Exhibit 2.8
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WARRANT TO PURCHASE ORDINARY SHARES
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NEITHER THIS WARRANT NOR THE SECURITIES INTO WHICH THIS WARRANT IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY U.S. STATE OR OTHER JURISIDICTION IN RELIANCE UPON
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS, AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE
TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE
TO THE COMPANY.
WARRANT TO PURCHASE ORDINARY SHARES
Number of Shares: Up to shares (subject to adjustment)
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Warrant Price: $ per share
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Issuance Date: July 21, 2005
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Expiration Date: July 21, 2010
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THIS WARRANT CERTIFIES THAT for value received, or its
registered assigns (hereinafter called the "Holder") is entitled to purchase
from Futuremedia PLC (hereinafter called the "Company"), the above referenced
number of fully paid and nonassessable shares (the "Shares") of Ordinary Shares
(the "Ordinary Shares"), of Company, at the Warrant Price per Share referenced
above; the number of shares purchasable upon exercise of this Warrant referenced
above being subject to adjustment from time to time as described herein. This
Warrant is issued in connection with that certain Securities Purchase Agreement
dated as of July 21, 2005, by and between the Company and Holder (the "Purchase
Agreement"). The exercise of this Warrant shall be subject to the provisions,
limitations and restrictions contained herein.
1. Term and Exercise.
1.1 Term. This Warrant is exercisable in whole or in part (but not as to any
fractional share of Ordinary Shares), at any time and from time to time after
the six month anniversary of the Issuance Date and prior to 6:00 p.m. on the
Expiration Date set forth above.
1.2 Warrant Price. The Warrant shall be exercisable at the Warrant Price
described above.
1.3 Maximum Number of Shares. The maximum number of Shares of Ordinary Shares
exercisable pursuant to this Warrant is Shares. However,
notwithstanding anything herein to the contrary, in no event shall the Holder be
permitted to exercise this Warrant for a number of Shares greater than the
number that would cause the aggregate beneficial ownership of the Company's
Ordinary Shares (calculated pursuant to Rule 13d-3 of the Securities Exchange
Act of 1934, as amended) of (a) the Holder and its affiliates or (b) M.A.G.
Capital, LLC, and its affiliates, to equal 9.99% of the Company's Ordinary
Shares then outstanding. In accordance with the shareholder approval
requirements under the rules of the Nasdaq Stock Market, notwithstanding any
other provision contained in this Warrant, in no event shall the Company be
obligated in connection with the transactions contemplated by this Warrant
and/or by the Purchase Agreement to issue shares representing more than 19.99%
of its outstanding capital stock as of the Issuance Date hereof without prior
approval of its shareholders at a general meeting called for that purpose.
1.4 Procedure for Exercise of Warrant. Holder may exercise this Warrant by
delivering the following to the principal office of the Company in accordance
with Section 5.1 hereof: (i) a duly executed Notice of Exercise in substantially
the form attached as Schedule A, (ii) payment of the Warrant Price then in
effect for each of the Shares being purchased, as designated in the Notice of
Exercise, and (iii) this Warrant. Payment of the Warrant Price may be in cash,
certified or official bank check payable to the order of the Company, or wire
transfer of funds to the Company's account (or any combination of any of the
foregoing) in the amount of the Warrant Price for each share being purchased.
1.5 Delivery of Certificate and New Warrant. In the event of any exercise of the
rights represented by this Warrant, a certificate or certificates for the
Ordinary Shares so purchased, registered in the name of the Holder or such other
name or names as may be designated by the Holder, together with any other
securities or other property which the Holder is entitled to receive upon
exercise of this Warrant, shall be delivered to the Holder hereof, at the
Company's expense, within a reasonable time, not exceeding fifteen (15) calendar
days, after the rights represented by this Warrant shall have been so exercised;
and, unless this Warrant has expired, a new Warrant representing the number of
Shares (except a remaining fractional share), if any, with respect to which this
Warrant shall not then have been exercised shall also be issued to the Holder
hereof within such time. The person in whose name any certificate for Ordinary
Shares is issued upon exercise of this Warrant shall for all purposes be deemed
to have become the holder of record of such shares on the date on which the
Warrant was surrendered and payment of the Warrant Price was received by the
Company, irrespective of the date of delivery of such certificate, except that,
if the date of such surrender and payment is on a date when the stock transfer
books of the Company are closed, such person shall be deemed to have become the
holder of such Shares at the close of business on the next succeeding date on
which the stock transfer books are open.
1.6 Restrictive Legend. Each certificate for Shares shall bear a restrictive
legend in substantially the form as follows, together with any additional legend
required by (i) any applicable state securities laws and (ii) any securities
exchange upon which such Shares may, at the time of such exercise, be listed:
The shares of stock evidenced by this certificate have not
been registered under the U.S. Securities Act of 1933, as
amended, and may not be offered, sold, pledged or otherwise
transferred ("transferred") in the absence of such
registration or an applicable exemption therefrom. In the
absence of such registration, such shares may not be
transferred unless, if the Company requests, the Company has
received a written opinion from counsel in form and
substance satisfactory to the Company stating that such
transfer is being made in compliance with all applicable
federal and state securities laws.
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Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend shall also bear such legend unless, in the
opinion of counsel for the Holder thereof (which counsel shall be reasonably
satisfactory to the Company), the securities represented thereby are not, at
such time, required by law to bear such legend.
1.7 Fractional Shares. No fractional Shares shall be issuable upon exercise or
conversion of the Warrant. In the event of a fractional interest, the number of
Shares to be issued shall be rounded down to the nearest whole Share.
2. Representations, Warranties and Covenants.
2.1 Representations and Warranties.
(a) The Company is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation and has all
necessary power and authority to perform its obligations under this Warrant;
(b) The execution, delivery and performance of this Warrant has been duly
authorized by all necessary actions on the part of the Company and constitutes
the legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms; and
(c) This Warrant does not violate and is not in conflict with any of the
provisions of the Company's Memorandum and Articles of Association and any
resolutions of the Company's Board of Directors or stockholders, or any
agreement of the Company, and no event has occurred and no condition or
circumstance exists that might (with or without notice or lapse of time)
constitute or result directly or indirectly in such a violation or conflict.
2.2 Issuance of Shares. The Company covenants and agrees that all shares of
Ordinary Shares that may be issued upon the exercise of the rights represented
by this Warrant will, upon issuance, be validly issued, fully paid and
nonassessable, and free from all taxes, liens and charges with respect to the
issue thereof. The Company further covenants and agrees that it will pay when
due and payable any and all taxes which may be payable in respect of the issue
of this Warrant or any Ordinary Shares or certificates therefor issuable upon
the exercise of this Warrant. The Company further covenants and agrees that the
Company will at all times have authorized and reserved, free from preemptive
rights, a sufficient number of shares of Ordinary Shares to provide for the
exercise in full of the rights represented by this Warrant. If at any time the
number of authorized but unissued shares of Ordinary Shares of the Company shall
not be sufficient to effect the exercise of the Warrant in full, subject to the
limitations set forth in Section 1.3 hereto, then the Company will take all such
corporate action as may, in the opinion of counsel to the Company, be necessary
or advisable to increase the number of its authorized shares of Ordinary Shares
as shall be sufficient to permit the exercise of the Warrant in full, subject to
the limitations set forth in Section 1.3 hereto, including without limitation,
using its best efforts to obtain any necessary stockholder approval of such
increase. The Company further covenants and agrees that if any shares of capital
stock to be reserved for the purpose of the issuance of shares upon the exercise
of this Warrant require registration with or approval of any governmental
authority under any federal or state law before such shares may be validly
issued or delivered upon exercise, then the Company will in good faith and as
expeditiously as possible endeavor to secure such registration or approval, as
the case may be. If and so long as the Ordinary Shares issuable upon the
exercise of this Warrant is listed on any national securities exchange or the
Nasdaq Stock Market, the Company will, if permitted by the rules of such
exchange or market, list and keep listed on such exchange or market, upon
official notice of issuance, all shares of such Ordinary Shares issuable upon
exercise of this Warrant.
3. Other Adjustments.
3.1 Subdivision or Combination of Shares. In case the Company shall at any time
subdivide its outstanding Ordinary Shares into a greater number of shares, the
Warrant Price in effect immediately prior to such subdivision shall be
proportionately reduced, and the number of Shares subject to this Warrant shall
be proportionately increased, and conversely, in case the outstanding Ordinary
Shares of the Company shall be combined into a smaller number of shares, the
Warrant Price in effect immediately prior to such combination shall be
proportionately increased, and the number of Shares subject to this Warrant
shall be proportionately decreased.
3.2 Dividends in Ordinary Shares, Other Stock or Property. If at any time or
from time to time the holders of Ordinary Shares (or any shares of stock or
other securities at the time receivable upon the exercise of this Warrant) shall
have received or become entitled to receive, without payment therefor:
(a) Ordinary Shares, Options or any shares or other securities which are
at any time directly or indirectly convertible into or exchangeable for Ordinary
Shares, or any rights or options to subscribe for, purchase or otherwise acquire
any of the foregoing by way of dividend or other distribution;
(b) any cash paid or payable otherwise than as a regular cash dividend; or
(c) Ordinary Shares or additional shares or other securities or property
(including cash) by way of spin-off, split-up, reclassification, combination of
shares or similar corporate rearrangement (other than Ordinary Shares issued as
a stock split or adjustments in respect of which shall be covered by the terms
of Section 3.1 above) and additional shares, other securities or property issued
in connection with a Change (as defined below) (which shall be covered by the
terms of Section 3.3 below), then and in each such case, the Holder hereof
shall, upon the exercise of this Warrant, be entitled to receive, in addition to
the number of shares of Ordinary Shares receivable thereupon, and without
payment of any additional consideration therefor, the amount of stock and other
securities and property (including cash in the cases referred to in clause (b)
above and this clause (c)) which such Holder would hold on the date of such
exercise had such Holder been the holder of record of such Ordinary Shares as of
the date on which holders of Ordinary Shares received or became entitled to
receive such shares or all other additional stock and other securities and
property.
3.3 Reorganization, Reclassification, Consolidation, Merger or Sale. If any
recapitalization, reclassification or reorganization of the share capital of the
Company, or any consolidation or merger of the Company with another corporation,
or the sale of all or substantially all of its shares and/or assets or other
transaction (including, without limitation, a sale of substantially all of its
assets followed by a liquidation) shall be effected in such a way that holders
of Ordinary Shares shall be entitled to receive shares, securities or other
assets or property (a "Change"), then, as a condition of such Change, lawful and
adequate provisions shall be made by the Company whereby the Holder hereof shall
thereafter have the right to purchase and receive (in lieu of the Ordinary
Shares of the Company immediately theretofore purchasable and receivable upon
the exercise of the rights represented hereby) such shares, securities or other
assets or property as may be issued or payable with respect to or in exchange
for the number of outstanding Ordinary Shares which such Holder would have been
entitled to receive had such Holder exercised this Warrant immediately prior to
the consummation of such Change. The Company or its successor shall promptly
issue to Holder a new Warrant for such new securities or other property. The new
Warrant shall provide for adjustments which shall be as nearly equivalent as may
be practicable to give effect to the adjustments provided for in this Section 3
including, without limitation, adjustments to the Warrant Price and to the
number of securities or property issuable upon exercise of the new Warrant. The
provisions of this Section 3.3 shall similarly apply to successive Changes.
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4. Ownership and Transfer.
4.1 Ownership of This Warrant. The Company may deem and treat the person in
whose name this Warrant is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by anyone
other than the Company) for all purposes and shall not be affected by any notice
to the contrary until presentation of this Warrant for registration of transfer
as provided in this Section 4.
4.2 Transfer and Replacement. This Warrant and all rights hereunder are
transferable in whole or in part upon the books of the Company by the Holder
hereof in person or by duly authorized attorney, and a new Warrant or Warrants,
of the same tenor as this Warrant but registered in the name of the transferee
or transferees (and in the name of the Holder, if a partial transfer is
effected) shall be made and delivered by the Company upon surrender of this
Warrant duly endorsed, at the office of the Company in accordance with Section
5.1 hereof. Upon receipt by the Company of evidence reasonably satisfactory to
it of the loss, theft or destruction, and, in such case, of indemnity or
security reasonably satisfactory to it, and upon surrender of this Warrant if
mutilated, the Company will make and deliver a new Warrant of like tenor, in
lieu of this Warrant; provided that if the Holder hereof is an instrumentality
of a state or local government or an institutional holder or a nominee for such
an instrumentality or institutional holder an irrevocable agreement of indemnity
by such Holder shall be sufficient for all purposes of this Warrant, and no
evidence of loss or theft or destruction shall be necessary. This Warrant shall
be promptly cancelled by the Company upon the surrender hereof in connection
with any transfer or replacement. Except as otherwise provided above, in the
case of the loss, theft or destruction of a Warrant, the Company shall pay all
expenses, taxes and other charges payable in connection with any transfer or
replacement of this Warrant, other than income taxes and stock transfer taxes
(if any) payable in connection with a transfer of this Warrant, which shall be
payable by the Holder. Holder will not transfer this Warrant and the rights
hereunder except in compliance with federal and state securities laws and except
after providing evidence of such compliance reasonably satisfactory to the
Company.
5. Miscellaneous Provisions.
5.1 Notices. Any notices required or permitted to be given under the terms of
this Agreement shall be sent by certified or registered mail (return receipt
requested) or delivered personally or by courier or by confirmed telecopy , and
shall be effective five days after being placed in the mail, if mailed, or upon
receipt or refusal of receipt, if delivered personally or by courier or
confirmed telecopy, in each case addressed to a party. The addresses for such
communications shall be: Futuremedia Plc, Nile House, Nile Street, Brighton, BN1
1HW, Fax: +44 (0) 1273 829702, with a copy to: Mark A. Dorff, Esq., Brown
Rudnick / 8 Clifford Street / London W1S 2LQ, Fax: +44-20-7851-6100. If to a
Fund or M.A.G.: M.A.G. Capital, LLC, 555 South Flower Street, Suite 4200, Los
Angeles, CA 90071, Telephone No.: (213) 533-8288, Facsimile No.: (213) 533-8285,
Attention: David Firestone, with a copy to Sheppard Mullin Richter & Hampton
LLP, 333 South Hope Street, 48th Floor, Los Angeles, CA 90071-1448, Facsimile
No.: (213) 620-1398, Attention: David C. Ulich. Each party hereto may from time
to time change its address or facsimile number for notices under this Section 8
by giving at least ten (10) days' prior written notice of such changed address
or facsimile number, in the case of the Funds to the Company, and in the case of
the Company to all of the Funds and M.A.G.
5.2 All notices, requests and approvals required by this Warrant shall be in
writing and shall be conclusively deemed to be given (i) when hand-delivered to
the other party, (ii) when received if sent by facsimile at the address and
number set forth above; provided that notices given by facsimile shall not be
effective, unless either (a) a duplicate copy of such facsimile notice is
promptly given by depositing the same in the mail, postage prepaid and addressed
to the party as set forth below or (b) the receiving party delivers a written
confirmation of receipt for such notice by any other method permitted under this
paragraph; and further provided that any notice given by facsimile received
after 5:00 p.m. (recipient's time) or on a non-business day shall be deemed
received on the next business day; (iii) five (5) business days after deposit in
the United States or United Kingdom mail, certified, return receipt requested,
postage prepaid, and addressed to the party as set forth below; or (iv) the next
business day after deposit with an international overnight delivery service,
postage prepaid, addressed to the party as set forth below with next business
day delivery guaranteed; provided that the sending party receives confirmation
of delivery from the delivery service provider.
5.3 No Rights as Shareholder; Limitation of Liability. This Warrant shall not
entitle the Holder to any of the rights of a shareholder of the Company except
upon exercise in accordance with the terms hereof. No provision hereof, in the
absence of affirmative action by the Holder to purchase shares of Ordinary
Shares, and no mere enumeration herein of the rights or privileges of the
Holder, shall give rise to any liability of the Holder for the Warrant Price
hereunder or as a shareholder of the Company, whether such liability is asserted
by the Company or by creditors of the Company.
5.4 Governing Law. This Warrant shall be governed by and construed in accordance
with the laws of the State of New York as applied to agreements among New York
residents made and to be performed entirely within the State of New York,
without giving effect to the conflict of law principles thereof.
5.5 Binding Effect on Successors. This Warrant shall be binding upon any
corporation succeeding the Company by merger, consolidation or acquisition of
all or substantially all of the Company's assets and/or securities. All of the
obligations of the Company relating to the Shares issuable upon the exercise of
this Warrant shall survive the exercise and termination of this Warrant. All of
the covenants and agreements of the Company shall inure to the benefit of the
successors and assigns of the Holder.
5.6 Waiver, Amendments and Headings. This Warrant and any provision hereof may
be changed, waived, discharged or terminated only by an instrument in writing
signed by both parties (either generally or in a particular instance and either
retroactively or prospectively). The headings in this Warrant are for purposes
of reference only and shall not affect the meaning or construction of any of the
provisions hereof.
5.7 Reseverd.
5.8 Attorneys' Fees and Disbursements. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party or parties shall be entitled to receive from the other party or parties
reasonable attorneys' fees and disbursements in addition to any other relief to
which the prevailing party or parties may be entitled.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly
authorized officer this day of , 2005.
COMPANY:
FUTUREMEDIA PLC
By
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Print Name:
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Title:
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SCHEDULE A
FORM OF NOTICE OF EXERCISE
[To be signed only upon exercise of the Warrant]
TO BE EXECUTED BY THE REGISTERED HOLDER
TO EXERCISE THE WITHIN WARRANT
The undersigned hereby elects to purchase shares of Ordinary Shares (the
"Shares") of Futuremedia PLC under the Warrant to Purchase Ordinary Shares dated
May __ , 2005, which the undersigned is entitled to purchase pursuant to the
terms of such Warrant. The undersigned has delivered $ , the aggregate
Warrant Price for Shares purchased herewith, in full in cash or by
certified or official bank check or wire transfer.
Please issue a certificate or certificates representing such shares of
Ordinary Shares in the name of the undersigned or in such other name as is
specified below and in the denominations as is set forth below:
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[Type Name of Holder as it should appear on the stock certificate]
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[Requested Denominations - if no denomination is specified, a single
certificate will be issued]
The initial address of such Holder to be entered on the books of Company
shall be:
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The undersigned hereby represents and warrants that the undersigned is
acquiring such shares for his own account for investment purposes only, and not
for resale or with a view to distribution of such shares or any part thereof.
By:
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Print Name:
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Title:
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Dated:
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FORM OF ASSIGNMENT
(ENTIRE)
[To be signed only upon transfer of entire Warrant]
TO BE EXECUTED BY THE REGISTERED HOLDER
TO TRANSFER THE WITHIN WARRANT
FOR VALUE RECEIVED ______________________________ hereby sells, assigns and
transfers unto _________________________________ all rights of the undersigned
under and pursuant to the within Warrant, and the undersigned does hereby
irrevocably constitute and appoint ______________________ Attorney to transfer
the said Warrant on the books of _____________________, with full power of
substitution.
[Type Name of Holder]
By:
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Title:
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Dated:
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NOTICE
The signature to the foregoing Assignment must correspond exactly to the name as
written upon the face of the within Warrant, without alteration or enlargement
or any change whatsoever.
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FORM OF ASSIGNMENT
(PARTIAL)
[To be signed only upon partial transfer of Warrant]
TO BE EXECUTED BY THE REGISTERED HOLDER
TO TRANSFER THE WITHIN WARRANT
FOR VALUE RECEIVED ______________________________ hereby sells, assigns and
transfers unto ____________________________ (i) the rights of the undersigned to
purchase _________________ shares of Ordinary Shares under and pursuant to the
within Warrant, and (ii) on a non-exclusive basis, all other rights of the
undersigned under and pursuant to the within Warrant, it being understood that
the undersigned shall retain, severally (and not jointly) with the transferee(s)
named herein, all rights assigned on such non-exclusive basis. The undersigned
does hereby irrevocably constitute and appoint ________________________ Attorney
to transfer the said Warrant on the books of Futuremedia PLC, with full power of
substitution.
[Type Name of Holder]
By:
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Title:
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Dated:
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NOTICE
The signature to the foregoing Assignment must correspond exactly to the name as
written upon the face of the within Warrant, without alteration or enlargement
or any change whatsoever.