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Exhibit 10.2
WARRANT AGREEMENT
Dated as of October 1, 2000
between
XXXXXXXXXXXXXX.XXX, INC.
and
WEIGHT WATCHERS INTERNATIONAL, INC.
WARRANT AGREEMENT
TABLE OF CONTENTS
Page
Section 1. Defined Terms.
1.1 Certain Definitions
1.2 Rules of Construction
Section 2. Issuance, Form, Execution, Delivery and Registration of Warrant Certificates.
2.1 Issuance of Warrants
2.2 Execution of Warrant Certificates
2.3 Registration, Registration of Transfers and Exchanges
2.4 Form of Warrant Certificates
2.5 Restrictive Legends
2.6 Offices for Exercise, etc
2.7 Cancellation
2.8 Lost, Stolen, Destroyed, Defaced or Mutilated Warrant Certificates
Section 3. Terms of Warrants; Exercise of Warrants. 6
3.1 Exercise Period 6
3.2 Manner of Exercise 7
3.3 Issuance of Warrant Shares
3.4 Fractional Warrant Shares
3.5 Sufficient Authorized Share Capital
3.6 Payment of Taxes 8
Section 4. Adjustment of Exercise Price and Number of Warrant Shares Issuable.
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4.1 Adjustments
4.2 Superseding Adjustment
4.3 Minimum Adjustment
4.4 Notice of Adjustment 13
4.5 Notice of Certain Transactions
4.6 Adjustment to Warrant Certificate
4.7 Challenge to Good Faith Determination
4.8 Treasury Stock
Section 5. Holders' Rights and Obligations.
5.1 Registration Rights
5.2 Other Rights and Obligations
Section 6. Miscellaneous.
6.1 Notices to the Company and WWI
6.2 Amendments
6.3 Severability
6.4 Successors
6.5 Termination
6.6 Governing Law
6.7 Jurisdiction; Venue
6.8 Benefits of This Agreement
6.9 Counterparts
6.10 Table of Contents
6.11 MUTUAL WAIVER OF JURY TRIAL
Exhibits
EXHIBIT A - Form of Note
EXHIBIT B - Form of Warrant Certificate
WARRANT AGREEMENT, dated as of October 1, 2000 (the "Agreement"), between
XxxxxxXxxxxxxx.xxx, Inc., a Delaware corporation (the "Company"), and Weight
Watchers International, Inc., a Virginia corporation ("WWI").
W I T N E S S E T H:
WHEREAS, WWI has agreed to loan the Company up to an aggregate principal amount
of $23.5 million (the "Loan") pursuant to the terms of the Note attached hereto
as Exhibit A; and
WHEREAS, in order to induce WWI to make the Loan, the Company has agreed to
enter into this Agreement and issue 1,200,000 Warrants to WWI.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, and for the purpose of defining the respective rights and
obligations of the Company and the Holders (as defined below), the parties
hereto agree as follows:
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1. DEFINED TERMS.
1. Certain Definitions
As used in this Agreement, the following
terms shall have the following respective
meanings:
"Affiliate" means, as applied to any Person,
any other Person directly or indirectly
controlling, controlled by, or under direct
or indirect common control with, such
Person. For purposes of this definition,
"control" (including, with correlative
meanings, the terms "controlling,"
"controlled by" and "under common control
with"), as applied to any Person, is defined
to mean the possession, directly or
indirectly, of the power to direct or cause
the direction of the management and policies
of such Person, whether through the
ownership of voting securities, by contract
or otherwise.
"Board" means the Board of Directors of the
Company.
"Business Day" means a day other than a
Saturday, Sunday or other day on which
commercial banks in New York City are
authorized or required by law to close.
"Cashless Exercise" has the meaning
specified in Section 3.2 hereof.
"Cashless Exercise Ratio" means a fraction,
the numerator of which is the excess of the
Current Market Value (as defined below) per
share of Common Stock on the Exercise Date
over the Exercise Price per share as of the
Exercise Date and the denominator of which
is the Current Market Value per share of
Common Stock on the Exercise Date.
"Combination" has the meaning specified in
Section 4.1(d) hereof.
"Commission" means the Securities and
Exchange Commission.
"Common Stock" means the common stock, par
value $0.01 per share, of the Company.
"Current Market Value," per share of Common
Stock or any other security at any date,
means (i) if the security is not registered
under the Exchange Act, the fair market
value of the security (without any discount
for lack of liquidity, the amount of such
security offered to be purchased or the fact
that such securities may represent a
minority interest in a private company or a
company under the control of another Person)
as determined in good faith by the Board and
certified in a board resolution that is
delivered to the Holders, and, if requested
by the Majority Holders, determined to be
fair, from a financial point of view, to the
holders of such security or another security
exercisable for such security, by an
Independent Financial Expert (as set forth
in such Independent Financial Expert's
written fairness opinion); or (ii) if the
security is registered under the Exchange
Act, the average of the last reported sale
price of the security (or the equivalent in
an over-the-counter market) for each
Business Day during the period commencing 15
Business Days before such date and ending on
the date one day prior to such date, or if
the security has been registered under the
Exchange Act for less than 15 consecutive
Business Days before such date, the average
of the daily closing bid prices (or such
equivalent) for all of the Business Days
before such date for which daily closing bid
prices are available (provided, however,
that if the closing bid price is not
determinable for at least 10 Business Days
in such period, the "Current Market Value"
of the security shall be determined as if
the security were not registered under the
Exchange Act). The Company shall pay the
fees and expenses of any Independent
Financial Expert in the determination of
Current Market Value.
"Exchange Act" means the Securities Exchange
Act of 1934, as amended (or any successor
act), and the rules and regulations
promulgated thereunder.
"Exercise Date" means the date on which a
Warrant is exercised by the Holder thereof.
"Exercise Price" means the purchase price
per Warrant Share to be paid upon the
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exercise of each Warrant, which price shall
be $7.14 per Warrant Share as adjusted in
accordance with the terms hereof.
"Expiration Date" means October 1, 2010.
"Holder" means the holder of a Warrant,
which shall initially be WWI.
"Independent Financial Expert" means a
nationally recognized investment bank that
does not (and whose directors, executive
officers and 5% stockholders do not) have a
direct or indirect financial interest in the
Company, the Holders, or any of their
respective subsidiaries or Affiliates, which
has not been for at least five years, and at
the time it is called upon to give
independent financial advice to the Company
is not (and none of its directors, executive
officers or 5% stockholders is), a promoter,
director, or officer of the Company, the
Holders or any of their respective
subsidiaries or Affiliates. The Independent
Financial Expert may be compensated and
indemnified by the Company for opinions or
services it provides as an Independent
Financial Expert.
"Issue Date" means October 1, 2000, the date
on which the Warrants are first issued.
"Majority Holders" means the Holders of a
majority of the then outstanding Warrants.
"Officer" means the principal executive
officer, the principal financial officer,
the treasurer or the principal accounting
officer of the Company.
"Person" means any individual, corporation,
partnership, joint venture, limited
liability company, association, joint-stock
company, trust, unincorporated organization,
government or any agency or political
subdivision thereof or any other entity.
"Repurchase Price" means, in respect of a
Warrant, (i) the excess of the Current
Market Value of a share of Common Stock of
the Company over the Exercise Price per
share of Common Stock, multiplied by (ii)
the number of Warrant Shares that would be
obtained if one Warrant was exercised on the
date of repurchase.
"Right" has the meaning specified in Section
4.1(g) hereof.
"Securities Act" means the Securities Act of
1933, as amended (or any successor act), and
the rules and regulations promulgated
thereunder.
"Successor Company" has the meaning
specified in Section 4.1(d) hereof.
"Warrant Certificates" means the
certificates evidencing the Warrants to be
delivered pursuant to this Agreement,
substantially in the form of Exhibit B
hereto.
"Warrant Registrar" has the meaning
specified in Section 2.3 hereof.
"Warrant Shares" has the meaning specified
in Section 2.1 hereof.
"Warrants" shall mean the Warrants issued
hereunder and all warrants issued upon
transfer, division or combination of, or in
substitution for, any thereof. All Warrants
shall at all times be identical as to terms
and conditions and date, except as to the
number of shares of Common Stock for which
they may be exercised.
2. Rules of Construction
Unless the text otherwise required.
i. a term has the meaning
assigned to it;
ii. an accounting term not
otherwise defined has the
meaning assigned to it in
accordance with United
States generally accepted
accounting principles
("U.S. GAAP") as in effect
from time to time;
iii. "or" is not exclusive;
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iv. "including" means
including, without
limitation; and
v. words in the singular
include the plural and
words in the plural include
the singular.
2. ISSUANCE, FORM, EXECUTION, DELIVERY AND REGISTRATION
OF WARRANT CERTIFICATES.
1. Issuance of Warrants
. Each Warrant Certificate shall evidence
the number of Warrants specified therein,
and each Warrant evidenced thereby shall
represent the right, subject to the
provisions contained herein and therein, to
purchase from the Company (and the Company
shall issue and sell to such holder of the
Warrant) one share of Common Stock of the
Company (the shares purchasable upon
exercise of a Warrant being hereinafter
referred to as the "Warrant Shares," subject
to adjustment as provided in Section 4
hereof).
2. Execution of Warrant Certificates
. The Warrant Certificates shall be executed
on behalf of the Company by one Officer of
the Company. Such signatures may be the
manual or facsimile signatures of the
present or any future such Officers.
Typographical and other minor errors or
defects in any such reproduction of any such
signature shall not affect the validity or
enforceability of any Warrant Certificate.
In case any Officer of the Company who shall
have signed any of the Warrant Certificates
shall cease to be such Officer before the
Warrant Certificate so signed shall be
delivered by the Company, such Warrant
Certificate nevertheless may be delivered or
disposed of as though the Person who signed
such Warrant Certificate had not ceased to
be such Officer of the Company; and any
Warrant Certificate may be signed on behalf
of the Company by such Persons as, at the
actual date of the execution of such Warrant
Certificate, shall be the proper Officers of
the Company, although at the date of the
execution and delivery of this Agreement any
such Person was not such an Officer.
3. Registration, Registration of Transfers and
Exchanges
. The Company will keep, at the office or
agency maintained by the Company for such
purpose, a register or registers in which,
subject to such reasonable regulations as it
may prescribe, the Company shall provide for
the registration of, and registration of
transfer and exchange of, Warrants as
provided herein. Each person designated by
the Company from time to time as a Person
authorized to register the transfer and
exchange of the Warrants is hereinafter
called, individually and collectively, the
"Warrant Registrar." The Company hereby
initially appoints itself as Warrant
Registrar. Upon written notice to the
Holders and any acting Warrant Registrar,
the Company may appoint a successor Warrant
Registrar for such purposes.
The Company will at all times designate one
Person (who may be the Company and who need
not be a Warrant Registrar) to act as
repository of a master list of names and
addresses of the holders of Warrants (the
"Warrant Register"). The Company will act as
such repository unless and until some other
Person is, by written notice from the
Company to the Holders and the Warrant
Registrar, designated by the Company to act
as such. In the event the Warrant Registrar
is not the repository, the Company shall
cause the Warrant Registrar to furnish to
such repository, on a current basis, such
information as to all registrations of
transfer and exchanges effected by the
Warrant Registrar, as may be necessary to
enable such repository to maintain the
Warrant Register on as current a basis as is
practicable.
When Warrants are presented to the Company
with a request to register the transfer of
the Warrants or exchange Warrants for an
equal number of Warrants of other authorized
denominations, the Company shall register
the transfer or make the exchange as
requested if the requirements under this
Warrant Agreement as set forth herein for
such transactions are met; provided,
however, that the Warrants presented or
surrendered for registration of transfer or
exchange shall be duly endorsed or
accompanied by a written instruction of
transfer in form satisfactory to the
Company, duly executed by the holder thereof
or by his attorney, duly authorized in
writing.
All Warrants issued upon any registration of
transfer or exchange of Warrants
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shall be the valid obligations of the
Company, evidencing the same obligations,
and entitled to the same benefits under this
Agreement, as the Warrants surrendered upon
such registration of transfer or exchange.
4. Form of Warrant Certificates
. The Warrant Certificates to be delivered
pursuant to this Agreement shall be
substantially in the form set forth in
Exhibit B attached hereto. Such Warrant
Certificates shall represent such of the
outstanding Warrants as shall be specified
therein and each shall provide that it shall
represent the aggregate amount of
outstanding Warrants from time to time
endorsed thereon and that the aggregate
amount of outstanding Warrants represented
thereby may from time to time be decreased
or increased, as appropriate. Any
endorsement of a Warrant Certificate to
reflect the amount of any increase or
decrease in the amount of outstanding
Warrants represented thereby shall be made
by the Company in accordance with
instructions given by the holder thereof.
5. Restrictive Legends
. The Warrant Certificates shall bear the
following legend (the "Private Placement
Legend") on the face thereof:
THE SECURITIES EVIDENCED HEREBY HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR
ANY STATE OR OTHER SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED
OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
SUCH REGISTRATION OR UNLESS THE TRANSACTION
IS EXEMPT FROM, OR NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT.
6. Offices for Exercise, etc
. So long as any of the Warrants remain
outstanding, the Company will designate: (a)
an office or agency where the Warrant
Certificates may be presented for exercise,
(b) an office or agency where the Warrant
Certificates may be presented for
registration of transfer and for exchange,
and (c) an office or agency where notices
and demands to or upon the Company in
respect of the Warrants or of this Agreement
may be served. The Company may from time to
time change such designation, as it may deem
desirable or expedient. The Company will
give to the Holders and the Warrant
Registrar written notice of the location of
any such office or agency and of any change
of location thereof. The Company hereby
designates its office at the address set
forth in Section 6.1, as the initial agency
maintained for such purpose.
7. Cancellation
. All Warrant Certificates surrendered for
the purpose of exercise (in whole or in
part), exchange, substitution or transfer
shall, if surrendered to the Company or to
any of its agents, be delivered to the
Company for cancellation or in cancelled
form, or if surrendered to the Company shall
be cancelled by it, and no Warrant
Certificates shall be issued in lieu thereof
except as expressly permitted by any of the
provisions of this Agreement. If the Company
purchases or acquires Warrants and if the
Company so chooses, the Company may cancel
and retire the Warrant Certificates
evidencing said Warrants.
8. Lost, Stolen, Destroyed, Defaced or
Mutilated Warrant Certificates
. Upon receipt by the Company (or any agent
of the Company if requested by the Company)
of evidence satisfactory to it of the loss,
theft, destruction, defacement or mutilation
of any Warrant Certificate and of indemnity
satisfactory to it (which may include
posting a bond) and, in the case of
mutilation or defacement, upon surrender
thereof to the Company for cancellation,
then, in the absence of notice to the
Company that such Warrant Certificate has
been acquired by a bona fide purchaser or
holder in due course, the Company shall
execute in exchange for or in lieu of the
lost, stolen, destroyed, defaced or
mutilated Warrant Certificate, a new Warrant
Certificate representing a like number of
Warrants, bearing a number or other
distinguishing
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symbol not contemporaneously outstanding.
Upon the issuance of any new Warrant
Certificate under this Section, the Company
may require the payment from the holder of
such Warrant Certificate of a sum sufficient
to cover any tax, stamp tax or other
governmental charge that may be imposed in
relation thereto and any other expenses
(including the fees and expenses of the
Warrant Registrar) in connection therewith.
Every substitute Warrant Certificate
executed and delivered pursuant to this
Section in lieu of any lost, stolen or
destroyed Warrant Certificate shall
constitute an additional contractual
obligation of the Company, whether or not
the lost, stolen or destroyed Warrant
Certificate shall be at any time enforceable
by anyone, and shall be entitled to the
benefits of (but shall be subject to all the
limitations of rights set forth in) this
Agreement equally and proportionately with
any and all other Warrant Certificates duly
executed and delivered hereunder. The
provisions of this Section 2.8 are exclusive
with respect to the replacement of lost,
stolen, destroyed, defaced or mutilated
Warrant Certificates and shall preclude (to
the extent lawful) any and all other rights
or remedies notwithstanding any law or
statute existing or hereafter enacted to the
contrary with respect to the replacement of
lost, stolen, destroyed, defaced or
mutilated Warrant Certificates.
3. TERMS OF WARRANTS; EXERCISE OF WARRANTS.
1. EXERCISE PERIOD
Subject to the terms of this Agreement, each
Holder shall have the right until 5:00 p.m.,
New York City time, on the Expiration Date
to receive from the Company the number of
fully paid and nonassessable Warrant Shares
which the Holder may at the time be entitled
to receive on exercise of such Warrants and
payment of the Exercise Price then in effect
for such Warrant Shares. Each Warrant not
exercised prior to 5:00 p.m., New York City
time, on the Expiration Date shall become
void and all rights thereunder and all
rights in respect thereof under this
Agreement shall cease as of such time.
The Company shall give notice not less than
90, and not more than 120, days prior to the
Expiration Date to the Holders of the
outstanding Warrants to the effect that the
Warrants will terminate and become void as
of 5:00 p.m., New York City time, on the
Expiration Date; provided, however, that the
failure by the Company to give such notice
as provided in this Section shall not affect
such termination and becoming void of the
Warrants as of 5:00 p.m., New York City
time, on the Expiration Date.
2. Manner of Exercise
A Warrant may be exercised at any time prior
to the Expiration Date upon (i) surrender to
the Company of the Warrant Certificates,
together with the form of election to
purchase properly completed and executed by
the Holder thereof and (ii) payment to the
Company of the Exercise Price for each share
of Common Stock or other securities issuable
upon exercise of such Warrants. The Exercise
Price may be paid (i) in cash or by
certified or official bank check or by wire
transfer to an account designated by the
Company for such purpose (a "Cash Exercise")
or (ii) without the payment of cash, by
reducing the number of shares of Common
Stock that would be obtainable upon the
exercise of a Warrant and payment of the
Exercise Price in cash so as to yield a
number of shares of Common Stock upon the
exercise of such Warrant equal to the
product of (a) the number of shares of
Common Stock for which such Warrant is
exercisable as of the date of exercise (if
the Exercise Price were being paid in cash)
and (b) the Cashless Exercise Ratio. An
exercise of a Warrant in accordance with
clause (ii) of the immediately preceding
sentence is herein called a "Cashless
Exercise." In the event of a Cashless
Exercise of Warrants, the Company will
purchase from the Holder thereof such number
of Warrants as would have entitled the
Holder thereof to receive the excess of the
number of shares of Common Stock deliverable
upon a Cash Exercise over the number of
shares of Common Stock deliverable upon a
Cashless Exercise, for a purchase price
equal to the Exercise Price multiplied by
the excess of the number of shares of Common
Stock purchasable upon a Cash Exercise over
the number of shares of Common Stock
purchasable upon a Cashless Exercise. The
Company agrees to offset the purchase price
referred to in the immediately preceding
sentence with the obligation to pay the
Exercise Price in respect of the shares of
Common Stock deliverable upon a Cashless
Exercise. Upon surrender of a Warrant
Certificate representing more than one
Warrant in connection with the holder's
option to elect a Cashless Exercise, the
number of shares of Common Stock deliverable
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upon a Cashless Exercise shall be equal to
the number of shares of Common Stock
issuable upon the exercise of Warrants that
the Holder specifies are to be exercised
pursuant to a Cashless Exercise multiplied
by the Cashless Exercise Ratio. All
provisions of this Agreement shall be
applicable with respect to a surrender of a
Warrant Certificate pursuant to a Cashless
Exercise for less than the full number of
Warrants represented thereby. Upon surrender
of the Warrant Certificate and payment of
the Exercise Price in accordance with this
Agreement, the Company will issue shares of
Common Stock of the Company for each Warrant
evidenced by such Warrant Certificate,
subject to adjustment as described herein.
Whenever there occurs a Cashless Exercise,
the Company shall deliver to the Holder a
certificate setting forth the Cashless
Exercise Ratio.
3. Issuance of Warrant Shares
Subject to Section 2.8, upon the surrender
of Warrant Certificates and payment of the
Exercise Price, as set forth above, the
Company shall issue shares of Common Stock
in such name or names as the Holder may
designate, for the number of full Warrant
Shares so purchased upon the exercise of
such Warrants or other securities or
property to which it is entitled, registered
or otherwise to the Person or Persons
entitled to receive the same, together with
cash as provided in Section 3.4 in respect
of any fractional Warrant Shares otherwise
issuable upon such exercise. Such shares of
Common Stock shall be deemed to have been
issued and any Person so designated shall be
deemed to have become a holder of record of
such Warrant Shares as of the date of the
surrender of such Warrant Certificates and
payment of the per share Exercise Price or
upon a Cashless Exercise.
The Company hereby agrees that no service
charge will be made for registration of
transfer or exchange upon surrender of any
Warrant Certificate at the office maintained
for that purpose. Holders may be required to
make payment of a sum sufficient to cover
any tax or other governmental charge that
may be imposed in connection with any
registration or transfer or exchange of
Warrant Certificates.
4. Fractional Warrant Shares
The Company shall not be required to issue
fractional Warrant Shares on the exercise of
Warrants. If more than one Warrant shall be
exercised in full at the same time by the
same Holder, the number of full Warrant
Shares which shall be issuable upon such
exercise shall be computed on the basis of
the aggregate number of Warrant Shares
purchasable pursuant thereto. If any
fraction of a Warrant Share would, except
for the provisions of this Section 3.4, be
issuable on the exercise of any Warrant (or
specified portion thereof), the Company may,
at its option, pay an amount in cash equal
to the Current Market Value for one Warrant
Share on the Business Day immediately
preceding the date the Warrant is exercised,
multiplied by such fraction.
5. Sufficient Authorized Share Capital
The Company has and will maintain an
authorized share capital sufficient for the
issuance of such number of shares of Common
Stock as will be issuable upon the exercise
of all outstanding Warrants. Such shares of
Common Stock, when issued and paid for in
accordance with the Warrant Agreement, will
be duly and validly issued, fully paid and
nonassessable, free of preemptive rights and
free from all liens, charges and security
interests with respect to the issue thereof.
6. Payment of Taxes
The Company will pay all documentary stamp
taxes attributable to the initial issuance
of the Warrants and the Warrant Shares
issuable upon the exercise of Warrants;
provided, however, that the Company shall
not be required to pay any tax or taxes
which may be payable in respect of any
transfer involved in the issue of any
Warrant Certificates or Warrant Shares in a
name other than that of the Holder of a
Warrant Certificate surrendered upon the
exercise of a Warrant, and the Company shall
not be required to issue or deliver such
Warrant Certificates unless or until the
Person or Persons requesting the issuance
thereof shall have paid to the Company the
amount of such tax or shall have established
to the satisfaction of the Company that such
tax has been paid.
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4. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT
SHARES ISSUABLE.
1. ADJUSTMENTS
The Exercise Price and the number of
Warrant Shares purchasable upon the exercise
of Warrants shall be subject to adjustment
from time to time as follows:
a. Changes in Shares of Common Stock.
In the event that at any time or
from time to time after the date
hereof the Company shall (i) pay a
dividend or make a distribution on
its shares of Common Stock in shares
of Common Stock or other shares of
capital stock, (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 shares of
Common Stock, then the number of
shares of Common Stock purchasable
upon exercise of each Warrant
immediately after the happening of
such event shall be adjusted
(including by adjusting the
definition of "Warrant Shares") so
that, after giving effect to such
adjustment, the Holder of each
Warrant shall be entitled to receive
the number of shares of Common Stock
upon exercise that such Holder would
have owned or have been entitled to
receive 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 shares of Common
Stock, immediately prior to the
record date therefor). An adjustment
made pursuant to this Section 4.1(a)
shall become effective immediately
after the effective date,
retroactive to the record date
therefor in the case of a dividend
or distribution in shares of Common
Stock, and shall become effective
immediately after the effective date
in the case of a subdivision,
combination or reclassification.
b. Cash Dividends and Other
Distributions. In case at any time
or from time to time after the date
hereof the Company shall distribute
to holders of shares of Common Stock
(i) any dividend or other
distribution of cash, evidences of
its indebtedness, shares of its
capital stock or any other
properties or securities or (ii) any
options, warrants or other rights to
subscribe for or purchase any of the
foregoing (other than, in each case
set forth in (i) and (ii), (x) any
dividend or distribution described
in Section 4.1(a) or (y) any rights,
options, warrants or securities
described in Section 4.1(c)) then
the number of Warrant Shares
purchasable upon the exercise of
each Warrant shall be increased to a
number determined by multiplying the
number of shares of Common Stock
issuable immediately prior to the
record date upon exercise of each
Warrant by a fraction, the numerator
of which shall be the sum of (x) any
cash distributed per Warrant Share
and (y) the Current Market Value of
the portion, if any, of the
distribution applicable to one
Warrant Share consisting of
evidences of indebtedness, shares of
stock, securities, other property,
warrants, options or subscription of
purchase rights and the denominator
of which shall be the Current Market
Value of the shares of Common Stock
comprising one Warrant Share
immediately after such dividend or
other distribution. Such adjustment
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 4.1(b) if at the time of
such distribution the Company makes
the same distribution to Holders of
Warrants as it makes to holders of
shares 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 4.1(b) which shall have
the effect of decreasing the number
of Warrant Shares purchasable upon
exercise of each Warrant.
c. Rights Issue. In the event that at
any time or from time to time after
the date hereof the Company shall
issue, sell, distribute or otherwise
grant any rights to subscribe for or
to purchase, or any options or
warrants for the purchase of, or any
securities convertible or
exchangeable into, shares of Common
Stock to all holders of shares of
Common Stock, entitling such holders
to subscribe for or purchase shares
of Common Stock or stock or
securities convertible into shares
of Common Stock within 60 days after
the record date for such issuance,
sale, distribution or other grant,
as the case may be, and the sum of
(a) the offering price of such
right, option,
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warrant or other security (on a per
share basis) and (b) any
subscription, purchase, conversion
or exchange price per share of
Common Stock (the "Consideration")
is lower at the record date for such
issuance than the then Current
Market Value per share of such
Common Stock, the number of shares
of Common Stock thereafter
purchasable shall be increased to a
number determined by multiplying the
number of shares of Common Stock
issuable immediately prior to the
record date upon exercise of each
Warrant by a fraction, the 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
are convertible or exchangeable, and
the 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 could
be purchased at the Current Market
Value with the aggregate of the
Consideration with respect to such
issuance, sale, distribution or
other grant. Such adjustment shall
be made whenever such rights,
options or warrants are issued and
shall become effective retroactively
immediately after the record date
for the determination of
stockholders entitled to receive
such rights, options, warrants or
securities; provided however, that
the Company is not required to make
an adjustment pursuant to this
Section 4.1(c) if the Company shall
make the same distribution to
Holders of Warrants. No adjustment
shall be made pursuant to this
Section 4.1(c) which shall have the
effect of decreasing the number of
Warrant Shares purchasable upon
exercise of each Warrant.
If the Company at any time shall
issue two or more securities as a
unit and one or more of such
securities shall be rights, options
or warrants for or securities
convertible or exchangeable into,
shares of Common Stock subject to
this Section 4.1(c), the
consideration allocated to each such
security shall be determined in good
faith by the Board.
d. Combination; Liquidation. Except as
provided in clause (ii) below, in
the event of certain consolidations,
mergers or demergers of the Company,
or the sale of all or substantially
all of the assets of the Company to
another Person (a "Combination"),
each Warrant will thereafter be
exercisable for the right to receive
the kind and amount of shares of
stock or other securities or
property to which such holder would
have been entitled as a result of
such Combination had the Warrants
been exercised immediately prior
thereto. Unless clause (ii) is
applicable to a Combination, if any
Warrants shall be outstanding after
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
Holders confirming the Holders'
rights pursuant to this Section
4.1(d) and providing for
adjustments, which shall be as
nearly equivalent as may be
practicable to the adjustments
provided for in this Section 4. The
provisions of this Section 4.1(d)
shall similarly apply to successive
Combinations involving any Successor
Company.
In the event of (A) a Combination,
and, in connection therewith, the
consideration payable to the holders
of shares of Common Stock in
exchange for their shares is payable
solely in cash or (B) a dissolution,
liquidation or winding-up of the
Company, then the holders of the
Warrants will be entitled to receive
distributions on an equal basis with
the holders of shares 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. Upon
receipt of such payment, if any, the
Warrants will expire and the rights
of holders thereof will cease.
In the case of any such Combination,
the surviving or acquiring Person as
described in this Section 4.1(d)
and, in the event of any
dissolution, liquidation or
winding-up of the Company, the
Company, shall promptly pay to the
Holders of the Warrants the amounts
to which they are entitled as
described above upon surrender of
the Warrant Certificates. The
Company shall make payment to the
Holders by delivering a check, or by
wire transfer of same-day funds, in
such amount as is appropriate (or,
in
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the case of consideration other than
cash, such other consideration as is
appropriate) to such Person or
Persons as it may be directed in
writing by the Holders surrendering
such Warrants.
e. Tender Offers; Exchange Offers. In
the event that the Company or any
subsidiary of the Company shall
purchase shares of Common Stock
pursuant to a tender offer or an
exchange offer for a price per share
of Common Stock that is greater than
the then Current Market Value per
share of Common Stock in effect at
the end of the trading day
immediately following the day on
which such tender offer or exchange
offer expires, then the Company, or
such subsidiary of the Company,
shall, within 10 Business Days of
the expiry of such tender offer or
exchange offer, offer to purchase
Warrants for comparable
consideration per share of Common
Stock based on the number of shares
of Common Stock which the Holders of
such Warrants would receive upon
exercise of such Warrants (the
"Offer") (such amount less the
Exercise Price in respect of such
share, the "Per Share
Consideration"); provided, however,
if a tender offer is made for only a
portion of the outstanding shares of
Common Stock, then such offer shall
be made for such shares of Common
Stock issuable upon exercise of the
Warrants in the same pro rata
proportion.
The Offer shall remain open for a
period of 20 Business Days following
its commencement and no longer,
except to the extent that a longer
period is required by applicable law
(the "Offer Period"). No later than
five Business Days after the
termination of the Offer Period (the
"Purchase Date"), the Company shall
purchase such Warrants for the
applicable Per Share Consideration.
f. Other Events. If any event occurs as
to which the foregoing provisions of
this Section 4 are not strictly
applicable or, if strictly
applicable, would not, in the good
faith judgment of the Board, fairly
and adequately protect the purchase
rights of the Warrants in accordance
with the essential intent and
principles of such provisions, then
the Board shall make such
adjustments in the application of
such provisions, in accordance with
such essential intent and
principles, as shall be reasonably
necessary, in the good faith opinion
of the Board, to protect such
purchase rights as aforesaid.
g. When No Adjustment Required. Without
limiting any other exception
contained in this Section 4.1, and
in addition thereto, no adjustment
need be made for:
i. (A) grants to, exercises of
Rights by, or issuances of
equity securities to
employees, directors,
consultants or advisors of
the Company or any of its
subsidiaries and (B)
exercises of Rights by, or
issuances of equity
securities in connection
with Rights previously
issued to former employees,
former directors, former
consultants (to the extent
that all such securities,
other than those permitted
by clause (ii) below, do
not have an aggregate value
in excess of 15% of the
equity value of the Company
on a fully diluted basis,
as determined in good faith
by the Board). As used
herein, "Right" shall mean
any right, option, warrant
or convertible or
exchangeable security
containing the right to
subscribe for or acquire
one or more shares of
Common Stock, excluding the
Warrants;
ii. options, warrants or other
agreements or rights to
purchase capital stock of
the Company entered into or
granted prior to the date
of the issuance of the
Warrants or any issuance of
capital stock pursuant
thereto or in connection
therewith;
iii. bona fide public offerings
or private placements;
iv. rights to purchase shares
of Common Stock pursuant to
a Company plan for
reinvestment of dividends
or interest; and
v. a change in the par value
of shares of Common Stock
(including a change from
par value to no par value
or vice versa).
h. Adjustment of Exercise Price.
Whenever the number of shares of
Common Stock purchasable upon the
exercise of each Warrant is
adjusted, as provided under this
Section 4, the Exercise Price per
share of Common Stock payable upon
exercise of such Warrant shall be
adjusted (calculated to the nearest
$0.01) so that it shall equal the
price determined by multiplying such
Exercise Price immediately prior to
such adjustment
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by a fraction the numerator of which
shall be the number of shares of
Common Stock purchasable upon the
exercise of each Warrant immediately
prior to such adjustment and the
denominator of which shall be the
number of shares of Common Stock so
purchasable immediately thereafter.
Following any adjustment to the
Exercise Price pursuant to this
Section 4, the amount payable, when
adjusted, shall never be less than
the par value per share of Common
Stock at the time of such
adjustment.
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 such classes of
shares in a manner that the Board deems fair
and equitable to the Holders. After such
allocation, the exercise privilege and the
Exercise Price of each class of shares shall
thereafter be subject to adjustment on terms
comparable to those applicable to shares of
Common Stock under this Section 4.
Such adjustment shall be made successively
whenever any event listed above shall occur.
2. Superseding Adjustment
Upon the expiration of any rights,
options, warrants or conversion or exchange
privileges which resulted in the adjustments
pursuant to this Section 4, if any thereof
shall not have been exercised, the number of
Warrant Shares purchasable upon the exercise
of each Warrant shall be readjusted as if
(A) 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,
actually issued upon the exercise of such
rights, options, warrants or conversion or
exchange privileges and (B) 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;
provided, however, that no such readjustment
shall (except by reason of an intervening
adjustment under Section 4.1(a)) have the
effect of decreasing the number of Warrant
Shares purchasable upon the exercise of each
Warrant 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.
3. Minimum Adjustment
The adjustments required by the preceding
Sections of this Section 4 shall be made
whenever and as often as any specified event
requiring an adjustment shall occur, except
that no adjustment of the number of shares
of Common Stock purchasable upon exercise of
Warrants that would otherwise be required
shall be made (except in the case of a
subdivision or combination of shares of
Common Stock, as provided for in Section
4.1(a)) unless and until such adjustment
either by itself or with other adjustments
not previously made increases or decreases
by at least 1% of the number of shares of
Common Stock purchasable 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 4 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 4,
fractional interests in shares of Common
Stock shall be taken into account to the
nearest one-hundredth of a share.
4. Notice of Adjustment
Whenever the number of shares of Common
Stock and other property, if any,
purchasable upon exercise of Warrants is
adjusted, as herein provided, the Company
shall deliver to the Holders a certificate
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 the Board determined the fair
market value of any evidences of
indebtedness, other securities or property
or warrants or other subscription or
purchase rights), and
13
specifying the number of shares of Common
Stock purchasable upon exercise of Warrants
after giving effect to such adjustment. The
Company shall promptly deliver a copy of
such certificate to each Holder.
5. Notice of Certain Transactions
In the event that the Company shall
propose (a) to pay any dividend payable in
securities of any class to the holders of
its shares of Common Stock or to make any
other distribution to the holders of its
shares of Common Stock, (b) to offer the
holders of its shares of Common Stock rights
to subscribe for or to purchase any
securities convertible into shares of Common
Stock or shares of Common Stock or shares of
stock of any class or any other securities,
rights or options, (c) to effect any
reclassification of its shares of Common
Stock, capital reorganization or Combination
or (d) to effect the voluntary or
involuntary dissolution, liquidation or
winding-up of the Company, or in the event
of a tender offer or exchange offer
described in Section 4.1(e), the Company
shall within 5 Business Days of making such
proposal, tender offer or exchange offer
send to the Holders a notice of such
proposed action or offer, such notice to be
mailed by the Company to the Holders at
their addresses as they appear in the
Warrant 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 shares of Common Stock, if any
such date is to be fixed, and shall briefly
indicate the effect of such action on the
shares of 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, purchasable upon exercise of each
Warrant after giving effect to any
adjustment which will be required as a
result of such action. Such notice shall be
given by the Company as promptly as possible
and, in the case of any action covered by
clause (a) or (b) above, at least 10
Business Days prior to the record date for
determining holders of the shares of Common
Stock for purposes of such action and, 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
shares of Common Stock, whichever shall be
the earlier.
6. Adjustment to Warrant Certificate
The form of Warrant Certificate need not
be changed because of any adjustment made
pursuant to this Section 4, and Warrant
Certificates issued after such adjustment
may state the same Exercise Price and the
same number of shares of Common Stock as are
stated in any Warrant Certificates issued
prior to the adjustment. 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 Warrant Certificate, and
any Warrant Certificate thereafter issued,
whether in exchange or substitution for an
outstanding Warrant Certificate or
otherwise, may be in the form as so changed.
7. Challenge to Good Faith Determination
Whenever the Board shall be required to
make a determination in good faith of the
Current Market Value of any item under
Section 4, such determination may be
challenged in good faith by the Majority
Holders.
8. Treasury Stock
The sale or other disposition of any
issued shares of Common Stock owned or held
by or for the account of the Company shall
be deemed an issuance thereof and a
repurchase thereof and designation of such
shares as treasury stock shall be deemed to
be a redemption thereof for the purposes of
this Agreement.
5. HOLDERS' RIGHTS AND OBLIGATIONS.
1. REGISTRATION RIGHTS
The parties hereby agree and acknowledge
that the Holders will have registration
rights with respect to Warrant Shares in
accordance with the provisions of the
Registration Rights Agreement, dated as of
September 29, 1999, among the Company, WWI,
X.X. Xxxxx Company ("Heinz") and Artal
14
Luxembourg S.A. ("Artal").
2. Other Rights and Obligations
The parties hereby agree that the Warrants
shall have the rights and be subject to the
obligations set forth in the Stockholders'
Agreement, dated as of September 29, 1999
(the "Stockholders' Agreement"), among the
Company, WWI, Heinz and Artal with respect
to shares of Common Stock held by WWI. The
parties hereby agree and acknowledge that
the Warrant Shares shall accordingly be
subject to the provisions of the
Stockholders' Agreement.
6. MISCELLANEOUS.
1. NOTICES TO THE COMPANY AND WWI
Any notice or demand authorized by this
Agreement to be given or made by the Holder
of any Warrant Certificate to or on the
Company shall be sufficiently given or made
(i) five business days after deposited in
the mail, first class or registered, postage
prepaid, (ii) one business day after being
timely delivered to a next-day air courier
or (ii) when receipt is acknowledged by the
addressee, if telecopied, addressed (until
another addresses is filed in writing by the
Company with the Holders), as follows:
XxxxxxXxxxxxxx.xxx, Inc.
000 Xxxxxxxxx Xxx., 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Telecopy: (000) 000-0000
Any notice pursuant to this Agreement to be
given by the Company to any Holder shall be
sufficiently given or made (i) five business
days after deposited in the mail,
first-class or registered, postage prepaid,
(ii) one business day after being timely
delivered to a next-day air courier or (ii)
when receipt is acknowledged by the
addressee, if telecopied, addressed (until
another or additional address is filed in
writing by a Holder with the Company) to the
Holder as follows:
Weight Watchers International, Inc.
000 Xxxxxxxxx Xxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: General Counsel
Telecopy: (000) 000-0000
2. Amendments
Except as set forth herein, the provisions
of this Agreement may only be amended or
waived with the prior written consent of the
Company and each Holder; provided that the
Company and the Majority Holders may amend
or waive this Agreement except to the extent
such waiver or amendment would constitute an
adverse amendment or waiver to a
non-consenting Holder's rights hereunder in
a material respect.
3. Severability
The provisions of this Agreement are
severable, and if any clause or provision
shall be held invalid, illegal or
unenforceable in whole or in part in any
jurisdiction, then such invalidity or
unenforceability shall affect in that
jurisdiction only such clause or provision,
or part thereof, and shall not in any manner
affect such clause or provision in any other
jurisdiction or any other
15
clause or provision of this Agreement in any
jurisdiction.
4. Successors
All the covenants and provisions of this
Agreement by or for the benefit of the
Company or the Holders shall bind and inure
to the benefit of their respective permitted
successors and assigns hereunder.
5. Termination
This Agreement (other than the Company's
obligations with respect to Warrants
previously exercised and the Company's and
the Holders' rights and obligations set
forth in Sections 5.1 and 5.2) shall
terminate at 5:00 p.m., New York City time
on the Expiration Date.
6. Governing Law
This Warrant Agreement and the Warrants
shall be governed by, and construed and
interpreted in accordance with, the law of
the State of New York.
7. Jurisdiction; Venue
The parties to this Agreement agree that
jurisdiction and venue in any action brought
by any party hereto pursuant to this
Agreement shall properly lie and shall be
brought in any federal or state court
located in the State of New York. By
execution and delivery of this Agreement,
each party hereto irrevocably submits to the
jurisdiction of such courts for itself or
himself and in respect of its or his
property with respect to such action. The
parties hereto irrevocably agree that venue
would be proper in such court, and hereby
irrevocably waive any objection that such
court is an improper or inconvenient forum
for the resolution of such action.
8. Benefits of This Agreement
Nothing in this Agreement shall be
construed to give to any Person other than
the Company and the Holders of any legal or
equitable right, remedy or claim under this
Agreement; but this Agreement shall be for
the sole and exclusive benefit of the
Company and the Holders.
a. Prior to the exercise of the
Warrants, no Holder of a Warrant
Certificate, as such, shall be
entitled to any rights of a
stockholder of the Company,
including, without limitation, the
right to receive dividends or
subscription rights, the right to
vote, to consent, to exercise any
preemptive right, to receive any
notice of meetings of stockholders
for the election of directors of the
Company, to share in the assets of
the Company in the event of the
liquidation, dissolution or winding
up of the Company's affairs or any
other matter or to receive any
notice of any proceedings of the
Company, except as may be
specifically provided for herein.
9. Counterparts
This Agreement may be executed in any
number of counterparts and each of such
counterparts shall for all purposes be
deemed to be an original, and all such
counterparts shall together constitute but
one and the same instrument.
10. Table of Contents
The table of contents and headings of the
Sections of this Agreement have been
inserted for convenience of reference only,
are not intended to be considered a part
hereof and shall not modify or restrict any
of the terms or provisions hereof.
11. MUTUAL WAIVER OF JURY TRIAL
THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR
PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER THIS
AGREEMENT OR ANY DOCUMENTS RELATED HERETO.
16
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above written.
XXXXXXXXXXXXXX.XXX, INC.
By:
Name:
Title:
WEIGHT WATCHERS INTERNATIONAL, INC.
By:
Name:
Title:
EXHIBIT A
[Form of Note]
EXHIBIT B
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE OR OTHER SECURITIES
LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT.
No. 02 1,200,000 Warrants
WARRANT CERTIFICATE
XXXXXXXXXXXXXX.XXX, INC.
THIS CERTIFIES THAT, Weight Watchers International, Inc., a Virginia corporation
("WWI"), is the owner of 1,200,000 Warrants (the "Warrants") as described above,
transferable only on the books of XxxxxxXxxxxxxx.xxx, Inc., a Delaware
corporation (the "Company"), by the holder thereof in person or by his or her
duly authorized attorney, on surrender of the Certificate properly endorsed.
Each Warrant entitles the holder thereof (the "Holder"), at its option and
subject to the provisions contained herein and in the Warrant Agreement, dated
as of October 1, 2000 (the "Warrant Agreement"), between the Company and WWI, to
purchase from the Company, one Warrant Share per Warrant at the exercise price
per share of $7.14 (the "Exercise Price"), or by Cashless Exercise. This
Warrant is subject to the terms and provisions contained in the Warrant
Agreement, to all of which terms and provisions the Holder of this Warrant
Certificate consents by acceptance hereof. The Warrant Agreement is hereby
incorporated herein by reference and made a part hereof. Reference is hereby
made to the Warrant Agreement for a full statement of the respective rights,
limitations of rights, duties and obligations of the Company and the Holders of
the Warrants. Capitalized terms used but not defined herein shall have the
meanings ascribed thereto in the Warrant Agreement. This Warrant Certificate
shall terminate and become void as of 5:00 p.m. on October 1, 2010 (the
"Expiration Date") or upon the exercise hereof as to all the shares of Common
Stock subject hereto. The Exercise Price and the number of Warrant Shares
purchasable upon exercise of the Warrants shall be subject to adjustment from
time to time as set forth in the Warrant Agreement.
17
Reference is hereby made to the further provisions of this Warrant Certificate
set forth on the reverse hereof and such further provisions shall for all
purposes have the same effect as though fully set forth at this place.
This Warrant Certificate shall be governed by, and construed and interpreted in
accordance with, the law of the State of New York.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
executed on behalf of the Company on the date set forth below.
Dated: October 1, 2000
XXXXXXXXXXXXXX.XXX, INC.
By:
Name:
Title:
[FORM OF REVERSE OF WARRANT CERTIFICATE]
This Warrant Certificate is issued under and in accordance with the Warrant
Agreement. A copy of the Warrant Agreement may be obtained for inspection by the
Holder hereof upon written request to the Company, 000 Xxxxxxxxx Xxx., 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
Warrants may be exercised at any time until 5:00 p.m., New York City time on the
Expiration Date. Subject to the terms of the Warrant Agreement, the Warrants may
be exercised in whole or in part by surrender of this Warrant Certificate with
the form of election to purchase Warrant Shares attached hereto duly executed
and with the simultaneous payment of the Exercise Price (i) in cash to the
Company at the office of the Company or (ii) by Cashless Exercise. Payment of
the Exercise Price in cash shall be made in cash or by certified or official
bank check payable to the order of the Company or by wire transfer of same-day
funds to an account designated by the Company for such purpose. Payment by
Cashless Exercise shall be made by the surrender of a Warrant or Warrants
represented by one or more Warrant Certificates and without payment of the
Exercise Price in cash, in exchange for the issuance of such number of shares of
Common Stock equal to the product of (1) the number of shares of Common Stock
for which such Warrants would otherwise then be nominally exercised if payment
of the Exercise Price were being made in cash and (2) the Cashless Exercise
Ratio.
The Warrant Agreement provides that upon the occurrence of certain events the
number of shares of Common Stock issuable upon the exercise of each Warrant
shall, subject to certain conditions, be adjusted.
In the event the Company enters into a Combination following which this Warrant
remains outstanding, the Holder hereof will be entitled to receive upon exercise
of the Warrants the shares of capital stock or other securities or other
property of such surviving entity as such Holder would have been entitled to
receive upon or as the result of such Combination had the Holder exercised its
Warrants immediately prior to such Combination; provided, however, that in the
event that, in connection with such Combination, consideration to holders of
shares of Common Stock in exchange for their shares is payable solely in cash or
in the event of the dissolution, liquidation or winding-up of the Company, the
Holder hereof will be entitled to receive distributions on an equal basis with
the holders of shares of Common Stock or other securities issuable upon exercise
of the Warrants, as if the Warrants had been exercised immediately prior to such
events, less the Exercise Price.
The Company may require payment of a sum sufficient to pay all taxes,
assessments or other governmental charges in connection with the transfer or
exchange of the Warrant Certificates pursuant to Section 3.6 of the Warrant
Agreement but not for any exchange or original issuance (not involving a
transfer) with respect to the exercise of the Warrants or the Warrant Shares.
Upon any partial exercise of the Warrants, there shall be issued to the Holder
hereof a new Warrant Certificate in respect of the Warrant Shares as to which
the Warrants shall not have been exercised. This Warrant Certificate may be
exchanged at the office of the Company by presenting this Warrant Certificate
properly endorsed with a request to exchange this Warrant Certificate for other
Warrant Certificates evidencing an equal number of Warrants. In the event any
fractional Warrant Shares would have to be issued upon the exercise of the
Warrants, the Company may, at its option, pay an amount in cash equal to the
Current Market Value for one Warrant Share on the Business Day immediately
preceding the date the Warrant is exercised, multiplied by such fraction, in
lieu of issuing such fractional share.
18
The Warrants do not entitle any holder hereof to any of the rights of a
stockholder of the Company. All shares of Common Stock issuable by the Company
upon the exercise of the Warrants shall, upon such issue, be duly and validly
issued and fully paid and non-assessable.
The Holder of this Warrant Certificate may be deemed and treated by the Company
as the absolute owner of the Warrant Certificate for all purposes whatsoever and
the Company shall not be affected by notice to the contrary.
FORM OF ELECTION TO PURCHASE WARRANT SHARES
(to be executed only upon exercise of Warrants)
[ ]
The undersigned hereby irrevocably elects to exercise ____________ Warrants at
an exercise price per Warrant Share of $________ to acquire an equal number of
Warrant Shares on the terms and conditions specified in the within Warrant
Certificate and the Warrant Agreement therein referred to, surrenders this
Warrant Certificate and all right, title and interest therein to
XxxxxxXxxxxxxx.xxx, Inc., and directs that the shares of Common Stock
deliverable upon the exercise of such Warrants be registered or placed in the
name and at the address specified below and delivered thereto.
Date:
-------------------------
-------------------------------
(Signature of Owner)
-------------------------------
(Street Address)
-------------------------------
(City) (State) (Zip Code)
Securities and/or check to be issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
Any unexercised Warrants evidenced by the within Warrant Certificate to be
issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
