EXHIBIT 10.10
--------------------------------------------------------------------------------
WARRANT
To Purchase ______ Shares of Common Stock
(or, as provided in section 12 of the Securities Purchase Agreements
hereinafter referred to, ________ Shares of Series B Preferred Stock)
of
XXXX INTERNATIONAL HOLDINGS, INC.
________________________, ____
--------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
1. Definitions 2
1.1. Definitions of Terms 2
1.2. Other Definitions 3
2. Exercise of Warrant 3
2.1. Right to Exercise; Notice 3
2.2. Manner of Exercise; Issuance of Shares of Holding Company
Common Stock 4
2.3. Effectiveness of Exercise 5
2.4. Continued Validity 5
2.5. Automatic Exercise on Last Day of Exercise Period 5
3. Registration, Transfer, Exchange and Replacement of Securities; Legends 6
3.1. Registration, Transfer, Exchange and Replacement of Securities 6
3.2. Transfers and Legends 6
4. Anti-Dilution Provisions 7
4.1. Adjustment of Number of Shares of Holding Company Class A
Common Stock Purchasable 7
4.2. Adjustment of Exercise Price 8
4.3. Rights Offering 16
4.4. Certificates and Notices 17
4.5. Adjustments for Changes in Certain Data 18
5. Put Rights; Registration, etc. 18
6. Reservation of Holding Company Common Stock (and/or Other Securities),
etc. 19
7. Various Covenants of the Holding Company 19
7.1. No Impairment or Amendment; No Further Issuances or Sales;
Continued Validity 19
7.2. Listing on Securities Exchanges, etc. 19
7.3. Anti-Dilution Provisions 20
7.4. Indemnification 20
7.5. Certain Expenses 20
8. Miscellaneous 20
8.1. Nonwaiver 20
8.2. Amendment 20
8.3. Communications 21
8.4. Like Tenor 21
8.5. Remedies 21
8.6. Successors and Assigns 21
8.7. Governing Law 21
8.8. Headings; Entire Agreement; Partial Invalidity, etc. 21
Exhibit 2.2(a) Form of Notice of Exercise
Exhibit 3.1 Form of Assignment
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY OTHER APPLICABLE SECURITIES LAW, AND MAY NOT BE TRANSFERRED IN
THE ABSENCE OF REGISTRATION THEREUNDER OR AN EXEMPTION THEREFROM.
THIS WARRANT IS SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER SET FORTH IN THE
RIGHTS AGREEMENT DATED DECEMBER 23, 1998, AS AMENDED, MODIFIED AND SUPPLEMENTED
FROM TIME TO TIME.
WARRANT
To Purchase ______ Shares of Common Stock
(or, as provided in section 12 of the Securities Purchase Agreements
hereinafter referred to, ________ Shares of Series B Preferred Stock)
of
XXXX INTERNATIONAL HOLDINGS, INC.
No. RW-_________________, ____
THIS IS TO CERTIFY that, for value received, ______________________, or
registered assigns, is entitled upon the due exercise hereof at any time during
the Exercise Period (as hereinafter defined) to purchase in the aggregate
__________ shares of Common Stock, $.10 par value (or, as provided in section 12
of the Securities Purchase Agreements hereinafter referred to, ________ Shares
of Series B Preferred Stock), of XXXX INTERNATIONAL HOLDINGS, INC., a Delaware
corporation (the "Holding Company"), at an Exercise Price of $.11 per share
(such Exercise Price and the number of Shares purchasable hereunder being
subject to adjustment as provided herein), and to exercise the other rights,
powers and privileges hereinafter provided, all on the terms and subject to the
conditions hereinafter set forth.
This Warrant is one of the Holding Company's Warrants to Purchase
Shares of Common Stock (or Series B Preferred Stock, as the case may be)
(herein, together with any warrants issued in exchange therefor or replacement
thereof, all as amended or supplemented from time to time, called the
"Warrants") initially exercisable in the aggregate for (a) [Insert "520,749"
(for Warrants issued at the Auto Ventshade Closing); "184,090" (for Warrants
issued at the Smittybilt Closing)] (subject to adjustment) shares of Common
Stock of the Holding Company and issued pursuant to those certain Securities
Purchase Agreements, dated December 23, 1998, by and among the Holding Company,
certain of its Subsidiaries and the institutional investors named therein (as
amended,
modified and supplemented from time to time, the "Securities Purchase
Agreements") or (b) as provided in section 12 of the Securities Purchase
Agreements, ________ [Insert "52,075" (for Warrants issued at the Auto Ventshade
Closing); "18,409" (for Warrants issued at the Smittybilt Closing)] (subject to
adjustment) shares of Series B Preferred Stock of the Holding Company. Reference
is hereby made to the Securities Purchase Agreements and to the Rights Agreement
(as defined therein) for a description of, among other things, certain terms
relating to the Warrants and the Warrant Shares and certain rights of the
holders hereof and thereof, including, without limitation, the rights of the
holders to require the registration of the Warrant Shares. Holders of Warrants
and/or Warrant Shares are entitled to the applicable benefits of the Securities
Purchase Agreements and the other Operative Documents and may enforce the
applicable agreements contained therein, all in accordance with the terms
thereof, notwithstanding any payment or prepayment or redemption or acquisition
of any of the other Securities issued pursuant to the Securities Purchase
Agreements.
1. Definitions.
1.1. Definitions of Terms. Terms used herein without definition which
are defined in the Securities Purchase Agreements have the meanings ascribed to
them therein, unless the context clearly requires otherwise, including, without
limitation, the following terms: "Business Day", "Companies", "corporation",
"Excluded Outstanding Options", "Fair Value", "Holding Company Class A Common
Stock", "Holding Company Class B Common Stock", "Holding Company Common Stock",
"Management Option Plan", "Notes", "Officers' Certificate", "Operative
Documents", "Organizational Documents", "Person", "Preferred Shares",
"Refinancing Debt", "Required Holders", "Rights Agreement", "Securities",
"Securities Act", "Senior Loan Documents", "Series B Preferred Stock", "Shares"
and "Subsidiary". In addition, the terms defined in this section 1, whenever
used and capitalized in this Warrant, shall, unless the context otherwise
requires, have the following respective meanings:
"Assignment" shall mean the form of Assignment appearing at the end of
this Warrant.
"Convertible Securities" shall mean evidences of indebtedness, Shares
(including, without limitation, any Preferred Shares) or other securities which
are convertible into or exchangeable or exercisable for, with or without payment
of additional consideration, Holding Company Common
Stock, either immediately or upon the arrival of a specified date or the
happening of a specified event.
"Exercise Period" shall mean, subject to the provisions of section 2.5,
the period commencing on the date on which this Warrant is issued and
terminating at 5:00 p.m., Boston time, on December 31, 2006.
"Exercise Price" shall mean the price per share of Holding Company
Common Stock set forth in the preamble to this Warrant, as such price may be
adjusted pursuant to section 4.
"Holding Company" shall mean Xxxx International Holdings, Inc., a
Delaware corporation, and any successor thereto.
"Notice of Exercise" shall mean the form of Notice of Exercise
appearing at the end of this Warrant.
"Other Securities" shall mean with reference to the exercise privilege
of the holders of the Warrants, any Shares (other than shares of Holding Company
Common Stock) of the Holding Company and any other securities of the Holding
Company (including, without limitation, Preferred Shares) or of any other Person
which the holders of the Warrants at any time shall be entitled to receive, or
shall have received, upon the exercise or partial exercise of the Warrants, in
lieu of or in addition to shares of Holding Company Common Stock, or which at
any time shall be issuable or shall have been issued in exchange for or in
replacement of shares of Holding Company Common Stock (or Other Securities)
pursuant to the terms of the Warrants or otherwise.
"Purchase Rights" shall mean any warrants, options or other rights to
subscribe for, purchase or otherwise acquire any shares of Holding Company
Common Stock or any Convertible Securities, either immediately or upon the
arrival of a specified date or the happening of a specified event.
"Securities Purchase Agreements" shall have the meaning specified in
the preamble to this Warrant.
"Warrant Shares" shall mean, subject to the provisions of section 12 of
the Securities Purchase Agreements, the shares of Holding Company Common Stock
(and/or Other Securities) issued or issuable, as the case may be, from time to
time upon exercise of the Warrants, including, without
limitation, any shares of Holding Company Common Stock (and/or Other Securities)
issued or issuable with respect thereto by way of dividend or distribution or in
connection with a combination of shares of Holding Company Common Stock,
recapitalization, merger, consolidation, other reorganization or otherwise.
"Warrants" shall have the meaning specified in the preamble to this
Warrant.
1.2. Other Definitions. The terms defined in this section 1.2, whenever
used in this Warrant, shall, unless the context otherwise requires, have the
following respective meanings:
"this Warrant" (and similar references to any of the other Operative
Documents) shall mean, and the words "herein" (and "therein"), "hereof" (and
"thereof"), "hereunder" (and "thereunder") and words of similar import shall,
unless the context clearly requires otherwise, refer to, such instruments as
they may from time to time be amended, modified or supplemented.
2. Exercise of Warrant.
2.1. Right to Exercise; Notice. On the terms and subject to the
conditions of this section 2, the holder hereof shall have the right, at its
option, to exercise this Warrant in whole or in part at any time or from time to
time during the Exercise Period, all as more fully specified below.
2.2. Manner of Exercise; Issuance of Shares of Holding Company Common
Stock. To exercise this Warrant, the holder hereof shall deliver to the Holding
Company (a) a Notice of Exercise (substantially in the form of Exhibit 2.2(a)
attached hereto) duly executed by a duly authorized officer of the holder hereof
(or its attorney) specifying the Warrant Shares to be purchased, (b) an amount
equal to the aggregate Exercise Price for all Warrant Shares as to which this
Warrant is then being exercised and (c) this Warrant. At the option of the
holder hereof, payment of the Exercise Price shall be made (w) by wire transfer
of funds to an account in a bank located in the United States designated by the
Holding Company for such purpose, (x) by check payable to the order of the
Holding Company, (y) by application of any Warrant Shares and/or any Notes, as
provided below, or (z) by any combination of such methods.
Upon the exercise of this Warrant in whole or in part, the holder
hereof may, at its option, submit to the Holding Company written instructions
from such holder to apply any specified portion of the Warrant Shares issuable
upon such exercise in payment of the Exercise Price required upon such exercise,
in which case the Holding Company will accept such specified portion of the
Warrant Shares (at a value per share equal to the then Fair Value thereof less,
in each case, the Exercise Price then in effect), in lieu of a like amount of
such cash payment.
Upon the exercise of this Warrant in whole or in part by the holder of
any Notes, such holder may, at its option, surrender such Notes to the Holding
Company together with written instructions from such holder to apply all or any
specified principal amount of such Notes against the payment of some or all of
the Exercise Price required upon such exercise, in which case the Holding
Company will accept such specified principal amount in lieu of a like amount of
such cash payment. In lieu of or in addition to the aforesaid application, such
holder may, without surrendering such Notes, furnish the Holding Company with
written instructions to apply all or any specified amount of accrued interest on
such Notes against the payment of some or all of the Exercise Price required
upon such exercise, in which case the Holding Company will accept such specified
accrued interest in lieu of a like amount of cash. Upon any such partial
application of the principal of any such Note, the Holding Company at its
expense will, and will cause each of the other Companies to, promptly issue and
deliver to or upon the order of the holder thereof a new Note or Notes equal in
aggregate principal amount to the unpaid principal amount of such surrendered
Note not so applied and dated so as to result in no loss of interest. At the
time of surrender of any such Note pursuant to this section 2.2, the Holding
Company will, and will cause each of the other Companies to, pay to the holder
surrendering such Note all interest on the principal amount thereof so applied
accrued to and including the date of such surrender.
Upon receipt of the items referred to in section 2.3, the Holding
Company shall, as promptly as practicable, and in any event within five days
thereafter, cause to be issued and delivered to the holder hereof (or its
nominee) or the transferee designated in the Notice of Exercise, a certificate
or certificates representing the Warrant Shares specified in the Notice of
Exercise (but not exceeding the maximum number thereof issuable upon exercise of
this Warrant) minus the Warrant Shares, if any, applied in payment of the
Exercise Price. Such certificates shall be
registered in the name of the holder hereof (or its nominee) or in the name of
such transferee, as the case may be.
If this Warrant is exercised in part, the Holding Company shall, at the
time of delivery of such certificate or certificates, issue and deliver to the
holder hereof or the transferee so designated in the Notice of Exercise, a new
Warrant evidencing the right of the holder hereof or such transferee to purchase
at the Exercise Price then in effect the Warrant Shares for which this Warrant
shall not have been exercised and this Warrant shall be cancelled.
2.3. Effectiveness of Exercise. Unless otherwise requested by the
holder hereof, this Warrant shall be deemed to have been exercised and such
certificate or certificates representing Warrant Shares shall be deemed to have
been issued, and the holder or transferee so designated in the Notice of
Exercise (subject to the provisions of section 3.2) shall be deemed to have
become the holder of record of such Warrant Shares for all purposes, as of the
close of business on the date on which the Notice of Exercise, the Exercise
Price and this Warrant shall have been received by the Holding Company.
2.4. Continued Validity. A holder of Warrant Shares issued upon the
exercise of this Warrant, in whole or in part, shall continue to be entitled to
all rights to which a holder of this Warrant is entitled pursuant to the
provisions of this Warrant, except such rights as by their terms apply solely
(a) to the holder of a Warrant or (b) to the period prior to the exercise of
this Warrant in whole or in part, notwithstanding that this Warrant is cancelled
following such exercise. The Holding Company will, at the time of any exercise
of this Warrant, upon the request of the holder of the Warrant Shares issued
upon the exercise hereof, acknowledge in writing, in form reasonably
satisfactory to such holder, its continuing obligation to afford to such holder
all rights to which such holder shall continue to be entitled after such
exercise in accordance with the provisions of this Warrant, including, without
limitation, those set forth in sections 7.1, 7.2, 7.4 and 7.5 of this Warrant;
provided that if such holder shall fail to make any such request, such failure
shall not affect the continuing obligation of the Holding Company to afford to
such holder all such rights.
2.5. Deemed Exercise on Merger or Sale; Automatic Exercise on Last Day
of Exercise Period.
(a) If the Holding Company merges or consolidates with, or
sells all or substantially all of its properties and assets to any
other unaffiliated Person and
(i) consideration is payable to the holders of
Holding Company Common Stock (or Other Securities) in exchange
for their shares of Holding Company Common Stock (or Other
Securities) in connection with such merger, consolidation or
sale which consists solely of cash or other property (other
than securities, as to which the following clause (ii) shall
apply), then (A) the holder of this Warrant shall be entitled
to receive distributions (the "Distributions") at the same
time as and on an equal basis with the holders of Holding
Company Common Stock (or Other Securities) as if this Warrant
had been exercised immediately prior to such event, less the
Exercise Price, or (B) at the option of the holder of this
Warrant, such holder may require that this Warrant be
purchased by the Holding Company or by the successor thereto
in such merger, consolidation or sale upon the consummation of
such merger, consolidation or sale at a price (for each share
of Holding Company Common Stock (or Other Security) issuable
upon exercise of this Warrant) equal to the Distributions per
share payable to the holders of the Holding Company Common
Stock (or Other Securities), less the Exercise Price. Upon
receipt by the holder of this Warrant of payment pursuant to
clauses (A) or (B) in this clause (i), this Warrant and the
rights of the holder hereof shall terminate; or
(ii) in connection therewith, securities are issuable
to the holders of Holding Company Common Stock (or Other
Securities), if this Warrant has not been exercised on or
before the consummation of such transaction, then the holder
of this Warrant shall be entitled to receive the same
securities at the same time as and on an equal basis with the
holders of Holding Company Common Stock (or Other Securities)
as if this Warrant had been exercised in full immediately
prior to such event and upon receipt of such securities this
Warrant and the rights of the holder hereof shall terminate.
Payment of the Exercise Price in
connection therewith shall be made by application of that
portion of the securities issuable to the holder of this
Warrant (at a value per share equal to the then Fair Value
thereof) equal to the aggregate exercise price which would
then be due upon an exercise of this Warrant.
(b) If this Warrant shall not have been exercised in full on
or before the last day of the Exercise Period, then this Warrant shall
be automatically exercised, without further action on the part of the
holder hereof, in full (and the holder hereof shall be deemed to be a
holder of the Warrant Shares issued upon such automatic exercise) on
and as of the last day of the Exercise Period, unless at any time on or
before such last day of the Exercise Period the holder of this Warrant
shall notify the Holding Company in writing that no such automatic
exercise is to occur. Payment of the Exercise Price due in connection
with any such automatic exercise pursuant to this section 2.5 shall be
made by application of that portion of the Warrant Shares issuable upon
such exercise (at a value per share equal to the then Fair Value
thereof) equal to the aggregate Exercise Price which is due upon such
exercise, unless at any time on or before such last day of the Exercise
Period the holder of this Warrant shall notify the Holding Company that
such holder elects one of the other payment options set forth in
section 2.2. As promptly as practicable following any such automatic
exercise, and in any event within ten Business Days after the day that
the holder of this Warrant surrenders this Warrant to the Holding
Company for cancellation, the Holding Company shall cause to be issued
and delivered to the holder hereof a certificate registered in the name
of the holder hereof (unless the holder shall specifically instruct the
Holding Company otherwise) representing the Warrant Shares issued in
connection with such automatic exercise of this Warrant minus the
number of Warrant Shares, if any, applied in payment of the Exercise
Price.
3. Registration, Transfer, Exchange and Replacement of Securities; Legends.
3.1. Registration, Transfer, Exchange and Replacement of Securities.
Reference is hereby made to sections 17 and 18 of the Securities Purchase
Agreements for certain provisions relating to the registration, transfer,
exchange and replacement of the Warrants and Warrant Shares. To transfer this
Warrant, the holder shall deliver to the Holding Company a Notice of Assignment
(substantially in the form of Exhibit 3.1 attached hereto) duly executed by the
holder hereof (or its attorney) specifying that this Warrant (or any portion
hereof) is to be transferred to the Person(s) named therein.
3.2. Transfers and Legends. Neither this Warrant nor any Warrant Shares
may be transferred or assigned (a) unless registered under the Securities Act or
unless an exemption from such registration is available and (b) except in
accordance with the restrictions on transfer set forth in the Rights Agreement,
and any transfer or assignment not made in accordance with the foregoing shall
be void. Until the date on which the Warrants are transferred pursuant to a
registration statement effective under the Securities Act or an exemption from
the registration requirements of the Securities Act each Warrant shall bear a
legend in substantially the following form:
"THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER
APPLICABLE SECURITIES LAW, AND MAY NOT BE
TRANSFERRED IN THE ABSENCE OF REGISTRATION
THEREUNDER OR AN EXEMPTION THEREFROM."
So long as this Warrant is subject to the restrictions on transfer set forth in
the Rights Agreement, this Warrant shall bear a legend in substantially the
following form:
"THIS WARRANT IS SUBJECT TO CERTAIN RESTRICTIONS ON
TRANSFER SET FORTH IN THE RIGHTS AGREEMENT DATED
DECEMBER 23, 1998, AS AMENDED, MODIFIED AND
SUPPLEMENTED FROM TIME TO TIME."
Until the date on which the Warrant Shares are transferred pursuant to a
registration statement or an exemption from the registration requirements of
the Securities Act becomes effective under the Securities Act, each certificate
evidencing Warrant Shares shall bear a legend in substantially the following
form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY OTHER APPLICABLE SECURITIES
LAW, AND MAY NOT BE TRANSFERRED IN THE ABSENCE OF
REGISTRATION THEREUNDER OR AN EXEMPTION THEREFROM."
So long as the Warrant Shares are subject to the restrictions on transfer set
forth in the Rights Agreement, each certificate evidencing Warrant Shares shall
bear a legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER SET
FORTH IN THE RIGHTS AGREEMENT DATED DECEMBER 23,
1998, AS AMENDED, MODIFIED AND SUPPLEMENTED FROM
TIME TO TIME."
4. Anti-Dilution Provisions.
4.1. Adjustment of Number of Shares of Holding Company Class A Common
Stock Purchasable. Upon any adjustment of the Exercise Price as provided in
section 4.2, the holder hereof shall thereafter be entitled to purchase, at the
Exercise Price resulting from such adjustment, the number of shares of Holding
Company Class A Common Stock (calculated to the nearest 1/100th of a share)
obtained by multiplying the Exercise Price in effect immediately prior to such
adjustment by the number of shares of Holding Company Class A Common Stock
purchasable hereunder immediately prior to such adjustment and dividing the
product thereof by the Exercise Price resulting from such adjustment.
4.2. Adjustment of Exercise Price. In addition to any adjustment
required under the provisions of section 4.5 below, and except as otherwise
provided in section 4.2(n) below, the Exercise Price shall be subject to
adjustment from time to time as set forth in this section 4.2, provided that no
such adjustment shall cause the Exercise Price to be less than the par value of
any Warrant Share issuable upon exercise.
(a) Dividends, Distributions, Subdivisions and Combinations.
If and whenever the Holding Company subsequent to the date hereof:
(i) declares a dividend upon, or makes any
distribution in respect of, any shares of Holding Company
Common Stock (or any other Shares of the Holding Company),
payable in shares of Holding Company Common Stock, Convertible
Securities or Purchase Rights, or
(ii) subdivides its outstanding shares of Holding
Company Common Stock into a larger number of shares of Holding
Company Common Stock, or
(iii) combines its outstanding shares of Holding
Company Common Stock into a smaller number of shares of
Holding Company Common Stock,
then the Exercise Price shall be adjusted to that price determined by
multiplying the Exercise Price in effect immediately prior to such
event by a fraction (A) the numerator of which shall be the total
number of outstanding shares of Holding Company Common Stock
immediately prior to such event, and (B) the denominator of which shall
be the total number of outstanding shares of Holding Company Common
Stock immediately after such event, treating as outstanding all shares
of Holding Company Common Stock issuable upon conversions or exchanges
of any such Convertible Securities issued in such dividend or
distribution and exercises of any such Purchase Rights issued in such
dividend or distribution.
(b) Issuance of Additional Shares of Holding Company Common
Stock. If and whenever the Holding Company subsequent to the date
hereof shall issue or sell shares of Holding Company Common Stock
(except as otherwise provided in the last paragraph of this section
4.2(b)), for a consideration per share of Holding Company Common Stock
less than the Fair Value per share of Holding Company Common Stock
(determined, in each case, as of the date specified in the next
succeeding paragraph), the Exercise Price upon each such issuance or
sale shall be adjusted as of the date specified in the next succeeding
paragraph to the price determined by multiplying the Exercise Price in
effect as of the date specified in the next succeeding paragraph by a
fraction (x) the numerator of which is (A) the sum of (1) the number of
shares of
Holding Company Common Stock outstanding immediately prior to such
issue or sale multiplied by the Fair Value per share of Holding Company
Common Stock immediately prior to such issue or sale plus (2) the
aggregate consideration, if any, received by the Holding Company upon
such issue or sale, divided by (B) the total number of shares of
Holding Company Common Stock outstanding immediately after such issue
or sale, and (y) the denominator of which is the Fair Value per share
of Holding Company Common Stock immediately prior to such issue or
sale.
For the purposes of this section 4.2(b), the date as of which
the Exercise Price shall be adjusted and the date as of which the Fair
Value shall be determined shall be the earlier of (A) the date on which
the Holding Company shall enter into a firm contract for the issuance
of such shares of Holding Company Common Stock and (B) immediately
prior to the date of actual issuance of such shares of Holding Company
Common Stock, provided that if such issuance is of the kind referred to
in the last sentence of the definition of Fair Value appearing in the
Securities Purchase Agreements, such date shall be the date on which
such issuance occurs.
No adjustment of the Exercise Price shall be made under this
section 4.2(b) upon the issuance of any shares of Holding Company
Common Stock which are (i) distributed to holders of shares of Holding
Company Common Stock pursuant to a dividend, distribution or
subdivision for which an adjustment shall previously have been made
under section 4.2(a) or (ii) issued pursuant to the exercise of any
Purchase Rights or pursuant to the conversion or exchange of any
Convertible Securities to the extent that an adjustment shall
previously have been made upon the issuance of such Purchase Rights or
Convertible Securities pursuant to sections 4.2(a), (c) or (d).
(c) Issuance of Purchase Rights. If and whenever the Holding
Company subsequent to the date hereof shall issue or sell any Purchase
Rights (except as otherwise provided in the last paragraph of this
section 4.2(c)) and the consideration per share of Holding Company
Common Stock for which shares of Holding Company Common Stock may at
any time thereafter be issuable upon exercise thereof (or, in the case
of Purchase Rights exercisable for the purchase of Convertible
Securities, upon the subsequent conversion or exchange of such
Convertible Securities) shall be less than the Fair Value per share of
Holding Company Common Stock (determined, in
each case, as of the date specified in the next succeeding paragraph),
the Exercise Price upon each such issuance or sale shall be adjusted as
provided in section 4.2(b) as of the date specified in the next
succeeding paragraph on the basis that the maximum number of shares of
Holding Company Common Stock ever issuable upon exercise of such
Purchase Rights (or upon conversion or exchange of such Convertible
Securities following such exercise) shall be deemed to have been issued
as of the date of the determination of the Fair Value specified in the
next succeeding paragraph.
For the purposes of this section 4.2(c), the date as of which
the Exercise Price shall be adjusted and the date as of which the Fair
Value shall be determined shall be the earlier of (A) the date on which
the Holding Company shall enter into a firm contract for the issuance
of such Purchase Rights and (B) immediately prior to the date of actual
issuance of such Purchase Rights, provided that if such issuance is of
the kind referred to in the last sentence of the definition of Fair
Value appearing in the Securities Purchase Agreements, such date shall
be the date on which such issuance occurs.
No adjustment of the Exercise Price shall be made under this
section 4.2(c) upon the issuance of any Purchase Rights to the extent
that an adjustment shall previously have been made upon the issuance of
such Purchase Rights pursuant to section 4.2(a).
(d) Issuance of Convertible Securities. If and whenever the
Holding Company subsequent to the date hereof shall issue or sell any
Convertible Securities (except as otherwise provided in the last
paragraph of this section 4.2(d)) and the consideration per share of
Holding Company Common Stock for which shares of Holding Company Common
Stock may at any time thereafter be issuable pursuant to the terms of
such Convertible Securities shall be less than the Fair Value per share
of Holding Company Common Stock (determined, in each case, as of the
date specified in the next succeeding paragraph), the Exercise Price
upon each such issuance or sale shall be adjusted as provided in
section 4.2(b) as of the date specified in the next succeeding
paragraph on the basis that the maximum number of shares of Holding
Company Common Stock ever necessary to effect the conversion or
exchange of all such Convertible Securities shall be deemed to have
been issued as of the date of the determination of the Fair Value
specified in the next succeeding paragraph.
For the purposes of this section 4.2(d), the date as of which
the Exercise Price shall be adjusted and the date as of which the Fair
Value shall be determined shall be the earlier of (A) the date on which
the Holding Company shall enter into a firm contract for the issuance
of such Convertible Securities and (B) immediately prior to the date of
actual issuance of such Convertible Securities, provided that if such
issuance is of the kind referred to in the last sentence of the
definition of Fair Value appearing in the Securities Purchase
Agreements, such date shall be the date on which such issuance occurs.
No adjustment of the Exercise Price shall be made under this
section 4.2(d) upon the issuance of any Convertible Securities which
are (i) distributed to holders of shares of Holding Company Common
Stock pursuant to a dividend or distribution to the extent that an
adjustment shall previously have been made pursuant to section 4.2(a)
or (ii) issued pursuant to the exercise of any Purchase Rights to the
extent that an adjustment shall previously have been made upon the
issuance of such Purchase Rights pursuant to section 4.2(a) or (c).
(e) Minimum Adjustment. If any adjustment of the Exercise
Price pursuant to this section 4.2 shall result in an adjustment of
less than $.0001, no such adjustment shall be made, but any such lesser
adjustment shall be carried forward and shall be made at the time and
together with the next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to $.0001; provided that
upon any adjustment of the Exercise Price resulting from (i) the
declaration of a dividend upon, or the making of any distribution in
respect of, any shares of Holding Company Common Stock (or any other
Shares of the Holding Company) payable in shares of Holding Company
Common Stock, Purchase Rights or Convertible Securities or (ii) the
reclassification by subdivision, combination or otherwise, of the
Holding Company Common Stock into a greater or smaller number of shares
of Holding Company Common Stock, the foregoing figure of $.0001 (or
such figure as last adjusted) shall be proportionately adjusted, and
provided, further, that upon the exercise of this Warrant, the Holding
Company shall make all necessary adjustments (to the nearest .0001 of a
cent) not theretofore made to the Exercise Price up to and including
the date upon which this Warrant is exercised.
(f) Readjustment of Exercise Price. Upon each change in (i)
the consideration, if any, payable for any Purchase Rights or
Convertible Securities referred to in section 4.2(a), (c) or (d), (ii)
the consideration, if any, payable upon exercise of such Purchase
Rights or upon the conversion or exchange of such Convertible
Securities or (iii) the number of shares of Holding Company Common
Stock issuable upon the exercise of such Purchase Rights or the rate at
which such Convertible Securities are convertible into or exchangeable
for shares of Holding Company Common Stock, the Exercise Price in
effect at the time of such event shall forthwith be readjusted to the
Exercise Price which would have been in effect at such time had such
Purchase Rights or Convertible Securities provided for such changed
consideration, number of shares of Holding Company Common Stock so
issuable or conversion rate, as the case may be, at the time initially
granted, issued or sold. On the expiration of any Purchase Rights not
exercised or of any right to convert or exchange under any Convertible
Securities not exercised, the Exercise Price then in effect shall
forthwith be increased to the Exercise Price which would have been in
effect at the time of such expiration had such Purchase Rights or
Convertible Securities never been issued. No readjustment of the
Exercise Price pursuant to this section 4.2(f) shall (i) increase the
Exercise Price by an amount in excess of the adjustment originally made
to the Exercise Price in respect of the issue, sale or grant of the
applicable Purchase Rights or Convertible Securities or (ii) require
any adjustment to the amount paid or number of Warrant Shares received
by any Person upon any exercise of this Warrant prior to the date upon
which such readjustment to the Exercise Price shall occur.
(g) Reorganization, Reclassification or Recapitalization of
the Holding Company. If and whenever subsequent to the date hereof the
Holding Company shall effect (i) any reorganization, reclassification
or recapitalization of the Holding Company Common Stock (or any other
Shares of the Holding Company) (other than in the cases referred to in
section 4.2(a)), (ii) any consolidation or merger of the Holding
Company with or into another Person (other than in the cases referred
to in section 2.5), (iii) the sale, transfer or other disposition of
the property, assets or business of the Holding Company as an entirety
or substantially as an entirety or (iv) any other transaction (or any
other event shall occur) as a result of which holders of shares of
Holding Company Common Stock become entitled to receive any Shares or
other securities and/or property
(including, without limitation, cash) with respect to or in exchange
for shares of Holding Company Common Stock, there shall thereafter be
deliverable upon the exercise of this Warrant or any portion thereof
(in lieu of or in addition to the Warrant Shares theretofore
deliverable, as appropriate) the highest number of Shares or other
securities and/or the greatest amount of property (including, without
limitation, cash) to which the holder of the number of Warrant Shares
which would otherwise have been deliverable upon the exercise of this
Warrant or any portion thereof at the time would have been entitled
upon such reorganization, reclassification, recapitalization,
consolidation, merger, sale, transfer, disposition or other transaction
or upon the occurrence of such other event, and at the same aggregate
Exercise Price.
Prior to and as a condition of the consummation of any
transaction or event described in the preceding sentence, the Holding
Company shall make equitable, written adjustments in the application of
the provisions set forth herein and in the other Operative Documents
for the benefit of the holders of the Warrants and/or Warrant Shares,
in a manner reasonably satisfactory to the Required Holders of the
Warrants and/or Warrant Shares, as applicable, so that all such
provisions shall thereafter be applicable, as nearly as possible, in
relation to any Shares or other securities or other property thereafter
deliverable upon exercise of the Warrants and so that the holders of
the Warrants will (prior to exercise) enjoy all of the rights and
benefits enjoyed by any Person who shall have acquired any such Shares
or other securities and/or property in connection with any such
transaction or event, including, without limitation, any subsequent
tender offer or redemption of any such Shares or other securities. Any
such adjustment shall be made by and set forth in a supplemental
agreement of the Holding Company and/or the successor entity, as
applicable, for the benefit of the holders of the Warrants and/or
Warrant Shares and in form and substance acceptable to the Required
Holders of the Warrants and Warrant Shares, which agreement shall bind
the Holding Company and/or the successor entity, as applicable, and all
holders of Warrants and Warrant Shares then outstanding and, upon
request by the Required Holders of the Warrants and Warrant Shares,
shall be accompanied by a favorable opinion of the regular outside
counsel to the Holding Company or the successor entity, as applicable
(or such other firm as is reasonably acceptable to the Required Holders
of the Warrants), as to the enforceability of such agreement and as
to such other matters as the Required Holders of the Warrants may
reasonably request.
(h) Other Dilutive Events. If any other transaction or event
shall occur (excluding any transaction or event explicitly referred to
in this section 4.2, but including, without limitation, any issuance,
repurchase, redemption, or other distribution in respect of any Shares
or other securities of the Holding Company or of any other Person,
including any Person referred to in section 4.2(g)), as to which the
other provisions of this section 4 are not strictly applicable but the
failure to make any adjustment to the Exercise Price or to any of the
other terms of this Warrant would not fairly protect the purchase
rights and other rights represented by this Warrant in accordance with
the essential intent and principles hereof, then, and as a condition to
the consummation of any such transaction or event, and in each such
case, the Holding Company shall appoint a firm of independent certified
public accountants of recognized national standing (which may be the
regular auditors of the Holding Company), which shall give its opinion
as to the adjustment, if any, on a basis consistent with the essential
intent and principles established in this section 4, necessary to
preserve, without dilution, the rights represented by this Warrant. The
certificate of any such firm of accountants shall be conclusive
evidence of the correctness of any computation made under this section
4. The Holding Company shall pay the fees and expenses of such firm of
accountants in connection with any such opinion. Upon receipt of such
opinion, the Holding Company will promptly deliver a copy thereof to
the holder of this Warrant and shall make the adjustments described
therein.
(i) Determination of Consideration. For the purposes of this
section 4, the consideration received or receivable by the Holding
Company for the issuance, sale or grant of shares of Holding Company
Common Stock, Purchase Rights or Convertible Securities, irrespective
of the accounting treatment of such consideration, shall be valued and
determined as follows:
(i) Cash Payment. In the case of cash, the gross
amount paid by the purchasers without deduction of any accrued
interest or dividends, any reasonable expenses paid or
incurred and any underwriting or placement commissions or
concessions paid or allowed by the Holding Company to
unaffiliated third parties in connection with such issue or
sale.
(ii) Non-Cash Payment. In the case of consideration
other than cash, the Fair Value thereof (in any case as of the
date immediately preceding the issuance, sale or grant in
question).
(iii) Certain Allocations. If shares of Holding
Company Common Stock, Purchase Rights and/or Convertible
Securities are issued or sold together with other securities
or other assets of the Holding Company for a consideration
which covers more than one of the foregoing categories of
securities and assets, the consideration received or
receivable (computed as provided in clauses (i) and (ii) of
this section 4.2(i)) shall be allocable to such shares of
Holding Company Common Stock, Purchase Rights and/or
Convertible Securities as reasonably determined in good faith
by the board of directors of the Holding Company (provided
such allocation is set forth in a written resolution and a
certified copy thereof is furnished to the holder of this
Warrant promptly (but in any event within 10 days) following
its adoption).
(iv) Dividends in Securities. If the Holding Company
shall declare a dividend or make any other distribution upon
any shares of Holding Company Common Stock payable in shares
of Holding Company Common Stock, Convertible Securities or
Purchase Rights, such shares of Holding Company Common Stock,
Convertible Securities or Purchase Rights, as the case may be,
issuable in payment of such dividend or distribution shall be
deemed to have been issued or sold without consideration.
(v) Purchase Rights and Convertible Securities. The
consideration for which each share of Holding Company Common
Stock shall be deemed to be issued upon the issuance or sale
of any Purchase Rights or Convertible Securities shall be
determined by dividing (A) the total consideration, if any,
received by the Holding Company as consideration for the
Purchase Rights or the Convertible Securities, as the case may
be, plus the minimum aggregate amount of additional
consideration, if any, ever payable to the Holding Company
upon the exercise of such Purchase Rights and/or upon the
conversion or exchange of such Convertible Securities, as the
case may be, but without deduction of any accrued interest or
dividends, any reasonable expenses paid or incurred and any
underwriting placement commissions or concessions paid or
allowed by the Holding Company to unaffiliated third parties
in connection with such issue or sale; by (B) the maximum
number of shares of Holding Company Common Stock ever issuable
upon the exercise of such Purchase Rights or upon the
conversion or exchange of such Convertible Securities.
(vi) Merger, Consolidation or Sale of Assets. If any
shares of Holding Company Common Stock, Convertible Securities
or Purchase Rights are issued in connection with any merger or
consolidation of which the Holding Company is the surviving
corporation, the amount of consideration therefor shall be
deemed to be the Fair Value of such portion of the assets and
business of the non-surviving corporation as shall be
attributable to such shares of Holding Company Common Stock,
Convertible Securities or Purchase Rights, as the case may be.
In the event of (A) any merger or consolidation of which the
Holding Company is not the surviving corporation or (B) the
sale, transfer or other disposition of the property, assets or
business of the Holding Company as an entirety or
substantially as an entirety for shares or other securities of
any other Person, the Holding Company shall be deemed to have
issued the number of shares of Holding Company Common Stock
for Shares or other securities of the surviving corporation or
such other Person computed on the basis of the actual exchange
ratio on which the transaction was predicated and for a
consideration equal to the Fair Value on the date of such
transaction of such Shares or other securities of the
surviving corporation or such other Person, and if any such
calculation results in adjustment of the Exercise Price, the
determination of the number of Warrant Shares issuable upon
exercise of this Warrant immediately prior to such merger,
consolidation or sale, for the purposes of section 4.2(g),
shall be made after giving effect to such adjustment of the
Exercise Price.
(j) Record Date. If the Holding Company shall take a record of
the holders of the Holding Company Common Stock for the purpose of
entitling them (i) to receive a dividend or other distribution payable
in shares of Holding Company Common Stock, Convertible Securities or
Purchase Rights or (ii) to subscribe for or purchase shares
of Holding Company Common Stock, Convertible Securities or Purchase
Rights, then all references in this section 4 to the date of the issue
or sale of shares of Holding Company Common Stock deemed to have been
issued or sold upon the declaration of such dividend or the making of
such other distribution or the date of the granting of such right of
subscription or purchase, as the case may be, shall be deemed to be
references to such record date.
(k) Shares Outstanding. The number of shares of Holding
Company Common Stock deemed to be outstanding at any given time shall
not include shares of Holding Company Common Stock held by the Holding
Company or any Subsidiary of the Holding Company.
(l) Maximum Exercise Price. At no time shall the Exercise
Price exceed the amount set forth in the first paragraph of the
Preamble of this Warrant except as a result of an adjustment thereto
pursuant to section 4.2(a)(iii) or 4.2(g).
(m) Application. All subdivisions of this section 4.2 are
intended to operate independently of one another. If a transaction or
an event occurs that requires the application of more than one
subdivision, all applicable subdivisions shall be given independent
effect (but without duplication of adjustment).
(n) No Adjustments Under Certain Circumstances. Anything
herein to the contrary notwithstanding, no adjustment to the Exercise
Price shall be made in the case of:
(i) any issuance of shares of Holding Company Common
Stock (or Other Securities) upon the exercise in whole or in
part of any of the Warrants; or
(ii) the issuance or sale of shares of Holding
Company Common Stock, Purchase Rights or Convertible
Securities for a consideration per share of Holding Company
Common Stock at or above the Fair Value per share of Holding
Company Common Stock, all determined as provided herein; or
(iii) the issuance of any shares of Holding Company
Class A Common Stock for an equal number of shares of Holding
Company Class B Common Stock (subject to
appropriate adjustment for any stock dividend, subdivision or
combination) upon conversion thereof pursuant to the terms of
the Holding Company's Certificate of Designation, Preferences
and Rights of Class B-1 Common Stock (as in effect on the Auto
Ventshade Closing Date); or
(iv) the issuance of shares of Holding Company Class
A Common Stock upon conversion of the Series B Preferred Stock
outstanding on the Auto Ventshade Closing Date pursuant to the
terms of the Holding Company's Certificate of Designation,
Preferences and Rights of the Series B Preferred Stock (as in
effect on the Auto Ventshade Closing Date); or
(v) the issuance of shares of Holding Company Common
Stock upon the exercise of the options therefor outstanding
(and as in effect) on the Auto Ventshade Closing Date and
specified on Exhibit 5.5(b) attached to the Securities
Purchase Agreements, provided that the aggregate number of
shares of Holding Company Common Stock so issued shall not
exceed 677,000 (subject to appropriate adjustment for any
stock dividend, subdivision or combination) at any time.
4.3. Rights Offering. If the Holding Company shall effect an offering
of its Shares pro rata among its stockholders, the holder hereof shall be
entitled, at its option, to elect to participate in each and every such offering
as if this Warrant had been exercised and such holder were, at the time of any
such rights offering, then a holder of that number of Warrant Shares to which
such holder is then entitled on the exercise hereof.
4.4. Certificates and Notices.
(a) Adjustments to Exercise Price. As promptly as practicable
(but in any event not later than 10 Business Days) after the occurrence
of any event requiring any adjustment under this section 4 to the
Exercise Price (or to the number or kind of securities or other
property deliverable upon the exercise of this Warrant), the Holding
Company shall, at its expense, deliver to the holder of this Warrant
either (i) an Officers' Certificate or (ii) a certificate signed by a
firm of independent certified public accountants of recognized national
standing (which may be the regular auditors of the Holding Company),
setting forth in reasonable detail the events requiring the adjustment
and the method by which such adjustment was calculated and specifying
the adjusted Exercise Price and the number of shares of Holding Company
Common Stock (or Other Securities) purchasable upon exercise of this
Warrant after giving effect to such adjustment. The certificate of any
such firm of accountants shall be conclusive evidence of the
correctness of any computation made under this section 4.
(b) Extraordinary Events. If and whenever the Holding Company
subsequent to the date hereof shall propose to (i) pay any dividend to
the holders of shares of Holding Company Common Stock or to make any
other distribution to the holders of shares of Holding Company Common
Stock (including, without limitation, any cash distribution), (ii)
offer to the holders of shares of Holding Company Common Stock rights
to subscribe for or purchase any additional shares of Holding Company
Common Stock (or any other Shares) or any other rights or options,
(iii) effect any reclassification of the Shares of the Holding Company
(other than a reclassification involving merely the subdivision or
combination of outstanding shares of Holding Company Common Stock
referred to in section 4.2(a)), (iv) engage in any reorganization or
recapitalization or any consolidation or merger, (v) consummate any
sale, transfer or other disposition of its property, assets and
business as an entirety or substantially as an entirety, (vi) effect
any other transaction which might require an adjustment to the Exercise
Price (or to the number or kind of shares of Holding Company Common
Stock, securities or other property deliverable upon the exercise of
this Warrant), including, without limitation, any transaction of the
kind described in section 4.2(g) or (vii) commence or effect the
liquidation, dissolution or winding up of
the Holding Company, then, in each such case, the Holding Company shall
deliver to the holder of this Warrant an Officers' Certificate giving
notice of such proposed action, specifying (A) the date on which the
books of the Holding Company shall close, or a record shall be taken,
for determining the holders of shares of Holding Company Common Stock
entitled to receive such dividend or other distribution or such rights
or options, or the date on which such reclassification, reorganization,
recapitalization, consolidation, merger, sale, transfer, other
disposition, transaction, liquidation, dissolution or winding up shall
take place or commence, as the case may be, and (B) the date as of
which it is expected that holders of shares of Holding Company Common
Stock shall be entitled to receive shares of Holding Company Common
Stock, securities or other property deliverable upon such action, if
any such date is to be fixed. Such Officers' Certificate shall be
delivered in the case of any action covered by clause (i) or (ii)
above, at least 30 days prior to the record date for determining
holders of shares of Holding Company Common Stock for purposes of
receiving such payment or offer, and, in any other case, at least 30
days prior to the date upon which such action takes place and 20 days
prior to any record date to determine holders of shares of Holding
Company Common Stock entitled to receive such securities or other
property.
(c) Effect of Failure. Failure to give any certificate or
notice, or any defect in any certificate or notice required under this
section 4.4 shall not affect the legality or validity of the adjustment
of the Exercise Price or the number of Warrant Shares purchasable upon
exercise of this Warrant.
4.5. Adjustments for Changes in Certain Data. The Holding Company
hereby agrees that the initial aggregate number of shares of Holding Company
Class A Common Stock issuable upon exercise in full of the Warrants issued on
the [Auto Ventshade/ Smittybilt] Closing Date (or upon conversion of the Series
B Preferred Stock issuable upon such exercise, subject to the provisions of
section 12 of the Securities Purchase Agreements) to the initial holders thereof
was _______ [Insert "520,749" (for Warrants issued at the Auto Ventshade
Closing); "184,090" (for Warrants issued at the Smittybilt Closing)], which was
intended to constitute not less than ______ [Insert "4.8%" (for Warrants issued
at the Auto Ventshade Closing); "1.2%" (for Warrants issued at the Smittybilt
Closing)] of the shares of Holding Company Common Stock (of both classes)
outstanding immediately following the [Auto Ventshade/Smittybilt] Closing
(calculated
on a fully-diluted basis assuming the conversion, exercise and exchange of all
outstanding securities convertible into or exercisable or exchangeable for
Shares of the Holding Company, including, without limitation, the Warrants, but
excluding the Excluded Outstanding Options. If for any reason the shares of
Holding Company Class A Common Stock purchasable upon the exercise of the
Warrants issued on the [Auto Ventshade/Smittybilt] Closing Date constituted less
than [4.8%/1.2%] of the shares of Holding Company Common Stock outstanding as of
such time (and as so calculated), the Holding Company shall forthwith reissue
each Warrant then outstanding with appropriate adjustments in the Exercise Price
and in the number of shares of Holding Company Class A Common Stock (and as
provided in section 12 of the Securities Purchase Agreements, shares of Series B
Preferred Stock) issuable upon exercise thereof (together with an Officers'
Certificate setting forth in reasonable detail the computation of such
adjustments), and all such adjustments shall be reasonably satisfactory to the
holders thereof.
5. Registration, etc. Reference is hereby made to the Securities Purchase
Agreements and to the Rights Agreement for certain provisions relating to the
rights of the holders of the Warrants and Warrant Shares to require the Holding
Company to register the Warrant Shares under the Securities Act.
6. Reservation of Holding Company Common Stock (and/or Other Securities), etc.
The Holding Company has reserved and after the date hereof will at all times
reserve and keep available, solely for issuance, sale and delivery upon the
exercise of this Warrant, such number of shares of Holding Company Class A
Common Stock purchasable upon the exercise of this Warrant. All such shares of
Holding Company Common Stock (and/or Other Securities) shall be duly authorized
and, when issued upon exercise of this Warrant in accordance with the terms
hereof, will be validly issued, fully paid and nonassessable and not subject to
preemptive rights on the part of any other Person or to any Lien, charge or
other security interest, but, in each case, subject to the applicable terms of
the Rights Agreement.
7. Various Covenants of the Holding Company.
7.1. No Impairment or Amendment; No Further Issuances or Sales;
Continued Validity. The Holding Company shall not by any action, including,
without limitation, amending its Organizational Documents, any reorganization,
recapitalization, transfer of assets, consolidation, merger, dissolution, issue
or sale of Shares or other securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such action as may be necessary or appropriate to
protect the rights of the holder hereof against impairment. Without limiting the
generality of the foregoing, the Holding Company (a) will take all such action
as may be necessary or appropriate in order that the Holding Company may validly
issue fully paid and nonassessable Warrant Shares, (b) will obtain and maintain
all such authorizations, exemptions or consents from any public regulatory body
having jurisdiction as may be necessary to enable the Holding Company to perform
its obligations under this Warrant, (c) will not be or become bound by any
agreement, document or instrument (other than the Senior Loan Documents (or the
documents related to any Refinancing Debt thereof)), the terms of which restrict
the Holding Company from performing its obligations under, and/or complying with
the terms of, this Warrant and/or any of the other Operative Documents, (d) will
not amend or modify any term, condition or provision of (i) its Organizational
Documents or (ii) the Management Option Plan, or any related agreement, document
or instrument, in a manner which is, or could reasonably be expected to be,
adverse in any material respect to the interests of any holder of Warrants
and/or Warrant Shares and (e) will not permit the par value of any Warrant
Shares issuable upon exercise of this Warrant to be greater than the amount
payable therefor upon such exercise.
So long as any Warrants or Warrant Shares are outstanding, the Holding
Company will acknowledge in writing, in form satisfactory to any holder of any
such security, the continued validity of the Holding Company's obligations
hereunder.
7.2. Listing on Securities Exchanges, etc. At all times following the
exercise of this Warrant, the Holding Company will use commercially reasonable
efforts to maintain the listing of all issued and outstanding Warrant Shares on
each securities exchange or market or trading system on which such securities
are then or at any time thereafter listed or traded.
7.3. Anti-Dilution Provisions. If the Holding Company issues any
Purchase Rights or Convertible Securities or other securities containing
provisions protecting the holder or holders thereof against dilution in any
manner more favorable to such holder or holders thereof than those set forth in
this Warrant, such provisions (or any more favorable portion thereof) shall be
deemed to be incorporated herein as if fully set forth in this Warrant and, to
the extent inconsistent with any provision of this Warrant, shall be deemed to
be substituted therefor.
7.4. Indemnification. Without limiting the generality of any provision
of the Securities Purchase Agreements or any of the other Operative Documents,
the Holding Company shall indemnify, save and hold harmless the holder of this
Warrant and the holder of any Warrant Shares from and against any and all
liability, loss, cost, damage, reasonable attorneys' and accountants' fees and
expenses, court costs and all other out-of-pocket expenses reasonably incurred
by such holder in connection with enforcing any of the terms hereof.
7.5. Certain Expenses. The Holding Company shall pay all taxes (other
than transfer taxes) and other governmental charges that may be imposed in
respect of, the issue, sale and delivery of this Warrant and any Warrant Shares.
8. Miscellaneous.
8.1. Nonwaiver. No course of dealing or any delay or failure to
exercise any right, power or remedy hereunder on the part of the holder of this
Warrant or of any Warrant Shares shall operate as a waiver of or otherwise
prejudice such holder's rights, powers or remedies.
8.2. Amendment. Any term, covenant, agreement or condition of the
Warrants may, with the consent of the Holding Company, be amended, or compliance
therewith may be waived (either generally or in a particular instance and either
retroactively or prospectively), by one or more substantially concurrent written
instruments signed by the Required Holders of the Warrants and the Holding
Company, provided that (a) no such amendment or waiver shall change the number
of Warrant Shares issuable upon the exercise of any Warrant or the manner of
exercise or the amount of any payment due upon exercise or the duration of the
Exercise Period, in each case without the prior written consent of the holder of
such Warrant and (b) no such amendment or waiver shall extend to or affect any
obligation not expressly amended or waived or impair any right consequent
thereon.
8.3. Communications. All communications provided for herein shall be
delivered, mailed or sent by facsimile transmission addressed in the manner and
shall be effective as of the time specified in the Securities Purchase
Agreements.
8.4. Like Tenor. All Warrants shall at all times be identical, except
as to the preamble to each Warrant.
8.5. Remedies. No remedy conferred in this Warrant on the holder of any
Warrant or Warrant Shares is intended to be exclusive of any other remedy, and
each and every such remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or under any other agreement, document or
instrument or now or hereafter existing at law or in equity or by statute or
otherwise.
8.6. Successors and Assigns. This Warrant and the rights evidenced
hereby shall inure to the benefit of and be binding upon the successors and
permitted assigns of the Holding Company, the holder or holders of this Warrant
and, as applicable, of any Warrant Shares, to the extent provided herein, and
shall be enforceable by such holder or holders.
8.7. Governing Law. This Warrant, including the validity hereof and the
rights and obligations of the Holding Company and of the holder hereof and all
amendments and supplements hereof and all waivers and consents hereunder, shall
be construed in accordance with and governed by the domestic substantive laws of
the State of New York without giving effect to any choice of law or conflicts of
law provision or rule that would cause the application of the domestic
substantive laws of any other jurisdiction.
8.8. Headings; Entire Agreement; Partial Invalidity, etc. The table of
contents to and headings in this Warrant are for purposes of reference only and
shall not limit or otherwise affect the meaning hereof. This Warrant, together
with the other Operative Documents, embodies the entire agreement and
understanding between the holder hereof and the Holding Company and supersedes
all prior agreements and understandings relating to the subject matter hereof.
In case any provision in this Warrant or any of the other Operative Documents
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
[The remainder of this page is left blank intentionally.]
IN WITNESS WHEREOF, the Holding Company has caused this Warrant to
be executed as an instrument under seal by its duly authorized officer as of the
date first above written.
XXXX INTERNATIONAL HOLDINGS, INC.
By: _______________________________
(Title)
Exhibit 2.2(a)
FORM OF NOTICE OF EXERCISE
(To be executed only upon partial or full exercise
of the within Warrant)
The undersigned registered holder of the within Warrant irrevocably
exercises the within Warrant for and purchases ______ shares of Common Stock of
XXXX INTERNATIONAL HOLDINGS, INC. and herewith makes payment therefor in the
amount of $_________, all at the price, in the manner and on the terms and
conditions specified in the within Warrant, and requests that a certificate (or
_______ certificates in denominations of _____________ Shares of Common Stock)
for such Common Stock hereby purchased be issued in the name of and delivered to
[choose one] (a) the undersigned or (b) _________________, whose address is
________________________ and, if such shares of Common Stock shall not include
all the Warrant Shares issuable as provided in the within Warrant, that a new
Warrant of like tenor for the Warrant Shares not being purchased hereunder be
issued in the name of and delivered to [choose one] (a) the undersigned or (b)
__________________, whose address is _________________________ .
Dated: ___________________, _____.
[ ]
By ___________________________
(Signature of Registered Holder)
NOTICE: The signature on this Notice of Exercise must correspond with the name
as written upon the face of the within Warrant in every particular,
without alteration or enlargement or any change whatever.
Exhibit 3
FORM OF ASSIGNMENT
(To be executed only upon the assignment of the within
Warrant)
FOR VALUE RECEIVED, the undersigned registered holder of the within
Warrant hereby sells, assigns and transfers unto ______________________________,
whose address is ____________________________, all of the rights of the
undersigned under the within Warrant, with respect to shares of Common Stock of
XXXX INTERNATIONAL HOLDINGS, INC. and, if such shares of Common Stock shall not
include all the Warrant Shares issuable as provided in the within Warrant, that
a new Warrant of like tenor for the Warrant Shares not being transferred
hereunder be issued in the name of and delivered to [choose one] (a) the
undersigned or (b) ____________, whose address is ________________, and does
hereby irrevocably constitute and appoint ______________________ Attorney to
register such transfer on the books of XXXX INTERNATIONAL HOLDINGS, INC.
maintained for the purpose, with full power of substitution in the premises.
Dated: ___________________, _____.
[ ]
By ___________________________
(Signature of Registered Holder)
NOTICE: The signature on this Assignment must correspond with the name as
written upon the face of the within Warrant in every particular,
without alteration or enlargement or any change whatever.
