NEITHER THIS
WARRANT NOR THE SECURITIES FOR WHICH THIS WARRANT IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED 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 COMPLIANCE WITH APPLICABLE STATE SECURITIES OR BLUE SKY LAWS.
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
WARRANT MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
EASYLINK SERVICES INTERNATIONAL
CORPORATION
WARRANT
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Warrant No.
_____
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Dated: May _____,
2009
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EASYLINK SERVICES INTERNATIONAL CORPORATION, a
Delaware corporation (the “ Company ”), hereby
certifies that, for value received,
or its registered assigns (the “ Holder ”), is
entitled to purchase from the Company up to a total of
shares of class A common stock, $0.01 par value per share (the
“ Common Stock ”), of the Company (each such
share, a “ Warrant Share ” and all such shares,
the “ Warrant Shares ”) at an exercise price
equal to $0.01 per share (as adjusted from time to time as provided
in Section 9 , the “ Exercise Price
”), at any time and from time to time from and after the date
hereof and through and including the date that is five years from
the date hereof (the “ Expiration Date ”), and
subject to the following terms and conditions.
1. Definitions . In addition to the
terms defined elsewhere in this Warrant, capitalized terms that are
not otherwise defined herein have the meanings given to such terms
in that certain Securities Exchange Agreement dated May ____,
2009, by and between the Company, the Holder and the other
Purchasers identified therein (the “Securities Exchange
Agreement”).
2. Registration of Warrant . The
Company shall register this Warrant, upon records to be maintained
by the Company for that purpose (the “ Warrant
Register ”), in the name of the record Holder hereof from
time to time. The Company may deem and treat the registered Holder
of this Warrant as the absolute owner hereof for the purpose of any
exercise hereof or any distribution to the Holder, and for all
other purposes, absent actual notice to the contrary.
3. Registration of Transfers . This
Warrant and all rights hereunder are transferable in whole or in
part upon the books of the Company by the Holder hereof; provided,
however, that the transferee shall agree in writing to be bound by
the terms and subject to the conditions of this Warrant and the
Securities Exchange Agreement. Subject to compliance with
applicable securities laws, the Company shall register the transfer
of any portion of this Warrant in the Warrant Register, upon
surrender of this Warrant, with the Form of Assignment attached
hereto duly completed and signed, to the Transfer Agent or to the
Company at its address specified herein. Upon any such registration
or transfer, a new warrant to purchase Common Stock, in
substantially the form of this Warrant (any such new warrant, a
“ New Warrant ”), evidencing the portion of this
Warrant so transferred shall be issued to the transferee and a New
Warrant evidencing the remaining portion of this Warrant not so
transferred, if any, shall be issued to the transferring Holder.
The acceptance of the New Warrant by the transferee thereof shall
be deemed the acceptance by such transferee of all of the rights
and obligations of a holder of a Warrant.
4. Exercise
and Duration of Warrants .
(a) Subject to the limitations set forth in
Section 11 hereof, this Warrant shall be exercisable by
the registered Holder in whole or in part at any time and from time
to time on or after the date hereof to and including the Expiration
Date. At 6:30 P.M., New York City time on the Expiration Date, the
portion of this Warrant not exercised prior thereto shall be and
become void and of no value.
(b) A Holder may exercise this Warrant by
delivering to the Company (i) the original Warrant,
(ii) an exercise notice, in the form attached hereto (the
“ Exercise Notice ”), appropriately completed
and duly signed, and (iii) payment of the Exercise Price for
the number of Warrant Shares as to which this Warrant is being
exercised in any form of consideration permitted under
Section 10 hereof, and the date such items are
delivered to the Company (as determined in accordance with the
notice provisions hereof) is an “ Exercise Date
.” Execution and delivery of the Exercise Notice shall have
the same effect as cancellation of the original Warrant and
issuance of a New Warrant evidencing the right to purchase the
remaining number of Warrant Shares.
5. Delivery
of Warrant Shares .
(a) Subject to Section 5(c)
below and the limitations set forth in Section 11 ,
upon exercise of this Warrant, the Company shall promptly (but in
no event later than five Trading Days after the Exercise Date)
issue or cause to be issued and cause to be delivered to or upon
the written order of the Holder and in such name or names as the
Holder may designate, a certificate for the Warrant Shares issuable
upon such exercise, free of restrictive legends unless the Warrant
Shares are not freely transferable without volume restrictions
pursuant to Rule 144 under the Securities Act. The Holder, or
any Person so designated by the Holder to receive Warrant Shares,
shall be deemed to have become holder of record of such Warrant
Shares as of the Exercise Date. The Company shall, upon request of
the Holder, use its best efforts to deliver Warrant Shares
hereunder electronically through the Depository Trust Corporation
or another established clearing corporation performing similar
functions.
-2-
(b) Subject to Section 5(c)
below and the limitations set forth in Section 11
hereof, this Warrant is exercisable, either in its entirety or,
from time to time, for a portion of the number of Warrant Shares.
Upon surrender of this Warrant following one or more partial
exercises, the Company shall issue or cause to be issued, at its
expense, a New Warrant evidencing the right to purchase the
remaining number of Warrant Shares.
(c) In addition to any other rights
available to a Holder, if the Company fails to deliver or cause to
be delivered to the Holder a certificate representing Warrant
Shares by the third Trading Day after the date on which delivery of
such certificate is required by this Warrant, and if after such
third Trading Day the Holder purchases (in an open market
transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Warrant Shares that the
Holder anticipated receiving from the Company (a
“Buy-In” ), then the Company shall, within five
Trading Days after the Holder’s request and in the
Holder’s discretion, either (i) pay cash to the Holder
in an amount equal to the Holder’s total purchase price
(including brokerage commissions, if any) for the shares of Common
Stock so purchased (the “Buy-In Price” ), at
which point the Company’s obligation to deliver such
certificate (and to issue such Common Stock) shall terminate, or
(ii) promptly honor its obligation to deliver to the Holder a
certificate or certificates representing such Common Stock and pay
cash to the Holder in an amount equal to the excess (if any) of the
Buy-In Price over the product of (A) such number of shares of
Common Stock, times (B) the Closing Price on the date of the
event giving rise to the Company’s obligation to deliver such
certificate.
(d) The Company’s obligations to
issue and deliver Warrant Shares in accordance with the terms and
subject to the conditions hereof are absolute and unconditional,
irrespective of any action or inaction by the Holder to enforce the
same, any waiver or consent with respect to any provision hereof,
the recovery of any judgment against any Person or any action to
enforce the same, or any setoff, counterclaim, recoupment,
limitation or termination, or any breach or alleged breach by the
Holder or any other Person of any obligation to the Company or any
violation or alleged violation of law by the Holder or any other
Person, and irrespective of any other circumstance which might
otherwise limit such obligation of the Company to the Holder in
connection with the issuance of Warrant Shares (other than such
limitations contemplated by this Warrant). Nothing herein shall
limit a Holder’s right to pursue any other remedies available
to it hereunder, at law or in equity including, without limitation,
a decree of specific performance and/or injunctive relief with
respect to the Company’s failure to timely deliver
certificates representing shares of Common Stock upon exercise of
the Warrant as required pursuant to the terms hereof.
(e) Each certificate for Warrant Shares
shall bear a restrictive legend to the extent and as provided in
the Securities Exchange Agreement and 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 opinion shall be reasonably
satisfactory to counsel for the Company), the securities
represented thereby are not, at such time, required by law to bear
such legend.
-3-
6. Charges, Taxes and Expenses .
Issuance and delivery of certificates for shares of Common Stock
upon exercise of this Warrant shall be made without charge to the
Holder for any issue or transfer tax, withholding tax, transfer
agent fee or other incidental tax or expense in respect of the
issuance of such certificates, all of which taxes and expenses
shall be paid by the Company; provided, however, that the Company
shall not be required to pay any tax which may be payable in
respect of any transfer involved in the registration of any
certificates for Warrant Shares or Warrants in a name other than
that of the Holder or an Affiliate thereof. The Holder shall be
responsible for all other tax liability that may arise as a result
of holding or transferring this Warrant or receiving Warrant Shares
upon exercise hereof.
7. Replacement of Warrant . If this
Warrant is mutilated, lost, stolen or destroyed, the Company shall
issue or cause to be issued in exchange and substitution for and
upon cancellation hereof, or in lieu of and substitution for this
Warrant, a New Warrant, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or
destruction and customary and reasonable indemnity, if requested.
Applicants for a New Warrant under such circumstances shall also
comply with such other reasonable regulations and procedures and
pay such other reasonable third-party costs as the Company may
prescribe.
8. Reservation of Warrant Shares .
The Company covenants that it will at all times reserve and keep
available out of the aggregate of its authorized but unissued and
otherwise unreserved Common Stock, solely for the purpose of
enabling it to issue Warrant Shares upon exercise of this Warrant
as herein provided, the number of Warrant Shares which are then
issuable and deliverable upon the exercise of this entire Warrant,
free from preemptive rights or any other contingent purchase rights
of persons other than the Holder (taking into account the
adjustments and restrictions of Section 9 ). The
Company covenants that all Warrant Shares so issuable and
deliverable shall, upon issuance and the payment of the applicable
Exercise Price in accordance with the terms hereof, be duly and
validly authorized, issued and fully paid and nonassessable. The
Company will take all such action as may be necessary to assure
that such shares of Common Stock may be issued as provided herein
without violation of any applicable law or regulation, or of any
requirements of any securities exchange or automated quotation
system upon which the Common Stock may be listed.
9. Certain Adjustments . The
Exercise Price and number of Warrant Shares issuable upon exercise
of this Warrant are subject to adjustment from time to time as set
forth in this Section 9 .
(a) Stock Dividends and Splits . If
the Company, at any time while this Warrant is outstanding,
(i) pays a stock dividend on its Common Stock or otherwise
makes a distribution on any class of capital stock that is payable
in shares of Common Stock, (ii) subdivides outstanding shares
of Common Stock into a larger number of shares, or
(iii) combines outstanding shares of Common Stock into a
smaller number of shares, then in each such case the number of
Warrant Shares that may be purchased upon exercise of this Warrant
shall be increased or decreased proportionately by multiplying the
number of Warrant Shares by a fraction of which the numerator shall
be the number of shares of Common Stock outstanding immediately
after such event and of which the denominator shall be the number
of shares of Common Stock outstanding immediately before such
event. Any adjustment made pursuant to clause (i) of this
paragraph shall become effective immediately after the record date
for the determination of stockholders entitled to receive such
dividend or distribution, and any adjustment pursuant to clause
(ii) or (iii) of this paragraph shall become effective
immediately after the effective date of such subdivision or
combination. Notwithstanding the foregoing, no adjustment will be
made under this paragraph (a) in respect of any payment of
accruing dividends of Common Stock that are required under the
terms of the Company’s Series C Preferred Stock in
effect as of the date hereof.
-4-
(b) Pro Rata Distributions . If the
Company, at any time while this Warrant is outstanding, distributes
to holders of Common Stock (i) evidences of its indebtedness,
(ii) any security (other than a distribution of Common Stock
covered by the
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