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EXHIBIT 4.8
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X'XXXXXXXX INDUSTRIES HOLDINGS, INC.
Class B Warrant to Purchase
93,273 Shares of Common Stock
Amended and Restated Class B Warrant Agreement
Dated as of November 30, 1999
Amended and Restated as of January 31, 2000
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AMENDED AND RESTATED CLASS B WARRANT AGREEMENT (this "AGREEMENT"), dated as
of January 31, 2000 between X'Xxxxxxxx Industries Holdings Inc., a Delaware
corporation (the "COMPANY"), and BancBoston Investments, Inc., a Massachusetts
corporation ("HOLDER").
WHEREAS, on November 30, 1999, the Company issued a Class B warrant (the
"Original Warrant") to initially purchase an aggregate of 93,273 shares of
Common Stock, par value $0.01 per share, of the Company pursuant to a Warrant
Agreement dated as of November 30, 1999 (the "Original Warrant Agreement")
between the Company and Bruckmann, Xxxxxx, Xxxxxxxx & Co., II, L.P. (the
"Original Holder"), in connection with the purchase by the Original Holder of
$15,000,000 principal amount in 12% Senior Notes due 2009 of the Company
pursuant to the Securities Purchase Agreement dated as of November 30, 1999
between the Company and the Original Holder;
WHEREAS, pursuant to an Assignment Agreement dated as of the date hereof
(the "Assignment Agreement") between the Original Holder and the Holder, on the
date hereof the Original Holder is selling to the Holder, and the Holder is
purchasing from the Original Holder, the Original Warrant;
WHEREAS, it is a condition to the closing of the Assignment Agreement that
the Company amend and restate the Original Agreement in the form of this
Agreement;
WHEREAS, the Company now desires to amend and restate the Original
Agreement in the form of this Agreement; and
WHEREAS, the Company will issue a Class B warrant (the "WARRANT") to
initially purchase an aggregate of 93,273 shares of Common Stock, par value
$0.01 per share (the "COMMON STOCK"), of the Company (the Common Stock issuable
on exercise of the Warrants being referred to herein as the "WARRANT SHARES"),
in connection with Holder's purchase of $15,000,000 principal amount in 12%
Senior Notes due 2009 (the "SENIOR NOTES") of the Company pursuant to the
Assignment Agreement and the Amended and Restated Securities Purchase Agreement
dated the date hereof between the Company and Holder.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto agree as follows:
SECTION 1. CERTAIN DEFINITIONS.
As used in this Agreement, the following terms shall have the following
respective meanings:
"AFFILIATE" of any Person means any other Person directly or indirectly
controlling or 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 used with respect to any Person shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of such specified Person, whether through the ownership
of voting securities, by agreement or otherwise;
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provided that beneficial ownership of 10% or more of the voting securities of a
Person shall be deemed to be control.
"BUSINESS DAY" means any day other than a Legal Holiday.
"COVERED HOLDER" means each holder of Warrants or Non-Public Warrant
Shares.
"DESIGNATED HOLDER" shall mean any Person or Persons holding in the
aggregate more than 50% of the aggregate Warrants and Warrant Shares then
outstanding.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"HOLDER" is defined in the recitals hereto.
"NONPUBLIC WARRANT SHARES" shall mean Warrant Shares that have not been
sold to the public (or pursuant to Rule 144, Rule 144A or Regulation S under the
Securities Act) and bear the legend set forth in Section 6 of the Stockholders
Agreement.
"ORIGINAL HOLDER" is defined in the recitals hereto.
"OWNERSHIP PERCENTAGE" for any Covered Holder means the percentage
calculated by dividing (i) the sum of (A) the number of shares of Common Stock
held by such holder plus (B) the number of shares of Common Stock then issuable
to such holder upon the exercise of all outstanding options and warrants and the
conversion of all outstanding convertible securities held by such holder, by
(ii) the total number of shares of Common Stock then outstanding on a fully
diluted basis.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof, including any
subdivision or ongoing business of any such entity or substantially all of the
assets of any such entity, subdivision or business.
"PRIVATE PLACEMENT AND TRANSFER RESTRICTION LEGEND" means the legend set
forth in Section 2.2(b) to be placed on all Warrants issued under this Warrant
Agreement except where otherwise permitted by the provisions of this Warrant
Agreement.
"PUBLIC EQUITY OFFERING" shall mean an underwritten offering of Common
Stock pursuant to a registration statement that has been declared effective by
the Commission pursuant to the Securities Act (other than a registration
statement on Form S-8 or otherwise relating to equity securities issuable under
any employee benefit plan of the Company).
"PUT COMMENCEMENT DATE" shall mean each of the following dates occurring
prior to an IPO: the date on which the holders of the Warrants and Nonpublic
Warrant Shares receive the audited financial statements of the Company and its
subsidiaries required to be delivered pursuant to the Amended and Restated
Securities Purchase Agreement dated the date hereof between the Company and the
Holder for the Company's fiscal year ended June 30, 2005 and for each of the
Company's fiscal years thereafter.
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"PUT PERIOD" shall mean, collectively, each period commencing on a Put
Commencement Date and ending on the earliest of (a) the date that is 60 days
after such Put Commencement Date, (b) the Expiration Date and (c) the date of
the IPO.
"REGISTRATION RIGHTS AGREEMENT" means the registration rights agreement,
dated as of November 30, 1999, by and among the Company, the Original Holder and
the other parties thereto.
"RULE 144" means Rule 144 promulgated under the Securities Act.
"RULE 144A" means Rule 144A promulgated under the Securities Act.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SENIOR CREDIT AGREEMENT" means the Credit Agreement dated as of November
30, 1999 among X'Xxxxxxxx Industries, Inc., the Company, Xxxxxx Commercial Paper
Inc., as Arranger, syndication agent and administrative agent, and the other
entities from time to time parties thereto providing for revolving credit
borrowings and term loans, including any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith, and in
each case as amended, modified, renewed, refunded, restructured, replaced or
refinanced from time to time including increases in principal amount (whether
the same are provided by the original lenders under such Senior Credit Agreement
or a successor agent or other lenders).
"STOCKHOLDERS' AGREEMENT" means the stockholders' agreement, dated as of
November 30, 1999, by and among the Company, the Original Holder and other
parties thereto.
SECTION 2. ISSUANCE OF WARRANTS; WARRANT CERTIFICATES.
2.1. FORM AND DATING.
The Warrant shall be substantially in the form of Exhibit A hereto (the
"WARRANT CERTIFICATE"). The Warrant may have notations, legends or endorsements
required by law, stock exchange rule or usage. The Warrant shall be dated the
date hereof.
The terms and provisions contained in the Warrants shall constitute, and
are hereby expressly made, a part of this Warrant Agreement. The Company and the
Holder, by their execution and delivery of this Warrant Agreement, expressly
agree to such terms and provisions and to be bound thereby. However, to the
extent any provision of the Warrant conflicts with the express provisions of
this Warrant Agreement, the provisions of this Warrant Agreement shall govern
and be controlling.
2.2. TRANSFER AND EXCHANGE.
(a) Subject to the transfer conditions referred to in the legends endorsed
on the Warrant, the Warrant and all rights thereunder are transferable in whole
or in part, without charge to the registered holder, upon surrender of the
Warrant with a properly executed Assignment (in the form of Exhibit B hereto) at
the principal office of the Company.
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(b) Legend.
The following legend shall appear on the face of all the Warrants issued
under this Warrant Agreement unless specifically stated otherwise in the
applicable provisions of this Warrant Agreement.
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
(THE "SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR
IN ACCORDANCE WITH AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (SUBJECT TO THE DELIVERY OF SUCH EVIDENCE, IF ANY, REQUIRED
UNDER THE WARRANT AGREEMENT PURSUANT TO WHICH THIS SECURITY IS ISSUED) AND IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER JURISDICTION. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER
OR ANOTHER EXEMPTION UNDER THE SECURITIES ACT. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY
MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PURCHASER IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d)
IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B)
THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN
(A) ABOVE. THIS WARRANT AND THE WARRANT SHARES UNDERLYING THIS WARRANT ARE ALSO
SUBJECT TO CERTAIN TRANSFER AND OTHER RESTRICTIONS CONTAINED IN A STOCKHOLDERS'
AGREEMENT AND A REGISTRATION RIGHTS AGREEMENT, EACH DATED NOVEMBER 30, 1999.
COPIES OF THE STOCKHOLDERS AND REGISTRATION RIGHTS AGREEMENTS MAY BE OBTAINED BY
THE HOLDER HEREOF UPON WRITTEN REQUEST TO THE COMPANY."
2.3. REPLACEMENT WARRANTS.
If a mutilated Warrant is surrendered to the Company and the Company
receives evidence to its satisfaction of the destruction, loss or theft of the
Warrant, the Company shall issue a replacement Warrant. If required by the
Company, an indemnity bond must be supplied by the Holder that is sufficient in
the reasonable judgment of the Company to protect the Company from any loss that
it may suffer if a Warrant is replaced. The Company may charge for its expenses
in replacing a Warrant.
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Every replacement Warrant is an additional warrant of the Company and shall
be entitled to all of the benefits of this Warrant Agreement equally and
proportionately with all other Warrants duly issued hereunder.
SECTION 3. TERMS OF THE WARRANT; EXERCISE OF THE WARRANT.
3.1. Subject to the terms of this Agreement, each Warrant holder shall have
the right, which may be exercised during the period commencing the date hereof
and until 5:00 p.m., New York City time on October 15, 2009 (the "EXERCISE
PERIOD"), 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 (the "EXERCISE
PRICE") either by (i) a bank or certified check payable to the Company in an
amount equal to the product of the Exercise Price multiplied by the number of
shares of Warrant Shares being purchased upon such exercise (the "AGGREGATE
EXERCISE PRICE"), (ii) the surrender to the Company of securities of the Company
or its subsidiaries having a Market Value equal to the Aggregate Exercise Price
of the Warrant Shares being purchased upon such exercise (provided that for
purposes of this subparagraph, and notwithstanding the definition of Market
Value set forth below, the Market Value of any note or other debt security or
any preferred stock shall be deemed to be equal to the aggregate outstanding
principal amount or liquidation value thereof plus all accrued and unpaid
interest thereon or accrued and unpaid dividends thereon) or (iii) a written
notice to the Company that the Holder is exercising the Warrant (or a portion
thereof) and authorizing the Company to withhold from issuance a number of
Warrant Shares issuable upon such exercise of the Warrant which when multiplied
by the Market Value of the Warrant Shares is equal to the Aggregate Exercise
Price (and such withheld shares shall no longer be issuable under this Warrant).
Each Warrant not exercised prior to 5:00 p.m., New York City time, on October
15, 2009 (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.
No adjustments as to dividends will be made upon exercise of the Warrants.
The "MARKET VALUE" per share of Common Stock as of any date shall equal (i)
if Common Stock is primarily traded on a securities exchange, the last sale
price on such securities exchange on the trading day immediately prior to the
date of determination, or if no sale occurred on such day, the mean between the
closing "bid" and "asked" prices on such day, (ii) if the principal market for
Common Stock is in the over-the-counter market, the closing sale price on the
trading day immediately prior to the date of the determination, as published by
the National Association of Securities Dealers Automated Quotation System or
similar organization, or if such price is not so published on such day, the mean
between the closing "bid" and "asked" prices, if available, on such day, which
prices may be obtained from any reputable pricing service, broker or dealer, and
(iii) if neither clause (i) nor clause (ii) is applicable, the fair market value
on the date of determination of Common Stock as determined in good faith by the
Board of Directors of the Company.
3.2. In order to exercise all or any of the Warrants represented by the
Warrant Certificate, the Holder must surrender for exercise the Warrant
Certificate to the Company together with the form of election to purchase on the
reverse thereof duly filled in and signed, and upon payment to the Company of
the Exercise Price, which is set forth in the form of Warrant Certificate
attached hereto as Exhibit A, as adjusted as herein provided, for the number of
Warrant Shares in respect of which such Warrants are then exercised.
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3.3. Subject to the provisions of Section 5 hereof, upon compliance with
clause (b) above, the Company shall deliver or cause to be delivered with all
reasonable dispatch, to or upon the written order of the Holder and in such name
or names as the Holder may designate, a certificate or certificates for the
number of whole Warrant Shares issuable upon the exercise of such Warrants or
other securities or property to which such holder is entitled hereunder,
together with cash as provided in Section 9 hereof; provided that if any
consolidation, merger or lease or sale of assets is proposed to be effected by
the Company as described in Section 8(l) hereof, or a tender offer or an
exchange offer for shares of Common Stock shall be made, upon such surrender of
Warrants and payment of the Exercise Price as aforesaid, the Company shall, as
soon as possible, but in any event not later than two business days thereafter,
deliver or cause to be delivered the full number of Warrant Shares issuable upon
the exercise of such Warrants in the manner described in this sentence or other
securities or property to which such holder is entitled hereunder, together with
cash as provided in Section 9 hereof. Such certificate or certificates shall be
deemed to have been issued and any Person so designated to be named therein
shall be deemed to have become a holder of record of such Warrant Shares as of
the date of the surrender of such Warrants and payment of the Exercise Price.
3.4. The Warrants shall be exercisable, at the election of the Holder,
either in full or from time to time in part. If less than all the Warrants
represented by the Warrant Certificate are exercised, the Warrant Certificate
shall be surrendered and a new Warrant Certificate of the same tenor and for the
number of Warrants which were not exercised shall be executed by the Company,
registered in such name or names as may be directed in writing by the Holder,
and the Company shall deliver the new Warrant Certificate to the Person or
Persons entitled to receive the same.
3.5. All Warrant Certificates surrendered upon exercise of Warrants shall
be canceled by the Company.
3.6. The Company shall keep copies of this Agreement and any notices given
or received hereunder available for inspection by the Holder during normal
business hours at its office.
SECTION 4. PUT.
4.1. Put Option. At the written request of any Designated Holder which
shall be irrevocable (each, a "Put Notice") made during any Put Period
requesting the Company to purchase all Warrants and/or Nonpublic Warrant Shares
held by such Designated Holder, the Company shall promptly give written notice
of such request to all other holders of Warrants and/or Nonpublic Warrant Shares
notifying such holders of the inclusion of all their Warrants and Nonpublic
Warrant Shares in such Put Notice and purchase all the Warrants and/or Nonpublic
Warrant Shares specified in such Put Notice and held by any other holder of
Warrants and/or Nonpublic Warrant Shares other than the Designated Holder who
gave such Put Notice (the "Put Option"). Except as set forth in Section 4(e),
the Put Option may be exercised on no more than one occasion. The aggregate
purchase price payable by the Company to all holders upon any exercise of the
Put Option shall be the product of (A) the aggregate number of Warrants and
Nonpublic Warrant Shares and (B) the Put Price (as defined below) (such
aggregate amount being the "Aggregate Put Amount"). The Aggregate Put Amount
shall be apportioned to each selling holder hereunder in accordance with the
aggregate number of the Warrants and Nonpublic Warrant Shares of such holder.
The portion of the Aggregate Put Amount payable to each holder shall be reduced
by an amount equal to the product of (1) the number of Warrants of such holder
and (2) the Exercise Price that would have been payable had each such Warrant
been exercised.
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4.2. The Put Price shall be determined as of the date of the Put Notice,
such determination to be made no later than 45 days thereafter. The "Put Price"
shall mean the fair market value per Warrant and/or Nonpublic Warrant Share
being purchased as determined in good faith by the Board of Directors of the
Company (and delivered in a written notice demonstrating in reasonable detail to
the holders of the Warrants and Nonpublic Warrant Shares being purchased), or if
a Designated Holder shall in the exercise of its sole discretion, object to any
such determinations, by an independent investment banking firm mutually selected
by the Company and the Designated Holders being purchased (50% of the cost of
the engagement of said investment banking firm to be borne by the Company and
50% of such cost to be borne by all selling holders of Warrants and Nonpublic
Warrant Shares, such cost to be divided among them pro rata based on the number
of Nonpublic Warrant Shares being sold by each of them; provided that if the Put
Price determined by such investment banking firm is more than 115% of the Put
Price determined by the Board of Directors of the Company, such cost shall be
borne by the Company); provided that if the Fair Value per share has been
determined pursuant to 8(g) within six months prior to any date as of which the
fair market value per Warrant and/or Nonpublic Warrant Share is to be determined
pursuant to this sentence, then such Fair Value per share shall constitute the
fair market value per Warrant and/or Nonpublic Warrant Share for purposes of
this sentence.
4.3. The Company shall purchase the Warrants and Nonpublic Warrant Shares
to be sold by each selling holder on a date designated in writing by the Company
to each holder (the "PUT CLOSING DATE"). The Put Closing Date shall be no later
than 90 days after the determination of the Put Price in connection with such
exercise of the Put Option.
4.4. On the Put Closing Date, each selling holder shall surrender its
Warrants and Nonpublic Warrant Shares to the Company without any representation
or warranty (other than that such holder has (i) good and valid title thereto
free and clear of liens, claims, encumbrances and restrictions of any kind
created by such holder and (ii) the power and authority to surrender such
Warrants and Nonpublic Warrant Shares), against payment therefor by (at the
option of such holder), (1) wire transfer to an account in a bank located in the
United States designated by such holder for such purpose or (2) a certified or
official bank check drawn on a member of the New York Clearing House payable to
the order of such holder.
4.5. In the event that the Company is prohibited by the terms of the Senior
Credit Agreement or the terms of the X'Xxxxxxxx Industries, Inc. 13-3/8% Senior
Subordinated Notes due 2009 from repurchasing the Warrants or the Nonpublic
Warrant Shares for cash, the Company shall pay the Aggregate Put Amount by
issuing to the holders promissory notes in the initial aggregate principal
amount of the Aggregate Put Amount. Such notes shall bear interest at the
greater of (i) Fleet Boston's Base Rate plus 500 basis points and (ii) 12% per
annum, payable semi-annually in arrears in cash or in kind at the Company's
option. Such notes will rank pari pasu with, amortize at the same rate and times
as, and be entitled to all of the covenants, rights and benefits of, the Senior
Notes under the Amended and Restated Securities Purchase Agreement dated as of
the date hereof, between the Company and the Holder.
SECTION 5. PAYMENT OF TAXES.
The Company will pay all documentary stamp taxes attributable to the
initial issuance of Warrant Shares upon the exercise of the Warrant; provided
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 any certificates for Warrant Shares in a name other than that of
the registered
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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.
SECTION 6. RESERVATION OF WARRANT SHARES.
6.1. The Company will at all times reserve and keep available, free from
preemptive rights, out of the aggregate of its authorized but unissued Common
Stock or its authorized and issued Common Stock held in its treasury, for the
purpose of enabling it to satisfy any obligation to issue Warrant Shares upon
exercise of the Warrant, the maximum number of shares of Common Stock which may
then be deliverable upon the exercise of all outstanding Warrants.
6.2. The Company or, if appointed, the transfer agent for the Common Stock
(the "TRANSFER AGENT") and every subsequent transfer agent for any shares of the
Company's capital stock issuable upon the exercise of any of the rights of
purchase aforesaid will be irrevocably authorized and directed at all times to
reserve such number of authorized shares as shall be required for such purpose.
The Company will keep a copy of this Agreement on file with the Transfer Agent
and with every subsequent transfer agent for any shares of the Company's capital
stock issuable upon the exercise of the rights of purchase represented by the
Warrants. The Company will supply such Transfer Agent with duly executed
certificates for such purposes and will provide or otherwise make available any
cash which may be payable as provided in Section 9 hereof. The Company will
furnish such Transfer Agent a copy of all notices of adjustments, and
certificates related thereto, transmitted to each holder pursuant to Section 10
hereof.
6.3. Before taking any action which would cause an adjustment pursuant to
Section 8 hereof to reduce the Exercise Price below the then par value (if any)
of the Warrant Shares, the Company will take any corporate action which may, in
the opinion of its counsel (which may be counsel employed by the Company), be
necessary in order that the Company may validly and legally issue fully paid and
nonassessable Warrant Shares at the Exercise Price as so adjusted.
6.4. The Company covenants that all Warrant Shares which may be issued upon
exercise of Warrants will, upon issue, be fully paid, nonassessable, free of
preemptive rights and free from all taxes, liens, charges and security interests
with respect to the issuance thereof.
SECTION 7. OBTAINING STOCK EXCHANGE LISTINGS.
The Company will from time to time take all action which may be necessary
so that the Warrant Shares, immediately upon their issuance upon the exercise of
the Warrant, will be listed on the principal securities exchanges, automated
quotation systems or other markets within the United States of America, if any,
on which other shares of Common Stock are then listed, if any.
SECTION 8. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES ISSUABLE.
The Exercise Price and the number of Warrant Shares issuable upon the
exercise of the Warrant are subject to adjustment from time to time upon the
occurrence of the events enumerated in this Section 8. For purposes of this
Section 8, "COMMON STOCK" means shares now or hereafter
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authorized of any class of common stock of the Company and any other stock of
the Company, however designated, that has the right (subject to any prior rights
of any class or series of preferred stock) to participate in any distribution of
the assets or earnings of the Company without limit as to per share amount.
8.1. Adjustment for Change in Capital Stock.
If the Company (i) pays a dividend or makes a distribution on its Common
Stock in shares of its Common Stock, (ii) subdivides its outstanding shares of
Common Stock into a greater number of shares, (iii) combines its outstanding
shares of Common Stock into a smaller number of shares, (iv) makes a
distribution on its Common Stock in shares of its capital stock other than
Common Stock or (v) issues by reclassification of its Common Stock any shares of
its capital stock, then the Exercise Price in effect immediately prior to such
action shall be proportionately adjusted so that the holder of any Warrant
thereafter exercised may receive the aggregate number and kind of shares of
capital stock of the Company which he would have owned immediately following
such action if such Warrant had been exercised immediately prior to such action.
The adjustment shall become effective immediately after the record date in
the case of a dividend or distribution and immediately after the effective date
in the case of a subdivision, combination or reclassification. 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, in
good faith, the allocation of the adjusted Exercise Price between the classes of
capital stock. After such allocation, the exercise privilege and the Exercise
Price of each class of capital stock shall thereafter be subject to adjustment
on terms comparable to those applicable to Common Stock in this Section 8. Such
adjustment shall be made successively whenever any event listed above shall
occur.
8.2. Adjustment for Rights Issue.
If the Company distributes any rights, options or warrants to all holders
of its Common Stock entitling them for a period expiring within 45 days after
the record date mentioned below to purchase shares of Common Stock at a price
per share less than the Fair Value (as defined herein) per share on that record
date, the Exercise Price shall be adjusted in accordance with the formula:
O + N x P
-----
E' = E x M
----------------
O + N
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
O = the number of shares of Common Stock outstanding on the
record date.
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N = the number of additional shares of Common Stock issued
pursuant to such rights, options or warrants.
P = the aggregate price per share of the additional shares.
M = the Fair Value per share of Common Stock on the record date.
The adjustment shall be made successively whenever any such rights, options
or warrants are issued and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the rights,
options or warrants. If at the end of the period during which such rights,
options or warrants are exercisable, not all rights, options or warrants shall
have been exercised, the Exercise Price shall be immediately readjusted to what
it would have been if "N" in the above formula had been the number of shares
actually issued.
8.3. Adjustment for Other Distributions.
If the Company distributes to all holders of its Common Stock any of its
assets (including cash), debt securities, preferred stock or any rights or
warrants to purchase debt securities, preferred stock, assets (including cash)
or other securities of the Company, the Exercise Price shall be adjusted in
accordance with the formula:
M - F
E' = E x --------------------
M
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
M = the Fair Value per share of Common Stock on the
record date mentioned below.
F = the fair market value on the record date
of the debt securities, preferred stock,
assets, securities, rights or warrants to be
distributed in respect of one share of
Common Stock as determined in good faith by
the Board of Directors of the Company (the
"Board of Directors").
The adjustment shall be made successively whenever any such distribution is
made and shall become effective immediately after the record date for the
determination of stockholders entitled to receive the distribution.
This Section 8(c) does not apply to cash dividends or cash distributions
paid out of consolidated current or retained earnings as shown on the books of
the Company prepared in accordance with generally accepted accounting
principles. Also, this Section 8(c) does not apply to rights, options or
warrants referred to in Section 8(b) hereof
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8.4. Adjustment for Common Stock Issue.
If the Company issues shares of Common Stock for a consideration per share
less than the Fair Value per share on the date the Company fixes the offering
price of such additional shares, the Exercise Price shall be adjusted in
accordance with the formula:
P
----
E' = E x O + M
-----------
A
where:
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares outstanding immediately prior to the
issuance of such additional shares.
P = the aggregate consideration received for the issuance of
such additional shares.
M = the Fair Value per share on the date of issuance of such
additional shares.
A = the number of shares outstanding immediately after the
issuance of such additional shares.
The adjustment shall be made successively whenever any such issuance is
made, and shall become effective immediately after such issuance.
This subsection (d) does not apply to:
(1) any of the transactions described in subsections (a), (b) and (c)
of this Section 8,
(2) the exercise of Warrants, or the conversion or exchange of other
securities convertible or exchangeable for Common Stock the issuance of
which caused an adjustment to be made under Section 8(e),
(3) Common Stock issued to the Company's employees, directors or
consultants (or any of the foregoing of its subsidiaries) under bona fide
employee benefit plans adopted by the Board of Directors and approved by
the holders of Common Stock when required by law, if such Common Stock
would otherwise be covered by this subsection (d) (but only to the extent
that the aggregate number of shares excluded hereby and issued after the
date of this Warrant Agreement shall not, together with the shares of
Common Stock underlying the options described in the last paragraph of
subsection 8(b) hereof, exceed 10% of the Common Stock
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outstanding at the time of the adoption of each such plan, exclusive of
anti-dilution adjustments thereunder),
(4) Common Stock issued to shareholders of any Person which merges
into the Company, or with a subsidiary of the Company, in proportion to
their stock holdings of such Person immediately prior to such merger, upon
such merger, provided that if such Person is an Affiliate of the Company,
the Board of Directors shall have obtained a fairness opinion from a
nationally recognized investment banking, appraisal or valuation firm,
which is not an Affiliate of the Company, stating that the consideration
received in such merger is fair to the Company from a financial point of
view, or
(5) the issuance of shares of Common Stock pursuant to rights, options
or warrants which were originally issued in a Non-Affiliate Sale (as
defined below) together with one or more other securities as part of a unit
at a price per unit; including without limitation, the warrants issued in
connection with the offering by the Company and X'Xxxxxxxx Industries, Inc.
of 100,000 units, each consisting of $1,000 principal amount of maturity of
X'Xxxxxxxx Industries, Inc. 13 3/8% Senior Subordinated Notes due 2009, one
warrant to purchase shares of the Company's Common Stock and one warrant to
purchase shares of the Company's Series B junior preferred stock.
(6) the issuance of shares of Common Stock issuable upon exercise of
the warrants issued pursuant to the Warrant Agreement, dated November 30,
1999, between the Company and Norwest Bank Minnesota, National Association,
as warrant agent.
8.5. Adjustment for Convertible Securities Issue.
If the Company issues any securities convertible into or exchangeable for
Common Stock (other than securities issued in transactions described in
subsections (a), (b) and (c) of this Section 8) for a consideration per share of
Common Stock initially deliverable upon conversion or exchange of such
securities less than the Fair Value per share on the date of issuance of such
securities, the Exercise Price shall be adjusted in accordance with this
formula:
P
-----
O + M
E' = E x -------
O + D
where:
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares outstanding immediately prior
to the issuance of such securities.
P = the aggregate consideration received for the
issuance of such securities.
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M = the Fair Value per share on the date of
issuance of such securities.
D = the maximum number of shares deliverable upon
conversion or in exchange for such securities
at the initial conversion or exchange rate.
The adjustment shall be made successively whenever any such issuance is
made, and shall become effective immediately after such issuance.
If all of the Common Stock deliverable upon conversion or exchange of
such securities have not been issued when such securities are no longer
outstanding, then the Exercise Price shall promptly be readjusted to the
Exercise Price which would then be in effect had the adjustment upon the
issuance of such securities been made on the basis of the actual number of
shares of Common Stock issued upon conversion or exchange of such securities.
This subsection (e) does not apply to convertible securities issued to
shareholders of any person which merges into the Company, or with a subsidiary
of the Company, in proportion to their stock holdings of such person
immediately prior to such merger, upon such merger, provided that if such
person is an Affiliate of the Company, the Board of Directors shall have
obtained a fairness opinion from a nationally recognized investment banking,
appraisal or valuation firm, which is not an Affiliate of the Company,
stating that the consideration received in such merger is fair to the Company
from a financial point of view.
8.6. Consideration Received.
For purposes of any computation respecting consideration received
pursuant to subsections (d), and (e) of this Section 8, the following shall
apply:
(1) in the case of the issuance of shares of Common Stock for cash,
the consideration shall be the amount of such cash, provided that in no
case shall any deduction be made for any commissions, discounts or other
expenses incurred by the Company for any underwriting of the issue or
otherwise in connection therewith;
(2) in the case of the issuance of shares of Common Stock for a
consideration in whole or in part other than cash, the consideration
other than cash shall be deemed to be the fair market value thereof as
determined in good faith by the Board of Directors (irrespective of the
accounting treatment thereof), whose determination shall be conclusive,
and described in a Board resolution which shall be delivered to the
Holder;
(3) in the case of the issuance of securities convertible into or
exchangeable for shares, the aggregate consideration received therefor
shall be deemed to be the consideration received by the Company for the
issuance of such securities plus the additional minimum consideration, if
any, to be received by the Company upon the conversion or exchange
thereof (the consideration in each case to be determined in the same
manner as provided in clauses (1) and (2) of this subsection); and
(4) in the case of the issuance of shares of Common Stock pursuant
to rights, options or warrants which rights, options or warrants were
originally issued together with one or more other securities as part of a
unit at a price per unit, the consideration shall be deemed to be the
fair value of such rights, options or warrants at the time of issuance
thereof as
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determined in good faith by the Board of Directors whose determination
shall be conclusive and described in a Board resolution which shall be
delivered to the Holder plus the additional minimum consideration, if any,
to be received by the Company upon the exercise, conversion or exchange
thereof (as determined in the same manner as provided in clauses (1) and
(2) of this subsection).
8.7. Fair Value.
In Sections 8(b), (c), (d) and (e) and Section 9 hereof, the "FAIR VALUE"
per security at any date of determination shall be (1) in connection with a sale
by the Company to a party that is not an Affiliate of the Company in an
arm's-length transaction (a "NON-AFFILIATE SALE"), the price per security at
which such security is sold and (2) in connection with any sale by the Company
to an Affiliate of the Company, (a) the last price per security at which such
security was sold in a Non-Affiliate Sale within the three-month period
preceding such date of determination or (b) if clause (a) is not applicable, the
fair market value of such security determined in good faith by (i) a majority of
the Board of Directors, including a majority of the Disinterested Directors, and
approved in a Board resolution delivered to the Holder or (ii) a nationally
recognized investment banking, appraisal or valuation firm, which is not an
Affiliate of the Company, in each case, taking into account, among all other
factors deemed relevant by the Board of Directors or such investment banking,
appraisal or valuation firm, the trading price and volume of such security on
any national securities exchange or automated quotation system on which such
security is traded.
For purposes of this Section 8(g), "DISINTERESTED DIRECTOR" means, in
connection with any issuance of securities that gives rise to a determination of
the Fair Value thereof, each member of the Board of Directors who is not an
officer, employee, director or other Affiliate of the party to whom the Company
is proposing to issue the securities giving rise to such determination.
For purposes of this Section 8(g), "AFFILIATE" of any specified Person
means (A) any other Person directly or indirectly controlling or controlled by
or under direct or indirect common control with such specified Person and (B)
any director, officer or employee of such specified person. For purposes of this
definition "CONTROL" (including, with correlative meanings, the terms
"CONTROLLING," "CONTROLLED BY" and "UNDER COMMON CONTROL WITH") as used with
respect to any Person, shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities, by agreement or
otherwise.
8.8. When De Minimis Adjustment May Be Deferred.
No adjustment in the Exercise Price need be made unless the adjustment
would require an increase or decrease of at least 1% in the Exercise Price. Any
adjustments that are not made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 8 shall be made
to the nearest one-one thousandth of a cent or to the nearest one-one thousandth
of a share, as the case may be, it being understood that no such rounding shall
be made under subsection (p).
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8.9. When No Adjustment Required.
No adjustment need be made for a transaction referred to Section 8(a), (b),
(c), (d), (e) or (f) hereof, if the Holder is to participate (without being
required to exercise its Warrants) in the transaction on a basis and with notice
that the Board of Directors determines to be fair and appropriate in light of
the basis and notice on which holders of Common Stock participate in the
transaction. No adjustment need be made for (i) rights to purchase Common Stock
pursuant to a Company plan for reinvestment of dividends or interest or (ii) a
change in the par value or no par value of the Common Stock. To the extent the
Warrants become convertible into cash, no adjustment need be made thereafter as
to the cash. Interest will not accrue on the cash.
8.10. Notice of Adjustment.
Whenever the Exercise Price is adjusted, the Company shall provide the
notices required by Section 10 hereof.
8.11. Notice of Certain Transactions.
If (i) the Company takes any action that would require an adjustment in the
Exercise Price pursuant to Section 8(a), (b), (c), (d), (e) or (f) hereof and if
the Company does not arrange for the Holder to participate pursuant to Section
8(i) hereof, (ii) the Company takes any action that would require a supplemental
Warrant Agreement pursuant to Section 8(l) hereof or (iii) there is a
liquidation or dissolution of the Company, then the Company shall mail to the
Holder a notice stating the proposed record date for a dividend or distribution
or the proposed effective date of a subdivision, combination, reclassification,
consolidation, merger, transfer, lease, liquidation or dissolution. The Company
shall mail the notice at least 15 days before such date. Failure to mail the
notice or any defect in it shall not affect the validity of the transaction.
8.12. Reorganization of Company.
Immediately after the date hereof, if the Company consolidates or merges
with or into, or transfers or leases all or substantially all its assets to, any
person, upon consummation of such transaction the Warrants shall automatically
become exercisable for the kind and amount of securities, cash or other assets
which the holder of a Warrant would have owned immediately after the
consolidation, merger, transfer or lease if the holder had exercised the Warrant
immediately before the effective date of the transaction. Concurrently with the
consummation of such transaction, the corporation formed by or surviving any
such consolidation or merger if other than the Company, or the person to which
such sale or conveyance shall have been made, shall enter into (i) a
supplemental Warrant Agreement so providing and further providing for
adjustments which shall be as nearly equivalent as may be practical to the
adjustments provided for in this Section 8(l) and (ii) a supplement to the
Registration Rights Agreement providing for the assumption of the Company's
obligations thereunder. The successor Company shall mail to Warrant holders a
notice describing the supplemental Warrant Agreement and Registration Rights
Agreement. If the issuer of securities deliverable upon exercise of Warrants
under the supplemental Warrant Agreement is an Affiliate of the formed,
surviving, transferee or lessee corporation, that issuer shall join in the
supplemental Warrant Agreement and Registration Rights Agreement. If this
Section 8(l) applies, Sections 8(a), (b), (c), (d), (e) and (f) hereof do not
apply.
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8.13. Company Determination Final.
Any determination that the Company or the Board of Directors must make
pursuant to Section 8(a), (c), (d), (e), (f), (g), (h) or (i) hereof is
conclusive.
8.14. When Issuance or Payment May Be Deferred.
In any case in which this Section 8 shall require that an adjustment in the
Exercise Price be made effective as of a record date for a specified event, the
Company may elect to defer until the occurrence of such event (i) issuing to the
Holder exercised after such record date the Warrant Shares and other capital
stock of the Company, if any, issuable upon such exercise over and above the
Warrant Shares and other capital stock of the Company, if any, issuable upon
such exercise on the basis of the Exercise Price and (ii) paying to Holder any
amount in cash in lieu of a fractional share pursuant to Section 10 hereof;
provided that the Company shall deliver to Holder a due xxxx or other
appropriate instrument evidencing Holder's right to receive such additional
Warrant Shares, other capital stock and cash upon the occurrence of the event
requiring such adjustment.
8.15. Adjustment in Number of Shares.
Upon each adjustment of the Exercise Price pursuant to this Section 8 each
Warrant outstanding prior to the making of the adjustment in the Exercise Price
shall thereafter evidence the right to receive upon payment of the adjusted
Exercise Price that number of shares of Common Stock (calculated to the nearest
hundredth) obtained from the following formula:
N' = N x E
----
E'
where:
N' = the adjusted number of Warrant Shares issuable upon
exercise of a Warrant by payment of the adjusted
Exercise Price.
N = the number or Warrant Shares previously issuable upon
exercise of a Warrant by payment of the Exercise Price
prior to adjustment.
E' = the adjusted Exercise Price.
E = the Exercise Price prior to adjustment.
8.16. Form of Warrants.
Irrespective of any adjustments in the Exercise Price or the number or kind
of shares purchasable upon the exercise of the Warrants, Warrants theretofore or
thereafter issued may continue to express the same price and number and kind of
shares as are stated in the Warrants initially issuable pursuant to this
Agreement.
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SECTION 9. FRACTIONAL INTERESTS.
The Company shall not be required to issue fractional Warrant Shares on the
exercise of Warrants. If more than one Warrant shall be presented for exercise
in full at the same time by the same holder, the number of full Warrant Shares
which shall be issuable upon the exercise thereof shall be computed on the basis
of the aggregate number of Warrant Shares purchasable on exercise of the
Warrants so presented. If any fraction of a Warrant Share would, except for the
provisions of this Section 9, be issuable on the exercise of any Warrant (or
specified portion thereof), the Company shall pay an amount in cash equal to the
Fair Value per Warrant Share, as determined on the day immediately preceding the
date the Warrant is presented for exercise, multiplied by such fraction,
computed to the nearest whole U.S. cent.
SECTION 10. NOTICES TO WARRANT HOLDERS.
10.1. Upon any adjustment of the Exercise Price pursuant to Section 8
hereof, the Company shall promptly thereafter (i) cause to be prepared a
certificate of a firm of independent public accountants of recognized standing
selected by the Board of Directors of the Company (who may be the regular
auditors of the Company) setting forth the Exercise Price after such adjustment
and setting forth in reasonable detail the method of calculation and the facts
upon which such calculations are based and setting forth the number of Warrant
Shares (or portion thereof) issuable after such adjustment in the Exercise
Price, upon exercise of a Warrant and payment of the adjusted Exercise Price,
which certificate shall be conclusive evidence of the correctness of the matters
set forth therein, and (ii) cause to be given to each of the holders of Warrants
at such holder's address as it appears in the records of the Company (unless
otherwise indicated by any such holder) written notice of such adjustments by
first-class mail, postage prepaid. Where appropriate, such notice may be given
in advance and included as a part of the notice required to be mailed under the
other provisions of this Section 10.
10.2. In case:
(i) the Company shall authorize the issuance to all holders of shares
of Common Stock of rights, options or warrants to subscribe for or purchase
shares of Common Stock or of any other subscription rights or warrants;
(ii) the Company shall authorize the distribution to all holders of
shares of Common Stock of evidences of its indebtedness or assets (other
than dividends or cash distributions paid out of consolidated current or
retained earnings as shown on the books of the Company prepared in
accordance with generally accepted accounting principles or dividends
payable in shares of Common Stock or distributions referred to in Section
10(a) hereof);
(iii) of any consolidation or merger to which the Company is a party
and for which approval of any stockholders of the Company is required, or
of the conveyance or transfer of the properties and assets of the Company
substantially as an entirety, or of any reclassification or change of
Common Stock issuable upon exercise of the Warrants (other than a change in
par value, or from par value to no par value, or from no par value to par
value, or as a result of a subdivision or combination), or a tender offer
or exchange offer for shares of Common Stock;
(iv) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
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(v) the Company proposes to take any action (other than actions of the
character described in Section 8(a) hereof) which would require an
adjustment of the Exercise Price pursuant to Section 8 hereof;
then the Company shall cause to be given to each of the registered holders of
Warrants at such holder's address as it appears in the records of the Company
(unless otherwise indicated by any such holder), at least 20 days (or 10 days in
any case specified in clauses (i) or (ii) above) prior to the applicable record
date hereinafter specified, or promptly in the case of events for which there is
no record date, by first-class mail, postage prepaid, a written notice stating
(x) the date as of which the holders of record of shares of Common Stock to be
entitled to receive any such rights, options, warrants or distribution are to be
determined, (y) the initial expiration date set forth in any tender offer or
exchange offer for shares of Common Stock, or (z) the date on which any such
consolidation, merger, conveyance, transfer, dissolution, liquidation or winding
up is expected to become effective or consummated, and the date as of which it
is expected that holders of record of shares of Common Stock shall be entitled
to exchange such shares for securities or other property, if any, deliverable
upon such reclassification, consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding up. The failure to give the notice required
by this Section 10 or any defect therein shall not affect the legality or
validity of any distribution, right, option, warrant, consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding up, or the vote upon
any action.
10.3. Nothing contained in this Agreement or in any of the Warrant
Certificates shall be construed as conferring upon the holders of Warrants the
right to vote or to consent or to receive notice as stockholders in respect of
the meetings of stockholders or the election of directors of the Company or any
other matter, or any rights whatsoever as stockholders of the Company.
SECTION 11. REPORTS
11.1. The Company agrees with Holder, for so long as any Warrants or
Warrant Shares remain outstanding and during any period in which the Company (i)
is not subject to Section 13 or 15(d) of the Exchange Act, to make available,
upon request of Holder, to such Holder or beneficial owner of Warrants or
Warrant Shares in connection with any sale thereof and any prospective purchaser
of such Warrants or Warrant Shares designated by such Holder or beneficial
owner, the information required by Rule 144(A)(d)(4) under the Securities Act in
order to permit resales of such Warrants or Warrant Shares pursuant to Rule
144A, and (ii) is subject to Section 13 or 15(d) of the Exchange Act, to make
all filings required thereby in a timely manner in order to permit resales of
such Warrants or Warrant Shares pursuant to Rule 144A.
SECTION 12. NOTICES TO COMPANY.
Any notice or demand authorized by this Agreement to be given or made by
the registered holder of any Warrant to or on the Company shall be sufficiently
given or made when received if deposited in the mail, first class or registered,
postage prepaid, addressed (until another address is filed in writing by the
Company) as follows:
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X'Xxxxxxxx Industries Holdings, Inc.
0000 Xxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, III, Esq.
With a copy to:
Xxxxxxxx & Xxxxx
International Financial Centre
Xxx Xxxxx Xxxxxx
Xxxxxx XX0X 0XX XX
Telecopier No.: 00 000 000-0000
Attention: X. Xxxxxx Xxxxx, Esq.
SECTION 13. FURTHER AGREEMENTS.
13.1. Public Equity Offering.
The Company agrees that it shall not undertake any initial Public Equity
Offering of common stock of any class other than the class of Common Stock into
which the Warrants are exercisable, unless the Company provides Holders of the
Warrants and Non Public Warrant Shares the ability to convert their Warrant
Shares or to exercise their Warrants for common stock of the same class as is
the subject of the initial Public Equity Offering.
13.2. Investment Company.
The Company agrees that it shall not, and shall not permit any of its
subsidiaries, to take any action that would subject it to the requirements of
the Investment Company Act of 1940.
SECTION 14. SUPPLEMENTS AND AMENDMENTS.
The Company may from time to time supplement or amend this Agreement
without the approval of any holders of Warrants in order to cure any ambiguity
or to correct or supplement any provision contained herein which may be
defective or inconsistent with any other provision herein, or to make any other
provisions in regard to matters or questions arising hereunder which the Company
may deem necessary or desirable and which shall not in any way adversely affect
the interests of the holders of Warrants. Any amendment or supplement to this
Agreement that has an adverse effect on the interests of the holders of Warrants
shall require the written consent of the holders of Warrants exercisable into a
majority of the Warrant Shares. The consent of each holder of Warrants affected
shall be required for any amendment pursuant to which the Exercise Price would
be increased or the number of Warrant Shares purchasable upon exercise of
Warrants would be decreased (other than pursuant to adjustments provided in this
Agreement) or which would affect any holder of Warrants in a manner different
from any other holder of Warrants.
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SECTION 15. SUCCESSORS.
All the covenants and provisions of this Agreement by or for the benefit of
the Company or Holder shall bind and inure to the benefit of their respective
successors and assigns hereunder.
SECTION 16. TERMINATION.
This Agreement shall terminate at 5:00 p.m., New York City time on October
15, 2009. Notwithstanding the foregoing, this Agreement will terminate on any
earlier date if all Warrants have been exercised.
SECTION 17. GOVERNING LAW.
This Agreement and the Warrant Certificate issued hereunder shall be deemed
to be a contract made under the laws of the State of New York and for all
purposes shall be construed in accordance with the internal laws of said State.
SECTION 18. BENEFITS OF THIS AGREEMENT.
Nothing in this Agreement shall be construed to give to any Person other
than the Company and the registered holders of Warrants 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 registered holders of
Warrants.
SECTION 19. 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.
SECTION 20. PREEMPTIVE RIGHTS.
20.1. Except for the issuance of Common Stock (or securities convertible
into or containing options or rights to acquire shares of Common Stock) (i)
pursuant to a Public Equity Offering, (ii) as consideration for the acquisition
of assets or stock of another Person, (iii) pursuant to the exercise of warrants
to purchase capital stock of the Company outstanding as of November 30, 1999,
(iv) pursuant to the terms of any capital stock or stock option issued to an
employee, director or consultant of the Company (or its subsidiaries), (v)
pursuant to a dividend or distribution made in respect of the Common Stock or
Preferred Stock, (vi) pursuant to the terms of any debt financing or (vii)
pursuant to which the Designated Holders have waived their rights to purchase
any securities pursuant to this Section 20, if the Company authorizes the
issuance and sale of any shares of any class of capital stock or any securities
convertible into or containing options or rights to acquire any shares of any
class of capital stock (such issuance and sale, a "Covered Offering" and the
securities proposed to be issued and sold thereunder, the "Offered Securities"),
the Company will first offer to sell to each Covered Holder a quantity of the
Offered Securities calculated by multiplying (x) the total number of Offered
Securities by (y) such holder's Ownership Percentage. Each Covered Holder will
be entitled to purchase such portion of the Offered Securities pursuant to the
terms and conditions set forth in paragraph (b) below.
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20.2. At least 20 days prior to the consummation of any Covered Offering,
the Company shall deliver a written notice (the "Sale Notice") to each Covered
Holder specifying in reasonable detail (i) the quantities and classes of Offered
Securities, (ii) the proposed offering price, (iii) the proposed date, time and
location of the closing of the Covered Offering, and (iv) such other information
necessary for such holder to calculate the number of Offered Securities that it
is entitled to purchase under this Section 20. The Covered Holders may make an
irrevocable election to purchase all or part of such securities, upon the same
terms and conditions and at the same time and place as described in the Sale
Notice, by delivering a written notice of such election to the Company within 10
days after the Sale Notice has been delivered by the Company. Any such election
notice shall specify the quantity of Offered Securities that the electing
Covered Holder is entitled to purchase under this Section 20. If any Covered
Holder elects to purchase Offered Securities pursuant to this Section 20, the
sale of such securities shall be consummated, together with the sale of any
Offered Securities not elected to be purchased under this Section 20, on the
terms and conditions specified in the Sale Notice at the time and place of the
closing of the Covered Offering specified in the Sale Notice or at such other
time (not later than 10 days after the time specified in the Sale Notice) and
place as the Company may decide and communicate to the electing Covered Holders
not less than 2 days prior to such closing. If no Covered Holder elects to
purchase Offered Securities pursuant to this Section 20, the Company shall be
free to sell the Offered Securities within 90 days after the expiration of the
offering period described above on terms and conditions no more favorable to the
purchasers thereof, in the aggregate, than set forth in the Sale Notice. Any
Offered Securities offered or sold by the Company after such 90 day period must
be reoffered to the Covered Holders pursuant to this Section 20.
20.3. Notwithstanding the foregoing provisions of this Section 20, in the
event that, in connection with any issuance and sale of securities of the
Company, a Covered Holder elects to purchase securities of the Company pursuant
to the exercise of any rights of such Covered Holder under Section 20 of the
Company's Amended and Restated Class B Warrant Agreement dated as of November
30, 1999 relating to a Class B Warrant to purchase 39,273 shares of Series B
Junior Preferred Stock of the Company, such Covered Holder shall not be entitled
to purchase securities of the Company pursuant to Section 20 of this Agreement
with respect to such issuance and sale; provided, that the foregoing provisions
of this Section 20.3 shall not apply with respect to any other Covered Holder.
SECTION 21. REGULATORY RESTRICTIONS
21.1 Any other provisions hereof to the contrary notwithstanding, no Person
which is a bank holding company or a subsidiary of a bank holding company (a
"Bank Affiliate") as defined in the Bank Holding Company Act of 1956, as
amended, or other applicable banking laws of the United States of America and
the rules and regulations promulgated thereunder shall be entitled to exercise
the right under the Warrant to purchase any share or shares of Common Stock if,
under any law or under any regulation, rule or other requirement of any
governmental authority at any time applicable to such Bank Affiliate, (a) as a
result of such purchase, such Bank Affiliate would own, control or have power to
vote a greater quantity of securities of any kind than the Bank Affiliate shall
be permitted to own, control or have power to vote, or (b) such purchase would
not be permitted. For purposes of this Section 21.1, a written statement of the
Bank Affiliate exercising the Warrant, delivered upon surrender of the Warrant
pursuant to this Agreement, to the effect that the Bank Affiliate is legally
entitled to exercise its right under the Warrant to purchase securities and that
such purchase will not violate the prohibitions set forth in the preceding
sentence, shall be conclusive and binding upon the Company and shall obligate
the Company to deliver certificates representing the shares of Common Stock so
purchased in accordance with the other provisions hereof and shall relieve the
Company of any liability under this Section 21.1.
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21.2. In the event that any Bank Affiliate is prevented from exercising any
rights to purchase any shares of Common Stock under the Warrant pursuant to
Section 21.1, the Company agrees to use its reasonable efforts to cause its
board of directors and shareholders to approve, and thereafter to cause its
officers to execute and file with the secretary of state of the state of
incorporation of the Company, an amendment to the certificate of incorporation
of the Company providing for (a) a new class of common stock (the "Non-Voting
Common Stock") identical in all respects to the voting Common Stock except that
it shall have no voting rights and (b) the convertibility of shares of voting
Common Stock into shares of Non-Voting Common Stock, and the convertibility of
shares of Non-Voting Common Stock into shares of voting Common Stock, at any
time at the election of the holder thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, as of the day and year first above written.
X'XXXXXXXX INDUSTRIES HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------------
Xxxxxxx X. Xxxxx, Senior Vice President
and Chief Financial Officer
BANCBOSTON INVESTMENTS, INC.
By: /s/ Xxxxxxx Xxxx
----------------------------------------
Name: Xxxxxxx Xxxx
Title: Director of BancBoston Investments Inc.
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EXHIBIT A
[Form of Class B Warrant Certificate]
[Face]
Private Placement and Transfer Restriction Legend: Each Warrant shall bear
the Private Placement Legend and Transfer Restriction Legend on the face
thereof:
No. ___________ ___Warrants
Class B Warrant Certificate
X'XXXXXXXX INDUSTRIES HOLDINGS, INC.
This Class B Warrant Certificate certifies that BancBoston Investments,
Inc. is the registered holder of Warrants expiring October 15, 2009 (the
"Warrants") to purchase Common Stock, par value $0.01 (the "Common Stock"), of
X'Xxxxxxxx Industries Holdings, Inc., a Delaware corporation (the "Company").
Each Class B Warrant entitles the registered holder upon exercise at any time
from 9:00 a.m. November 30, 1999 (the "Exercise Date") until 5:00 p.m. New York
City Time on October 15, 2009 to receive from the Company 0.9327 fully paid and
nonassessable shares of Common Stock (the "Warrant Shares") at the initial
exercise price (the "Exercise Price") of $0.01 per share payable upon surrender
of this Warrant Certificate and payment of the Exercise Price at the offices of
the Company, but only subject to the conditions set forth herein and in the
Warrant Agreement referred to on the reverse hereof. The Exercise Price and
number of Warrant Shares issuable upon exercise of the Class B Warrant are
subject to adjustment upon the occurrence of certain events set forth in the
Warrant Agreement.
No Class B Warrant may be exercised after 5:00 p.m., New York City Time on
October 15, 2009, and to the extent not exercised by such time such Warrants
shall become void.
Reference is hereby made to the further provisions of this Class B 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 in accordance
with the internal laws of the State of New York.
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IN WITNESS WHEREOF, X'Xxxxxxxx Industries Holdings, Inc. has caused this
Class B Warrant Certificate to be signed below.
DATED: January __, 2000
X'XXXXXXXX INDUSTRIES HOLDINGS, INC.
By:
-----------------------------------------
Name:
Title:
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[Reverse of Class B Warrant Certificate]
The Class B Warrants evidenced by this Class B Warrant Certificate are
issued pursuant to an Amended and Restated Class B Warrant Agreement dated as of
January ___, 2000 (the "Class B Warrant Agreement"), duly executed and delivered
by the Company to BancBoston Investments, Inc. which Class B Warrant Agreement
is hereby incorporated by reference in and made a part of this instrument and is
hereby referred to for a description of the rights, limitation of rights,
obligations, duties and immunities thereunder of the Company and the holders
(the words "holders" or "holder" meaning the registered holders or registered
holder) of the Class B Warrant. A copy of the Class B Warrant Agreement may be
obtained by the holder hereof upon written request to the Company.
Class B Warrants may be exercised at any time on or after November 30, 1999
and on or before 5:00 p.m. New York City time on October 15, 2009; provided that
holders shall be able to exercise their Class B Warrants only if a registration
statement relating to the Warrant Shares is then in effect, or the exercise of
such Class B Warrants is exempt from the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act"), and such securities
are qualified for sale or exempt from qualification under the applicable
securities laws of the states in which the various holders of the Class B
Warrants or other persons to whom it is proposed that the Warrant Shares be
issued on exercise of the Class B Warrants reside. In order to exercise all or
any of the Class B Warrants represented by this Warrant Certificate, the holder
must deliver to the Company at its address set forth in Section 12 of the Class
B Warrant Agreement this Class B Warrant Certificate and the form of election to
purchase on the reverse hereof duly filled in and signed, and upon payment to
the Company of the Exercise Price, as adjusted as provided in the Class B
Warrant Agreement, for the number of Warrant Shares in respect of which such
Class B Warrants are then exercised. No adjustment shall be made for any
dividends on any Common Stock issuable upon exercise of this Class B Warrant.
The Class B Warrant Agreement provides that upon the occurrence of certain
events the Exercise Price set forth on the face hereof may, subject to certain
conditions, be adjusted. If the Exercise Price is adjusted, the Class B Warrant
Agreement provides that the number of shares of Common Stock issuable upon the
exercise of each Class B Warrant shall be adjusted. No fractions of a share of
Common Stock will be issued upon the exercise of any Class B Warrant, but the
Company will pay the cash value thereof determined as provided in the Class B
Warrant Agreement.
The Company has agreed pursuant to a Registration Rights Agreement dated as
of November 30, 1999 (the "Registration Rights Agreement") to provide the
holders of the Warrants with certain demand and piggy-back registration rights
with respect to the Common Stock purchasable upon exercise of such Warrants, as
set forth in the Registration Rights Agreement. A copy of the Registration
Rights Agreement may be obtained by the holder hereof upon written request to
the Company.
The Class B Warrants and the shares of Common Stock underlying the Warrants
are subject to certain restrictions or transfer and other restrictions set forth
in a Stockholders Agreement, dated November 30, 1999. Copies of the Stockholders
Agreement may be obtained by the holder hereof, upon written request to the
Company.
Class B Warrant Certificates, when surrendered at the office of the Company
by the registered holder thereof in person or by legal representative or
attorney duly authorized in writing, may be exchanged, in the manner and subject
to the limitations provided in the Class B Warrant Agreement,
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but without payment of any service charge, for another Class B Warrant
Certificate or Class B Warrant Certificates of like tenor evidencing in the
aggregate a like number of Class B Warrants.
Upon due presentation for registration of transfer of this Class B Warrant
Certificate at the office of the Company a new Class B Warrant Certificate or
Class B Warrant Certificates of like tenor and evidencing in the aggregate a
like number of Class B Warrants shall be issued to the transferee(s) in exchange
for this Class B Warrant Certificate, subject to the limitations provided in the
Class B Warrant Agreement, without charge except for any tax or other
governmental charge imposed in connection therewith.
The Company may deem and treat the registered holder(s) thereof as the
absolute owner(s) of this Class B Warrant Certificate (notwithstanding any
notation of ownership or other writing hereon made by anyone), for the purpose
of any exercise hereof, of any distribution to the holder(s) hereof, and for all
other purposes, the Company shall not be affected by any notice to the contrary.
Neither the Class B Warrants nor this Class B Warrant Certificate entitles any
holder hereof to any rights of a stockholder of the Company.
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[Form of Election to Purchase]
(To Be Executed Upon Exercise Of Class B Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Class B Warrant Certificate, to receive _____________ shares
of Common Stock and herewith tenders payment for such shares to the order of
X'XXXXXXXX INDUSTRIES HOLDINGS, INC., in the amount of the Aggregate Exercise
Price in accordance with the terms hereof. The undersigned requests that a
certificate for such shares be registered in the name of _______________, whose
address is __________________ and that such shares be delivered to ___________,
whose address is ____________________________. If said number of shares is less
than all of the shares of Common Stock purchasable hereunder, the undersigned
requests that a new Warrant Certificate representing the remaining balance of
such shares be registered in the name of ______________________, whose address
is ____________________, and that such Warrant Certificate be delivered to whose
address is ____________________.
----------------------------------------
Signature
Date:
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EXHIBIT B
ASSIGNMENT
FOR VALUE RECEIVED, _________________________ hereby sells, assigns and
transfers all of the rights of the undersigned under the attached Class B
Warrant (Certificate No. W______) with respect to the number of shares of the
Common Stock covered thereby set forth below, unto:
Names of Assignee Address No. of Shares
----------------- ------- -------------
Dated: Signature ------------------------
------------------------
Witness ------------------------
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