<PAGE>
EXHIBIT 4.3
Exhibit A
Representative's Warrant Agreement
November ___, 2000
INSTITUTIONAL EQUITY CORPORATION
As Representative of the Several Underwriters
5910 North Central Expressway, Suite 1480
Dallas, Texas 75206
Gentlemen:
Catalog.com, Inc., an Oklahoma corporation (the "Company"), hereby agrees
to sell to you, and you hereby agree to purchase from the Company at an
aggregate purchase price of $32, unit purchase warrants (the "Representative's
Warrants") covering 32,000 units (the "Units") with each Unit consisting of four
shares of the Company's Common Stock (the "Underlying Shares") and two common
stock purchase warrants (the "Underlying Warrants"). Each Warrant is exercisable
to purchase one share of Common Stock (a "Warrant Share") at a price of $_____,
representing 130% of the initial public offering price of a Unit divided by
four. The Underlying Warrants will be subject to and issued in accordance with
the terms of the Warrant Agreement ("the Warrant Agreement"), dated as of
November __, 2000, between the Company and UMB Bank, N.A., as Warrant Agent (the
"Warrant Agent"). All of the Units, the Underlying Shares, and the Underlying
Warrants, are collectively referred to as the "Warrant Securities."
The Representative's Warrants will be exercisable by you as to all or
any lesser number of Units covered thereby, at the Purchase Price per Unit as
defined below, at any time and from time to time on and after the first
anniversary of the date hereof and ending at 5:00 p.m. on the fifth anniversary
of the effective date of the Registration Statement.
1. Definitions.
As used herein, the following terms, unless the context otherwise requires,
shall have for all purposes hereof the following meanings:
The term "Act" refers to the Securities Act of 1933, as amended.
The term "Affiliate" of any Person refers to any Person directly or
indirectly controlling, controlled by or under direct or indirect common control
with, such other Person. A Person shall be deemed to control a corporation if
such Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such corporation, whether through
the ownership of voting securities, by contract or otherwise.
The term "Commission" refers to the Securities and Exchange Commission.
The term "Common Stock" refers to the Company's Common Stock, $.01 par
value.
The term "Current Market Price" on any date refers to the average of the
daily Market Price per share of Common Stock for the 30 consecutive Trading Days
commencing 45 Trading Days before the date in question.
The term "Exchange Act" refers to the Securities Exchange Act of 1934, as
amended.
The term "Market Price" refers to (a) the average of the means between the
closing bid and asked prices of the Common Stock in the over-the-counter market,
(b) if the Common Stock is quoted on the Nasdaq Small Cap Market, the
<PAGE>
average of the means of the daily closing bid and asked prices of the Common
Stock as quoted on the Nasdaq SmallCap Market, (c) if the Common Stock is listed
on the American Stock Exchange, any other national securities exchange, or the
Nasdaq National Market System, the average of the daily closing prices of the
Common Stock as published on such national securities exchange or quoted on the
Nasdaq National Market System, as applicable. If Market Price cannot be
established as described above, Market Price shall be the fair market value of
the Common Stock as determined in good faith by the Board of Directors whose
determination shall be conclusive.
The term "Other Securities" refers to any securities of the Company (other
than Units, Underlying Shares, or Underlying Warrants) or any other person
(corporate or otherwise) which the holders of the Representative's Warrants at
any time shall be entitled to receive, or shall have received, upon the exercise
of the Representative's Warrants, in lieu of or in addition to Units, Underlying
Shares, or Underlying Warrants or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Units or Other Securities
pursuant to Section 6 below or otherwise.
The term "Person" refers to an individual, a partnership, a corporation, a
trust, a joint venture, an unincorporated organization and a government or any
department or agency thereof.
The term "Prospectus" shall mean the final prospectus of the Company, dated
the date hereof, relating to the offer and sale of Units.
The term "Purchase Price" refers to the purchase price per Unit subject to
this Agreement. The Purchase Price shall be equal to 135% of the initial
offering price to the public of the Units as set forth in the Prospectus,
subject to adjustment as provided in Section 6 below.
The term "Registration Statement" refers to a Registration Statement filed
with the Commission pursuant to the Rules and Regulations of the Commission
promulgated under the Act.
The term "Trading Day" shall mean a day on which the Nasdaq National Market
System or the principal national securities exchange on which the Common Stock
is listed or admitted to trading is open for the transaction of business.
The purchase and sale of the Representative's Warrants shall take place,
and the purchase price therefor shall be paid by delivery of your check,
simultaneously with the purchase of and payment for any Units as provided in the
Underwriting Agreement between the Company and you, dated the date hereof.
2. Representations and Warranties.
The Company represents and warrants to you as follows:
(a) Corporate Action. The Company has all requisite corporate power and
authority, and has taken all necessary corporate action, (i) to execute and
deliver this Agreement, (ii) to issue and deliver the Representative's Warrants
and certificates evidencing same, (iii) to authorize and reserve for issuance,
and upon payment from time to time of the Purchase Price to issue and deliver,
the Units; and (iv) to authorize and reserve for issuance, and upon payment of
the exercise price of the Underlying Warrants, to issue and deliver the Warrant
Shares.
(b) No Violation. Neither the execution nor delivery of this Agreement,
the consummation of the actions herein contemplated nor compliance with the
terms and provisions hereof will conflict with, or result in a breach of, or
constitute a default or an event permitting acceleration under, any of the
terms, provisions or
A-2
<PAGE>
conditions of the Articles of Incorporation or Bylaws of the Company or any
indenture, mortgage, deed of trust, note, bank loan, credit agreement,
franchise, license, lease, permit, judgment, decree, order, statute, rule or
regulation or any other agreement, understanding or instrument to which the
Company is a party or by which it is bound.
3. Compliance with the Act.
(a) Transferability of Representative's Warrants. You agree that the
Representative's Warrants may not be transferred, sold, assigned or hypothecated
for a period of one (1) year from the date hereof; except to (i) persons who are
officers of you; (ii) a successor to you in a merger or consolidation; (iii) a
purchaser of all or substantially all of your assets; (iv) your shareholders in
the event you are liquidated or dissolved; and (v) persons who are officers or
partners of participating Underwriters.
(b) Registration of Warrant Securities. The Warrant Securities issuable
upon the exercise of the Representative's Warrants have not been registered
under the Act. You agree not to make any sale or other disposition of the
Warrant Securities except pursuant to a Registration Statement which has become
effective under the Act, setting forth the terms of such offering, the
underwriting discount and the commissions and any other pertinent data with
respect thereto, unless you have provided the Company with an opinion of counsel
reasonably acceptable to the Company that such registration is not
required.
(c) Inclusion in Registration of Other Securities. If at any time
commencing one year after the date hereof but prior to the fifth anniversary of
the date hereof, the Company proposes to file a registration statement under the
Act covering a proposed sale of shares of Common Stock (other than registration
statements under a Form S-8 (or successor forms) to register interests in
employee benefit plans or Form S-4 (or successor forms) to register securities
issued in connection with mergers or acquisitions), the Company shall at least
30 days prior to the filing of such Registration Statement give you written
notice, or telegraphic or telephonic notice followed as soon as practicable by
written confirmation thereof, of such proposed registration and, upon written
notice, or telegraphic or telephonic notice followed as soon as practicable by
written confirmation thereof, given to the Company within five business days
after the giving of such notice by the Company, shall use its reasonable best
efforts to include or cause to be included in any such Registration Statement
all or such portion of the Warrant Securities as you may request. If the
proposed offering is an underwritten offering, the Company shall direct and use
its reasonable best efforts to cause the managing underwriter of a proposed
underwritten offering (unless the offering is an underwritten offering of a
class of the Company's equity securities other than Common Stock and the
managing underwriter has advised the Company in writing that, in its opinion,
the inclusion in such offering of and of the Warrant Securities would materially
adversely affect the distribution of such offering) to permit you to include in
the registration and proposed offering such Warrant Securities as you request,
and the Company shall use its reasonable best efforts to include such Warrant
Securities in such proposed offering on the same terms and conditions as any
similar securities of the Company included therein. If the offering of which
the Company gives notice is a public offering involving an underwriter, your
right to registration pursuant to this Section 3(c) shall be conditioned upon
(i) your participation in such underwriting and the inclusion of the Warrant
Securities to be sold by you in the underwriting and (ii) your execution of the
underwriting agreement entered into by the Company which includes customary
terms and conditions relating to sales by shareholders. The foregoing
notwithstanding, in the case of an underwritten offering, if the managing
underwriter of such offering shall advise the Company in writing that, in its
opinion, the distribution of all or a specified portion of the Warrant
Securities requested to be included in the registration concurrently with the
securities being registered by the Company would materially adversely affect the
distribution of such securities, then the securities to be included in a
registration which is a primary underwritten offering on behalf of the Company
shall be reduced in the following order: (i) first, Warrant Securities and such
other securities requested to be included by holders of such other securities
shall be excluded pro rata, and (ii) second, the securities the Company proposes
to include therein shall be excluded. In any event, the Company may at any time
withdraw or cease proceeding with any such registration if it shall at the same
time withdraw or cease proceeding with the registration of such Common Stock or
such Other Securities originally proposed to be registered.
A-3
<PAGE>
Notwithstanding any provision of this Agreement to the contrary, if
any holder of Representative's Warrants exercises such Representative's Warrants
but shall not have included all the Warrant Securities in a Registration
Statement which complies with Section 10(a)(3) of the Act, which has been
effective for at least 30 calendar days following the exercise of the
Representative's Warrants, the registration rights set forth in this Section
3(c) shall be extended until such time as (i) such a Registration Statement
including such Warrant Securities has been effective for at least 30 calendar
days or (ii) in the opinion of counsel satisfactory to you and the Company,
registration is not required under the Act or under applicable state laws for
resale of the Warrant Securities in the manner proposed.
(d) Company's Obligations in Registration. In connection with any
offering of Underlying Securities pursuant to Section 3(c) above, the Company
shall:
(i) Notify you as to the filing thereof and of all amendments or
supplements thereto filed prior to the effective date thereof;
(ii) Comply with all applicable rules and regulations of the
Commission;
(iii) Notify you promptly, and confirm the notice in writing, (1) when
the Registration Statement becomes effective, (2) of the
issuance by the Commission of any stop order or of the
initiation, or the threatening, of any proceedings for that
purpose, (3) of the receipt by the Company of any notification
with respect to the suspension of qualification of the
Warrant Securities for sale in any jurisdiction or of the
initiation, or the threatening, of any proceedings for that
purpose and (4) of the receipt of any comments, or requests for
additional information, from the Commission or any state
regulatory authority. If the Commission or any state regulatory
authority shall enter such a stop order or order suspending
qualification at any time, the Company will make every
reasonable effort to obtain the lifting of such order as
promptly as practicable.
(iv) During the time when a Prospectus is required to be delivered
under the Act during the period required for the distribution of
the Warrant Securities, comply so far as it is able with all
requirements imposed upon it by the Act, as hereafter amended,
and by the Rules and Regulations promulgated thereunder, as from
time to time in force, so far as necessary to permit the
continuance of sales of or dealings in the Warrant Securities.
If at any time when a Prospectus relating to the Warrant
Securities is required to be delivered under the Act any event
shall have occurred as a result of which, in the opinion of
counsel for the Company or your counsel, the Prospectus relating
to the Warrant Securities as then amended or supplemented
includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if
it is necessary at any time to amend such Prospectus to comply
with the Act, the Company will promptly prepare and file with
the Commission an appropriate amendment or supplement (in form
reasonably satisfactory to you).
(v) Endeavor in good faith, in cooperation with you, at or prior to
the time the Registration Statement becomes effective, to
qualify the Warrant Securities for offering and sale under
the securities laws relating to the offering or sale of the
Warrant Securities of such jurisdictions as you may
reasonably designate and to continue the qualifications in
effect so long as required for purposes of the sale of the
Warrant Securities; provided that no such qualification shall
be required in any jurisdiction where, as a result thereof, the
Company would be subject to service of general process, or to
taxation as a foreign corporation doing business in such
jurisdiction. In each jurisdiction where such qualification
shall be effected, the Company will, unless you agree that such
action is not at the time necessary or advisable, file and make
such statements or reports at such times as are or may
reasonably be required by the laws of such jurisdiction. For the
purposes of
A-4
<PAGE>
this paragraph, "good faith" is defined as the same standard of
care and degree of effort as the Company will use to qualify
its securities other than the Warrant Securities.
(vi) Make generally available to its security holders as soon as
practicable, but not later than the first day of the eighteenth
full calendar month following the effective date of the
Registration Statement, an earnings statement (which need not
be certified by independent public or independent certified
public accountants unless required by the Act or the rules and
regulations promulgated thereunder, but which shall satisfy the
provisions of Section 11(a) of the Act) covering a period of at
least twelve months beginning after the effective date of the
Registration Statement.
(vii) After the effective date of such Registration Statement,
prepare, and promptly notify you of the proposed filing of, and
promptly file with the Commission, each and every amendment or
supplement thereto or to any Prospectus forming a part thereof
as may be necessary to make any statements therein not
misleading; provided that no such amendment or supplement shall
be filed if you shall object thereto in writing promptly after
being furnished a copy thereof.
(viii) Furnish to you, as soon as available, copies of any such
Registration Statement and each preliminary or final
Prospectus, or supplement or amendment prepared pursuant
thereto, all in such quantities as you may from time to time
reasonably request;
(ix) Make such representations and warranties to any underwriter of
the Warrant Securities, and use your best efforts to cause
Company counsel to render such opinions to such underwriter, as
such underwriter may reasonably request; and
(x) Pay all costs and expenses incident to the performance of the
Company's obligations under Sections 3(c) and 3(d), including,
without limitation, the fees and disbursements of the Company's
auditors and legal counsel, fees and disbursements of legal
counsel for you, registration, listing and filing fees,
printing expenses and expenses in connection with the transfer
and delivery of the Warrant Securities; provided, however, that
the Company shall not be responsible for compensation and
reimbursement of expenses to underwriters or selling agents for
the included Warrant Securities.
(e) Agreements by Warrant Holder. In connection with the filing of a
Registration Statement pursuant to Section 3(c) above, if you participate in the
offering by including the Warrant Securities owned by you, you agree:
(i) To furnish the Company all material information requested by
the Company concerning yourself and your holdings of securities
of the Company and the proposed method of sale or other
disposition of the Warrant Securities and such other
information and undertakings as shall be reasonably required in
connection with the preparation and filing of any such
Registration Statement covering all or a part of the Warrant
Securities and in order to ensure full compliance with the Act;
and
(ii) To cooperate in good faith with the Company and its
underwriters, if any, in connection with such registration,
including placing the Warrant Securities to be included in
such Registration Statement in escrow or custody to facilitate
the sale and distribution thereof.
(f) Indemnification. The Company shall indemnify and hold harmless
you and any underwriter (as defined in the Act) for you, and each person, if
any, who respectively controls you or such underwriter within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, against any loss,
liability, claim, damage and expense whatsoever (including but not limited to
any and all expense whatsoever reasonably incurred in investigating, preparing
or defending against any litigation, commenced or threatened, or any claim
whatsoever), joint or several, to
A-5
<PAGE>
which any of you or such underwriter or such controlling person becomes subject,
under the Act or otherwise, insofar as such loss, liability, claim, damage and
expense (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
(i) a Registration Statement covering the Underlying Securities, in the
prospectus contained therein, or in an amendment or supplement thereto or (ii)
in any application or other document or communication (in this Section
collectively called "application") executed by or on behalf of the Company or
based upon written information furnished by or on behalf of the Company filed in
any jurisdiction in order to qualify the Warrant Securities under the
securities laws thereof or filed with the Commission, or arise out of or based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading;
provided, however, that the Company shall not be obligated to indemnify in any
such case to the extent that any such loss, claim, damage, expense or liability
arises out of or is based upon any untrue statement or alleged untrue statement
or omission or alleged omission made in reliance upon, and in conformity with,
written information respectively furnished by you or such underwriter or such
controlling person for use in the Registration Statement, or any amendment or
supplement thereto, or any application, as the case may be.
If any action is brought against a person in respect of which
indemnity may be sought against, the Company pursuant to the foregoing
paragraph, such person shall promptly notify the Company in writing of the
institution of such action and the Company shall assume the defense of the
action, including the employment of counsel (satisfactory to the indemnified
person in its reasonable judgment) and payment of expenses. The indemnified
person shall have the right to employ its or their own counsel in any such case,
but the fees and expenses of such counsel shall be at the expense of such
indemnified person or unless the employment of such counsel shall have been
authorized in writing by the Company in connection with the defense of the
action or the Company shall not have employed counsel to have charge of the
defense of the action or the indemnified person shall have reasonably concluded
that there may be defenses available to it or them which are different from or
additional to those available to the Company (in which case the Company shall
not have the right to direct the defense of the action on behalf of the
indemnified person), in any of which events these fees and expenses shall be
borne by the Company. Anything in this paragraph to the contrary
notwithstanding, the Company shall not be liable for any settlement of any claim
or action effected without its written consent. The Company's indemnity
agreements contained in this Section shall remain in full force and effect
regardless of any investigation made by or on behalf of any indemnified person,
and shall survive any termination of this Agreement. The Company agrees promptly
to notify you of the commencement of any litigation or proceedings against the
Company or any of its officers or directors in connection with the Registration
Statement pursuant to Section 3(c) above.
If you choose to include any Warrant Securities in a public
offering pursuant to Section 3(c) or above, then you agree to indemnify and hold
harmless the Company and each of its directors and officers who have signed any
such Registration Statement, and any underwriter for the Company (as defined in
the Act), and each person, if any, who controls the Company or such underwriter
within the meaning of the Act, to the same extent as the indemnity by the
Company in this Section 3(f) but only with respect to statements or omissions,
if any, made in such Registration Statement, or any amendment or supplement
thereto, or in any application in reliance upon, and in conformity with, written
information furnished by you to the Company for use in the Registration
Statement, or any amendment or supplement thereto, or any application, as the
case may be. In case any action shall be brought in respect of which indemnity
may be sought against you, you shall have the rights and duties given to the
Company, and the persons so indemnified shall have the rights and duties given
to you by the provisions of the first paragraph of this Section.
If the indemnification provided for in this Section 3(f) is
unavailable or insufficient to hold harmless an indemnified party in respect of
any losses, claims, damages, or liabilities (or action in respect thereof)
referred to herein, then each indemnifying party will contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages, or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the parties from this
Agreement and from the offering of the shares of Common Stock. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law, then each indemnifying party will contribute to such amount paid
or payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
parties in connection with the statement or omissions that resulted in such
losses, claims, damages, or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative fault
A-6
<PAGE>
will be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or the
holder (and the persons controlling them) and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the holders agree that it would not be
just and equitable if contribution pursuant to this paragraph were determined by
pro rata allocation (even if the holders were treated as one entity for such
purpose) or by any other method of allocation that does not take into account
the equitable considerations referred to above in this paragraph. Except as
otherwise provided in this Section 3(f), the amount paid or payable by an
indemnified party as a result of the losses, claims, damages, or liabilities (or
actions in respect thereof) referred to above in this paragraph will be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigation or defending any such action or claim. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 1933 Act) will be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
4. Exercise of Representative's Warrants.
(a) Cash Exercise. Each Representative's Warrant may be exercised in full
or in part (but not as to a fractional Unit) by the holder thereof by surrender
of the Warrant Certificate, with the form of subscription at the end thereof
duly executed by such holder, to the Company at its principal office,
accompanied by payment, in cash or by certified or bank cashier's check payable
to the order of the Company, in the respective amount obtained by multiplying
the number of Units to be purchased by the Purchase Price per Unit.
(b) Net Exercise. Notwithstanding anything to the contrary contained in
Section 4(a), any holder of a Representative's Warrant may elect to exercise the
Representative's Warrant in full or in part and receive Units on a "net
exercise" basis in an amount equal to the value of the Representative's Warrant
by delivery of the form of subscription attached to the Warrant Certificate and
surrender of the Representative's Warrant at the principal office of the
Company, in which event the Company shall issue to the holder a number of Units
computed using the following formula:
X= (P)(Y)(A-B)
A
Where: X= the number of Units to be issued to holder.
P= the portion of the Representative's Warrant being exercised
(expressed as a fraction).
Y= the total number of Units issuable upon exercise of the
Representative's Warrant.
A= the Current Market Price of one Unit.
B= Purchase Price.
(c) Partial Exercise. Prior to the expiration of the Representative's
Warrants, upon any partial exercise, the Company at its expense will forthwith
issue and deliver to or upon the order of the purchasing holder, a new Warrant
Certificate or Certificates of like tenor, in the name of the holder thereof or
as such holder (upon payment by such holder of any applicable transfer taxes)
may request calling in the aggregate for the purchase of the number of Units
equal to the number of such Units called for on the face of the Warrant
Certificate (after giving effect to any adjustment therein as provided in
Section 6 below) minus the number of such Units (after giving effect to such
adjustment) designated by the holder in the aforementioned form of subscription.
(d) Company to Reaffirm Obligations. The Company will, at the time of any
exercise of any Representative's Warrant, upon the request of the holder
thereof, acknowledge in writing its continuing obligation to afford to such
holder any rights (including without limitation any right to registration of the
Units issued upon such exercise) to which such holder shall continue to be
entitled after such exercise in accordance with the provisions of
A-7
<PAGE>
this Agreement; provided, however, that if the holder of a Representative's
Warrant shall fail to make any such request, such failure shall not affect the
continuing obligation of the Company to afford to such holder any such rights.
5. Delivery of Certificates on Exercise.
As soon as practicable after the exercise of any Representative's Warrant
in full or in part, and in any event within twenty days thereafter, the Company
at its expense (including the payment by it of any applicable issue taxes) will
cause to be issued in the name of and delivered to the purchasing holder
thereof, a certificate or certificates for the number of fully paid and
nonassessable Units of the Underlying Shares and Underlying Warrants to which
such holder shall be entitled upon such exercise, plus in lieu of any fractional
share of Common Stock to which such holder would otherwise be entitled, cash in
an amount determined pursuant to Section 7(g), together with any other stock or
other securities and property (including cash, where applicable) to which such
holder is entitled upon such exercise pursuant to Section 6 below or otherwise.
6. Anti-Dilution Provisions.
The Representative's Warrants are subject to the following terms and
conditions during the term thereof:
(a) Stock Distributions and Splits. In case (i) the outstanding Common
Stock (or Other Securities) shall be subdivided into a greater number of shares
or (ii) a dividend in Common Stock (or Other Securities) shall be paid in
respect of Common Stock (or Other Securities), the Purchase Price per Unit in
effect immediately prior to such subdivision or at the record date of such
dividend or distribution shall simultaneously with the effectiveness of such
subdivision or immediately after the record date of such dividend or
distribution be proportionately reduced; and if outstanding Common Stock (or
Other Securities) shall be combined into a smaller number of shares thereof, the
Purchase Price per Unit in effect immediately prior to such combination shall
simultaneously with the effectiveness of such combination be proportionately
increased. Any dividend paid or distributed on the Common Stock (or Other
Securities) in stock or any other securities convertible into Common Stock (or
Other Securities) shall be treated as a dividend paid in Common Stock (or Other
Securities) to the extent that shares of Common Stock (or Other Securities) are
issuable upon the conversion thereof.
(b) Adjustments. Whenever the Purchase Price per Unit is adjusted as
provided in Section 6(a) above, the number of Units purchasable upon exercise of
the Representative's Warrants immediately prior to such Purchase Price
adjustment shall be adjusted, effective simultaneously with such Purchase Price
adjustment, to equal the product obtained (calculated to the nearest full Unit)
by multiplying such number of Units by a fraction, the numerator of which is the
Purchase Price per Unit in effect immediately prior to such Purchase Price
adjustment and the denominator of which is the Purchase Price per Unit in effect
upon such Purchase Price adjustment, which adjusted number of Units shall
thereupon be the number of Units purchasable upon exercise of the
Representatives' Warrants until further adjusted as provided herein.
(c) Reorganizations. In case the Company shall be recapitalized by
reclassifying its outstanding Common Stock (or Other Securities) into a stock
with a different par value or by changing its outstanding Common Stock (or Other
Securities) with par value to stock without par value, then, as a condition of
such reorganization, lawful and adequate provision shall be made whereby each
holder of a Representative's Warrant shall thereafter have the right to
purchase, upon the terms and conditions specified herein, in lieu of the Units
(or Other Securities) theretofore purchasable upon the exercise of the
Representative's Warrants, the kind and amount of shares of stock and other
securities receivable upon such recapitalization by a holder of the number of
Units (or Other Securities) which the holder of a Representative's Warrant might
have purchased immediately prior to such recapitalization. If any consolidation
or merger of the Company with another corporation, or the sale of all or
substantially all of its assets to another corporation, shall be effected in
such a way that holders of Common Stock shall be entitled to receive stock,
securities or assets with respect to or in exchange for Common Stock, then, as a
condition of such consolidation, merger or sale, lawful and adequate provisions
shall be made whereby the holder hereof shall thereafter have the right to
purchase and receive upon the basis and upon the terms and conditions specified
in this Warrant Agreement and in lieu of the Units immediately theretofore
purchasable and receivable upon the exercise of the rights represented hereby,
such shares of stock, securities or assets as may be issued or payable with
respect to or in exchange for a number of outstanding Units equal to the number
of Units of such stock immediately theretofore purchasable and receivable upon
the exercise of the rights represented hereby had such consolidation, merger or
sale not taken place, and in any such case, appropriate provision shall be made
with respect to the rights and interests of the holders of Representative's
Warrants to the end that the provisions hereof (including without limitation
provisions for adjustments of the Purchase Price and of the number of Units
purchasable and receivable upon the exercise of the Representative's Warrants)
shall thereafter be applicable, as nearly as may be, in relation to any shares
of stock, securities or assets thereafter deliverable upon the exercise hereof
(including an immediate adjustment, by reason of such consolidation or merger,
of the Purchase Price to the value for the Common Stock reflected by the terms
of such consolidation or merger if the value so reflected is less than the
Purchase Price in effect immediately prior to such consolidation or merger). In
the event of a merger or consolidation of the Company with or into another
corporation as a result of which a number of shares of common stock of the
surviving corporation greater or lesser than the number of shares of Common
Stock outstanding immediately prior to such merger or consolidation are issuable
to holders of Common Stock of the Company, then the Purchase Price in effect
immediately prior to such merger or consolidation shall be adjusted in the same
manner as though there were a subdivision or combination of the outstanding
Common Stock. The Company will not effect any such consolidation, merger or
sale, unless prior to the consummation thereof the successor corporation (if
other than the Company) resulting from such consolidation or merger or the
corporation purchasing such assets shall assume by written instrument executed
and mailed or delivered to the registered holder hereof at the last address of
such holder appearing on the books of the Company, the obligation to deliver to
such holder such shares of stock, securities or assets as, in accordance with
the foregoing provisions, such holder may be entitled to purchase. If a
purchase, tender or exchange offer is made to and accepted by the holders of
more than a majority of the outstanding Common Stock, the Company shall not
effect any consolidation, merger or sale with the Person having made such offer
or with any Affiliate of such Person, unless prior to the consummation of such
consolidation, merger or sale the holders of Representative's Warrants shall
have been given a reasonable opportunity to then elect to receive upon the
exercise of Representative's Warrants either the stock, securities or assets
then issuable with respect to the Common Stock of the Company or the stock,
securities or assets, or the equivalent issued to previous holders of the Common
Stock in accordance with such offer.
A-8
<PAGE>
(d) Effect of Dissolution or Liquidation. In case the Company shall
dissolve or liquidate all or substantially all of its assets, all rights under
this Agreement shall terminate as of the date upon which a certificate of
dissolution or liquidation shall be filed with the Secretary of the State of
Oklahoma (or, if the Company theretofore shall have been merged or consolidated
with a corporation incorporated under the laws of another state, the date upon
which action of equivalent effect shall have been taken); provided, however,
that (i) no dissolution or liquidation shall affect the rights under Section
6(c) of any holder of a Representative's Warrant and (ii) if the Company's Board
of Directors shall propose to dissolve or liquidate the Company, each holder of
a Representative's Warrant shall be given written notice of such proposal at the
earlier of (x) the time when the Company's shareholders are first given notice
of the proposal or (y) the time when notice to the Company's shareholders is
first required.
(e) Notice of Change of Purchase Price. Whenever the Purchase Price per
Unit or the kind or amount of securities purchasable under the Representative's
Warrants shall be adjusted pursuant to any of the provisions of this Agreement,
the Company shall forthwith thereafter cause to be sent to each holder of a
Representative's Warrant, a certificate setting forth the adjustments in the
Purchase Price per Unit and/or in such the amount or kind if securities
purchasable under the Representative's Warrants, and also setting forth in
detail the facts requiring, such adjustments, including without limitation a
statement of the consideration received or deemed to have been received by the
Company for any additional shares of stock issued by it requiring such
adjustment. In addition, the Company at its expense shall within 90 days
following the end of each of its fiscal years during the term of this Agreement,
and promptly upon the reasonable request of any holder of a Representative's
Warrant in connection with the exercise from time to time of all or any portion
of any Representative's Warrant, cause independent certified public accountants
of recognized standing selected by the Company to compute any such adjustment in
accordance with the terms of the Representative's Warrants and prepare a
certificate setting forth such adjustment and showing in detail the facts upon
which such adjustment is based.
(f) Notice of a Record Date. In the event of (i) any taking by the Company
of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend (other
than a cash dividend payable out of earned surplus of the Company) or other
distribution, or any right to subscribe for, purchase or otherwise acquire any
shares of stock of any class or any other securities or property, or to receive
any other right, (ii) any capital reorganization of the Company, or any
reclassification or recapitalization of the capital stock of the Company, or any
transfer of all or substantially all of the assets of the Company to, or
consolidation or merger of the Company with or into, any other person or (iii)
any voluntary or involuntary dissolution or liquidation of the Company, then and
in each such event the Company will mail or cause to be mailed to each holder of
a Representative's Warrant a notice specifying not only the date on which any
such record is to be taken for the purpose of such dividend, distribution or
right and stating the amount and character of such dividend, distribution or
right, but also the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up is to take place, and the time, if any, as of which the holders of
record of Common Stock (or Other Securities) shall be entitled to exchange their
Units (or other Securities) for securities or other property deliverable upon
such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up. Such notice shall
be mailed at least twenty (20) days prior to the proposed record date therein
specified.
7. Further Covenants of the Company.
(a) Reservation of Stock. The Company shall at all times reserve and keep
available, solely for issuance and delivery upon the exercise of the
Representative's Warrants, all Underlying Shares and Warrant Shares from time to
time
A-9
<PAGE>
issuable upon the exercise of the Representative's Warrants and the Underlying
Warrants and shall take all necessary actions to ensure that the par value per
share, if any, of the [shares of the Warrant Securities] is, at all times equal
to or less than the then effective Purchase Price per Unit divided by four.
(b) Title to Shares. Upon exercise of the Representative's Warrants and/or
the Underlying Warrants, and payment of the exercise price therefor, all of the
Units, Underlying Shares, Underlying Warrants, and Warrant Shares shall be
validly issued, fully paid and nonassessable; each holder of a Representative's
Warrant shall receive good and marketable title to the such Units and Warrant
Shares, free and clear of all voting and other trust arrangements, liens,
encumbrances, equities and adverse claims whatsoever; and the Company shall have
paid all taxes, if any, in respect of the issuance thereof.
(c) Listing on Securities Exchanges; Registration. If the Company at any
time shall list any Common Stock on any national securities exchange, the
Company will, at its expense, simultaneously list on such exchange, upon
official notice of issuance upon the exercise of the Representative's Warrants
and/or the Underlying Warrants, and maintain such listing of, all Units,
Underlying Shares, Underlying Warrants, and Warrant Shares from time to time
issuable upon the exercise of the Representative's Warrants and/or the
Underlying Warrants; and the Company will so list on any national securities
exchange, will so register and will maintain such listing of, any Other
Securities if and at the time that any securities of like class or similar type
shall be listed on such national securities exchange by the Company.
(d) Exchange of Representative's Warrants. Subject to Section 3(a) hereof,
upon surrender for exchange of any Warrant Certificate to the Company, the
Company at its expense will promptly issue and deliver to or upon the order of
the holder thereof a new Warrant Certificate or certificates of like tenor, in
the name of such holder or as such holder (upon payment by such holder of any
applicable transfer taxes) may direct, calling in the aggregate for the purchase
of the number of Units called for on the face or faces of the Warrant
Certificate or Certificates so surrendered.
(e) Replacement of Representative's Warrants. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of any Warrant Certificate and, in the case of any such loss, theft
or destruction, upon delivery of an indemnity agreement reasonably satisfactory
in form and amount to the Company or, in the case of any such mutilation, upon
surrender and cancellation of such Warrant Certificate, the Company, at the
expense of the warrant holder will execute and deliver, in lieu thereof, a new
Warrant Certificate of like tenor.
A-10
<PAGE>
(f) Reporting by the Company. The Company agrees that, if it files a
Registration Statement during the term of the Representative's Warrants, it will
use its best efforts to keep current in the filing of all forms and other
materials which it may be required to file with the appropriate regulatory
authority pursuant to the Exchange Act, and all other forms and reports required
to be filed with any regulatory authority having jurisdiction over the Company.
(g) Fractional Units. No fractional Units or shares of Common Stock are to
be issued upon the exercise of any Representative's Warrant or Underlying
Warrant, but the Company shall pay a cash adjustment in respect of any fraction
of a Unit or a share of Common Stock, which would otherwise be issuable in an
amount equal to the same fraction of the highest market price per Unit or
share of Common Stock on the day of exercise, as determined by the Company.
8. Other Holders.
The Representative's Warrants are issued upon the following terms, to all
of which each holder or owner thereof by the taking thereof consents and agrees
as follows: (a) any person who shall become a transferee, within the limitations
on transfer imposed by Section 3(a) hereof, of a Representative's Warrant
properly endorsed shall take such Representative's Warrant subject to the
provisions of Section 3(a) hereof and thereupon shall be authorized to represent
himself as absolute owner thereof and, subject to the restrictions contained in
this Agreement, shall be empowered to transfer absolute title by endorsement and
delivery thereof to a permitted bona fide purchaser for value; (b) each prior
taker or owner waives and renounces all of his equities or rights in such
Representative's Warrant in favor of each such permitted bona fide purchaser,
and each such permitted bona fide purchaser shall acquire absolute title thereto
and to all rights presented thereby; (c) until such time as the respective
Representative's Warrant is transferred on the books of the Company, the Company
may treat the registered holder thereof as the absolute owner thereof for all
purposes, notwithstanding any notice to the contrary and (d) all references to
the word "you" in this Warrant Agreement shall be deemed to apply with equal
effect to any person to whom a Warrant Certificate or Certificates have been
transferred in accordance with the terms hereof, and where appropriate, to any
person holding Warrant Securities.
9. Miscellaneous.
All notices, certificates and other communications from or at the request
of the Company to the holder of any Representative's Warrant shall be mailed by
first class, registered or certified mail, postage prepaid, to such address as
may have been furnished to the Company in writing by such holder, or, until an
address is so furnished, to the address of the last holder of such
Representative's Warrant who has so furnished an address to the Company, except
as otherwise provided herein. This Agreement and any of the terms hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of such change, waiver, discharge
or termination is sought. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of Oklahoma. The headings
in this Agreement are for reference only and shall not limit or otherwise affect
any of the terms hereof. This Agreement, together with the forms of instruments
annexed hereto as Schedule I, constitutes the full and complete agreement of the
parties hereto with respect to the subject matter hereof.
IN WITNESS WHEREOF, this Warrant Agreement has been duly executed on the
date hereof.
Catalog.com, Inc.
By:_____________________________
Robert W. Crull
President
A-11
<PAGE>
Institutional Equity Corporation
By:_________________________________
Robert A. Shuey, III
A-12
<PAGE>
SCHEDULE I
Catalog.com, Inc.
Warrant Certificate
Evidencing Right to Purchase 32,000 Units
This is to certify that Institutional Equity Corporation ("IEC") or
assigns, is entitled to purchase for the consideration specified in Section 4 of
the Representative's Warrant Agreement dated the date hereof between
Catalog.com, Inc., an Oklahoma corporation (the "Company") and IEC (the "Warrant
Agreement") at any time or from time to time after 10:00 a.m., Dallas, Texas
time, on November ___, 2001 and until 5:00 p.m., Dallas, Texas time, on November
___, 2005, up to the above-referenced number of units (the "Units"). Each Unit
consists of four shares of Common Stock, $.01 par value (the "Common Stock"), of
the Company and two common stock purchase warrants (the "Warrants"). Each
Warrant entitles the holder thereof to purchase one share of Common Stock at a
purchase price of $____, which is 130% of the initial public offering price of
one Unit divided by four. Any exercise of Warrants shall be effected by
surrender of this Warrant Certificate and payment of the Purchase Price as
provided in the Warrant Agreement.
This Warrant is issued pursuant to the terms of the Warrant Agreement, and
all rights of the holder of this Warrant Certificate are subject to the terms
and provisions of the Warrant Agreement, copies of which are available for
inspection at the office of the Company. Capitalized terms used but not defined
herein shall have the respective meanings set forth in the Warrant Agreement.
The Warrant Agreement provides that upon the occurrence of certain events,
the Purchase Price and the type and/or number of the Company's securities
issuable upon the exercise thereof may, subject to certain conditions, be
adjusted. In such event, the Company will, at the request of the holder, issue a
new Warrant Certificate evidencing the adjustment in the Purchase Price and the
number and/or type of securities issuable upon the exercise of the Warrants;
provided, however, that the failure of the Company to issue such new Warrant
Certificates shall not in any way change, alter, or otherwise impair, the rights
of the holder as set forth in the Underwriter's Warrant Agreement.
The Units issuable upon the exercise of the Representative's Warrant and
the Underlying Warrant have not been registered under the Securities Act of
1933, as amended (the "Act"), and no distribution of such securities may be made
until the effectiveness of a Registration Statement under the Act covering such
securities. Transfer of this Warrant Certificate is restricted as provided in
Section 3(a) of the Warrant Agreement.
This Warrant has been issued to the registered owner in reliance upon
written representations necessary to ensure that this Warrant was issued in
accordance with an appropriate exemption from registration under any applicable
state and federal securities laws, rules and regulations. This Warrant may not
be sold, transferred, or assigned unless, in the opinion of the Company and its
legal counsel, such sale, transfer or assignment will not be in violation of the
Act, applicable rules and regulations of the Securities and Exchange Commission
and any applicable state securities law.
Subject to the provisions of the Act and of such Warrant Agreement, this
Warrant Certificate and all rights hereunder are transferable, in whole or in
part, at the offices of the Company, by the holder hereof in person or by duly
authorized attorney, upon surrender of this Warrant Certificate, together with
the Assignment hereof duly endorsed. Until transfer of this Warrant Certificate
on the books of the Company, the Company may treat the registered holder hereof
as the owner hereof for all purposes.
Any Units (or other securities) which are acquired pursuant to the exercise
of this Warrant shall be acquired in accordance with the Warrant Agreement and
certificates representing all securities so acquired shall bear a restrictive
legend reading substantially as follows:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR UNDER ANY APPLICABLE STATE LAW. THEY MAY NOT BE OFFERED FOR
SALE, SOLD, TRANSFERRED OR PLEDGED WITHOUT (1) REGISTRATION UNDER THE
SECURITIES ACT OF 1933 AND ANY APPLICABLE STATE LAW, OR (2) AN OPINION
OF COUNSEL (SATISFACTORY TO THE CORPORATION) THAT REGISTRATION IS NOT
REQUIRED.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
executed by its duly authorized officer.
Date: November ___, 2000.
Catalog.com, Inc.
By:________________________
<PAGE>
SUBSCRIPTION
(To be signed only upon exercise of Warrant)
To: Catalog.com, Inc.
The undersigned, the holder of the enclosed Warrant Certificate, hereby
irrevocably elects to exercise the purchase right represented by such Warrant
Certificate for, and to purchase thereunder, _________________ Units, each Unit
consisting of four shares of Common Stock, $.01 par value, of Catalog.com, Inc.,
and two common stock purchase Warrants, with each Warrant for the purchase of
one share of Common Stock, and tenders herewith payment of the purchase price in
full in the form of cash or a certified or cashier's check in the amount of
$______________ therefor or, if the undersigned elects pursuant to Section 4(b)
of the Warrant Agreement referred to in the Warrant Certificate to convert the
enclosed Warrant Certificate into Units by net issuance, the undersigned
exercises the Warrant by exchange under the terms of said Section 4(b), and
requests that the certificate or certificates for such Units be issued in the
name of and delivered to the undersigned.
Date: ______________________________
_______________________________________
(Signature must conform
in all respects to name
of holder as specified on
the face of the Warrant
Certificate)
_______________________________________
_______________________________________
(Address)
Please indicate in the space below the number of Units called for on the
face of the Warrant Certificate (or, in the case of a partial exercise, the
portion thereof as to which the Warrant is being exercised), in either case
without making any adjustment for additional Units or other securities or
property or cash which, pursuant to the adjustment provisions of the Warrant,
may be deliverable upon exercise, and whether the exercise is a cash exercise
pursuant to Section 4(a) of the Warrant Agreement or a net issuance exercise
pursuant to Section 4(b) of the Warrant Agreement.
Number of Units:__________
Cash:_____________________
Net issuance:_____________
2
<PAGE>
-3-
ASSIGNMENT
(To be signed only upon transfer of Warrant)
For value received, the undersigned hereby sells, assigns and transfers unto
____________________________________ the right represented by the enclosed
Warrant Certificate to purchase ____________________ Units, each Unit consisting
of four shares of Common Stock, $.01 par value, of Catalog.com, Inc., and two
common stock purchase Warrants, with each Warrant for the purchase of one share
of Common Stock, with full power of substitution in the premises.
The undersigned represents and warrants that the transfer, in whole in or
in part, of such right to purchase represented by the enclosed Warrant
Certificate is permitted by the terms of the Warrant Agreement referred to in
the Warrant Certificate, and the transferee hereof, by his acceptance of this
Assignment, represents and warrants that he or she is familiar with the terms of
such Warrant Agreement and agrees to be bound by the terms thereof with the same
force and effect as if a signatory thereto.
Date:___________________
(Signature must conform
in all respects to name of
holder as specified on
the face of the Warrant
Certificate)
(Address)
Signed in the presence of:_________________________
