VOID AFTER 5:00 P.M., PHILADELPHIA TIME, ON JUNE 5, 2002 OR IF NOT A BUSINESS
DAY, AS DEFINED HEREIN, AT 5:00 P.M., PHILADELPHIA TIME, ON THE NEXT FOLLOWING
BUSINESS DAY.
WARRANT TO PURCHASE 100,000 SHARES OF COMMON STOCK
OF MICROLEAGUE MULTIMEDIA, INC.
NO. 1
TRANSFER OF THIS WARRANT IS RESTRICTED
AS PROVIDED HEREIN-- SEE SECTION 6.02
________________
For good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged by MicroLeague Multimedia, Inc., a Pennsylvania
corporation (the "Company"), the Company hereby grants to THE HEARST
CORPORATION, and its registered, permitted assigns (collectively, the
"WARRANTHOLDER"), subject to the terms and conditions hereof, the right and
option to purchase 100,000 fully-paid and nonassessable shares of the
Company's $.01 par value common stock.
ARTICLE I
SECTION 1.01: DEFINITION OF TERMS. As used in this Warrant, the
following capitalized terms shall have the following respective meanings:
1. BUSINESS DAY: A day other than a Saturday, Sunday or other
day on which banks in the Commonwealth of Pennsylvania are authorized by law
to remain closed.
2. COMMON STOCK: common stock, $0.01 par value, of the Company.
3. COMMON STOCK EQUIVALENTS: Securities that are convertible
into or exercisable or exchangeable for shares of Common Stock or of which
Common Stock is a part.
4. EXERCISE PRICE PER SHARE: $4.75 per Warrant Share, subject to
adjustment as provided in Article III hereof.
5. PERSON: An individual, partnership, joint venture,
corporation, trust, limited liability company, unincorporated organization,
government or any department or agency thereof, or any other entity.
6. WARRANT: This warrant, the warrants of like tenor issued on
the date hereof and all other warrants that may be issued in its or their
place (together evidencing the right to purchase an aggregate of 100,000
Warrant Shares).
7. WARRANT EXPIRATION DATE: 5:00 P.M., Philadelphia time, on
June 5, 2002 or, if such day is not a Business Day, the next succeeding day
which is a Business Day.
1
8. WARRANTHOLDER: The person(s) or entity(ies) to whom this
Warrant is originally issued, or any successor in interest thereto, or any
assignee or transferee thereof, in whose name this Warrant is registered upon
the books to be maintained by the Company for that purpose.
9. WARRANT SHARES: Shares of Common Stock issuable upon exercise
of this Warrant.
ARTICLE II
DURATION AND EXERCISE OF WARRANT
________________________________
SECTION 2.01: DURATION OF WARRANT. Subject to the terms contained
herein, this Warrant may be exercised at any time after 9:00 A.M.,
Philadelphia time, on June 6, 1997, and before 5:00 P.M., Philadelphia time,
on the Warrant Expiration Date. If this Warrant is not exercised in full on
or before the Warrant Expiration Date, it shall become void to the extent not
exercised, and all unexercised rights hereunder shall thereupon cease.
SECTION 2.02: EXERCISE OF WARRANT.
(a) The Warrantholder may exercise this Warrant, in whole or in
part by presentation and surrender of this Warrant to the Company at its
corporate office at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, with the
Subscription Form annexed hereto duly executed and accompanied by payment of
the Exercise Price Per Share for each Warrant Share to be purchased. Payment
for the Warrant Shares shall be made by certified or official bank check
payable to the order of the Company.
(b) Upon receipt of this Warrant with the Subscription Form duly
executed and accompanied by payment of the aggregate Exercise Price Per Share,
the Company shall cause to be issued certificates for the total number of
whole shares of Common Stock that constitute the number of Warrant Shares for
which this Warrant is being exercised (adjusted as provided in Article III and
in Section 4.04, if applicable) in such denominations as are requested for
delivery to the Warrantholder, and the Company shall thereupon deliver such
certificates to the Warrantholder.
(c) In case the Warrantholder shall exercise this Warrant with
respect to fewer than all of the Warrant Shares that may be purchased under
this Warrant, the Company shall execute a new warrant in the form of this
Warrant for the balance of such Warrant Shares and promptly deliver such new
warrant to the Warrantholder.
(d) The Company shall pay all documentary, stamp, transfer or
other transactional taxes attributable to the issuance of this Warrant or any
Warrant Shares. The Company shall not, however, be required to pay any tax
imposed on income or gross receipts of the Warrantholder or any tax that may
be payable by the Warrantholder in respect of any transfer involved in the
issuance or delivery of this Warrant in a name other than that of the
Warrantholder at the time of surrender and, until the payment of such tax,
shall not be required to issue such Warrant Shares.
2
ARTICLE III
Adjustment of Shares of Common Stock
PURCHASABLE AND OF EXERCISE PRICE
____________________________________
The Exercise Price Per Share and the number and kind of Common Stock
shall be subject to adjustment from time to time upon the happening of certain
events as provided in this Article III.
SECTION 3.01: ADJUSTMENTS. (a) If at any time prior to the
exercise of this Warrant in full, the Company shall (i) pay a dividend or make
a distribution on the Common Stock, in either case in shares of Common Stock
or Common Stock Equivalents; (ii) subdivide, reclassify or recapitalize the
outstanding Common Stock into a greater number of shares; (iii) combine,
reclassify or recapitalize the outstanding Common Stock into a smaller number
of shares; or (iv) issue by reclassification of the Common Stock any shares of
capital stock of the Company, the Exercise Price Per Share in effect at the
time of the record date of such dividend distribution, subdivision,
combination, reclassification or recapitalization shall be adjusted so that
the Warrantholder shall be entitled to receive, upon exercise of this Warrant,
the aggregate number and kind of shares of Common Stock which, if this Warrant
had been exercised in full immediately prior to such time, such Warrantholder
would have owned upon such exercise(s) and been entitled to receive upon such
dividend, subdivision, combination, reclassification or recapitalization. Any
adjustment required by this SECTION 3.01(A) shall be made whenever any event
listed in this SECTION 3.01(A) shall occur.
A. Whenever the Exercise Price Per Share payable upon exercise of
this Warrant is adjusted pursuant to SECTION 3.01(A), the number of Warrant
Shares purchasable hereunder shall simultaneously be adjusted by multiplying
the number of Warrant Shares issuable upon exercise of this Warrant
immediately prior to the event giving rise to such adjustment by the Exercise
Price Per Share in effect on the date thereof and dividing the product so
obtained by the Exercise Price Per Share, as adjusted.
B. No adjustment in the Exercise Price Per Share shall be
required unless such adjustment would require an increase or decrease of at
least five cents ($.05) in such price; PROVIDED, HOWEVER, that any adjustments
which by reason of this paragraph (d) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under this SECTION 3.01 shall be made to the nearest cent or to
the nearest one-hundredth of a share, as the case may be.
C. If at any time, as a result of any adjustment made pursuant to
SECTION 3.01(A), the Warrantholder shall become entitled to receive any shares
of the Company other than Common Stock, thereafter the number of such other
shares so receivable upon exercise of any Warrant shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Common Stock contained in
this SECTION 3.01.
D. If, as a result of an adjustment made pursuant to this Article
III, the holder of any Warrant thereafter surrendered for exercise shall
3
become entitled to receive shares of two or more classes of capital stock or
shares of Common Stock and other capital stock of the Company (other than as
may be contemplated by this Warrant), the Board of Directors (whose
determination shall be conclusive and shall be described in a written notice
to the Warrantholder promptly after such adjustment) shall determine in good
faith the allocation of the adjusted per share price between or among shares
or such classes of capital stock or shares of Common Stock and other capital
stock.
SECTION 3.02: NOTICE OF ADJUSTMENT. Whenever the number of Warrant
Shares or the Exercise Price Per Share is adjusted as herein provided, the
Company shall prepare and deliver to the Warrantholder a certificate signed by
its President and Treasurer or Secretary, setting forth the adjusted number of
Warrant Shares purchasable upon exercise of this Warrant, and the Exercise
Price Per Share after such adjustment, setting forth a brief statement of the
facts requiring such adjustment and setting forth the computation by which
such adjustment was made.
SECTION 3.03: PRESERVATION OF PURCHASE RIGHTS IN CERTAIN
TRANSACTIONS. In case of any capital reorganization or reclassification, or
any consolidation or merger to which the Company is a party, or in case of any
sale or conveyance to another entity of all or substantially all of the
property of the Company, or in the case of any statutory exchange of
securities with another corporation (including any exchange effected in
connection with a merger of a third corporation into the Company), the
Warrantholder shall have the right thereafter to receive on the exercise of
this Warrant the kind and amount of securities, cash or other property which
the Warrantholder would have owned or have been entitled to receive
immediately after such reorganization, reclassification, consolidation,
merger, statutory exchange, sale or conveyance had this Warrant been exercised
immediately prior to the effective date of such reorganization,
reclassification, consolidation, merger, statutory exchange, sale or
conveyance and in any such case, if necessary, appropriate adjustment shall be
made in the application of the provisions set forth in this Article III with
respect to the rights and interests thereafter of the Warrantholder to the end
that the provisions set forth in this Article III shall thereafter
correspondingly be made applicable, as nearly as may reasonably be, in
relation to any shares of stock or other securities or property thereafter
deliverable on the exercise of this Warrant. The provisions of this SECTION
3.04 shall similarly apply to successive reorganizations, reclassifications,
consolidations, mergers, statutory exchanges, sales or conveyances which occur
prior to the exercise, repurchase or expiration of this Warrant. The issuer
of any shares of stock or other securities or property thereafter deliverable
on the exercise of this Warrant shall be jointly and severally responsible for
all of the agreements and obligations of the Company hereunder. Notice of any
such reorganization, reclassifica tion, consolidation, merger, statutory
exchange, sale or conveyance and of such provisions so proposed to be made,
shall be mailed to the Warrantholder not less than 30 days prior to such
event. A sale of all or substantially all of the assets of the Company for a
consideration consisting primarily of securities shall be deemed a
consolidation or merger for the foregoing purposes.
SECTION 3.04: FORM OF WARRANT AFTER ADJUSTMENTS. The form of this
Warrant need not be changed because of any adjustments in the Exercise Price
4
Per Share or the number or kind of the Warrant Shares, and Warrants
theretofore or thereafter issued may continue to express the same price and
number and kind of shares as are stated in this Warrant, as initially issued.
ARTICLE IV
Other Provisions Relating
TO RIGHTS OF WARRANTHOLDER
__________________________
SECTION 4.01: NO RIGHTS AS SHAREHOLDERS; NOTICE TO WARRANTHOLDERS.
Nothing contained in this Warrant shall be construed as conferring upon the
Warrantholder in its position as such or his or its transferees the right to
vote or to receive dividends or to consent or to receive notice as a
shareholder in respect of any meeting of shareholders for the election of
directors of the Company or of any other matter, or any rights whatsoever as
shareholders of the Company. The Company shall give notice to the
Warrantholder if, at any time prior to the expiration or exercise in full of
this Warrant, any of the following events shall occur:
(a) the Company shall effect any transactions subject to SECTION
3.01 with respect to the holders of shares of Common Stock;
(b) the Company shall offer to all holders of shares of Common
Stock any additional shares of Common Stock or Common Stock Equivalents or any
right to subscribe thereto;
(c) a dissolution, liquidation or winding up of the Company (other
than in connection with a consolidation, merger, or sale of all, or
substantially all, of its property, assets, and business as an entirety) shall
be approved; or
(d) any consolidation of the Company with or merger of the Company
into another corporation, or in the case of any sale or conveyance to another
corporation of the property of the Company, as an entirety or substantially as
an entirety.
Such notice shall be given not later than ten days prior to the date fixed as
a record date or the date of closing of the Company's stock transfer books for
the determination of the shareholders entitled to such dividend, distribution,
or subscription rights, or for the determination of the shareholders entitled
to vote on such proposed merger, consolidation, sale, conveyance, dissolution,
liquidation or winding up. Such notice shall specify such record date or the
date of closing the stock transfer books, as the case may be, the date of any
shareholder meeting scheduled in connection therewith, and the anticipated
payment or closing date in connection therewith. Failure to provide such
notice shall not affect the validity of any action taken in connection with
such dividend, distribution or subscription rights, or proposed merger,
consolidation, sale, conveyance, dissolution, liquidation or winding up.
SECTION 4.02: LOST, STOLEN, MUTILATED OR DESTROYED WARRANTS. If
this Warrant is lost, stolen, mutilated or destroyed, the Company may, on such
terms as to indemnity or otherwise as it may in its reasonable discretion
5
impose (which shall, in the case of a mutilated Warrant, include the surrender
thereof), issue a new Warrant of like denomination and tenor as, and in
substitution for, this Warrant.
SECTION 4.03: RESERVATION OF SHARES.
(a) The Company shall at all times reserve and keep available for
the exercise of this Warrant such number of authorized shares of Common Stock
as are sufficient to permit the exercise in full of this Warrant.
(b) The Company covenants that all shares of Common Stock will,
upon payment of the Exercise Price Per Share in accordance with the terms
hereof, be validly issued, fully paid, nonassessable and free of any
preemptive or similar rights.
SECTION 4.04: NO FRACTIONAL SHARES. Anything contained herein to
the contrary notwithstanding, the Company shall not be required to issue any
fraction of a share in connection with the exercise of this Warrant, and in
any case where the Warrantholder would, except for the provisions of this
SECTION 4.04, be entitled under the terms of this Warrant to receive a
fraction of a share upon the exercise of this Warrant, the Company shall, upon
the exercise of this Warrant and receipt of the Exercise Price Per Share,
issue the smaller number of whole Warrant Shares purchasable upon exercise of
this Warrant and shall make an equitable cash adjustment in respect of such
fraction of a share to which the Warrantholder would otherwise be entitled.
ARTICLE V
TREATMENT OF WARRANTHOLDER
__________________________
Prior to due presentment for registration of transfer of all or any
portion of this Warrant in compliance with SECTION 6.02 hereof, the Company
may deem and treat the Warrantholder as the absolute owner of this Warrant
(notwithstanding any notation of ownership or other writing hereon) for all
purposes and shall not be affected by any notice to the contrary. Upon such
due presentment, the Company shall register the transfer and the assignee on
its books and records.
ARTICLE VI
Split-Up, Combination.
EXCHANGE AND TRANSFER OF WARRANTS
_________________________________
Section 6.01: SPLIT-UP, COMBINATION, EXCHANGE AND TRANSFER OF
WARRANTS. Subject to the provisions of SECTION 6.02 hereof, this Warrant may
be split up, combined or exchanged for another Warrant or Warrants containing
the same terms to purchase a like aggregate number of Warrant Shares. If the
Warrantholder desires to split up, combine or exchange this Warrant, he or it
shall make such request in writing delivered to the Company and shall
surrender to the Company this Warrant and any other Warrant to be so split up,
6
combined or exchanged. Upon any such surrender for a split up, combination or
exchange, the Company shall execute and deliver to the person entitled thereto
a Warrant or Warrants, as the case may be, as so requested. The Company shall
not be required to effect any split up, combination or exchange which will
result in the issuance of a Warrant entitling the Warrantholder to purchase
upon exercise a fraction of a share of Common Stock. The Company may require
such Warrantholder to pay a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any split up, combination or
exchange of Warrants.
Section 6.02: RESTRICTIONS ON TRANSFER. This Warrant may not be
sold, hypothecated, assigned or transferred unless registered under the
Securities Act of 1933 and applicable state securities laws, or unless holder
of this Warrant has furnished to the Company an opinion of counsel, in form
and substance satisfactory to the Company, to the effect that no such
registration is required.
ARTICLE VII
OTHER MATTERS
_____________
SECTION 7.01: EXPENSES OF TRANSFER. The Company shall from time to
time promptly pay, subject to the provisions of SECTION 6.01 and PARAGRAPH (D)
OF SECTION 2.02, all documentary, stamp, transfer or other transactional taxes
that may be imposed upon the Company in respect to the issuance or delivery of
Warrant Shares upon the exercise of this Warrant by the Warrantholder.
SECTION 702: SUCCESSORS AND ASSIGNS. All the covenants,
obligations and provisions of this Warrant by or for the benefit of the
Company and the Warrantholder shall bind and inure to the benefit of their
respective successors and assigns hereunder.
SECTION 703: AMENDMENTS AND WAIVERS. The provisions of this
Warrant, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given unless the Company has obtained the written
consent of Persons holding Warrants representing the right to purchase a
majority of the Warrant Shares. The Warrantholder shall be bound by any
consent authorized by this Section 7.03.
SECTION 7.04: GOVERNING LAW. This Warrant shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania,
without regard to the law of conflicts.
SECTION 7.05: SEVERABILITY. In the event that any one or more of
the provisions contained herein, or the application thereof in any
circumstances, is held invalid, illegal or unenforceable, the validity,
legality and enforceability of any such provisions in every other respect and
of the remaining provisions contained herein shall not be affected or impaired
thereby.
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SECTION 7.06: INTEGRATION; ENTIRE AGREEMENT. This Warrant is
intended by the parties as a final expression of their agreement and intended
to be a complete and exclusive statement of the agreement and understanding of
the parties hereto in respect of the subject matter contained herein. This
Warrant supersedes all prior agreements and understandings between the parties
with respect to such subject matter.
SECTION 7.07: NOTICES. Notice or demand pursuant to this Warrant
to be given or made by the Warrantholder to or on the Company shall be
sufficiently given or made if sent by registered or certified mail, postage
prepaid, or by overnight courier, addressed, until another address is
designated in writing by the Company, as follows:
MicroLeague Multimedia, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Any notice or demand authorized by this Warrant to be given or made
by the Company to or on the Warrantholder shall be sufficiently given or made
if sent by registered or certified mail, postage prepaid, or by overnight
courier to the Warrantholder at his or its last known address as it shall
appear on the books of the Company.
SECTION 7.08: HEADINGS. The headings herein have been inserted for
convenience of reference only and are not part of this Warrant and shall not
affect the interpretation thereof.
IN WITNESS WHEREOF, this Warrant has been duly executed by the
Company under its corporate seal as of the ___ day of June, 1997.
MICROLEAGUE MULTIMEDIA, INC.
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
______________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman and Chief Executive Officer
8
SUBSCRIPTION FORM
(To be executed upon exercise of Warrant)
MicroLeague Multimedia, Inc.
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by the within Warrant Certificate for, and to purchase
thereunder, _____________________ shares of Common Stock as provided for
therein, and tenders herewith payment of the purchase price in full in the
form of cash or a certified or official bank check in the amount of
$____________.
Please issue a certificate or certificates for such Common Stock in
the name of:
Name ____________________________________________________
(Please Print Name, Address and Social Security No.)
Signature _______________________________________________
NOTE: The above signature should correspond exactly
with the name on the first page of this Warrant
Certificate or with the name of the assignee
appearing in the assignment form below.
If such number of shares shall not be all the shares of Common Stock
purchasable under the within Warrant Certificate, a new Warrant Certificate
shall be issued in the name of the undersigned for the balance remaining of
the shares of Common Stock purchasable thereunder.
PHIL1\69910-3