EXHIBIT 8
WARRANT AGREEMENT
THIS WARRANT AGREEMENT (the "Agreement") is made and
entered into as of ___________ ____, 2001 between XXXX XX
Holding Corp., a Delaware corporation (the "Company") and FS
Equity Partners III, L.P., a Delaware limited partnership
("FSEP"), and FS Equity Partners International, L.P., a Delaware
limited partnership ("FSEP International," and together with
FSEP, the "FS Parties").
WHEREAS, pursuant to that certain Agreement and Plan
of Reorganization, dated as of May 14, 1997 by and among CB
Xxxxxxx Xxxxx Services, Inc. (successor to CB Commercial Real
Estate Services Group, Inc.) ("CBRE"), Xxxx Real Estate Services
("KRES") and the other parties listed therein, KRES merged with
a subsidiary of CBRE and the holders of shares of common stock
of KRES, including the FS Parties, and options exercisable into
shares of common stock of KRES received warrants (the "Old
Warrants") to purchase up to an aggregate of 500,000 shares of
the Common Stock of CBRE;
WHEREAS, pursuant to that certain Agreement and Plan
of Merger (the "Merger Agreement"), dated as of February 23,
2001, by and among, CBRE, the Company and XXXX XX Corp., a
Delaware corporation and wholly owned subsidiary of the Company
("Acquiror"), the Acquiror will merge with and into CBRE, such
that CBRE shall become a wholly owned subsidiary of the Company;
and
WHEREAS, pursuant to that certain Contribution and
Voting Agreement, dated as of February 23, 2001, by and among,
the Company, the FS Parties and the other parties thereto, upon
the Closing, among other things, (i) the Company shall cancel
the Old Warrants, and (ii) the FS Parties shall receive, in the
aggregate, warrants (the "Warrants") to purchase up to an
aggregate of [number of shares of Common Stock equal to the
number that represents the same percentage of the total
outstanding shares of Common Stock immediately after
consummation of the Merger (with respect to the Company) as
the warrants to acquire 364,884 shares of CBRE Common Stock
entitled Xxxxxxx Xxxxxx immediately prior to the consummation
of the Merger (with respect to CBRE)] shares (the "Warrant
Shares") of the Common Stock, par value $.01 per share (the
"Common Stock"), of the Company.
NOW THEREFORE, in consideration of the premises and
the mutual agreements herein set forth, the parties hereto agree
as follows (capitalized terms used herein and not otherwise
defined have the meanings ascribed thereto in the Merger
Agreement):
SECTION 1. Optional Exercise of Warrant.
Subject to the terms of this Agreement, each holder of
a Warrant may, at any time on and after August 26, 2007, but not
later than August 27, 2007 (the "Expiration Date"), exercise this
Warrant in whole at any time or in part from time to time for the
number of Warrant Shares which such holder is then entitled to
purchase hereunder.
Each holder of a Warrant may exercise such Warrant, in
whole or in part by either of the following methods:
(a) delivering to the Company at its office
maintained for such purpose pursuant to Section 12(d):
(i) a written notice of such holder's election to exercise
this Warrant, which notice shall specify the number of
Warrant Shares to be purchased, (ii) this Warrant and
(iii) a sum equal to the Exercise Price (as set forth in
the Warrant Certificate attached hereto) therefor payable
in immediately available funds; or
(b) The holder of this Warrant may also exercise
this Warrant, in whole or in part, in a "cashless" or
"net-issue" exercise by delivering to the Company at
its office maintained for such purpose pursuant to
Section 12(d): (i) a written notice of such holder's
election to exercise this Warrant, which notice shall
specify the number of Warrant Shares to be delivered to
such holder and the number of Warrant Shares with respect
to which this Warrant is being surrendered in payment of
the aggregate Exercise Price for the Warrant Shares to be
delivered to the holder, and (ii) the Warrant. For
purposes of this provision, all Warrant Shares as to which
the Warrant is surrendered will be attributed a value
equal to (x) the current market price per share of Common
Stock (determined in the manner set forth in Section 7(f))
minus (y) the current Exercise Price per share of
Common Stock.
Such notice may be in the form of Election to Purchase
set out at the end of this Warrant Agreement. Upon delivery
thereof, together with the Warrant and the Exercise Price, as
applicable, and such holder becoming a party to the Stockholders'
Agreement, dated as of the date hereof (the "Stockholder
Agreement"), by and among the Company, the FS Parties and the
other parties thereto if such holder shall not already be a party
thereto, the Company shall cause to be executed and delivered to
such holder within five business days a certificate or
certificates representing the aggregate number of fully-paid and
nonassessable shares of Common Stock issuable upon such exercise.
The stock certificate or certificates for Warrant
Shares so delivered shall be in such denominations as may be
specified in said notice and shall be registered in the name of
such holder or such other name or names as shall be designated in
said notice. Such certificate or certificates shall be deemed to
have been issued and such holder or any other person so
designated to be named therein shall be deemed to have become a
holder of record of such shares, including to the extent
permitted by law the right to vote such shares or to consent or
to receive notice as a stockholder (subject to the terms of the
Stockholders' Agreement), as of the time said notice is delivered
to the Company as aforesaid; provided that such shares shall be
subject to the provisions of the Stockholders' Agreement. If a
Warrant shall have been exercised only in part, the Company
shall, at the time of delivery of said certificate or
certificates, deliver to such holder a new Warrant dated the date
it is issued, evidencing the rights of such holder to purchase
the remaining Warrant Shares called for by this Warrant, which
new Warrant shall in all other respects be identical with this
Warrant, or, at the request of such holder, appropriate notation
may be made on this Warrant and the Warrant shall be returned to
such holder.
All Warrant Shares issuable upon the exercise of a
Warrant shall be validly issued, fully paid and nonassessable and
free from all liens and other encumbrances thereon, other than
liens or other encumbrances created by the holder thereof or the
restrictions set forth in the Stockholders' Agreement.
The Company will not close its books against the
transfer of a Warrant or of any Warrant Shares in any manner
which interferes with the timely exercise of a Warrant. The
Company will from time to time take all such action as may be
necessary to assure that the par value per share of the unissued
Common Stock acquirable upon exercise of a Warrant is at all
times equal to or less than the Exercise Price then in effect.
SECTION 2. Automatic Exercise of Warrant.
Notwithstanding the prior delivery of a notice
pursuant to Section 1 hereto, in the event an Automatic
Exercise Event (as defined below) occurs prior to the
Expiration Date, without any action by the Company or the FS
Parties, the Warrants shall automatically be exercised in a
"cashless" or "net issue" exercise pursuant to which (i) the
Exercise Price shall be paid to the Company entirely in Warrant
Shares (or such other consideration as set forth in Section 7(l)
hereto), which for purposes of this provision, will be
attributed a value equal to (x) the current market price per
share of Common Stock (determined in the manner set forth in
Section 7(f)) to the holders thereof minus (y) the current
Exercise Price per share of Common Stock, and (ii) the Company,
subject to the following paragraph of this Section 2, shall
deliver to the holders thereof the number of Warrant Shares
remaining after subtracting the Exercise Price; provided,
however that if, upon an Automatic Exercise Event, the amount
set forth in subclause (y) of the foregoing clause (i) shall
be equal to or greater than the amount set forth in subclause
(x) of the foregoing clause (i), then the Warrants, without any
action by the Company or the FS Parties, shall be cancelled and
shall cease to represent the right to receive any Warrant Shares
or other security, property or asset of the Company or any
surviving entity.
As soon as practicable after an Automatic Exercise
Event, the Company shall deliver a notice of such Automatic
Exercise Event to each of the holders of the Warrants. Upon
delivery of the Warrants to the Company by a holder thereof and
such holder becoming a party to the Stockholders' Agreement, if
such holder shall not already be a party thereto, the Company
shall cause to be executed and delivered to such holder within
five business days a certificate or certificates representing the
aggregate number of fully-paid and nonassessable shares of Common
Stock issuable as a result of such Automatic Exercise Event.
The stock certificate or certificates for Warrant
Shares so delivered shall be in such denominations as may be
specified by the Warrant holders and shall be registered in the
name of such holder or such other name or names as shall be
designated by the Warrant holders . Such certificate or
certificates shall be deemed to have been issued and such holder
or any other person so designated to be named therein shall be
deemed to have become a holder of record of such shares,
including to the extent permitted by law the right to vote such
shares or to consent or to receive notice as a stockholder
(subject to the terms of the Stockholders' Agreement), as of the
time of the Automatic Exercise Event; provided that such shares
shall be subject to the provisions of the Stockholders'
Agreement.
All Warrant Shares issuable upon an Automatic Exercise
Event shall be validly issued, fully paid and nonassessable and
free from all liens and other encumbrances thereon, other than
liens or other encumbrances created by the holder thereof or the
restrictions set forth in the Stockholders' Agreement.
The Company will not close its books against the
transfer of a Warrant or of any Warrant Shares in any manner
which interferes with the exercise of a Warrant pursuant to an
Automatic Exercise Event. The Company will from time to time
take all such action as may be necessary to assure that the par
value per share of the unissued Common Stock acquirable upon
exercise of a Warrant pursuant to an Automatic Exercise Event is
at all times equal to or less than the Exercise Price then in
effect.
For purposes of this Agreement, an "Automatic Exercise
Event" shall mean either (a) the completion of a sale of shares
of any class of the Common Stock to the public pursuant to an
effective registration statement (other than a registration
statement on Form S-8 or any similar or successor form) filed
under the Securities Act pursuant to which the Company becomes
listed on a national securities exchange or on the NASDAQ Stock
Market (the "Initial Public Offering"), (b) any "person" or
"group," (each as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"))
other than XXXX Capital Partners, L.P. ("XXXX") and its
affiliates, is or becomes the "beneficial owner" (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, of more than 50% of the total voting power of the
outstanding voting stock of the Company, including by way of
merger, consolidation or otherwise, and XXXX and its affiliates
cease to control the Company's Board of Directors, (c) any sale
of all or substantially all of the assets of the Company and its
subsidiaries to any "person" or "group," (each as defined in
Rules 13d-3 and 13d-5 under the Exchange Act) other than XXXX
and its affiliates, or (d) any merger, consolidation or other
transaction or series or related transactions after the
consummation of which the shares owned by the holders of the
Company's outstanding voting stock possessing a majority of the
voting power to elect the Company's Board of Directors
immediately prior to the occurrence of such transaction or
transactions cease to constitute a majority of the Company's
outstanding voting stock possessing the voting power to elect
the Company's Board of Directors (or equivalent governing body).
SECTION 3. Transfer, Division and Combination.
The Warrants are, and all rights thereunder are,
transferable, in whole or in part, on the books of the Company
to be maintained for such purpose, upon (a) surrender of a
Warrant at the office of the Company maintained for such purpose
pursuant to Section 12(d), together with a written assignment of
such Warrant duly executed by the holder thereof or its agent or
attorney and payment of funds sufficient to pay any stock
transfer taxes payable upon the making of such transfer, and (b)
a signed agreement by the assignee or assignees to become a party
to the Stockholders' Agreement prior to the exercise of such
Warrant. Upon such surrender and, if required, such payment,
the Company shall, execute and deliver a new Warrant or Warrants
in the name of the assignee or assignees and in the
denominations specified in such instrument of assignment, and
the surrendered Warrant shall promptly be canceled. If and when
a Warrant is assigned in blank, the Company may (but shall not
be obligated to) treat the bearer thereof as the absolute owner
of such Warrant for all purposes and the Company shall not be
affected by any notice to the contrary. A Warrant, if properly
assigned in compliance with this Section 2, may be exercised by
an assignee for the purchase of shares of Common Stock without
having a new Warrant issued.
A Warrant may, be divided or combined with other
Warrants upon presentation at the aforesaid office of the
Company, together with a written notice specifying the names and
denominations in which new Warrants are to be issued, signed by
the holder hereof or its agent or attorney. Subject to
compliance with the preceding paragraph, as to any transfer
which may be involved in such division or combination, the
Company shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined
in accordance with such notice.
The Company agrees to maintain at its aforesaid office
books for the registration and transfer of the Warrants.
SECTION 4. Payment of Taxes.
The Company will pay all documentary stamp taxes
attributable to the initial issuance of Warrant Shares upon the
exercise of Warrants; provided, however, that the Company shall
not be required to pay any tax or taxes which may be payable in
respect of any transfer involved in the issue of any Warrant
Certificates or any certificates for Warrant Shares in a name
other than that of the registered 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 5. Mutilated or Missing Warrant Certificates.
In case any of the Warrant Certificates shall be
mutilated, lost, stolen or destroyed, the Company may in its
discretion issue, in exchange and substitution for and upon
cancellation of the mutilated Warrant Certificate, or in lieu
of and substitution for the Warrant Certificate lost, stolen
or destroyed, a new Warrant Certificate of like tenor and
representing an equivalent number of Warrants, but only upon
receipt of evidence satisfactory to the Company of such loss,
theft or destruction of such Warrant Certificate and indemnity,
if requested, also satisfactory to them. Applicants for such
substitute Warrant Certificates shall also comply with such
other reasonable regulations and pay such other reasonable
charges as the Company may prescribe.
SECTION 6. Reservation of Warrant Shares.
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 Warrants, the maximum number of shares of
Common Stock which may then be deliverable upon the exercise
of all outstanding Warrants.
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
furnish such Transfer Agent a copy of all notices of
adjustments and certificates related thereto transmitted to
each holder pursuant to Section 9 hereof.
SECTION 7. Adjustment of Exercise Price.
The Exercise Price and the number of Warrant Shares
issuable upon the exercise of each Warrant are subject to
adjustment from time to time upon the occurrence of the events
enumerated in this Section 7. For purposes of this Section 7,
"Common Stock" means shares now or hereafter 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.
(a) Adjustment for Change in Capital Stock.
If the Company:
(1) pays a dividend or makes a distribution on
its Common Stock in shares of its Common Stock;
(2) subdivides its outstanding shares of Common
Stock into a greater number of shares;
(3) combines its outstanding shares of Common
Stock into a smaller number of shares;
(4) makes a distribution on its Common Stock in
shares of its capital stock other than Common Stock; or
(5) issues by reclassification of its Common
Stock any shares of its capital stock;
then the Exercise Price in effect immediately prior to such
action and the number and kind of shares into which a Warrant is
exercisable shall all be adjusted appropriately 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 Board of Directors of the
Company shall determine the allocation of the adjusted Exercise
Price between the classes of capital stock. After such
allocation, the exercise privilege and the Exercise Price of each
class of capital stock shall thereafter be subject to adjustment
on terms comparable to those applicable to Common Stock in this
Section.
Such adjustment shall be made successively whenever any
event listed above shall occur.
(b) 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 60 days after the record date for such
distribution to purchase shares of Common Stock at a price per
share less than the current market price 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.
N = the number of additional shares of
Common Stock offered pursuant to such
rights issue.
P = the offering price per share of the
additional shares.
M = the current market price 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.
(c) Adjustment for Other Distributions.
If the Company distributes to all holders of its Common
Stock any assets (excluding cash) or debt securities or any
rights or warrants to purchase debt securities, assets or other
securities, the Exercise Price shall be adjusted in accordance
with the formula:
E' = E x M - F
-------
M
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
M = the current market price per share
of Common Stock on the record date
mentioned below.
F = the aggregate fair market value on
the record date of the assets,
securities, rights or warrants divided
by the number of outstanding shares of
Common Stock on the record date for
such distribution. The Board of
Directors of the Company shall
determine the fair market value.
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.
(d) Adjustment for Common Stock Issue:
If the Company issues shares of Common Stock for a
consideration per share less than the current market price 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 current market price 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 (b) and (c) of this Section 7,
(2) the exercise of Warrants, or the conversion
or exchange of other securities convertible into, or
exchangeable or exercisable for, Common Stock,
(3) Common Stock issued to the Company's
employees 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),
(4) Common Stock issued upon the exercise of
rights or warrants issued to the holders of Common Stock,
(5) Common Stock issued to shareholders of any
person which merges into the Company in proportion to their
stock holdings of such person immediately prior to such
merger, upon such merger,
(6) Common Stock issued in a bona fide public
offering pursuant to a firm commitment underwriting,
(7) Common Stock issued in a bona fide private
placement to, or through a placement agent which is, a
member firm of the National Association of Securities
Dealers, Inc., or
(8) Common Stock issued as a dividend on any
preferred stock in accordance with the stated terms of such
preferred stock and in lieu of cash dividends otherwise
payable on such preferred stock pursuant to the instrument
under which the preferred stock was issued.
(e) Adjustment for Convertible Securities Issue.
If the Company issues any securities convertible into
or exchangeable or exercisable for Common Stock (other than
securities issued in transactions described in subsections (b)
and (c) of this Section 7) for a consideration per share of
Common Stock initially deliverable upon conversion or exchange of
such securities less than the current market price per share on
the date of issuance of such securities, the Exercise Price shall
be adjusted in accordance with this formula:
P
-
E' = E x O + M
--------
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.
M = the current market price per share
of Common Stock 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 has 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:
(1) 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,
(2) convertible securities issued in a bona
fide public offering pursuant to a firm commitment
underwriting,
(3) convertible securities issued in a bona
fide private placement through a placement agent which
is a member firm of the National Association of Securities
Dealers, Inc.,
(4) rights, warrants and convertible and
exchangeable securities outstanding on or prior to the
date of issuance of the Warrant, or
(5) convertible securities or warrants issued
in connection with the incurrence of debt by the Company
or any of its subsidiaries, so long as the fair value
allocable to such convertible securities or warrants
(taking into account the terms of the debt), together
with any consideration payable to the Company upon
conversion or exercise of such convertible securities or
warrants, treating such convertible securities or warrants
on an as converted basis, is no less than the then current
market price of Common Stock on the date of issuance of
such convertible securities or warrants.
(f) Current Market Price.
Subject to the last two sentences of this subsection
(f), in subsections (b), (c), (d) and (e) of this Section 7, the
current market price per share of Common Stock on any date is
the average of the Quoted Prices of the Common Stock for 30
consecutive trading days commencing 45 trading days before the
date in question. The "Quoted Price" of the Common Stock is
the last reported sales price of the Common Stock as reported
by NASDAQ National Market, or if the Common Stock is listed on a
securities exchange, the last reported sales price of the Common
Stock on such exchange which shall be for consolidated trading
if applicable to such exchange, or if neither so reported or
listed, the last reported bid price of the Common Stock. In
the absence of one or more such quotations (including, without
limitation, during the period prior to the Initial Public
Offering), the Board of Directors of the Company shall determine
the current market price on the basis of such quotations, if
available, or other valuation information as it in good faith
considers appropriate. In the event of the Initial Public
Offering, the current market price per share of Common Stock
shall be the Quoted Price on the day of such Initial Public
Offering.
(g) Consideration Received.
For purposes of any computation respecting
consideration received pursuant to subsections (d) and (e) of
this Section 7, 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
(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).
(h) When De Minimis Adjustment May Be Deferred.
No adjustment in the Exercise Price need be made unless
the adjustment would require on 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 shall be made to
the nearest cent or nearest 1/100th of a share as the case may
be.
(i) When No Adjustment Required.
No adjustment need be made for a transaction referred
to in subsection (a), (b), (c), (d) or (e) of this Section 7 if
Warrant holders are permitted to participate in the transaction
(without being required to exercise their Warrants in order to do
so) on a basis and with notice that the Board of Directors of the
Company 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 rights to purchase
Common Stock pursuant to a Company plan for reinvestment of
dividends or interest.
No adjustment need be made for 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.
(j) Notice of Adjustment.
Whenever the Exercise Price is adjusted, the Company
shall provide the notices required by Section 9 hereof.
(k) Voluntary Reduction.
The Company from time to time may reduce the Exercise
Price by any amount for any period of time if the period is at
least 20 days and if the reduction is irrevocable during the
period; provided, however, that in no event may the Exercise
Price be less than the par value of a share of Common Stock.
Whenever the Exercise Price is reduced, the Company
shall mail to Warrant holders a notice of the reduction. The
Company shall mail the notice at least 15 days before the date
the reduced Exercise Price takes effect. The notice shall state
the reduced Exercise Price and the period it will be in effect.
A reduction of the Exercise Price pursuant to this
clause (k) does not change or adjust the Exercise Price otherwise
in effect for purposes of subsections (a), (b), (c), (d) and (e)
of this Section 7.
(l) Reorganization of Company.
If the Company consolidates or merges with or into, or
sells, transfers or leases all or substantially all of its assets
to, any person (including, without limitation, in a transaction
that is an Automatic Exercise Event), upon consummation of such
transaction the Warrants shall automatically become exercisable
(or, in the event of an Automatic Exercise Event, be exercised)
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, sale, transfer or lease if the holder had
exercised the Warrant immediately before the effective date of
the transaction. Unless such transaction shall have been an
Automatic Exercise Event, 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 transfer, sale or lease shall have been made, shall
enter into 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. The successor Company shall mail to warrant
holders a notice describing the supplemental Warrant 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.
If this subsection (l) applies, subsections (a), (b),
(c), (d) and (e) of this Section 7 do not apply.
(m) Determinations Conclusive.
Any determination that the Company or the Board of
Directors of the Company must make pursuant to subsection (a),
(c), (d), (e), (f), (g) or (i) of this Section 7 is conclusive,
provided the Board of Directors has acted reasonably.
(n) When Issuance or Payment May Be Deferred.
In any case in which this Section 7 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 of any Warrant exercised after such record date the
Warrant Shares and such securities or assets, if any, issuable
upon such exercise over and above the Warrant Shares and such
securities or assets, if any, issuable upon such exercise on
the basis of the Exercise Price and (ii) paying to such holder
any amount in cash in lieu of a fractional share pursuant to
Section 8; provided, however, that the Company shall deliver to
such holder a due xxxx or other appropriate instrument
evidencing such holder's right to receive such additional
warrant Shares, other capital stock and cash upon the occurrence
of the event requiring such adjustment.
(o) Adjustment in Number of Shares.
Upon each adjustment of the Exercise Price pursuant to
this Section 7, 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 of 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.
SECTION 8. 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 8 be issuable on the exercise of any Warrants (or
specified portion thereof), the Company shall pay an amount in
cash equal to the current Exercise Price, multiplied by such
fraction.
SECTION 9. Notices to Warrant Holders.
Upon any adjustment of the Exercise Price pursuant to
Section 7, the Company shall promptly thereafter cause to be
given to each of the registered holders of the Warrant
Certificates at its address appearing on the Warrant register
written notice of such adjustment 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 7.
In case:
(a) 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; or
(b) the Company shall authorize the distribution to
all holders of shares of Common Stock of evidences of
indebtedness or assets, including cash dividends or cash
distributions payable out of consolidated current or
retained earnings, but not including dividends payable in
shares of Common Stock or distributions referred to in
subsection (a) of Section 7 hereof; or
(c) of any consolidation or merger to which the
Company is a party and of which approval of any
shareholders of the Company is required, or of the
conveyance, sale, transfer or lease 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; or
(d) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company; or
(e) the Company proposes to take any action (other
than actions of the character described in Section 7(a))
that would require an adjustment of the Exercise Price
pursuant to Section 7;
then the Company shall cause to be given to each of the
registered holders of the Warrant Certificates at his address
appearing on the Warrant register, at least 20 days (or 10
days in any case specified in clause (a) or (b) 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
(i) the date as of which the holders of record of shares of
Common Stock to be entitled to receive any such rights,
options, warrant or distribution are to be determined, or
(ii) the initial expiration date set forth in any tender offer
or exchange offer for shares of Common Stock, or (iii) 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, sale,
transfer, lease, dissolution, liquidation, winding up or other
action. The failure to give the notice required by this Section
9 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.
Nothing contained in this Agreement or in any of the
Warrant Certificates shall be construed as conferring upon the
holders thereof the right to vote or to consent or to receive
notice as shareholders in respect of the meetings of shareholders
or the election of directors of the Company or any other matter
or any rights whatsoever as shareholders of the Company.
SECTION 10. Amendments.
The terms of this Warrant Agreement and the Warrants
may be amended by the Company, and the observance of any term
herein or therein may be waived, but only with the written
consent of the holders of Warrants representing a majority in
number of the total Warrant Shares at the time purchasable upon
the exercise of all then outstanding Warrants, provided that no
such action may change the Exercise Price (other than in
accordance with Section 7(k) hereof) without the written consent
of all holders of Warrants affected thereby.
SECTION 11. Miscellaneous.
(a) Issue Date. The provisions of this Warrant shall
be construed and shall be given effect in all respects as if
it had been issued and delivered by the Company on the date
hereof.
(b) Successors. This Warrant shall be binding upon
any successors or assigns of the Company.
(c) Governing Law. This Warrant shall be governed by
and construed in accordance with the laws of the State of
Delaware.
(d) Office of the Company. So long as the Warrants
remain outstanding, the Company shall maintain an office
where the Warrants may be presented for exercise, transfer,
division and combination. Such office shall be at 000
Xxxxx Xxxxxxxxx Xxxxxxxxx, Xx Xxxxxxx, Xxxxxxxxxx
00000-0000, unless and until the Company shall designate
and maintain another office for such purposes, in which
case the Company shall deliver notice of such change to
all holders of outstanding Warrants in the manner set
forth herein.
(e) Headings. The headings used in this Warrant are
used for convenience only and are not to be considered in
construing or interpreting this agreement.
(f) Notices. Unless otherwise provided, any notice
required or permitted under this Warrant shall be given
in writing and shall be deemed effectively given upon
personal delivery to the party to be notified or three
days after being sent via air courier, in all cases
addressed to the party to be notified at the address
indicated for such party on the signature page hereof,
or at such other address as such party may designate by
ten days advance written notice to the other party.
Notwithstanding the foregoing, notice may be given by
telex or facsimile provided that appropriate confirmation
of receipt is received.
(g) Saturdays, Sundays, Holidays. If the last or
appointed day for the taking of any action or the
expiration of any right required or granted herein shall
be a Saturday or a Sunday or shall be a legal holiday in
the State of California, then such action may be taken or
such right may be exercised on the next succeeding day not
a legal holiday.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
XXXX XX HOLDING CORP.
By:
-----------------------------
Name:
Title:
FS EQUITY PARTNERS III, L.P.
By: FS Capital Partners, L.P.
Its: General Partner
By: FS Holdings, Inc.
Its: General Partner
By:
---------------------------------------
Name:
Title:
FS EQUITY PARTNERS INTERNATIONAL, L.P.
By: FS&Co. International, L.P.
Its: General Partner
By: FS International Holdings Limited
Its: General Partner
By:
----------------------------------------
Name:
Title:
EXHIBIT B
ELECTION TO PURCHASE
(To Be Executed Upon Exercise Of Warrant Pursuant To Section 1)
The undersigned hereby irrevocably elects to exercise
the right represented by this Warrant Certificate, to receive
__________ shares of Common Stock and hereby tenders payment for
such shares [to the order of XXXX XX Holding Corp. by cash or
immediately available funds in the amount of $ _______] [by
delivery to the Company of __________ Warrant Shares with respect
to which this Warrant is being surrendered in payment of the
aggregate Exercise Price for the Warrant Shares to be delivered
to the holder] in accordance with the terms hereof. The
undersigned requests that a certificate for such shares be
registered in the name of __________________, 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____________________.
Date:__________________________
_______________________________
Print Name
_______________________________
Signature Guaranteed*
_______________________________
* The signature must be guaranteed by a bank or trust company
having an office in Los Angeles, California, or by a firm
having membership on the New York Stock Exchange.
EXHIBIT B
EXERCISABLE ON OR AFTER AUGUST 26, 2007
AND ON OR BEFORE AUGUST 27, 2007
OR UPON AN AUTOMATIC EXERCISE EVENT
No. _____ _________ Warrants
WARRANT CERTIFICATE
XXXX XX HOLDING CORP.
This Warrant Certificate certifies that
________________________, or registered assigns, is the
registered holder of ___________________ Warrants expiring
___________________ (the "Warrants") to purchase shares of
Common Stock (the "Common Stock") of XXXX XX Holding Corp. (the
"Company"). Each Warrant entitles the holder, (i) unless an
Automatic Exercise Event shall occur on or prior to August 27,
2007, upon exercise to receive from the Company on or after
August 26, 2007 and on or before 5:00 p.m. Los Angeles Time on
August 27, 2007 one fully paid and nonassessable share of Common
Stock (a "Warrant Share") at the initial exercise price (the
"Exercise Price") of $30.00, payable in lawful money of the
United States of America or in Warrant Shares by "cashless
exercise," upon surrender of this Warrant Certificate and
payment of the Exercise Price at the principal office of the
Company, but only subject to the conditions set forth herein and
in the Warrant Agreement referred to on the reverse hereof, or
(ii) upon the occurrence of an Automatic Exercise Event on or
prior to August 27, 2007, to receive automatically from the
Company a Warrant Share at the Exercise Price, payable by
"cashless exercise," upon surrender of this Warrant Certificate
and payment of the Exercise Price at the principal office 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 Warrants are subject to adjustment upon the
occurrence of certain events set forth in the Warrant Agreement.
Except in connection with an Automatic Exercise Event,
no warrant may be exercised before August 26, 2007 or after 5:00
PM, Los Angeles time, on August 27, 2007 and to the extent not
exercised by, or an Automatic Exercise Event shall not have
occurred by, such time, such Warrants shall become void.
This Warrant Certificate shall be governed and
construed in accordance with the internal laws of the State of
Delaware.
IN WITNESS WHEREOF, XXXX XX Holding Corp. has caused
this Warrant Certificate to be signed by its President and by its
Secretary, each by his signature or a facsimile of his signature.
Dated: ____________
By: __________________________
President
By: __________________________
Secretary
EXHIBIT B
[FORM OF WARRANT CERTIFICATE]
[REVERSE]
The Warrants evidenced by this Warrant Certificate are
part of a duly authorized issue of Warrants expiring August 27,
2007 entitling the holder on exercise to receive shares of
Common Stock, of the Company (the "Common Stock"), $.01 par
value, and are issued or to be issued pursuant to a Warrant
Agreement dated as of _________ ____, 2001 (the "Warrant
Agreement"), duly executed and delivered by the Company, which
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 Warrants. A copy of the Warrant
Agreement may be obtained by the holder hereof upon written
request to the Company.
Unless an Automatic Exercise Event shall occur on or
prior to August 27, 2007, warrants may be exercised at any time
on or after August 26, 2007 and on or before August 27, 2007.
The holder of Warrants evidenced by this Warrant Certificate
may exercise them, subject to the limitations set forth in the
Warrant Agreement, by surrendering this Warrant Certificate,
with the form of election to purchase set forth hereon properly
completed and executed, together with payment of the Exercise
Price in cash or immediately available funds or in Warrant
Shares by "cashless exercise," at the principal office of the
Company. In the event that upon any exercise of Warrants
evidenced hereby the number of Warrants exercised shall be less
than the total number of Warrants evidenced hereby, there shall
be issued to the holder hereof or his assignee a new Warrant
Certificate evidencing the number of Warrants not exercised.
Upon the occurrence of an Automatic Exercise Event on
or prior to August 27, 2007, the Warrants evidenced by this
Warrant Certificate shall automatically be exercised, subject to
the limitations set forth in the Warrant Agreement, and the
holder thereof shall be entitled to receive, upon surrendering
this Warrant Certificate, together with payment of the Exercise
Price in Warrant Shares by "cashless exercise," at the principal
office of the Company, the number of Warrant Shares resulting
after subtracting such Exercise Price.
The Warrant Agreement provides that upon the
occurrence of certain events the Exercise Price and the number
of Warrant Shares into which this Warrant is exercisable set
forth on the face hereof may, subject to certain conditions,
be adjusted. No fractions of a share of Common stock will be
issued upon the exercise of any Warrant, but the Company will
pay the cash value thereof determined as provided in the Warrant
Agreement. No adjustment shall be made for any dividends on any
Common Stock issuable upon exercise of this Warrant.
Warrant Certificates, where surrendered at the
principal 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 Warrant Agreement, but without
payment of any service charge, for another Warrant Certificate
or Warrant Certificates of like tenor evidencing in the
aggregate a like number of Warrants.
Upon due presentation for registration of transfer of
this Warrant Certificate at the principal office of the Company
a new Warrant Certificate or Warrant Certificates of like tenor
and evidencing in the aggregate a like number of Warrants shall
be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided in the Warrant
Agreement (including, without limitation, delivery to the
Company of the written agreement of such transferee(s) to become
party to the Stockholders' Agreement, dated as of _______ ___,
2001, by and among the Company and the other parties thereto,
if such transferee(s) are not already party thereto, prior to
receipt from the Company of any Warrant Shares as a result of
the exercise of the Warrants represented by such Warrant
Certificate), without charge except for any tax or other
governmental charge imposed in connection therewith.
The Company may deem and treat the registered
holder(s) hereof as the absolute owner(s) of this 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, and the Company shall not be affected by any
notice to the contrary. Neither the Warrants nor this Warrant
Certificate entitle any holder hereof to any rights of a
stockholder of the Company.
