Exhibit 10.11
WARRANT AGREEMENT
WARRANT AGREEMENT (this "Agreement"), dated as of October 11, 2000, by and
between Safety Components International, Inc., a corporation organized under the
laws of Delaware (the "Company"), and Continental Stock Transfer and Trust
Company (the "Warrant Agent"), acting solely in its capacity as agent for each
of the holders of Warrants issued by the Company hereunder (such holders,
together with their transferees, successors and assigns from time to time, the
"Holders").
W I T N E S S E T H:
WHEREAS, on April 11, 2000, the Company, and certain of the Company's
subsidiaries each filed a voluntary petition in the United States Bankruptcy
Court for the District of Delaware initiating cases (the "Chapter 11 Cases")
under chapter 11 of title 11 of the United States Code xx.xx. 101-1330 (as
amended, the Bankruptcy Code") and continued in the possession of their assets
and in the management of their businesses pursuant to sections 1107 and 1108 of
the Bankruptcy Code;
WHEREAS, on the effective date (the "Effective Date") of the joint plan of
reorganization for the Company confirmed in the Chapter 11 Cases, as partial
consideration for the full satisfaction, settlement, release, and discharge of
and in exchange for all of the issued and outstanding shares of common stock,
par value $0.01 per share, of the Company held by certain persons (the "Old
Stockholders"), the Company has agreed to issue Warrants (as hereinafter
defined) to each Old Stockholder exercisable, in accordance with the terms and
conditions thereof, for shares of Common Stock (as hereinafter defined) of the
Company;
WHEREAS, the Company has authorized the issuance of the Warrants; and
WHEREAS, the Old Stockholders now desire to subscribe for and the Company
now desires to issue, the Warrants to the Old Stockholders upon the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the premises set forth herein and other
good and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
Section 1. Definitions.
1.01 Definitions. As used herein:
"Affiliate" shall mean, with respect to any Person, any other Person that
directly or indirectly controls, or is under common control with, or is
controlled by, such Person. As used in this definition, "control" (including,
with their correlative meanings, the terms "controlled by" and "under common
control with"), as used with respect to any Person, shall mean the possession,
directly or indirectly, of power to direct or cause the direction of the
management and policies of such Person (whether through ownership of securities
or partnership or other ownership interests, contract or otherwise); provided
that, in any event, any Person which owns, directly or indirectly, more than 10%
of the securities having ordinary voting power for the
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election of directors or other governing body of a corporation or more than 10%
of the partnership or other ownership interests of any Person (other than as a
limited partner of such other Person) will be deemed to control such corporation
or other Person. Notwithstanding the foregoing, neither any initial Holder of
Warrants nor any of its Affiliates shall be deemed, solely by virtue of its
holding of Warrants, to be an Affiliate of the Company.
"Board of Directors" means the board of directors of the Company or any
committee thereof duly authorized to act on behalf of such board.
"Business Day" shall mean any day other than a Saturday, Sunday or any
other day on which banking institutions in the State of New York are authorized
or obligated by law or executive order to close.
"Capital Stock" of any Person means any and all shares of, interests in,
rights to purchase, warrants or options for, or participations or other
equivalents of or interests in (however designated), equity of such Person,
including any preferred stock, but excluding any debt securities convertible
into such equity.
"Combination" means an event in which the Company consolidates with, merges
with or into, or sells all or substantially all of its assets to, another
Person.
"Common Stock" shall mean the Company's new authorized Common Stock, par
value $0.01 per share, authorized under the Company's Amended Certificate of
Incorporation, as issued and outstanding on any Exercise Date.
"Commission" shall mean the Securities and Exchange Commission or any
successor entity.
"Company" shall have the meaning assigned to such term in the preamble of
this Agreement.
"Current Market Value" shall mean, as of any date of determination thereof,
with respect to any class of Common Stock of the Company, including any Common
Stock issuable upon exercise of any warrant (including the Warrants) or option
to acquire such Common Stock (i) if there is a Qualified Public Market for such
class of Common Stock, the value determined pursuant to clause (a) or (b) below
of this definition, or (ii) if there is no such Qualified Public Market, the
value determined pursuant to clause (c) below of this definition:
(a) if such security is listed on a national securities exchange or
admitted to unlisted trading privileges on such an exchange, the average last
reported sale price of a share of such equity security over a 21-day period
prior to the date of determination or, if no such sale is made on any such day
the mean of the closing bid and asked prices for such day on such exchange; or
(b) if such equity is not so listed or admitted to unlisted trading
privileges, the average mean of the last bid and asked prices reported for a
share of such equity security over a 21-day period prior to the date of
determination (A) by the National Association of Securities Dealers Automatic
Quotation System or, (B) if reports are unavailable under clause (A) above, by
the National Quotation Bureau Incorporated; or
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(c) if such equity security is not so listed or admitted to unlisted
trading privileges and bid and asked prices are not so reported, the Current
Market Value for a share of such equity shall be the fair market value as
determined by an Independent Financial Expert selected by the Company and
reasonably acceptable to the Required Holders, it being understood and agreed
that in determining such Current Market Value, the Independent Financial Expert
shall take into account all relevant factors with respect to the capital stock
of the Company. The costs and expenses of any such Independent Financial Expert
making such valuation shall be paid by the Company.
"Effective Date" shall mean the effective date of the plan described in the
second recital of this Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Exercise Date" shall mean any date on which a Warrant is exercised in
accordance with the terms of the Warrant.
"Exercise Period" shall mean the period from the Effective Date through
5:00 p.m. (New York time) on April 10, 2003.
"Exercise Price" shall mean a price per share of Common Stock purchased
pursuant to any Warrant of U.S. $19.99 per share.
"GAAP" shall mean accounting principles generally accepted in the United
States as in effect from time to time.
"Holder" shall mean each registered holder of any Warrant or Warrant Share.
"Independent Financial Expert" shall mean a nationally recognized appraiser
or investing banking firm that does not (and whose Affiliates do not) have a
direct or indirect financial interest in the Company or any of the Holders
(other than in its trading accounts or as a participating underwriter in an
offering of securities), that has not been, and at the time it is called upon to
determine Current Market Value is not (and none of whose Affiliates is), a
promoter, director or officer of the Company or any of its Affiliates or any of
the Holders or an underwriter with respect to any of the securities of the
Company, and that has not provided any advice or opinions to the Company during
the two years prior to the date it is called upon to serve as Independent
Financial Expert except as an Independent Financial Expert pursuant hereto;
provided that, if any Holder is a commercial bank, an institutional investor or
an Affiliate thereof, the conduct by such investment banking firm of investment
banking transactions in the ordinary course of its business (including, without
limitation, underwritings of securities, private placements, broker-dealer
transactions and mergers and acquisitions) in which such Holder is a participant
shall not by itself result in the disqualification of such firm from being an
Independent Financial Expert pursuant hereto.
"Person" shall mean an individual, a corporation, a limited liability
company, a company, a voluntary association, a general partnership, a limited
partnership, a joint venture, an association, a joint-stock company, a trust, an
unincorporated organization or a government or any agency, instrumentality or
political subdivision thereof.
"Qualified Public Market" shall mean an active trading market on a national
securities exchange or over-the-counter market of the publicly held Common Stock
of the
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Company, with a minimum market value of $10,000,000 for such Common Stock or
other equity securities. A "Qualified Public Market" shall be deemed to exist if
the financial parameters set forth in the immediately preceding sentence have
been met for the Common Stock for a period of 21 consecutive days.
"Required Holders" shall mean the holders, from time to time, of more than
50% of all Warrant Shares outstanding (assuming the full exercise of all
outstanding Warrants).
"Securities Register" shall have the meaning assigned to such term in
Section 2.03.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Warrant" shall have the meaning assigned to such term in Section 2.01.
"Warrant Agent" shall have the meaning assigned to such term in the
preamble of this Agreement.
"Warrant Share" shall mean a share of Common Stock issued or issuable upon
the exercise of a Warrant. For purposes of this Agreement, a Warrant Share shall
be deemed to be "outstanding" from and after the Exercise Date until the
redemption or cancellation of such Warrant Share (or, if the related Warrant has
not been exercised, the expiration, repurchase or cancellation of such Warrant)
by the Company.
1.02 Accounting Terms and Determinations. Unless otherwise specified
herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all financial statements and certificates and reports as to financial matters
required to be delivered hereunder shall be prepared, in accordance with GAAP.
Section 2. Terms and Conditions of Issuance and of Warrants
2.01 Issuance of the Warrants. In consideration of the premises and other
good and valuable consideration, the Company hereby agrees to issue to each Old
Stockholder on the date hereof: one or more warrants (the "Warrants") to
purchase, during the Exercise Period, an aggregate number of shares of Common
Stock that is set forth on the face of each such warrant. Such Warrants, at the
date of issuance thereof, shall entitle the Old Stockholders to purchase, in the
aggregate, 681,818 Warrant Shares, subject to adjustment, as provided in Section
5 hereto and in the respective Warrants.
2.02 Exercise of Warrants. Each Warrant may be exercised in whole or in
part, at any time and from time to time, during the Exercise Period, for the
purchase of shares of Common Stock of the Company not exceeding the number of
shares set forth on the face of the Warrant, as shall be adjusted pursuant to
Section 5 hereof, by presentation and surrender of the Warrant to the Warrant
Agent at its principal office at 0 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000 Attention: Compliance Department (or at such other address as the Company
may notify the Holders in writing after the date hereof), with the purchase form
(the "Purchase Form") annexed to said Warrant duly executed and accompanied by a
check payable to the Company in the amount of the Exercise Price for the Warrant
Shares for which the Warrant is being exercised. The Warrant Agent shall
promptly transmit the check to the Company for the Warrant Shares at the address
set forth in Section 12 of Exhibit A hereto.
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Upon receipt by the Warrant Agent of the Warrant and such Purchase Form,
together with a check in the amount of the Exercise Price for the Warrant Shares
for which the Warrant is being exercised, the Holder shall be deemed to be the
holder of record of the number of Warrant Shares specified in such Purchase
Form, notwithstanding that the transfer books of the Company shall then be
closed or that certificates (if any) representing the Warrant Shares shall not
then be actually delivered to the Holder. The Company shall pay any and all
documentary stamp or similar issue taxes payable in respect of the issue of the
Warrant Shares. If a Warrant is exercised in part only the Warrant Agent shall,
upon surrender of the Warrant, execute and deliver a new Warrant evidencing the
rights of the Holder thereof to purchase the balance of the Warrant Shares
issuable under the surrendered Warrant.
Notwithstanding anything in this Warrant Agreement to the contrary, the
Warrant Agent shall not issue or distribute Warrants representing fractions of
Warrant Shares. In lieu of issuing or distributing a Warrant for fractional
Warrant Shares, the actual distribution that the Warrant Agent will make will
reflect a rounding of such fraction to the nearest whole share (up or down),
with half shares or less being rounded down and fractions in excess of half of a
share being rounded up.
2.03 Securities Register. The Warrant Agent shall keep and maintain a
register (the "Securities Register") in which, subject to such reasonable
regulations as it may prescribe, the Warrant Agent shall provide for the
registration of Warrants and the registration of transfers of Warrants. The
Securities Register shall contain addresses and contact information for each
Holder.
Section 3. Representations and Warranties of the Company. The Company
represents and warrants to each Holder as follows:
3.01 Authorization. The Company has all necessary power and authority to
execute, deliver and perform its obligations under this Agreement and the
Warrants and to issue and deliver the Warrants and Warrant Shares; the
execution, delivery and performance by the Company of this Agreement and the
Warrants have been duly authorized by all necessary action; each of this
Agreement and the Warrants has been duly executed and delivered by the Company
and constitutes the legal, valid and binding obligation of the Company
enforceable in accordance with its terms, subject, as to enforceability, to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws relating to creditors' rights generally and to
general equitable principles.
3.02. Valid Issuances. The Warrant Shares have been duly and validly
reserved for issuance upon the exercise of the Warrants. The Warrants, when
issued and delivered pursuant hereto, and the Warrant Shares when issued and
delivered upon exercise of the Warrants in accordance with their terms and the
payment of the applicable Exercise Price, will be validly issued, fully paid and
non-assessable, with no liability on the part of the holders thereof, and are
not and will not be subject to any preemptive rights, rights of first refusal or
rights of first offer.
3.03 No Breach. None of the execution and delivery by the Company of this
Agreement or the Warrants, the consummation of the transactions herein or
therein contemplated, including the issuance and delivery of the Warrants and,
upon the exercise of the Warrants, the Warrant Shares, or compliance with the
terms and provisions hereof or thereof will conflict with or result in a breach
of, or require any consent under, the Amended Certificate of Incorporation or
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the Amended By-Laws of the Company, or any resolutions of the Company's Board of
Directors or shareholders, or any applicable law or regulation, or any order,
writ, injunction or decree of any court or governmental authority or agency, or
of applicable provisions of the Securities Act, the Exchange Act and state
securities laws in connection with the exercise by the Holders of their rights
under the Warrants, or any agreement or instrument to which the Company is a
party or by which it is bound or to which any of its properties or assets is
subject, or constitute a default under any such agreement or instrument or
result in the creation or imposition of any lien upon any of the revenues or
assets of the Company pursuant to the terms of any such agreement or instrument.
3.04 Approvals. No authorizations, approvals or consents of, and no filings
or registrations with, any governmental or regulatory authority or agency, which
have not already been made or obtained, are necessary for the execution,
delivery or performance by the Company of this Agreement or the Warrants, the
consummation of the transactions contemplated herein and therein or the validity
or enforceability hereof or thereof.
3.05 Capitalization. The Company's authorized equity capitalization is as
previously disclosed in writing by the Company to the Old Stockholders, and the
Common Stock conforms in all material respects to the aforesaid disclosure and
to the copies of the Amended Certificate of Incorporation and the amended
By-Laws of the Company provided by the Company to the Old stockholders. As of
the date hereof, except as set forth in the aforesaid description there are no
other outstanding shares of Capital Stock of the Company, and there are no
outstanding options of warrants to acquire, or any securities convertible into,
any shares of Capital Stock of the Company.
3.06 No Litigation. There is no action, suit, proceeding or investigation
pending or, to the best of the Company's knowledge after due inquiry, threatened
against the Company or any of its subsidiaries before any governmental authority
seeking to enjoin the transactions contemplated by this Agreement or the
Warrants.
3.07 Absence of Certain Changes or Events. Except as disclosed in the
Company SEC Reports filed prior to the date of this Agreement, since June 30,
2000 there has not been any change, event or development having, or that could
be reasonably expected to have, individually or in the aggregate, a material
adverse effect on the Company and its subsidiaries taken as a whole.
Section 4. Covenants.
4.01 Notice of Merger. For so long as any of the Warrants remains
outstanding, the Company shall give each Holder at least 20 Business Days' prior
written notice before it agrees to any merger, acquisition, consolidation or
similar transaction in which the Company shall not be the surviving corporation.
4.02 Inspection. The Company covenants and agrees that it will permit each
Holder and its representatives to examine and make extracts and copies from the
books and records of the Company during normal business hours to the same extent
that any shareholder of the Company has the right to do so under the laws of the
State of Delaware.
4.03 Information. The Company covenants and agrees that it will deliver to
each Holder such financial statements and other information regarding the
Company or any of its subsidiaries that the Company prepares and delivers, or is
obligated to prepare and deliver, to its
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shareholders generally, in each case at the same time such financial statements
and other information are delivered to such shareholders or which it files or is
required to file with the Commission. The Company hereby acknowledges and agrees
that each Holder may share with any of its Affiliates any information related to
the Company and any of its subsidiaries (including, without limitation, any
non-public customer information regarding the creditworthiness of the Company
and its subsidiaries).
4.04 Filings. The Company covenants that it will file any reports required
to be filed by it under the Exchange Act and that it will take such further
action necessary to permit the Warrants to be freely transferable in any
jurisdiction of the United States.
Section 5. Antidilution Provisions.
5.01 Changes in Common Stock. The Exercise Price and the number of Warrant
Shares issuable upon the exercise of each Warrant are subject to adjustment from
time to time upon the occurrence of the events enumerated in this Section 5.
In the event that at any time or from time to time the Company shall:
(i) pay a dividend or make a distribution on its Common Stock payable in
shares of its Common Stock or other equity interests of the Company,
(ii) subdivide its outstanding shares of Common Stock into a larger number
of shares of Common Stock,
(iii) combine its outstanding shares of Common Stock into a smaller number
of shares of Common Stock, or
(iv) increase or decrease the number of shares of Common Stock outstanding
by reclassification of its Common Stock,
then (a) the number of shares of Common Stock issuable upon exercise of each
Warrant immediately after the happening of such event shall be adjusted to a
number determined by multiplying (1) the number of shares of Common Stock that
such holder would have owned or have been entitled to receive upon exercise had
such Warrants been exercised immediately prior to the happening of the events
described above (or, in the case of a dividend or distribution of Common Stock
or other shares of capital stock, immediately prior to the record date
therefor), (2) by a fraction, the numerator of which shall be the total number
of shares of Common Stock outstanding immediately after the happening of the
events described above and the denominator of which shall be the total number of
shares of Common Stock outstanding immediately prior to the happening of the
events described above; and (b), subject to Section 5.07, the Exercise Price for
each Warrant shall be adjusted to a number determined by dividing (1) the
Exercise Price immediately prior to such event by (2) the aforementioned
fraction. An adjustment made pursuant to this Section 5.01 shall become
effective immediately after the effective date of such event, retroactive to the
record date therefor in the case of a dividend or distribution in shares of
Common Stock or other shares of the Company's capital stock.
If after an adjustment a Holder of a Warrant upon exercise of it may
receive shares of two or more classes of capital stock of the Company, the
Company shall determine the allocation of the adjusted Exercise Price between
the classes of capital stock. After such allocation, the exercise privilege and
the Exercise Price of each class of capital stock shall
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thereafter be subject to adjustment on terms comparable to those applicable to
Common Stock in this Section 5.
Such adjustment shall be made successively whenever any event listed above
shall occur.
5.02 Cash Dividends and Other Distributions. In the event that at any time
or from time to time the Company shall distribute to all holders of Common
Stock:
(i) any dividend or other distribution of cash, evidences of its
indebtedness, shares of its capital stock or any other assets, properties or
debt securities, or
(ii) any options, warrants or other rights to subscribe for or purchase any
of the foregoing (other than, in each case, (a) the issuance of any rights under
a shareholder rights plan, (b) any dividend or distribution described in Section
5.01, (c) any rights, options, warrants or securities described in Section 5.03
and (d) any cash dividends or other cash distributions solely from current or
retained earnings),
then the number of shares of Common Stock issuable upon the exercise of each
Warrant shall be increased to a number determined by multiplying (1) the number
of shares of Common Stock issuable upon the exercise of such Warrant immediately
prior to the record date for any such dividend or distribution, by (2) a
fraction, the (A) numerator of which shall be the Current Market Value per share
of Common Stock on the record date for such dividend or distribution, and (B)
the denominator of which shall be such Current Market Value per share of Common
Stock on the record date for such dividend or distribution less the sum of (x)
the amount of cash, if any, distributed per share of Common Stock and (y) the
fair market value (as determined in good faith by the Board of Directors, whose
determination shall be evidenced by a resolution of the Board of Directors
delivered to the Holders) of the portion, if any, of the distribution applicable
to one share of Common Stock consisting of such cash, evidences of indebtedness,
shares of capital stock, other assets, property or debt securities, or such
options, warrants or other subscription or purchase rights. Subject to Section
5.07, the Exercise Price shall be adjusted to a number determined by dividing
the Exercise Price immediately prior to such record date by the aforementioned
fraction.
Such adjustments shall be made whenever any distribution is made and shall
become effective as of the date of distribution, retroactive to the record date
for any such distribution; provided, however that the Company is not required to
make an adjustment pursuant to this Section 5.02 if at the time of such
distribution the Company makes the same distribution to Holders of Warrants as
it makes to holders of Common Stock pro rata based on the number of shares of
Common Stock for which such Warrants are exercisable (whether or not currently
exercisable). No adjustment shall be made pursuant to this Section 5.02 which
shall have the effect of decreasing the number of shares of Common Stock
issuable upon exercise of each Warrant or increasing the Exercise Price.
5.03 Rights Issue to All Holders of Common Stock. In the event that at any
time or from time to time the Company shall issue to all holders of Common Stock
any rights, options or warrants entitling the holders thereof to subscribe for
shares of Common Stock, or securities convertible into or exchangeable or
exercisable for Common Stock, entitling such holders to subscribe for or
purchase shares of Common Stock at a price per share that is lower at the record
date for such issuance than the Current Market Value per share of Common Stock,
and shall not offer such rights, options or warrants to the Holders of Warrants,
then the number
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of shares of Common Stock issuable upon the exercise of each Warrant shall be
increased to a number determined by (i) multiplying the number of shares of
Common Stock theretofore issuable upon exercise of each Warrant, by (ii) a
fraction, the (a) numerator of which shall be the number of shares of Common
Stock outstanding on the date of issuance of such rights, options, warrants or
securities plus the number of additional shares of Common Stock offered for
subscription or purchase or into or for which such securities that are issued
are convertible, exchangeable or exercisable, and the (b) denominator of which
shall be the number of shares of Common Stock outstanding on the date of
issuance of such rights, options, warrants or securities plus the total number
of shares of Common Stock which the aggregate consideration expected to be
received by the Company in respect of both such rights, options or warrants and
the shares of Common Stock received in respect thereof (assuming the exercise or
conversion of all such rights, options, warrants or securities) would purchase
at the Current Market Value per share of Common Stock. Subject to Section 5.07,
in the event of any such adjustment, the Exercise Price shall be adjusted to a
number determined by (1) dividing the Exercise Price immediately prior to such
date of issuance by (2) the aforementioned fraction. Such adjustment shall be
made immediately after such rights, options or warrants are issued and shall
become effective retroactive to the record date for the determination of
stockholders entitled to receive such rights, options, warrants or securities.
No adjustment shall be made pursuant to this Section 5.03 which shall have the
effect of decreasing the number of shares of Common Stock purchasable upon
exercise of each Warrant or of increasing the Exercise Price.
5.04 Other Issuances of Common Stock or Rights. In the event that at any
time or from time to time the Company shall issue:
(i) shares of Common Stock,
(ii) rights, options or warrants entitling the holder thereof to subscribe
for shares of Common Stock (provided; however, that no adjustment shall be made
upon the exercise of such rights, options or warrants), or
(iii) securities convertible into or exchangeable or exercisable for Common
Stock (provided; however, that no adjustment shall be made upon the conversion,
exchange or exercise of such securities), at a price per share at the record
date of such issuance that is less than the Current Market Value per share of
Common Stock (other than a distribution solely to all holders of shares of
Common Stock, which shall be covered by the preceding section),
then the number of shares of Common Stock issuable upon the exercise of each
Warrant shall be increased to a number determined by multiplying (a) the number
of shares of Common Stock theretofore issuable upon exercise of each Warrant by
(b) a fraction, the (1) numerator of which shall be the number of shares of
Common Stock outstanding immediately after such sale or issuance plus the number
of additional shares of Common Stock offered for subscription or purchase or
into or for which such securities that are issued are convertible, exchangeable
or exercisable, and the (2) denominator of which shall be the number of shares
of Common Stock outstanding immediately prior to such sale or issuance plus the
total number of shares of Common Stock which the aggregate consideration
expected to be received by the Company in respect of both such rights, options
or warrants and the shares of Common Stock received in respect thereof (assuming
the exercise or conversion of all such rights, options, warrants or securities,
if any) would purchase at the Current Market Value per share of Common Stock.
Subject to Section 5.07, the Exercise Price shall be adjusted to a number
determined by dividing the Exercise Price immediately prior to such date of
issuance by the aforementioned fraction.
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Such adjustments shall be made whenever such rights, options or warrants or
convertible securities are issued or, in the absence of such options, rights,
warrants or convertible securities, whenever such shares of Common Stock are
issued. No adjustment shall be made pursuant to this Section 5.04 which shall
have the effect of decreasing the number of shares of Common Stock issuable upon
exercise of each warrant or of increasing the Exercise Price.
For purposes of this Section 5.04 only, any issuance of Common Stock, or
rights, options or warrants to subscribe for, or other securities convertible
into or exercisable or exchangeable for, Common Stock, which issuance (or
agreement to issue) (A) is in exchange for or otherwise in connection with the
bona fide acquisition of property or assets of any kind (excluding any such
exchange exclusively for cash) of any Person, and (B) is at a price per share
determined by the Board of Directors to be equal to the fair market value
thereof at the time an agreement in principle is reached or at the time a
definitive agreement is entered into, shall be deemed to have been made at a
price per share equal to the Current Market Value Per share at the record date
with respect to such issuance (the time of closing or consummation of such
exchange or acquisition) if such definitive agreement is entered into within 90
days of the date of such agreement in principle.
5.05 Combination: Liquidation. (a) Except as provided in Section 5.05(b),
in the event of a Combination, each Holder shall have the fight to receive upon
exercise of the Warrants the kind and amount of shares of Common Stock or other
securities or property which such Holder would have been entitled to receive
upon or as a result of such Combination had such Warrant been exercised
immediately prior to such event, less the Exercise Price. Unless paragraph (b)
is applicable to a Combination, the Company shall provide that the surviving or
acquiring Person (the "Successor Company") in such Combination will enter into
an agreement with the Warrant Agent confirming the Holders' rights pursuant to
this Section 5.05(a) and providing for adjustments, which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Section
5. The provisions of this Section 5.05(a) shall similarly apply to successive
Combinations involving any Successor Company.
(b) In the event of (i) a Combination where consideration to the holders of
Common Stock in exchange for their shares is payable solely in cash or (ii) the
dissolution, liquidation or winding-up of the Company, the holders of the
Warrants shall be entitled to receive, upon surrender of their Warrants,
distributions on an equal basis with the holders of Common Stock or other
securities, issuable upon exercise of the Warrants, as if the Warrants had been
exercised immediately prior to such event, less the Exercise Price.
In case of any Combination described in this Section 5.05(b), the surviving
or acquiring Person and, in the event of any dissolution, liquidation or
winding-up of the Company, the Company shall promptly (and in any event within
three Business Days of receipt thereof) pay to each Holder the amounts to which
such Holder shall be entitled, by same-day funds wire transfer (or, in the case
of consideration other than cash, to deliver such other consideration as is
appropriate) to such Person or Persons as it may be directed in writing by the
Holders surrendering such Warrants.
5.06 Superseding Adjustment. Upon the expiration of any rights, options,
warrants or conversion or exchange privileges which resulted in adjustments
pursuant to this Section 5, if any thereof shall not have been exercised, the
number of Warrant Shares issuable upon the exercise of each Warrant shall be
readjusted pursuant to the applicable section of this Section 5 as if (i) the
only shares of Common Stock issuable upon exercise of such rights, options,
warrants, conversion or exchange privileges were the shares of Common Stock, if
any,
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actually issued upon the exercise of such rights, options, warrants or
conversion or exchange privileges, and (ii) shares of Common Stock actually
issued, if any, were issuable for the consideration actually received by the
Company upon such exercise plus the aggregate consideration, if any, actually
received by the Company for the issuance, sale or grant of all such rights,
options, warrants or conversion or exchange privileges whether or not exercised,
and the Exercise Price shall be readjusted inversely. Notwithstanding the
foregoing, no such readjustment shall (except by reason of an intervening
adjustment under Section 5.01) have the effect of decreasing the number of
Warrant Shares Purchasable upon the exercise of each Warrant or increase the
Exercise Price by an amount in excess of the amount of the adjustment initially
made in respect of the issuance, sale or grant of such rights, options, warrants
or conversion or exchange privileges.
5.07 Minimum Adjustment. The adjustments required by the preceding sections
of this Section 5 shall be made whenever and as often as any specified event
requiring an adjustment shall occur, except that no adjustment of the Exercise
Price or the number of shares of Common Stock issuable upon exercise of Warrants
that would otherwise be required shall be made unless and until such adjustment
either by itself or with other adjustments not previously made increases or
decreases by at lean 1% the Exercise Price or the number of shares of Common
Stock issuable upon exercise of Warrants immediately prior to the making of such
adjustment. Any adjustment representing a change of less than such minimum
amount shall be carried forward and made as soon as such adjustment, together
with other adjustments required by this Section 5 and not previously made, would
result in a minimum adjustment. For the purpose of any adjustment, any specified
event shall be deemed to have occurred at the close of business on the date of
its occurrence. In computing adjustments under this Section 5, fractional
interests in Common Stock shall be taken into account to the nearest
one-hundredth of a share.
5.08 Notice of Adjustment. Whenever the Exercise Price or the number of
shares of Common Stock and other property, if any, issuable upon exercise of the
Warrants is adjusted, as herein provided, the Company shall deliver to the
Warrant Agent and each of the Holders (through the Warrant Agent) a certificate
of a firm of independent accountants selected by the Board of Directors (who may
be the regular accountants employed by the Company) setting forth. in reasonable
detail, the event requiring the adjustment and the method by which such
adjustment was calculated (including a description of the basis on which (i) the
Board of Directors determined the fair value of any evidences of indebtedness,
other securities or property or warrants, options or other subscription or
purchase rights, and (ii) the Current Market Value of the Common Stock was
determined, if either of such determinations were required), and specifying the
Exercise Price and the number of shams of Common Stock issuable upon exercise of
Warrants after giving effect to such adjustment. The Warrant Agent shall
promptly mail a copy of such certificate to each Holder in accordance with
Section 7.02. The Warrant Agent shall be entitled to rely on such certificate
and shall be under no duty or responsibility with respect to any such
certificate, except to exhibit the same from time to time to any Holder desiring
an inspection thereof during reasonable business hours. The Warrant Agent shall
not at any time be under any duty or responsibility to any Holder to determine
whether any facts exist which may require any adjustment of the Exercise Price,
or the number of shares of Common Stock or other stock or property issuable on
exercise of the Warrants, or with respect to the nature or extent of any such
adjustment when made, or with respect to the method employed in making such
adjustment or the validity or value of any shares of Common Stock, evidences of
indebtedness, warrants, options, or other securities or property.
5.09 Notice of Certain Transactions. In the event that the Company shall
propose to:
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(a) pay any dividend payable in securities of any class to the holders of
its Common Stock or to make any other non-cash dividend or distribution to the
holders of its Common Stock,
(b) offer the holders of its Common Stock rights to subscribe for or to
purchase any securities convertible into shares of Common Stock or shares of
stock of any class or any other securities, rights or options,
(c) issue any (i) shares of Common Stock, (ii) rights, options or warrants
entitling the holders thereof to subscribe for shares of Common Stock or (iii)
securities convertible into or exchangeable or exercisable for Common Stock,
(d) effect any capital reorganization, reclassification, consolidation or
merger,
(e) effect the voluntary or involuntary dissolution, liquidation or
winding-up of the Company, or
(f) make a tender offer or exchange offer with respect to the common Stock,
then the Company shall within five days send to each Holder a notice of such
proposed action or offer.
Such notice shall be mailed by the Company (through the Warrant Agent) to
the Holders at their addresses as they appear in the Securities Register, which
shall specify the record date for the purposes of such dividend, distribution or
rights, or the date such issuance or event is to take place and the date of
participation therein by the holders of Common Stock, if any such date is to be
fixed, and shall briefly indicate the effect of such action on the Common Stock
and on the number and kind of any other shares of stock and on other property,
if any, and the number of shares of Common Stock and other property, if any,
issuable upon exercise of each Warrant and the Exercise Price after giving
effect to any adjustment pursuant to this Section 5 which will be required as a
result of such action. Such notice shall be given as promptly as possible and
(x) in the case of any action covered by clause (a) or (b) above, at least 10
days prior to the record date for determining holders of the Common Stock for
purposes of such action or (y) in the case of any other such action, at least 20
Business Days prior to the date of the taking of such proposed action or the
date of participation therein by the holders of Common Stock, whichever shall be
the earlier.
5.10 Adjustment to Warrants. The form of Warrant need not be changed
because of any adjustment made pursuant to this Section 5, and Warrants issued
after such adjustment may state the same Exercise Price and the same number of
shares of Common Stock issuable upon exercise of the Warrants as are stated in
the Warrant certificates initially issued pursuant to this Agreement. The
Company, however, may at any time in its sole discretion make any change in the
form of Warrant certificate that it may deem appropriate to give effect to such
adjustments and that does not affect the substance of the Warrants, and any
Warrant thereafter issued or countersigned, whether in exchange or substitution
for an outstanding Warrant or otherwise, may be in the form as so changed.
Section 6. The Warrant Agent.
6.01 General. The duties and responsibilities of the Warrant Agent shall be
as specifically set forth herein, and no implied covenants or obligations shall
be read into this
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Warrant Agreement against the Warrant Agent. Notwithstanding the foregoing, no
provision of this Warrant Agreement shall require the Warrant Agent to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it. Whether or not therein expressly so provided, every provision of
this Warrant Agreement relating to the conduct or affecting the liability of or
affording protection to the Warrant Agent shall be subject to the provisions of
this Section 6.
6.02. Certain Rights of Warrant Agent.
(a) The warrant Agent may rely and shall be protected in acting or
refraining from acting upon any document believed by it to be genuine and to
have been signed or presented by the proper person. The Warrant Agent need not
investigate any fact or matter stated in the document;
(b) before the Warrant Agent acts or refrains from acting, it may require
an officers' Certificate or an Opinion of Counsel. The Warrant Agent shall not
be liable for any action it takes or omits to take in good faith in reliance on
such certificate or opinion;
(c) the Warrant Agent may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care;
(d) the Warrant Agent shall be under no obligation to exercise any of the
rights or powers vested in it by this Warrant Agreement at the request or
direction of any of the Holders, unless such Holders shall have offered to the
Warrant Agent security or indemnity reasonably satisfactory to the Warrant Agent
against the costs, expenses and liabilities that might be incurred by it in
compliance with such request or direction;
(e) the Warrant Agent shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within its rights or
powers; provided, however, that the Warrant Agent's conduct does not constitute
gross negligence or bad faith; and
(f) the Warrant Agent shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction of
the Required Holders relating to the time, method and place of conducting any
proceeding for any remedy available to the Warrant Agent.
6.03. May Hold Warrants. The Warrant Agent, in its individual or any other
capacity, may become the owner or pledgee of Warrants and may make loans to,
accept deposits from, perform services for, and otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not the Warrant
Agent.
6.04. Warrant Agent's Disclaimer. The Warrant Agent (i) makes no
representation as to the validity or adequacy of this Warrant Agreement or the
Warrants, (ii) shall not be accountable for the Company's use of the proceeds
from the Warrants and (iii) shall not be responsible for any statement made in
the Warrants.
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6.05. Compensation and Indemnity.
(a) The Company shall pay to the Warrant Agent such compensation as shall
be agreed upon in writing for its services. The compensation of the Warrant
Agent shall not be limited by any law on compensation of a trustee of an express
trust. The Company shall reimburse the Warrant Agent upon request for all
reasonable expenses, disbursements and advances incurred or made by it. Such
expenses shall include the reasonable compensation and expenses of the Warrant
Agent's agents and counsel.
(b) The Company shall indemnify the Warrant Agent for, and hold it harmless
against, any loss or liability or expense incurred by it without gross
negligence or bad faith on its part arising out of or in connection with the
execution, acceptance or administration of this Warrant Agreement and its duties
under this Warrant Agreement or the Warrants, including the costs and expenses
of defending itself against any claim or liability and of complying with any
process served upon it or any of its officers in connection with the exercise or
performance of any of its powers or duties under this Warrant Agreement of the
Warrants.
(c) The provisions of this Section 6.05 shall survive the resignation or
removal of the Warrant Agent and the termination of this Warrant Agreement.
6.06. Replacement of Warrant Agent.
(a) A resignation or removal of the Warrant Agent and appointment of a
successor Warrant Agent shall become effective only upon the successor Warrant
Agent's acceptance of appointment as provided in this Section 6.06.
(b) The Warrant Agent may resign by so notifying the Company in writing at
least 30 days prior to the date of the proposed resignation. The Required
Holders may remove the Warrant Agent by so notifying the Warrant Agent in
writing and may appoint a successor Warrant Agent with the consent of the
Company. The Company may remove the Warrant Agent if:
(i) the Warrant Agent is adjudged a bankrupt or an insolvent;
(iii) a receiver or other public officer takes charge of the Warrant Agent
or its property; or
(iii) the Warrant Agent becomes incapable of acting.
(c) If the Warrant Agent resigns or is removed, or if a vacancy exists in
the office of Warrant Agent for any reason, the Company shall promptly appoint a
successor Warrant Agent. Within one year after the successor Warrant Agent takes
office, the Required Holders may appoint a successor Warrant Agent to replace
the successor Warrant Agent appointed by the Company. If the successor Warrant
Agent does not take office within 30 days after the retiring Warrant Agent
resigns or is removed, the retiring Warrant Agent, the Company or the Required
Holders may petition any court of competent jurisdiction for the appointment of
a successor Warrant Agent.
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6.07. Successor Warrant Agent by Merger, Etc.
If the Warrant Agent consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation or national banking association, the resulting, surviving or
transferee corporation or national banking association without any further act
shall be the successor Warrant Agent with the same effect as if the successor
Warrant Agent had been named as the Warrant Agent herein.
Section 7. Miscellaneous.
7.01 Expenses. The Company agrees to pay all fees and disbursements of the
Warrant Agent and each Holder (including the reasonable fees and expenses of
counsel to the Warrant Agent and of counsel to the Holders) in connection with
the purchase and sale of the Warrants as contemplated by this Agreement or any
amendments hereto and the fees and disbursements of each Holder (including the
reasonable fees and expenses of its counsel) in connection with the negotiation,
execution, delivery and enforcement of this Agreement and the Warrants or any
waiver or consent hereunder or thereunder or any amendment hereof or thereof. In
addition, the Company agrees to pay any and all stamp, transfer and other
similar taxes payable or determined to be payable by any Holder in connection
with the execution and delivery of this Agreement, any Warrants or the issuance
or transfer of the Warrants (other than any such taxes in connection with a
transfer of the Warrants to another Holder).
7.02 Notices. All notices and other communications provided for herein
(including, without limitation, any modifications of, or waivers or consents
under, this Agreement) shall be given or made by telex, telegraph, facsimile,
cable or other writing and telexed, faxed, telegraphed, cabled, mailed or
delivered to the intended recipient at its address as it appears on the Security
Register and shall be sufficiently given to him if so mailed or transmitted
within the time prescribed. Copies of any such communication or notice to a
Holder shall be mailed to the Warrant Agent which will promptly transmit such
communication or notice to the Holder. All such communications shall be deemed
to have been duty given when transmitted by telex or facsimile, delivered to the
telegraph or cable office or personally delivered or, in the case of a mailed
notice, upon receipt in each case given or addressed as aforesaid.
7.03 Exclusion. This Agreement and the Warrants shall be binding upon, and
inure solely to the benefit of the Company, the Warrant Agent and the Holders,
and no other Person shall acquire or have any right under or by virtue of this
Agreement or the Warrants (other than any such Person to whom such Holders have
transferred an interest in the Warrants pursuant to the terms thereof and
hereof).
7.04 Specific Performance. The Company acknowledges and agrees that in the
event of any breach of this Agreement or the Warrants by the Company, the
Holders would be irreparably harmed and could not be made whole by monetary
damages. The Company accordingly agrees (i) to waive the defense in any action
for specific performance that a remedy at law would be adequate, and (ii) that
the Holders, in addition to any other remedy to which they may be entitled at
law or in equity, shall be entitled to compel specific performance of this
Agreement or the Warrants in any action instituted in the United States District
Court for the District of Delaware, or, in the event such Court would not have
jurisdiction for such action, in any court of the United States or any state
thereof having subject matter jurisdiction for such action.
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7.05 Holder Not a Shareholder. Prior to the exercise of any of its
Warrants, no Holder shall, except as specifically provided herein, be entitled
to any of the rights of, or be deemed to be, a shareholder in the Company.
7.06 No Waivers. No failure or delay by any party in exercising any rights,
power or privilege hereunder or under the Warrants shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies provided herein shall be cumulative and not exclusive of
any rights or remedies provided by law.
7.07 Amendments and Waivers. Any provision of this Agreement or the
Warrants may be amended, modified or waived if, but only if, such amendment,
modification or waiver is in writing and signed by the Company, the Required
Holders and, until such time as the Initial Holder (or any Affiliate thereof) no
longer holds any Warrants or Warrant Shares, the Initial Holder (or such
Affiliates); provided that no such amendment, modification or waiver shall,
without the written consent of each Holder affected thereby, have the effect of
(i) decreasing the number of Warrant Shares entitled to be exercised by each
Warrant, (ii) increasing the Exercise Price, (iii) modifying the Exercise Period
or (iv) modifying the definition of Required Holders or the provisions of this
Section 7.07.
7.08 GOVERNING LAW. THIS AGREEMENT AND THE WARRANTS SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE. If any
action or proceeding shall be brought by the Holder in order to enforce any
right or obligation in respect of this Warrant, the Company hereby consents and
submits, to the fullest extent permitted by law, to the non-exclusive
jurisdiction of any state or federal court of competent jurisdiction sitting
within the State of Delaware, and agrees that venue will be proper in any such
court.
7.09 Captions. The captions and section headings appearing herein are
included solely for convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.
7.10 Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatories thereto and hereto were upon the same instrument.
* * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
SAFETY COMPONENTS INTERNATIONAL, INC.
By: /s/
------------------------------------
Name:
Title:
CONTINENTAL STOCK TRANSFER AND
TRUST COMPANY,
As Warrant Agent for the Holders
By: /s/
------------------------------------
Name:
Title:
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EXHIBIT A
FORM OF WARRANT
SAFETY COMPONENTS INTERNATIONAL, INC.
Common Stock Purchase Warrant
Representing Right to Purchase _______ shares of Common Stock of Safety
Components International, Inc., subject to adjustment as provided herein.
No. R-__
FOR VALUE RECEIVED, SAFETY COMPONENTS INTERNATIONAL INC., a corporation
organized under the laws of Delaware (the "Company"), hereby certifies that
___________________, or its registered assigns (the "Holder"), is entitled,
subject to the provisions of this Warrant, to purchase from the Company, at any
time or from time to time during the Exercise Period (as hereinafter defined),
up to a total of ________ shares of Common Stock (as such number of shares may
be adjusted pursuant to Section 4 below, the "Warrant Shares"), at the exercise
price per share of U.S. $19.99 per share (as such price may be adjusted pursuant
to Section 4 below, the "Exercise Price"). This Warrant is issued to the Holder
(together with such other Warrants as may be issued in exchange, transfer or
replacement of this Warrant, the "Warrants") and entitles the Holder to purchase
the Warrant Shares. This Warrant is issued under, and is entitled to the
benefits of, the Warrant Agreement dates as of October 11, 2000 (the "Warrant
Agreement"), by and between the Company and the Continental Stock Transfer and
Trust Company (the "Warrant Agent"), acting solely in its capacity as agent for
each of the Holders.
Section 1.1 Certain Definitions. Terms defined in the Warrant Agreement and
not otherwise defined herein have, as used herein, the respective meanings
provided for therein.
Section 2. Exercise of Warrant; Cancellations of Warrant. This Warrant may
be exercised in whole or in part, at any time or from time to time, during the
Exercise Period, for the purchase of shares of Common Stock of the Company not
exceeding the number of shares set forth on the face hereof, as shall be
adjusted pursuant to Section 4 hereof, by presentation and surrender of this
Warrant to the Warrant Agent at its principal office at 0 Xxxxxxxx, 00xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000 Attention: Compliance Department, (or at such other
address as the Company may after the date hereof notify the Holder in writing),
with the purchase form annexed hereto (the "Purchase Form") duly executed and
accompanied by a check in the amount of the Exercise Price for the Warrant
Shares for which this Warrant is being exercised.
Upon receipt by the Warrant Agent of this Warrant and such Purchase Form,
together with the Exercise Price for the Warrant Shares for which this Warrant
is being exercised, the Holder shall be deemed to be the holder of record of the
number of Warrant Shares specified in such Purchase Form, notwithstanding that
the transfer books of the Company shall then be closed or that certificates (if
any) representing the Warrant Shares shall not then be actually delivered to the
Holder. The Company shall pay any and all documentary stamp or similar issue
taxes payable in respect of the issue of the Warrant Shares. If this Warrant
should be exercised in part only, the Warrant Agent shall, upon surrender of
this Warrant, execute and deliver a new Warrant evidencing the rights of the
Holder thereof to purchase the balance of the Warrant Shares issuable hereunder.
B-1
Section 3. Exchange, Transfer, Assignment or Loss of Warrant. This Warrant
is exchangeable at the option of, and without cost to, the Holder, upon
presentation and surrender of this Warrant to the Warrant Agent for other
Warrants of different denominations, entitling the Holder to purchase in the
aggregate the same number of Warrant Shares. The Holder of this Warrant shall be
entitled, without obtaining the consent of the Company, to transfer or assigns
its interest in (and rights under) this Warrant in whole or in part to any
Person or Persons, subject to the provisions of Section 6 of the Warrant
Agreement. Upon surrender of this Warrant to the Warrant Agent, with the
Assignment Form annexed hereto duly executed and funds sufficient to pay any
transfer tax, the Warrant Agent shall, without charge, execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees named in such
instrument of assignment and, if the Holder's entire interest is not being
assigned, in the name of the Holder, and this Warrant shall promptly be
canceled. This Warrant may be divided or combined with other Warrants that carry
the same rights upon presentation hereof at the office of the Warrant Agent,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued and signed by the Holder hereof. Upon receipt by
the Warrant Agent of evidence satisfactory to it of the loss, theft, destruction
or mutilation of this Warrant, and (in the case of loss, theft or destruction)
of reasonably satisfactory indemnification, and upon surrender and cancellation
of this Warrant, if mutilated, the Warrant Agent shall execute and deliver a new
Warrant of like tenor and date.
Section 4. Adjustment of Number of Warrant Shares and Exercise Price. The
number of Warrant Shares purchasable pursuant hereto, and the Purchase Price
with respect thereto, shall be subject to adjustment from time to time as
provided in Section 5 of the Warrant Agreement.
Section 5.1. Special Covenants of the Company: The Company covenants and
agrees that until all Warrants have been exercised in full:
(a) The Company will not, by amendment of its certificate of
incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, directly or indirectly avoid or seek to avoid the
observance or performance of any of the terms of this Warrant or the
Warrant Agreement, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such actions as may
be necessary or appropriate in order to protect the rights of the Holder
against dilution or other impairment in accordance with the terms of this
Warrant. Without limiting the generality of the foregoing, the Company (I)
will not increase the par value of any shares of Common Stock receivable
upon the exercise of the Warrants above the Exercise Price payable therefor
upon such exercise, and (ii) will take all such action as may be necessary
or appropriate in order that the Company may validly and legally issue
fully paid and nonassessable shares of stock upon the exercise of all
Warrants from time to time outstanding (including as a result of a
reduction in the purchase price pursuant to the terms hereof).
(b) If any Warrant Shares required to be reserved for the purposes of
exercise of this Warrant require registration with or approval of any
governmental authority under any federal law or under any state law before
such Warrant Shares may be issued upon exercise of this Warrant, the
Company will, at its expense, as expeditiously as possible use its best
efforts to cause such Warrant Shares to be duly registered or approved, as
the case may be.
B-2
(c) If at any time as the Common Stock is listed on any national
securities exchange (as defined in the Exchange Act), the Company will, at
its expense, obtain and maintain the approval for listing on each such
exchange upon official notice of issuance of all Warrant Shares receivable
upon the exercise of the Warrants at the time outstanding and maintain the
listing of such Warrant Shares after their issuance; and the Company will
so list on such national securities exchange, will register under the
Exchange Act (and any similar state statute then in effect) and will
maintain such listing of, any other securities that at any time are
issuable upon exercise of the Warrants, if and at the time that any
securities of the same class shall be listed on such national securities
exchange by the Company.
(d) The Company will give notice to the Holder within five days after
the Company shall have filed with the Commission or with any national
securities exchange an application to register any securities of the
Company pursuant to the Exchange Act.
Section 5.2. Pro Rata Purchase. If at any time the Company or any of its
Affiliates shall offer to purchase any shares of Common Stock, the Company
shall, as part of such offer, also make an offer to purchase the Warrants and
Warrant Shares from the holders of all outstanding Warrant Shares and Warrants,
and with any purchase pursuant to each offer to be allocated pro rata among the
holders of Warrant Shares and Warrants and the other holders of Common Stock
accepting each offer to purchase.
Section 6. Notification by the Company. In case at any time:
(i) the Company shall declare any dividend or make any distribution
upon its Common Stock or any other class of its capital stock; or
(ii) the Company shall offer for subscription pro rata to the holders
of its Common Stock or any other class of its capital stock any additional
shares of stock of any class or any other securities convertible into or
exchangeable for shares of stock or any rights or options to subscribe
thereto; or
(iii) the Board of Directors shall authorize any capital
reorganization, reclassification or similar transaction involving the
capital stock of the Company, or a sale or conveyance of all or a
substantial part of the asserts of the Company, or a consolidation, merger
or business combination of the Company with another Person; or
(iv) actions or proceedings shall be authorized or commenced for a
voluntary or involuntary dissolution, liquidation or winding-up of the
Company;
then, in any one or more of such cases, the Company (through the Warrant Agent)
shall give written notice to the Holder, at the earliest time legally
practicable and, in any event, not less than 10 days before any record date with
respect to any action covered by clause (I) or (ii) above, or at least 20
Business Days prior to the earliest of the date of the taking of any other such
proposed action or the date of participation therein by the holders of Common
Stock. Such notice shall also specify the date as of which the holders of the
Common Stock of record shall participate in said dividend, distribution,
subscription rights or options or shall be entitled to exchange their Common
Stock for securities or other property deliverable upon such reorganization,
reclassification, sale, conveyance, consolidation, merger, dissolution,
liquidation or winding-up, as the case may be. If the action in question or the
record date is subject to the effectiveness of a
B-3
registration statement under the Securities Act or to a favorable vote of
shareholders, the notice required by this Section 6 shall so state.
Section 7. No Voting Rights; Limitations of Liability. Prior to exercise,
this Warrant will not entitle the Holder to any voting rights or other rights as
a shareholder of the Company. No provision hereof, in the absence of affirmative
action by the Holder to purchase Common Stock, and no enumeration herein of the
rights or privileges of the Holder shall give rise to any liability of the
Holder for the purchase price of Common Stock acquirable by exercise hereof or
as a shareholder of the Company.
Section 8. Date of Issuance. The date the Company initially issues this
Warrant will be deemed to be the "Date of Issuance" hereof and of each new
Warrant issued in exchange, transfer or replacement hereof, regardless of the
number of times new certificates representing the unexpired and unexercised
rights formerly represented by this Warrant shall be issued.
Section 9. Amendment and Waiver. (a) No failure or delay of the Holder in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of such right or power, or any abandonment
or discontinuance of steps to enforce such a right or power, preclude any other
or further exercise thereof or the exercise of any other right of power. The
rights and remedies of the Holder are cumulative and not exclusive of any rights
or remedies which it would otherwise have. The provisions of this Warrant may be
amended, modified or waived only in accordance with the provisions of Section
7.07 of the Warrant Agreement.
(b) Any such amendment, modification or waiver effected pursuant to this
Section 9 shall be binding upon the Holders of all Warrant and Warrant Shares,
upon each future holder thereof, upon the Company and its shareholders. In the
event of any such amendment, modification or waiver, the Company shall give
prompt written notice thereof to all Holders and, if appropriate, notation
thereof shall be made on all Warrants thereafter surrendered for registration of
transfer or exchange.
(c) No notice or demand on the Company in any case shall entitle the
Company to any other or further notice or demand in similar or other
circumstances.
Section 10. No Fractional Warrant Shares. The Warrant Agent shall not issue
or distribute Warrants representing fractions of Warrant Shares. In lieu of
issuing or distributing a Warrant for fractional Warrant Shares, the actual
distribution that the Warrant Agent will make will reflect a rounding of such
fraction to the nearest whole share (up or down), with half shares or less being
rounded down and fractions in excess of half of a share being rounded up.
Section 11. Reservation of Warrant Shares. The Company will authorize,
reserve and keep available at all times, free from preemptive rights, a
sufficient number of Warrant Shares to satisfy the requirements of this Warrant
and any other outstanding Warrants.
Section 12. Notices. All notices, requests, consents and other
communications hereunder shall be in writing (including, telegraphic, telex,
facsimile or cable communication) and delivered, mailed, telegraphed, telexed,
telecopied or cabled:
(i) if to a Holder, to its address as set forth in the Securities
Register; and
B-4
(ii) if to the Company, to Safety Components International, Inc., at
00 Xxxxx Xxxxxx, Xxxxxxxxxx, X.X. 00000; Attention: Xxxxx Xxxxxxx,
Facsimile: (000) 000-0000 (or at such other address as the Company may
after the date hereof notify the Holder in writing).
All such communications shall be deemed to have been duly given when
transmitted by telex or facsimile, delivered to the telegraph or cable office or
personally delivered or, in the case of a mailed notice, upon receipt, in each
case given or addressed as aforesaid.
Section 13. Headings. The headings of the sections and subsections of this
Warrant are inserted for convenience only and shall not be deemed to constitute
a part of this Warrant.
Section 14. Governing Law; Consent to Jurisdiction. THIS WARRANT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
DELAWARE. If any action or proceeding shall be brought by the Holder in order to
enforce any right or obligation in respect of this Warrant, the Company hereby
consents and submits, to the fullest extent permitted by law, to the
non-exclusive jurisdiction of any state or federal court of competent
jurisdiction sitting within the State of Delaware, and agrees that venue will be
proper in any such court.
Section 16. Binding Effect. The terms and provisions of this Warrant shall
inure to the benefit of the original Holder and its successors and assigns and
shall be binding upon the Company and its successors and assigns, including,
without limitation, any Persons succeeding to the Company by merger,
consolidation or acquisition of all or substantially all of the Company's
assets.
IN WITNESS WHEREOF, the seal of the Company and the signature of its duly
authorized officer have been affixed hereto as of October 11, 2000.
SAFETY COMPONENTS INTERNATIONAL, INC.
By:
-------------------------------------
Name:
Title:
Attest: ____________________
B-5
PURCHASE FORM
Dated ______________________,
The undersigned hereby irrevocably elects to exercise the attached Warrant
to the extent of purchasing ______ shares of the Common Stock issuable hereunder
and encloses a check, payable to Safety Components International, Inc., in the
amount of $___________ in payment of the exercise price thereof.
______________
INSTRUCTIONS FOR REGISTRATION OF
COMMON STOCK
________________________________
Name ___________________________________________________________________________
(please typewrite or print in block letters)
Address ________________________________________________________________________
Signature ________________________________________________________________
B-6
ASSIGNMENT FORM
FOR VALUE RECEIVED, _____________________________ hereby sells, assigns and
transfers unto
Name ___________________________________________________________________________
(please typewrite or print in block letters)
Address ________________________________________________________________________
Its right to purchase _______ shares of the Common Stock represented by this
Warrant and does hereby irrevocably constitute and appoint ___________________
Attorney, to transfer the same on the books of the Company, with full power of
substitution in the premises.
Date:___________________________
Signature ________________________________________________________________
Signature Guaranteed:
B-7
