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THIS WARRANT AND ANY SHARES ACQUIRED UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAW OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION TO THE
REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS. THIS WARRANT AND SUCH
SHARES MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN
COMPLIANCE WITH THE CONDITIONS SPECIFIED IN THIS WARRANT.
XXXX GROUP, INC.
COMMON STOCK PURCHASE WARRANT
No. W-001 April 18, 1997
Void after the Expiration Date (as defined herein)
94,735 Warrants (subject to adjustment)
to purchase Shares of Common Stock
Xxxx Group, Inc., a Delaware corporation (the "Company"), for value
received, hereby certifies that Xxxxxxxxx L.L.C., a New York limited liability
company ("Lender"), or registered assigns (the Lender or any assignee,
collectively the"Holder"), is entitled to purchase from the Company an aggregate
number of duly authorized, validly issued, fully paid and nonassessable shares
of Common Stock, par value $0.50 per share, of the Company (the "Common Stock")
equal to the Adjusted Share Amount (as defined in Section 1), at an initial
purchase price of $0.50 per share , at any time or from time to time prior to
5:00 P.M., New York City time, on April 18, 1999 (or such later date as may be
determined pursuant to Section 22) (the "Expiration Date"), all subject to the
terms, conditions and adjustments set forth below in this Warrant.
This Warrant is one of the Common Stock Purchase Warrants
(collectively, the "Warrants", such term to include any such warrants issued in
substitution therefor) originally issued in connection with the revolving credit
facility provided by the Lender to the Company of up to $8.5 million pursuant to
the terms of the Loan and Security Agreement, dated as of April 18, 1997,
between the Company and the Lender (as amended or otherwise modified from time
to time, the "Loan Agreement"). The Warrants originally so issued evidence
rights to purchase an aggregate of 94,735 shares of Common Stock, subject to
adjustment as
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provided herein, initially representing 2% of the aggregate issued and
outstanding shares of Common Stock on a fully diluted basis.
1. Definitions. As used herein, unless the context otherwise requires,
the following terms shall have the meanings indicated:
"Additional Shares of Common Stock" shall mean all shares (including
treasury shares) of Common Stock issued or sold (or, pursuant to Section 3.3 or
3.4, deemed to be issued) by the Company after the date hereof, whether or not
subsequently reacquired or retired by the Company (excluding shares of Common
Stock issued upon (i) the conversion or exchange of any existing preferred stock
of the Company and (ii) the exercise or exchange of any existing option,
warrant, debenture or similar agreement, in each case to the extent that such
shares do not exceed the number of shares issuable pursuant to existing rights),
other than
(a) shares issued upon the exercise of the Warrants, and
(b) such additional number of shares as may become issuable upon the
exercise of any of the securities referred to in the foregoing clause (a) by
reason of adjustments required pursuant to anti-dilution provisions
applicable to such securities as in effect on the date hereof, in order to
reflect any subdivision or combination of Common Stock, by reclassification
or otherwise, or any dividend on Common Stock payable in Common Stock.
"Adjusted Share Amount" shall mean, initially 94,735 shares of Common
Stock, subject to adjustment as set forth below.
"Adjustment Factor" shall mean initially 1.00 per share of Common
Stock, subject to adjustment and readjustment from time to time as provided in
Section 3, and, as so adjusted or readjusted, shall remain in effect until a
further adjustment or readjustment thereof is required by Section 3.
"Business Day" shall mean any day other than a Saturday or a Sunday or
a day on which commercial banking institutions in the City of New York or Los
Angeles are authorized by law to be closed. Any reference to "days" (unless
Business Days are specified) shall mean calendar days.
"Commission" shall mean the Securities and Exchange Commission or any
successor agency having jurisdiction to enforce the Securities Act.
"Common Stock" shall have the meaning assigned to it in the
introduction to this Warrant, such term to include any stock into which such
Common Stock shall have been changed or any stock resulting from any
reclassification of such Common Stock, and all other stock of any class or
classes (however designated) of the Company the holders of which have the right,
without limitation as to amount, either to all or to a share of the balance of
current
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dividends and liquidating dividends after the payment of dividends and
distributions on any shares entitled to preference.
"Company" shall have the meaning assigned to it in the introduction to
this Warrant, such term to include any corporation or other entity which shall
succeed to or assume the obligations of the Company hereunder in compliance with
Section 4.
"Convertible Securities" shall mean any evidences of indebtedness,
shares of stock (other than Common Stock) or other securities directly or
indirectly convertible into or exchangeable for Additional Shares of Common
Stock.
"Current Market Price" shall mean, on any date specified herein, the
average of the daily Market Price during the 10 consecutive trading days
commencing 15 trading days before such date, except that, if on any such date
the shares of Common Stock are not listed or admitted for trading on any
national securities exchange or quoted in the over-the-counter market, the
Current Market Price shall be the Market Price on such date.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations thereunder, or any
similar or successor statute.
"Expiration Date" shall have the meaning assigned to it in the
introduction to this Warrant.
"Loan Agreement" shall have the meaning assigned to it in the
introduction to this Warrant.
"Holder" shall have the meaning assigned to it in the introduction to
this Warrant.
"Market Price" shall mean, on any date specified herein, the amount per
share of the Common Stock, equal to (a) the last reported sale price of such
Common Stock, regular way, on such date or, in case no such sale takes place on
such date, the average of the closing bid and asked prices thereof regular way
on such date, in either case as officially reported on the principal national
securities exchange on which such Common Stock is then listed or admitted for
trading, or (b) if such Common Stock is not then listed or admitted for trading
on any national securities exchange but is designated as a national market
system security by the NASD, the last reported trading price of the Common Stock
on such date, or (c) if there shall have been no trading on such date or if the
Common Stock is not so designated, the average of the closing bid and asked
prices of the Common Stock on such date as shown by the NASD automated quotation
system, or (d) if such Common Stock is not then listed or admitted for trading
on any national exchange or quoted in the over-the-counter market, the fair
value thereof (as of a date which is within 20 days of the date as of which the
determination is to be made) determined in good faith jointly by the Company and
the Holder; provided, however, that if such parties are unable to reach
agreement within a reasonable period of time, the Market Price shall be
determined in good faith by an independent investment banking firm
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selected jointly by the Company and the Holder or, if that selection cannot be
made within ten days, by an independent investment banking firm selected by the
American Arbitration Association in accordance with its rules, and provided
further, that the Company shall pay all of the fees and expenses of any third
parties incurred in connection with determining the Market Price.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Options" shall mean any rights, options or warrants to subscribe for,
purchase or otherwise acquire either Additional Shares of Common Stock or
Convertible Securities.
"Other Securities" shall mean any stock (other than Common Stock) and
other securities of the Company or any other Person (corporate or otherwise)
which the holders of the Warrants at any time shall be entitled to receive, or
shall have received, upon the exercise of the Warrants, in lieu of or in
addition to Common Stock, or which at any time shall be issuable or shall have
been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 4 or otherwise.
"Person" shall mean any individual, firm, corporation, partnership,
trust, joint venture, association, joint stock company, limited liability
company, unincorporated organization or any other entity or organization,
including a government or agency or subdivision thereof, and shall include any
successor (by merger or otherwise) of such entity.
"Purchase Price" shall mean the purchase price per share of Common
Stock, which shall initially be $0.50 per share. If the par value per share of
Common Stock is at any time increased or decreased, the Purchase Price shall be
adjusted to equal the par value per share of Common Stock immediately after the
effective time and date of such increase or decrease.
"Registration Agreement" shall mean the Registration Agreement, dated
as of the date hereof, substantially in the form of Exhibit E to the Loan
Agreement.
"Restricted Securities" shall mean (a) any Warrants bearing the
applicable legend set forth in Section 10.1, (b) any shares of Common Stock (or
Other Securities) issued or issuable upon the exercise of Warrants which are
(or, upon issuance, will be) evidenced by a certificate or certificates bearing
the applicable legend set forth in such Section, and (c) any shares of Common
Stock (or Other Securities) issued subsequent to the exercise of any of the
Warrants as a dividend or other distribution with respect to, or resulting from
a subdivision of the outstanding shares of Common Stock (or other Securities)
into a greater number of shares by reclassification, stock splits or otherwise,
or in exchange for or in replacement of the Common Stock (or Other Securities)
issued upon such exercise, which are evidenced by a certificate or certificates
bearing the applicable legend set forth in such Section.
"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time, and the rules and regulations thereunder, or any similar or
successor statute.
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"Warrants" shall have the meaning assigned to it in the introduction to
this Warrant.
2. Exercise of Warrant.
2.1. Manner of Exercise; Payment of the Purchase Price. (a) This
Warrant may be exercised by the Holder hereof, in whole (with respect to the
number of shares determined in accordance with Section 3.1) or in part, at any
time or from time to time prior to the Expiration Date, by surrendering to the
Company at its principal office during normal business hours on any Business Day
this Warrant, with the form of Election to Purchase Shares attached hereto as
Exhibit A (or a reasonable facsimile thereof) duly executed by the Holder and
accompanied by payment of the Purchase Price for the number of shares of Common
Stock specified in such form.
(b) Payment of the Purchase Price may be made as follows (or by any
combination of the following): (i) in United States currency by cash or delivery
of a certified check, bank draft or postal or express money order payable to the
order of the Company or by wire transfer to the Company, (ii) by cancellation of
all or any part of the unpaid principal amount of Notes held by the Holder in an
amount equal to the Purchase Price, (iii) by cancellation of all or any part of
the unpaid amount of the exit fee payable by the Company to the Holder pursuant
to the terms and provisions of the Loan Agreement, (iv) by reducing the the
amount otherwise payable to the Holder pursuant to Section 3.2.2, (v) by
cancellation of such number of the shares of Common Stock otherwise issuable to
the Holder upon such exercise as shall be specified in such Election to Purchase
Shares, such that the Current Market Price of such specified number of shares on
the date of exercise attributable to such shares shall equal the Purchase Price
attributable to the shares of Common Stock to be issued upon such exercise, in
which case such amount shall be deemed to have been paid to the Company and the
number of shares issuable upon such exercise shall be reduced by such specified
number, or (vi) by surrender to the Company for cancellation of securities of
the Company having a Current Market Price on the date of Warrant exercise equal
to the Purchase Price.
2.2. When Exercise Effective. Each exercise of this Warrant shall be
deemed to have been effected immediately prior to the close of business on the
Business Day on which this Warrant shall have been surrendered to, and the
Purchase Price shall have been received by, the Company as provided in Section
2.1, and at such time the Person or Persons in whose name or names any
certificate or certificates for shares of Common Stock (or Other Securities)
shall be issuable upon such exercise as provided in Section 2.3 shall be deemed
to have become the holder or holders of record thereof for all purposes.
2.3. Delivery of Stock Certificates, etc.; Charges, Taxes and Expenses.
(a) As soon as practicable after each exercise of this Warrant, in whole or in
part, and in any event within three Business Days thereafter, the Company shall
cause to be issued in the name of and delivered to the Holder hereof or, subject
to Section 10, as the Holder may direct,
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(1) a certificate or certificates for the number of shares of Common
Stock (or Other Securities) to which the Holder shall be entitled upon such
exercise plus, in lieu of issuance of any fractional share to which the
Holder would otherwise be entitled, if any, a check for the amount of cash
equal to the same fraction multiplied by the Current Market Price per share
on the date of Warrant exercise, and
(2) in case such exercise is for less than all of the shares of
Common Stock purchasable under this Warrant, a new Warrant or Warrants of
like tenor, for the balance of the shares of Common Stock purchasable
hereunder.
(b) Issuance of certificates for shares of Common Stock upon the
exercise of this Warrant shall be made without charge to the Holder hereof for
any issue or transfer tax or other incidental expense, in respect of the
issuance of such certificates, all of which such taxes and expenses shall be
paid by the Company, unless the Holder directs shares of Common Stock to be
issued in the name of a Person other than the Holder, in which case the Holder
or such transferee shall pay any transfer taxes payable in connection with such
transfer. It shall be a condition to such issuance that the Company receive
evidence reasonably acceptable to it that any transfer taxes payable in
connection with such transfer have been paid.
2.4. Company to Reaffirm Obligations. The Company shall, at the time
of each exercise of this Warrant, upon the request of the Holder hereof,
acknowledge in writing its continuing obligation to afford to such Holder all
rights of the shares of Common Stock or Other Securities issued upon such
exercise to which the Holder shall continue to be entitled after such exercise
in accordance with the terms of this Warrant, provided that if the Holder of
this Warrant shall fail to make any such request, such failure shall not affect
the continuing obligation of the Company to afford such rights to the Holder.
3. Adjustment of Common Stock Issuable Upon Exercise.
3.1. Adjustment of Number of Shares.
Upon each adjustment of the Adjustment Factor as a result of the
calculations made in this Section 3, this Warrant shall thereafter evidence the
right to receive, at the Purchase Price then in effect, that number of shares of
Common Stock obtained by dividing (i) the product of the aggregate number of
shares covered by this Warrant immediately prior to such adjustment and the
Adjustment Factor in effect immediately prior to such adjustment of the
Adjustment Factor by (ii) the Adjustment Factor in effect immediately after such
adjustment of the Adjustment Factor.
3.2. Adjustment of Adjustment Factor.
3.2.1 Issuance of Additional Shares of Common Stock. In case the
Company at any time or from time to time after the date hereof shall issue or
sell Additional Shares of Common Stock (including Additional Shares of Common
Stock deemed to be issued pursuant to Section 3.3 or Section 3.4) without
consideration or for a consideration per share less than the greater of the
Current Market Price and the Purchase Price immediately prior to such
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issue or sale, then, and in each such case, subject to Section 3.8, such
Adjustment Factor shall be decreased, concurrently with such issue or sale, to a
number (calculated to the nearest .00001) determined by multiplying such
Adjustment Factor by a fraction
(a) the numerator of which shall be the sum of (i) the
number of shares of Common Stock outstanding immediately prior to such
issue or sale and (ii) the number of shares of Common Stock which the
aggregate consideration received by the Company for the total number of
such Additional Shares of Common Stock so issued or sold would purchase
at the greater of such Current Market Price and the Purchase Price, and
(b) the denominator of which shall be the number of shares
of Common Stock outstanding immediately after such issue or sale,
provided that, for the purposes of this Section 3.2.1, (x) immediately
after any Additional Shares of Common Stock are deemed to have been
issued pursuant to Section 3.3 or 3.4, such Additional Shares shall be
deemed to be outstanding, and (y) treasury shares shall not be deemed
to be outstanding.
3.2.2 Extraordinary Dividends and Distributions. In case the
Company at any time or from time to time after the date hereof shall declare,
order, pay or make a dividend or other distribution (including, without
limitation, any distribution of other or additional stock or other securities or
property or Options by way of dividend or spin-off, reclassification,
recapitalization or similar corporate rearrangement) on the Common Stock , then,
in each such case, the Company shall pay to the Holder of this Warrant, upon the
exercise of this Warrant, an amount equal to the product of (i) the number of
shares of Common Stock that the Holder would be entitled to purchase upon
exercise of this Warrant after consideration of all prior adjustments and
readjustments pursuant to Section 3.1, and (ii) the aggregate amount at such
time of such dividend or distribution (as determined in good faith by the Board
of Directors of the Company ) applicable to the shares of Common Stock issuable
upon such exercise by such Holder.
3.3. Treatment of Options and Convertible Securities. In case
the Company at any time or from time to time after the date hereof shall issue,
sell, grant or assume, or shall fix a record date for the determination of
holders of any class of securities entitled to receive, any Options or
Convertible Securities, then, and in each such case, the maximum number of
Additional Shares of Common Stock (as set forth in the instrument relating
thereto, without regard to any provisions contained therein for a subsequent
adjustment of such number) issuable upon the exercise of such Options or, in the
case of Convertible Securities and Options therefor, the conversion or exchange
of such Convertible Securities shall be deemed to be Additional Shares of Common
Stock issued as of the time of such issue, sale, grant or assumption or, in case
such a record date shall have been fixed, as of the close of business on such
record date (or, if the Common Stock trades on an ex-dividend basis, on the date
prior to the commencement of ex-dividend trading), provided that such Additional
Shares of Common Stock shall not be deemed to have been issued unless the
consideration per share (determined pursuant to Section 3.5) of such shares
would be less than the greater of the
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Current Market Price and the Purchase Price in effect on the date of and
immediately prior to such issue, sale, grant or assumption or immediately prior
to the close of business on such record date (or, if the Common Stock trades on
an ex-dividend basis, on the date prior to the commencement of ex-dividend
trading), as the case may be, and provided, further, that in any such case in
which Additional Shares of Common Stock are deemed to be issued
(a) no further adjustment of the Adjustment Factor shall be
made upon the subsequent issue or sale of Convertible Securities or
shares of Common Stock upon the exercise of such Options or the
conversion or exchange of such Convertible Securities, except in the
case of any such Options or Convertible Securities which contain
provisions requiring an adjustment, subsequent to the date of the issue
or sale thereof, of the number of Additional Shares of Common Stock
issuable upon the exercise of such Options or the conversion or
exchange of such Convertible Securities by reason of (x) a change of
control of the Company, (y) the acquisition by any Person or group of
Persons of any specified number or percentage of the voting securities
of the Company or (z) any similar event or occurrence, each such case
to be deemed hereunder to involve a separate issuance of Additional
Shares of Common Stock, Options or Convertible Securities, as the case
may be;
(b) if such Options or Convertible Securities by their terms
provide, with the passage of time or otherwise, for any increase in the
consideration payable to the Company, or decrease in the number of
Additional Shares of Common Stock issuable, upon the exercise,
conversion or exchange thereof (by change of rate or otherwise), the
Adjustment Factor computed upon the original issue, sale, grant or
assumption thereof (or upon the occurrence of the record date, or date
prior to the commencement of ex-dividend trading, as the case may be,
with respect thereto), and any subsequent adjustments based thereon,
shall, upon any such increase or decrease becoming effective, be
recomputed to reflect such increase or decrease insofar as it affects
such Options, or the rights of conversion or exchange under such
Convertible Securities, which are outstanding at such time;
(c) upon the expiration (or purchase by the Company and
cancellation or retirement) of any such Options which shall not have
been exercised or the expiration of any rights of conversion or
exchange under any such Convertible Securities which (or purchase by
the Company and cancellation or retirement of any such Convertible
Securities the rights of conversion or exchange under which) shall not
have been exercised, the Adjustment Factor computed upon the original
issue, sale, grant or assumption thereof (or upon the occurrence of the
record date, or date prior to the commencement of ex-dividend trading,
as the case may be, with respect thereto), and any subsequent
adjustments based thereon, shall, upon such expiration (or such
cancellation or retirement, as the case may be), be recomputed as if:
(i) in the case of Options for Common Stock or Convertible
Securities, the only Additional Shares of Common Stock issued
or sold were the Additional Shares of Common Stock, if any,
actually issued or sold upon the
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exercise of such Options or the conversion or exchange of such
Convertible Securities and the consideration received therefor
was the consideration actually received by the Company for the
issue, sale, grant or assumption of all such Options, whether
or not exercised, plus the consideration actually received by
the Company upon such exercise, or for the issue or sale of
all such Convertible Securities which were actually converted
or exchanged, plus the additional consideration, if any,
actually received by the Company upon such conversion or
exchange, and
(ii) in the case of Options for Convertible Securities,
only the Convertible Securities, if any, actually issued or
sold upon the exercise of such Options were issued at the time
of the issue or sale, grant or assumption of such Options, and
the consideration received by the Company for the Additional
Shares of Common Stock deemed to have then been issued was the
consideration actually received by the Company for the issue,
sale, grant or assumption of all such Options, whether or not
exercised, plus the consideration deemed to have been received
by the Company (pursuant to Section 3.5) upon the issue or
sale of such Convertible Securities with respect to which such
Options were actually exercised;
(d) no readjustment pursuant to subdivision (b) or (c) above
shall have the effect of increasing the Adjustment Factor by an amount
in excess of the amount of the adjustment thereof originally made in
respect of the issue, sale, grant or assumption of such Options or
Convertible Securities; and
(e) in the case of any such Options which expire by their
terms not more than 30 days after the date of issue, sale, grant or
assumption thereof, no adjustment of the Adjustment Factor shall be
made until the expiration or exercise of all such Options, whereupon
such adjustment shall be made in the manner provided in subdivision (c)
above.
3.4. Treatment of Stock Dividends, Stock Splits, etc. In case
the Company at any time or from time to time after the date hereof shall declare
or pay any dividend on the Common Stock payable in Common Stock, or shall effect
a subdivision of the outstanding shares of Common Stock into a greater number of
shares of Common Stock (by reclassification or otherwise than by payment of a
dividend in Common Stock), then, and in each such case, Additional Shares of
Common Stock shall be deemed to have been issued (a) in the case of any such
dividend, immediately after the close of business on the record date for the
determination of holders of any class of securities entitled to receive such
dividend, or (b) in the case of any such subdivision, at the close of business
on the day immediately prior to the day upon which such corporate action becomes
effective.
3.5. Computation of Consideration. For the purposes of this
Section 3,
(a) the consideration for the issue or sale of any Additional
Shares of Common Stock shall, irrespective of the accounting treatment
of such consideration,
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(i) insofar as it consists of cash, be computed at the net
amount of cash received by the Company, without deducting any
expenses paid or incurred by the Company or any commissions or
compensations paid or concessions or discounts allowed to
underwriters, agents, dealers or others performing similar
services in connection with such issue or sale,
(ii) insofar as it consists of property (including
securities) other than cash, be computed at the fair value
thereof at the time of such issue or sale, as determined in
good faith by the Board of Directors of the Company, and
(iii) in case Additional Shares of Common Stock are issued
or sold together with other stock or securities or other
assets of the Company for a consideration which covers both,
be the portion of such consideration so received, computed as
provided in clauses (i) and (ii) above, allocable to such
Additional Shares of Common Stock, all as determined in good
faith by the Board of Directors of the Company;
(b) Additional Shares of Common Stock deemed to have been
issued pursuant to Section 3.3, relating to Options and Convertible
Securities, shall be deemed to have been issued for a consideration per
share determined by dividing
(i) the total amount, if any, received and receivable by
the Company as consideration for the issue, sale, grant or
assumption of the Options or Convertible Securities in
question, plus the minimum aggregate amount of additional
consideration (as set forth in the instruments relating
thereto, without regard to any provision contained therein for
a subsequent adjustment of such consideration to protect
against dilution) payable to the Company upon the exercise in
full of such Options or the conversion or exchange of such
Convertible Securities or, in the case of Options for
Convertible Securities, the exercise of such Options for
Convertible Securities and the conversion or exchange of such
Convertible Securities, in each case computing such
consideration as provided in the foregoing subdivision (a),
by
(ii) the maximum number of shares of Common Stock (as set
forth in the instruments relating thereto, without regard to
any provision contained therein for a subsequent adjustment of
such number to protect against dilution) issuable upon the
exercise of such Options or the conversion or exchange of such
Convertible Securities; and
(c) Additional Shares of Common Stock deemed to have been
issued pursuant to Section 3.4, relating to stock dividends, stock
splits, etc., shall be deemed to have been issued for no consideration.
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3.6. Adjustments for Combinations, etc. In case the
outstanding shares of Common Stock shall be combined or consolidated, by
reclassification or otherwise, into a lesser number of shares of Common Stock,
the Adjustment Factor in effect immediately prior to such combination or
consolidation shall, concurrently with the effectiveness of such combination or
consolidation, be proportionately increased.
3.7 Dilution in Case of Other Securities. In case any Other
Securities shall be issued or sold or shall become subject to issue or sale upon
the conversion or exchange of any stock (or Other Securities) of the Company (or
any issuer of Other Securities or any other Person referred to in Section 4) or
to subscription, purchase or other acquisition pursuant to any Options issued or
granted by the Company (or any such other issuer or Person) for a consideration
such as to dilute, on a basis consistent with the standards established in the
other provisions of this Section 3, the purchase rights granted by this Warrant,
then, and in each such case, the computations, adjustments and readjustments
provided for in this Section 3 with respect to the Purchase Price and the number
of shares purchasable upon Warrant exercise shall be made as nearly as possible
in the manner so provided and applied to determine the amount of Other
Securities from time to time receivable upon the exercise of the Warrants, so as
to protect the holders of the Warrants against the effect of such dilution.
3.8 De Minimis Adjustments. If the amount of any adjustment of
the Adjustment Factor per share required pursuant to this Section 3 would be
less than one-tenth (1/10) of one percent (1%) of the Adjustment Factor in
effect at such time, such amount shall be carried forward and adjustment with
respect thereto made at the time of and together with any subsequent adjustment
which, together with such amount and any other amount or amounts so carried
forward, shall aggregate a change in the Adjustment Factor of at least one-tenth
(1/10) of one percent (1%) of such Adjustment Factor.
3.9 Abandoned Dividend or Distribution. If the Company shall
take a record of the holders of its Common Stock for the purpose of entitling
them to receive a dividend or other distribution (which results in an adjustment
to the Adjustment Factor under the terms of this Warrant) and shall, thereafter,
and before such dividend or distribution is paid or delivered to stockholders
entitled thereto, legally abandon its plan to pay or deliver such dividend or
distribution, then any adjustment made to the Adjustment Factor and number of
shares of Common Stock purchasable upon Warrant exercise by reason of the taking
of such record shall be reversed, and any subsequent adjustments, based thereon,
shall be recomputed.
3.10. Grant, Issue or Sale of Options, Convertible Securities,
or Rights. If at any time or from time to time the Company shall grant, issue or
sell any Options, Convertible Securities, rights to purchase property or
evidences of indebtedness (the "Purchase Rights") to the holders of its shares
of Common Stock generally and such grants, issuances or sales do not result in
an adjustment of the Adjustment Factor under Section 3 (or otherwise entitle the
Holder to receive the Purchase Rights), then the Holder of this Warrant shall be
entitled to acquire (within 30 days after the later to occur of the initial
exercise date of such Purchase Rights or receipt by such Holder of the notice
concerning Purchase Rights to which such
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Holder shall be entitled under Section 8) and upon the terms applicable to such
Purchase Rights either:
(i) the aggregate Purchase Rights which such Holder could
have acquired if it had held the number of shares of Common Stock
acquired upon exercise of this Warrant immediately before the grant,
issuance or sale of such Purchase Rights; provided that if any Purchase
Rights were distributed to holders of Common Stock without the payment
of additional consideration by such holders, corresponding Purchase
Rights shall be distributed to the exercising Holder of this Warrant as
soon as possible after such exercise and it shall not be necessary for
the exercising Holder of this Warrant specifically to request delivery
of such rights; or
(ii) in the event that any such Purchase Rights shall
have expired or shall expire prior to the end of such 30 day period,
the number of shares of Common Stock or the amount of property which
such Holder could have acquired upon such exercise at the time or times
at which the Company granted, issued or sold such expired Purchase
Rights.
4. Consolidation, Merger, etc.
4.1. Adjustments for Consolidation, Merger, Sale of Assets,
Reorganization, etc. In case the Company after the date hereof (a) shall
consolidate with or merge into any other Person and shall not be the continuing
or surviving corporation of such consolidation or merger, or (b) shall permit
any other Person to consolidate with or merge into the Company and the Company
shall be the continuing or surviving Person but, in connection with such
consolidation or merger, the Common Stock or Other Securities shall be changed
into or exchanged for stock or other securities of any other Person or cash or
any other property, or (c) shall transfer all or substantially all of its
properties or assets to any other Person, or (d) shall effect a capital
reorganization or reclassification of the Common Stock or Other Securities
(other than a capital reorganization or reclassification resulting in the issue
of Additional Shares of Common Stock for which adjustment in the Adjustment
Factor is provided in Section 3.2.1 or 3.2.2), then, and in the case of each
such transaction, proper provision shall be made so that, upon the basis and the
terms and in the manner provided in this Warrant, the Holder, upon the exercise
hereof at any time after the consummation of such transaction, shall be entitled
to receive (at the aggregate Adjustment Factor in effect at the time of such
consummation for all Common Stock or Other Securities issuable upon such
exercise immediately prior to such consummation), in lieu of the Common Stock or
Other Securities issuable upon such exercise prior to such consummation, the
highest amount of securities, cash or other property to which such Holder would
actually have been entitled as a stockholder upon such consummation if such
Holder had exercised this Warrant immediately prior thereto, subject to
adjustments (subsequent to such consummation) as nearly equivalent as possible
to the adjustments provided for in Sections 3 through 5, provided that if a
purchase, tender or exchange offer shall have been made to and accepted by the
holders of more than 50% of the outstanding shares of Common Stock, and if the
Holder so designates in a notice given to the Company on or before the date
immediately preceding the date of the consummation of such
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transaction, the Holder upon the exercise of the Warrants shall be entitled to
receive the highest amount of securities, cash or other property to which it
would actually have been entitled as a stockholder if such Holder had exercised
such Warrants immediately prior to the expiration of such purchase, tender or
exchange offer and accepted such offer, subject to adjustments (from and after
the consummation of such purchase, tender or exchange offer) as nearly
equivalent as possible to the adjustments provided for in Sections 3 through 5.
4.2. Assumption of Obligations. Notwithstanding anything contained
in the Warrants or in the Loan Agreement to the contrary, the Company shall not
effect any of the transactions described in clauses (a) through (d) of Section
4.1 unless, prior to the consummation thereof, each Person (other than the
Company) which may be required to deliver any stock, securities, cash or
property upon the exercise of this Warrant as provided herein shall assume, by
written instrument delivered to, and in form and substance reasonably
satisfactory to, the Holder, (a) the obligations of the Company under this
Warrant (and if the Company shall survive the consummation of such transaction,
such assumption shall be in addition to, and shall not release the Company from,
any continuing obligations of the Company under this Warrant), (b) the
obligations of the Company under the Registration Agreement and (c) the
obligation to deliver to the Holder such shares of stock, securities, cash or
property as, in accordance with the foregoing provisions of this Section 4, the
Holder may be entitled to receive and such Person shall have similarly delivered
to the Holder an opinion of counsel for such Person, which counsel shall be
reasonably satisfactory to the Holder, stating that each of this Warrant and the
Registration Agreement shall thereafter continue in full force and effect and
the terms hereof (including, without limitation, all of the provisions of this
Section 4) shall be applicable to the stock, securities, cash or property which
such Person may be required to deliver upon any exercise of this Warrant or the
exercise of any rights pursuant hereto. Nothing in this Section 4 shall be
deemed to authorize the Company to enter into any transaction not otherwise
permitted by the Loan Agreement.
5. Other Dilutive Events. In case any event shall occur as to
which the provisions of Section 3 or Section 4 hereof are not strictly
applicable or if strictly applicable would not fairly protect the purchase
rights of the Holder in accordance with the essential intent and principles of
such Sections, then, in each such case, the Board of Directors of the Company
shall in good faith make an adjustment in the application of such provisions, in
accordance with such essential intent and principles, so as to preserve, without
dilution, the purchase rights represented by this Warrant.
6. No Dilution or Impairment. The Company shall not, by amendment
of its certificate of incorporation or through any consolidation, merger,
reorganization, transfer of assets, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Warrant, but will at all times in good faith assist
in the carrying out of all such terms and in the taking of all such action as
may be necessary or appropriate in order to protect the rights of the Holder
against dilution or other impairment. Without limiting the generality of the
foregoing, the Company (a) shall not permit the par value of any shares of stock
receivable upon the exercise of this Warrant to exceed the amount payable
therefor upon such exercise, (b) shall take all such action as may
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be necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable shares of stock, free from all taxes, liens,
security interests, encumbrances, preemptive rights and charges on the exercise
of the Warrants from time to time outstanding, (c) shall not take any action
which results in any adjustment of the Adjustment Factor if the total number of
shares of Common Stock (or Other Securities) issuable after the action upon the
exercise of all of the Warrants would exceed the total number of shares of
Common Stock (or Other Securities) then authorized by the Company's certificate
of incorporation and available for the purpose of issue upon such exercise, and
(d) shall not issue any capital stock of any class which is preferred as to
dividends or as to the distribution of assets upon voluntary or involuntary
dissolution, liquidation or winding-up, unless the rights of the holders thereof
shall be limited to a fixed rate or sum or percentage of par value or a sum
determined by reference to a formula based on a published index of interest
rates, an interest rate publicly announced by a financial institution or a
similar indicator of interest rates in respect of participation in dividends and
to a fixed sum or percentage of par value in any such distribution of assets.
7. Accountants' Report as to Adjustments. In each case of any
adjustment or readjustment in the shares of Common Stock (or Other Securities)
issuable upon the exercise of this Warrant, the Company at its expense shall
promptly compute such adjustment or readjustment in accordance with the terms of
this Warrant and cause independent certified public accountants of recognized
national standing (which may be the regular auditors of the Company) selected by
the Company to verify such computation (other than any computation of the fair
value of property as determined in good faith by the Board of Directors of the
Company) and prepare a report setting forth such adjustment or readjustment and
showing in reasonable detail the method of calculation thereof and the facts
upon which such adjustment or readjustment is based, including a statement of
(a) the consideration received or to be received by the Company for any
Additional Shares of Common Stock issued or sold or deemed to have been issued,
(b) the number of shares of Common Stock outstanding or deemed to be
outstanding, and (c) the Adjustment Factor in effect immediately prior to such
issue or sale and as adjusted and readjusted (if required by Section 3) on
account thereof. The Company shall forthwith mail a copy of each such report to
each Holder and shall, upon the written request at any time of any Holder,
furnish to such holder a like report setting forth the Adjustment Factor at the
time in effect and showing in reasonable detail how it was calculated. The
Company shall also keep copies of all such reports at its principal office and
shall cause the same to be available for inspection at such office during normal
business hours by any Holder or any prospective purchaser of a Warrant
designated by the Holder thereof.
8. Notices of Corporate Action. In the event of:
(a) any taking by the Company of a record of the holders
of any class of securities for the purpose of determining the holders
thereof who are entitled to receive any dividend (other than a
regularly scheduled cash dividend payable out of consolidated earnings
or earned surplus, determined in accordance with generally accepted
accounting principles, in an amount not exceeding the amount of the
immediately preceding cash dividend for such period) or other
distribution, or any right
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to subscribe for, purchase or otherwise acquire any shares of stock of
any class or any other securities or property, or to receive any other
right, or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the
Company, any consolidation or merger involving the Company and any
other Person, any transaction or series of transactions in which more
than 50% of the voting securities of the Company are transferred to
another Person, or any transfer, sale or other disposition of all or
substantially all the assets of the Company to any other Person, or
(c) any voluntary or involuntary dissolution, liquidation
or winding-up of the Company,
the Company shall mail to each Holder a notice specifying (i) the date or
expected date on which any such record is to be taken for the purpose of such
dividend, distribution or right, and the amount and character of such dividend,
distribution or right, and (ii) the date or expected date on which any such
reorganization, reclassification, recapitalization, consolidation, merger,
transfer, sale, disposition, dissolution, liquidation or winding-up is to take
place and the time, if any such time is to be fixed, as of which the holders of
record of Common Stock (or Other Securities) shall be entitled to exchange their
shares of Common Stock (or Other Securities) for the securities or other
property deliverable upon such reorganization, reclassification,
recapitalization, consolidation, merger, transfer, dissolution, liquidation or
winding-up. Such notice shall be mailed at least 30 days prior to the date
therein specified.
9. Registration of Common Stock. If any shares of Common
Stock required to be reserved for purposes of exercise of this Warrant require
registration with or approval of any governmental authority under any federal or
state law (other than the Securities Act) before such shares may be issued upon
exercise, the Company shall, at its expense and as expeditiously as possible,
use its best efforts to cause such shares to be duly registered or approved, as
the case may be. The Company shall, at its expense, obtain promptly and maintain
the approval for listing on each such exchange, upon official notice of
issuance, the shares of Common Stock issuable upon exercise of the then
outstanding Warrants and maintain the listing of such shares after their
issuance; and the Company shall also list on such national securities exchange,
shall register under the Exchange Act and shall maintain such listing of, any
Other Securities that at any time are issuable upon exercise of the Warrants, if
and at the time that any securities of the same class shall be listed on such
national securities exchange by the Company.
10. Restrictions on Transfer.
10.1. Restrictive Legends. Except as otherwise permitted by
this Section 10, each Warrant (including each Warrant issued upon the transfer
of any Warrant) shall be stamped or otherwise imprinted with a legend in
substantially the following form:
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"THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR THE SECURITIES LAW OF ANY STATE, AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES
LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION TO THE REGISTRATION
REQUIREMENTS OF SUCH ACT AND SUCH LAWS. THIS WARRANT AND SUCH SHARES
MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN
COMPLIANCE WITH THE CONDITIONS SPECIFIED IN THIS WARRANT."
Except as otherwise permitted by this Section 10, each certificate for Common
Stock (or Other Securities) issued upon the exercise of any Warrant, and each
certificate issued upon the transfer of any such Common Stock (or Other
Securities), shall be stamped or otherwise imprinted with a legend in
substantially the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAW OF ANY STATE, AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR
PURSUANT TO AN APPLICABLE EXEMPTION TO THE REGISTRATION REQUIREMENTS OF
SUCH ACT AND SUCH LAWS. SUCH SHARES MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE CONDITIONS
SPECIFIED IN CERTAIN COMMON STOCK PURCHASE WARRANTS ISSUED ON APRIL 18,
1997 BY XXXX GROUP, INC. A COMPLETE AND CORRECT COPY OF THE FORM OF
SUCH WARRANT IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF
XXXX GROUP, INC. OR AT THE OFFICE OR AGENCY MAINTAINED BY XXXX GROUP,
INC. AS PROVIDED IN SUCH WARRANTS AND WILL BE FURNISHED TO THE HOLDER
OF SUCH SHARES UPON WRITTEN REQUEST AND WITHOUT CHARGE."
10.2. Transfer to Comply With the Securities Act. Restricted
Securities may not be sold, assigned, pledged, hypothecated, encumbered
or in any manner transferred or disposed of, in whole or in part,
except in compliance with the provisions of the Securities Act and
state securities or Blue Sky laws and the terms and conditions hereof.
10.3. Termination of Restrictions. The restrictions imposed by
this Section 10 upon the transferability of Restricted Securities shall cease
and terminate as
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to any particular Restricted Securities (a) when such securities are transferred
pursuant to an effective registration statement under the Securities Act, (b)
when such securities are transferred pursuant to Rule 144 under the Securities
Act (or any similar provision then in force), or (c) when such securities are
transferred in any other transaction if the Holder delivers to the Company an
opinion of its counsel, which counsel and opinion shall be reasonably
satisfactory to the Company, to the effect that such legend is no longer
necessary in order to protect the Company against a violation of the Securities
Act upon any sale or other disposition of such securities without registration
thereunder. Whenever such restrictions shall cease and terminate as to any
Restricted Securities, the holder thereof shall be entitled to receive from the
Company, without expense (other than applicable transfer taxes, if any), new
securities of like tenor not bearing the applicable legends required by Section
10.1.
11. Availability of Information. The Company shall timely file the
reports required to be filed by it under the Securities Act and the Exchange Act
(including but not limited to the reports under Sections 13 and 15(d) of the
Exchange Act referred to in subparagraph (c) of Rule 144 adopted by the
Commission under the Securities Act)) and will take such further action as any
holder of Restricted Securities may reasonably request, all to the extent
required from time to time to enable such holder to sell Restricted Securities
without registration under the Securities Act within the limitation of the
exemptions provided by (a) Rule 144 under the Securities Act, as such rules may
be amended from time to time, or (b) any other rule or regulation now existing
or hereafter adopted by the Commission. Upon the request of any holder of
Restricted Securities, the Company will deliver to such holder a written
statement as to whether it has complied with such requirements.
12. Reservation of Stock, etc. The Company shall at all times reserve
and keep available, solely for issuance and delivery upon exercise of the
Warrants, the number of shares of Common Stock (or Other Securities) from time
to time issuable upon exercise of all Warrants at the time outstanding. All
shares of Common Stock (or Other Securities) issuable upon exercise of any
Warrants shall be duly authorized and, when issued upon such exercise, shall be
validly issued and, in the case of shares, fully paid and nonassessable with no
liability on the part of the holders thereof, and, in the case of all
securities, shall be free from all taxes, liens, security interests,
encumbrances, preemptive rights and charges. The transfer agent for the Common
Stock, which may be the Company ("Transfer Agent"), and every subsequent
Transfer Agent for any shares of the Company's capital stock issuable upon the
exercise of any of the purchase rights represented by this Warrant are hereby
irrevocably authorized and directed at all times until the Expiration Date to
reserve such number of authorized and unissued shares as shall be requisite for
such purpose. The Company shall keep copies of this Warrant on file with the
Transfer Agent for the Common Stock 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 this Warrant. The Company shall supply such
Transfer Agent with duly executed stock certificates for such purpose. All
Warrant Certificates surrendered
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upon the exercise of the rights thereby evidenced shall be canceled, and such
canceled Warrants shall constitute sufficient evidence of the number of shares
of stock which have been issued upon the exercise of such Warrants. Subsequent
to the Expiration Date, no shares of stock need be reserved in respect of any
unexercised Warrant.
13. Registration and Transfer of Warrants, etc.
13.1. Warrant Register; Ownership of Warrants. Each Warrant issued
by the Company shall be numbered and shall be registered in a warrant register
(the "Warrant Register") as it is issued and transferred, which Warrant Register
shall be maintained by the Company at its principal office or, at the Company's
election and expense, by a Warrant Agent or the Company's transfer agent. The
Company shall be entitled to treat the registered Holder of any Warrant on the
Warrant Register as the owner in fact thereof for all purposes and shall not be
bound to recognize any equitable or other claim to or interest in such Warrant
on the part of any other Person, and shall not be affected by any notice to the
contrary, except that, if and when any Warrant is properly assigned in blank,
the Company may (but shall not be obligated to) treat the bearer thereof as the
owner of such Warrant for all purposes. Subject to Section 10, a Warrant, if
properly assigned, may be exercised by a new holder without a new Warrant first
having been issued.
13.2. Transfer of Warrants. Subject to compliance with Section 10,
this Warrant and all rights hereunder are transferable in whole or in part,
without charge to the Holder hereof, upon surrender of this Warrant with a
properly executed Form of Assignment attached hereto as Exhibit B at the
principal office of the Company. Upon any partial transfer, the Company shall at
its expense issue and deliver to the Holder a new Warrant of like tenor, in the
name of the Holder, which shall be exercisable for such number of shares of
Common Stock with respect to which rights under this Warrant were not so
transferred.
13.3. Replacement of Warrants. On receipt by the Company of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and, in the case of any such loss, theft or
destruction of this Warrant, on delivery of an indemnity agreement reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, on surrender of such Warrant to the Company at its principal office
and cancellation thereof, the Company at its expense shall execute and deliver,
in lieu thereof, a new Warrant of like tenor.
13.4. Adjustments To Adjustment Factor and Number of Shares.
Notwithstanding any adjustment in the Adjustment Factor or in the number or kind
of shares of Common Stock purchasable upon exercise of this Warrant, any Warrant
theretofore or thereafter issued may continue to express the same number and
kind of shares of Common Stock as are stated in this Warrant, as initially
issued.
13.5 Fractional Shares. Notwithstanding any adjustment pursuant to
Section 3 in the number of shares of Common Stock covered by this Warrant or any
other
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provision of this Warrant, the Company shall not be required to issue
fractions of shares upon exercise of this Warrant or to distribute certificates
which evidence fractional shares. In lieu of fractional shares, the Company
shall make payment to the Holder, at the time of exercise of this Warrant as
herein provided, in an amount in cash equal to such fraction multiplied by the
Current Market Price of a share of Common Stock on the date of Warrant exercise.
14. Remedies; Specific Performance. The Company stipulates that
there would be no adequate remedy at law to the Holder of this Warrant in the
event of any default or threatened default by the Company in the performance of
or compliance with any of the terms of this Warrant and accordingly, the Company
agrees that, in addition to any other remedy to which the Holder may be entitled
at law or in equity, the Holder shall be entitled to seek to compel specific
performance of the obligations of the Company under this Warrant, without the
posting of any bond, in accordance with the terms and conditions of this Warrant
in any court of the United States or any State thereof having jurisdiction, and
if any action should be brought in equity to enforce any of the provisions of
this Warrant, the Company shall not raise the defense that there is an adequate
remedy at law. Except as otherwise provided by law, a delay or omission by the
Holder hereto in exercising any right or remedy accruing upon any such breach
shall not impair the right or remedy or constitute a waiver of or acquiescence
in any such breach. No remedy shall be exclusive of any other remedy. All
available remedies shall be cumulative.
15. No Rights or Liabilities as Shareholder. Nothing contained in
this Warrant shall be construed as conferring upon the Holder hereof any rights
as a shareholder of the Company or as imposing any obligation on the Holder to
purchase any securities or as imposing any liabilities on the Holder as a
shareholder of the Company, whether such obligation or liabilities are asserted
by the Company or by creditors of the Company.
16. Notices. All notices and other communications (and deliveries)
provided for or permitted hereunder shall be made in writing by hand delivery,
telex, telecopier, any courier guaranteeing overnight delivery or first class
registered or certified mail, return receipt requested, postage prepaid,
addressed (a) if to the Company, to the attention of its President at its
principal office located at 000 Xxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxx
00000 or such other address as may hereafter be designated in writing by the
Company to the Holder in accordance with the provisions of this Section, or (b)
if to the Holder, at its address as it appears in the Warrant Register.
All such notices and communications (and deliveries) shall be deemed to
have been duly given: at the time delivered by hand, if personally delivered;
when answered back, if telexed; when receipt is acknowledged, if telecopied; on
the next Business Day, if timely delivered to a courier guaranteeing overnight
delivery; and ten days after being deposited in the mail, if sent first class or
certified mail, return receipt requested, postage prepaid; provided, that the
exercise of any Warrant shall be effective in the manner provided in Section 2.
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17. Amendments. This Warrant and any term hereof may not be amended,
modified, supplemented, discharged or terminated, and waivers or consents to
departures from the provisions hereof may not be given, except by an instrument
in writing signed by the Company and the Holder.
18. Descriptive Headings, Etc. The headings in this Warrant are for
convenience of reference only and shall not limit or otherwise affect the
meaning of terms contained herein. Unless the context of this Warrant otherwise
requires: (1) words of any gender shall be deemed to include each other gender;
(2) words using the singular or plural number shall also include the plural or
singular number, respectively; (3) the words "hereof", "herein" and "hereunder"
and words of similar import when used in this Warrant shall refer to this
Warrant as a whole and not to any particular provision of this Warrant, and
Section and paragraph references are to the Sections and paragraphs of this
Warrant unless otherwise specified; (4) the word "including" and words of
similar import when used in this Warrant shall mean "including, without
limitation," unless otherwise specified; (5) "or" is not exclusive; and (6)
provisions apply to successive events and transactions.
19. GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE
CONFLICTS OF LAW PRINCIPLES THEREOF).
20. Judicial Proceedings. Any legal action, suit or proceeding brought
against the Company with respect to this Agreement may be brought in any federal
court of the Southern District of New York or any state court located in New
York County, State of New York, and by execution and delivery of this Agreement,
the Company irrevocably waives any claim (by way of motion, as a defense or
otherwise) of improper venue, that it is not subject personally to the
jurisdiction of such court, that such courts are an inconvenient forum or that
this Agreement or the subject matter may not be enforced in or by such court.
The Company hereby irrevocably consents to the service of process of any of the
aforementioned courts in any such action, suit or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, at its address
set forth or provided for in Section 16, such service to become effective 10
days after such mailing. Nothing herein contained shall be deemed to affect the
right of any party to serve process in any manner permitted by law or commence
legal proceedings or otherwise proceed against any other party in any other
jurisdiction to enforce judgments obtained in any action, suit or proceeding
brought pursuant to this Section. EACH OF THE HOLDER AND THE COMPANY HEREBY
IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING, WHETHER AT
LAW OR EQUITY, BROUGHT BY IT OR THE HOLDER IN CONNECTION WITH THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY.
21. Registration Agreement. The shares of Common Stock (and Other
Securities) issuable upon exercise of this Warrant (or upon conversion of any
shares of Common Stock issued upon such exercise) shall constitute Registrable
Securities (as such term
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is defined in the Registration Agreement). Each Holder shall be entitled to all
of the benefits afforded to a holder of any such Registrable Securities under
the Registration Agreement and such holder, by its acceptance of this Warrant,
agrees to be bound by and to comply with the terms and conditions of the
Registration Agreement applicable to such holder as a holder of such Registrable
Securities. A complete and correct copy of the Registration Agreement may be
obtained without charge upon request to the Company at its address as set forth
or provided for in Section 16.
22. Expiration. The Company shall give the Holder of this Warrant not
less than six weeks nor more than six months notice of the expiration of the
right to exercise this Warrant. The right to exercise this Warrant shall expire
at 5:00 p.m, New York City time, on April 18, 1999, unless the Company shall
fail to give such notice as aforesaid, in which event the right to exercise this
Warrant shall not expire until a date six weeks after the date on which the
Company shall give the holder hereof notice of the expiration of the right to
exercise this Warrant.
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23. Tax Basis. The Company and the Holder shall mutually agree as to
the basis of this Warrant for purposes of the Internal Revenue Code of 1986, as
amended and the treatment of this Warrant under the Code by each of the Company
and the Holder shall be consistent with such agreement.
XXXX GROUP, INC.
By: /s/ D. Xxxxxx Xxxxxxxxxx
------------------------------------------
Name: D. Xxxxxx Xxxxxxxxxx
Title: President & Chief Executive Officer
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EXHIBIT A to
Common Stock Purchase Warrant
[FORM OF]
ELECTION TO PURCHASE SHARES
The undersigned hereby irrevocably elects to exercise the Warrant to
purchase ____ shares of Common Stock, par value $0.50 per share ("Common
Stock"), of Xxxx Group, Inc. and hereby makes payment of $________ therefor. The
undersigned hereby requests that certificates for such shares be issued and
delivered as follows:
ISSUE TO: _____________________________________________________________________
(NAME)
________________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
________________________________________________________________________________
(SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER)
DELIVER TO: ___________________________________________________________________
(NAME)
________________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
If the number of shares of Common Stock purchased (and/or canceled)
hereby is less than the number of shares of Common Stock covered by the Warrant,
the undersigned requests that a new Warrant representing the number of shares of
Common Stock not so purchased (or canceled) be issued and delivered as follows:
ISSUE TO: _____________________________________________________________________
(NAME OF HOLDER(1))
________________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
DELIVER TO: ___________________________________________________________________
(NAME OF HOLDER(1))
________________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
Dated: _____________, ____ [NAME OF HOLDER(1)]
By _____________________________________
Name:
Title:
----------
(1) Name of Holder must conform in all respects to name of holder as
specified on the face of the Warrant.
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EXHIBIT B to
Common Stock Purchase Warrant
[FORM OF] ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers unto the Assignee named below all of the rights of the undersigned to
purchase Common Stock, par value $0.50 per share ("Common Stock") of Xxxx Group,
Inc. represented by the Warrant, with respect to the number of shares of Common
Stock set forth below:
Name of Assignee Address No. of Shares
and does hereby irrevocably constitute and appoint ____________________ Attorney
to make such transfer on the books of Xxxx Group, Inc. maintained for that
purpose, with full power of substitution in the premises.
Dated: _______________, ____ [NAME OF HOLDER(1)]
By _____________________________________
Name:
Title:
----------
(1) Name of Holder must conform in all respects to name of holder as
specified on the face of the Warrant.
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