-1-
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY
STATE SECURITIES LAWS OF ANY STATE (THE "ACTS") AND MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN
EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACTS OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
No. W-
WARRANT TO PURCHASE COMMON STOCK
OF
MDI ENTERTAINMENT, INC.
This certifies that, for value received, ______________________
("Holder"), with an address at c/▇ ▇▇▇▇▇▇▇▇▇ Associates, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, is entitled, subject to the terms set forth below, to
purchase from MDI ENTERTAINMENT, INC. (the "Company"), a Delaware corporation,
shares (the "Shares") of the Common Stock of the Company ("Common Stock"), as
constituted on the date hereof (the "Warrant Issue Date"), with a notice of
exercise in one of the forms attached hereto duly executed, and simultaneous
payment therefor in lawful money of the United States, at the Exercise Price as
set forth in Section 2 below except as otherwise set forth herein. The number,
character and Exercise Price of such shares of Common Stock are subject to
adjustment as provided below.
1. TERM OF WARRANT. This Warrant shall be exercisable, in whole
or in part, during the five-year term commencing September 8, 2000 and ending on
September 7, 2005.
2. EXERCISE PRICE AND NUMBER OF SHARES.
2.1 EXERCISE PRICE. The exercise price at which this Warrant
may be exercised shall be $3.938 per Share, as adjusted from time to time
pursuant to Section 11 hereof (the "Exercise Price").
2.2 NUMBER OF SHARES. The number of Shares which may be
purchased pursuant to this Warrant shall be __________ shares Shares, as
adjusted from time to time pursuant to Section 11 hereof.
3. EXERCISE OF WARRANT.
3.1 The purchase rights represented by this Warrant are
exercisable by the Holder in whole or in part at any time during the term of
this Warrant, or from time to time, by the surrender of this Warrant and a
notice of exercise in the form of the Cash Exercise Form annexed hereto duly
completed and executed on behalf of the Holder, at the office of the Company (or
such other office or agency of the Company as it may designate by notice in
writing to the Holder at the address of the Holder appearing on the books of the
Company) upon payment in cash, wire transfer or by check acceptable to the
Company. In lieu of the payment of the Exercise Price in cash, the Holder shall
have the right (but not the obligation), during the Exercise Period, to require
the Company to convert this Warrant (the "Conversion Right"), in whole or in
part, into the Shares as provided for in this Section (the "Net Exercise
Shares"). Upon exercise of the Conversion Right, the Company shall deliver to
the Holder (without payment by the Holder of the Exercise Price) that number of
Net Exercise Shares equal to (i) the number of Shares issuable upon exercise of
the portion of the Warrant being converted, multiplied by (ii) the quotient
obtained by dividing (x) the value of the Warrant (on a per Share basis) at the
time the Conversion Right is exercised (determined by subtracting the Exercise
Price (as adjusted) from the Current Market Price (as defined below), for the
Shares issuable upon exercise of the Warrant immediately prior to the exercise
of the Conversion Right) by (y) the Current Market Price of one share of Common
Stock immediately prior to the exercise of the Conversion Right. The Conversion
Rights provided under this Section may be exercised in whole or in part and at
any time and from time to time while any Warrants remain outstanding. In order
to exercise the Conversion Right, the Holder shall surrender to the Company, at
its offices, this Warrant accompanied by a notice of exercise in the form of the
Cashless Exercise Form annexed hereto duly completed and executed. The
presentation and surrender shall be deemed a waiver of the Holder's obligation
to pay all or any portion of the aggregate Exercise Price payable for the Shares
being issued upon such exercise of this Warrant. This Warrant (or so much
thereof as shall have been surrendered for conversion) shall be deemed to have
been converted immediately prior to the close of business on the day of
surrender of this Warrant for conversion in accordance with the foregoing
provisions.
3.2 The "Current Market Price" per Share on any date shall be
deemed to be the average of the daily closing prices for the five (5)
consecutive trading days immediately preceding the date in question. The
"closing price" for each day shall be the last reported sales price, regular
way, or, in case no such reported sale takes place on such day, the average of
the closing bid and asked prices, in either case, reported on the principal
consolidated transaction reporting system with respect to the securities listed
on the principal national securities exchange on which the Common Stock is
listed or admitted to trading or, if the Common Stock is not listed or admitted
to trading on any national securities exchange, the closing price (as defined
above) for the Common Stock as furnished by the National Association of
Securities Dealers, Inc. through Nasdaq or a similar organization if Nasdaq is
no longer reporting such information. If on any such date the Common Stock is
not listed or admitted to trading on any national securities exchange and is not
quoted by Nasdaq or any similar organization, the fair value of a share of
Common Stock on such date, shall be determined by an independent appraiser
appointed in good faith by the Board of Directors of the Company, whose
determination shall be conclusive absent manifest error, shall be used.
3.3 This Warrant shall be deemed to have been exercised or
converted, as the case may be, immediately prior to the close of business on the
date of its surrender for exercise or conversion, as provided above, and the
person entitled to receive the Shares of Common Stock issuable upon such
exercise shall be treated for all purposes as the holder of record of such
Shares as of the close of business on such date. As promptly as practicable on
or after such date, the Company at its expense shall issue and deliver to the
person or persons entitled to receive the same a certificate or certificates for
the number of Shares issuable upon such exercise or conversion. In the event
that this Warrant is exercised in part, the Company at its expense will execute
and deliver a new Warrant of like tenor exercisable for the number of Shares for
which this Warrant may then be exercised.
3.4 If this Warrant is exercised in part this Warrant must be
exercised or converted, as the case may be, for a number of whole shares of the
Common Stock.
4. REPLACEMENT OF WARRANT. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and substance to the Company
or, in the case of mutilation, on surrender and cancellation of this Warrant,
the Company at its expense shall execute and deliver, in lieu of this Warrant, a
new warrant of like tenor and amount.
5. RIGHTS OF STOCKHOLDERS. The Holder shall not be entitled to
vote or receive dividends or be deemed the holder of Common Stock, nor shall
anything contained herein be construed to confer upon the Holder, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action (whether
upon any recapitalization, issuance of stock, reclassification of stock, change
of par value, or change of stock to no par value, consolidation, merger,
conveyance or otherwise) or to receive notice of meetings, or to receive
dividends or subscription rights or otherwise until the Warrant shall have been
exercised as provided herein.
6. TRANSFER OF WARRANT.
6.1 EXCHANGE OF WARRANT UPON A TRANSFER. Upon delivery by the
transferee of a written agreement to be bound by the terms of this Warrant and
surrender of this Warrant for exchange, properly endorsed and transferred in
accordance with this Section 6, the Company at its expense shall issue to or on
the order of the Holder a new warrant or warrants of like tenor, in the name of
the Holder or as the Holder (on payment by the Holder of any applicable transfer
taxes) may direct, of the number of shares issuable upon exercise hereof.
6.2 RESTRICTIONS ON TRANSFER; COMPLIANCE WITH SECURITIES
LAWS.
6.2.1 The Holder of this Warrant, by acceptance hereof,
acknowledges that this Warrant and the shares of Common Stock to be issued upon
exercise hereof are being acquired solely for the Holder's own account and not
as a nominee for any other party, and for investment and agrees to comply with
the transfer restrictions contained in this Section 6.2. The Holder will not
offer, sell or otherwise dispose of this Warrant or any Shares of Common Stock
to be issued upon exercise hereof, except under circumstances that will not
result in a violation of applicable federal and state securities laws. Prior to
offering, selling or otherwise disposing of the Warrants or Shares, the holder
hereof or thereof will give the Company a written notice describing the manner
and circumstances of the transfer accompanied by, if requested by the Company, a
written opinion of legal counsel satisfactory to the Company to the effect, as
amended, that the proposed transfer may be effected without registration under
the Securities Act of 1933 or any state blue sky law. Any Warrant or Shares
transferred in violation of applicable federal and state securities laws shall
be void and not recognized by the Company. For so long as the restrictions on
transfer specified in this Section 6 apply, any transferee of this Warrant or
Shares shall execute an agreement agreeing to be bound by the terms of this
Section 6.
6.2.2 All shares of Common Stock issued upon exercise hereof
shall be stamped or imprinted with a legend in substantially the following form
(in addition to any legend required by state securities laws):
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER UNITED STATES FEDERAL OR STATE
SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE,
SOLD OR OTHERWISE TRANSFERRED OR ASSIGNED FOR
VALUE, DIRECTLY OR INDIRECTLY, NOR MAY THE
SECURITIES BE TRANSFERRED ON THE BOOKS OF THE
COMPANY, WITHOUT REGISTRATION OF SUCH SECURITIES
UNDER ALL APPLICABLE UNITED STATES FEDERAL
SECURITIES LAWS OR COMPLIANCE WITH AN APPLICABLE
EXEMPTION THEREFROM, SUCH COMPLIANCE AT THE OPTION
OF THE COMPANY, TO BE EVIDENCED BY AN OPINION OF
STOCKHOLDER'S COUNSEL, IN FORM ACCEPTABLE TO THE
COMPANY, THAT NO VIOLATION OF SUCH REGISTRATION
PROVISIONS WOULD RESULT FROM ANY PROPOSED TRANSFER
OR ASSIGNMENT."
7. REGISTRATION RIGHTS.
7.1 Certain Definitions.
-------------------
As used in this Section 7, the following terms shall have the
following respective meanings:
"Commission" shall mean the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
"Holder" shall mean the record owner of Registrable Securities.
"Underwritten Public Offering" shall mean an underwritten public offering of the
Company's securities.
"Lock-Up Period" shall mean the period beginning on the effective date of the
Underwritten Public Offering and ending six months later.
The terms "Register" "Registered" and "Registration" refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act ("Registration Statement"), and the declaration or ordering of
the effectiveness of such Registration Statement.
"Registrable Securities" shall mean all Common Stock not previously sold to the
public and issued to the Holder pursuant to the exercise of this Warrant, or
Common Stock issued with respect to such shares pursuant to stock splits, stock
dividends and similar distributions with respect to such shares, provided,
however, that shares of Common Stock which are Registrable Securities shall
cease to be Registrable Securities at such time, and for so long as, such shares
are eligible for sale pursuant to Rule 144(k) under the Securities Act.
"Registration Expenses" shall mean all expenses incurred by the Company in
complying with Section 7.2 of this Agreement, including, without limitation, all
federal and state registration, qualification and filing fees, printing
expenses, fees and disbursements of counsel and independent public accountants
for the Company, blue sky fees and expenses, fees of the National Association of
Securities Dealers, Inc., fees of transfer agents and registrars, costs of
insurance, fees and disbursements of one counsel for the sellers of Registrable
Securities, and the expense of any special audits incident to or required by any
such registration, but shall not include Selling Expenses.
"Securities Act" shall mean the Securities Act of 1933, as amended, or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean all underwriting discounts and selling commissions
applicable to the sale of Registrable Securities pursuant to this Agreement and
all expenses of any special counsel for the Holder.
7.2 Piggyback Registration.
----------------------
7.2.1 Notice of Piggyback Registration and Inclusion of
----------------------------------------------------
Registrable Securities.
-----------------------
Subject to the terms of this Agreement, in the event
the Company decides to Register any of its Common
Stock for cash (either for its own account or the
account of a security holder), other than pursuant to
(i) a Registration Statement which exclusively
relates to the Registration of securities under an
employee stock option, purchase, bonus or other
benefit plan, or (ii) a Registration relating solely
to a transaction under Rule 145 promulgated by the
Commission, then at any time following an Initial
Public Offering and for so long as the Holder holds
Registrable Securities, the Company will: (1)
promptly give the Holder written notice thereof
(which shall include a list of the jurisdictions in
which the Company intends to attempt to qualify such
securities under the applicable Blue Sky or other
state securities laws); (2) include in such
Registration (and any related qualification under
Blue Sky laws or other compliance), and in any
underwriting involved therein, all the Registrable
Securities specified in a written request delivered
to the Company by the Holder within 10 days after
delivery of such written notice from the Company; (3)
use its commercially reasonable efforts to keep such
registration effective for a period of one year or
until each Holder has completed the distribution
described in the registration statement relating
thereto, whichever first occurs; (4) furnish such
number of prospectuses and other documents incident
thereto as each Holder from time to time may
reasonably request; and (5) register or qualify the
Registrable Securities covered by such registration
under such other securities or blue sky laws of such
jurisdiction (subject to the approval of any managing
underwriter involved) as each Holder shall reasonably
request, and do any and all other acts and things
which may be reasonably necessary or advisable to
enable each Holder to consummate the disposition in
such jurisdictions of the Registrable Securities;
provided, however, that the Company shall not be
obligated, by reason thereof, to qualify as a foreign
corporation in any jurisdiction where it would not
otherwise be required to qualify or consent to
general service of process in any such jurisdiction
or subject itself to taxation as doing business in
any such jurisdiction.
7.2.2 Underwriting in Piggyback Registration.
---------------------------------------
If the Registration of which the Company gives notice
is a Registered public offering involving an
underwriting, the Company shall so advise the Holder
as a part of the written notice given pursuant to
Subsection 7.2.1. In such event the right of the
Holder to Registration shall be conditioned upon such
underwriting and the inclusion of a Holder's
Registrable Securities in such underwriting to the
extent provided in this Section 7.2. The Holder
shall, together with the Company, enter into an
underwriting agreement with the Underwriter's
Representative for such offering. The Holder shall
have no right to participate in the selection of the
underwriters for an offering pursuant to this
Section.
7.2.3 Marketing, Limitation in Piggyback Registration.
----------------------------------------------------
In the event the Underwriter's Representative advises
the Company and the Holder engaged in a Registration
under Subsection 7.2.1 in writing that market factors
(including, without limitation, the aggregate number
of shares of Common Stock requested to be Registered,
the general condition of the market and the status of
the persons proposing to sell securities pursuant to
the Registration) require a limitation of the number
of shares to be underwritten, the Underwriter's
Representative (subject to the allocation priority
set forth in Section 7.2.4) may exclude some or all
of the Registrable Securities from such Registration
and underwriting.
7.2.4 Allocation of Shares in Piggyback Registration.
--------------------------------------------------
In the event that the Underwriter's Representative
limits the number of shares to be included in a
Registration pursuant to Subsection 7.2.1, the Holder
shall be entitled to include a portion of the
Registrable Securities requested to be included in
such Registration pro rata (based on the number of
shares requested to be included) with all other
persons currently holding similar written piggyback
registration rights requesting Registration. Unless
all Registrable Securities and such other
piggybacking shares requested to be included in such
Registration are so included, no other securities may
be included in the Registration Statement in addition
to those securities being sold on behalf of the
Company.
7.2.5 Withdrawal in Piggyback Registration.
--------------------------------------
If the Holder disapproves of the terms of any such
underwriting, it may elect to withdraw therefrom by
written notice to the Company and the underwriter
delivered at least seven days prior to the effective
date of the Registration Statement. Any Registrable
Securities or other securities excluded or withdrawn
from such underwriting shall be withdrawn from such
Registration.
7.3 Obligations of the Company and Holders.
--------------------------------------
7.3.1 Underwriting Requirements.
---------------------------
In connection with any offering involving an
underwriting of shares pursuant to Section 7.2 the
Company shall not be required to include any of the
Holders' Registrable Securities in such underwriting
unless they accept the terms of the underwriting as
agreed upon between the Company and the underwriters
selected by it.
7.3.2 Expenses of Registration.
-------------------------
All Registration Expenses incurred in connection with
all Registrations pursuant to Section 7.2 shall be
borne by the Company. Selling Expenses to be borne by
the holders of the Registrable Securities Registered
shall be borne pro rata on the basis of the number of
Registrable Securities being Registered.
7.4 Indemnification.
---------------
7.4.1 Company's Indemnification of the Holder.
----------------------------------------- The Company
will indemnify the Holder, and each of its directors,
officers, stockholders, partners or other beneficial
owners, and each person controlling the Holder, with
respect to which Registration, qualification or
compliance of Registrable Securities has been
effected pursuant to this Warrant, and each
underwriter, if any, and each person who controls any
underwriter against all claims, losses, damages or
liabilities, including reasonable legal fees and
expenses (or actions in respect thereof) to the
extent such claims, losses, damages or liabilities
arise out of or are based upon any untrue statement
(or alleged untrue statement) of a material fact
contained in any prospectus or other document
(including any related Registration Statement)
incident to any such Registration, qualification or
compliance, or are based on any omission (or alleged
omission) to state therein a material fact required
to be stated therein or necessary to make the
statements therein not misleading, or any violation
by the Company of any rule or regulation promulgated
under the Securities Act applicable to the Company
and relating to action or inaction required of the
Company in connection with any such Registration,
qualification or compliance; and the Company will
reimburse the Holder, each of its directors,
officers, stockholders, partners or other beneficial
owners, each such underwriter and each person who
controls the Holder or underwriter for any legal and
any other expenses reasonably incurred in connection
with investigating or defending any such claim, loss,
damage, liability or action; provided, however, that
the indemnity contained in this Section 7.4 shall not
apply to amounts paid in settlement of any such
claim, loss, damage, liability or action if
settlement is effected without the consent of the
Company (which consent shall not unreasonably be
withheld); and provided, further, that the Company
will not be liable in any such case to the extent
that any such claim, loss, damage, liability or
expense arises out of or is based upon any untrue
statement or omission based upon written information
furnished to the Company by the Holder, underwriter
or controlling person and stated to be for use in
connection with the offering of securities of the
Company.
7.4.2 The Holder's Indemnification of Company.
-----------------------------------------
The Holder will, if Registrable Securities held by
the Holder are included in the securities as to which
such Registration, qualification or compliance is
being effected pursuant to this Warrant, indemnify
the Company, each of its directors and officers, each
legal counsel and independent accountant of the
Company, each underwriter, if any, of the Company's
securities covered by such a Registration Statement,
and each person who controls the Company or such
underwriter within the meaning of the Securities Act
against all claims, losses, damages and liabilities,
including legal fees and expenses (or actions in
respect thereof), arising out of or based upon any
untrue statement (or alleged untrue statement) of a
material fact contained in any such Registration
Statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to
state therein a material fact required to be stated
therein or necessary to make the statements therein
not misleading, or any violation by the Holder of any
rule or regulation promulgated under the Securities
Act applicable to the Holder and relating to action
or inaction required of the Holder in connection with
any such Registration, qualification or compliance;
and will reimburse the Company, such directors,
officers, partners, persons, law and accounting
firms, underwriters or control persons for any legal
and any other expenses reasonably incurred in
connection with investigating or defending any such
claim, loss, damage, liability or action, in each
case to the extent, but only to the extent, that such
untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such
Registration Statement, prospectus, offering circular
or other document in reliance upon and in conformity
with written information furnished to the Company by
the Holder and stated to be specifically for use in
connection with the offering of securities of the
Company; provided, however, that the Holders'
liability under this Section 7.4 shall not exceed the
▇▇▇▇▇▇'s proceeds from the offering of securities
made in connection with such Registration.
7.4.3 Indemnification Procedure.
--------------------------
Promptly after receipt by an indemnified party under
this Section 7.4 of notice of the commencement of any
action, such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying
party under this Section 7.4, notify the indemnifying
party in writing of the commencement thereof and
generally summarize such action. The indemnifying
party shall have the right to participate in and to
assume the defense of such claim; provided, however,
that the indemnifying party shall be entitled to
select counsel for the defense of such claim with the
approval of any parties entitled to indemnification,
which approval shall not be unreasonably withheld;
provided further, however, that if either party
reasonably determines that there may be a conflict
between the position of the Company and the Holders
in conducting the defense of such action, suit or
proceeding by reason of recognized claims for
indemnity under this Section 7.4, then counsel for
such party shall be entitled to conduct the defense
to the extent reasonably determined by such counsel
to be necessary to protect the interest of such
party. The failure to notify an indemnifying party
promptly of the commencement of any such action, if
prejudicial to the ability of the indemnifying party
to defend such action, shall relieve such
indemnifying party, to the extent so prejudiced, of
any liability to the indemnified party under this
Section 7.4, but the omission so to notify the
indemnifying party will not relieve such party of any
liability that such party may have to any indemnified
party otherwise other than under this Section 7.4.
7.4.4 Subsequent Transferees.
-----------------------
The provisions of this Section 7.4 applicable to the
Holder shall apply with equal force and effect to
each subsequent transferee to whom any of the
Registrable Securities are transferred with the
consent of the Company.
7.5 Market Stand-Off.
----------------
During the Lock-Up Period, the Holder shall agree not
to transfer, sell, make short sales of, loan, grant
any option for the purchase of, or otherwise dispose
of any Registrable Securities, except for private
sales to persons approved by the Company (which
approval will not be unreasonably withheld) and who
agree to be bound by the provisions of this Agreement
(including this Section 7.5).
7.6 Current Public Information.
--------------------------
At all times after the Company has filed a
Registration Statement pursuant to the Securities
Act, the Company will timely file all reports
required under the Securities Act or the Securities
Exchange Act of 1934, as amended, and the rules and
regulations thereunder, and will take such further
action as may be reasonably required to enable any
Holder of "restricted securities" (as defined in Rule
144 adopted by the Commission under the Securities
Act) to sell such securities pursuant to Rule 144, as
amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission.
8. RESERVATION OF STOCK. The Company covenants that during the
term that this Warrant is exercisable, the Company will reserve from its
authorized and unissued Common Stock a sufficient number of shares to provide
for the issuance of Common Stock upon the exercise of this Warrant and, from
time to time, will take all steps necessary to amend its Certificate of
Incorporation (the "Certificate") to provide sufficient reserves of shares of
Common Stock issuable upon the exercise of the Warrant. The Company further
covenants that all Shares that may be issued upon the exercise of rights
represented by this Warrant, upon exercise of the rights represented by this
Warrant and payment of the Exercise Price (unless cashless exercise is elected)
all as set forth herein, will be free from all taxes, liens and charges in
respect of the issue thereof (other than taxes in respect of any transfer
occurring contemporaneously or otherwise specified herein), and will be validly
issued, fully paid and nonassessable.
9. NOTICES. Whenever the Exercise Price or number of shares
purchasable hereunder shall be adjusted pursuant to Section 11 hereof, the
Company shall issue a certificate signed by its Chief Financial Officer setting
forth, in reasonable detail, the event requiring the adjustment, the amount of
the adjustment, the method by which such adjustment was calculated, and the
Exercise Price and number of shares purchasable hereunder after giving effect to
such adjustment, and shall cause a copy of such certificate to be mailed (by
first-class mail, postage prepaid) to the Holder of this Warrant.
10. AMENDMENTS.
10.1 Any term of this Warrant may be amended with the written
consent of the Company and the Holder. Any amendment effected in accordance with
this Section 10 shall be binding upon the Holder, each future Holder and the
Company.
10.2 No waivers of, or exceptions to, any term, condition or
provision of this Warrant, in any one or more instances, shall be deemed to be,
or construed as, a further or continuing waiver of any such term, condition or
provision.
11. ADJUSTMENTS. The number of Shares purchasable hereunder and/or
the Exercise Price at which such Shares may be purchased is subject to
adjustment from time to time as follows:
11.1 REORGANIZATION, MERGER OR SALE OF ASSETS. If at any time
while this Warrant, or any portion thereof, is outstanding and unexpired there
shall be (i) a reorganization (other than a combination, reclassification,
exchange or subdivision of shares otherwise provided for herein), (ii) a merger
or consolidation of the Company with or into another corporation in which the
Company is not the surviving entity, or a reverse triangular merger in which the
Company is the surviving entity but the shares of the Company's capital stock
outstanding immediately prior to the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash or
otherwise, or (iii) a sale or transfer of the Company's properties and assets
as, or substantially as, an entirety to any other person, then, as a part of
such reorganization, merger, consolidation, sale or transfer, lawful provision
shall be made so that the holder of this Warrant shall thereafter be entitled to
receive upon payment of the Exercise Price then in effect, the number of shares
of stock or other securities or property of the successor corporation resulting
from such reorganization, merger, consolidation, sale or transfer that a holder
of the Shares deliverable upon exercise of this Warrant would have been entitled
to receive in such reorganization, consolidation, merger, sale or transfer if
this Warrant had been exercised immediately before such reorganization, merger,
consolidation, sale or transfer, all subject to further adjustment as provided
in this Section 11. The foregoing provisions of this Section 11.1 shall
similarly apply to successive reorganizations, consolidations, mergers, sales
and transfers and to the stock or securities of any other corporation that are
at the time receivable upon the exercise of this Warrant. If the per-share
consideration payable to the Holder hereof for shares in connection with any
such transaction is in a form other than cash or marketable securities, then the
value of such consideration shall be determined in good faith by the Company's
Board of Directors. In all events, appropriate adjustment (as determined in good
faith by the Company's Board of Directors) shall be made in the application of
the provisions of this Warrant with respect to the rights and interests of the
Holder after the transaction, to the end that the provisions of this Warrant
shall be applicable after that event, as near as reasonably may be, in relation
to any shares or other property deliverable after that event upon exercise of
this Warrant.
11.2 RECLASSIFICATION. If the Company, at any time while this
Warrant, or any portion thereof, remains outstanding and unexpired, by
reclassification of securities or otherwise, shall change any of the securities
as to which purchase rights under this Warrant exist into the same or a
different number of securities of any other class or classes, this Warrant shall
thereafter represent the right to acquire such number and kind of securities as
would have been issuable as the result of such change with respect to the
securities that were subject to the purchase rights under this Warrant
immediately prior to such reclassification or other change and the Exercise
Price therefor shall be appropriately adjusted, all subject to further
adjustment as provided in this Section 11.
11.3 DIVIDEND, SPLIT, SUBDIVISION OR COMBINATION OF SHARES. If
the Company at any time while this Warrant, or any portion thereof, remains
outstanding and unexpired shall (i) declare a dividend or make a distribution on
the securities as to which purchase rights under this Warrant exist payable in
shares of its capital stock or securities convertible into or exchangeable for
capital stock or (ii) split, subdivide or combine the securities as to which
purchase rights under this Warrant exist, then, in each case, the Exercise Price
in effect, and the number of shares issuable upon exercise of the Warrant, at
the time of the record date for such dividend or at the effective date of such
split, subdivision or combination, shall be proportionately adjusted so that the
holders of the Warrant after such time shall be entitled to receive upon
exercise of the Warrant the aggregate number and kind of shares which, if such
Warrant had been exercised immediately prior to such time, such holders would
have owned upon such exercise and immediately thereafter been entitled to
receive by virtue of such dividend, split, subdivision or combination. Such
adjustment shall be made successively whenever any event listed above shall
occur, subject to further adjustment as provided in this Section 11.
12. PARTIES BOUND, ETC. The provisions of this Warrant shall
be binding upon and inure to the benefit of the Holder and its respective heirs,
beneficiaries, legal representatives, successors and assigns (except as
otherwise prohibited by this Warrant).
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officers thereunto duly authorized.
Dated as of September 8, 2000
MDI ENTERTAINMENT, INC.
By:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Chief Financial Officer
CASH EXERCISE FORM
TO: MDI ENTERTAINMENT, INC.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
(1) The undersigned hereby elects to purchase _______ shares of Common
Stock of MDI ENTERTAINMENT, INC. pursuant to the terms of the attached Warrant
and tenders herewith payment of the purchase price for such shares in full.
(2) In exercising this Warrant, the undersigned hereby confirms and
acknowledges that the shares of Common Stock are being acquired solely for the
account of the undersigned and not as a nominee for any other party, and for
investment, and that the undersigned will not offer, sell or otherwise dispose
of any such shares of Common Stock except under circumstances that will not
result in a violation of the Securities Act of 1933, as amended, or any state
securities laws.
(3) Please issue a certificate or certificates representing said shares
of Common Stock in the name of the undersigned or in such other name as is
specified below:
(Name)
(Signature)
(4) Please issue a new Warrant for the unexercised portion of the
attached Warrant in the name of the undersigned or in such other name as is
specified below:
(Name)
(Date) (Signature)
CASHLESS EXERCISE FORM
TO: MDI ENTERTAINMENT, INC.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
(1) The undersigned hereby irrevocably elects to surrender its Warrant
for the number of Shares as shall be issuable pursuant to the cashless exercise
provisions of Section 3 of the within Warrant, in respect of ________ Shares
underlying the within Warrant.
(2) In exercising this Warrant, the undersigned hereby confirms and
acknowledges that the shares of Common Stock are being acquired solely for the
account of the undersigned and not as a nominee for any other party, and for
investment, and that the undersigned will not offer, sell or otherwise dispose
of any such shares of Common Stock except under circumstances that will not
result in a violation of the Securities Act of 1933, as amended, or any state
securities laws.
(3) Please issue a certificate or certificates representing said shares
of Common Stock in the name of the undersigned or in such other name as is
specified below:
(Name)
(Signature)
(4) Please issue a new Warrant for the unexercised portion of the
attached Warrant in the name of the undersigned or in such other name as is
specified below:
(Name)
(Date) (Signature)