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Exhibit 10.28
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (this "Agreement") dated as of the 27th day
of October, 2000 between Student Advantage, Inc., a Delaware corporation (the
"Company"), and Hare & Co., (the "Purchaser"), f/b/o Xxxx Xxxxxxx Small Cap
Value Fund.
In consideration of the mutual promises hereinafter set forth and other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereby agree as follows:
1. PURCHASE AND SALE OF THE SHARES.
(a) The Company agrees to issue and sell to the Purchaser, and the
Purchaser agrees to purchase from the Company:
(i) 1,200,000 shares (the "Shares") of Common Stock, $.01 par value
per share ("Common Stock"), of the Company for an aggregate purchase price of
$6,000,000; and
(ii) warrants (the "Warrants"), in the form attached hereto as EXHIBIT
A and EXHIBIT B, to acquire (A) 300,000 shares of Common Stock at any time prior
to October 26, 2002, at a purchase price of $5.00 per share and (B) an
additional 300,000 shares of Common Stock at any time prior to October 26, 2003,
at a purchase price of $6.00 per share.
(b) At the closing of the transactions contemplated hereby (the
"Closing"), which shall be held on the date hereof, the following events shall
occur:
(i) each of the Company and Purchaser shall execute and deliver to
the other party the Registration Rights Agreement in the form attached hereto as
EXHIBIT C (the "Registration Rights Agreement");
(ii) the Purchaser shall pay the Company the amount of $6,000,000 by
wire transfer or other form of payment acceptable to the Company; and
(iii) the Company shall issue and deliver to the Purchaser an original
stock certificate representing the Shares and the Warrants.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and
warrants as follows:
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(a) ORGANIZATION AND GOOD STANDING. The Company has been duly incorporated
and organized, and is validly existing in good standing, under the laws of the
State of Delaware. The Company has the corporate power and authority to enter
into and perform this Agreement and the Registration Rights Agreement
(collectively, the "Agreements"), to own and operate its properties and assets
and to carry on its business as currently conducted and as presently proposed to
be conducted.
(b) AUTHORIZATION AND BINDING NATURE. The execution, delivery and
performance by the Company of the Agreements and the issuance and delivery of
the Shares, the Warrants and the shares of Common Stock issuable upon exercise
of the Warrants (the "Warrant Shares") has been duly authorized by all requisite
corporate action on the part of the Company and the Agreements constitute valid
and legally binding obligations of the Company, enforceable against the Company
in accordance with their respective terms.
(c) NON-CONTRAVENTION. The execution, delivery and performance by the
Company of the Agreements will not, with or without the giving of notice or the
passage of time or both, (i) violate the provisions of the certificate of
incorporation or bylaws of the Company, (ii) violate any judgment, decree, order
or award of any court, governmental body or arbitrator applicable to the
Company, or (iii) conflict with or violate any material agreement to which the
Company is a party or by which it is bound.
(d) GOVERNMENTAL CONSENTS. No consent, approval, order or authorization
of, or registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority is required on the part of the
Company in order to enable the Company to execute, deliver and perform its
obligations under the Agreements EXCEPT FOR such qualifications or filings under
applicable securities laws as may be required in connection with the
transactions contemplated by this Agreement. All such qualifications and filings
will, in the case of qualifications, be effective on the Closing and will, in
the case of filings, be made within the time prescribed by law.
(e) CAPITALIZATION. The authorized capital stock of the Company consists
of (i) 150,000,000 shares of Common Stock, of which, as of October 25, 2000,
36,192,857 shares are issued and outstanding, and (ii) 5,000,000 shares of
Preferred Stock, $.01 par value per share, of which no shares are issued or
outstanding. As of October 25, 2000, there were 10,683,783 shares of Common
Stock reserved for issuance upon the exercise or conversion of outstanding
options, warrants and convertible securities of the Company. All of the issued
and outstanding shares of Common Stock have been duly authorized and validly
issued and are fully paid and nonassessable. When issued, sold and delivered
against payment therefor in accordance with the provisions of this Agreement,
the Shares, the Warrants and the Warrant Shares will be duly and validly issued,
fully paid and nonassessable and will be free of restrictions on transfer other
than restrictions under this Agreement, the Registration Rights Agreement and
applicable state and federal securities laws.
(f) SEC REPORTS. The Company has previously furnished or made available to
the Purchaser complete and accurate copies, as amended or supplemented, of its
(i) Annual Report on Form 10-K for the fiscal year ended December 31, 1999, as
filed with the Securities and Exchange Commission (the "SEC"), and (ii) all
other reports filed by the Company under
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Section 13 or subsections (a) and (c) of Section 14 of the Securities Exchange
Act of 1934 (as amended the "Exchange Act") with the SEC since January 1, 2000
(such reports are collectively referred to herein as the "Reports"). The Reports
constitute all of the documents required to be filed by the Company under
Section 13 or subsections (a) and (c) of Section 14 of the Exchange Act with the
SEC from January 1, 2000 through the date of this Agreement. The Reports
complied in all material respects with the requirements of the Exchange Act and
the rules and regulations thereunder when filed. As of their respective dates,
the Company Reports did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading. The audited financial statements and unaudited interim
financial statements of the Company included in the Company Reports (i) complied
as to form in all material respects with applicable accounting requirements and
the published rules and regulations of the SEC with respect thereto when filed,
(ii) were prepared in accordance with GAAP applied on a consistent basis
throughout the periods covered thereby (except as may be indicated therein or in
the notes thereto, and in the case of quarterly financial statements, as
permitted by Form 10-Q under the Exchange Act), (iii) fairly present the
consolidated financial condition, results of operations and cash flows of the
Company as of the respective dates thereof and for the periods referred to
therein, and (iv) are consistent with the books and records of the Company.
3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser represents
and warrants as follows:
(a) INVESTMENT. The Purchaser is acquiring the Shares, the Warrants and
any shares acquired upon exercise of the Warrant (collectively, the
"Securities") for its own account for investment, not for resale to any other
person and not with a view to or in connection with any resale or distribution.
The Purchaser understands that, except as provided in the Registration Rights
Agreement, the Securities have not been registered under the securities laws of
the United States or any other jurisdiction and cannot be transferred or resold
except as permitted pursuant to a valid registration statement or an applicable
exemption from registration. The Purchaser acknowledges that the Company has not
made any representations with respect to registration of the Securities under
applicable securities laws, that there can be no assurance that there will be
any market for the Common Stock in the foreseeable future and that, as a result,
the Purchaser must be prepared to bear the economic risk of its investment for
an indefinite period of time. The Purchaser understands that the certificate
representing the Securities shall bear a legend substantially in the following
form:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and may not be
sold, exchanged, transferred, pledged, hypothecated or otherwise
disposed of unless and until such securities are registered under such
Act or an opinion of counsel satisfactory to the issuer is obtained to
the effect that such registration is not required."
The foregoing legend shall be removed and the Company shall issue a
certificate without such legend to the holder of any Security upon which it is
stamped, if, unless otherwise required
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by state securities laws, (i) the sale of such Security is registered under the
Securities Act of 1933, as amended (the "Securities Act"), or (ii) the
Securities become eligible for resale pursuant to Rule 144(k) of the Securities
Act.
(b) AUTHORIZATION AND BINDING NATURE. The execution, delivery and
performance by the Purchaser of this Agreement has been duly authorized by all
requisite corporate action on the part of the Purchaser and this Agreement
constitutes the valid and legally binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms.
(c) NON-CONTRAVENTION. The execution, delivery and performance by the
Purchaser of this Agreement will not, with or without the giving of notice or
the passage of time or both, (i) violate the provisions of the charter documents
of the Purchaser, (ii) violate any judgment, decree, order or award of any
court, governmental body or arbitrator applicable to the Purchaser, or (iii)
conflict with or violate any material agreement to which the Purchaser is a
party or by which it is bound.
(d) ACCESS TO INFORMATION. The Purchaser has substantial knowledge and
experience in making investment decisions of this type and is capable of
evaluating the merits and risks of its investment in the Company. The Company
has made available to the Purchaser all documents and other information
necessary for the Purchaser to evaluate the merits and risks of its investment
in the Company. The Company has made available to the Purchaser all documents
requested and has provided answers to all of its questions relating to an
investment in the Company. In evaluating the suitability of an investment in the
Company, the Purchaser has not relied upon any representations (whether oral or
written) other than as set forth herein. The Purchaser has had an opportunity to
discuss this investment with representatives of the Company and to ask questions
of them. The Purchaser understands that an investment in the Company involves
significant risks. The Purchaser is an "accredited investor," as defined in Rule
501 under the Securities Act.
4. NOTICES. Any notices or other communications required or permitted
hereunder shall be sufficiently given if delivered personally or sent by
telecopy or via a reputable express courier, with charges prepaid, to the
address set forth below or to such other address of which the parties may have
given notice. Unless otherwise specified herein, such notices or other
communications shall be deemed received one business day after personal delivery
or delivery by telecopy, or three business days after being sent, if sent by
reputable express courier.
If to the Company:
Student Advantage, Inc.
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: General Counsel
with a copy to:
Xxxx X. Xxxxxx, Esq.
Xxxx and Xxxx LLP
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00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
If to the Purchaser:
Hare & Co. f/b/o Xxxx Xxxxxxx Technology Fund
c/o Bank of New York Securities Department
X.X. Xxx 00,000
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Hare & Co. f/b/o Xxxx Xxxxxxx Technology Fund
c/o Xxxx Xxxxxxx Advisers, Inc.
Attn: Investment Operations, 4th Floor
Private Placement Corporate Actions
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
6. SUCCESSORS AND ASSIGNS. No party may assign its rights or obligations
hereunder without the prior written consent of the other party. Subject to the
foregoing, this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. Any assignment in
contravention of this provision shall be void.
7. SURVIVAL OF WARRANTIES. The representations, warranties and covenants of
the Company and the Purchaser contained in or made pursuant to this Agreement
shall survive the execution and delivery of this Agreement and the Closing and
shall in no way be affected by any investigation of the subject matter thereof
made by or on behalf of the Purchaser, its counsel or the Company, as the case
may be.
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8. ENTIRE AGREEMENT. This Agreement, including the exhibits attached hereto,
represents the entire understanding and agreement between the parties hereto
with respect to the subject matter hereof and supersedes all prior oral and
written and all contemporaneous oral negotiations, commitments and
understandings between such parties. The parties may amend or modify this
Agreement, in such manner as may be agreed upon, only by a written instrument
executed by the parties hereto.
9. EXPENSES. Each party shall pay its own expenses in connection with this
Agreement and the transactions contemplated hereby.
10. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware in the United States, without
reference to conflict of laws principles, and the parties hereby consent to the
jurisdiction of the courts of the State of Delaware.
11. SECTION HEADINGS. The section headings are for the convenience of the
parties and in no way alter, modify, amend, limit or restrict the contractual
obligations of the parties.
12. SEVERABILITY. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
13. COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original, but all of which shall be one
and the same document.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of and on the date first above written.
STUDENT ADVANTAGE, INC.
By: /s/ Xxxxxxx X. Xxxxx, Xx.
-----------------------------------------
Title: President
HARE & CO.
F/B/O XXXX XXXXXXX SMALL CAP VALUE FUND
By: /s/ Xxxxxx Xxxxxxx
-----------------------------------------
Title: General Manager
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EXHIBIT A
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUED UPON ITS
EXERCISE ARE SUBJECT TO THE RESTRICTIONS ON
TRANSFER SET FORTH IN SECTION 5 OF THIS WARRANT
Warrant No. 8 Number of Shares: 300,000
(subject to adjustment)
Date of Issuance: October 27, 2000
STUDENT ADVANTAGE, INC.
COMMON STOCK PURCHASE WARRANT
(VOID AFTER OCTOBER 26, 2002)
Student Advantage, Inc., a Delaware corporation (the "Company"), for value
received, hereby certifies that Hare & Co. f/b/o Xxxx Xxxxxxx Small Cap Value
Fund, or its registered assigns (the "Registered Holder"), is entitled, subject
to the terms and conditions set forth below, to purchase from the Company, at
any time or from time to time on or after the date of issuance and on or before
5:00 p.m. (Boston time) on October 26, 2002, 300,000 shares of Common Stock,
$.01 par value per share, of the Company, at a purchase price of $5.00 per
share. The shares purchasable upon exercise of this Warrant, and the purchase
price per share, each as adjusted from time to time pursuant to the provisions
of this Warrant, are hereinafter referred to as the "Warrant Shares" and the
"Purchase Price," respectively.
1. EXERCISE.
(a) This Warrant may be exercised by the Registered Holder, in whole
or in part, by surrendering this Warrant, with the purchase form appended hereto
as EXHIBIT I duly executed by the Registered Holder or by the Registered
Holder's duly authorized attorney, at the principal office of the Company, or at
such other office or agency as the Company may designate, accompanied by payment
in full, in lawful money of the United States, of the Purchase Price payable in
respect of the number of Warrant Shares purchased upon such exercise.
(b) The Registered Holder may elect to exercise this Warrant, in
whole or in part, by way of cashless exercise by surrendering this Warrant, with
the purchase form appended hereto as EXHIBIT I duly executed by such Registered
Holder or by such Registered Holder's duly authorized attorney, at the principal
office of the Company, or at such other office or agency as the Company may
designate, in which event the Company shall issue to the Registered Holder a
number of Warrant Shares as is determined using the following formula:
CS = (WS x (FMV - PP)) / FMV
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Where: "CS" equals the number of Warrant Shares to be issued to the
Registered Holder;
"WS" equals the number of Warrant Shares purchasable under the Warrant
or, if only a portion of the Warrant is being exercised, the portion of the
Warrant being exercised (as of the effective date of exercise (the "Exercise
Date"));
"FMV" equals the Fair Market Value per share of Common Stock as of the
Exercise Date, as determined below pursuant to this subsection 1(b); and
"PP" equals the Purchase Price per share.
The Fair Market Value per share of Common Stock shall be determined as follows:
(i) If the Common Stock is listed on a national securities
exchange, the Nasdaq National Market or another nationally recognized exchange
or trading system (including the over-the-counter market as reported by the
National Quotation Bureau) as of three business days prior to the Exercise Date,
the Fair Market Value per share of Common Stock shall be deemed to be the
average of the last reported sale prices per share of Common Stock over the five
trading-day period ending on the date that is three business days prior to the
Exercise Date; or, if no such price is reported on such date, such average price
ending on the next preceding business day (provided that if no such price is
reported on the next preceding business day, the Fair Market Value per share of
Common Stock shall be determined pursuant to clause (ii) below).
(ii) If the Common Stock is not listed on a national securities
exchange, the Nasdaq National Market or another nationally recognized exchange
or trading system (including the over-the-counter market as reported by the
National Quotation Bureau) as of the Exercise Date, the Fair Market Value per
share of Common Stock shall be deemed to be the amount most recently determined
by the Board of Directors in good faith to represent the fair market value per
share of the Common Stock (including without limitation a determination for
purposes of granting Common Stock options or issuing Common Stock under an
employee benefit plan of the Company); and, upon request of the Registered
Holder, the Board of Directors (or a representative thereof) shall promptly
notify the Registered Holder of the Fair Market Value per share of Common Stock.
Notwithstanding the foregoing, if the Board of Directors has not made such a
determination within the three-month period prior to the Exercise Date, then (A)
the Board of Directors shall make such a determination within 15 days of a
request by the Registered Holder that it do so, and (B) the exercise of this
Warrant pursuant to this subsection 1(b) shall be delayed until such
determination is made.
(c) Each exercise of this Warrant shall be deemed to have been effected
immediately prior to the close of business on the day on which this Warrant
shall have been surrendered to the Company as provided in subsection 1(a) above.
At such time, the person or persons in whose name or names any certificates for
Warrant Shares shall be issuable upon such exercise as provided in subsection
1(d) below shall be deemed to have become the holder or holders of record of the
Warrant Shares represented by such certificates.
(d) As soon as practicable after the exercise of this Warrant in full or
in part, and in any event within 10 days thereafter, the Company, at its
expense, will cause to be issued in the
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name of, and delivered to, the Registered Holder, or as such Holder (upon
payment by such Holder of any applicable transfer taxes) may direct:
(i) a certificate or certificates for the number of full Warrant
Shares to which the Registered Holder shall be entitled upon such exercise plus,
in lieu of any fractional share to which the Registered Holder would otherwise
be entitled, cash in an amount determined pursuant to Section 3 hereof; and
(ii) in case such exercise is in part only, a new warrant or
warrants (dated the date hereof) of like tenor, calling in the aggregate on the
face or faces thereof for the number of Warrant Shares equal (without giving
effect to any adjustment therein) to the number of such shares called for on the
face of this Warrant minus the sum of (a) the number of such shares purchased by
the Registered Holder upon such exercise plus (b) the number of Warrant Shares
(if any) covered by the portion of this Warrant cancelled in payment of the
Purchase Price payable upon such exercise pursuant to subsection 1(b) above.
2. ADJUSTMENTS.
(a) ADJUSTMENT FOR STOCK SPLITS AND COMBINATIONS. If the Company shall at
any time or from time to time after the date on which this Warrant was first
issued (the "Original Issue Date") effect a subdivision of the outstanding
Common Stock, the Purchase Price then in effect immediately before that
subdivision shall be proportionately decreased. If the Company shall at any time
or from time to time after the Original Issue Date combine the outstanding
shares of Common Stock, the Purchase Price then in effect immediately before the
combination shall be proportionately increased. Any adjustment under this
paragraph shall become effective at the close of business on the date the
subdivision or combination becomes effective.
(b) ADJUSTMENT FOR CERTAIN DIVIDENDS AND DISTRIBUTIONS. In the event the
Company at any time, or from time to time after the Original Issue Date shall
make or issue, or fix a record date for the determination of holders of Common
Stock entitled to receive, a dividend or other distribution payable in
additional shares of Common Stock, then and in each such event the Purchase
Price then in effect immediately before such event shall be decreased as of the
time of such issuance or, in the event such a record date shall have been fixed,
as of the close of business on such record date, by multiplying the Purchase
Price then in effect by a fraction:
(1) the numerator of which shall be the total number of shares
of Common Stock issued and outstanding immediately prior to the time
of such issuance or the close of business on such record date, and
(2) the denominator of which shall be the total number of shares
of Common Stock issued and outstanding immediately prior to the time
of such issuance or the close of business on such record date plus the
number of shares of Common Stock issuable in payment of such dividend
or distribution;
provided, however, if such record date shall have been fixed and such dividend
is not fully paid or if such distribution is not fully made on the date fixed
therefor, the Purchase Price shall be recomputed accordingly as of the close of
business on such record date and thereafter the
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Purchase Price shall be adjusted pursuant to this paragraph as of the time of
actual payment of such dividends or distributions.
(c) ADJUSTMENT IN NUMBER OF WARRANT SHARES. When any adjustment is
required to be made in the Purchase Price pursuant to subsections 2(a) or 2(b),
the number of Warrant Shares purchasable upon the exercise of this Warrant shall
be changed to the number determined by dividing (i) an amount equal to the
number of shares issuable upon the exercise of this Warrant immediately prior to
such adjustment, multiplied by the Purchase Price in effect immediately prior to
such adjustment, by (ii) the Purchase Price in effect immediately after such
adjustment.
(d) ADJUSTMENTS FOR OTHER DIVIDENDS AND DISTRIBUTIONS. In the event the
Company at any time or from time to time after the Original Issue Date shall
make or issue, or fix a record date for the determination of holders of Common
Stock entitled to receive, a dividend or other distribution payable in
securities of the Company (other than shares of Common Stock) or in cash or
other property (other than cash out of earnings or earned surplus, determined in
accordance with generally accepted accounting principles), then and in each such
event provision shall be made so that the Registered Holder shall receive upon
exercise hereof, in addition to the number of shares of Common Stock issuable
hereunder, the kind and amount of securities of the Company and/or cash and
other property which the Registered Holder would have been entitled to receive
had this Warrant been exercised into Common Stock on the date of such event and
had the Registered Holder thereafter, during the period from the date of such
event to and including the Exercise Date, retained any such securities
receivable, giving application to all adjustments called for during such period
under this Section 2 with respect to the rights of the Registered Holder.
(e) ADJUSTMENT FOR MERGERS OR REORGANIZATIONS, ETC. If there shall occur
any reorganization, recapitalization, consolidation or merger involving the
Company in which the Common Stock is converted into or exchanged for securities,
cash or other property (other than a transaction covered by subsections 2(a),
2(b) or 2(d)), then, following any such reorganization, recapitalization,
consolidation or merger, the Registered Holder shall receive upon exercise
hereof the kind and amount of securities, cash or other property which the
Registered Holder would have been entitled to receive if, immediately prior to
such reorganization, recapitalization, consolidation or merger, the Registered
Holder had held the number of shares of Common Stock subject to this Warrant. In
any such case, appropriate adjustment (as determined in good faith by the Board
of Directors of the Company) shall be made in the application of the provisions
set forth herein with respect to the rights and interests thereafter of the
Registered Holder, to the end that the provisions set forth in this Section 2
(including provisions with respect to changes in and other adjustments of the
Purchase Price) shall thereafter be applicable, as nearly as reasonably may be,
in relation to any securities, cash or other property thereafter deliverable
upon the exercise of this Warrant.
(f) CERTIFICATE AS TO ADJUSTMENTS. Upon the occurrence of each adjustment
or readjustment of the Purchase Price pursuant to this Section 2, the Company at
its expense shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and furnish to the Registered Holder a certificate setting
forth such adjustment or readjustment (including the kind and amount of
securities, cash or other property for which this Warrant shall
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be exercisable and the Purchase Price) and showing in detail the facts upon
which such adjustment or readjustment is based.
3. EXERCISE AT THE OPTION OF THE COMPANY.
(a) The Company shall have the right and option (the "Company Option to
Force Exercise") on any Trading Day (as defined below) (the "Forced Exercise
Date") on which, and for a period of twenty consecutive Trading Days prior
thereto, the average of the FMV (as defined below) for such period is at least
$15.00 (subject to appropriate adjustment for stock splits, stock dividends and
similar transactions), to cause the Registered Holder to exercise this Warrant
in full, and upon exercise of such Company Option to Force Exercise by the
Company, the exercise of this Warrant in full by the Registered Holder shall be
deemed to have been effected immediately prior to the close of business on the
Forced Exercise Date. At such time, the person or persons in whose name or names
any certificates for Warrant Shares shall be issuable upon such exercise as
provided in subsection 1(d) above shall be deemed to have become the holder or
holders of record of the Warrant Shares represented by such certificates. To
exercise the Company Option to Exercise, the Company must deliver to the
Registered Holder at its principal offices, within 3 days after the Forced
Exercise Date, a written notice of exercise of the Company Option to Force
Exercise (the "Forced Exercise Notice"). Promptly upon receipt of such Forced
Exercise Notice, the Registered Holder shall elect to exercise the Warrant
either for cash as set forth in Section 1(a) or pursuant to the cashless
exercise procedure set forth in Section 1(b) and shall submit the purchase form
appended hereto as EXHIBIT I to the Company.
(b) As soon as practicable after the exercise of the Company Option to
Force Exercise in full or in part, and in any event within 20 days thereafter,
the Company, at its expense, will cause to be issued in the name of, and
delivered to, the Registered Holder, or as such Holder (upon payment by such
Holder of any applicable transfer taxes) may direct, a certificate or
certificates for the number of full Warrant Shares to which the Registered
Holder shall be entitled upon such exercise plus, in lieu of any fractional
share to which the Registered Holder would otherwise be entitled, cash in an
amount determined pursuant to Section 4 hereof (provided that any delay in the
issuance of such Warrant Shares shall not invalidate the Company's exercise of
the Company Option to Force Exercise with respect to such Warrant Shares).
(c) For purposes of this Subsection 3:
"Trading Day" shall mean any day on which the Common Stock of the Company
is traded for any period on the Nasdaq National Market, or on the principal
securities exchange or other securities market on which such Common Stock is
then being traded; and
3. "FMV" shall mean, as of any day, the last reported sale price per share of
the Common Stock of the Company on the Nasdaq National Market as reported by
Bloomberg Financial Markets or other reporting service mutually acceptable to
the Registered Holder and the Company ("Bloomberg") or, if the Nasdaq National
Market is not the principal trading market for the Common Stock, the last
reported sale price per share of the Common Stock on the principal securities
exchange or trading market where the Common Stock is listed or traded as
reported by Bloomberg, or if the foregoing do not apply, the last reported sale
price for
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the Common Stock in the over-the-counter market on the electronic bulletin board
for the Common Stock as reported by Bloomberg or, if no last closing trade price
is reported for the Common Stock by Bloomberg, the average of the ask prices of
any market makers for the Common Stock that are listed on the "pink sheets" by
the National Quotation Bureau, Inc. If the Common Stock is not listed on a
national securities exchange, the Nasdaq National Market or another nationally
recognized exchange or trading system (including the over-the-counter market as
reported by the National Quotation Bureau), the FMV shall be the fair market
value of the Common Stock as determined in good faith by the Board of Directors
of the Company.
4. FRACTIONAL SHARES. The Company shall not be required upon the exercise of
this Warrant to issue any fractional shares, but shall make an adjustment
therefor in cash on the basis of the Fair Market Value per share of Common
Stock, as determined pursuant to subsection 1(b) above.
5. REQUIREMENTS FOR TRANSFER.
(a) This Warrant and the Warrant Shares shall not be sold or transferred
unless either (i) they first shall have been registered under the Securities Act
of 1933, as amended (the "Act"), or (ii) the Company first shall have been
furnished with an opinion of legal counsel, reasonably satisfactory to the
Company, to the effect that such sale or transfer is exempt from the
registration requirements of the Act.
(b) Notwithstanding the foregoing, no registration or opinion of counsel
shall be required for (i) a transfer by a Registered Holder which is a
corporation to a wholly owned subsidiary, parent or affiliate of such
corporation, a transfer by a Registered Holder which is a partnership to a
partner of such partnership or a retired partner of such partnership or to the
estate of any such partner or retired partner, or a transfer by a Registered
Holder which is a limited liability company to a member of such limited
liability company or a retired member or to the estate of any such member or
retired member, provided that the transferee in each case agrees in writing to
be subject to the terms of this Section 4, or (ii) a transfer made in accordance
with Rule 144 under the Act.
(c) Each certificate representing Warrant Shares shall bear a legend
substantially in the following form:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and may
not be offered, sold or otherwise transferred, pledged or
hypothecated unless and until such securities are registered
under such Act or an opinion of counsel satisfactory to the
Company is obtained to the effect that such registration is not
required."
The foregoing legend shall be removed from the certificates representing
any Warrant Shares, at the request of the holder thereof, at such time as they
become eligible for resale pursuant to Rule 144(k) under the Act.
- 6 -
14
6. NO IMPAIRMENT. The Company will not, by amendment of its charter or through
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the holder of this Warrant against impairment.
7. NOTICES OF RECORD DATE, ETC. In the event:
(a) the Company shall take a record of the holders of its Common Stock (or
other stock or securities at the time deliverable upon the exercise of this
Warrant) for the purpose of entitling or enabling them to receive any dividend
or other distribution, or to receive any right to subscribe for or purchase any
shares of stock of any class or any other securities, or to receive any other
right; or
(b) of any capital reorganization of the Company, any reclassification of
the Common Stock of the Company, any consolidation or merger of the Company with
or into another corporation (other than a consolidation or merger in which the
Company is the surviving entity and its Common Stock is not converted into or
exchanged for any other securities or property), or any transfer of all or
substantially all of the assets of the Company; or
(c) of the voluntary or involuntary dissolution, liquidation or winding-up
of the Company, then, and in each such case, the Company will mail or cause to
be mailed to the Registered Holder a notice specifying, as the case may be, (i)
the record date for such dividend, distribution or right, and the amount and
character of such dividend, distribution or right, or (ii) the effective date on
which such reorganization, reclassification, consolidation, merger, transfer,
dissolution, liquidation or winding-up is to take place, and the time, if any is
to be fixed, as of which the holders of record of Common Stock (or such other
stock or securities at the time deliverable upon the exercise of this Warrant)
shall be entitled to exchange their shares of Common Stock (or such other stock
or securities) for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, transfer, dissolution,
liquidation or winding-up. Such notice shall be mailed at least ten days prior
to the record date or effective date for the event specified in such notice.
8. RESERVATION OF STOCK. The Company will at all times reserve and keep
available, solely for issuance and delivery upon the exercise of this Warrant,
such number of Warrant Shares and other securities, cash and/or property, as
from time to time shall be issuable upon the exercise of this Warrant.
9. EXCHANGE OF WARRANTS. Upon the surrender by the Registered Holder of any
Warrant or Warrants, properly endorsed, to the Company at the principal office
of the Company, the Company will, subject to the provisions of Section 4 hereof,
issue and deliver to or upon the order of such Holder, at the Company's expense,
a new Warrant or Warrants of like tenor, in the name of the Registered Holder or
as the Registered Holder (upon payment by the Registered Holder of any
applicable transfer taxes) may direct, calling in the aggregate on the face or
faces thereof for the number of shares of Common Stock (or other securities,
cash and/or property) then issuable upon exercise of this Warrant.
- 7 -
15
10. REPLACEMENT OF WARRANTS. Upon receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant and
(in the case of loss, theft or destruction) upon delivery of an indemnity
agreement (with surety if reasonably required) in an amount reasonably
satisfactory to the Company, or (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will issue, in lieu thereof, a new
Warrant of like tenor.
11. TRANSFERS, ETC.
(a) The Company will maintain a register containing the name and address
of the Registered Holder of this Warrant. The Registered Holder may change its
or his address as shown on the warrant register by written notice to the Company
requesting such change.
(b) Subject to the provisions of Section 4 hereof, this Warrant and all
rights hereunder are transferable, in whole or in part, upon surrender of this
Warrant with a properly executed assignment (in the form of EXHIBIT II hereto)
at the principal office of the Company.
(c) Until any transfer of this Warrant is made in the warrant register,
the Company may treat the Registered Holder as the absolute owner hereof for all
purposes; PROVIDED, HOWEVER, that if and when this Warrant is properly assigned
in blank, the Company may (but shall not be obligated to) treat the bearer
hereof as the absolute owner hereof for all purposes, notwithstanding any notice
to the contrary.
12. MAILING OF NOTICES, ETC. All notices and other communications from the
Company to the Registered Holder of this Warrant shall be mailed by first-class
certified or registered mail, postage prepaid, to the address last furnished to
the Company in writing by the Registered Holder. All notices and other
communications from the Registered Holder or in connection herewith to the
Company shall be mailed by first-class certified or registered mail, postage
prepaid, to the Company at its principal office set forth below. If the Company
should at any time change the location of its principal office to a place other
than as set forth below, it shall give prompt written notice to the Registered
Holder of this Warrant and thereafter all references in this Warrant to the
location of its principal office at the particular time shall be as so specified
in such notice.
13. NO RIGHTS AS STOCKHOLDER. Until the exercise of this Warrant, the
Registered Holder of this Warrant shall not have or exercise any rights by
virtue hereof as a stockholder of the Company.
14. XXXX-XXXXX-XXXXXX COMPLIANCE. If the Registered Holder is prevented from
consummating the exercise of this Warrant until the expiration or early
termination of any waiting periods imposed by the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 0000 (xxx "XXX Xxx") (such waiting periods hereinafter
referred to as the "HSR Act Restrictions"), the Company agrees to (i) prepare
and file a responsive HSR Act filing reasonably necessary to support the
Registered Holder's effort to remove the HSR Act Restrictions and (ii) permit
the extension of the expiration date of this Warrant to such date that is five
(5) business days subsequent to the termination of the XXX Xxx Xxxxxxxxxxxx.
- 0 -
00
00. CHANGE OR WAIVER. Any term of this Warrant may be changed or waived only by
an instrument in writing signed by the party against which enforcement of the
change or waiver is sought.
16. SECTION HEADINGS. The section headings in this Warrant are for the
convenience of the parties and in no way alter, modify, amend, limit or restrict
the contractual obligations of the parties.
17. GOVERNING LAW. This Warrant will be governed by and construed in accordance
with the internal laws of the State of Delaware (without reference to the
conflicts of law provisions thereof).
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17
EXECUTED as of the Date of Issuance indicated above.
STUDENT ADVANTAGE, INC.
By:
-----------------------------------------
Title:
--------------------------------------
HARE & CO. F/B/O XXXX XXXXXXX SMALL CAP VALU
FUND
By:
-----------------------------------------
Title:
--------------------------------------
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18
EXHIBIT I
PURCHASE FORM
To:_________________ Dated:____________
The undersigned, pursuant to the provisions set forth in the attached
Warrant (No. ___), hereby irrevocably elects to purchase (check applicable box):
[ ] _____ shares of the Common Stock covered by such Warrant; or
[ ] the maximum number of shares of Common Stock covered by such Warrant
pursuant to the cashless exercise procedure set forth in Section 1(b).
The undersigned herewith makes payment of the full purchase price for such
shares at the price per share provided for in such Warrant, which is $________.
Such payment takes the form of (check applicable box or boxes):
[ ] $______ in lawful money of the United States; and/or
[ ] the cancellation of such portion of the attached Warrant as is
exercisable for a total of _____ Warrant Shares (using a Fair Market
Value of $_____ per share for purposes of this calculation); and/or
[ ] the cancellation of such number of Warrant Shares as is necessary, in
accordance with the formula set forth in Section 1(b), to exercise
this Warrant with respect to the maximum number of Warrant Shares
purchasable pursuant to the cashless exercise procedure set forth in
Section 1(b).
Signature:
----------------------------------
Address:
------------------------------------
------------------------------------
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19
EXHIBIT II
ASSIGNMENT FORM
FOR VALUE RECEIVED, ________________________________________ hereby sells,
assigns and transfers all of the rights of the undersigned under the attached
Warrant (No. ____) with respect to the number of shares of Common Stock covered
thereby set forth below, unto:
NAME OF ASSIGNEE ADDRESS NO. OF SHARES
---------------- ------- -------------
Dated: Signature:
----------------------- ----------------------------------
Signature Guaranteed:
By:
--------------------------
The signature should be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership in
an approved signature guarantee medallion program) pursuant to Rule 17Ad-15
under the Securities Exchange Act of 1934.
- 12 -
20
EXHIBIT B
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUED UPON ITS
EXERCISE ARE SUBJECT TO THE RESTRICTIONS ON
TRANSFER SET FORTH IN SECTION 5 OF THIS WARRANT
Warrant No. 9 Number of Shares: 300,000
(subject to adjustment)
Date of Issuance: October 27, 2000
STUDENT ADVANTAGE, INC.
COMMON STOCK PURCHASE WARRANT
(VOID AFTER OCTOBER 26, 2002)
Student Advantage, Inc., a Delaware corporation (the "Company"), for value
received, hereby certifies that Hare & Co. f/b/o Xxxx Xxxxxxx Small Cap Value
Fund, or its registered assigns (the "Registered Holder"), is entitled, subject
to the terms and conditions set forth below, to purchase from the Company, at
any time or from time to time on or after the date of issuance and on or before
5:00 p.m. (Boston time) on October 26, 2002, 300,000 shares of Common Stock,
$.01 par value per share, of the Company, at a purchase price of $6.00 per
share. The shares purchasable upon exercise of this Warrant, and the purchase
price per share, each as adjusted from time to time pursuant to the provisions
of this Warrant, are hereinafter referred to as the "Warrant Shares" and the
"Purchase Price," respectively.
1. EXERCISE.
(a) This Warrant may be exercised by the Registered Holder, in whole or in
part, by surrendering this Warrant, with the purchase form appended hereto as
EXHIBIT I duly executed by the Registered Holder or by the Registered Holder's
duly authorized attorney, at the principal office of the Company, or at such
other office or agency as the Company may designate, accompanied by payment in
full, in lawful money of the United States, of the Purchase Price payable in
respect of the number of Warrant Shares purchased upon such exercise.
(b) The Registered Holder may elect to exercise this Warrant, in whole or
in part, by way of cashless exercise by surrendering this Warrant, with the
purchase form appended hereto as EXHIBIT I duly executed by such Registered
Holder or by such Registered Holder's duly authorized attorney, at the principal
office of the Company, or at such other office or agency as the Company may
designate, in which event the Company shall issue to the Registered Holder a
number of Warrant Shares as is determined using the following formula:
CS = (WS x (FMV - PP)) / FMV
Where:
21
"CS" equals the number of Warrant Shares to be issued to the
Registered Holder;
"WS" equals the number of Warrant Shares purchasable under the Warrant
or, if only a portion of the Warrant is being exercised, the portion of the
Warrant being exercised (as of the effective date of exercise (the "Exercise
Date"));
"FMV" equals the Fair Market Value per share of Common Stock as of the
Exercise Date, as determined below pursuant to this subsection 1(b); and
"PP" equals the Purchase Price per share.
The Fair Market Value per share of Common Stock shall be determined as follows:
(i) If the Common Stock is listed on a national securities
exchange, the Nasdaq National Market or another nationally recognized exchange
or trading system (including the over-the-counter market as reported by the
National Quotation Bureau) as of three business days prior to the Exercise Date,
the Fair Market Value per share of Common Stock shall be deemed to be the
average of the last reported sale prices per share of Common Stock over the five
trading-day period ending on the date that is three business days prior to the
Exercise Date; or, if no such price is reported on such date, such average price
ending on the next preceding business day (provided that if no such price is
reported on the next preceding business day, the Fair Market Value per share of
Common Stock shall be determined pursuant to clause (ii) below).
(ii) If the Common Stock is not listed on a national securities
exchange, the Nasdaq National Market or another nationally recognized exchange
or trading system (including the over-the-counter market as reported by the
National Quotation Bureau) as of the Exercise Date, the Fair Market Value per
share of Common Stock shall be deemed to be the amount most recently determined
by the Board of Directors in good faith to represent the fair market value per
share of the Common Stock (including without limitation a determination for
purposes of granting Common Stock options or issuing Common Stock under an
employee benefit plan of the Company); and, upon request of the Registered
Holder, the Board of Directors (or a representative thereof) shall promptly
notify the Registered Holder of the Fair Market Value per share of Common Stock.
Notwithstanding the foregoing, if the Board of Directors has not made such a
determination within the three-month period prior to the Exercise Date, then (A)
the Board of Directors shall make such a determination within 15 days of a
request by the Registered Holder that it do so, and (B) the exercise of this
Warrant pursuant to this subsection 1(b) shall be delayed until such
determination is made.
(c) Each exercise of this Warrant shall be deemed to have been
effected immediately prior to the close of business on the day on which this
Warrant shall have been surrendered to the Company as provided in subsection
1(a) above. At such time, the person or persons in whose name or names any
certificates for Warrant Shares shall be issuable upon such exercise as provided
in subsection 1(d) below shall be deemed to have become the holder or holders of
record of the Warrant Shares represented by such certificates.
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22
(d) As soon as practicable after the exercise of this Warrant in full
or in part, and in any event within 10 days thereafter, the Company, at its
expense, will cause to be issued in the name of, and delivered to, the
Registered Holder, or as such Holder (upon payment by such Holder of any
applicable transfer taxes) may direct:
(i) a certificate or certificates for the number of full Warrant
Shares to which the Registered Holder shall be entitled upon such exercise plus,
in lieu of any fractional share to which the Registered Holder would otherwise
be entitled, cash in an amount determined pursuant to Section 3 hereof; and
(ii) in case such exercise is in part only, a new warrant or
warrants (dated the date hereof) of like tenor, calling in the aggregate on the
face or faces thereof for the number of Warrant Shares equal (without giving
effect to any adjustment therein) to the number of such shares called for on the
face of this Warrant minus the sum of (a) the number of such shares purchased by
the Registered Holder upon such exercise plus (b) the number of Warrant Shares
(if any) covered by the portion of this Warrant cancelled in payment of the
Purchase Price payable upon such exercise pursuant to subsection 1(b) above.
2. ADJUSTMENTS.
(a) ADJUSTMENT FOR STOCK SPLITS AND COMBINATIONS. If the Company
shall at any time or from time to time after the date on which this Warrant was
first issued (the "Original Issue Date") effect a subdivision of the outstanding
Common Stock, the Purchase Price then in effect immediately before that
subdivision shall be proportionately decreased. If the Company shall at any time
or from time to time after the Original Issue Date combine the outstanding
shares of Common Stock, the Purchase Price then in effect immediately before the
combination shall be proportionately increased. Any adjustment under this
paragraph shall become effective at the close of business on the date the
subdivision or combination becomes effective.
(b) ADJUSTMENT FOR CERTAIN DIVIDENDS AND DISTRIBUTIONS. In the event
the Company at any time, or from time to time after the Original Issue Date
shall make or issue, or fix a record date for the determination of holders of
Common Stock entitled to receive, a dividend or other distribution payable in
additional shares of Common Stock, then and in each such event the Purchase
Price then in effect immediately before such event shall be decreased as of the
time of such issuance or, in the event such a record date shall have been fixed,
as of the close of business on such record date, by multiplying the Purchase
Price then in effect by a fraction:
(1) the numerator of which shall be the total number of shares
of Common Stock issued and outstanding immediately prior to the time
of such issuance or the close of business on such record date, and
(2) the denominator of which shall be the total number of shares
of Common Stock issued and outstanding immediately prior to the time
of such issuance or the close of business on such record date plus the
number of shares of Common Stock issuable in payment of such dividend
or distribution;
- 3 -
23
provided, however, if such record date shall have been fixed and such dividend
is not fully paid or if such distribution is not fully made on the date fixed
therefor, the Purchase Price shall be recomputed accordingly as of the close of
business on such record date and thereafter the Purchase Price shall be adjusted
pursuant to this paragraph as of the time of actual payment of such dividends or
distributions.
(c) ADJUSTMENT IN NUMBER OF WARRANT SHARES. When any adjustment is
required to be made in the Purchase Price pursuant to subsections 2(a) or 2(b),
the number of Warrant Shares purchasable upon the exercise of this Warrant shall
be changed to the number determined by dividing (i) an amount equal to the
number of shares issuable upon the exercise of this Warrant immediately prior to
such adjustment, multiplied by the Purchase Price in effect immediately prior to
such adjustment, by (ii) the Purchase Price in effect immediately after such
adjustment.
(d) ADJUSTMENTS FOR OTHER DIVIDENDS AND DISTRIBUTIONS. In the event
the Company at any time or from time to time after the Original Issue Date shall
make or issue, or fix a record date for the determination of holders of Common
Stock entitled to receive, a dividend or other distribution payable in
securities of the Company (other than shares of Common Stock) or in cash or
other property (other than cash out of earnings or earned surplus, determined in
accordance with generally accepted accounting principles), then and in each such
event provision shall be made so that the Registered Holder shall receive upon
exercise hereof, in addition to the number of shares of Common Stock issuable
hereunder, the kind and amount of securities of the Company and/or cash and
other property which the Registered Holder would have been entitled to receive
had this Warrant been exercised into Common Stock on the date of such event and
had the Registered Holder thereafter, during the period from the date of such
event to and including the Exercise Date, retained any such securities
receivable, giving application to all adjustments called for during such period
under this Section 2 with respect to the rights of the Registered Holder.
(e) ADJUSTMENT FOR MERGERS OR REORGANIZATIONS, ETC. If there shall
occur any reorganization, recapitalization, consolidation or merger involving
the Company in which the Common Stock is converted into or exchanged for
securities, cash or other property (other than a transaction covered by
subsections 2(a), 2(b) or 2(d)), then, following any such reorganization,
recapitalization, consolidation or merger, the Registered Holder shall receive
upon exercise hereof the kind and amount of securities, cash or other property
which the Registered Holder would have been entitled to receive if, immediately
prior to such reorganization, recapitalization, consolidation or merger, the
Registered Holder had held the number of shares of Common Stock subject to this
Warrant. In any such case, appropriate adjustment (as determined in good faith
by the Board of Directors of the Company) shall be made in the application of
the provisions set forth herein with respect to the rights and interests
thereafter of the Registered Holder, to the end that the provisions set forth in
this Section 2 (including provisions with respect to changes in and other
adjustments of the Purchase Price) shall thereafter be applicable, as nearly as
reasonably may be, in relation to any securities, cash or other property
thereafter deliverable upon the exercise of this Warrant.
(f) CERTIFICATE AS TO ADJUSTMENTS. Upon the occurrence of each
adjustment or readjustment of the Purchase Price pursuant to this Section 2, the
Company at its expense shall
- 4 -
24
promptly compute such adjustment or readjustment in accordance with the terms
hereof and furnish to the Registered Holder a certificate setting forth such
adjustment or readjustment (including the kind and amount of securities, cash or
other property for which this Warrant shall be exercisable and the Purchase
Price) and showing in detail the facts upon which such adjustment or
readjustment is based.
3. EXERCISE AT THE OPTION OF THE COMPANY.
(a) The Company shall have the right and option (the "Company Option to
Force Exercise") on any Trading Day (as defined below) (the "Forced Exercise
Date") on which, and for a period of twenty consecutive Trading Days prior
thereto, the average of the FMV (as defined below) for such period is at least
$15.00 (subject to appropriate adjustment for stock splits, stock dividends and
similar transactions), to cause the Registered Holder to exercise this Warrant
in full, and upon exercise of such Company Option to Force Exercise by the
Company, the exercise of this Warrant in full by the Registered Holder shall be
deemed to have been effected immediately prior to the close of business on the
Forced Exercise Date. At such time, the person or persons in whose name or names
any certificates for Warrant Shares shall be issuable upon such exercise as
provided in subsection 1(d) above shall be deemed to have become the holder or
holders of record of the Warrant Shares represented by such certificates. To
exercise the Company Option to Exercise, the Company must deliver to the
Registered Holder at its principal offices, within 3 days after the Forced
Exercise Date, a written notice of exercise of the Company Option to Force
Exercise (the "Forced Exercise Notice"). Promptly upon receipt of such Forced
Exercise Notice, the Registered Holder shall elect to exercise the Warrant
either for cash as set forth in Section 1(a) or pursuant to the cashless
exercise procedure set forth in Section 1(b) and shall submit the purchase form
appended hereto as EXHIBIT I to the Company.
(b) As soon as practicable after the exercise of the Company Option to
Force Exercise in full or in part, and in any event within 20 days thereafter,
the Company, at its expense, will cause to be issued in the name of, and
delivered to, the Registered Holder, or as such Holder (upon payment by such
Holder of any applicable transfer taxes) may direct, a certificate or
certificates for the number of full Warrant Shares to which the Registered
Holder shall be entitled upon such exercise plus, in lieu of any fractional
share to which the Registered Holder would otherwise be entitled, cash in an
amount determined pursuant to Section 4 hereof (provided that any delay in the
issuance of such Warrant Shares shall not invalidate the Company's exercise of
the Company Option to Force Exercise with respect to such Warrant Shares).
(c) For purposes of this Subsection 3:
"Trading Day" shall mean any day on which the Common Stock of the Company
is traded for any period on the Nasdaq National Market, or on the principal
securities exchange or other securities market on which such Common Stock is
then being traded; and
3. "FMV" shall mean, as of any day, the last reported sale price per
share of the Common Stock of the Company on the Nasdaq National Market as
reported by Bloomberg Financial Markets or other reporting service mutually
acceptable to the Registered Holder and the Company ("Bloomberg") or, if the
Nasdaq National Market is not the principal trading
- 5 -
25
market for the Common Stock, the last reported sale price per share of the
Common Stock on the principal securities exchange or trading market where the
Common Stock is listed or traded as reported by Bloomberg, or if the foregoing
do not apply, the last reported sale price for the Common Stock in the
over-the-counter market on the electronic bulletin board for the Common Stock as
reported by Bloomberg or, if no last closing trade price is reported for the
Common Stock by Bloomberg, the average of the ask prices of any market makers
for the Common Stock that are listed on the "pink sheets" by the National
Quotation Bureau, Inc. If the Common Stock is not listed on a national
securities exchange, the Nasdaq National Market or another nationally recognized
exchange or trading system (including the over-the-counter market as reported by
the National Quotation Bureau), the FMV shall be the fair market value of the
Common Stock as determined in good faith by the Board of Directors of the
Company.
4. FRACTIONAL SHARES. The Company shall not be required upon the exercise
of this Warrant to issue any fractional shares, but shall make an adjustment
therefor in cash on the basis of the Fair Market Value per share of Common
Stock, as determined pursuant to subsection 1(b) above.
5. REQUIREMENTS FOR TRANSFER.
(a) This Warrant and the Warrant Shares shall not be sold or
transferred unless either (i) they first shall have been registered under the
Securities Act of 1933, as amended (the "Act"), or (ii) the Company first shall
have been furnished with an opinion of legal counsel, reasonably satisfactory to
the Company, to the effect that such sale or transfer is exempt from the
registration requirements of the Act.
(b) Notwithstanding the foregoing, no registration or opinion of
counsel shall be required for (i) a transfer by a Registered Holder which is a
corporation to a wholly owned subsidiary, parent or affiliate of such
corporation, a transfer by a Registered Holder which is a partnership to a
partner of such partnership or a retired partner of such partnership or to the
estate of any such partner or retired partner, or a transfer by a Registered
Holder which is a limited liability company to a member of such limited
liability company or a retired member or to the estate of any such member or
retired member, provided that the transferee in each case agrees in writing to
be subject to the terms of this Section 4, or (ii) a transfer made in accordance
with Rule 144 under the Act.
(c) Each certificate representing Warrant Shares shall bear a legend
substantially in the following form:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and may
not be offered, sold or otherwise transferred, pledged or
hypothecated unless and until such securities are registered
under such Act or an opinion of counsel satisfactory to the
Company is obtained to the effect that such registration is not
required."
- 6 -
26
The foregoing legend shall be removed from the certificates representing
any Warrant Shares, at the request of the holder thereof, at such time as they
become eligible for resale pursuant to Rule 144(k) under the Act.
6. NO IMPAIRMENT. The Company will not, by amendment of its charter or
through reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of this Warrant, but
will at all times in good faith assist in the carrying out of all such terms and
in the taking of all such action as may be necessary or appropriate in order to
protect the rights of the holder of this Warrant against impairment.
7. NOTICES OF RECORD DATE, ETC. In the event:
(a) the Company shall take a record of the holders of its Common
Stock (or other stock or securities at the time deliverable upon the exercise of
this Warrant) for the purpose of entitling or enabling them to receive any
dividend or other distribution, or to receive any right to subscribe for or
purchase any shares of stock of any class or any other securities, or to receive
any other right; or
(b) of any capital reorganization of the Company, any
reclassification of the Common Stock of the Company, any consolidation or merger
of the Company with or into another corporation (other than a consolidation or
merger in which the Company is the surviving entity and its Common Stock is not
converted into or exchanged for any other securities or property), or any
transfer of all or substantially all of the assets of the Company; or
(c) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company, then, and in each such case, the Company will mail or
cause to be mailed to the Registered Holder a notice specifying, as the case may
be, (i) the record date for such dividend, distribution or right, and the amount
and character of such dividend, distribution or right, or (ii) the effective
date on which such reorganization, reclassification, consolidation, merger,
transfer, dissolution, liquidation or winding-up is to take place, and the time,
if any is to be fixed, as of which the holders of record of Common Stock (or
such other stock or securities at the time deliverable upon the exercise of this
Warrant) shall be entitled to exchange their shares of Common Stock (or such
other stock or securities) for securities or other property deliverable upon
such reorganization, reclassification, consolidation, merger, transfer,
dissolution, liquidation or winding-up. Such notice shall be mailed at least ten
days prior to the record date or effective date for the event specified in such
notice.
8. RESERVATION OF STOCK. The Company will at all times reserve and keep
available, solely for issuance and delivery upon the exercise of this Warrant,
such number of Warrant Shares and other securities, cash and/or property, as
from time to time shall be issuable upon the exercise of this Warrant.
9. EXCHANGE OF WARRANTS. Upon the surrender by the Registered Holder of
any Warrant or Warrants, properly endorsed, to the Company at the principal
office of the Company, the Company will, subject to the provisions of Section 4
hereof, issue and deliver to or upon the order of such Holder, at the Company's
expense, a new Warrant or Warrants of like tenor, in the
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27
name of the Registered Holder or as the Registered Holder (upon payment by the
Registered Holder of any applicable transfer taxes) may direct, calling in the
aggregate on the face or faces thereof for the number of shares of Common Stock
(or other securities, cash and/or property) then issuable upon exercise of this
Warrant.
10. REPLACEMENT OF WARRANTS. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and (in the case of loss, theft or destruction) upon delivery of an
indemnity agreement (with surety if reasonably required) in an amount reasonably
satisfactory to the Company, or (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will issue, in lieu thereof, a new
Warrant of like tenor.
11. TRANSFERS, ETC.
(a) The Company will maintain a register containing the name and
address of the Registered Holder of this Warrant. The Registered Holder may
change its or his address as shown on the warrant register by written notice to
the Company requesting such change.
(b) Subject to the provisions of Section 4 hereof, this Warrant and
all rights hereunder are transferable, in whole or in part, upon surrender of
this Warrant with a properly executed assignment (in the form of EXHIBIT II
hereto) at the principal office of the Company.
(c) Until any transfer of this Warrant is made in the warrant
register, the Company may treat the Registered Holder as the absolute owner
hereof for all purposes; PROVIDED, HOWEVER, that if and when this Warrant is
properly assigned in blank, the Company may (but shall not be obligated to)
treat the bearer hereof as the absolute owner hereof for all purposes,
notwithstanding any notice to the contrary.
12. MAILING OF NOTICES, ETC. All notices and other communications from the
Company to the Registered Holder of this Warrant shall be mailed by first-class
certified or registered mail, postage prepaid, to the address last furnished to
the Company in writing by the Registered Holder. All notices and other
communications from the Registered Holder or in connection herewith to the
Company shall be mailed by first-class certified or registered mail, postage
prepaid, to the Company at its principal office set forth below. If the Company
should at any time change the location of its principal office to a place other
than as set forth below, it shall give prompt written notice to the Registered
Holder of this Warrant and thereafter all references in this Warrant to the
location of its principal office at the particular time shall be as so specified
in such notice.
13. NO RIGHTS AS STOCKHOLDER. Until the exercise of this Warrant, the
Registered Holder of this Warrant shall not have or exercise any rights by
virtue hereof as a stockholder of the Company.
14. XXXX-XXXXX-XXXXXX COMPLIANCE. If the Registered Holder is prevented
from consummating the exercise of this Warrant until the expiration or early
termination of any waiting periods imposed by the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 0000 (xxx "XXX Xxx") (such waiting periods hereinafter
referred to as the "HSR Act Restrictions"), the Company agrees to (i) prepare
and file a responsive HSR Act filing reasonably necessary to
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support the Registered Holder's effort to remove the HSR Act Restrictions and
(ii) permit the extension of the expiration date of this Warrant to such date
that is five (5) business days subsequent to the termination of the HSR Act
Restrictions.
15. CHANGE OR WAIVER. Any term of this Warrant may be changed or waived
only by an instrument in writing signed by the party against which enforcement
of the change or waiver is sought.
16. SECTION HEADINGS. The section headings in this Warrant are for the
convenience of the parties and in no way alter, modify, amend, limit or restrict
the contractual obligations of the parties.
17. GOVERNING LAW. This Warrant will be governed by and construed in
accordance with the internal laws of the State of Delaware (without reference to
the conflicts of law provisions thereof).
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EXECUTED as of the Date of Issuance indicated above.
STUDENT ADVANTAGE, INC.
By:
-----------------------------------------
Title:
--------------------------------------
HARE & CO. F/B/O XXXX XXXXXXX SMALL CAP VALUE
FUND
By:
-----------------------------------------
Title:
--------------------------------------
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30
EXHIBIT I
PURCHASE FORM
To:_________________ Dated:____________
The undersigned, pursuant to the provisions set forth in the attached
Warrant (No. ___), hereby irrevocably elects to purchase (check applicable box):
[ ] _____ shares of the Common Stock covered by such Warrant; or
[ ] the maximum number of shares of Common Stock covered by such Warrant
pursuant to the cashless exercise procedure set forth in Section 1(b).
The undersigned herewith makes payment of the full purchase price for such
shares at the price per share provided for in such Warrant, which is $________.
Such payment takes the form of (check applicable box or boxes):
[ ] $______ in lawful money of the United States; and/or
[ ] the cancellation of such portion of the attached Warrant as is
exercisable for a total of _____ Warrant Shares (using a Fair Market
Value of $_____ per share for purposes of this calculation); and/or
[ ] the cancellation of such number of Warrant Shares as is necessary, in
accordance with the formula set forth in Section 1(b), to exercise
this Warrant with respect to the maximum number of Warrant Shares
purchasable pursuant to the cashless exercise procedure set forth in
Section 1(b).
Signature:
----------------------------------
Address:
------------------------------------
------------------------------------
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31
EXHIBIT II
ASSIGNMENT FORM
FOR VALUE RECEIVED, ________________________________________ hereby sells,
assigns and transfers all of the rights of the undersigned under the attached
Warrant (No. ____) with respect to the number of shares of Common Stock covered
thereby set forth below, unto:
NAME OF ASSIGNEE ADDRESS NO. OF SHARES
---------------- ------- -------------
Dated: Signature:
----------------------- ----------------------------------
Signature Guaranteed:
By:
--------------------------
The signature should be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership in
an approved signature guarantee medallion program) pursuant to Rule 17Ad-15
under the Securities Exchange Act of 1934.
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32
EXHIBIT C
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") dated as of October
27, 2000 is entered into between Student Advantage, Inc., a Delaware corporation
(the "Company") and Hare & Co., (the "Purchaser"), f/b/o Xxxx Xxxxxxx Small Cap
Value Fund.
WHEREAS, the Company and the Purchaser have entered into a Securities
Purchase Agreement of even date herewith (the "Purchase Agreement"), pursuant to
which the Company has agreed to sell 1,200,000 shares (the "Initial Shares") of
common stock of the Company, $.01 par value per share (the "Common Stock") and
warrants to purchase an additional 600,000 shares of Common Stock (the
"Warrants"); and
WHEREAS, the Company and the Purchaser desire to provide for certain
arrangements with respect to the registration of the Initial Shares and the
shares of Common Stock issuable upon exercise of the Warrants (together with the
Initial Shares, the "Shares") under the Securities Act of 1933, as amended (the
"Securities Act");
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, the parties hereto agree as follows:
1. REGISTRATION OF THE SHARES. The Company shall file with the Securities and
Exchange Commission (the "SEC"), within 90 days following the Closing (as
defined in the Purchase Agreement), a registration statement on Form S-3
covering the resale to the public by the Purchaser of the Shares (the "Purchaser
Registration Statement"). The Company shall use commercially reasonable efforts
to cause the Purchaser Registration Statement to be declared effective by the
SEC as soon as practicable. The Company shall cause the Purchaser Registration
Statement to remain effective until the date one year after the date of the
Closing (the "Closing Date") or such earlier time as all of the Shares covered
by the Purchaser Registration Statement have been sold pursuant thereto.
2. LIMITATIONS ON REGISTRATION RIGHTS.
(a) The Company may, by written notice to the Purchaser signed by the
President or Chief Executive Officer of the Company, (i) delay the filing or
effectiveness of the Purchaser Registration Statement for a period of not more
than 120 days or (ii) suspend the Purchaser Registration Statement after
effectiveness and require that the Purchaser immediately cease sales of shares
pursuant to the Purchaser Registration Statement, in the event that (A) the
Company files a registration statement (other than a registration statement on
Form S-8 or its successor form) with the SEC for a public offering of its
securities, (B) the Company is engaged in any activity or transaction or
preparations or negotiations for any activity or transaction that the Company
desires to keep confidential for business reasons, if the Board of Directors of
the Company determines in good faith that it would be detrimental to the Company
for such Purchaser Registration Statement to be filed in the near future and
that it is, therefore, essential to defer the filing of such registration
statement, or (C) any financial statements required to be
33
included in the Purchaser Registration Statement, due to a merger, acquisition
or other transaction entered into by the Company, are not available despite
commercially reasonable efforts by the Company to obtain such financial
statements.
(b) If the Company delays or suspends the Purchaser Registration Statement
or requires the Purchaser to cease sales of shares pursuant to paragraph (a)
above, the Company shall, as promptly as practicable following the termination
of the circumstance which entitled the Company to do so, notify the Purchaser of
such termination and take such actions as may be necessary to file or reinstate
the effectiveness of the Purchaser Registration Statement and/or give written
notice to the Purchaser authorizing it to resume sales pursuant to the Purchaser
Registration Statement. If as a result thereof the prospectus included in the
Purchaser Registration Statement has been amended to comply with the
requirements of the Securities Act, the Company shall enclose such revised
prospectus with the notice to the Purchaser given pursuant to this paragraph
(b), and the Purchaser shall make no offers or sales of shares pursuant to the
Purchaser Registration Statement other than by means of such revised prospectus.
3. REGISTRATION PROCEDURES.
(a) In connection with the filing by the Company of the Purchaser
Registration Statement, the Company shall furnish to the Purchaser a copy of the
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act.
(b) The Company shall use its best efforts to register or qualify the
Shares covered by the Purchaser Registration Statement under the securities laws
of each state of the United States; PROVIDED, HOWEVER, that the Company shall
not be required in connection with this paragraph (b) to qualify as a foreign
corporation or execute a general consent to service of process in any
jurisdiction.
(c) If the Company has delivered preliminary or final prospectuses to the
Purchaser and after having done so the prospectus is amended or supplemented to
comply with the requirements of the Securities Act, the Company shall promptly
notify the Purchaser and, if requested by the Company, the Purchasers shall
immediately cease making offers or sales of shares under the Purchaser
Registration Statement and return all prospectuses to the Company. The Company
shall promptly provide the Purchaser with revised or supplemented prospectuses
and, following receipt of the revised or supplemented prospectuses, the
Purchaser shall be free to resume making offers and sales under the Purchaser
Registration Statement.
(d) The Company shall pay the expenses incurred by it in complying with
its obligations under Sections 1, 2 and 3, including all registration and filing
fees, exchange listing fees, fees and expenses of counsel for the Company, and
fees and expenses of accountants for the Company, but excluding (i) any
brokerage fees, selling commissions or underwriting discounts incurred by the
Purchaser in connection with sales under the Purchaser Registration Statement
and (ii) the fees and expenses of any counsel retained by the Purchaser.
4. REQUIREMENTS OF THE PURCHASER. The Company shall not be required to include
any Shares in the Purchaser Registration Statement unless:
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34
(a) the Purchaser furnishes to the Company in writing such information
regarding the Purchaser and the proposed sale of the Shares by the Purchaser as
the Company may reasonably request in writing in connection with the Purchaser
Registration Statement or as shall be required in connection therewith by the
SEC or any state securities law authorities;
(b) the Purchaser shall have provided to the Company its written
agreement:
(i) to indemnify the Company and each of its directors and officers
against, and hold the Company and each of its directors and officers harmless
from, any losses, claims, damages, expenses or liabilities (including reasonable
attorneys fees) to which the Company or such directors and officers may become
subject by reason of any statement or omission in the Purchaser Registration
Statement made in reliance upon, or in conformity with, a written statement by
the Purchaser furnished pursuant to this Section 4(b)(I); and
(ii) to report to the Company sales made pursuant to the Purchaser
Registration Statement.
5. INDEMNIFICATION. The Company agrees to indemnify and hold harmless the
Purchaser against any losses, claims, damages, expenses or liabilities to which
the Purchaser may become subject by reason of any untrue statement of a material
fact contained in the Purchaser Registration Statement or any omission to state
therein a fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages, expenses
or liabilities arise out of or are based upon information furnished to the
Company by or on behalf of the Purchaser for use in the Purchaser Registration
Statement. The Company shall have the right to assume the defense and settlement
of any claim or suit for which the Company may be responsible for
indemnification under this Section 5.
6. TERMINATION. All of the Company's obligations to register the Shares under
this Agreement shall terminate on the earlier of (a) the first anniversary of
the date of this Agreement or (b) the date on which all of the Shares have been
sold by the Purchaser.
7. ASSIGNMENT OF RIGHTS. This Agreement, and the rights and obligations of the
Purchaser hereunder, may be assigned by the Purchaser to any affiliate to whom
the Shares may be transferred pursuant to the terms of the Purchase Agreement,
and such transferee shall be deemed a "Purchaser" for the purposes of this
Agreement; provided that such transferee provides written notice of such
assignment to the Company and agrees to be bound in writing hereby.
8. SEVERABILITY. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
9. SPECIFIC PERFORMANCE. In addition to any and all other remedies that may be
available at law in the event of any breach of this Agreement, the Purchaser
shall be entitled to specific performance of the agreements and obligations of
the Company hereunder and to such other injunctive or other equitable relief as
may be granted by a court of competent jurisdiction.
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35
10. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Delaware (without reference to
the conflicts of law provisions thereof).
11. NOTICES. Any notices or other communications required or permitted
hereunder shall be sufficiently given if delivered personally or sent by
telecopy or via a reputable express courier, with charges prepaid, to the
address set forth below or to such other address of which the parties may have
given notice. Unless otherwise specified herein, such notices or other
communications shall be deemed received one business day after personal delivery
or delivery by telecopy, or three business days after being sent, if sent by
reputable express courier.
If to the Company:
Student Advantage, Inc.
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: General Counsel
with a copy to:
Xxxx X. Xxxxxx, Esq.
Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
If to the Purchaser:
Hare & Co. f/b/o Xxxx Xxxxxxx Technology Fund
c/o Bank of New York Securities Department
X.X. Xxx 00,000
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Hare & Co. f/b/o Xxxx Xxxxxxx Technology Fund
c/o Xxxx Xxxxxxx Advisers, Inc.
Attn: Investment Operations, 4th Floor
Private Placement Corporate Actions
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
12. ENTIRE AGREEMENT. This Agreement (including the documents referred to
herein) constitutes the entire agreement and understanding of the parties hereto
with respect to the subject matter hereof and supersedes all prior agreements
and understandings relating to such
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36
subject matter. The parties may amend or modify this Agreement, in such manner
as may be agreed upon, only by a written instrument executed by the parties
hereto.
13. COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, and all
of which together shall constitute one and the same document. This Agreement may
be executed by facsimile signatures.
14. SECTION HEADINGS. The section headings are for the convenience of the
parties and in no way alter, modify, amend, limit or restrict the contractual
obligations of the parties.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
STUDENT ADVANTAGE, INC.
By:
-----------------------------------------
Title:
--------------------------------------
HARE & CO.
F/B/O XXXX XXXXXXX SMALL CAP VALUE FUND
By:
-----------------------------------------
Title:
--------------------------------------
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