AMENDED AND RESTATED WARRANT AGREEMENT,
dated as of February 22, 1996
between
XXXXXX CO., INC.
and
the Purchasers
listed on the signature pages hereto.
TABLE OF CONTENTS
Page
SECTION 1. Defined Terms . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. Issuance and Delivery of Warrants . . . . . . . . . . . . 7
SECTION 3. Execution of Warrant Certificates . . . . . . . . . . . . 7
SECTION 4. Registration . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 5. Warrants; Exercise of Warrants . . . . . . . . . . . . . 7
SECTION 6. Payment of Taxes . . . . . . . . . . . . . . . . . . . . 9
SECTION 7. Fractional Interests . . . . . . . . . . . . . . . . . . 9
SECTION 8. Reservation of Warrant Shares . . . . . . . . . . . . . . 9
SECTION 9. Adjustment of Exercise Price and Number of Warrant
Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 10. Payments in Respect of Dividends and Distributions . . . 16
SECTION 11. Preemptive Rights . . . . . . . . . . . . . . . . . . . 16
SECTION 12. Registration Rights . . . . . . . . . . . . . . . . . . 18
SECTION 13. Representations and Warranties . . . . . . . . . . . . . 18
SECTION 14. Covenants . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 15. Amendments and Waivers . . . . . . . . . . . . . . . . . 22
SECTION 16. Transfers . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 17. Miscellaneous . . . . . . . . . . . . . . . . . . . . . 24
EXHIBIT A - Form of Warrant Certificate
EXHIBIT B - Registration Rights Provisions
AMENDED AND RESTATED WARRANT AGREEMENT
THIS AMENDED AND RESTATED WARRANT AGREEMENT, dated as of
February 22, 1996 (this "Agreement"), by and among XXXXXX CO., INC., a
Wisconsin corporation (the "Company"), and each of the Purchasers listed
on the signature pages attached hereto (together with their respective
successors and assigns, the "Purchasers").
W I T N E S S E T H:
WHEREAS, the Company and certain of the Purchasers are
parties to the Warrant Agreement, dated as of December 22, 1995 (the
"Existing Warrant Agreement");
WHEREAS, the parties to the Existing Warrant Agreement desire
that such agreement be amended and restated as set forth in this
Agreement;
WHEREAS, the Company proposes to issue to the Purchasers
Warrants (such capitalized term and other capitalized terms used in these
recitals without definition shall have the meanings provided in Section 1)
to purchase shares of the Common Stock, no par value per share (the
"Common Stock"), of the Company pursuant to an Amended and Restated Note
and Warrant Purchase Agreement dated as of the date hereof (as amended
from time to time pursuant to the terms thereof and hereof, the "Note and
Warrant Purchase Agreement"), in the amounts set forth on Schedule I
attached thereto by and among the Company and the Purchasers;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements set forth herein, the parties hereto agree (i) that the
Existing Warrant Agreement is hereby amended and restated, and (ii)
further as follows:
SECTION 1. Defined Terms. (a) The following terms (whether
or not underscored) when used in this Agreement, including its preamble
and recitals, shall, except where the context otherwise requires, have the
following meanings:
"Equivalent Security" means, with respect to any security (a
"first security") issued or to be issued by any Person, a security (an
"equivalent security") of such Person that is identical in rights and
benefits to such first security, except that (a) the equivalent security
shall not be entitled to vote on any matter on which holders of voting
securities of such Person are entitled to vote, other than as required by
applicable law or with respect to any amendment or repeal of any provision
of the Organic Documents of such Person or any other agreement or
instrument pursuant to which the equivalent security was issued which
provision specifically affects such equivalent security, (b) subject to
such reasonable restrictions as the applicable Holder may request, the
equivalent security shall be convertible in a one-to-one ratio into the
first security and (c) the terms of the equivalent security shall include
such provisions requested by the applicable Holder as are reasonable and
equitable to ensure that (i) the equivalent security is treated comparably
to the first security with respect to dividends, distributions, stock
splits, reclassifications, capital reorganizations, mergers,
consolidations and other similar events and transactions, (ii) the
conversion right provided in clause (b) above is equitably protected and
(iii) the acquisition of the equivalent security will not cause such
Holder to violate any applicable law.
"Excluded Securities" means:
(a) securities issued pursuant to a stock dividend, stock
split or subdivision;
(b) Common Stock issued upon the exercise of any Warrant;
and
(c) securities issued by the Company in a Qualified Public
Offering.
"Fully-Diluted Basis" means, as applied to the calculation of
the number of shares of Common Stock outstanding at any time, after giving
effect to (a) all shares of Common Stock outstanding at the time of
determination, (b) all shares of Common Stock issuable upon the
conversion, exercise or exchange of any convertible security, warrant,
option, subscriptions, calls or other rights to acquire Common Stock
outstanding at the time of determination, irrespective of whether such
conversion, exercise or exchange is permitted, restricted or vested at the
time of determination, and irrespective of the price or consideration
required by such conversion, exercise or exchange, and (c) all other
commitments, promises or understandings to issue any shares of Common
Stock or any convertible security, warrant, option, subscription, call or
other rights outstanding at the time of determination. Such calculation
will reflect the Warrants, and will not be made in accordance with the
"treasury method in accordance with GAAP".
"Holder" or "Holders" means the Purchasers (so long as either
of them holds any Warrants or Warrant Shares) and any other holder of any
of the Warrants or Warrant Shares.
"Independent Financial Expert" means a nationally recognized
investment banking firm (a) that does not (and whose directors, officers,
employees and Affiliates do not) have a direct or indirect material
financial interest in the Company, (b) that has not been, and, at the time
it is called upon to serve as an Independent Financial Expert under this
Agreement is not (and none of whose directors, officers, employees or
Affiliates is) a promoter, director or officer of the Company, (c) that
has not been retained by the Company for any purpose, other than to
perform an equity valuation, within the preceding twelve months and (d)
that is otherwise qualified to serve as an independent financial advisor.
Any such Person may receive customary compensation and indemnification by
the Company for opinions or services it provides as an Independent
Financial Expert.
"Interest Expense" means, with respect to any Person for any
applicable period, the total interest expense of such Person and its
Subsidiaries for such period, as determined in accordance with GAAP,
including (i) commitment fees paid or owed with respect to the then
unutilized portion of any credit facility, (ii) all other fees paid or
owed with respect to the issuance or maintenance of letters of credit,
bankers' acceptances and similar contingent liabilities, which, in
accordance with GAAP, would be included as interest expense, (iii) net
costs in connection with Hedging Obligations and (iv) the portion of any
payments made in respect of Capitalized Lease Liabilities of such Person
and its Subsidiaries allocable to interest expense.
"Liquidity Creation Event" means any of the following:
(a) a Qualified Public Offering;
(b) a sale of all the Common Stock of the Company
(including the Warrants and all Warrant Shares) pursuant to a
bona fide transaction in which (i) the consideration therefor
consists solely of cash and Publicly Traded securities, (ii)
each holder of shares of Common Stock receives the same form
and amount of consideration and no such holder or Affiliate
thereof would be entitled, directly or indirectly, to any
benefits, fees, payments, inducements or other compensation
from any of the purchasers except as provided to each other
such holder; (iii) if any such holder is given an option as
to the form and amount of consideration to be received, each
such holder is given the same option; (iv) each Holder, to
the extent of its unexercised Warrants, is given an
opportunity to either (A) exercise such Warrants prior to the
consummation of such sale and participate in such sale as
holders of Common Stock or (B) upon the consummation of such
sale, receive in exchange for such Warrants consideration
equal to the amount determined by multiplying (1) the same
amount of consideration per share of Common Stock received by
holders of such Common Stock in connection with such sale
less the Exercise Price per share of such Common Stock
pursuant to such Warrants by (2) the number of shares of such
Common Stock represented by such Warrants; (v) no Holder is
obligated in connection with such sale to make any
representations, warranties, indemnities or similar
agreements other than representations and warranties as to
such Holder's title to the Warrants or Warrant Shares being
sold and the authority to sell such Warrants or Warrant
Shares and indemnities as to such representations and
warranties, which indemnities shall be several and not joint
(provided that no Holder shall be required to provide
indemnification that would result in an aggregate liability
to such Holder in excess of such Holder's net proceeds from
the sale of its Warrants or Warrant Shares pursuant to such
sale); (vii) no Holder is obligated to pay any portion of the
transaction costs associated with such sale (except for the
costs of any legal counsel specifically engaged by it); and
(viii) in the case such sale involves a purchase price
adjustment based on a closing financial statement of the
Company as of the closing date of such sale, no Holder is
obligated to remit to any purchaser in such sale any amount
after 180 days following such closing date or if such
adjustment is finally determined and due and payable within
such 180 days pay any amount which is greater than the lesser
of (x) such Holder's pro rata share of the amount of such
adjustment as finally determined and (y) an amount equal to
10% of the aggregate net proceeds received by such Holder at
such closing (provided that each Holder shall be entitled to
receive its full pro rata share of any adjustment in favor of
the sellers in such sale when and as paid to all such
sellers); or
"Market Price" means, with respect to a share of Common Stock
on any Business Day:
(a) if the Common Stock is Publicly Traded at the time of
determination, the average of the closing prices for the
Common Stock on the principal United States domestic
securities exchange on which such security may at the time be
listed, or, if there have been no sales on any such exchange
on such day, the average of the highest bid and lowest asked
prices on such exchange at the end of such day, or, if on any
day such security is not so listed, the average of the
representative bid and asked prices quoted on NASDAQ as of
4:00 P.M., New York time, on such day, or if on any day such
security is not quoted in NASDAQ, the average of the highest
bid and lowest asked prices on such day in the United States
domestic over-the-counter market as reported by the National
Quotation Bureau, Incorporated, or any similar successor
organization, in each such case averaged over a period of 20
Business Days consisting of the Business Day as of which
"Market Price" is being determined and 19 consecutive
Business Days prior to such day; or
(b) if the Common Stock is not Publicly Traded at the time
of determination, the Market Value per share of Common Stock.
"Market Value" means the fair market value of the common
equity interest in the Company as determined in good faith by the Board of
Directors of the Company.
"Market Value per share of Common Stock" means the price per
share of Common Stock obtained by dividing (i) the Market Value by
(ii) the number of shares of Common Stock outstanding (on a Fully-Diluted
Basis) at the time of determination.
"NASDAQ" means the National Association of Securities
Dealers, Inc., Automated Quotation System.
"Net Income" means, with respect to any Person for any
applicable period, the net income (or loss) of such Person and its
Subsidiaries on a consolidated basis for such period determined in
conformity with GAAP, exclusive of any extraordinary gains or non-cash
extraordinary losses.
"Proportionate Percentage" means, with respect to any Holder
at any time, the quotient obtained by dividing (a) the aggregate number of
Warrant Shares then held by such Holder by (b) the total number of shares
of Common Stock then outstanding (on a Fully-Diluted Basis).
"Publicly Traded" means, with respect to any security, that
such security is (a) listed on a United States domestic securities
exchange, (b) quoted on NASDAQ or (c) traded in the United States domestic
over-the-counter market, which trades are reported by the National
Quotation Bureau, Incorporated.
"Qualified Public Offering" means an underwritten public
offering of Common Stock registered under the Securities Act at an initial
offering price (subject to appropriate reverse stock splits) of $5.00 per
share and resulting in gross proceeds to the Company of at least
$10,000,000.
"Requisite Holders" means Holders holding Warrants or Warrant
Shares representing at least a majority of all Warrant Shares issued or
issuable upon exercise of Warrants outstanding on the date of
determination.
"Significant Holder" means a Holder holding Warrants or
Warrant Shares representing more than 25% of all Warrant Shares issued or
issuable upon exercise of Warrants outstanding on the date of
determination.
"Warrant Certificate" means a certificate evidencing
Warrants, substantially in the form set forth as Exhibit A hereto.
Warrant Certificates shall be dated the date of issuance by the Company.
"Warrant Shares" means (a) the shares of Common Stock issued
or issuable upon exercise of a Warrant in accordance with Section 5 or
upon exchange of a Warrant in accordance with Section 5, (b) all other
securities or other property issued or issuable upon any such exercise or
exchange in accordance with this Agreement and (c) any securities of the
Company distributed with respect to the securities referred to in the
preceding clauses (a) and (b). As used in this Agreement, the phrase
"Warrant Shares then held" by any Holder or Holders (or any similar
phrase) shall mean Warrant Shares held at the time of determination by
such Holder or Holders, and shall include Warrant Shares issuable upon
exercise of Warrants held at the time of determination by such Holder or
Holders.
"Warrants" means the Warrants, the Escrowed Warrants and the
Additional Warrants.
(b) The following terms are defined in the Sections or other
areas indicated:
Term Section
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . preamble
Board Representative . . . . . . . . . . . . . . . . . . . . . . . . . 14
Common Stock . . . . . . . . . . . . . . . . . . . . . . . third recital
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . preamble
Convertible Securities . . . . . . . . . . . . . . . . . . . . . . . . 9
Exercise Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Existing Warrant Agreement . . . . . . . . . . . . . . . . first recital
Expiration Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Note and Warrant Purchase Agreement . . . . . . . . . . . . third recital
Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . preamble
Registration Rights Agreement . . . . . . . . . . . . . . . . . . . . . 12
Reorganizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 11 Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 11 Offer Notice . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 11 Offered Securities . . . . . . . . . . . . . . . . . . . . . 11
Section 11 Notice of Acceptance . . . . . . . . . . . . . . . . . . . . 11
Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Transfer Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(c) Unless otherwise defined herein or the context otherwise
requires, terms used in this Agreement have the meanings provided in the
Note and Warrant Purchase Agreement.
SECTION 2. Issuance and Delivery of Warrants. On the terms
and subject to the conditions of the Note and Warrant Purchase Agreement
and this Agreement, on the Closing Date, the Company shall issue and
deliver to the Purchasers Warrant Certificates evidencing the Warrants.
SECTION 3. Execution of Warrant Certificates. The Warrant
Certificates shall be signed on behalf of the Company by its Chairman of
the Board or its President or a Vice President. Each such signature upon
the Warrant Certificates may be in the form of a facsimile signature of
the present or any future Chairman of the Board, President or Vice
President, and may be imprinted or otherwise reproduced on the Warrant
Certificates and for that purpose the Company may adopt and use the
facsimile signature of any person who shall have been Chairman of the
Board, President or Vice President, notwithstanding the fact that at the
time the Warrant Certificates shall be delivered or disposed of he shall
have ceased to hold such office. Each Warrant Certificate shall also be
manually signed on behalf of the Company by its Secretary or an Assistant
Secretary under its corporate seal. The seal of the Company may be in the
form of a facsimile thereof and may be impressed, affixed, imprinted or
otherwise reproduced on the Warrant Certificates.
SECTION 4. Registration. The Company shall number and
register the Warrant Certificates in a register as they are issued. The
Company may deem and treat the registered Holders of the Warrant
Certificates as the absolute owners thereof (notwithstanding any notation
of ownership or other writing thereon made by anyone) for all purposes and
shall not be affected by any notice to the contrary. The Warrants shall
be registered initially in such name or names as the Purchaser shall
designate.
SECTION 5. Warrants; Exercise of Warrants. Subject to the
terms of this Agreement, each Holder shall have the right, which may be
exercised at any time or from time to time until 5:00 p.m., New York time,
on December 21, 2005 (the "Expiration Date") to receive from the Company
the number of fully paid and nonassessable Warrant Shares (and such other
consideration) which the Holder may at the time be entitled to receive on
exercise of such Warrants and payment of the Exercise Price then in effect
for such Warrant Shares. Each Warrant not exercised prior to 5:00 p.m.,
New York time, on the Expiration Date shall become void and all rights
thereunder and all rights in respect thereof under this Agreement shall
cease as of such time; provided that the occurrence of the Expiration Date
shall not relieve the Company of any obligation to any Holder which arose
pursuant to the terms of this Agreement prior to such date.
The price at which each Warrant shall be exercisable (the
"Exercise Price") shall initially be $0.20 per share of Common Stock. The
Company shall not change the par value of its Common Stock.
A Warrant may be exercised upon surrender to the Company at
its office designated for such purpose (as provided for in Section 17(b))
of the Warrant Certificate or Certificates to be exercised with the form
of election to purchase attached thereto duly filled in and signed, and
upon payment to the Company of the Exercise Price for the number of
Warrant Shares in respect of which such Warrants are then exercised.
Payment of the aggregate Exercise Price may be made, at the option of the
applicable Holder, (i) by cash, certified or bank cashier's check or wire
transfer, (ii) by surrendering to the Company the number of Warrants
which, if exercised, would entitle the Holder thereof to that number of
Warrant Shares which is equal to (A) such aggregate Exercise Price divided
by (B) the excess of (1) the product obtained by multiplying the number of
Warrant Shares which may be purchased with one Warrant by the Market Price
per share of Common Stock over (2) the Exercise Price, (iii) by
surrendering to the Company the number of shares of Common Stock equal to
the quotient obtained by dividing (A) such aggregate Exercise Price by (B)
the Market Price per share of Common Stock, (iv) by surrendering Notes to
the Company in an aggregate principal amount equal to the aggregate
Exercise Price, or (v) any combination of the foregoing.
Subject to the provisions of Section 6, upon such surrender
of Warrants and payment of the Exercise Price the Company shall issue and
cause to be delivered with all reasonable dispatch to or upon the written
order of the Holder and in such name or names as such Holder may designate
a certificate or certificates for the number of full Warrant Shares
issuable upon the exercise of such Warrants (and such other consideration
as may be deliverable upon exercise of such Warrants) together with, at
the sole option of the Company, cash for fractional Warrant Shares as
provided in Section 7; provided that, if requested by any Holder in its
sole discretion, such Holder shall be entitled to receive, in lieu of any
such consideration comprised of securities not constituting shares of
Common Stock, the same number of shares or other units of an Equivalent
Security (which the Company agrees to use its best efforts to create,
including, subject to Section 14(h), amending its Organic Documents).
Such certificate or certificates shall be deemed to have been issued and
the Person so named therein shall be deemed to have become a holder of
record of such Warrant Shares as of the date of the surrender of such
Warrants and payment of the Exercise Price, irrespective of the date of
delivery of such certificate or certificates for Warrant Shares.
Each Warrant shall be exercisable, at the election of the
Holder thereof, either in full or from time to time in part and, in the
event that a Warrant Certificate is exercised in respect of fewer than all
of the Warrant Shares issuable on such exercise at any time prior to the
date of expiration of the Warrants, a new certificate evidencing the
remaining Warrant or Warrants will be issued and delivered pursuant to the
provisions of this Section 5.
All Warrant Certificates surrendered upon exercise of
Warrants shall be cancelled and disposed of by the Company. The Company
shall keep copies of this Agreement and any notices given or received
hereunder available for inspection by the Holders during normal business
hours at its office.
SECTION 6. Payment of Taxes. The Company will pay all taxes
and other governmental charges (including all documentary stamp taxes, but
excluding all foreign, federal, state or local income taxes payable by a
Holder of a Warrant) in connection with the issuance or delivery of the
Warrants hereunder, including all such taxes attributable to the initial
issuance or delivery of Warrant Shares upon the exercise of Warrants and
payment of the Exercise Price. The Company shall not, however, be
required to pay any tax that may be payable in respect of any subsequent
transfer of the Warrants.
SECTION 7. Fractional Interests. The Company shall not be
required to issue fractional Warrant Shares on the exercise of Warrants.
If more than one Warrant shall be presented for exercise in full at the
same time by the same Holder, the number of full Warrant Shares which
shall be issuable upon the exercise thereof shall be computed on the basis
of the aggregate number of Warrant Shares purchasable on exercise of the
Warrants so presented. If any fraction of a Warrant Share would, except
for the provisions of this Section 7, be issuable on the exercise of any
Warrants (or specified portion thereof), the Company shall, at its sole
option, pay an amount in cash equal to the Market Price of the Warrant
Share so issuable multiplied by such fraction.
SECTION 8. Reservation of Warrant Shares. The Company shall
at all times reserve and keep available, free from preemptive rights
(except as otherwise provided herein), out of its authorized and issued
Common Stock held in its treasury, for the purpose of enabling it to
satisfy any obligation to issue Warrant Shares upon exercise of Warrants,
the maximum number of shares of Common Stock which may then be deliverable
upon the exercise of all outstanding Warrants options, warrants or other
securities convertible into (including the Warrant Shares) or exchangeable
or exercisable for Common Stock.
The Company or, if appointed, the transfer agent for the
Common Stock and each transfer agent for any shares of the Company's
capital stock issuable upon the exercise of any of the Warrants
(collectively, the "Transfer Agent)" will be irrevocably authorized and
directed at all times to reserve such number of authorized shares as shall
be required for such purpose. The Company shall keep a copy of this
Agreement on file with any such Transfer Agent. The Company will supply
any such Transfer Agent with duly executed certificates for such purposes
and will provide or otherwise make available all other consideration that
may be deliverable upon exercise of the Warrants. the Company will
furnish any such Transfer Agent a copy of all notices of adjustments and
certificates related thereto transmitted to each Holder pursuant to
Section 14(a).
The Company covenants that all Warrant Shares and other
capital stock issued upon exercise of Warrants will, upon payment of the
Exercise Price therefor and issue thereof, be validly authorized and
issued, fully paid, nonassessable, free of preemptive rights (except as
may be granted by this Agreement) and free, subject to the provisions of
Section 6, from all taxes, liens, charges and security interests with
respect to the issue thereof.
SECTION 9. Adjustment of Exercise Price and Number of
Warrant Shares. The Exercise Price and the number and kind of Warrant
Shares purchasable upon exercise of each Warrant shall be subject to
adjustment from time to time in accordance with this Section 9.
(a) Adjustment upon Issuance of Common Stock. (i) If, at
any time after the Closing Date (other than in connection with the
Undertaking), the Company shall issue or sell (or, in accordance with
Section 9(a)(ii), shall be deemed to have issued or sold) any shares of
Common Stock without consideration or for a consideration per share less
than the Market Price determined as of the date of such issuance or sale,
then, effective immediately upon such issuance or sale, the Exercise Price
shall be reduced to an amount equal to the product obtained by multiplying
(A) the Exercise Price in effect immediately prior to such
issuance or sale,
by
(B) a fraction, the numerator of which shall be the sum of
(x) the product obtained by multiplying (1) the number of
shares of Common Stock outstanding on a Fully-Diluted Basis
immediately prior to such issuance or sale by (2) the Market
Price as of the date of such issuance or sale,
plus
(y) the consideration, if any, received by the Company upon
such issuance or sale, and
the denominator of which shall be the product obtained by
multiplying (1) the number of shares of Common Stock
outstanding on a Fully-Diluted Basis immediately after such
issuance or sale by (2) such Market Price.
Upon each such adjustment of the Exercise Price hereunder, the number of
Warrant Shares which may be obtained upon exercise of such Warrant shall
be increased to the number of shares determined by multiplying (A) the
number of Warrant Shares which could be obtained upon exercise of such
Warrant immediately prior to such adjustment by (B) a fraction, the
numerator of which shall be the Exercise Price in effect immediately prior
to such adjustment and the denominator of which shall be the Exercise
Price in effect immediately after such adjustment.
(ii) For the purpose of determining the adjusted Exercise
Price under this Section 9, the following shall be applicable:
(A) Issuance of Rights or Options. If the Company in any
manner (other than in connection with the Undertaking) issues
or grants any rights or options to subscribe for or to
purchase (A) Common Stock or (B) any stock or other
securities convertible into or exchangeable for Common Stock
(such rights or options being herein called "Options" and
such convertible or exchangeable stock or securities being
herein called "Convertible Securities"), and the price per
share for which Common Stock is issuable upon the exercise of
such Options or upon conversion or exchange of such
Convertible Securities is less than the Market Price
determined as of the date of issuance or grant of such
Options, then the total maximum number of shares of Common
Stock issuable upon the exercise of such Options (or upon
conversion or exchange of the total maximum amount of such
Convertible Securities issuable upon the exercise of such
Options) shall be deemed to be outstanding and to have been
issued and sold by the Company for such price per share. For
purposes of this paragraph, the price per share for which
Common Stock is issuable upon exercise of Options or upon
conversion or exchange of Convertible Securities issuable
upon exercise of Options shall be determined by dividing (x)
the total amount, if any, received or receivable by the
Company as consideration for the issuing or granting of such
Options, plus the minimum aggregate amount of additional
consideration payable to the Company upon the exercise of all
such Options, plus in the case of such Options which relate
to Convertible Securities, the minimum aggregate amount of
additional consideration, if any, payable to the Company upon
issuance or sale of such Convertible Securities and the
conversion or exchange thereof by (y) the total maximum
number of shares of Common Stock issuable upon exercise of
such Options or upon the conversion or exchange of all such
Convertible Securities issuable upon the exercise of such
Options. No further adjustment of the Exercise Price shall
be made upon the actual issuance of such Common Stock or of
such Convertible Securities upon the exercise of such Options
or upon the actual issuance of such Common Stock upon
conversion or exchange of such Convertible Securities.
(B) Issuance of Convertible Securities. If the Company in
any manner issues or sells any Convertible Securities having
an exercise or conversion or exchange price per share of
Common Stock which is less than the Market Price determined
as of the date of such issuance or sale, then the maximum
number of shares of Common Stock issuable upon the conversion
or exchange of such Convertible Securities shall be deemed to
be outstanding and to have been issued and sold by the
Company for such lower price per share. For purposes of this
paragraph, the price per share for which Common Stock is
issuable upon conversion or exchange of Convertible
Securities is determined by dividing (x) the total amount
received or receivable by the Company as consideration for
the issuance or sale of such Convertible Securities, plus the
minimum aggregate amount of additional consideration, if any,
payable to the Company upon the conversion or exchange
thereof, by (y) the total maximum number of shares of Common
Stock issuable upon the conversion or exchange of all such
Convertible Securities. No further 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 if any such issuance or sale of such
Convertible Securities is made upon exercise of any Options
for which adjustments of the Exercise Price had been or are
required to be made pursuant to other provisions of this
Section 9(a)(ii), no further adjustment of the Exercise Price
shall be made by reason of such issuance or sale.
(C) Change in Option Price or Conversion Rate. If the
purchase price provided for in any Options, the additional
consideration, if any, payable upon the issuance, conversion
or exchange of any Convertible Securities, or the rate at
which any Convertible Securities are convertible into or
exchangeable for Common Stock change at any time, then the
Exercise Price in effect at the time of such change shall 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 changed
conversion rate, as the case may be, at the time initially
granted, issued or sold and the number of Warrant Shares
shall be correspondingly readjusted.
(D) Treatment of Expired Options and Unexercised
Convertible Securities. Upon the expiration of any Option or
the termination of any right to convert or exchange any
Convertible Securities without the exercise of such Option or
right, the Exercise Price then in effect and the number of
Warrant Shares acquirable hereunder shall be adjusted to the
Exercise Price and the number of shares which would have been
in effect at the time of such expiration or termination had
such Option or Convertible Securities, to the extent
outstanding immediately prior to such expiration or
termination, never been issued.
(E) Calculation of Consideration Received. If any Common
Stock, Options or Convertible Securities are issued or sold
or deemed to have been issued or sold for cash, then the
consideration received therefor shall be deemed to be the net
amount received by the Company therefor. If any Common
Stock, Options or Convertible Securities are issued or sold
for consideration other than cash, then the amount of the
consideration other than cash received by the Company shall
be the Market Value of such consideration.
(F) Treasury Shares. The number of shares of Common Stock
outstanding at any given time does not include shares owned
or held by or for the account of the Company or any
Subsidiary of the Company, and the disposition of any shares
so owned or held shall be considered an issue or sale of
Common Stock.
(G) Record Date. If the Company takes a record of the
holders of Common Stock for the purpose of entitling them (x)
to receive a dividend or other distribution payable in Common
Stock, Options or in Convertible Securities or (y) to
subscribe for or purchase Common Stock, Options or
Convertible Securities, then such record date shall be deemed
to be the date of the issuance 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.
(b) Subdivisions or Combinations of Common Stock. If, at
any time after the Closing Date, (i) the number of shares of Common Stock
outstanding is increased by a dividend or other distribution payable in
shares of Common Stock or by a subdivision or split-up of shares of Common
Stock or (ii) the number of shares of Common Stock outstanding is
decreased by a combination or reverse stock split of shares of Common
Stock, then, in each case, effective as of the effective date of such
event retroactive to the record date, if any, of such event, (A) the
Exercise Price shall be adjusted to a price determined by multiplying (x)
the Exercise Price in effect immediately prior to such event by (y) 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 after
giving effect to such event and (B) the number of Warrant Shares subject
to purchase upon the exercise of any Warrant shall be adjusted effective
at such time to a number equal to the product of (x) the number of Warrant
Shares subject to purchase upon the exercise of such Warrant immediately
prior to such event by (y) a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding after giving effect to such
event and the denominator of which shall be the number of shares of Common
Stock outstanding immediately prior to such event.
(c) Reorganizations. In case of any capital reorganization
or reclassification of the capital stock of the Company, other than in the
cases referred to in Section 9(a) or (b), or the consolidation or merger
of the Company with or into another Person (other than a merger or
consolidation in which the Company is the surviving entity and which does
not result in any reclassification of the outstanding shares of Common
Stock into shares of other stock or other securities or property), or the
sale of the property of the Company as an entirety or substantially as an
entirety (collectively, such actions being hereinafter referred to as
"Reorganizations"), there shall thereafter be deliverable upon exercise of
any Warrant (in lieu of the number of shares of Common Stock theretofore
deliverable) the number of shares of stock or other securities or property
to which a holder of the number of shares of Common Stock that would
otherwise have been deliverable upon the exercise of such Warrant would
have been entitled upon such Reorganization if such Warrant had been
exercised in full immediately prior to such Reorganization. In case of
any Reorganization, appropriate adjustment, as determined in good faith by
the Board of Directors of the Company, whose determination shall be
described in a duly adopted resolution certified by the Company's
Secretary or Assistant Secretary, shall be made in the application of the
provisions herein set forth with respect to the rights and interests of
Holders so that the provisions set forth herein shall thereafter be
applicable, as nearly as possible, in relation to any shares or other
property thereafter deliverable upon exercise of Warrants.
The Company shall not effect or permit any such
Reorganization unless (i) the successor entity resulting from such
Reorganization or the Person purchasing such assets (A) is a corporation
duly organized and validly existing under the laws of a state of the
United States of America, (B) immediately after giving effect to such
Reorganization (and the incurrence or anticipated incurrence of any
Indebtedness to be incurred in connection therewith) shall have a Net
Worth equal to or greater than the Net Worth of the Company immediately
preceding such transaction and (ii) prior to or simultaneously with the
consummation of such Reorganization the successor entity (if other than
the Company) resulting from such Reorganization or the Person purchasing
such assets shall expressly assume, by a supplemental Warrant Agreement or
other acknowledgement executed and delivered to the Holder(s) in form and
substance satisfactory to the Requisite Holders, the obligation to deliver
to each such Holder such shares of stock, securities or assets as, in
accordance with the foregoing provisions, such Holder may be entitled to
purchase, and all other obligations and liabilities under this Agreement.
(d) Notice; Calculations; Etc. Whenever the Exercise Price
and the number of Warrant Shares shall be adjusted as provided in this
Section 9, the Company shall provide to each Holder an Officer's
Certificate describing in detail the facts requiring such adjustment and
setting forth a calculation of the Exercise Price and the number of
Warrant Shares applicable to each Warrant after giving effect to such
adjustment. All calculations under this Section 9 shall be made to the
nearest one hundredth of a cent ($.0001) or to the nearest one hundred
thousandth of a share, as the case may be. Adjustments pursuant to
Sections 9(a), (b) and (c) shall apply to successive events or
transactions of the type covered thereby.
(e) Adjustment Rules. Any adjustments pursuant to this
Section 9 shall be made successively whenever an event referred to herein
shall occur, except that, notwithstanding any other provision of this
Section 9, no adjustment shall be made to the number of Warrant Shares or
to the Exercise Price if such adjustment represents less than 1/2 of 1% of
the number of Warrant Shares then outstanding, but any lesser adjustment
shall be carried forward and shall be made at the time and together with
the next subsequent adjustment which together with any adjustments so
carried forward shall amount to 1/2 of 1% or more of such number of
Warrant Shares.
(f) Form of Warrants. Irrespective of any adjustments in
the Exercise Price or the number or kind of Warrant Shares purchasable
upon the exercise of any Warrant, Warrants theretofore or thereafter
issued may continue to express the same Exercise Price and number and kind
of Warrant Shares as are stated in the Warrants initially issuable
pursuant to this Agreement.
(g) Miscellaneous. In the event that at any time, as a
result of an adjustment made pursuant to this Section 9, the Holders shall
become entitled to purchase any securities of the Company other than, or
in addition to, shares of Common Stock, thereafter the number or amount of
such other securities so purchasable upon exercise of each Warrant shall
be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the
Warrant Shares contained in this Section 9, and the provisions of Sections
5, 6, 7 and 8 with respect to the Warrant Shares or the Common Stock shall
apply on like terms to any such other securities.
SECTION 10. Payments in Respect of Dividends and
Distributions. If the Company pays any dividend or makes any distribution
(whether in cash, property or securities of the Company) on its capital
stock which does not result in an adjustment under Section 9, then the
Company shall simultaneously pay to each Holder the dividend or
distribution which would have been paid to such Holder on the Warrant
Shares receivable upon the exercise in full of each Warrant had such
Warrant been fully exercised immediately prior to the record date for such
dividend or distribution or, if no record is taken, the date as of which
the record holders of Common Stock entitled to such dividend or
distribution are to be determined.
SECTION 11. Preemptive Rights. (a) The Company shall not
issue, sell or exchange, agree to issue, sell or exchange, or reserve or
set aside for issuance, sale or exchange, any (i) Common Stock, (ii) any
other equity security of the Company, (iii) any debt security of the
Company which by its terms is convertible into or exchangeable for any
equity security of the Company or has any other equity feature, (iv) any
security of the Company that is a combination of debt and equity or (v)
any option, warrant or other right to subscribe for, purchase or otherwise
acquire any equity security or any such debt security of the Company (each
of the foregoing, a "Security"), unless, in each case, the Company shall
have first offered (each such offer, a "Section 11 Offer") to sell to each
Holder its Proportionate Percentage of such Securities (such Securities,
the "Section 11 Offered Securities") (and to sell thereto Section 11
Offered Securities not subscribed for by other Holders as hereinafter
provided), at a price and on such other terms as shall have been specified
by the Company in a written notice (each such notice, a "Section 11 Offer
Notice") delivered to such Holder, which Offer by its terms shall remain
open and irrevocable for a period of twenty Business Days from the date it
is delivered by the Company to such Holder.
(b) Notice of each Holder's intention to accept, in whole or
in part, a Section 11 Offer shall be evidenced by a writing signed by such
Holder and delivered to the Company prior to the end of the 20-day period
of such Section 11 Offer, setting forth such portion of the Section 11
Offered Securities as such Holder elects to purchase (each such writing, a
"Section 11 Notice of Acceptance"). If any Holder shall subscribe for
less than its Proportionate Percentage of the Section 11 Offered
Securities available to such Holder, the other subscribing Holders,
subject to the terms of the Stockholders Agreement, shall be entitled to
purchase the balance of such Holder's Proportionate Percentage in the same
proportion in which they were initially entitled to purchase the Section
11 Offered Securities (excluding for such purposes such Holder subscribing
for less than its Proportionate Percentage). The Company shall notify
each other Holder within five Business Days following the expiration of
the 20-day period described above of the amount of Section 11 Offered
Securities which each Holder may purchase pursuant to the foregoing
sentence, and each Holder shall then have five Business Days from the
delivery of such notice to indicate such additional amount, if any, that
such Holder wishes to purchase.
(c) In the event that Section 11 Notices of Acceptance are
not given by the Holders in respect of all the Section 11 Offered
Securities, the Company shall have 90 days from the expiration of the
foregoing 20-day period to sell all or any part of such Section 11 Offered
Securities as to which Section 11 Notices of Acceptance have not been
given by the Holders (such Securities, the "Refused Securities") to any
other Person or Persons, but only upon terms and conditions in all
respects, including unit price and interest rates, which are no more
favorable, in the aggregate, to such other Person or Persons or less
favorable to the Company than those set forth in the Section 11 Offer.
Upon the closing of the sale of the Refused Securities, the Holders shall
purchase from the Company, and the Company shall sell to the Holders, the
Section 11 Offered Securities in respect of which Section 11 Notices of
Acceptance were delivered to the Company, at the terms specified in the
Section 11 Offer.
(d) The preemptive rights granted in this Section 11 shall
not apply to the issuance or sale of Excluded Securities.
(e) If requested by any Holder in its sole discretion, such
Holder shall be entitled to receive, in lieu of such number (as it shall
specify) of shares or other units of Section 11 Offered Securities it
would otherwise be entitled to acquire pursuant to this Section 11, the
same number of shares or other units of Common Stock, to the extent such
Section 11 Offered Securities are comprised of Common Stock, and/or an
Equivalent Security (which the Company agrees to use its best efforts to
create, including amending its Organic Documents) to the extent such
Section 11 Offered Securities are comprised of Securities other than
Common Stock.
SECTION 12. Registration Rights. The Company hereby grants
to the Holders the registration rights with respect to the Warrant Shares
on the terms set forth in Exhibit B hereto (the "Registration Rights
Agreement"), and all references to "this Agreement" contained herein are
deemed to include the Registration Rights Agreement.
SECTION 13. Representations and Warranties. The Company
hereby represents and warrants to the Holders that the representations and
warranties contained in Article IV of the Note and Warrant Purchase
Agreement and in any of the other Transaction Documents are hereby
confirmed and restated, insofar as the representations and warranties
contained therein by their terms are applicable to the Company or any of
its Subsidiaries and its or their properties, each such representation and
warranty (insofar as applicable as aforesaid), together with all related
definitions and ancillary provisions, being hereby incorporated into this
Agreement by reference as though specifically set forth in this Section.
SECTION 14. Covenants. (a) Notices of Certain Actions. In
the event that the Company:
(i) shall authorize the issuance to holders of Common Stock
of rights or warrants to subscribe for or purchase capital
stock of the Company or of any other subscription rights or
warrants; or
(ii) shall authorize a dividend or other distribution to
holders of Common Stock of evidences of its indebtedness,
cash or other property or assets; or
(iii) proposes to become a party to any consolidation or
merger for which approval of any stockholders of the Company
will be required, or to a conveyance or transfer of the
properties and assets of the Company substantially as an
entirety, or of any capital reorganization or
reclassification or change of the Common Stock; or
(iv) commences a voluntary or involuntary dissolution,
liquidation or winding up; or
(v) commences discussions with respect to a Qualified
Public Offering or other Liquidity Creation Event; or
(vi) breaches, or suffers a default under, this Agreement;
or
(vii) proposes to take any other action which would require
an adjustment pursuant to Section 9; or
(viii) becomes subject to a Change in Control;
then the Company shall provide as soon as possible a written notice to
each Holder stating (A) the date as of which the holders of record of
Common Stock to be entitled to receive any such rights, warrants or
distribution are to be determined, (B) the material terms of any such
consolidation, merger, Liquidity Creation Event, Change in Control,
conveyance, transfer, dissolution, liquidation or winding up (including
copies of all documents executed in connection therewith), the date any
such event is expected to occur or become effective, and, if applicable,
the date as of which it is expected that holders of record of Common Stock
will be entitled to exchange their shares for securities or other
property, if any, deliverable upon the occurrence of any such event or (C)
the nature and period of existence of any such breach or default.
(b) Financial Statements and Reports. The Company shall
furnish to each Holder the financial statements, reports, certificates,
statements and notices described in Section 6.1 of the Note and Warrant
Purchase Agreement as in effect on the date hereof, within the periods set
forth therein, and such clauses, together with all related definitions and
ancillary definitions, are hereby incorporated into this Agreement by
reference as though specifically set forth in this Section and all of such
provisions shall survive the repayment of the Note and the termination of
the Note and Warrant Purchase Agreement for the purposes hereof.
(c) Information Rights. (i) Each Holder shall have all of
the rights of a holder of Common Stock under applicable law, whether or
not such Holder has exercised or exchanged any Warrants, to receive lists
of stockholders and, subject to the other provisions of this Agreement, to
receive other information respecting the Company, to inspect the books and
records of the Company and its Subsidiaries and to visit the properties of
the Company and its Subsidiaries.
(ii) The Company will permit an authorized representative of
each Significant Holder to visit and inspect any of the properties of the
Company or any of its Subsidiaries, including its and their financial and
accounting records, and to make copies and take extracts therefrom, and to
discuss its and their affairs, finances and accounts with its and their
officers and independent public accountants (and the Company hereby
authorizes such independent public accountant to discuss its and their
financial matters with each such Significant Holder or its representatives
whether or not any representative of the Company is present) and to
examine (and, at the expense of the Company, photocopy extracts from) any
of its and their books or other corporate records. The Company shall pay
reasonable fees of such independent public accountant (up to a $15,000
maximum aggregate amount) incurred in connection with any Significant
Holder's exercise of its rights pursuant to this Section.
(iii) The Company will hold meetings of its Board of
Directors at least quarterly. An authorized representative of each
Significant Holder (each such representative, a "Board Representative")
may, at the expense of the Company, attend all meetings of the Board of
Directors of the Company in a nonvoting observer capacity. The Company
shall provide each Board Representative with such notice of, and other
information with respect to, such meetings as are provided to members of
the Board of Directors or to members of management at the same time as so
provided to such Persons. The Company shall notify each Board
Representative, as promptly as practicable prior thereto, of the taking of
any action by written consent of its Board of Directors in lieu of a
meeting thereof.
(d) Covenants Incorporated by Reference. The Company agrees
with each of the Holders that, until the performance of all of its
obligations hereunder, the Company will perform, comply with and be bound
by all of the agreements, covenants and obligations contained in Articles
II and VI of the Note and Warrant Purchase Agreement as in effect on the
date hereof, which by their terms are applicable to the Company or its
properties, each such agreement, covenant and obligation, together with
all related definitions and ancillary provisions, being hereby
incorporated into this Agreement by reference as though specifically set
forth in this Section and all of such agreements, covenants and
obligations shall survive the repayment of the Notes and the termination
of the Note and Warrant Purchase Agreement for purposes hereof.
(e) Liquidity Creation Event. The Company agrees to use its
best efforts to consummate a Liquidity Creation Event prior to the third
anniversary of this Agreement; provided, however, that, in the event a
Liquidity Creation Event shall have not been consummated prior to such
date, the Company shall continue to use its best efforts to consummate a
Liquidity Creation Event prior to December 21, 2005.
(f) Current Public Information. At all times after the
Company has filed a registration statement with the Securities and
Exchange Commission pursuant to the requirements of either the Securities
Act or the Exchange Act, the Company will file all reports required to be
filed by it under the Securities Act and the Exchange Act and the rules
and regulations adopted by the Securities and Exchange Commission
thereunder, and will take such further action as any Holder may reasonably
request, all to the extent required to enable such Holder to sell Warrant
Shares pursuant to Rule 144 or Rule 144A adopted by the Securities and
Exchange Commission under the Securities Act. Upon request, the Company
will deliver to any such Holder a written statement as to whether it has
complied with such requirements.
(g) Public Disclosures. The Company will not disclose any
Holder's name or identity as an investor in the Company in any press
release or other public announcement or in any public filing without the
written consent of such Holder, unless such disclosure is required by
applicable law or governmental regulations or by order of a court of
competent jurisdiction, in which case prior to making such disclosure the
Company will give written notice to such Holder describing in reasonable
detail the proposed content of such disclosure and will permit the Holder
to review and comment upon the form and substance of such disclosure.
(h) Certain Restrictions. The Company will not without the
consent of the Requisite Holders:
(i) permit any amendment to its Organic Documents, as in
effect on the date hereof, including the creation of any
class of capital stock other than the Common Stock and Common
Stock or the alteration of any powers, preferences or special
rights of the shares of Common Stock so as to affect them
beneficially or so as to affect the holders of Common Stock
adversely; or
(ii) take any other action, corporate or otherwise, the
effect of which would be to alter, impair or affect adversely
either the rights and benefits of the Holders or the duties
and obligations of the Company under the Warrant Documents.
(i) Specific Performance. Each Holder shall have the right
to specific performance by the Company of the provisions of this
Agreement, in addition to any other remedies it may have at law or in
equity. the Company hereby irrevocably waives, to the extent that it may
do so under applicable law, any defense based on the adequacy of a remedy
at law which may be asserted as a bar to the remedy of specific
performance in any action brought against the Company for specific
performance of this Agreement by any Holder of the Warrants or Warrant
Shares.
SECTION 15. Amendments and Waivers. (a) Consent of
Holders. No amendment, modification, termination or waiver of any
provision of this Agreement (including the terms of the Note and Warrant
Purchase Agreement incorporated herein by reference and the Registration
Rights Agreement) and the Warrant Certificates, or consent to any
departure by the Company therefrom, shall in any event be effective
without the written concurrence of the Requisite Holders; provided,
however, that without the consent of each Holder affected, no amendment,
modification, termination or waiver may:
(i) make any change to the definition of "Requisite
Holders";
(ii) make any change to the transfer provisions of Section
16 that adversely affects the ability of a Holder to make any
transfer described therein; or
(iii) make any change in the foregoing amendment and waiver
provisions.
After an amendment, modification, termination or waiver under
this Section 15 becomes effective, the Company shall mail to the Holders
affected thereby a notice briefly describing such amendment, modification,
termination or waiver. Any failure of the Company to mail such notice, or
any defect therein, shall not, however, in any way impair or affect the
validity of any such amendment, modification, termination or waiver.
(b) Solicitation of Holders. The Company will not solicit,
request or negotiate for or with respect to any proposed amendment,
modification, termination or waiver of any of the provisions of this
Agreement (including the Registration Rights Agreement) and the Warrant
Certificates, unless each Holder (irrespective of the amount of Warrants
or Warrant Shares then owned by it) shall be informed thereof by the
Company (but only to the extent the Company has been provided with
addresses for the Holders) and shall be afforded the opportunity of
considering the same and shall be supplied by the Company with sufficient
information to enable it to make an informed decision with respect
thereto. Executed or true and correct copies of any amendment,
modification, termination or waiver effected pursuant to the provisions of
this Section 15 shall be delivered by the Company to each Holder of
outstanding Warrants or Warrant Shares forthwith following the date on
which the same shall have been executed and delivered by the Holder or
Holders of the requisite percentage of outstanding Warrant Shares (but
only to the extent the Company has been provided with the addresses for
the Holders).
(c) Revocation and Effect of Consents. Until an amendment,
modification, termination or waiver becomes effective, a consent to it by
a Holder is a continuing consent by the Holder and every subsequent Holder
of a Warrant or Warrant Shares, even if notation of the consent is not
made on any Warrant Certificate or stock certificate. However, any such
Holder or subsequent Holder may revoke any such consent by notice to the
Company received before the date on which the Requisite Holders have
consented (and not theretofore revoked such consent) to such amendment,
modification, termination or waiver.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders entitled to consent to any
amendment, modification, termination or waiver, which record date shall be
at least 30 days prior to the first solicitation of such consent. If a
record date is fixed, then notwithstanding the last sentence of the
immediately preceding paragraph, those Persons who were Holders at such
record date (or their duly designated proxies), and only those Persons,
shall be entitled to revoke any consent previously given, whether or not
such Persons continue to be Holders after such record date.
SECTION 16. Transfers. Each Holder shall be permitted to
transfer any Warrant or Warrant Share (and the rights relating thereto
under this Agreement and the other Warrant Documents) to any Person;
provided that
(i) such transfer is made pursuant to a registration
statement under the Securities Act (it being acknowledged
that the Company shall not be obligated to assist in any
manner in any such registration) or pursuant to an exemption
from the registration requirements of the Securities Act;
(ii) if such transfer is being made pursuant to an
exemption from such registration requirements and if
requested by the Company, counsel for such Holder (which
counsel may be internal counsel) furnishes to the Company an
opinion to the effect that such transfer is being made
pursuant such an exemption;
(iii) the applicable transferee is an "accredited investor"
as defined in Regulation D promulgated under the Securities
Act;
(iv) such transferee represents to the Company in writing
that it is acquiring such Warrant or Warrant Share solely for
its own account and not as nominee or agent for any other
Person and not with a view to, or for offer or sale in
connection with, any distribution thereof (within the meaning
of the Securities Act) that would be in violation of the
securities laws of the United States of America or any state
thereof, without prejudice, however, to its right at all
times to sell or otherwise dispose of all or any part of said
Warrant or Warrant Share pursuant to a registration statement
under the Securities Act or pursuant to an exemption from the
registration requirements of the Securities Act, and subject,
nevertheless, to the disposition of its property being at all
times within its control; and
(v) unless the Holder making such transfer is making such
transfer to any of its Affiliates or any of its partners or
with the Company's prior written consent, such transfer is of
(A) all the Warrants and Warrant Shares then held by such
Holder or (B) Warrants and Warrant Shares (assuming exercise
of the Warrants) aggregating not less than 5% of the shares
of Common Stock outstanding (on a Fully-Diluted Basis) as of
the date hereof, as such amount may be adjusted from time to
time upon application of the provisions of Section 9.
The Company shall promptly register the transfer of any
outstanding Warrants in the Warrant Register and any outstanding Warrant
Shares in a Common Stock register to be maintained by the Company upon
surrender thereof accompanied by a written instrument or instruments of
transfer in form reasonably satisfactory to the Company, duly executed by
the registered Holder or Holders thereof or by the duly appointed legal
representative thereof or by a duly authorized attorney. Upon any such
registration of transfer, a new Warrant Certificate or Common Stock
certificate, as the case may be, shall be issued and delivered with all
reasonable dispatch to the transferee(s) and such transferee(s) shall be
deemed to have become the Holder(s) of record of the Warrants or Warrant
Shares evidenced thereby, as the case may be, and the surrendered Warrant
Certificate or Common Stock certificates, as the case may be, shall be
canceled and disposed of by the Company.
SECTION 17. Miscellaneous. (a) Warrant Document. This
Agreement is a Warrant Document executed pursuant to the Note and Warrant
Purchase Agreement and shall (unless otherwise expressly indicated herein)
be construed, administered and applied in accordance with the terms and
provisions thereof, including Article XII thereof.
(b) Notices. Unless otherwise specifically provided herein,
any notice or other communication herein required or permitted to be given
shall be in writing and shall be made by personal service, facsimile,
United States airmail or reputable courier service:
(i) if to the Purchasers or subsequent Holder, at the
address or facsimile number set forth on the signature pages
to the Note and Warrant Purchase Agreement, or such other
address as shall be designated in a written notice delivered
to the Company, with a copy to Xxxxx, Xxxxx & Xxxxx, 0000
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Facsimile No. (212) 262-
1910, Attention: Xxxxx X. Xxxxxxx, Esq.; and
(ii) if to the Company, at the address or facsimile number
set forth on the signature pages to the Note and Warrant
Purchase Agreement, or such other address as shall be
designated in a written notice delivered to the other parties
hereto.
Unless otherwise specifically provided herein, any notice or
other communication shall be deemed to have been given when delivered in
person or by courier service, upon receipt of facsimile (electronically
confirmed), or five Business Days after depositing it in the United States
airmail with postage prepaid and properly addressed.
(c) Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of any Holder in the exercise of any
power, right or privilege hereunder or under any other Warrant Document
shall impair such power, right or privilege or be construed to be a waiver
of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights
and remedies existing under this Agreement and the other Warrant Documents
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.
(d) Severability. In case any provision in or obligation
under this Agreement or the Warrant Certificates shall be invalid, illegal
or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
(e) Headings. Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose or be given
any substantive effect.
(f) Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY,
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF ILLINOIS.
(g) Successors and Assigns. This Agreement shall be binding
upon the parties hereto and their respective successors and assigns and
shall inure to the benefit of the parties hereto and the successors and
assigns of the Purchaser (including each Holder and its successors and
assigns).
(h) Consent to Jurisdiction and Service of Process. The
Company hereby confirms its agreements under Section 11.12 of the Note and
Warrant Purchase Agreement.
(i) Waiver of Jury Trial. The Company hereby confirms its
agreements under Section 11.13 of the Note and Warrant Purchase Agreement.
(j) Counterparts. This Agreement and any amendments,
waivers, consents or supplements hereto or in connection herewith may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall
be deemed an original, but all such counterparts together shall constitute
but one and the same instrument; signature pages may be detached from
multiple separate counterparts and attached to a single counterpart so
that all signature pages are physically attached to the same document.
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
XXXXXX CO., INC.
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Secretary
XXXXX XXXXXXXX, LTD.
By: /s/ Xxxxxxxx X. Xxxxxxxx
Name: Xxxxxxxx X. Xxxxxxxx
Title:
ING EQUITY PARTNERS, L.P. I
By: Lexington Partners, L.P.,
its General Partner
By: Lexington Partners, Inc.,
its General Partner
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title:
STATE STREET RESEARCH
HIGH INCOME FUND
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
STATE STREET RESEARCH MANAGED ASSETS
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
XXXXXXXX PRINCIPLE MATURITY TRUST
By: /s/ Xxxxxxxx Xxxxxx
Name: Xxxxxxxx Xxxxxx
SALOMON BROTHERS INC.
By: /s/ Xxxxxx Xxxx
Name: Xxxxxx Xxxx
WYNNEFIELD PARTNERS
By: /s/ Xxxxxx Xxxx
Name: Xxxxxx Xxxx
C.C. PARTNERS, LTD.
By: /s/ Xxxxxxxx Xxxxxxx
Name: Xxxxxxxx Xxxxxxx
EBI INDEMNITY COMPANY
By: /s/ Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
SECURITY REINSURANCE COMPANY
By: /s/ Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
GUARANTY NATIONAL INSURANCE COMPANY
By: /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
CANYON PARTNERS INCORPORATED
By: /s/ Xxxxxxxx X. Xxxxx
Name: Xxxxxxxx X. Xxxxx
NEW GENERATION LIMITED PARTNERSHIP
By: /s/ Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
NEW GENERATION INSTITUTIONAL LIMITED
PARTNERSHIP
By: /s/ Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
XXXXXXX FAMILY PARTNERS
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
PRUDENTIAL SECURITIES
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
XXXXXX XXXXXXX & CO.
By: /s/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
/s/ Xxxxxx Xxxx
/s/ Xxx Xxxxxx
/s/ Xxxx X. Xxxxxxx
/s/ Xxxxxxx X. Xxxxxxx
/s/ Xxxxxxx Xxxxx
/s/ Xxxxxx X. Xxxx
/s/ Xxxxxxxx Xxxxxxx
