Exhibit 4.4
Execution Version
EXHIBIT B
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NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE
SECURITIES MAY BE PLEDGED IN A MANNER CONSISTENT WITH THE SECURITIES ACT IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.
XXXXXX COMPANIES, INC.
WARRANT
Warrant No. [ ] Date of Original Issuance: December __, 2006
Xxxxxx Companies, Inc., a Missouri corporation (the "COMPANY"),
hereby certifies that, for value received, [ ] or its registered assigns (the
"HOLDER"), is entitled to purchase from the Company up to a total of [ ]
shares of common stock, par value $0.01 per share (the "COMMON STOCK"), of the
Company (each such share, a "WARRANT SHARE" and all such shares, the "WARRANT
SHARES") at an exercise price equal to $28.06 per share (as adjusted from time
to time as provided in Section 9, the "EXERCISE PRICE"), at any time and from
time to time from and after the date hereof and through and including December
____, 2012 (the "EXPIRATION DATE"), and subject to the following terms and
conditions:
1. Definitions. In addition to the terms defined elsewhere in this
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Warrant, capitalized terms that are not otherwise defined herein shall have
the meanings given to such terms in the Loan and Warrant Agreement, dated as
of September 29, 2005, as amended by Amendment No. 1, dated as of April 28,
2006, and Amendment No. 2, dated as of December 14, 2006, to which the Company
and the original Holder are parties (the "PURCHASE AGREEMENT").
2. Registration of Warrant. The Company shall register this Warrant,
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upon records to be maintained by the Company for that purpose (the "WARRANT
REGISTER"), in the name of the
record Holder hereof from time to time. The Company may deem and treat the
registered Holder of this Warrant as the absolute owner hereof for the purpose
of any exercise hereof or any distribution to the Holder, and for all other
purposes, absent actual notice to the contrary.
3. Registration of Transfers. The Company shall register the transfer
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of any portion of this Warrant in the Warrant Register, upon surrender of this
Warrant, with the Form of Assignment attached hereto duly completed and
signed, to the Company at its address specified herein. Upon any such
registration or transfer, a new Warrant to purchase Common Stock, in
substantially the form of this Warrant (any such new Warrant, a "NEW
WARRANT"), evidencing the portion of this Warrant so transferred shall be
issued to the transferee and a New Warrant evidencing the remaining portion of
this Warrant not so transferred, if any, shall be issued to the transferring
Holder. The acceptance of the New Warrant by the transferee thereof shall be
deemed the acceptance by such transferee of all of the rights and obligations
of a holder of a Warrant.
4. Exercise and Duration of Warrants.
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(a) This Warrant shall be exercisable by the registered
Holder at any time and from time to time on or after the date hereof to and
including the Expiration Date. At 6:30 p.m., New York City time on the
Expiration Date, the portion of this Warrant not exercised prior thereto shall
be and become void and of no value, provided, that if the closing sales price
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of the Common Stock on the Expiration Date is greater than 102% of the
Exercise Price on the Expiration Date, then this Warrant shall be deemed to
have been exercised in full (to the extent not previously exercised) on a
"cashless exercise" basis at 6:30 P.M. New York City time on the Expiration
Date. The Company may not call or redeem all or any portion of this Warrant
without the prior written consent of the Holder.
(b) Notwithstanding anything to the contrary herein this
Warrant will not be exercisable until the Company has obtained Nasdaq
Approval. For the purposes of this Warrant, the term "Nasdaq Approval" shall
mean the date in which the Company receives approval from Nasdaq to issue all
of the Warrants and the underlying shares of Common Stock into which the
Warrants are exercisable.
(c) Notwithstanding anything to the contrary herein, at the
option of the Holder, the Expiration Date may be extended for the number of
Trading Days during any period occurring after the Effectiveness Date in which
(i) trading in the Common Stock is suspended by any Trading Market, (ii) the
Registration Statement is not effective, or (iii) the prospectus included in
the Registration Statement may not be used by the Holders for the resale of
Registrable Securities thereunder.
5. Delivery of Warrant Shares.
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(a) To effect exercises hereunder, the Holder shall not be
required to physically surrender this Warrant unless the aggregate Warrant
Shares represented by this Warrant is being exercised. Upon delivery of the
Exercise Notice to the Company (with the attached Warrant Shares Exercise Log)
at its address for notice set forth herein and upon payment of the Exercise
Price multiplied by the number of Warrant Shares that the Holder
intends to purchase hereunder, the Company shall promptly (but in no event
later than three Trading Days after the Date of Exercise (as defined herein))
issue and deliver to the Holder, a certificate for the Warrant Shares issuable
upon such exercise, which, unless otherwise required by the Purchase
Agreement, shall be free of restrictive legends. The Company shall, upon
request of the Holder and subsequent to the date on which a registration
statement covering the resale of the Warrant Shares has been declared
effective by the Securities and Exchange Commission, use its best efforts to
deliver Warrant Shares hereunder electronically through The Depository Trust
Corporation or another established clearing corporation performing similar
functions, if available, provided, that, the Company may, but will not be
required to change its transfer agent if its current transfer agent cannot
deliver Warrant Shares electronically through the Depository Trust
Corporation. A "DATE OF EXERCISE" means the date on which the Holder shall
have delivered to Company: (i) the Exercise Notice (with the Warrant Exercise
Log attached to it), appropriately completed and duly signed and (ii) if such
Holder is not utilizing the cashless exercise provisions set forth in this
Warrant, payment of the Exercise Price for the number of Warrant Shares so
indicated by the Holder to be purchased.
(b) If by the third Trading Day after a Date of Exercise the
Company fails to deliver the required number of Warrant Shares in the manner
required pursuant to Section 5(a), then the Holder will have the right to
rescind such exercise.
(c) If by the third Trading Day after a Date of Exercise the
Company fails to deliver the required number of Warrant Shares in the manner
required pursuant to Section 5(a), and if after such third Trading Day and
prior to the receipt of such Warrant Shares, the Holder purchases (in an open
market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Warrant Shares which the Holder
anticipated receiving upon such exercise (a "BUY-IN"), then the Company shall
(1) pay in cash to the Holder the amount by which (x) the Holder's total
purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased exceeds (y) the amount obtained by multiplying (A)
the number of Warrant Shares that the Company was required to deliver to the
Holder in connection with the exercise at issue by (B) the closing bid price
of the Common Stock at the time of the obligation giving rise to such purchase
obligation and (2) at the option of the Holder, either reinstate the portion
of the Warrant and equivalent number of Warrant Shares for which such exercise
was not honored or deliver to the Holder the number of shares of Common Stock
that would have been issued had the Company timely complied with its exercise
and delivery obligations hereunder. The Holder shall provide the Company
written notice indicating the amounts payable to the Holder in respect of the
Buy-In.
(d) The Company's obligations to issue and deliver Warrant
Shares in accordance with the terms hereof are absolute and unconditional,
irrespective of any action or inaction by the Holder to enforce the same, any
waiver or consent with respect to any provision hereof, the recovery of any
judgment against any Person or any action to enforce the same, or any setoff,
counterclaim, recoupment, limitation or termination, or any breach or alleged
breach by the Holder or any other Person of any obligation to the Company or
any violation or alleged violation of law by the Holder or any other Person,
and irrespective of any other circumstance which might otherwise limit such
obligation of the Company to the Holder in connection with the issuance of
Warrant Shares. Nothing herein shall limit a Holder's right to pursue any
other remedies available to it hereunder, at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief
with respect to the Company's failure to timely
deliver certificates representing shares of Common Stock upon exercise of the
Warrant as required pursuant to the terms hereof.
6. Charges, Taxes and Expenses. Issuance and delivery of certificates
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for shares of Common Stock upon exercise of this Warrant shall be made without
charge to the Holder for any issue or transfer tax, withholding tax, transfer
agent fee or other incidental tax or expense in respect of the issuance of
such certificates, all of which taxes and expenses shall be paid by the
Company; provided, however, that the Company shall not be required to pay any
tax which may be payable in respect of any transfer involved in the
registration of any certificates for Warrant Shares or Warrants in a name
other than that of the Holder. The Holder shall be responsible for all other
tax liability that may arise as a result of holding or transferring this
Warrant or receiving Warrant Shares upon exercise hereof.
7. Replacement of Warrant. If this Warrant is mutilated, lost, stolen
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or destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation hereof, or in lieu of and substitution
for this Warrant, a New Warrant, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction and customary
and reasonable indemnity (which may include a surety bond for any Holder other
than the original Holder of the Warrant), if requested. Applicants for a New
Warrant under such circumstances shall also comply with such other reasonable
regulations and procedures and pay such other reasonable third-party costs as
the Company may prescribe. If a New Warrant is requested as a result of a
mutilation of this Warrant, then the Holder shall deliver such mutilated
Warrant to the Company as a condition precedent to the Company's obligation to
issue the New Warrant.
8. Reservation of Warrant Shares. The Company covenants that it will
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at all times reserve and keep available out of the aggregate of its authorized
but unissued and otherwise unreserved Common Stock, solely for the purpose of
enabling it to issue Warrant Shares upon exercise of this Warrant as herein
provided, the number of Warrant Shares which are then issuable and deliverable
upon the exercise of this entire Warrant, free from preemptive rights or any
other contingent purchase rights of persons other than the Holder (taking into
account the adjustments and restrictions of Section 9). The Company covenants
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that all Warrant Shares so issuable and deliverable shall, upon issuance and
the payment of the applicable Exercise Price in accordance with the terms
hereof, be duly and validly authorized, issued and fully paid and
nonassessable.
9. Certain Adjustments. The Exercise Price and number of Warrant
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Shares issuable upon exercise of this Warrant are subject to adjustment from
time to time as set forth in this Section 9.
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(a) Stock Dividends and Splits. If the Company, at any time
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while this Warrant is outstanding, (i) pays a stock dividend on its Common
Stock or otherwise makes a distribution on any class of capital stock that is
payable in shares of Common Stock, (ii) subdivides outstanding shares of
Common Stock into a larger number of shares, or (iii) combines outstanding
shares of Common Stock into a smaller number of shares, then in each such case
the Exercise Price shall be multiplied by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding immediately before
such event and of which the denominator shall be the number of shares of
Common Stock outstanding immediately after such
event. Any adjustment made pursuant to clause (i) of this paragraph shall
become effective immediately after the record date for the determination of
shareholders entitled to receive such dividend or distribution, and any
adjustment pursuant to clause (ii) or (iii) of this paragraph shall become
effective immediately after the effective date of such subdivision or
combination. If any event requiring an adjustment under this paragraph occurs
during the period that an Exercise Price is calculated hereunder, then the
calculation of such Exercise Price shall be adjusted appropriately to reflect
such event.
(b) Pro Rata Distributions. If the Company, at any time
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while this Warrant is outstanding, distributes to all holders of Common Stock
(i) evidences of its indebtedness, (ii) any security (other than a
distribution of Common Stock covered by the preceding paragraph), (iii) rights
or warrants to subscribe for or purchase any security, or (iv) any other asset
(in each case, "DISTRIBUTED PROPERTY"), then, at the request of any Holder
delivered before the 90th day after the record date fixed for determination of
shareholders entitled to receive such distribution, the Company will deliver
to such Holder, within five Trading Days after such request (or, if later, on
the effective date of such distribution), the Distributed Property that such
Holder would have been entitled to receive in respect of the Warrant Shares
for which such Holder's Warrant could have been exercised immediately prior to
such record date. If such Distributed Property is not delivered to a Holder
pursuant to the preceding sentence, then upon any exercise of the Warrant that
occurs after such record date, such Holder shall be entitled to receive, in
addition to the Warrant Shares otherwise issuable upon such conversion, the
Distributed Property that such Holder would have been entitled to receive in
respect of such number of Warrant Shares had the Holder been the record holder
of such Warrant Shares immediately prior to such record date. Notwithstanding
the foregoing, this Section 9(b) shall not apply to any distribution of rights
or securities in respect of adoption by the Company of a shareholder rights
plan which events shall be covered by the anti-dilution provisions of Section
9(a).
(c) Fundamental Transactions. If, at any time while this
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Warrant is outstanding, (1) the Company effects any merger or consolidation of
the Company with or into another Person, (2) the Company effects any sale of
all or substantially all of its assets in one or a series of related
transactions, (3) any tender offer or exchange offer approved or authorized by
the Board of Directors of the Company (whether by the Company or another
Person) is completed pursuant to which holders of Common Stock are permitted
to tender or exchange their shares for other securities, cash or property, or
(4) the Company effects any reclassification of the Common Stock or any
compulsory share exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, cash or property (in any
such case, a "FUNDAMENTAL TRANSACTION"), then the Holder shall have the right
thereafter to receive, upon exercise of this Warrant, the same amount and kind
of securities, cash or property as it would have been entitled to receive upon
the occurrence of such Fundamental Transaction if it had been, immediately
prior to such Fundamental Transaction, the holder of the number of Warrant
Shares then issuable upon exercise in full of this Warrant (the "ALTERNATE
CONSIDERATION"). For purposes of any such exercise, the determination of the
Exercise Price shall be appropriately adjusted to apply to such Alternate
Consideration based on the amount of Alternate Consideration issuable in
respect of one share of Common Stock in such Fundamental Transaction, and the
Company shall apportion the Exercise Price among the Alternate Consideration
in a reasonable manner reflecting the relative value of any different
components of the Alternate Consideration. If holders of Common Stock are
given any choice as to the securities, cash or property to be received in a
Fundamental Transaction, then the Holder shall be
given the same choice as to the Alternate Consideration it receives upon any
exercise of this Warrant following such Fundamental Transaction. At the
Holder's option and request, any successor to the Company or surviving entity
in such Fundamental Transaction shall, either (1) issue to the Holder a new
warrant substantially in the form of this Warrant and consistent with the
foregoing provisions and evidencing the Holder's right to purchase the
Alternate Consideration for the aggregate Exercise Price upon exercise
thereof, or (2) purchase the Warrant from the Holder for a purchase price,
payable in cash within five Trading Days after such request (or, if later, on
the effective date of the Fundamental Transaction), equal to the Black Scholes
value of the remaining unexercised portion of this Warrant on the date of such
request as well as assumptions reasonably mutually acceptable to the Company
and the Holder, provided, that for purposes of such calculation, the market
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price of the Common Stock shall be the closing bid price of the Common Stock
on the Trading Day immediately preceding the public announcement of the
Fundamental Transaction and the volatility factor shall be determined by
reference to the 12 month average industry volatility measures. The terms of
any agreement pursuant to which a Fundamental Transaction is effected shall
include terms requiring any such successor or surviving entity to comply with
the provisions of this paragraph (c) and insuring that the Warrant (or any
such replacement security) will be similarly adjusted upon any subsequent
transaction analogous to a Fundamental Transaction.
(d) Subsequent Equity Sales.
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(i) While any portion of this Warrant is
outstanding, if the Company issues any shares of Common Stock or the Company
or any subsidiary thereof issues any rights, warrants, options or other
securities or debt that is convertible into, exchangeable for (any such
securities, "COMMON STOCK EQUIVALENTS") entitling any Person to acquire shares
of Common Stock, at a price per share less than the Exercise Price (if the
holder of the Common Stock or Common Stock Equivalent so issued shall at any
time, whether by operation of purchase price adjustments, reset provisions,
floating conversion, exercise or exchange prices or otherwise, or due to
warrants, options or rights issued in connection with such issuance, be
entitled to receive shares of Common Stock at a price less than the Exercise
Price, such issuance shall be deemed to have occurred for less than the
Exercise Price), then the Exercise Price shall be adjusted to equal the
conversion, exchange or purchase price for such Common Stock or Common Stock
Equivalents (including any reset provisions thereof) at issue and which
adjusted Exercise Price shall continue for as long as this Warrants remain
outstanding. Such adjustment shall be made whenever such Common Stock or
Common Stock Equivalents are issued. The Company shall notify the Holder in
writing, no later than the Trading Day following the issuance of any Common
Stock or Common Stock Equivalent subject to this section, indicating therein
the applicable issuance price, or of applicable reset price, exchange price,
conversion price and other pricing terms.
(ii) For purposes of this subsection 9(d), the
following subsections (d)(ii)(l) to (d)(ii)(6) shall also be applicable:
(1) Issuance of Rights or Options. In case
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at any time the Company shall in any manner grant (directly and not by
assumption in a merger or otherwise) any warrants or other rights to subscribe
for or to purchase, or any options for the purchase of, Common Stock or any
stock or security convertible into or exchangeable for Common Stock
(such warrants, rights or options being called "OPTIONS" and such convertible
or exchangeable stock or securities being called "CONVERTIBLE SECURITIES")
whether or not such Options or the right to convert or exchange any such
Convertible Securities are immediately exercisable, and the price per share
for which Common Stock is issuable upon the exercise of such Options or upon
the conversion or exchange of such Convertible Securities (determined by
dividing (i) the sum (which sum shall constitute the applicable consideration)
of (x) the total amount, if any, received or receivable by the Company as
consideration for the granting of such Options, plus (y) the aggregate amount
of additional consideration payable to the Company upon the exercise of all
such Options, plus (z), in the case of such Options which relate to
Convertible Securities, the aggregate amount of additional consideration, if
any, payable upon the issue or sale of such Convertible Securities and upon
the conversion or exchange thereof, by (ii) the total maximum number of shares
of Common Stock issuable upon the exercise of such Options or upon the
conversion or exchange of all such Convertible Securities issuable upon the
exercise of such Options) shall be less than the Exercise Price in effect
immediately prior to the time of the granting of such Options, then the total
number of shares of Common Stock issuable upon the exercise of such Options or
upon conversion or exchange of the total amount of such Convertible Securities
issuable upon the exercise of such Options shall be deemed to have been issued
for such price per share as of the date of granting of such Options or the
issuance of such Convertible Securities and thereafter shall be deemed to be
outstanding for purposes of adjusting the Exercise Price. Except as otherwise
provided in subsection 9(d)(ii)(3), no adjustment of the Exercise Price shall
be made upon the actual issue of such Common Stock or of such Convertible
Securities upon exercise of such Options or upon the actual issue of such
Common Stock upon conversion or exchange of such Convertible Securities.
(2) Issuance of Convertible Securities. In
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case the Company shall in any manner issue (directly and not by assumption in
a merger or otherwise) or sell any Convertible Securities, whether or not the
rights to exchange or convert any such Convertible Securities are immediately
exercisable, and the price per share for which Common Stock is issuable upon
such conversion or exchange (determined by dividing (i) the sum (which sum
shall constitute the applicable consideration) of (x) the total amount
received or receivable by the Company as consideration for the issue or sale
of such Convertible Securities, plus (y) the aggregate amount of additional
consideration, if any, payable to the Company upon the conversion or exchange
thereof, by (ii) the total number of shares of Common Stock issuable upon the
conversion or exchange of all such Convertible Securities) shall be less than
the Exercise Price in effect immediately prior to the time of such issue or
sale, then the total maximum number of shares of Common Stock issuable upon
conversion or exchange of all such Convertible Securities shall be deemed to
have been issued for such price per share as of the date of the issue or sale
of such Convertible Securities and thereafter shall be deemed to be
outstanding for purposes of adjusting the Exercise Price, provided that (a)
except as otherwise provided in subsection 9(d)(ii)(3), no adjustment of the
Exercise Price shall be made upon the actual issuance of such Common Stock
upon conversion or exchange of such Convertible Securities and (b) no further
adjustment of the Exercise Price shall be made by reason of the issue or sale
of Convertible Securities upon exercise of any Options to purchase any such
Convertible Securities for which adjustments of the Exercise Price have been
made pursuant to the other provisions of subsection 9(d).
(3) Change in Option Price or Conversion
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Rate. Upon the happening of any of the following events, namely, if the
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purchase price provided for in any Option referred to in subsection
9(d)(ii)(l) hereof, the additional consideration, if any, payable upon the
conversion or exchange of any Convertible Securities referred to in
subsections 9(d)(ii)(l) or 9(d)(ii)(2), or the rate at which Convertible
Securities referred to in subsections 9(d)(ii)(l) or 9(d)(ii)(2) are
convertible into or exchangeable for Common Stock shall change at any time
(including, but not limited to, changes under or by reason of provisions
designed to protect against dilution), the Exercise Price in effect at the
time of such event shall forthwith be readjusted to the Exercise Price which
would have been in effect at such time had such Options or Convertible
Securities still outstanding provided for such changed purchase price,
additional consideration or conversion rate, as the case may be, at the time
initially granted, issued or sold. On the termination of any Option for which
any adjustment was made pursuant to this subsection 9(d) or any right to
convert or exchange Convertible Securities for which any adjustment was made
pursuant to this subsection 9(d) (including without limitation upon the
redemption or purchase for consideration of such Convertible Securities by the
Company), the Exercise Price then in effect hereunder shall forthwith be
changed to the Exercise Price which would have been in effect at the time of
such termination had such Option or Convertible Securities, to the extent
outstanding immediately prior to such termination, never been issued.
(4) Stock Dividends. Subject to the
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provisions of this Section 9(d), in case the Company shall declare a dividend
or make any other distribution upon any stock of the Company (other than the
Common Stock) payable in Common Stock, Options or Convertible Securities, then
any Common Stock, Options or Convertible Securities, as the case may be,
issuable in payment of such dividend or distribution shall be deemed to have
been issued or sold without consideration.
(5) Consideration for Stock. In case any
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shares of Common Stock, Options or Convertible Securities shall be issued or
sold for cash, the consideration received therefor shall be deemed to be the
net amount received by the Company therefor, after deduction therefrom of any
expenses incurred or any underwriting commissions or concessions paid or
allowed by the Company in connection therewith. In case any shares of Common
Stock, Options or Convertible Securities shall be issued or sold for a
consideration other than cash, the amount of the consideration other than cash
received by the Company shall be deemed to be the fair value of such
consideration as determined in good faith by the Board of Directors of the
Company, after deduction of any expenses incurred or any underwriting
commissions or concessions paid or allowed by the Company in connection
therewith. In case any Options shall be issued in connection with the issue
and sale of other securities of the Company, together comprising one integral
transaction in which no specific consideration is allocated to such Options by
the parties thereto, such Options shall be deemed to have been issued for such
consideration as determined in good faith by the Board of Directors of the
Company. If Common Stock, Options or Convertible Securities shall be issued or
sold by the Company and, in connection therewith, other Options or Convertible
Securities (the "ADDITIONAL RIGHTS") are issued, then the consideration
received or deemed to be received by the Company shall be reduced by the fair
market value of the Additional Rights (as determined using the Black-Scholes
option pricing model or another method mutually agreed to by the Company and
the Holder). The Board of Directors of the Company shall respond promptly, in
writing, to an inquiry by the Holders as to the fair market value of the
Additional Rights. In the event that the Board of
Directors of the Company and the Holders are unable to agree upon the fair
market value of the Additional Rights, the Company and the Holders shall
jointly select an appraiser, who is experienced in such matters. The decision
of such appraiser shall be final and conclusive, and the cost of such
appraiser shall be borne evenly by the Company and the Holder.
(6) Record Date. In case the Company shall
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take a record of the holders of its Common Stock for the purpose of entitling
them (i) to receive a dividend or other distribution payable in Common Stock,
Options or Convertible Securities or (ii) to subscribe for or purchase Common
Stock, Options or Convertible Securities, then such record date shall be
deemed to be the date of the issue or sale of the shares of Common Stock
deemed to have been issued or sold upon the declaration of such dividend or
the making of such other distribution or the date of the granting of such
right of subscription or purchase, as the case may be.
(iii) Notwithstanding the foregoing, no adjustment
will be made under this Section 9(d) as a result of: (i) the issuance of
securities upon the exercise or conversion of any Common Stock Equivalents
issued by the Company prior to the date of this Agreement (but will apply to
any amendments, modifications and reissuances thereof), (ii) the grant of
options or warrants, or the issuance of additional securities, under any duly
authorized company stock option, stock incentive plan, restricted stock plan
or stock purchase plan in existence on the First Closing Date, (iii) the
issuance of Common Stock in payment of interest on the 2005 Notes, 2004 Notes,
the 2003 Debentures, the 2004 Debentures or the Notes, (iv) the issuance of
Common Stock Equivalents pursuant to a Strategic Transaction, or (v) the
issuance of Common Stock pursuant to the provisions of Section 2(c) of the
Registration Rights Agreement.
(e) Number of Warrant Shares. Simultaneously with any
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adjustment to the Exercise Price pursuant to paragraph (a) of this Section,
the number of Warrant Shares that may be purchased upon exercise of this
Warrant shall be increased or decreased proportionately, so that after such
adjustment the aggregate Exercise Price payable hereunder for the adjusted
number of Warrant Shares shall be the same as the aggregate Exercise Price in
effect immediately prior to such adjustment.
(f) Calculations. All calculations under this Section 9
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shall be made to the nearest cent or the nearest 1/100th of a share, as
applicable. The number of shares of Common Stock outstanding at any given time
shall not include shares owned or held by or for the account of the Company,
and the disposition of any such shares shall be considered an issue or sale of
Common Stock.
(g) Notice of Adjustments. Upon the occurrence of each
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adjustment pursuant to this Section 9, the Company at its expense will
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promptly compute such adjustment in accordance with the terms of this Warrant
and prepare a certificate setting forth such adjustment, including a statement
of the adjusted Exercise Price and adjusted number or type of Warrant Shares
or other securities issuable upon exercise of this Warrant (as applicable),
describing the transactions giving rise to such adjustments and showing in
detail the facts upon which such adjustment is based. Upon written request,
the Company will promptly deliver a copy of each such certificate to the
Holder and to the Company's transfer agent.
(h) Notice of Corporate Events. If the Company (i) declares
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a dividend or any other distribution of cash, securities or other property in
respect of its Common Stock, including without limitation any granting of
rights or warrants to subscribe for or purchase any capital stock of the
Company or any Subsidiary, (ii) authorizes or approves, enters into any
agreement contemplating or solicits shareholder approval for any Fundamental
Transaction or (iii) authorizes the voluntary dissolution, liquidation or
winding up of the affairs of the Company, then the Company shall deliver to
the Holder a notice describing the material terms and conditions of such
transaction, at least 20 calendar days prior to the applicable record or
effective date on which a Person would need to hold Common Stock in order to
participate in or vote with respect to such transaction, and the Company will
take all steps reasonably necessary in order to insure that the Holder is
given the practical opportunity to exercise this Warrant prior to such time so
as to participate in or vote with respect to such transaction; provided,
however, that the failure to deliver such notice or any defect therein shall
not affect the validity of the corporate action required to be described in
such notice.
10. Payment of Exercise Price. The Holder may pay the Exercise Price
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in one of the following manners:
(a) Cash Exercise. The Holder may deliver immediately
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available funds; or
(b) Cashless Exercise. The Holder may notify the Company in
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an Exercise Notice of its election to utilize cashless exercise, in which
event the Company shall issue to the Holder the number of Warrant Shares
determined as follows:
X = Y [(A-B)/A]
where:
X = the number of Warrant Shares to be
issued to the Holder.
Y = the number of Warrant Shares with
respect to which this Warrant is being
exercised.
A = the average of the closing prices for
the five Trading Days immediately prior to
(but not including) the Exercise Date.
B = the Exercise Price.
For purposes of Rule 144 promulgated under the Securities Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction shall be deemed to have been acquired by the Holder, and
the holding period for the Warrant Shares shall be deemed to have commenced,
on the date this Warrant was originally issued.
11. Limitations on Exercise.
-----------------------
(i) Notwithstanding anything to the contrary
contained herein, the number of shares of Common Stock that may be acquired by
a Holder upon any exercise of Warrants (or otherwise in respect hereof) shall
be limited to the extent necessary to insure that, following such exercise (or
other issuance), the total number of shares of Common Stock then
beneficially owned by such Holder and its Affiliates and any other Persons
whose beneficial ownership of Common Stock would be aggregated with such
Holder's for purposes of Section 13(d) of the Exchange Act, does not exceed
4.999% (the "THRESHOLD PERCENTAGE") or 9.999% (the "MAXIMUM PERCENTAGE") of
the total number of issued and outstanding shares of Common Stock (including
for such purpose the shares of Common Stock issuable upon such conversion).
For such purposes, beneficial ownership shall be determined in accordance with
Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder. Each delivery of an Exercise Notice hereunder will constitute a
representation by the Holder that it has evaluated the limitation set forth in
this paragraph and determined that issuance of the full number of Warrant
Shares requested in such Exercise Notice is permitted under this paragraph.
The Company's obligation to issue shares of Common Stock in excess of the
limitation referred to in this Section shall be suspended (and shall not
terminate or expire notwithstanding any contrary provisions hereof) until such
time, if any, as such shares of Common Stock may be issued in compliance with
such limitation, but in no event later than the Expiration Date. By written
notice to the Company, the Holder may waive the provisions of this Section or
increase or decrease the Maximum Percentage to any other percentage specified
in such notice, but (i) any such waiver or increase will not be effective
until the 61st day after such notice is delivered to the Company, and (ii) any
such waiver or increase or decrease will apply only to the Holder and not to
any other holder of Warrants.
(ii) Notwithstanding anything to the contrary in
this Warrant, if the Company has not previously obtained Shareholder Approval
(as defined below), then the Company may not issue shares of Common Stock in
excess of the (a) the Issuable Maximum or (b) a number of shares above which
the issuance of one additional share would cause a Change of Control (a
"CHANGE OF CONTROL THRESHOLD") upon exercise of this Warrant at an exercise
price which is less than the Closing Price on the Trading Day immediately
preceding the Original Issue Date (the "THRESHOLD PRICE"). The "Issuable
Maximum" means, as of any date, a number of shares of Common Stock equal to
19.99% of the outstanding shares of Common Stock immediately preceding the
First Closing Date, less such number of shares of Common Stock as have been
issued at a price below the Threshold Price (1) upon exercise of the Warrants
and warrants issued under the 2003 Securities Purchase Agreement, the 2004
Securities Purchase Agreement, 2004 Loan Agreement or the 2005 Loan Agreement,
(2) upon conversion of the 2003 Debentures, the 2004 Debentures, the 2004
Notes, and the 2005 Notes and (3) upon conversion of the Notes, or in payment
of interest thereunder. Each Holder shall be entitled to a portion of the
Issuable Maximum or Change of Control Threshold, as applicable, equal to the
quotient obtained by dividing: (x) the principal amount of Notes issued and
sold to such Holder on the Original Issue Date by (y) the aggregate principal
amount of all Notes issued and sold by the Company on the Original Issue Date.
If any Holder shall no longer hold Notes, then such Holder's remaining portion
of the Issuable Maximum or Change of Control Threshold, as applicable, (other
than those represented by the remaining portion of this Warrant and the other
warrants referenced in clause (1) above) shall be allocated pro-rata among the
remaining Holders, giving effect to the Company's desire to allocate among the
class of securities known as the Notes this limitation. If on any Date of
Exercise, or at such time as a Holder shall notify the Company that the
condition in (A) following this clause shall be in effect: (A) the aggregate
number of shares of Common Stock that would then be issuable upon exercise in
full of this Warrant would exceed the Issuable Maximum or would exceed the
Change of Control Threshold on such date, and (B) the Company shall not have
previously obtained the vote of shareholders
applicable to approve the issuance of shares of Common Stock in excess of the
Issuable Maximum or Change of Control Threshold, as applicable, pursuant to
the terms hereof (the "SHAREHOLDER APPROVAL"), then, the Company shall, on
such Date of Exercise or on any Date of Exercise prior to the receipt by the
Company of the Shareholder Approval, shall issue upon exercise hereof a number
of shares of Common Stock equal to the Issuable Maximum or Change of Control
Threshold, as applicable, and, with respect to the remainder of this Warrant
for which an exercise would result in an issuance of shares of Common Stock in
excess of the Issuable Maximum or Change of Control Threshold, the Company
must seek Shareholder Approval in accordance with subsection (iii) below. The
Company and the Holder understand and agree that shares of Common Stock issued
to and then held by the Holder as a result of exercises of this Warrant shall
not be entitled to cast votes on any resolution to obtain Shareholder Approval
pursuant hereto.
(iii) Shareholder Approval.
--------------------
(1) If required under applicable Nasdaq
regulations, the Company shall use its best efforts to obtain as soon as
possible but in no event later than 90 days following the date of the Loan
Agreement or 120 days in the event the proxy materials shall be reviewed by
the Commission, shareholder approval of the issuance of the Underlying Shares
(the "SHAREHOLDER PROPOSAL"), which approval shall meet the requirements of
Nasdaq's Rule 4350(i) of Nasdaq set forth in the NASD Manual (the "SHAREHOLDER
APPROVAL DATE").
(2) As soon as practicable following the
date of the Loan Agreement, but in no event more than 30 days following the
date of the Loan Agreement, the Company shall prepare and file with the
Commission proxy materials calling a special meeting (the "SPECIAL MEETING")
of its shareholders seeking approval of the Shareholder Proposal. The Company
shall use its reasonable best efforts to cause such proxy materials to reach
the "no further comment" stage as soon as possible (the "CLEARANCE DATE") and
to hold the Special Meeting as soon as possible following the Clearance Date,
but in no event later than 45 days following the Clearance Date.
(3) The Board of Directors shall recommend
approval thereof by the Company's shareholders. The Company shall mail and
distribute its proxy materials for the Special Meeting to its shareholders at
least 30 days prior to the date of the Special Meeting and shall actively
solicit proxies to vote for the Shareholder Proposal. The Company shall
provide the Holders an opportunity to review and comment on such proxy
materials by providing (which may be by e-mail) copies of such proxy materials
and any revised preliminary proxy materials to the Holders at least three (3)
days prior to their filing with the Commission. The Company shall provide the
Holders (which may be by e-mail) copies of all correspondence from or to the
Commission or its staff concerning the proxy materials for the Special Meeting
promptly after the same is sent or received by the Company and summaries of
any comments of the Commission's staff which the Company receives orally
promptly after receiving such oral comments. The Company shall (i) furnish to
the Holders and their counsel (which may be by e-mail) a copy of its
definitive proxy materials for the Special Meeting and any amendments or
supplements thereto promptly after the same are first used, mailed to
shareholders or filed with the Commission, (ii) inform the Holders of the
progress of solicitation of proxies for such meeting and (iii) inform the
Holders of any adjournment of the Special Meeting and shall report
the result of the vote of shareholders on the Shareholder Proposal at the
conclusion of the Special Meeting.
(4) If for any reason the Shareholder
Proposal is not approved at the Special Meeting, the Company will take such
additional acts or actions as are necessary to hold an additional Special
Meeting to consider the Shareholder Proposal and in conjunction therewith
shall hire a nationally recognized proxy solicitation firm, selected by the
Holders which is reasonably satisfactory to the Company, to assist it in
obtaining the necessary shareholder votes to approve the Shareholder Proposal.
The Company shall bear all costs and expenses of the preparation and filing of
any and all proxy materials and Special Meetings, including but not limited to
the costs and expenses of the proxy solicitation firm if needed.
12. No Fractional Shares. No fractional shares of Warrant Shares will
--------------------
be issued in connection with any exercise of this Warrant. In lieu of any
fractional shares which would, otherwise be issuable, the Company shall pay
cash equal to the product of such fraction multiplied by the closing price of
one Warrant Share as reported by the applicable Trading Market on the date of
exercise.
13. Notices. Any and all notices or other communications or
-------
deliveries hereunder (including, without limitation, any Exercise Notice)
shall be in writing and shall be deemed given and effective on the earliest of
(i) the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number specified in this Section prior to 6:30 p.m.
(New York City time) on a Trading Day, (ii) the next Trading Day after the
date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number specified in this Section on a day that is
not a Trading Day or later than 6:30 p.m. (New York City time) on any Trading
Day, (iii) the Trading Day following the date of mailing, if sent by
nationally recognized overnight courier service, or (iv) upon actual receipt
by the party to whom such notice is required to be given. The addresses for
such communications shall be: (i) if to the Company, to Xxxxxx Companies,
Inc., 0000 XxXxxxxx Xxxx, Xx. Xxxxx, Xxxxxxxx 00000, Attn: Chief Financial
Officer, Facsimile No.: (000) 000-0000, or (ii) if to the Holder, to the
address or facsimile number appearing on the Warrant Register or such other
address or facsimile number as the Holder may provide to the Company in
accordance with this Section.
14. Warrant Agent. The Company shall serve as warrant agent under
-------------
this Warrant. Upon 30 days' notice to the Holder, the Company may appoint a
new warrant agent. Any corporation into which the Company or any new warrant
agent may be merged or any corporation resulting from any consolidation to
which the Company or any new warrant agent shall be a party or any corporation
to which the Company or any new warrant agent transfers substantially all of
its corporate trust or shareholders services business shall be a successor
warrant agent under this Warrant without any further act. Any such successor
warrant agent shall promptly cause notice of its succession as warrant agent
to be mailed (by first class mail, postage prepaid) to the Holder at the
Holder's last address as shown on the Warrant Register.
15. Miscellaneous.
-------------
(a) This Warrant shall be binding on and inure to the
benefit of the parties hereto and their respective successors and assigns.
Subject to the preceding sentence, nothing in this Warrant shall be construed
to give to any Person other than the Company and the Holder any
legal or equitable right, remedy or cause of action under this Warrant. This
Warrant may be amended only in writing signed by the Company and the Holder
and their successors and assigns.
(b) All questions concerning the construction, validity,
enforcement and interpretation of this Warrant shall be governed by and
construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof. Each
party agrees that all legal proceedings concerning the interpretations,
enforcement and defense of this Warrant and the transactions herein
contemplated ("PROCEEDINGS") (whether brought against a party hereto or its
respective Affiliates, employees or agents) shall be commenced exclusively in
the state and federal courts sitting in the City of New York, Borough of
Manhattan (the "NEW YORK COURTS"). Each party hereto hereby irrevocably
submits to the exclusive jurisdiction of the New York Courts for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any Proceeding, any claim that it is not
personally subject to the jurisdiction of any New York Court, or that such
Proceeding has been commenced in an improper or inconvenient forum. Each party
hereto hereby irrevocably waives personal service of process and consents to
process being served in any such Proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Warrant
and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit
in any way any right to serve process in any manner permitted by law. Each
party hereto hereby irrevocably waives, to the fullest extent permitted by
applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Warrant or the transactions contemplated
hereby. If either party shall commence a Proceeding to enforce any provisions
of this Warrant, then the prevailing party in such Proceeding shall be
reimbursed by the other party for its attorney's fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such
Proceeding.
(c) The headings herein are for convenience only, do not
constitute a part of this Warrant and shall not be deemed to limit or affect
any of the provisions hereof.
(d) In case any one or more of the provisions of this
Warrant shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Warrant shall not
in any way be affected or impaired thereby and the parties will attempt in
good faith to agree upon a valid and enforceable provision which shall be a
commercially reasonable substitute therefor, and upon so agreeing, shall
incorporate such substitute provision in this Warrant.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its authorized officer as of the date first indicated above.
XXXXXX COMPANIES, INC.
By:
-------------------------------------
Name:
Title:
EXERCISE NOTICE
To XXXXXX COMPANIES, INC.:
The undersigned hereby irrevocably elects to purchase _____________
shares of common stock, par value $0.01 per share, of XXXXXX COMPANIES, INC.
("COMMON STOCK"), pursuant to Warrant No. [ ], originally issued _____, 2006
(the "WARRANT"), and, if such Holder is not utilizing the cashless exercise
provisions set forth in the Warrant, encloses herewith $________ in cash,
certified or official bank check or checks or other immediately available
funds, which sum represents the aggregate Exercise Price (as defined in the
Warrant) for the number of shares of Common Stock to which this Exercise
Notice relates, together with any applicable taxes payable by the undersigned
pursuant to the Warrant.
By its delivery of this Exercise Notice, the undersigned represents
and warrants to the Company that in giving effect to the exercise evidenced
hereby the Holder will not beneficially own in excess of the number of shares
of Common Stock (determined in accordance with Section 13(d) of the Securities
Exchange Act of 1934) permitted to be owned under Section 11 of this Warrant
to which this notice relates.
The undersigned requests that certificates for the shares of Common
Stock issuable upon this exercise be issued in the name of
PLEASE INSERT SOCIAL SECURITY OR
TAX IDENTIFICATION NUMBER
(Please print name and address)
Warrant Shares Exercise Log
---------------------------
--------------------------------------------------------------------------------------------------------------------
Number of Warrant
Number of Warrant Shares Number of Warrant Shares Shares Remaining to
Date Available to be Exercised Exercised be Exercised
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
FORM OF ASSIGNMENT
[To be completed and signed only upon transfer of Warrant]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ________________________________ the right represented by the
within Warrant to purchase ____________ shares of Common Stock of XXXXXX
COMPANIES, INC. to which the within Warrant relates and appoints
________________ attorney to transfer said right on the books of the Company
with full power of substitution in the premises.
Dated: _______________, ____
---------------------------------------
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant)
---------------------------------------
Address of Transferee
---------------------------------------
---------------------------------------
In the presence of:
--------------------------
