
(c) Any beneficial interest in one of the Global Warrants that
is transferred to a Person who takes delivery in the form of an interest in the
other Global Warrant will, upon transfer, cease to be an interest in such Global
Warrant and become an interest in the other Global Warrant and, accordingly,
will thereafter be subject to all transfer restrictions, if any, and other
procedures applicable to beneficial interests in such other Global Warrant for
as long as it remains such in interest.
(d) In connection with any transfer pursuant to paragraph (b)
of this Section of a portion of the beneficial interests in the Rule ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ to beneficial owners who are required to hold Restricted Certificated
Warrants, the Warrant Agent shall reflect on its books and records the date and
a decrease in the number of shares of Common Stock represented by the Rule 144A
Global Warrant in an amount equal to the number of shares of Common Stock
represented by the beneficial interest in the Rule 144A Global Warrant to be
transferred, and the Company shall execute, and the Warrant Agent shall
countersign and deliver, one or more Restricted Certificated Warrants of like
tenor and amount.
(e) In connection with the transfer of the entire Rule 144A
Global Warrant or Regulation S Global Warrant to beneficial owners pursuant to
paragraph (b) of this Section, the Rule ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or the Regulation S
Global Warrant, as the case may be, shall be deemed to be surrendered to the
Warrant Agent for cancellation, and the Company shall execute, and the Warrant
Agent shall countersign and deliver, to each beneficial owner identified by DTC
in exchange for its beneficial interest in the Rule ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or the
Regulation S Global Warrant, as the case may be, Restricted Certificated
Warrants or Offshore Certificated Warrants, as the case may be, of authorized
denominations representing, in the aggregate, the number of Warrants theretofore
represented by the Rule ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or the Regulation S Global Warrant.
(f) Any Restricted Certificated Warrant delivered in exchange
for an interest in a Global Warrant pursuant to paragraph (b) or (d) of this
Section shall, except as otherwise provided by paragraph (c) of Section 5.04
hereof, bear the legend regarding transfer restrictions set forth in Section
2.02.
(g) The registered holder of the Rule ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and
the Regulation S Global Warrant may grant proxies and otherwise authorize any
Person, including Agent Members and persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Agreement or the Warrants.
19
SECTION 5.04. Special Transfer Provisions. Unless and until an Initial
Public Offering registration statement is declared effective that includes all
outstanding Warrants and Warrant Shares to the extent provided in the
Registration Rights Agreement (as certified to the Warrant Agent by the
Company), the following provisions shall apply:
(a) Transfers to Non-QIB Institutional Accredited Investors.
The following provisions shall apply with respect to the registration of any
proposed transfer of Warrants to any Institutional Accredited Investor which
is not a QIB (excluding Non-U.S. Persons):
(i) The Warrant Agent shall register the transfer of
any Warrant Certificate, if (x)(A) the requested transfer is at least
two years after the Issue Date or (B) the proposed transferee has
delivered to the Warrant Agent certificates substantially in the forms
of Exhibits B and C hereto and (y) if requested by the Warrant Agent or
the Company, the proposed transferee has delivered to the Warrant Agent
or the Company, an opinion of counsel acceptable to the Warrant Agent
or the Company that such transfer is in compliance with the Securities
Act.
(ii) If the proposed transferor is an Agent Member
holding a beneficial interest in the Rule 144A Global Warrant, upon
receipt by the Warrant Agent of (x) the documents, if any, required by
paragraph (i) and (y) instructions given in accordance with DTC's and
the Warrant Agent's procedures, the Warrant Agent shall reflect on its
books and records the date and a decrease in the number of Warrants
represented by the Rule 144A Global Warrant in an amount equal to the
number of Warrants represented by the Rule 144A Global Warrant to be
transferred, and the Company shall execute, and the Warrant Agent shall
countersign and deliver, one or more Restricted Certificated Warrants
of like tenor and amount.
(b) Transfers to QIBs. The following provisions shall apply
with respect to the registration of any proposed transfer of Warrants to a QIB
(excluding Non-U.S. Persons):
(i) If the Warrants to be transferred are represented
by (x) Restricted Certificated Warrants, the Warrant Agent shall
register the transfer if it has received from such transferor a
certificate substantially in the form of Exhibit B that the sale has
been made in compliance with the provisions of Rule 144A to a
transferee who has signed the certification provided for on the form of
Warrant Certificate stating, or has otherwise advised the Company and
the Warrant Agent in writing, that it is purchasing the Warrants for
its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a QIB within
the meaning of Rule 144A, and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has received
such information regarding the Company as it has requested pursuant to
Rule 144A or has determined not to request such information and that it
is aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from registration
provided by Rule 144A or (y) an interest in the Rule 144A Global
20
Warrant, the transfer of such interest may be effected only through the
book-entry system maintained by DTC.
(ii) If the proposed transferee is an Agent Member,
and the Warrants to be transferred are represented by Restricted
Certificated Warrants, upon receipt by the Warrant Agent of the
documents referred to in clause (i) above and instructions given in
accordance with DTC's and the Warrant Agent's procedures, the Warrant
Agent shall reflect on its books and records the date and an increase
in the number of Warrants represented by the Rule 144A Global Warrant
in an amount equal to the number of Warrants represented by the
Restricted Certificated Warrants, and the Warrant Agent shall cancel
the Restricted Certificated Warrant.
(c) Transfers of Interest in the Regulation S Global Warrant
or Offshore Certificated Warrants to U.S. Persons. With respect to any transfer
of interests in the Regulation S Global Warrant or Offshore Certificated
Warrants to U.S. Persons:
(i) on or prior to the date that is 40 calendar days
after the Issue Date, the Warrant Agent shall refuse to register such
transfer; and
(ii) after such date, the Warrant Agent shall
register such transfer without requiring additional certification and
shall deliver Warrant Certificates that do not bear the legend in
Section 2.02.
(d) Transfers to Non-U.S. Persons at Any Time. The following
provisions shall apply with respect to any transfer of Warrants to a Non-U.S.
Person:
(i) the Warrant Agent shall register any proposed
transfer of Warrants to a Non-U.S. Person only upon receipt of a
certificate substantially in the form of Exhibit B from the proposed
transferor.
(ii) (x) If the proposed transferor is an Agent
Member holding a beneficial interest in the Rule 144A Global Warrant,
upon receipt by the Warrant Agent of (A) the documents required by
paragraph (i) and (B) instructions in accordance with DTC's and the
Warrant Agent's procedures, the Warrant Agent shall reflect on its
books and records the date and a decrease in the number of Warrants
represented by the Rule 144A Global Warrant to be transferred, and (y)
if the proposed transferee is an Agent Member, upon receipt by the
Warrant Agent of instructions given in accordance with DTC's and the
Warrant Agent's procedures, the Warrant Agent shall reflect on its
books and records the date and an increase in the number of Warrants
represented by the Regulation S Global Warrant in an amount equal to
the number of Warrants represented by the Restricted Certificated
Warrants or the Rule ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, as the case may be, to be
transferred, and the Warrant Agent shall cancel the Certificated
Warrant, if any, so transferred or decrease the number of Warrants
represented by the Rule 144A Global Warrant.
21
(e) General. By its acceptance of any Warrants represented by
a Warrant Certificate bearing the legend in Section 2.02, each Holder of such
Warrants acknowledges the restrictions on transfer of such Warrants set forth in
this Agreement and in the legend and agrees that it will transfer such Warrants
only as provided in this Agreement. The Warrant Agent shall not register a
transfer of any Warrants unless such transfer complies with the requirements of
this Section 5.04. In connection with any transfer of Warrants, each Holder
agrees by its acceptance of Warrants to furnish the Warrant Agent or the Company
such certifications, legal opinions or other information as either of them may
reasonably require to confirm that such transfer is being made pursuant to an
exemption from, or a transaction not subject to, the registration requirements
of the Securities Act; provided, however, that the Warrant Agent shall not be
required to determine (but may rely on a determination made by the Company with
respect to) the sufficiency of any such certifications, legal opinions or other
information. The Warrant Agent's only obligation to enforce the transfer
restrictions of this Agreement shall be to require the certifications and
opinions specifically required by this Section 5.04 as a condition to a
transfer.
(f) Records. The Warrant Agent shall retain copies of all
letters, notices and other written communications received pursuant to Section
5.03 hereof or this Section 5.04. The Company shall have the right to inspect
and make copies of all such letters, notices or other written communications at
any reasonable time upon the giving of reasonable written notice to the Warrant
Agent.
SECTION 5.05. Surrender of Warrant Certificates. Any Warrant
Certificate surrendered for registration of transfer, exchange, exercise or
repurchase of the Warrants represented thereby shall, if surrendered to the
Company, be delivered to the Warrant Agent, and all Warrant Certificates
surrendered or so delivered to the Warrant Agent shall be promptly canceled by
the Warrant Agent and shall not be reissued by the Company and, except as
provided in this Article V in case of an exchange or in Article III hereof in
case of the exercise or repurchase of less than all the Warrants represented
thereby or in case of a mutilated Warrant Certificate, no Warrant Certificate
shall be issued hereunder in lieu thereof. The Warrant Agent shall deliver to
the Company from time to time or otherwise dispose of such canceled Warrant
Certificates as the Company may direct in writing.
ARTICLE VI - OTHER RIGHTS
SECTION 6.01. Registration Rights. With respect to the Warrant
Shares, the Holders shall have the registration rights set forth in the
Registration Rights Agreement.
ARTICLE VII - WARRANT AGENT
SECTION 7.01. Appointment of Warrant Agent. The Company hereby appoints
the Warrant Agent to act as agent for the Company in accordance with provisions
of this Agreement and the Warrant Agent hereby accepts such appointment.
22
SECTION 7.02. Rights and Duties of Warrant Agent.
(a) Agent for the Company. In acting under this Warrant
Agreement and in connection with the Warrant Certificates, the Warrant Agent is
acting solely as agent of the Company and does not assume any obligation or
relationship or agency or trust for or with any of the holders of Warrant
Certificates or beneficial owners of Warrants.
(b) Counsel. The Warrant Agent may consult with counsel
satisfactory to it, and the advice of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in accordance with the advice of such counsel.
(c) Documents. The Warrant Agent shall be protected and shall
incur no liability for or in respect of any action taken or thing suffered by it
in reliance upon any Warrant Certificate, notice, direction, consent,
certificate, affidavit, statement or other paper or document reasonably believed
by it to be genuine and to have been presented or signed by the proper parties.
(d) No Implied Obligations. The Warrant Agent shall be
obligated to perform only such duties as are herein and in the Warrant
Certificates specifically set forth and no implied duties or obligations shall
be read into this Agreement or the Warrant Certificates against the Warrant
Agent. The Warrant Agent shall not be under any obligation to take any action
hereunder which may tend to involve it in any expense or liability for which it
does not receive indemnity if such indemnity is reasonably requested. The
Warrant Agent shall not be accountable or under any duty or responsibility for
the use by the Company of any of the Warrant Certificates countersigned by the
Warrant Agent and delivered by it to the Holders or on behalf of the Holders
pursuant to this Agreement or for the application by the Company of the proceeds
of the Warrants. The Warrant Agent shall have no duty or responsibility in case
of any default by the Company in the performance of its covenants or agreements
contained herein or in the Warrant Certificates or in the case of the receipt of
any written demand from a Holder with respect to such default, including any
duty or responsibility to initiate or attempt to initiate any proceedings at law
or otherwise.
(e) Not Responsible for Adjustments or Validity of Stock. The
Warrant Agent shall not at any time be under any duty or responsibility to any
Holder to determine whether any facts exist that may require an adjustment of
the number of shares of Common Stock purchasable upon exercise of each Warrant
or the Exercise Price, or with respect to the nature or extent of any adjustment
when made, or with respect to the method employed, or herein or in any
supplemental agreement provided to be employed, in making the same. The Warrant
Agent shall not be accountable with respect to the validity or value of any
shares of Common Stock or of any securities or property which may at any time be
issued or delivered upon the exercise of any Warrant or upon any adjustment
pursuant to Article IV, and it makes no representation with respect thereto. The
Warrant Agent shall not be responsible for any failure of the Company to make
any cash payment or to issue, transfer or deliver any shares of Common Stock or
stock certificates upon the surrender of any Warrant
23
Certificate for the purpose of exercise or upon any adjustment pursuant to
Article IV, or to comply with any of the covenants of the Company contained in
Article IV.
SECTION 7.03. Individual Rights of Warrant Agent. The Warrant Agent and
any stockholder, director, officer or employee of the Warrant Agent may buy,
sell or deal in any of the Warrants or other securities of the Company or its
affiliates or become pecuniarily interested in transactions in which the Company
or its affiliates may be interested, or contract with or lend money to the
Company or its affiliates or otherwise act as fully and freely as though it were
not the Warrant Agent under this Agreement. Nothing herein shall preclude the
Warrant Agent from acting in any other capacity for the Company or for any other
legal entity.
SECTION 7.04. Warrant Agent's Disclaimer. The Warrant Agent shall not
be responsible for and makes no representation as to the validity or adequacy of
this Agreement or the Warrant Certificates and it shall not be responsible for
any statement in this Agreement or the Warrant Certificates other than its
countersignature thereon.
SECTION 7.05. Compensation and Indemnity. The Company agrees to pay the
Warrant Agent from time to time reasonable compensation for its services and to
reimburse the Warrant Agent upon request for all reasonable out-of- pocket
expenses incurred by it, including the reasonable compensation and expenses of
the Warrant Agent's agents and counsel. The Company shall indemnify the Warrant
Agent against any loss, liability or expense (including reasonable agents' and
attorneys' fees and expenses) incurred by it without negligence or bad faith on
its part arising out of or in connection with the acceptance or performance of
its duties under this Agreement. The Warrant Agent shall notify the Company
promptly of any claim for which it may seek indemnity. The Company need not
reimburse any expense or indemnify against any loss or liability incurred by the
Warrant Agent through wilful misconduct, negligence or bad faith. The Company's
payment obligations pursuant to this Section 7.05 shall survive the termination
of this Agreement.
To secure the Company' payment obligations under this Agreement, the
Warrant Agent shall have a lien prior to the Warrant Holders on all money or
property held or collected by the Warrant Agent.
SECTION 7.06. Successor Warrant Agent.
(a) The Company To Provide Warrant Agent. The Company agrees
for the benefit of the Holders that there shall at all times be a Warrant Agent
hereunder until all the Warrants have been exercised or are no longer
exercisable.
(b) Resignation and Removal. The Warrant Agent may at any time
resign by giving written notice to the Company of such intention on its part,
specifying the date on which its desired resignation shall become effective;
provided, however, that such date shall not be less than 60 days after the date
on which such notice is given unless the Company otherwise agrees. The Warrant
Agent hereunder may be removed at any time by the filing
24
with it of an instrument in writing signed by or on behalf of the Company and
specifying such removal and the date when it shall become effective, which date
shall not be less than 60 days after such notice is given unless the Warrant
Agent otherwise agrees. Any removal under this Section 7.06 shall take effect
upon the appointment by the Company as hereinafter provided of a successor
Warrant Agent (which shall be a bank or trust company authorized under the laws
of the jurisdiction of its organization to exercise corporate trust powers) and
the acceptance of such appointment by such successor Warrant Agent.
(c) The Company To Appoint Successor. In case at any time the
Warrant Agent shall resign, or shall be removed, or shall become incapable of
acting, or shall be adjudged a bankrupt or insolvent, or shall commence a
voluntary case under the Federal bankruptcy laws, as now or hereafter
constituted, or under any other applicable Federal or state bankruptcy,
insolvency or similar law or shall consent to the appointment of or taking
possession by a receiver, custodian, liquidator, assignee, trustee, sequestrator
(or other similar official) of the Warrant Agent or its property or affairs, or
shall make an assignment for the benefit of creditors, or shall admit in writing
its inability to pay its debts generally as they become due, or shall take
corporate action in furtherance of any such action, or a decree or order for
relief by a court having jurisdiction in the premises shall have been entered in
respect of the Warrant Agent in an involuntary case under the Federal bankruptcy
laws, as now or hereafter constituted, or any other applicable Federal or State
bankruptcy, insolvency or similar law; or a decree order by a court having
jurisdiction in the premises shall have been entered for the appointment of a
receiver, custodian, liquidator, assignee, trustee, sequestrator (or similar
official) of the Warrant Agent or of its property or affairs, or any public
officer shall take charge or control of the Warrant Agent or of its property or
affairs for the purpose of rehabilitation, conservation, winding up of or
liquidation, a successor Warrant Agent, qualified as aforesaid, shall be
appointed by the Company by an instrument in writing, filed with the successor
Warrant Agent. Upon the appointment as aforesaid of a successor Warrant Agent
and acceptance by the successor Warrant Agent of such appointment, the Warrant
Agent shall cease to be Warrant Agent hereunder; provided, however, that in the
event of the resignation of the Warrant Agent under this subsection (c), such
resignation shall be effective on the earlier of (i) the date specified in the
Warrant Agent's notice of resignation and (ii) the appointment and acceptance of
a successor Warrant Agent hereunder.
(d) Successor To Expressly Assume Duties. Any successor
Warrant Agent appointed hereunder shall execute, acknowledge and deliver to its
predecessor and to the Company an instrument accepting such appointment
hereunder, and thereupon such successor Warrant Agent, without any further act,
deed or conveyance, shall become vested with all the rights and obligations of
such predecessor with like effect as if originally named as Warrant Agent
hereunder, and such predecessor, upon payment of its charges and disbursements
then unpaid, shall thereupon become obligated to transfer, deliver and pay over,
and such successor Warrant Agent shall be entitled to receive, all monies,
securities and other property on deposit with or held by such predecessor, as
Warrant Agent hereunder.
25
(e) Successor by Merger. Any corporation into which the
Warrant Agent hereunder may be merged or consolidated, or any corporation
resulting from any merger or consolidation to which the Warrant Agent shall be a
party, or any corporation to which the Warrant Agent shall sell or otherwise
transfer all or substantially all of its corporate trust business; provided that
it shall be qualified as aforesaid, shall be the successor Warrant Agent under
this Agreement without the execution or filing of any paper or any further act
on the part of any of the parties hereto.
ARTICLE VIII - MISCELLANEOUS
SECTION 8.01. Company Resales. The Company hereby agrees with each
Holder, that the Company shall not resell any Warrants or Warrant Shares it
acquires, by purchase or otherwise, except pursuant to an effective registration
statement.
SECTION 8.02. SEC Reports and Other Information. Notwithstanding that
the Company may not be subject to the reporting requirements of Section 13 or
15(d) of the Exchange Act, the Company shall, for all periods ending after the
date of this Warrant Agreement, file with the SEC and thereupon provide the
Warrant Agent and Holders with such annual reports and such information,
documents and other reports are as specified in Sections 13 and 15(d) of the
Exchange Act and applicable to a U.S. corporation subject to such Sections, such
information, documents and other reports to be so filed and provided at the
times specified for the filing of such information, documents and reports under
such Sections. In addition, for as long as any of the Warrants are outstanding,
the Company will make available to any prospective purchaser of the Warrants or
Warrant Shares or beneficial owner thereof in connection with any sales thereof
the information required by Rule 144A(d)(4) under the Securities Act.
SECTION 8.03. Rule 144A. The Company hereby agrees with each Holder,
for so long as any Warrants or Warrant Shares remain outstanding and during any
period in which the Company is not subject to Section 13 or 15(d) of the
Exchange Act, to make available, upon request of any Holder, to any Holder or
beneficial owner of Warrants or Warrant Shares in connection with any sale
thereof and any prospective purchaser of such Warrants or Warrant Shares from
such Holder or beneficial owner, the information required by Rule 144A(d)(4)
under the Securities Act in order to permit resales of such Warrants or Warrant
Shares pursuant to Rule 144A.
SECTION 8.04. Persons Benefitting. Nothing in this Agreement is
intended or shall be construed to confer upon any Person other than the Company,
the Warrant Agent and the Holders any right, remedy or claim under or by reason
of this agreement or any part hereof.
SECTION 8.05. Rights of Holders. Except as expressly contemplated
herein, holders of unexercised Warrants are not entitled (i) to receive
dividends or other distributions (ii) to receive notice of or vote at any
meeting of the stockholders, (iii) to consent to any
26
action of the stockholders, (iv) to receive notice of any other proceedings of
the Company or (v) to exercise any other rights as stockholders of the Company.
SECTION 8.06. Amendment. This Agreement may be amended by the parties
hereto without the consent of any Holder for the purpose of curing any
ambiguity, or of curing, correcting or supplementing any defective provision
contained herein or making any other provisions with respect to matters or
questions arising under this Agreement as the Company and the Warrant Agent may
deem necessary or desirable; provided, however, that the Company determines, and
the Warrant Agent may rely on such determination, that such action shall not
affect adversely the rights of the Holders. Any amendment or supplement to this
Agreement that has an adverse effect on the interests of the Holders shall
require the written consent of the Holders of majority of the then outstanding
Warrants. The consent of each Holder 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 in Article IV as of the Issue Date
of the Warrants). In determining whether the Holders of the required number of
Warrants have concurred in any direction, waiver or consent, Warrants owned by
the Company or by any Person directly or indirectly controlling or controlled by
or under direct or indirect common control with the Company shall be disregarded
and deemed not to be outstanding, except that, for the purpose of determining
whether the Warrant Agent shall be protected in relying on any such direction,
waiver or consent, only Warrants which the Warrant Agent knows are so owned
shall be so disregarded. Also, subject to the foregoing, only Warrants
outstanding at the time shall be considered in any such determination.
SECTION 8.07. Notices. Any notice or communication shall be in
writing and delivered in Person or mailed by first-class mail addressed as
follows:
if to the Company:
Inter*Act Electronic Marketing, Inc.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President & Chief Operating Officer
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ L.L.P.
Suite ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
27
if to the Warrant Agent:
American Stock Transfer & Trust Company
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇
The Company or the Warrant Agent by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Holder shall be mailed to the
Holder at the Holder's address as it appears on the register in which the
Company shall provide for the registration of Warrants and Warrant Shares and of
transfers and exchanges of Warrants and Warrant Shares and shall be sufficiently
given if so mailed within the time prescribed.
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. If a notice
or communication is mailed in the manner provided above, it is duly given,
whether or not the addressee receives it.
SECTION 8.08. Governing Law. The laws of the State of New York
shall govern this Agreement and the Warrant Certificates.
SECTION 8.09. Successors. All agreements of the Company in this
Agreement and the Warrant Certificates shall bind its successors. All
agreements of the Warrant Agent in this Agreement shall bind its successors.
SECTION 8.10. Multiple Originals. The parties may sign any number
of copies of this Agreement. Each signed copy shall be an original, but all
of them together represent the same agreement. One signed copy is enough to
prove this Agreement.
SECTION 8.11. Table of Contents. The table of contents and headings of
the Articles and Sections of this Agreement have been inserted for convenience
of reference only, are not intended to be considered a part hereof and shall not
modify or restrict any of the terms or provisions hereof.
SECTION 8.12. Severability. The provisions of this Agreement are
severable, and if any clause or provision shall be held invalid, illegal or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Agreement in any jurisdiction.
28
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first written above.
INTER*ACT ELECTRONIC
MARKETING, INC.
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
__________________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Executive Vice President
AMERICAN STOCK TRANSFER &
TRUST COMPANY, as Warrant Agent,
By: /s/ ▇ ▇ ▇▇▇▇
__________________________________
Name: ▇ ▇ ▇▇▇▇
Title: Vice President
29
EXHIBIT A
[FORM OF FACE OF WARRANT CERTIFICATE]
THE WARRANTS AND THE WARRANT SHARES (THE "SECURITIES") HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN
MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION AND SUBJECT TO COMPLIANCE WITH
OTHER APPLICABLE LAWS. THE HOLDER HEREOF, BY ITS ACCEPTANCE HEREOF, AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, UNLESS PREVIOUSLY REGISTERED
UNDER THE SECURITIES ACT, ONLY (A) TO THE COMPANY; (B) PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE); (C) TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A; OR (D)
PURSUANT TO AN OFFSHORE TRANSACTION COMPLYING WITH RULE 904 OF REGULATION S
UNDER THE SECURITIES ACT.
[Unless and until it is exchanged in whole or in part for Warrants in
definitive form, this Warrant may not be transferred except as a whole by the
depository to a nominee of the depository or by a nominee of the depository to
the depository or another nominee of the depository or by the depository or any
such nominee to a successor depository or a nominee of such successor
depository. The Depository Trust Company ("DTC") (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇) shall act as the depository until a successor shall be appointed by
the Company and the Warrant Agent. Unless this certificate is presented by an
authorized representative of DTC to the issuer or its agent for registration of
transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or such other name as requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.](1)
--------
(1) To be included only if the Warrant is in global form.
No. [ ] Certificate for ______ Warrants
WARRANTS TO PURCHASE COMMON STOCK OF
INTER*ACT ELECTRONIC MARKETING, INC.
THIS CERTIFIES THAT, [___________], or its registered assigns, is the
registered holder of the number of Warrants set forth above (the "Warrants").
Each Warrant entitles the holder thereof (the "Holder"), at its option and
subject to the provisions contained herein and in the Warrant Agreement referred
to below, to purchase from Inter*Act Electronic Marketing, Inc., a North
Carolina corporation ("the Company") at the per share exercise price of $0.01
(the "Exercise Price"), that number of shares of Common Stock, no par value, of
the Company (the "Common Stock") equal to the Warrant Exercise Amount (as
defined in the Warrant Agreement). This Warrant Certificate shall terminate and
become void as of the close of business on (i) December 31, 2009 (the
"Expiration Date"), (ii) upon the exercise hereof as to all the shares of Common
Stock subject hereto or (iii) upon the optional redemption by Inter*Act
Operating Co., Inc. of all of its Senior Pay-in-Kind Notes Due 2003 pursuant to
the terms of that certain Indenture, prior to the Exercisability Date. The
number of shares purchasable upon exercise of the Warrants and the Exercise
Price per share shall be subject to adjustment from time to time as set forth in
the Warrant Agreement.
This Warrant Certificate is issued under and in accordance with a
Warrant Agreement dated as of December 15, 1999 (the "Warrant Agreement"),
between the Company and American Stock Transfer & Trust Company (the "Warrant
Agent", which term includes any successor Warrant Agent under the Warrant
Agreement), and is subject to the terms and provisions contained in the Warrant
Agreement, to all of which terms and provisions the Holder of this Warrant
Certificate consents by acceptance hereof. The Warrant Agreement is hereby
incorporated herein by reference and made a part hereof. Reference is hereby
made to the Warrant Agreement for a full statement of the respective rights,
limitations of rights, duties and obligations of the Company, the Warrant Agent
and the Holders of the Warrants. Capitalized terms used but not defined herein
shall have the meanings ascribed thereto in the Warrant Agreement. A copy of the
Warrant Agreement may be obtained for inspection by the Holder hereof upon
written request to the Warrant Agent at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇ ▇▇▇▇.
Subject to the terms of the Warrant Agreement, the Warrants may be
exercised in whole or in part by presentation of this Warrant Certificate.
As provided in the Warrant Agreement and subject to the terms and
conditions therein set forth, the Warrants shall be exercisable at any time or
from time to time on any Business Day on or after December 31, 2002; provided,
however, that no Warrant shall be exercisable after December 31, 2009.
In the event the Company enters into a Combination, the Holder hereof
will be entitled to receive the shares of capital stock or other securities or
other property of such
2
surviving entity as the Holder would have received had the Holder exercised its
Warrants immediately prior to such Combination; provided, however, that in the
event that, in connection with such Combination, consideration to holders of
Common Stock in exchange for their shares is payable solely in cash or in the
event of the dissolution, liquidation or winding-up of the Company, the Holder
hereof will be entitled to receive cash distributions as the Holder would have
received had the Holder exercised its Warrants immediately prior to such
Combination.
The Company may require payment of a sum sufficient to pay all taxes,
assessments or other governmental charges in connection with the transfer or
exchange of the Warrant Certificates pursuant to Section 5.02 of the Warrant
Agreement but not for any exchange or original issuance (not involving a
transfer) with respect to temporary Warrant Certificates, the exercise of the
Warrants or the Warrant Shares.
Upon any partial exercise of the Warrants, there shall be countersigned
and issued to the Holder hereof a new Warrant Certificate in respect of the
shares of Common Stock as to which the Warrants shall not have been exercised,
subject to any adjustments made pursuant to the Warrant Agreement. This Warrant
Certificate may be exchanged at the office of the Warrant Agent by presenting
this Warrant Certificate properly endorsed with a request to exchange this
Warrant Certificate for other Warrant Certificates evidencing an equal number of
Warrants. No fractional Warrant Shares will be issued upon the exercise of the
Warrants, but the Company shall pay an amount in cash equal to the Market Price
for one Warrant Share on the trading day immediately preceding the date the
Warrant is exercised, multiplied by the fraction of a Warrant Share that would
be issuable on the exercise of any Warrant.
All shares of Common Stock issuable by the Company upon the exercise of
the Warrants shall, upon such issue, be duly and validly issued and fully paid
and nonassessable.
The Holder in whose name the Warrant Certificate is registered may be
deemed and treated by the Company and the Warrant Agent as the absolute owner of
the Warrant Certificate for all purposes whatsoever and neither the Company nor
the Warrant Agent shall be affected by notice to the contrary.
The Warrants do not entitle any holder hereof to any of the rights of a
shareholder of the Company.
This Warrant Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Warrant Agent.
INTER*ACT ELECTRONIC
MARKETING, INC.
By: ________________________
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[SEAL]
Attest:
------------------------------------
Secretary
DATED:
Countersigned:
AMERICAN STOCK TRANSFER & TRUST COMPANY,
as Warrant Agent
By:
--------------------------------
Authorized Signatory
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SCHEDULE OF EXCHANGES OF CERTIFICATED WARRANTS(2)
The following exchanges of a part of this Global Warrant for definitive
Warrants have been made:
DATE OF EXCHANGE AMOUNT OF INCREASE NUMBER OF SIGNATURE OF
IN NUMBER OF WARRANTS IN THIS AUTHORIZED OFFICER
WARRANTS IN THIS GLOBAL WARRANT OF WARRANT AGENT
GLOBAL WARRANT FOLLOWING SUCH
INCREASE
--------------------------- ----------------------- ----------------------- ------------------------
--------------------------- ----------------------- ----------------------- ------------------------
--------------------------- ----------------------- ----------------------- ------------------------
--------------------------- ----------------------- ----------------------- ------------------------
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(2) To be included only if the Warrant is in global form.
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EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR
REGISTRATION OF TRANSFER OF WARRANTS
Re: Warrants to Purchase Common Stock (the "Warrants") of
Inter*Act Electronic Marketing, Inc. (the "Company")
This Certificate relates to Warrants held in definitive form by
_______________ (the "Transferor").
The Transferor has requested the Warrant Agent by written order to
exchange or register the transfer of a Warrant or Warrants. In connection with
such request and in respect of each such Warrant, the Transferor does hereby
certify that the Transferor is familiar with the Warrant Agreement relating to
the above captioned Warrants and that the transfer of this Warrant does not
require registration under the Securities Act of 1933 (the "Securities Act")
because(3):
[_] Such Warrant is being acquired for the Transferor's own
account without transfer.
[_] Such Warrant is being transferred to the Company.
[_] Such Warrant is being transferred pursuant to an effective
registration statement pursuant to the Securities Act.
[_] Such Warrant is being transferred to a qualified institutional
buyer (as defined in Rule 144A under the Securities Act), in reliance on Rule
144A.
[_] Such Warrant is being transferred pursuant to an offshore
transaction in accordance with Rule 904 under the Securities Act.
[_] Such Warrant is being transferred in a transaction meeting the
requirements of Rule 144 under the Securities Act.
If such transfer is being made pursuant to an offshore transaction in
accordance with Rule 904 under the Securities Act, the Transferor further
certifies that:
(i) the offer of the Warrants was not made to a Person in
the United States;
--------
(3) Please check applicable box.
(ii) at the time the buy order was originated, the transferee
was outside the United States or we and any Person acting on our behalf
reasonably believed that the transferee was outside the United States;
(iii) no directed selling efforts have been made by us in the
United States in contravention of the requirements of Rule 903(b) or Rule 904(b)
of Regulation S under the Securities Act, as applicable;
(iv) the transaction is not part of a plan or scheme by us to
evade the registration requirements of the Securities Act; and
(v) if applicable, the transfer has been made in accordance
with Rule 903(c)(3) or Rule 904(c)(1), as the case may be.
Terms used in this paragraph have the meanings set forth in
Regulation S.
The Warrant Agent and the Company are entitled to rely upon this
Certificate and are irrevocably authorized to produce this Certificate or a copy
hereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby.
[INSERT NAME OF TRANSFEROR]
Date: _________________________ ____________________________
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EXHIBIT C
Form of Investor Letter To Be Delivered in Connection
with Transfers Non-QIB Institutional Accredited Investors
Inter*Act Electronic Marketing, Inc.
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▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
c/o American Stock Transfer & Trust Company
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Ladies and Gentlemen:
In connection with our proposed purchase of ____ Warrants To Purchase
Shares of Common Stock (the "Warrants") of Inter*Act Electronic Marketing, Inc.
(the "Company"), we confirm that:
1. We understand that the Warrants have not been registered under the
Securities Act of 1933 (the "Securities Act"), and may not be sold except as
permitted in the following sentence. We agree on our own behalf and on behalf of
any investor account for which we are purchasing the Warrants to offer, sell or
otherwise transfer such Warrants prior to the date which is three years after
the later of the date of original issue and the last date on which the Company
or any affiliate of the Company was the owner of such Warrants, or any
predecessor thereto (the "Resale Restriction Termination Date") only (a) to the
Company, (b) pursuant to a registration statement which has been declared
effective under the Securities Act, (c) for so long as the Warrants are eligible
for resale pursuant to Rule 144A under the Securities Act, to a person we
reasonably believe is a qualified institutional buyer under Rule 144A (a "QIB")
that purchases for its own account or for the account of a QIB to whom notice is
given that the transfer is being made in reliance on Rule 144A, (d) pursuant to
offers and sales to non-U.S. Persons that occur outside the United States within
the meaning of Regulation S under the Securities Act, (e) to an institutional
"accredited investor" within the meaning of subparagraph (a)(1), (2), (3) or (7)
of Rule 501 under the Securities Act that is acquiring the Warrants for its own
account or for the account of such an institutional "accredited investor" for
investment purposes and not with a view to, or for offer or sale in connection
with, any distribution thereof in violation of the Securities Act or (f)
pursuant to any other available exemption from the registration requirements of
the Securities Act, subject in each of the foregoing cases to any requirement of
law that the disposition of our property and the property of such investor
account or accounts be at all times within our or their control and to
compliance with any applicable state securities laws. The foregoing restrictions
on resale will not apply subsequent to the Resale Restriction Termination Date.
If any resale or other transfer of the Warrants is proposed to be made pursuant
to clause (e)
above prior to the Resale Restriction Termination Date, the transferor shall
deliver a letter from the transferee substantially in the form of this letter to
the Warrant Agent, which shall provide, among other things, that the transferee
is an institutional "accredited investor" within the meaning of subparagraph
(a)(1), (2), (3) or (7) or Rule 501 under the Securities Act and that it is
acquiring such Warrants for investment purposes and not for distribution in
violation of the Securities Act. We acknowledge that the Company and the Warrant
Agent reserve the right prior to any offer, sale or other transfer prior to the
Resale Restriction Termination Date of the Warrants pursuant to clauses (d), (e)
and (f) above to require the delivery of an opinion of counsel, certifications
or other information satisfactory to the Company and the Warrant Agent.
2. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2) (3) or (7) of Regulation D under the Securities Act) purchasing
for our own account or for the account of such an institutional "accredited
investor", and we are acquiring the Warrants for investment purposes and not
with a view to, or for offer or sale in connection with, any distribution in
violation of the Securities Act and we have such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of our investment in the Warrants, and we and any accounts for which we
are acting are each able to bear the economic risk of our or its investment.
3. We are acquiring the Warrants purchased by us for our own account or
for one or more accounts as to each of which we exercise sole investment
discretion.
4. You are entitled to rely upon this letter and you are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.
Very truly yours,
(Name of Purchaser),
By: _________________________
Date: _______________________
Upon transfer, the Warrants would be registered in the name of the new
beneficial owner as follows:
Name: _______________________
Address: ____________________
Taxpayer ID Number __________
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