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Exhibit 10.11
FORM OF WARRANT
THE WARRANTS REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY APPLICABLE
STATE SECURITIES LAWS. THESE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION, AND MAY NOT BE SOLD,
TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR UNDER ANY APPLICABLE STATE SECURITIES LAWS OR AN
OPINION OF COUNSEL SATISFACTORY TO THE PATHWAYS GROUP, INC. THAT
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR SUCH LAWS.
VOID AFTER 5:00 P.M. (PACIFIC TIME) THREE YEARS FROM ISSUANCE DATE
No. ____ Issuance Date:____________
THE PATHWAYS GROUP, INC.
WARRANTS TO PURCHASE COMMON STOCK
THIS CERTIFIES that ________________ or his registered assigns
(hereinafter called the "Holder") is the registered holder of the aggregate
number of Warrants ("Warrants") entitling the Holder to purchase from The
Pathways Group, Inc., a corporation organized and existing under the laws of the
State of Delaware (the "Company"), subject to the terms and conditions set forth
hereinafter, __________________________________________ (_____________) fully
paid and non-assessable shares (each, a "Warrant Share") of the Common Stock,
par value $.01 per share ("Common Stock"), of the Company (subject to adjustment
as provided herein). The Holder shall be entitled to exercise the Warrants upon
surrender of this Warrant Certificate, and with the subscription form annexed
hereto duly executed, and payment in lawful money of the United States of the
exercise price equal to $0.65 (the "Exercise Price") for each Warrant Share
being purchased, at any time on or after the date hereof and at or prior to 5:00
P.M. (Pacific Time) three years from the issuance date hereof (the "Expiration
Date"), at the office of the Company or, if the Company shall designate a
warrant transfer agent, at the office of such warrant transfer agent. The
Warrants represented by this Warrant Certificate may be exercised by the Holder
in whole or in part, but not as to a fraction of a Warrant Share.
Payment of the Exercise Price shall be made in cash or by certified or official
bank check.
1. This Warrant is exercisable, at the option of the Holder,
in whole or in part at any time and from time to time on or before the
Expiration Date. Upon the surrender of this Warrant Certificate and payment of
the Exercise Price, as herein provided, the Warrants shall be deemed to have
been exercised and the person exercising the same shall become the holder of
record of the shares of Common Stock so purchased for all purposes on the date
of such surrender and payment; provided, however, that if such date is a date on
which the stock transfer
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books of the Company are closed, such person shall be deemed to have become the
record holder of such shares of Common Stock on the next succeeding date on
which the stock transfer books are open. As soon as practicable after such
surrender and payment, the Company shall issue and deliver to, or upon the order
of, the Holder a certificate or certificates representing the Warrant Shares so
purchased and, in the case of a fractional interest in a Warrant Share, cash as
provided herein. Upon surrender of this Warrant Certificate to the Company (or
its warrant transfer agent, if any), the Company (or warrant transfer agent)
shall cancel this Warrant Certificate, and to the extent there is a partial
exercise of the Warrants evidenced hereby, the Holder of the Warrant certificate
shall receive a replacement Warrant Certificate of like tenor and date
evidencing the number of Warrants which shall not have been exercised, unless
such Warrants shall have expired.
2. Notwithstanding the foregoing, if the Company shall give
notice to its stockholders of the liquidation, dissolution or winding up of the
Company, the right to exercise the Warrants evidenced hereby shall terminate at
the close of business on the third full business day prior to the date specified
in such notice as the record date for determining the Company's stockholders
entitled to receive any distribution upon liquidation, dissolution or winding
up.
3. The number and kinds of shares of stock of the Company
issuable upon exercise of the Warrants evidenced hereby are subject to
modification and adjustment upon the happening of certain events set forth as
follows:
(a) If, at any time after the date hereof, the Company shall
declare or pay a dividend or make a distribution to its stockholders consisting
of Common Stock of the Company, the Holder of the Warrants evidenced hereby
shall, upon the exercise of such Warrants after the record date for such
dividend, receive, in addition to the Warrants Shares otherwise issuable upon
such exercise, the number of shares of Common Stock as to which such Holder
would have been entitled to receive had such Holder exercised such Warrants
immediately prior to the record date for such dividend.
(b) If, at any time after the date hereof, the Company shall,
by subdivision, combination or reclassification of Common Stock, or through
merger or consolidation, or otherwise, alter or modify the number, kind or class
of shares of Common Stock, or other securities or property of the Company, then
as of the record date of such alteration or modification, the Warrant Shares
issuable upon the exercise of a warrant shall be adjusted so as to consist of
the number of shares of capital stock or other securities or property of the
Company which the Holder would have owned or have been entitled to receive had
the Warrants evidenced hereby been exercised immediately prior to the record
date for such subdivision, combination or reclassification of Common Stock, or
merger or consolidation, or other alteration or modification.
(c) If, at any time after the date hereof, the Company shall
make any distribution of its assets upon or with respect to the Common Stock, as
a liquidating or partial liquidating dividend (other than a liquidation,
dissolution, or winding up of the Company as provided for below, or other than
as a cash dividend payable out of earnings legally available for dividends under
the laws of the State of Delaware), the Holder of the Warrants evidenced hereby
shall, upon the exercise of such Warrants after the record date for such
distribution or, in the
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absence of a record date, after the date of such distribution, receive, in
addition to the Warrant Shares issuable upon such exercise, the amount of such
assets which would have been distributed to such Holder had such Holder
exercised such Warrants immediately prior to the record date for such
distribution or, in the absence of a record date, immediately prior to the date
of such distribution.
(d) Unless the context otherwise indicates, all references to
Warrant Shares in this Warrant Certificate shall, in the event of an adjustment
hereunder, be deemed to refer also to any other securities or property
receivable upon exercise of the Warrants pursuant to such adjustment.
(e) The Warrant Certificate need not be amended because of
any adjustment in the number and/or content of Warrant Shares pursuant thereto,
and any Warrant Certificate delivered after such adjustment may state the same
number of Warrant Shares as is stated in the Warrant Certificate originally
delivered. However, the Company may, with the prior written consent of the
holders of a majority of outstanding Warrants, amend the form of Warrant
Certificate, provided such amendment in form does not affect the substance
thereof; and any Warrant Certificate thereafter countersigned and delivered,
whether in exchange or substitution for an outstanding Warrant Certificate or
otherwise, may be in the form as so amended.
(f) The Company shall not be required to issue fractional
shares of Common Stock upon exercise of the Warrants. If, by reason of the
calculation of the number of Warrant Shares issuable upon exercise of the
Warrants or any adjustment made pursuant to the terms hereof the Holder of the
Warrants evidenced hereby would be entitled, upon the exercise thereof, to
receive a fractional interest in a share of Common Stock, the Company shall,
upon such exercise, purchase such fractional interest for an amount in cash
equal to (i) the then current market value of such fractional interest, computed
on the basis of the average closing bid and asked prices of shares of Common
Stock on the exercise date as furnished to the Company by any member of member
firm of a registered national securities exchange selected from time to time by
the Company for that purpose or (ii) if such shares of Common Stock are listed
on a national securities exchange, at the closing price of such shares on the
exercise date.
(g) The Holder of the Warrants evidenced hereby shall not,
upon the exercise thereof, be entitled to any dividends that may have accrued
with respect to the Warrant Shares issuable in respect thereof, or to any
interest that may have accrued upon any evidence of indebtedness included in the
Warrant Shares, prior to the exercise date.
(h) Whenever the number and/or content of Warrant Shares is
adjusted pursuant to the terms hereof, the Company shall promptly mail to the
Holder of the Warrants evidenced hereby at the address registered with the
Company a notice setting forth the adjusted number and/or content of Warrant
Shares. Notwithstanding anything to the contrary herein, no provisions of this
Warrant Certificate shall entitle the Holder of the Warrants evidenced hereby to
any adjustment in Warrant Shares as a result of the grant or exercise of options
to public stockholders of the Company.
4. In lieu of exercise of any portion of the Warrant, the
Warrant represented by this Warrant Certificate (or any portion thereof) may, at
the election of the Holder, be
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converted into the nearest whole number of Warrant Shares equal to: (a) the
product of (i) the number of Warrant Shares to be so purchased, and (ii) the
excess, if any, of (A) the market price per share as of the date of conversion
over (B) the Exercise price per Warrant Share, divided by (b) the market price
per share as of the date of conversion. The rights provided under this Section 4
may be exercised in whole or in part and at any time and from time to time while
any portion of the Warrant remains outstanding. In order to exercise the
conversion privilege, the Holder shall surrender to the Company, at its offices,
this Warrant Certificate accompanied by a duly completed Notice of Conversion in
the form attached hereto. This Warrant (or so much thereof as shall have been
surrendered for conversion) shall be deemed to have been converted immediately
prior to the close of business on the day of surrender of such Warrant
Certificate for conversion in accordance with the foregoing provisions. As
promptly as practicable on or after the conversion date, the Company shall issue
and shall deliver to the Holder (i) a certificate or certificates representing
the number of shares of Common Stock to which the Holder shall be entitled as a
result of the conversion, and (ii) if the Warrant Certificate is being converted
in part only, a new certificate of like tenor and date for the balance of the
unconverted portion of the Warrant Certificate.
5. This Warrant Certificate may be exchanged either
separately or in combination with one or more other Warrant Certificates
evidencing Warrants for one or more new certificates of like tenor and date for
the same aggregate number of Warrants as are evidenced by the Warrant
Certificate exchanged.
6. In the event of the liquidation, dissolution, or winding
up of the Company (which shall not include an event described in the next
paragraph), a notice thereof shall be filed by the Company with the warrant
transfer agent, if any shall have been designated by the Company, at least
thirty (30) days prior to the record date (which date shall be specified in such
notice) for determining security holders of the Company entitled to receive any
distribution upon such liquidation, dissolution, or winding up. Such notice also
shall specify the date on which the right to exercise Warrants shall expire as
provided above. A copy of such notice shall be mailed to the Holder of the
Warrants evidenced hereby at the address registered with the Company not more
than thirty (30) nor less than twenty (20) days before such record date.
7. In the case of any consolidation or merger of the Company
with or into another corporation (other than a consolidation or merger in which
the Company is the continuing corporation and which does not result in any
reclassification or change of outstanding shares of the class or classes of
Warrant Shares), or in the case of any sale or transfer to another corporation
of the property of the Company in its entirety or substantially in its entirety,
the Holder of the Warrants evidenced hereby, upon the exercise thereof at any
time after such consolidation, merger, sale or transfer, shall be entitled to
receive the kind and amount of shares of Common Stock and other securities and
property which such Holder would have received upon such consolidation, merger,
sale, or transfer had such Holder exercised its Warrants immediately prior
thereto.
8. The issue of any shares of Common Stock or other
certificate upon the exercise of the Warrants shall be made without charge to
the Holder hereof for any tax in respect of the issue thereof. The Company shall
not, however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of any certificate in a name
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other than that of the Holder of this Warrant Certificate, and the Company shall
not be required to issue or deliver any such certificate unless and until the
person or persons requesting the issue thereof shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.
9. This Warrant Certificate and all rights hereunder are
transferable on the books of the Company only upon compliance with the
provisions of the Securities Act of 1933, as amended, and applicable state
securities laws, upon surrender of this Warrant Certificate, with the form of
assignment attached hereto duly executed by the Holder hereof or by its attorney
duly authorized in writing, to the Company at its principal executive offices,
or at the office of the warrant transfer agent, if any shall have been
designated by the Company, and thereupon there shall be issued in the name of
the transferee or transferees, in exchange for this Warrant Certificate, a new
Warrant Certificate or Warrant Certificates of like tenor and date, representing
in the aggregate the number of warrants evidenced hereby.
10. If this Warrant Certificate shall be lost, stolen,
mutilated or destroyed, the Company shall, on such terms as to indemnify or
otherwise protect the Company as the Company may in its discretion impose, issue
a new Warrant Certificate of like denomination, tenor and date as the Warrant
Certificate so lost, stolen, mutilated or destroyed. Any such new Warrant
Certificate shall constitute an original contractual obligation of the Company,
whether or not the allegedly lost, stolen, mutilated or destroyed Warrant
Certificate shall be at any time enforceable by anyone.
11. The Company may deem and treat the Holder of this Warrant
Certificate as the absolute owner of this Warrant Certificate for all purposes
and shall not be affected by any notice to the contrary.
12. This Warrant Certificate and the Warrants evidenced
hereby shall not, prior to the exercise thereof, entitle the Holder to any
rights of a stockholder of the Company either at law in or equity including,
without limitation, the right to vote, to receive dividends and other
distributions, to exercise any preemptive rights or to receive any notice of
meetings of stockholders or of any other proceedings of the Company.
13. In the event that one or more of the provisions of this
Warrant Certificate shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Warrant Certificate, but this
Warrant Certificate shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
14. This Warrant Certificate shall be binding upon any
successors or assigns of the Company.
15. This Warrant Certificate shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to provisions thereof governing conflicts of law.
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly executed and delivered by its officer hereunder duly
authorized.
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THE PATHWAYS GROUP, INC.
By:
Carey F. Daly II, President and
Chief Executive Officer and Director
Countersigned:
Charles W. Dunn, Senior Vice President, Treasurer
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[Form of Subscription]
(To be Executed by the Holder Desiring to Exercise
Warrants Evidenced by the Within Warrant Certificate)
To: THE PATHWAYS GROUP, INC.
The undersigned hereby irrevocable elects to exercise
Warrants, evidenced by the within Warrant Certificate, for, and to purchase
thereunder, full shares of Common Stock, par value $.01 per share, of The
Pathways Group, Inc. issuable upon exercise of said Warrants and delivery of
$ in cash.
The undersigned requests that certificates for such shares by
issued in the name of .
SOCIAL SECURITY
OR TAX IDENTIFICATION NUMBER:_______________
____________________________________________
____________________________________________
(Please print name and address)
Date:_______________________ __________________
(Signature)
If said number of Warrants shall not be all of the Warrants
evidenced by the within Warrant Certificate, the undersigned requests that a new
Warrant Certificate evidencing the Warrants not so exercised be issued in the
name of and delivered to:
_______________________________
(Please print name and address)
_______________________________
_______________________________
(Signature)
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NOTICE: The signature on this subscription form must correspond with
the name as written upon the face of the within Warrant
Certificate, or upon the assignment thereof, in every
particular, without alteration, enlargement, or any change
whatsoever and must be guaranteed by a bank, other than a
savings bank, or trust company having an office or
correspondent in New York, New York, or by a firm having
membership on a regional securities exchange and an office in
New York, New York.
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TRANSFER OF WARRANT CERTIFICATE
For value received hereby sells, assigns and
transfers unto Warrants to purchase shares of Common Stock, par value
$.01 per share, of THE PATHWAYS GROUP, INC. (the "Company"), which Warrants
are represented by the attached Warrant Certificate, and does hereby
irrevocably constitute and appoint attorney to transfer such Warrants
on the books of such Company, with full power of substitution in the premises.
______________________
(Signature)
Social Security or other
Identifying Number of Transferor:____________________________________
Address of Assignee:_________________________________________________
_____________________________________________________________________
_____________________________________________________________________
Dated:___________________________________
In the Presence of:__________________________________________________
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NOTICE OF CONVERSION
The undersigned hereby irrevocably elects to convert, pursuant
to Section 4 of the Warrant Certificate accompanying this Notice of Conversion,
______ Warrants into shares of the Common Stock of the Company.
The number of shares to be received by the undersigned shall
be calculated in accordance with the provisions of Section 4 of the Warrant
Certificate.
____________________________
Name of Holder
_____________________________
Signature
Address:
______________________________
______________________________
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