EXHIBIT 10.2
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WARRANT AGREEMENT
WARRANT AGREEMENT, dated as of August 15, 1998, between Xxxxxx X.
Xxxxx ("Xxxxx") and Xxxx X. Xxxxx ("Holder").
W I T N E S S E T H:
WHEREAS, the Holder desires to purchase from Seher, and Seher
desires to sell to the Holder, upon the terms and conditions set forth
herein, the stock purchase warrant substantially in the form of
Exhibit A hereto (the "Warrant");
NOW, THEREFORE in consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
Section 1. DEFINITIONS. The following terms have the meanings
set forth below:
"Common Stock" means the Company's Common Stock, par value $.01
per share, as constituted on the date hereof, and any capital stock
into which such Common Stock may thereafter be changed, and shall also
include (i) capital stock of the Company of any other class
(regardless of how denominated) issued to the holders of shares of
Common Stock upon any reclassification thereof which is also not
preferred as to dividends or assets over any other class of stock of
the Company and which is not subject to redemption and (ii) shares of
common stock of any successor or acquiring corporation received by or
distributed to the holders of Common Stock of the Company in
connection with a consolidation, merger or other business combination
contemplated by Section 2.2 of the Warrant.
"Company" means NACO, Inc., a Delaware corporation.
"Exercise Price" shall be $100.00 per share of Common Stock, as
adjusted from time to time pursuant to the terms of the Warrant.
"Termination Date" shall mean the earlier of July 31, 2001 or the
date on which the Warrant is exercised in full in accordance with the
procedures set forth in Section 1.2 of the Warrant.
"Warrant Price" shall be $8.00 per share of Warrant Stock or
$120,000 in the aggregate.
"Warrant Stock" means the 15,000 shares of the Company's Common
Stock deliverable upon exercise of the Warrant, initially as set forth
on the signature page of this Agreement, as adjusted from time to
time.
Section 2. TERMS AND CONDITIONS OF EXECUTION AND DELIVERY OF THE
WARRANT.
2.1 DESCRIPTION OF THE WARRANT. Subject to the terms and
conditions herein, Seher agrees to sell to the Holder, and the Holder
agrees to purchase from Seher, the Warrant. The Warrant to be
executed and delivered by Seher under this Agreement shall entitle the
Holder to purchase upon exercise of such Warrant that number of shares
of the Company's Common Stock as set forth on the signature page of
this Agreement, as adjusted from time to time.
2.2 WARRANT PRICE.
(a) Subject to Section 2.2(c), the Holder agrees to pay the
Warrant Price to Seller according to the following schedule:
10% of Warrant Price ($12,000) Upon execution of this Agreement
30% of Warrant Price ($36,000) July 31, 1999
30% of Warrant Price ($36,000) July 31, 2000
30% of Warrant Price ($36,000) July 31, 2001
(b) Concurrently with the execution of this Agreement, the
Holder shall (i) pay in cash to Seher 10% of the Warrant Price
($12,000) for the Warrant Stock, and (ii) execute and deliver to Seher
a note, substantially in the form of Exhibit B hereto (the "Note")
providing for payment of the balance of the Warrant Price ($108,000).
(c) In the event that the Warrant is exercised in full, the
Warrant Price shall be immediately due and payable by the Holder. In
the event that the Warrant is partially exercised, a proportionate
amount of the Warrant Price shall be immediately due and payable by
the Holder, and the unpaid balance of the Warrant Price shall be paid
in accordance with subsections (a)-(b) above.
Section 3. REPRESENTATIONS AND WARRANTIES.
3.1 SEHER REPRESENTATIONS AND WARRANTIES. Seher represents and
warrants to the Holder that Seher (a) owns the Warrant Stock free and
clear of all liens, charges, security interests, restrictions or other
legal or equitable encumbrances and (b) has all requisite power and
authority to enter into and perform this Agreement and to sell the
Warrant and the Warrant Stock as contemplated herein.
3.2 HOLDER REPRESENTATIONS AND WARRANTIES. The Holder
represents and warrants to Seher that he is acquiring the Warrant for
his own account for the purpose of investment and not with a view to
any distribution thereof.
Section 4. COVENANTS.
4.1 SUFFICIENCY; GOOD TITLE. Until the Termination Date, Seher
agrees to segregate and keep available such number of shares of
Warrant Stock to be delivered to the Holder upon the exercise of the
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Warrant. Seher covenants that all shares of Warrant Stock shall, when
delivered, be duly and validly issued, fully paid and nonassessable
and free from all taxes, liens, charges, security interests,
restrictions or other legal or equitable encumbrances.
4.2 ESCROW ACCOUNT. Concurrently with the execution of this
Agreement, Seher and Holder shall execute and deliver an Escrow
Agreement substantially in the form of Exhibit C hereto (the "Escrow
Agreement") providing for the escrow of the Warrant Shares pending the
payment in full of the Warrant Price.
Section 5. MISCELLANEOUS.
5.1 NOTICES. Except as otherwise expressly provided herein, all
notices referred to in this Warrant Agreement shall be in writing and
shall be delivered personally, sent by reputable express courier
service (charges prepaid) or sent by registered or certified mail,
return receipt requested, postage prepaid and shall be deemed to have
been given when so delivered, sent or deposited in the U.S. Mail (i)
to Seher at 0000 Xxxxxxxxx Xxxx, Xxxxxxx Xxxxx, XX 00000 (unless
otherwise indicated by Seher) and (ii) to the Holder at 000 X. Xxxx
Xxxxx Xxxxx, Xxxx #0000, Xxxxxxx, Xxxxxxxx 00000 (unless otherwise
indicated by the Holder).
5.2 EXCLUSION. This Agreement and the Warrant shall be binding
upon, and inure solely to the benefit of Seher and the Holder, and no
other person shall acquire or have any right under or by virtue of
this Agreement or the Warrant.
5.3 NO WAIVERS. No failure or delay by any party in exercising
any rights, power or privilege hereunder or under the Warrant shall
operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies
provided herein shall be cumulative and not exclusive of any rights or
remedies provided by law.
5.4 AMENDMENTS AND WAIVERS. Any provision of this Agreement or
the Warrant may be amended or waived if, but only if, such amendment
or waiver is in writing and signed by Seher and the Holder.
5.5 GOVERNING LAW. This Agreement and the Warrant shall be
governed by and construed in accordance with the laws of the State of
Delaware without giving effect to the principles of conflict of laws
thereof.
5.6 COUNTERPARTS. This Agreement may be signed in counterpart,
each of which shall be an original, with the same effect as if the
signatories thereto and hereto were upon the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered as of the day and year first above
written.
/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
/s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
(Warrant to purchase 15,000 shares of
the Company's Common Stock owned by
Xxxxxx X. Xxxxx)
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EXHIBIT A to EXHIBIT 10.2
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * **
* THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY HAVE BEEN *
* ACQUIRED BY THE HOLDER FOR HIS OWN ACCOUNT, FOR INVESTMENT *
* PURPOSES AND NOT WITH A VIEW TO THE DISTRIBUTION OF SUCH *
* SECURITIES. THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY *
* HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS *
* AMENDED (THE "ACT") OR ANY APPLICABLE STATE SECURITIES LAW AND MAY *
* NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFEC- *
* TIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE *
* SECURITIES LAW OR AN EXEMPTION THEREFROM OR THE PROVISIONS OF THIS *
* WARRANT. *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * **
STOCK PURCHASE WARRANT
Date of Issuance: August 15, 1998
Certificate No. W-1
For value received, Xxxxxx X. Xxxxx ("Seher"), hereby grants to
Xxxx X. Xxxxx (the "Holder") the right to purchase from Seher
15,000 shares of Warrant Stock (as determined and adjusted
pursuant to Section 1.1 and Section 2 and from time to time
hereunder) at a price per share of $100.00 (as adjusted from time
to time hereunder, the "Exercise Price"). The amount and kind of
securities purchasable pursuant to the rights granted hereunder
and the purchase price for such securities are subject to
adjustment pursuant to the provisions contained in this Warrant.
This Warrant is executed and delivered pursuant to the terms of
the Warrant Agreement, dated of even date herewith, between Seher
and the Holder (the "Warrant Agreement"). Certain capitalized
terms used herein are defined in Section 1 of the Warrant
Agreement. The amount and kind of securities purchasable
pursuant to the rights granted hereunder and the purchase price
for such securities are subject to adjustment pursuant to the
provisions contained in this Warrant.
This Warrant is subject to the following provisions:
Section 1. EXERCISE OF WARRANT.
1.1. EXERCISE PERIOD. At any time or from time to time from
the date hereof until 5:00 P.M., Central Time on July 1, 2001 (the
"Exercise Period"), the Holder may exercise, in whole or in part, the
right to purchase 15,000 shares of the Company's Common Stock (subject
to adjustment pursuant to Section 2 hereunder).
1.2. EXERCISE PROCEDURE.
(i) This Warrant shall be deemed to have been exercised
when Seher has received all of the following items (the "Exercise
Time"):
(a) a completed Exercise Agreement, as described
in Section 1.3 below and in substantially the form set forth
in EXHIBIT I hereof, executed by the Person exercising all
or part of the purchase rights represented by this Warrant
(the "Purchaser");
(b) this Warrant;
(c) if this Warrant is not registered in the name
of the Purchaser, an Assignment or Assignments in the form
set forth in EXHIBIT II hereto evidencing the assignment of
this Warrant to the Purchaser, in which case the Holder
shall have complied with the provisions set forth in Section
5 hereof; and
(d) a check or wire transfer of immediately
available funds payable to Seher in an amount equal to the
product of the Exercise Price multiplied by the number of
shares of Warrant Stock being purchased upon such exercise.
(ii) Certificates for shares of Warrant Stock purchased upon
exercise of this Warrant shall be delivered by Seher to the
Purchaser within five business days after the date of the
Exercise Time. Unless this Warrant has expired or all of the
purchase rights represented hereby have been exercised, Seher
shall prepare a new Warrant, substantially identical hereto,
representing the rights formerly represented by this Warrant
which have not expired or been exercised and shall, within such
five-day period, deliver such new Warrant to the Person
designated for delivery in the Exercise Agreement.
(iii) The Warrant Stock deliverable upon the exercise of
this Warrant shall be deemed to have been transferred to the
Purchaser at the Exercise Time, and the Purchaser shall be deemed
for all purposes to have become the record holder of such Warrant
Stock at the Exercise Time.
1.3. EXERCISE AGREEMENT. Upon any exercise of this Warrant,
the Exercise Agreement shall be substantially in the form set forth in
EXHIBIT I hereto, except that if the shares of Warrant Stock are not
to be held in the name of the Holder, the Exercise Agreement shall
also state the name of the Person to whom the certificates for the
shares of Warrant Stock are to be held, and if the number of shares of
Warrant Stock to be delivered does not include all the shares of
Warrant Stock purchasable hereunder, it shall also state the name of
the Person to whom a new Warrant for the unexercised portion of the
rights hereunder is to be delivered. Such Exercise Agreement shall be
dated the actual date of execution thereof. For purposes of this
Warrant, "Person" means an individual, a partnership, a joint venture,
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a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.
Section 2. ADJUSTMENT OF NUMBER OF SHARES. In order to prevent
dilution of the rights granted under this Warrant, the number of
shares of Warrant Stock obtainable upon exercise of this Warrant shall
be subject to adjustment from time to time as provided in this Section
2.
2.1. STOCK DIVIDENDS, SUBDIVISION OR COMBINATION OF COMMON
STOCK. If the Company at any time declares a dividend or makes a
distribution on its Common Stock payable in shares of its capital
stock (whether shares of Common Stock or of capital stock of any other
class), the Holder shall thereafter be entitled to purchase the
aggregate number of any kind of shares which, if the Warrant had been
exercised immediately prior to such event, such Holder would have
owned upon such exercise and been entitled to receive by virtue of
such dividend or distribution and the Exercise Price and Warrant Price
in effect immediately prior to the record date shall automatically be
adjusted to allow the purchase of such aggregate number and kind of
shares. If the Company at any time subdivides (by any stock split,
stock dividend, recapitalization or otherwise) its outstanding shares
of Common Stock into a greater number of shares, the number of shares
of Warrant Stock obtainable upon exercise of this Warrant immediately
prior to such subdivision shall be proportionately increased. If the
Company at any time combines (by reverse stock split or otherwise) its
outstanding shares of Common Stock into a smaller number of shares,
the number of shares of Warrant Stock obtainable upon exercise of this
Warrant immediately prior to such combination shall be proportionately
decreased.
2.2. MINIMUM ADJUSTMENT. No adjustment pursuant to Section
2.1 in the number of shares of Warrant Stock purchasable hereunder
shall be required unless such adjustment would require an increase or
decrease of at least one whole share; PROVIDED, HOWEVER, that any
adjustments which by reason of this Section 2.2 are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 2 shall be made to
the nearest share.
2.3 CONSOLIDATION, MERGER OR BUSINESS COMBINATION. In case
the Company shall consolidate, merge or enter into a business
combination with another corporation and pursuant to the terms of such
consolation, merger or business combination, shares of common stock of
the successor or acquiring corporation or any cash, shares of stock or
other securities or property of any nature whatsoever in addition to
or in lieu of common stock of the successor or acquiring corporation
("Other Property") are to be received by or distributed to holders of
the Common Stock of the Company, then the Holder shall have the right
thereafter to receive, upon exercise of the Warrant, the number of
shares of common stock of the successor or acquiring corporation or of
the Company, if it is the surviving corporation, and Other Property
receivable upon or as a result of such merger, consolidation or
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business combination by a holder of the number of shares of Common
Stock for which this Warrant is exercisable immediately prior to such
event.
2.4 NOTICES. Immediately upon any adjustment of the number
of shares of Warrant Stock obtainable upon exercise of this Warrant,
Seher shall give written notice thereof to the Holder, setting forth
in reasonable detail the calculation of such adjustment.
Section 3. NO VOTING RIGHTS; LIMITATIONS OF LIABILITY. This
Warrant shall not entitle the holder hereof to any voting rights or
other rights as a stockholder of the Company. No provision hereof, in
the absence of affirmative action by the Holder to purchase Warrant
Stock, and no enumeration herein of the rights or privileges of the
Holder shall give rise to any liability of such holder for the
Exercise Price of Warrant Stock acquirable by exercise hereof or as a
stockholder of the Company.
Section 4. REPLACEMENT. Upon receipt of evidence reasonably
satisfactory to Seher (an affidavit of the Holder shall be
satisfactory) of the ownership and the loss, theft, destruction or
mutilation of any certificate evidencing this Warrant, and in the case
of any such loss, theft or destruction, upon receipt of indemnity
reasonably satisfactory to Seher, or, in the case of any such
mutilation upon surrender of such certificate, Seher shall execute and
deliver in lieu of such certificate a new certificate of like kind
representing the same rights represented by such lost, stolen,
destroyed or mutilated certificate and dated the date of such lost,
stolen, destroyed or mutilated certificate.
Section 5. NOTICES. Except as otherwise expressly provided
herein, all notices referred to in this Warrant shall be in writing
and shall be delivered personally, sent by reputable express courier
service (charges prepaid) or sent by registered or certified mail,
return receipt requested, postage prepaid and shall be deemed to have
been given when so delivered, sent or deposited in the U.S. Mail (i)
to Seher, at 0000 Xxxxxxxxx Xxxx, Xxxxxxx Xxxxx, XX 00000 (unless
otherwise indicated by Seher) and (ii) to the Holder at 000 X. Xxxx
Xxxxx Xxxxx, Xxxx #0000, Xxxxxxx, Xxxxxxxx 00000 (unless otherwise
indicated by the Holder).
Section 6. AMENDMENT AND WAIVER. Any provision of this
Agreement or the Warrant may be amended or waived if, but only if,
such amendment or waiver is in writing and signed by Seher and the
Holder.
Section 7. DESCRIPTIVE HEADINGS; GOVERNING LAW. The descriptive
headings of the several Sections and paragraphs of this Warrant are
inserted for convenience only and do not constitute a part of this
Warrant. The corporate law of the State of Delaware shall govern all
questions concerning the relative rights of the Company and its
stockholders. The construction, validity and interpretation of this
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Warrant shall be governed by the internal law, and not the conflicts
law, of the State of Delaware.
IN WITNESS WHEREOF, Xxxxxx X. Xxxxx has signed this Warrant as of
its Date of Issuance.
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Xxxxxx X. Xxxxx
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EXHIBIT I to EXHIBIT 10.2
EXERCISE AGREEMENT
[To be executed only upon exercise of the Warrant]
To: Xxxxxx X. Xxxxx Dated:______________________
The undersigned, pursuant to the provisions set forth in the
attached Warrant (Certificate No. W-1), hereby agrees to purchase
_______ shares of the Warrant Stock covered by such Warrant and makes
payment herewith in full therefor at the price per share provided by
such Warrant.
Signature: ________________________
Address: __________________________
___________________________________
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EXHIBIT II to EXHIBIT 10.2
ASSIGNMENT
FOR VALUE RECEIVED, ____________________ hereby sells, assigns
and transfers all of the rights of the undersigned under the attached
Warrant (Certificate No. W- 1) with respect to the number of shares of
the Warrant Stock covered thereby set forth below, unto:
Names of Assignee Address No. of Shares
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Dated: _______________ Signature: ________________________
Address:___________________________
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