Exhibit 10.11
EXECUTION COPY
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THIS WARRANT IS NON-TRANSFERABLE BY THE HOLDER HEREOF, OTHER THAN AS
SPECIFICALLY PROVIDED HEREIN. THE UNDERLYING SHARES OF COMMON STOCK ISSUED UPON
ITS EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT") OR APPLICABLE STATE SECURITIES LAWS, AND NO SALE
OR TRANSFER THEREOF MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT OR APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL FOR
THE HOLDER, SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED
UNDER THE ACT.
No. W-1 November 26, 1997
XXXXXX PRODUCTS CORP.
Non-Transferable
Common Stock Purchase Warrant
XXXXXX PRODUCTS CORP., a Massachusetts corporation (the "Company"),
hereby certifies that, for value received, Pentland Group, plc, is entitled,
subject to the terms set forth below, to purchase from the Company as provided
in Section 1.1 hereof before 5:00 P.M., Boston, Massachusetts time, on the
Exercise Date (as herein defined), 23.64497 fully paid and nonassessable shares
of Common Stock, no par value per share, of the Company; provided however, that
this Warrant (as herein defined) shall not be exercisable except on an Exercise
Date in connection with the consummation of a Value Event (as herein defined) on
or prior to the Expiration Date. This Warrant shall be exercisable at a purchase
price per share of $74,011.5044 (such purchase price per share as adjusted from
time to time as herein provided is referred to herein as the "Purchase Price"),
which Purchase Price shall be adjusted as provided in Section 2.6 of that
certain Stock Purchase and Redemption Agreement dated as of October 27, 1997, as
amended. The number and character of such shares of Common Stock and the
Purchase Price are subject to adjustment as provided herein.
As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
(a) The term "Company" shall include Xxxxxx Products Corp. and
any corporation which shall succeed or assume the obligations of the Company
hereunder.
(b) The term "Common Stock" includes the Company's Common
Stock, no par value per share, as authorized on the date hereof and any other
securities into which or for which any of such Common Stock may be converted or
exchanged pursuant to a plan of recapitalization, reorganization, merger, sale
of assets or otherwise.
(c) The term "Exercise Date" shall mean a date which is two
(2) business days prior to the consummation of a Value Event.
(d) The term "Expiration Date" shall mean November 26, 1999;
provided however that if the Company shall have, prior to November 26, 1999,
executed an agreement to consummate a transaction that could qualify as a Value
Event and the transactions contemplated by such agreement are consummated on or
prior to February 26, 2000, then the term "Expiration Date" shall mean February
26, 2000.
(e) The term "Value Event" shall mean any of (i) the sale to
an unrelated third party of (A) all or a majority of the Common Stock owned by
affiliates of Berkshire Partners LLC or (B) all or substantially all of the
capital stock or assets of the Company (other than in a reincorporation
transaction), (ii) the sale of the Company's equity securities pursuant to an
effective registration statement under the Securities Act of 1933, as amended (a
"Registered Offering"), (iii) a transaction pursuant to which the Company incurs
additional Indebtedness or other financing, the proceeds of which are used to
fund a recapitalization or other similar transaction pursuant to which all or
substantially all of the stockholders of the Company receive aggregate
distributions equal to or greater than thirty-five percent (35%) of the
aggregate cost basis of their shares, provided that such distributions, together
with the value of the shares retained by such stockholders, are equal to or
greater than the aggregate cost basis of the shares (provided that this clause
(iii) shall not be triggered in connection with the repurchase by the Company of
any shares of Common Stock pursuant to the provisions of Section 2.2 of the
Company's Stockholders' Agreement (as defined in Section 11)) or (iv) any
transaction or series of related transactions which would have a similar effect
to the transactions contemplated by clauses (i), (ii) or (iii) above; provided,
however, that a Registered Offering shall only be a Value Event if (x) the
registration statement for such Registered Offering includes stockholders of the
Company as selling stockholders or (y) if the registration statement for such
Registered Offering does not include shares of Common Stock being sold for the
benefit of stockholders of the Company, and within the period which expires on
the first to occur of 18 months following the consummation of such Registered
Offering and November 26, 2000, affiliates of Berkshire Partners LLC shall sell
any shares of Common Stock in the public markets (whether pursuant to Rule 144
promulgated under the Securities Act of 1933, as amended, or pursuant to a
subsequent Registered Offering).
(f) The term "Warrant" shall mean this Common Stock Purchase
Warrant.
(g) The term "Warrant Shares" shall mean the shares of Common
Stock issuable upon exercise of this Warrant.
1. Exercise of Warrant.
1.1 Exerciseability. This Warrant may only be exercised by the
holder hereof by delivery of an executed copy of the Form of Subscription on an
Exercise Date, together with the aggregate exercise price hereof. Any such
exercise shall be conditioned
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upon the consummation of such Value Event. If this Warrant is not exercised as
set forth in this Section 1.1 and the Value Event is consummated, this Warrant
shall immediately expire and be of no further force or effect.
1.2 Procedure for Exercise. Assuming this Warrant may be
exercised pursuant to Section 1.1 hereof, this Warrant may be exercised in full
by the holder hereof by surrender of this Warrant, with the form of subscription
at the end hereof duly executed by such holder, to the Company at its principal
office, accompanied by payment either in cash or by certified or official bank
check payable to the order of the Company or by wire transfer in immediately
available funds, in the amount obtained by multiplying the number of shares of
Common Stock for which this Warrant is then exercisable by the Purchase Price
then in effect.
2. Delivery of Stock Certificates, etc., on Exercise. As soon as
practicable after the exercise of this Warrant, and in any event within 10 days
thereafter, the Company at its expense (including the payment by it of any
applicable issue taxes) will cause to be issued in the name of and delivered to
the holder hereof, or as such holder (upon payment by such holder of any
applicable transfer taxes) may direct, a certificate or certificates for the
number of fully paid and nonassessable shares of Common Stock (or Other
Securities) to which such holder shall be entitled on such exercise, plus, in
lieu of any fractional share to which the holder would otherwise be entitled,
cash equal to such fraction multiplied by the then current market value of one
full share, together with any other stock or other securities and property
(including cash, where applicable) to which such holder is entitled upon such
exercise pursuant to Section 1 or otherwise.
3. Adjustment for Stock Dividends and Stock Splits. In the event that
the Company shall (i) issue additional shares of Common Stock as a dividend or
other distribution on outstanding Common Stock, (ii) subdivide its outstanding
shares of Common Stock or (iii) combine its outstanding shares of the Common
Stock into a smaller number of shares of the Common Stock, then, in each such
event, the Purchase Price shall, simultaneously with the happening of such
event, be adjusted by multiplying the Purchase Price in effect immediately prior
to such event by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to such event and the
denominator of which shall be the number of shares of Common Stock outstanding
immediately after such event, and the product so obtained shall thereafter be
the Purchase Price then in effect. The Purchase Price, as so adjusted, shall be
readjusted in the same manner upon the happening of any successive event or
events described herein in this Section 3. The holder of this Warrant shall
thereafter, on the exercise hereof as provided in Section 1, be entitled to
receive that number of shares of Common Stock determined by multiplying the
number of shares of Common Stock which would otherwise (but for the provisions
of this Section 3) be issuable on such exercise by a fraction of which (i) the
numerator is the Purchase Price which would otherwise (but for the provisions of
this Section 3) be in effect and (ii) the denominator is the Purchase Price in
effect on the date of such exercise.
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4. Notices of Value Event. The Company will mail or cause to be mailed
to the holder of this Warrant a notice specifying the date on which it is
proposed that the Company consummate a Value Event, which notice shall provide
the holder of this Warrant with all relevant information (including price and
any other material terms) in connection with such Value Event. Such notice shall
be provided at least 30 days prior to the date specified in such notice on which
any such Value Event is proposed to be consummated, provided that such notice
shall at a minimum be via registered mail or otherwise of a type reasonably
likely to result in its receipt by the intended recipient.
5. Reservation of Stock, etc., Issuable on Exercise of Warrants. The
Company will at all times reserve and keep available, solely for issuance and
delivery on the exercise of the Warrants, all shares of Common Stock (or other
Securities) from time to time issuable on the exercise of the Warrants. In the
case of any adjustment in the shares of Common Stock issuable on the exercise of
this Warrant, the Company will furnish to the holder a certificate of its chief
financial officer setting forth how such adjustment was calculated.
6. Exchange of Warrants. On surrender for exchange of any Warrant,
properly endorsed, to the Company, the Company at its expense will issue and
deliver to or on the order of the holder thereof a new Warrant or Warrants of
like tenor, in the name of such holder or as such holder (on payment by such
holder of any applicable transfer taxes) may direct, calling in the aggregate on
the face or faces thereof for the number of shares of Common Stock called for on
the face or faces of the Warrant or Warrants so surrendered.
7. Replacement of Warrants. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Warrant and, in the case of any such loss, theft or destruction of any Warrant,
on delivery of an indemnity agreement or security reasonably satisfactory in
form and amount to the Company or, in the case of any such mutilation, on
surrender and cancellation of such warrant, the Company at its expense will
execute and deliver, in lieu thereof, a new Warrant of like tenor.
8. Remedies. The Company stipulates that the remedies at law of 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 are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
9. Non-Negotiability. This Warrant may not be transferred other than to
an affiliate of the holder hereof. This Warrant shall not be transferred on the
Company's books and records, and no transfer shall be otherwise effective,
unless any such transfer is made in accordance with the terms and conditions of
this Warrant, and the Company is hereby authorized to enter appropriate stop
transfer notations on its transfer records to give effect to the terms of this
Section 9.
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10. No Rights as Shareholder. The holder hereof shall have no rights as
a shareholder of the Company with respect to any Warrant Shares unless and until
a certificate or certificates representing such Warrant Shares are duly issued
and delivered to the holder upon due exercise of the Warrant.
11. Execution of Stockholders' Agreement. The holder hereof
acknowledges and agrees that no exercise of the Warrant shall be effective
unless and until the holder shall have executed and delivered to the Company a
counterpart signature page to the Company's Stockholders' Agreement (the
"Stockholders' Agreement") dated as of December 1, 1997 between the Company and
its stockholders (provided that such holder is not already a party thereto)
evidencing such holder's agreement to be bound by the terms thereof.
12. Notices, etc. All notices and other communications from the Company
to the holder of this Warrant shall be mailed by first class registered or
certified mail, postage prepaid, at such address as may have been furnished to
the Company in writing by such holder or, until any such holder furnishes to the
Company an address, then to, and at the address of, the last holder of this
Warrant who has so furnished an address to the Company.
13. Miscellaneous. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Warrant shall be construed and enforced in accordance with and
governed by the laws of the Commonwealth of Massachusetts. The headings in this
Warrant are for purposes of reference only, and shall not limit or otherwise
affect any of the terms hereof. This Warrant is being executed as an instrument
under seal. The invalidity or unenforceability of any provision hereof shall in
no way affect the validity or enforceability of any other provision.
Dated: November 26, 1997 XXXXXX PRODUCTS CORP.
By: /s/ Jordan X. Xxxx
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Name: Jordan X. Xxxx
Title: President
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FORM OF SUBSCRIPTION
(To be signed only on exercise of Warrant)
TO: XXXXXX PRODUCTS CORP.
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise this Warrant for, and to purchase thereunder _______
shares of Common Stock of Xxxxxx Products Corp., and herewith makes
payment of the aggregate Purchase Price therefor by (cross out
inapplicable choice) cash/check, and requests that the certificates for
such shares be issued in the name of, and delivered to ________________
whose address is ____________________________________.
Dated:
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(Signature must conform to name of holder as
specified on the face of the Warrant)
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FORM OF ASSIGNMENT
(To be signed only on transfer of warrant)
For value received, the undersigned hereby sells, assigns, and
transfers unto ____________________, an affiliate of the undersigned,
the right represented by the within Warrant to purchase shares of
Common Stock of Xxxxxx Products Corp. to which the within Warrant
relates, and appoints _________________ as its Attorney to transfer
such right on the books of Xxxxxx Products Corp. with full power of
substitution in the premises.
Dated:
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(Signature must conform to name of holder as
specified on the face of the Warrant)
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(Address)
Signed in the presence of:
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