EXHIBIT 4.6
WARRANT AGREEMENT dated as of November 21, 2001 (this "Agreement") between TELEX
COMMUNICATIONS, INC., a Delaware corporation (the "Company"), and BNY MIDWEST
TRUST COMPANY, an Illinois trust company (the "Warrant Agent"), on behalf of the
warrant holders (the "Holders").
Witnesseth:
Whereas, warrants (the "Warrants") have been issued by the Company pursuant
to the "Exchange Offer" described in the Amended and Supplemented
Consent Solicitation and Exchange Offering Memorandum dated
October 24, 2001 (the "Consent Solicitation and Exchange Offering
Memorandum"); and
Whereas, the Warrants shall initially entitle Holders to purchase shares of
the Series B Preferred Stock, par value $0.01 (the "Series B
Preferred Stock"), or if the Series B Preferred Stock shall have
been converted in accordance with the terms thereof, shares of the
Common Stock, par value $0.01 per share (the "Common Stock"), of
the Company, on the terms and conditions provided herein.
Now, therefore, the Company hereby agrees as follows for the benefit of Holders:
Article 1
General
Section 1.01. Definitions.
As used in this Agreement, the following capitalized terms shall have the
following meanings:
"Board of Directors" means the Board of Directors of the Company or any
committee thereof duly authorized to act on behalf of such Board of Directors.
"Business Day" means a day other than a Saturday, Sunday or other day on which
commercial banks in the State of New York or the State of Minnesota are
authorized or required by law to close.
"Certificate of Incorporation" means the Restated Certificate of Incorporation
of the Company, as amended and in effect on the date hereof, and as the same may
be further amended or restated from time to time.
"Combination" means an event in which the Company consolidates with, merges with
or into, sells all or substantially all its property and assets to another
Person or voluntarily or involuntarily liquidates, dissolves or winds-up its
affairs and businesses.
"Consolidated EBITDA" and "Consolidated EBITDA Measuring Period" have the
meanings give such terms in Section 3.02(b) hereof.
"Current Market Value" means, with respect to the Series B Preferred Stock or
the Common Stock at any date, the average of the daily closing prices on the
exchange or market specified below for the shorter of (i) the 20 consecutive
trading days ending on the last full trading day on the exchange or market
specified below prior to the time of determination and (ii) the period
commencing on the date after the first public announcement of the issuance,
sale, distribution or granting in question and ending on such last full trading
day prior to the time of determination. The term "time of determination" as used
in this Agreement is the time and date of the earlier to occur of (A) the date
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as of which the Current Market Value is to be computed and (B) the last full
trading day on such exchange or market before the commencement of "ex-dividend"
trading in the Series B Preferred Stock or the Common Stock relating to the
event giving rise to the adjustment described above. The closing price for any
day is the last reported sale price regular way or, if no such reported sale
takes place on such day, the average of the closing bid and asked prices regular
way for such day, in each case (1) on the principal national securities exchange
on which the shares of the Series B Preferred Stock or the Common Stock are
listed or to which such shares are admitted to trading or (2) if the Series B
Preferred Stock or the Common Stock is not listed or admitted to trading on a
national securities exchange, in the over-the-counter market as reported by the
NASDAQ or (3) if the Series B Preferred Stock or the Common Stock is not listed
on NASDAQ, as furnished by two members of the NASD selected from time to time in
good faith by the Board of Directors for that purpose. In the absence of all of
the foregoing, or if for any other reason the Current Market Value cannot be
determined under the other terms of this Agreement the Current Market Value
shall be the fair market value thereof as determined in good faith by the Board
of Directors.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holders" means the Persons who from time to time are the registered holders of
Warrant Certificates provided that such Persons have not acquire Warrants or
Warrant Certificates in violation of this Agreement.
"NASDAQ" means the National Association of Securities Dealers, Inc. Automated
Quotation System or any comparable system.
"Officer" means the Chairman of the Board of Directors, the President, any Vice
President, the Treasurer or the Secretary of the Company.
"Person" means an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, governmental agency or authority or other entity of whatever
nature.
"Commission" means the United States Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933.
"Senior Secured Credit Facility" means the Credit Agreement dated as of May 6,
1997, as amended from time to time, among the Company, the several banks and
other financial institutions party thereto from time to time (the "Senior
Lenders"), Xxxxxx Xxxxxxx Senior Funding, Inc., as documentation agent for the
Senior Lenders, and The Chase Manhattan Bank, as administrative agent for the
Senior Lenders. In the event of the amendment, refinancing or substitution of
the Senior Secured Credit Facility subsequent to the date hereof, all references
herein to the "Senior Secured Credit Facility" shall mean the Senior Secured
Credit Facility as in effect prior to giving effect to any such amendment,
refinancing or substitution unless the Holders of a majority of the Warrants
shall have consented to such amendment, refinancing or substitution of the
Senior Secured Credit Facility.
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"Transfer Restricted Securities" means the Warrants and the Warrant Shares
issued to Holders upon exercise of the Warrants, whether or not such exercise
has been effected. Each such security shall cease to be a Transfer Restricted
Security when (i) it has been disposed of pursuant to a registration statement
of the Company filed with the Commission and declared effective by the
Commission that covers the disposition of such Transfer Restricted Security,
(ii) it has been distributed pursuant to Rule 144 (or any similar provisions
under the Securities Act then in effect), or (iii) it has been otherwise
transferred and may be resold without registration under the Securities Act.
"Warrants" has the meaning given such term in the recitals to this Agreement.
"Warrant Certificate" has the meaning given such term in Section 2.01 hereof.
"Warrant Shares" means the shares of the Series B Preferred Stock or, if the
Series B Preferred Stock shall have been converted pursuant to its terms, shares
of the Common Stock, received or issued upon exercise of the Warrants.
Section 1.02. Rules of Construction. Unless the text otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning assigned to
it in accordance with generally accepted accounting principles as in
effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including, without limitation; and
(v) words in the singular include the plural and words in the plural
include the singular.
Article 2
Warrant
Section 2.01. Form and Dating.
The Warrants shall be evidenced by certificates issued in substantially the form
of the certificate annexed hereto as Exhibit A (a "Warrant Certificate"), which
Exhibit is hereby incorporated in and expressly made a part of this Agreement.
The Warrant Certificate may have notations, legends or endorsements required by
law, stock exchange rule, agreements to which the Company is subject, if any, or
usage (provided that any such notation, legend or endorsement is in a form
acceptable to the Company) and shall bear the legend required by Section 4.02.
Each Warrant Certificate shall be dated the date of its countersignature. The
terms of the Warrants set forth in Exhibit A are part of the terms of this
Agreement.
Section 2.02. Execution. One Officer shall sign each Warrant Certificate on
behalf of the Company by manual or facsimile signature. The Company's seal shall
be impressed, affixed, imprinted or reproduced on the Warrant Certificate and
may be in facsimile form.
Section 2.03. Warrant Register. The Warrant Agent shall keep a register (the
"Warrant Register") of the Warrant Certificates and of their transfer and
exchange, a copy of which shall be provided to any Holder upon demand. The
Warrant Register shall show the names and addresses of the respective Holders
and the date and number of Warrants evidenced on the face of each of the Warrant
Certificates. The Warrant Agent may deem and treat the Person in whose name a
Warrant Certificate is registered as the absolute owner of such Warrant
Certificate for all purposes whatsoever and the Warrant Agent shall not be
affected by notice to the contrary.
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Section 2.04. Transfer and Exchange.
(a) Transfer and Exchange of Warrant.
When any Warrant Certificate is presented to the Warrant Agent with a
request to register the transfer of the Warrant or to exchange such Warrant
for an equal number of Warrants of other authorized denominations, the
Warrant Agent shall, so long as such transfer or exchange is not prohibited
hereunder, promptly register the transfer or make the exchange as requested
if its reasonable requirements for such transaction are met; provided,
however, that any Warrant surrendered for transfer or exchange:
(i) shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and duly
executed by the Holder thereof or his attorney duly authorized in
writing; and
(ii) in the case of any Warrant that is a Transfer Restricted Security,
shall be accompanied by a certificate from such Holder certifying that
such Transfer Restricted Security is being transferred pursuant to any
available exemption from the registration requirements of the
Securities Act and, if required by the Company, an opinion counsel
satisfactory to the Company.
(b) Obligations with Respect to Transfers and Exchanges of Warrants.
In furtherance of all eligible transfers and exchanges, the Company shall
execute Warrant Certificates as required pursuant to the provisions of this
Section 2.04.
(i) All Warrant Certificates issued upon any registration of transfer or
exchange of Warrant Certificates shall be the valid obligations of the
Company, entitled to the same benefits under this Agreement, as the
Warrant Certificates surrendered upon such registration of transfer or
exchange.
(ii) Prior to due presentment for registration of transfer of any Warrant
Certificate, the Warrant Agent may deem and treat the Person in whose
name any Warrant Certificate is registered on the Warrant Register as
the absolute owner of such Warrant and the Warrant Agent shall not be
affected by notice to the contrary.
(iii) No service charge shall be made to a Holder for any registration of
transfer or exchange upon surrender of any Warrant Certificate at the
office of the Warrant Agent maintained for that purpose. However, the
Company may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any
registration of transfer or exchange of any Warrant Certificate.
(iv) Upon any sale or transfer of Warrants pursuant to an effective
registration statement under the Securities Act or pursuant to an
opinion of counsel reasonably satisfactory to the Company that no
legend is required, the Company shall permit the Holder thereof to
exchange the Warrant Certificate for other Warrants that do not bear
the legend set forth in Section 4.02 and rescind any restriction on the
transfer of such Warrants.
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Section 2.05. Replacement Certificates.
If a mutilated Warrant Certificate is surrendered to the Company, or if the
Holder of a Warrant Certificate claims that the Warrant Certificate has been
lost, destroyed or wrongfully taken, the Company shall issue a replacement
Warrant Certificate if the reasonable requirements of Section 8-405 of the
Uniform Commercial Code as in effect in the State of New York are met. If
required by the Company, such Holder shall furnish an indemnity sufficient in
the judgment of the Company to protect the Company from any loss which it may
suffer if a Warrant Certificate is replaced. The Company may charge the Holder
for its expenses in replacing a Warrant Certificate.
Section 2.06. Cancellation.
(a) In the event the Company shall purchase or otherwise acquire Warrants, the
same shall thereupon immediately be canceled by the Company.
(b) The Warrant Agent and no one else shall cancel and destroy all Warrant
Certificates surrendered for transfer, exchange, replacement, exercise or
cancellation. The Company shall not issue new Warrant Certificates to
replace Warrant Certificate to the extent they evidence Warrants which have
been exercised or Warrants which the Company has purchased or otherwise
acquired.
Section 2.07. The Warrant Agent.
(a) The Warrant Agent (i) shall be obligated only for the performance of such
duties as are expressly and specifically set forth in this Agreement on its
part to be performed, each of which is ministerial (and shall not be
construed to be fiduciary) in nature, and no implied duties or obligations
of any kind shall be read into this Agreement against or on the part of the
Warrant Agent, (ii) shall not be obligated to take any legal or other
action hereunder which might in its judgment involve or cause it to incur
any expense or liability unless it shall have been furnished with
acceptable indemnification, (iii) may rely on and shall be protected in
acting or refraining from acting upon any written notice, instruction,
instrument, statement, certificate, request or other document furnished to
it hereunder and believed by it to be genuine and to have been signed or
presented by the proper person, and shall have no responsibility for making
inquiry as to or determining the genuineness, accuracy or validity thereof,
or of the authority of the person signing or presenting the same, and (iv)
may consult counsel satisfactory to it, including in-house counsel, and the
opinion or advice of such counsel in any instance shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in accordance with
the opinion or advice of such counsel.
(b) The Warrant Agent shall not be liable to anyone for any action taken or
omitted to be taken by it hereunder except in the case of the Warrant
Agent's gross negligence or willful misconduct in breach of the terms of
this Agreement. In no event shall the Warrant Agent be liable for indirect,
punitive, special or consequential damage or loss (including but not
limited to lost profits) whatsoever, even if the Warrant Agent has been
informed of the likelihood of such loss or damage and regardless of the
form of action.
(c) The Warrant Agent shall have no more or less responsibility or liability on
account of any action or omission of any book-entry depository, securities
intermediary or other agent employed by the Warrant Agent than any such
book-entry depository, securities intermediary or other agent has to the
Warrant Agent, except to the extent that such action or omission of any
book- entry depository, securities intermediary or other agent was caused
by the Warrant Agent's own gross negligence or willful misconduct in breach
of this Agreement.
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(d) The Company agrees (i) to pay or reimburse the Warrant Agent for its
reasonable and documented attorney's fees and expenses incurred in
connection with the preparation of this Agreement and (ii) to pay the
Warrant Agent's compensation for its normal services hereunder in
accordance with the fee schedule attached hereto as Exhibit D and made a
part hereof.
(e) The Company agrees to reimburse the Warrant Agent on demand for all
reasonable and documented costs and expenses incurred in connection with
the administration of this Agreement or the performance or observance of
its duties hereunder which are in excess of its compensation for normal
services hereunder, including without limitation, payment of any reasonable
and documented legal fees and expenses incurred by the Warrant Agent in
connection with resolution of any claim by any party hereunder.
(f) The Company covenants and agrees to indemnify the Warrant Agent (and its
directors, officers and employees) and hold it (and such directors,
officers and employees) harmless from and against any loss, liability,
damage, cost and expense of any nature incurred by the Warrant Agent
arising out of or in connection with this Agreement or with the
administration of its duties hereunder, including but not limited to
reasonable and documented attorney's fees and other costs and expenses of
defending or preparing to defend against any claim of liability unless and
except to the extent such loss, liability, damage, cost and expense shall
be caused by the Warrant Agent's gross negligence, or willful misconduct.
The foregoing indemnification and agreement to hold harmless shall survive
the termination of this Agreement.
Article 3
Exercise Terms
Section 3.01. Exercise Price.
Each Warrant shall entitle the Holder hereof, subject to adjustment pursuant to
the terms of this Agreement, to purchase Warrant Shares determined as follows
for an exercise price of $0.01 (the "Exercise Price") per Warrant Share.
Section 3.02. Number of Warrant Shares.
(a) The Warrants shall entitle the holders thereof to purchase Warrant Shares
up to an amount which represents a maximum of 1,666,666.67 Warrant Shares
(subject to anti-dilution adjustments as hereinafter provided); the actual
number of shares purchasable under the New Warrants to increase to such
maximum amount as, and provided that, the Company achieves the Consolidated
EBITDA Requirements.
(b) For purposes of determining the number of Warrant Shares purchasable upon
exercise of the Warrants, "Consolidated EBITDA" shall be determined, and
shall have the meaning given such term, under the Senior Secured Credit
Facility. In the event of the amendment, refinancing or substitution of the
Senior Secured Credit Facility subsequent to the date hereof which affects
the definition of "Consolidated EBITDA", such amended or substituted
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definition shall be applicable for purposes of the Warrants with the
consent of the holders of a majority of the Warrants; but if such consent
is not obtained, then the definition of "Consolidated EBITDA" prior to
giving effect to any such amendment, refinancing or substitution of the
Senior Secured Credit Facility shall be applicable for purposes of the
Warrants. For purposes hereof, "Consolidated EBITDA Measuring Period" shall
mean any four consecutive fiscal quarters subsequent to September 30, 2001.
(c) The number of shares of Warrant Shares purchasable upon exercise of the
Warrants shall be determined, and shall vest, as follows (subject to
anti-dilution adjustments as hereinafter provided) based on the following
Consolidated EBITDA Requirements:
Aggregate number of shares of Warrant Shares
purchasable upon exercise of all of the
Consolidated EBITDA Requirement Warrants
----------------------------------------------------------- --------------------------------------------
If Consolidated EBITDA for any Consolidated EBITDA
Measuring Period of at least $45 million is achieved at
any time prior to December 31, 2006.................... 555,556 Warrant Shares
If Consolidated EBITDA for any Consolidated EBITDA
Measuring Period of at least $50 million is achieved at
any time prior to December 31, 2006.................... 1,250,000 Warrant Shares
If EBITDA for any EBITDA Measuring Period of at least
$55 million is achieved at any time prior to
December 31, 2006...................................... 1,666,667 Warrant Shares
Section 3.03. Terms and Expiration.
(a) The Warrants will be immediately exercisable upon issuance, subject to
satisfaction of the Consolidated EBITDA Requirements.
(b) Unless exercised, the Warrants will automatically expire on the later of
March 30, 2007 or 15 days after the Company shall have either furnished to
the holders of the Warrants its audited financial statements for the fiscal
year ended December 31, 2006 or shall have filed with the Commission an
annual report on Form 10-K with respect to such fiscal year.
Section 3.04. Manner of Exercise.
Warrants may be exercised upon (i) notice to the Warrant Agent and surrender to
the Warrant Agent of the Warrant Certificates, together with the form of
election to purchase Warrant Shares (in the form attached as Exhibit C hereto),
duly completed and signed by the Holder thereof, and (ii) payment to the Company
of the Exercise Price for the number of Warrant Shares in respect of which such
Warrant is then exercised. Such payment shall be made in cash or by certified or
official bank check payable to the order of the Company or by wire transfer of
funds to an account designated by the Company for such purpose.
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Section 3.05. Issuance of Warrant Shares.
Upon the surrender of Warrant Certificates and payment of the per share Exercise
Price, as set forth in Section 3.04, the Company shall issue or, if appointed,
cause a transfer agent for the Warrant Shares (the "Transfer Agent") to
countersign and deliver to or upon the written order of the Holder and in such
name or names as the Holder may designate, a certificate or certificates for the
number of full Warrant Shares so purchased upon the exercise of such Warrants or
other securities or property to which it is entitled, registered or otherwise to
the Person or Persons entitled to receive the same. Such certificate or
certificates shall be deemed to have been issued and any Person so designated to
be 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 Warrant and payment of
the per share Exercise Price.
Section 3.06. Fractional Warrant Shares.
The Company shall not be required to issue fractional Warrant Shares beyond two
decimal places on the exercise of Warrants. If more than one Warrant shall be
exercised in full at the same time by the same Holder, the number of Warrant
Shares which shall be issuable upon such exercise shall be computed on the basis
of the aggregate number of Warrant Shares purchasable pursuant thereto. If any
fraction of a Warrant Share beyond two decimal places would, except for the
provisions of this Section 3.06, be issuable on the exercise of any Warrant (or
specified portion thereof), the Company shall pay an amount in cash equal to the
Current Market Value for one Warrant Share on the date the Warrant is exercised,
multiplied by such fraction, rounded up to the nearest whole cent.
Section 3.07. Reservation of Warrant Shares.
The Company shall at all times keep reserved out of its authorized shares of
capital stock a number of Warrant Shares sufficient to provide for the exercise
of all outstanding Warrants. The registrar for the Warrant Shares (the
"Registrar") shall at all times until all Warrants have been exercised, deemed
to have been exercised or canceled, reserve such number of authorized shares as
shall be required for such purpose. The Company will keep a copy of this
Agreement on file at the chief executive offices of the Company or, if
appointed, with the Transfer Agent. All Warrant Shares which may be issued upon
exercise of Warrants shall, upon issue, be fully paid and non-assessable. The
Company will supply the Transfer Agent, if appointed, with duly executed stock
certificates for such purpose and will itself provide or otherwise make
available any cash which may be payable as provided in Section 3.06. The Company
will furnish to such Transfer Agent a copy of all notices of adjustments and
certificates related thereto transmitted to each Holder.
Section 3.08. Compliance with Law.
If any Warrant Shares required to be reserved for purposes of exercise of
Warrants require, under any other Federal or state law or applicable governing
rule or regulation of any national securities exchange, registration with or
approval of any governmental authority, or listing on any such national
securities exchange before such shares may be issued upon exercise, the Company
will cause such shares to be duly registered or approved by such governmental
authority.
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Article 4
Transferability
Section 4.01. Permitted Transfers.
The Warrants and Warrant Shares may be transferred only pursuant to an effective
registration statement under the Securities Act, or pursuant to any exemption
from registration thereunder, or pursuant to Rule 144 under the Securities Act.
Section 4.02. Legend.
Warrant Shares shall bear a legend substantially as follows unless and until
such Warrant Shares are transferred pursuant to an effective registration
statement under the Securities Act:
"The securities represented hereby have not been issued pursuant to any
registration or similar filing, listing or prospectus or document
delivery requirements under the laws of any jurisdiction or the rules,
regulations or guidelines of any stock exchange or quotation system. No
transfer of the securities represented hereby may be made without
compliance with any of the foregoing, unless an exemption thereunder is
available in the opinion of counsel for the Corporation.
The securities represented hereby are subject to the provisions of a
certain Warrant Agreement dated as of November 21, 2001, including
certain restrictions on transfer set forth therein. A complete and
correct copy of such Warrant Agreement is available for inspection at
the principal offices of the Corporation and will be furnished upon
written request and without charge. The Corporation is authorized to
issue more than one class of stock. The Corporation will furnish to
each Holder of these securities who requests a copy of the powers,
designations, preferences and relative rights and limitations of each
outstanding class of stock of the Corporation."
Article 5
Anti-dilution Provisions
Section 5.01. Changes in the Series B Preferred Stock or the Common Stock.
In the event that at any time or from time to time the Company shall (i) pay a
dividend or make a distribution on its Series B Preferred Stock or Common Stock
in shares of its Series B Preferred Stock or Common Stock or other shares of
capital stock, (ii) subdivide its outstanding shares of Series B Preferred Stock
or Common Stock into a larger number of shares of Series B Preferred Stock or
Common Stock, (iii) combine its outstanding shares of Series B Preferred Stock
or Common Stock into a smaller number of shares of Series B Preferred Stock or
Common Stock or (iv) increase or decrease the number of shares of Series B
Preferred Stock or Common Stock outstanding by reclassification of its Series B
Preferred Stock or Common Stock, then the number of shares of Series B Preferred
Stock or Common Stock purchasable upon exercise of each Warrant immediately
after the occurrence of such event shall be adjusted so that, after giving
effect to such adjustment, the Holder of each Warrant shall be entitled to
receive the number of shares of Series B Preferred Stock or Common Stock upon
exercise that such Holder would have owned or have been entitled to receive
immediately following such event had such Warrants been exercised immediately
prior to the occurrence of the events described above (or, in the case of a
dividend or distribution of Series B Preferred Stock or Common Stock,
immediately prior to the record date therefor), and the Exercise Price for each
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Warrant shall be adjusted in inverse proportion. An adjustment made pursuant to
this Section 5.01 shall become effective immediately after the effective date,
retroactive to the record date therefor in the case of a dividend or
distribution in shares of Series B Preferred Stock or Common Stock, and shall
become effective immediately after the effective date in the case of a
subdivision, combination or reclassification.
Section 5.02. Cash Dividends and Other Distributions.
In case at any time or from time to time the Company shall distribute to holders
of Series B Preferred Stock or Common Stock (i) any dividend or other
distribution of cash, evidences of its indebtedness or any other properties or
securities or (ii) any options, warrants or other rights to subscribe for or
purchase any of the foregoing (other than, in each case set forth in (i) and
(ii), (x) any dividend or distribution described in Section 5.01 or (y) any
rights, options, warrants or securities described in Section 5.03) then the
number of shares of Series B Preferred Stock or Common Stock purchasable upon
the exercise of each Warrant shall be increased to a number determined by
multiplying the number of shares of Series B Preferred Stock or Common Stock
purchasable upon the exercise of such Warrant immediately prior to the record
date for any such dividend or distribution by a fraction, the numerator of which
shall be the Current Market Value per share, on such record date, of Series B
Preferred Stock or Common Stock on the record date for such distribution, and
the denominator of which shall be such Current Market Value per share of Series
B Preferred Stock or Common Stock less the sum of (x) the per share amount of
any cash distributed in respect of Series B Preferred Stock or Common Stock and
(y) the fair value (as determined in good faith by the Board of Directors, whose
determination shall be evidenced by a resolution of the Board of Directors, a
copy of which will be sent to Holders upon request) of the portion, if any, of
the distribution applicable to one share of Series B Preferred Stock or Common
Stock consisting of evidences of indebtedness, shares of stock, securities,
other property, warrants, options or subscription of purchase rights. The
Exercise Price shall be adjusted to a number determined by dividing the Exercise
Price immediately prior to such record date by the above fraction. Such
adjustments shall be made whenever any distribution is made and shall become
effective as of the date of distribution, retroactive to the record date for any
such distribution; provided, however, that the Company is not required to make
an adjustment pursuant to this Section 5.02 if at the time of such distribution
the Company makes the same distribution to Holders of Warrants as it makes to
holders of Series B Preferred Stock or Common Stock pro rata based on the number
of shares of Series B Preferred Stock or Common Stock for which such Warrants
are exercisable (whether or not currently exercisable). No adjustment shall be
made pursuant to this Section 5.02 which shall have the effect of decreasing the
number of shares of Series B Preferred Stock or Common Stock purchasable upon
exercise of each Warrant or increasing the Exercise Price.
Section 5.03. Rights Issue, etc.
In the event that at any time or from time to time the Company shall issue
Series B Preferred Stock or Common Stock or rights, options or warrants for, or
securities convertible or exchangeable into, Series B Preferred Stock or Common
Stock to any Person, entitling such Person to subscribe for or purchase shares
of Series B Preferred Stock or Common Stock at a price per share that is lower
at the record date for such issuance than the then Current Market Value per
share of Series B Preferred Stock or Common Stock, the number of shares of
Series B Preferred Stock or Common Stock thereafter purchasable upon the
exercise of each Warrant shall be determined by multiplying the number of shares
of Series B Preferred Stock or Common Stock theretofore purchasable upon
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exercise of each Warrant by a fraction, the numerator of which shall be the
number of shares of Series B Preferred Stock or Common Stock outstanding on the
date of issuance of such Series B Preferred Stock or Common Stock, rights,
options, warrants or securities plus the number of additional shares of Series B
Preferred Stock or Common Stock offered for subscription or purchase or into
which such securities are convertible or exchangeable, and the denominator of
which shall be the number of shares of Series B Preferred Stock or Common Stock
outstanding on the date of issuance of such Series B Preferred Stock or Common
Stock, rights, options, warrants or securities plus the total number of shares
of Series B Preferred Stock or Common Stock which could be purchased at the
Current Market Value with the aggregate consideration received through issuance
of such rights, warrants, options, or convertible securities. In the event of
any such adjustment, the Exercise Price shall be adjusted to a number determined
by dividing the Exercise Price immediately prior to such date of issuance by the
aforementioned fraction. Such adjustment shall be made whenever such rights,
options or warrants are issued and shall become effective retroactively
immediately after the record date for the determination of stockholders entitled
to receive such rights, options, warrants or securities. No adjustment shall be
made pursuant to this Section 5.03 which shall have the effect of decreasing the
number of shares of Series B Preferred Stock or Common Stock purchasable upon
exercise of each Warrant or of increasing the Exercise Price.
Section 5.04. Combination; Liquidation.
(a) No Combination shall be effected without the approval of the Holders of a
majority of the Warrants. In the event that any Combination shall be
effected without such approval of the Holders, then the Warrants shall vest
100% and be exercisable as of immediately prior to the effectiveness of any
such Combination and without regard to the Consolidated EBITDA for any
Consolidated EBITDA Measuring Period ending on or prior to effectiveness of
such Combination. In the event that such Holders shall have approved any
such Combination, and unless the Holders of a majority of the Warrants
shall have agreed to a different treatment, then, except as provided in
Section 5.04(b) hereof, the Holders shall have the right to receive upon
exercise of the Warrants such number of shares of capital stock or other
securities or property which such Holder would have been entitled to
receive upon or as a result of such Combination had such Warrant been
exercised immediately prior to such event. Unless Section 5.04(b) hereof is
applicable to a Combination, the Company shall provide that the surviving
or acquiring Person (the "Successor Company") in such Combination will
enter into an agreement with the Holders confirming the Holders' rights
pursuant to this Section 5.04(a) and providing for adjustments, which shall
be as nearly equivalent as may be practicable to the adjustments provided
for in this Article 5. The provisions of this Section 5.04(a) shall
similarly apply to successive Combinations involving any Successor Company.
In the event of any such Combination, the Consolidated EBITDA applicable
for purposes of the Warrants shall be determined for business of the
Company
(b) In the event of (i) a Combination where consideration to Holders of Series
B Preferred Stock or Common Stock in exchange for their shares is payable
solely in cash, or (ii) the dissolution, liquidation or winding-up of the
Company, then the holders of the Warrants will be entitled to receive
distributions on an equal basis with the holders of Series B Preferred
Stock or Common Stock or other securities issuable upon exercise of the
Warrants, as if the Warrants had been exercised immediately prior to such
event, less the Exercise Price.
(c) In case of any Combination described in Section 5.04(b), the surviving or
acquiring Person and, in the event of any dissolution, liquidation or
winding-up of the Company, the Company, shall, after the surrendered
Warrant Certificates are received, make payment to the Holders by
delivering a check in such amount as is appropriate (or, in the case of
consideration other than cash, such other consideration as is appropriate)
to such Person or Persons as it may be directed in writing by the Holders
surrendering such Warrants.
12
(d) This Section 5.04 will be of no force or effect to the extent all Warrants
have been exercised for Series B Preferred Stock or Common Stock.
Section 5.05. Tender Offers; Exchange Offers.
In the event that the Company or any subsidiary of the Company shall purchase
shares of Series B Preferred Stock or Common Stock pursuant to a tender offer or
an exchange offer for a price per share of Series B Preferred Stock or Common
Stock that is greater than the then Current Market Value per share of Series B
Preferred Stock or Common Stock in effect at the end of the trading day
immediately following the day on which such tender offer or exchange offer
expires, then the Company, or such subsidiary of the Company, shall offer to
purchase Warrants for comparable consideration per share of Series B Preferred
Stock or Common Stock based on the number of shares of Series B Preferred Stock
or Common Stock which the Holders of such Warrants would receive upon exercise
of such Warrants (with such Warrants being deemed for this purpose to have
vested 100% and without regard to the Consolidated EBITDA for any Consolidated
EBITDA Measuring Period ending on or prior to effectiveness of such
Combination); provided, however, if a tender offer is made for only a portion of
the outstanding shares of Series B Preferred Stock or Common Stock, then such
offer shall be made for Warrants in the same pro rata proportion.
Section 5.06. Other Events.
If any event occurs as to which the foregoing provisions of this Article 5 are
not strictly applicable or, if strictly applicable, would not, in the good faith
judgment of the Board of Directors, fairly and adequately protect the purchase
rights of the Warrants in accordance with the essential intent and principles of
such provisions, then the Board of Directors shall make such adjustments in the
application of such provisions, in accordance with such essential intent and
principles, as shall be reasonably necessary, in the good faith opinion of such
Board of Directors, to protect such purchase rights as aforesaid, but in no
event shall any such adjustment have the effect of increasing the Exercise Price
or decreasing the number of shares of Series B Preferred Stock or Common Stock
subject to purchase upon exercise of this Agreement.
Section 5.07. Superseding Adjustment.
Upon the expiration of any rights, options, warrants or conversion or exchange
privileges which resulted in the adjustments pursuant to this Article 5, if any
thereof shall not have been exercised, the number of Warrant Shares purchasable
upon the exercise of each Warrant shall be readjusted as if (A) the only shares
of Series B Preferred Stock or Common Stock issuable upon exercise of such
rights, options, warrants, conversion or exchange privileges were the shares of
Series B Preferred Stock or Common Stock, if any, actually issued upon the
exercise of such rights, options, warrants or conversion or exchange privileges
and (B) shares of Series B Preferred Stock or Common Stock actually issued, if
any, were issuable for the consideration actually received by the Company upon
such exercise plus the aggregate consideration, if any, actually received by the
Company for the issuance, sale or grant of all such rights, options, warrants or
conversion or exchange privileges whether or not exercised and the Exercise
Price shall be readjusted inversely; provided, however, that no such
readjustment shall (except by reason of an intervening adjustment under Section
5.01) have the effect of decreasing the number of Warrant Shares purchasable
13
upon the exercise of each Warrant or increase the Exercise Price by an amount in
excess of the amount of the adjustment initially made in respect of the
issuance, sale or grant of such rights, options, warrants or conversion or
exchange privileges.
Section 5.08. Minimum Adjustment.
The adjustments required by the preceding Sections of this Article 5 shall be
made whenever and as often as any specified event requiring an adjustment shall
occur, except that no adjustment of the Exercise Price or the number of Warrant
Shares purchasable upon exercise of Warrants that would otherwise be required
shall be made (except in the case of a subdivision or combination of shares of
Series B Preferred Stock or Common Stock, as provided for in Section 5.01)
unless and until such adjustment either by itself or with other adjustments not
previously made increases or decreases by at least 1% the Exercise Price or the
number of shares of Series B Preferred Stock or Common Stock purchasable upon
exercise of Warrants immediately prior to the making of such adjustment. Any
adjustment representing a change of less than such minimum amount shall be
carried forward and made as soon as such adjustment, together with other
adjustments required by this Article 5 and not previously made, would result in
a minimum adjustment. For the purpose of any adjustment, any specified event
shall be deemed to have occurred at the close of business on the date of its
occurrence. In computing adjustments under this Article 5, fractional interests
in Series B Preferred Stock or Common Stock shall be taken into account to the
nearest one-hundredth of a share.
Section 5.09. Notice of Adjustment.
Whenever the Exercise Price or the number of Warrant Shares and other property,
if any, purchasable upon exercise of Warrants is adjusted, as herein provided,
the Company shall deliver to the Holders a certificate of a firm of independent
accountants selected by the Board of Directors (who may be the regular
accountants employed by the Company) setting forth, in reasonable detail, the
event requiring the adjustment and the method by which such adjustment was
calculated (including a description of the basis on which the Board of Directors
determined the fair market value of any evidences of indebtedness, other
securities or property or warrants or other subscription or purchase rights),
and specifying the Exercise Price and the number of Warrant Shares purchasable
upon exercise of Warrants after giving effect to such adjustment. The Company
shall promptly mail a copy of such certificate to each Holder in accordance with
Section 6.04.
Section 5.10. Adjustment to Warrants
The form of Warrant Certificate need not be changed because of any adjustment
made pursuant to this Article 5, and the Warrant Certificates issued after such
adjustment may state the same Exercise Price and the same number of Warrant
Shares as are stated in any Warrant Certificate issued prior to the adjustment.
The Company may, however, at any time in its sole discretion make any change in
the form of Warrant Certificate that it may deem appropriate to give effect to
such adjustments and that does not affect the substance of the Warrant
Certificate, and any Warrant Certificate thereafter issued or countersigned,
whether in exchange or substitution for an outstanding Warrant or otherwise, may
be in the form as so changed.
14
Article 6
Miscellaneous
Section 6.01. Persons Benefiting.
Nothing in this Agreement is intended or shall be construed to confer upon any
Person other than the Company and the other Holders any right, remedy or claim
under or by reason of this Agreement or any part hereof.
Section 6.02. Rights of Holders.
Except as otherwise specifically provided in Article 5 hereof, holders of
unexercised Warrants are not entitled (i) to receive dividends or other
distributions, (ii) to receive notice of or vote at any meeting of the
stockholders, (iii) to consent to any action of the stockholders, (iv) to
receive notice of any other proceedings of the Company or (v) to exercise any
other rights as stockholders of the Company.
Section 6.03. Amendment.
This Agreement may be amended by the parties hereto without the consent of any
Holder for the purpose of curing any ambiguity, or of curing, correcting or
supplementing any defective provision contained herein or making any other
provisions with respect to matters or questions arising under this Agreement as
the Company and the Warrant Agent may deem necessary or desirable; provided,
however, that such action shall not affect adversely the rights of the Holders.
Any amendment or supplement to this Agreement that has an adverse effect on the
interests of the Holders shall require the written consent of the Holders of a
majority of the then outstanding Warrants. The consent of each Holder affected
shall be required for any amendment pursuant to which the Exercise Price would
be increased or the number of Warrant Shares purchasable upon exercise of
Warrants would be decreased (other than pursuant to adjustments provided
herein). In determining whether the Holders of the required number of Warrants
have concurred in any direction, waiver or consent, Warrants owned by the
Company or any subsidiary of the Company shall be disregarded and deemed not to
be outstanding. Only Warrants outstanding at the time shall be considered in any
such determination.
Section 6.04. Notices.
All notices, consents and other communications required or permitted hereunder
shall be given to all parties hereto and shall be in writing and to the address
of each party's representative set forth below. Any notice, consent or other
communication so addressed shall be deemed given upon receipted personal
delivery (reputable overnight courier permissible), confirmed facsimile
transmission or United States certified mail delivery. Any notice given by other
means shall be deemed given upon its arrival at the address for notices.
If to the Company: with a copy to:
----------------- --------------
Telex Communications, Inc. Dechert
00000 Xxxxxxxx Xxxxxx 00 Xxxxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000 Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
Attention: Attention: Xxxxxx X. Xxxxxx
Chief Financial Officer
15
If to the Warrant Agent:
-----------------------
BNY Midwest Trust Company
0 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxxx
The parties by notice to the other may designate additional or different
addresses for subsequent notices or communications.
Any notice or communication mailed to a Holder shall be mailed to the Holder at
the Holder's address as it appears on the Warrant Register and shall be
sufficiently given if so mailed within the time prescribed.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders. If a notice or
communication is mailed in the manner provided above, it is duly given, whether
or not the addressee receives it.
Section 6.05. Governing Law.
The laws of the State of New York shall govern this Agreement and the Warrant
Certificates.
Section 6.06. Successors.
All agreements of the Company, the Warrant Agent and the Holders in this
Agreement shall bind their respective successors, transferees and assigns.
Section 6.07. Multiple Originals.
The parties may sign any number of copies of this Agreement. Each signed copy
shall be an original, but all of them together represent the same agreement.
Section 6.08. Section Headings.
The sections headings of this Agreement have been inserted for convenience of
reference only, are not intended to be considered a part hereof and shall not
modify or restrict any of the terms or provisions hereof.
Section 6.09. Severability.
The provisions of this Agreement are severable, and if any clause or provision
shall be held invalid, illegal or unenforceable in whole or in part in any
jurisdiction, then such invalidity or unenforceability shall affect in that
jurisdiction only such clause or provision, or part thereof, and shall not in
any manner affect such clause or provision in any other jurisdiction or any
other clause or provision of this Agreement in any jurisdiction.
16
In witness whereof, the parties have caused this Agreement to be duly executed
as of the date first written above .
TELEX COMMUNICATIONS, INC. BNY MIDWEST TRUST COMPANY
By:__________________________________ By:__________________________________
Xxxxxxx X. Xxxxxxx
Vice President and Chief
Financial Officer
Exhibit A to Warrant Agreement
(Form of Face of Warrant Certificate)
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN ISSUED PURSUANT TO ANY
REGISTRATION OR SIMILAR FILING, LISTING OR PROSPECTUS OR DOCUMENT DELIVERY
REQUIREMENTS UNDER THE LAWS OF ANY JURISDICTION OR THE RULES, REGULATIONS
OR GUIDELINES OF ANY STOCK EXCHANGE OR QUOTATION SYSTEM. NO TRANSFER OF
THE SECURITIES REPRESENTED HEREBY MAY BE MADE WITHOUT COMPLIANCE WITH ANY
OF THE FOREGOING, UNLESS AN EXEMPTION THEREUNDER IS AVAILABLE IN THE
OPINION OF COUNSEL FOR THE CORPORATION.
THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE PROVISIONS OF A
CERTAIN WARRANT AGREEMENT DATED AS OF NOVEMBER 21, 2001, INCLUDING CERTAIN
RESTRICTIONS ON TRANSFER SET FORTH THEREIN. A COMPLETE AND CORRECT COPY OF
SUCH WARRANT AGREEMENT IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL
OFFICES OF THE CORPORATION AND WILL BE FURNISHED UPON WRITTEN REQUEST AND
WITHOUT CHARGE. THE CORPORATION IS AUTHORIZED TO ISSUE MORE THAN ONE CLASS
OF STOCK. THE CORPORATION WILL FURNISH TO EACH HOLDER OF THESE SECURITIES
WHO REQUESTS A COPY OF THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE
RIGHTS AND LIMITATIONS OF EACH OUTSTANDING CLASS OF STOCK OF THE
CORPORATION.
No. ________ CUSIP No. ________
CERTIFICATE FOR _____ WARRANTS
WARRANTS TO PURCHASE SERIES B PREFERRED STOCK, PAR VALUE $0.01 PER SHARE,
OF
TELEX COMMUNICATIONS, INC.
This Certifies that, _________, or its registered assigns (the "Holder"), is the
registered holder of the number of Warrants set forth above (the "Warrants").
Each whole Warrant entitles the Holder, at its option and subject to the
provisions contained herein and in the Warrant Agreement referred to below, to
purchase from Telex Communications, Inc., a Delaware corporation (the
"Company"), one share of the Company's Series B Preferred Stock, par value $0.01
per share (the "Series B Preferred Stock"), or if the Series B Preferred Stock
shall have been converted in accordance with the terms thereof, one share of the
Common Stock, par value $0.01 per share (the "Common Stock"), at the per share
exercise price of $0.01 (the "Exercise Price"). This Warrant Certificate and
each Warrant it represents shall terminate and become void upon the exercise
hereof (the "Expiration Date"). The number of shares purchasable upon exercise
of the Warrants and the Exercise Price per share shall be subject to adjustment
from time to time as set forth in the Warrant Agreement.
This Warrant Certificate is issued under and in accordance with a Warrant
Agreement dated as of November 21, 2001 (the "Warrant Agreement"), between the
Company and The Bank of New York, as Warrant Agent (the "Warrant Agent"), and is
subject to the terms and provisions contained in the Warrant Agreement including
the restrictions on transfer, to all of which terms and provisions the Holder of
this Warrant Certificate consents by acceptance hereof. The Warrant Agreement is
hereby incorporated herein by reference and made a part hereof. Reference is
hereby made to the Warrant Agreement including the restrictions on transfer for
a full statement of the respective rights, limitations of rights, duties and
2
obligations of the Company and the Holders of the Warrants. Capitalized terms
used but not defined herein shall have the meanings ascribed thereto in the
Warrant Agreement. A copy of the Warrant Agreement may be obtained for
inspection by the Holder hereof upon written request to the Company at 00000
Xxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxx 00000, Facsimile: (000) 000-0000,
Attention: Chief Financial Officer.
Subject to the terms of the Warrant Agreement, the Warrants may be exercised in
whole or in part by presentation of this Warrant Certificate with the Purchase
Form attached hereto duly executed to the Warrant Agent, and with the
simultaneous payment of the Exercise Price in cash (subject to adjustment) to
the Company at the office of the Company.
As provided in the Warrant Agreement and subject to the terms and conditions
therein set forth, the Warrants shall be exercisable on terms and conditions
specified in the Warrant Agreement; provided, however, that no Warrant shall be
exercisable after the Expiration Date.
In the event the Company enters into a Combination, the Holder hereof will be
entitled to receive the shares of capital stock or other securities or other
property of such surviving entity as the Holder would have received had the
Holder exercised its Warrants immediately prior to such Combination; provided,
however, that in the event that, in connection with such Combination,
consideration to holders of the Warrant Shares in exchange for their shares is
payable solely in cash or in the event of the dissolution, liquidation or
winding-up of the Company, the Holder hereof will be entitled to receive cash
distributions as the Holder would have received had the Holder exercised its
Warrants immediately prior to such Combination, less the Exercise Price.
The Company may require payment of a sum sufficient to pay all taxes,
assessments or other governmental charges in connection with the transfer or
exchange of the Warrant Certificates pursuant to Section 2.04 of the Warrant
Agreement but not for any exchange or original issuance (not involving a
transfer) with respect to temporary Warrant Certificates, the exercise of the
Warrants or the Warrant Shares.
Upon any partial exercise of the Warrants, there shall be countersigned and
issued to the Holder hereof a new Warrant Certificate in respect of the shares
of Warrant Shares as to which the Warrants shall not have been exercised. This
Warrant Certificate may be exchanged at the office of the Warrant Agent by
presenting this Warrant Certificate properly endorsed with a request to exchange
this Warrant Certificate for other Warrant Certificates evidencing an equal
number of Warrants. No fractional Warrant Shares beyond two decimal places will
be issued upon the exercise of the Warrants, but the Company shall pay an amount
in cash equal to the Current Market Value for one Warrant Share on the trading
day immediately preceding the date the Warrant is exercised, multiplied by the
fraction of a Warrant Share that would be issuable on the exercise of any
Warrant.
All Warrant Shares issuable by the Company upon the exercise of the Warrants
shall, upon such issue, be duly and validly issued and fully paid and
non-assessable.
The Holder in whose name the Warrant Certificate is registered may be deemed and
treated by the Warrant Agent as the absolute owner of the Warrant Certificate
for all purposes whatsoever and the Warrant Agent shall not be affected by
notice to the contrary.
3
The Warrants do not entitle any holder hereof to any of the rights of a
shareholder of the Company.
Telex Communications, Inc.
By:____________________________________
Xxxxxxx X. Xxxxxxx
Vice President and Chief Financial
Officer
Exhibit B to Warrant Agreement
Certificate to Effect Exchange or Transfer of Warrants
Re: Warrants to Purchase Series B Preferred Stock, par value $0.01 per
share, of Telex Communications, Inc., or if the Series B Preferred
Stock shall have been converted in accordance with the terms thereof,
shares of the Common Stock, par value $0.01 per share, of Telex
Communications, Inc.
This Certificate relates to ____ Warrants held in definitive form by ________
(the "Transferor").
The Transferor has requested the Warrant Agent by written order to exchange or
register the transfer of a Warrant or Warrants. In connection with such request
and in respect of each such Warrant, the Transferor does hereby certify that the
Transferor is familiar with the Warrant Agreement relating to the
above-captioned Warrants and that the transfer of this Warrant does not require
registration under the Securities Act of 1933, (the "Securities Act") because:
[_] Such Warrant is being acquired for the Transferor's own account
without transfer.
[_] Such Warrant is being transferred to the Company.
[_] Such Warrant is being transferred pursuant to an effective
registration statement pursuant to the Securities Act.
[_] Such Warrant is being transferred in a transaction meeting the
requirements of Rule 144 under the Securities Act.
[_] Such Warrant is being transferred pursuant to another
available exemption from the registration requirements of the
Securities Act, i.e.: _________________.
The Transferor does hereby certify that the transfer of this Warrant complies
with Section 4.01 of the Warrant Agreement dated as of November 21, 2001 between
the Company and BNY Midwest Trust Company, as Warrant Agent.
The Company is entitled to rely upon this Certificate and is irrevocably
authorized to produce this Certificate or a copy hereof to any interested party
in any administrative or legal proceedings or official inquiry with respect to
the matters covered hereby.
------------------------------------
[Insert name of transferor]
Date: By:
----------------------------------
------------------------------
Exhibit C to Warrant Agreement
Form of Election to Exercise Warrant and
Purchase Warrant Shares (to be executed
only upon exercise of Warrants)
Telex Communications, Inc.
The undersigned hereby irrevocably elects to exercise Warrants to purchase
_______ Warrant Shares at an exercise price per Warrant Share (subject to
adjustment) of $0.01, on the terms and conditions specified in the Warrant
Certificate and the Warrant Agreement to which reference is made therein, and
surrenders this Warrant Certificate and all right, title and interest therein to
Telex Communications, Inc. and directs that the Warrant Shares deliverable upon
the exercise of such Warrant be registered or placed in the name and at the
address specified below and delivered thereto.
Date: ____________________________ Holder:
-------------------------------
Print Name:
Exhibit D to Warrant Agreement
Bank of New York
Schedule of Fees
[To come]