EXHIBIT 10.25
THIS WARRANT AND THE SHARES OF COMMON STOCK PURCHASABLE HEREUNDER HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES
LAWS OF ANY STATE OR OTHER JURISDICTION AND MAY NOT BE SOLD, OFFERED FOR SALE OR
OTHERWISE TRANSFERRED UNLESS REGISTERED OR QUALIFIED UNDER SAID ACT AND
APPLICABLE STATE SECURITIES LAWS OR UNLESS THE COMPANY RECEIVES AN OPINION OF
COUNSEL IN FORM AND SCOPE REASONABLY SATISFACTORY TO THE COMPANY THAT
REGISTRATION, QUALIFICATION OR OTHER SUCH ACTIONS ARE NOT REQUIRED UNDER ANY
SUCH LAWS. THE OFFERING OF THIS SECURITY HAS NOT BEEN REVIEWED OR APPROVED BY
ANY STATE'S SECURITIES ADMINISTRATOR. THIS WARRANT AND THE SHARES OF COMMON
STOCK PURCHASABLE HEREUNDER ARE ALSO SUBJECT TO A BUY-SELL AGREEMENT, DATED AS
OF DECEMBER 10, 2003, BETWEEN THE COMPANY AND THE INITIAL HOLDER A COPY OF WHICH
IS ON FILE WITH THE COMPANY AND WILL BE FURNISHED UPON WRITTEN REQUEST AND
WITHOUT CHARGE. THIS WARRANT AND THE SHARES OF COMMON STOCK PURCHASABLE
HEREUNDER ARE ALSO SUBJECT TO AN EXECUTIVE EMPLOYMENT AGREEMENT DATED AS OF
DECEMBER 10, 2003 BY AND BETWEEN THE COMPANY AND XXXX X. XXXX, A COPY OF WHICH
IS ON FILE WITH THE COMPANY AND WILL BE FURNISHED UPON WRITTEN REQUEST AND
WITHOUT CHARGE TO THE REGISTERED HOLDER OF THIS WARRANT.
Dated: December 10, 2003
WARRANT
To Purchase 7,750 Shares of Common Stock
ATRIUM CORPORATION
EXPIRING December 10, 2013.
THIS IS TO CERTIFY THAT, for value received, Xxxx X. Xxxx, or
registered assigns as a holder of this Warrant (the "Holder"), is entitled to
purchase from Atrium Corporation (successor by merger of KAT Holdings, Inc. and
Atrium Corporation), a Delaware corporation (the "Company"), at any time or from
time to time prior to 5:00 p.m., Dallas, Texas time, December 10, 2013 (without
early termination of vested Warrants due to the termination of employment of the
initial Holder) at the place where the Warrant Agency (as hereinafter defined)
is located, (i) at the A Exercise Price (as hereinafter defined) 4,000 shares of
common stock, par value $.01 per share (the "Common Stock"), of the Company (the
"A Warrant"), but only if and to the extent the A Warrant is A Warrant Vested
and (ii) at the B Exercise Price (as hereinafter defined)
3,750 shares of Common Stock, par value $.01 per share of the Company (the "B
Warrant"), but only to the extent the B Warrant is B Warrant Vested. The Holder
shall designate at the time of exercise whether the Holder is exercising an A
Warrant and/or B Warrant and the number of shares of Common Stock to be
purchased respectively thereunder. Notwithstanding the foregoing, in the event
that Termination of Employment occurs as a result (a) of the Holder's death or
Disability, (b) the Holder's termination by the Company or any Related Entity
without Cause, (c) a Company Non-Renewal of Holder, (d) a termination by the
Holder for Good Reason, or (e) Retirement, all of the remaining unvested portion
of the A Warrant or B Warrant at the time of Termination of Employment shall
automatically become A Warrant Vested or B Warrant Vested, as applicable for all
purposes hereof. In addition, in the event that a Change of Control or Sale of
the Company occurs, then upon consummation thereof, all of the unvested portion
of the A Warrant or B Warrant shall automatically become A Warrant Vested or B
Warrant Vested, as applicable. In the event that a Qualified Public Offering is
consummated, then, effective upon the consummation of the Qualified Public
Offering, one-half of the unvested portion of the A Warrant or B Warrant that
are then unvested (if any) shall automatically become A Warrant Vested or B
Warrant Vested, and as to any remaining unvested portion of the A Warrant or B
Warrant, they will continue to vest in accordance with this Warrant, provided
that any such remaining unvested portion of the A Warrant or B Warrant that are
still unvested as of the 18 month anniversary of the release or termination of
the QPO Lock-Ups shall automatically become A Warrant Vested or B Warrant
Vested, as applicable, at such anniversary.
Certain terms used in this Warrant are defined in Article V.
ARTICLE I
EXERCISE OF WARRANTS
Method of Exercise. To exercise this Warrant in whole or in part, the
Holder shall deliver to the Company, at the Warrant Agency, (a) this Warrant,
(b) a written notice, in substantially the form of the Subscription Notice
attached hereto as Annex A, of such Holder's election to exercise this Warrant,
which notice shall specify (i) whether the Holder is exercising an A Warrant
and/or B Warrant, (ii) the number of shares of Common Stock to be purchased
under an A Warrant and/or B Warrant, as applicable, (iii) the denominations of
the share certificate or certificates desired, (iv) the name or names in which
such certificate or certificates are to the registered, (c) if the Common Stock
to be received upon the exercise of this Warrant has not been registered under
the Securities Act, a written certification in substantially the form of the
Certification attached hereto as Annex B, and (d) payment of the Exercise Price
with respect to such shares. Such payment may be made, at the option of the
Holder, by cash, money order, certified or bank cashier's check, wire transfer
or by the surrender, assignment and transfer by the Holder to the Company of a
portion of this Warrant whose aggregate Fair Market Value
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(determined by reference to the Fair Market Value per share of underlying Common
Stock minus the exercise price of the surrendered Warrant) equals the exercise
price.
With respect to the exercise of the A Warrant and/or B Warrant, the
Company shall, as promptly as practicable and in any event within five Business
Days after receipt of such written notice of exercise, execute and deliver or
cause to be executed and delivered, in accordance with such notice, a
certificate or certificates representing the aggregate number of shares of
Common Stock specified in said notice. The share certificate or certificates so
delivered shall be in such denominations as may be specified in such notice or,
if such notice shall not specify denominations, shall be in the amount of the
number of shares of Common Stock for which the Warrant is being exercised, and
shall be issued in the name of the Holder or such other name or names as shall
be designated in such notice. Such certificate or certificates shall be deemed
to have been issued, and such Holder or any other Person so designated to be
named therein shall be deemed for all purposes to have become a holder of record
of such shares, as of the date the aforementioned notice is received by the
Company. If this Warrant shall have been exercised only in part (including if
part of this Warrant is surrendered to pay the exercise price), the Company
shall, at the time of delivery of the certificate or certificates, deliver to
the Holder a new Warrant evidencing the rights to purchase the remaining shares
of Common Stock which may be purchased under the A Warrant and/or B Warrant, as
applicable, which new Warrant shall in all other respects be identical with this
Warrant, or, at the request of the Holder, appropriate notation may be made on
this Warrant which shall then be returned to the Holder. The Company shall pay
all expenses, taxes (if any) and other charges payable in connection with the
preparation, issuance and delivery of share certificates and a new Warrant,
except that, if share certificates or a new Warrant shall be registered in a
name or names other than the name of the Holder, funds sufficient to pay all
transfer taxes payable as a result of such transfer shall be paid by the Holder
at the time of delivery of the aforementioned notice of exercise or promptly
upon receipt of a written request of the Company for payment.
1.1 Shares To Be Fully Paid and Nonassessable. All shares of Common
Stock issued upon the exercise of this Warrant shall be validly issued, fully
paid and nonassessable and free from all preemptive rights of any stockholder,
and from all taxes.
1.2 No Fractional Shares To Be Issued. The Company shall not be
required to issue fractions of shares of Common Stock upon exercise of this
Warrant. If any fraction of a share would, but for this Section, be issuable
upon any exercise of this Warrant, in lieu of such fractional share the Company
shall pay to the Holder, in cash, an amount equal to such fraction of the Fair
Market Value per share of Common Stock of the Company on the Business Day
immediately prior to the date of such exercise.
1.3 Share Legend. Each certificate for shares of Common Stock issued
upon exercise of this warrant, unless at the time of exercise such shares are
registered under the Securities Act, shall bear the following legend:
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"This security has not been registered under the Securities Act of
1933, as amended, or under the securities laws of any state or other
jurisdiction and may not be sold, offered for sale or otherwise
transferred unless registered or qualified under said Act and
applicable state securities laws or unless the Company receives an
opinion of counsel in form and scope reasonably satisfactory to the
Company that registration, qualification or other such actions are not
required under any such laws. The offering of this security has not
been reviewed or approved by any state securities administrator. This
security is subject to a Stockholders Agreement, dated as of December
10, 2003, between the Company and the other parties listed therein, and
a Buy-Sell Agreement, dated as of December 10, 2003, between the
Company and the initial holder hereof, copies of which are on file with
the Company and will be furnished upon written request and without
charge."
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon completion
of a public distribution pursuant to a registration statement under the
Securities Act) shall also bear such legend unless, in the opinion of counsel
selected by the holder of such certificate and reasonably acceptable to the
Company, the securities represented thereby are no longer subject to
restrictions on resale under the Securities Act.
1.4 Reservation; Authorization. The Company has reserved and will keep
available for issuance upon exercise of this Warrant the total number of shares
of Common Stock deliverable upon exercise of this Warrant from time to time
outstanding. The issuance of such shares has been duly and validly authorized
and, when issued and sold in accordance with this Warrant, such shares will be
duly and validly issued, fully paid and nonassessable.
ARTICLE II
WARRANT AGENCY; TRANSFER, EXCHANGE
AND REPLACEMENT OF WARRANTS
2.1 Warrant Agency. At any time after a public offering of Common Stock
registered under the Securities Act, the Company may promptly appoint and
thereafter maintain, at its own expense, an agency in New York, New York, which
agency may be the Company's then existing transfer agent (the "Warrant Agency"),
for certain purposes specified herein, and shall give prompt notice of such
appointment (and appointment of any successor Warrant Agency) to the Holder.
Until an independent Warrant Agency is so appointed, the Company shall perform
the obligations of the Warrant Agency provided herein at its address as
specified on the signature page hereto or such other address as the Company
shall specify by notice to the Holder.
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2.2 Ownership of Warrant. The Company may deem and treat the Person in
whose name this Warrant is registered as the Holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by any Person
other than the Warrant Agency) for all purposes and shall not be affected by any
notice to the contrary, until presentation of this Warrant for registration of
transfer as provided in this Article II.
2.3 Transfer of Warrant. Holder may not sell, assign, transfer, pledge
or otherwise dispose of ("Transfer") all or any portion of this Warrant, either
voluntarily or involuntarily or by operation of law, other than by will or the
laws of descent and distribution; provided, that Holder may Transfer all or any
portion of the Warrant to Holder's Personal Representative, so long as such
Personal Representative agrees to be bound by the provisions hereof, including
the Stockholders Agreement and Buy-Sell Agreement referenced in the legend
included in Section 1.3.
2.4 Division of Warrant. This Warrant may be divided upon surrender
hereof to the Warrant Agency, together with a written notice specifying the
names and denominations in which the new Warrants are to be issued, signed by
the Holder. Subject to compliance with Section 2.3 as to any Transfer which may
be involved in the division, the Company shall execute and deliver new Warrants
in exchange for the Warrant or Warrants to be divided in accordance with such
notice.
2.5 Loss, Theft, Destruction or Mutilation of Warrants. Upon receipt of
evidence satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security reasonably satisfactory to
the Company, or, in the case of any such mutilation, upon surrender and
cancellation of such Warrant, the Company will make and deliver, in lieu of such
lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and
representing the right to purchase the same aggregate number of shares of Common
Stock as provided for in such lost, stolen, destroyed or mutilated Warrant.
2.6 Expenses of Delivery of Warrants. The Company shall pay all
expenses, taxes (other than transfer taxes and income taxes) and other charges
payable in connection with the preparation, issuance and delivery of this
Warrant and the Common Stock issuable hereunder.
ARTICLE III
CERTAIN RIGHTS
3.1 Stockholders Agreement and Buy-Sell Agreement. This Warrant and the
Common Stock issuable upon exercise of this Warrant are subject to a
Stockholders Agreement dated as of December 10, 2003, by and among the Company
and the other parties listed therein (the "Stockholders Agreement"), the
Employment Agreement, dated as of December 10, 2003, between the Company and the
initial holder hereof ("Employment Agreement") and to the Buy-Sell Agreement,
dated as of December 10,
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2003, by and between the Company and the initial holder hereof ("Buy-Sell
Agreement"). The Company shall keep a copy of the Stockholders Agreement, the
Buy-Sell Agreement and the Employment Agreement and any amendments thereto, at
the Warrant Agency and shall furnish copies thereof to the Holder upon request.
ARTICLE IV
ANTIDILUTION AND PROTECTIVE PROVISIONS
4.1 Adjustments Generally. The Exercise Price and the number of shares
of Common Stock (or other securities or property) issuable upon exercise of this
Warrant shall be subject to adjustment from time to time upon the occurrence of
certain events, as provided in this Article IV.
4.2 Common Stock Reorganization. If the Company shall after the date of
issuance of this Warrant subdivide its outstanding shares of Common Stock into a
greater number of shares or consolidate its outstanding shares of Common Stock
into a smaller number of shares (any such event being called a "Common Stock
Reorganization"), then (a) the Exercise Price of the A Warrant and/or B Warrant
shall each be adjusted, effective immediately after the record date at which the
holders of shares of Common Stock are determined for purposes of such Common
Stock Reorganization, to a price determined by multiplying the applicable
Exercise Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the number of shares of Common Stock outstanding
on such record date before giving effect to such Common Stock Reorganization and
the denominator of which shall be the number of shares of Common Stock
outstanding after giving effect to such Common Stock Reorganization, and (b) the
number of shares of Common Stock subject to purchase upon exercise of the A
Warrant and/or B Warrant shall each be adjusted, effective at such time, to a
number determined by multiplying the number of shares of Common Stock subject to
purchase immediately before such Common Stock Reorganization by a fraction, the
numerator of which shall be the number of shares outstanding after giving effect
to such Common Stock Reorganization and the denominator of which shall be the
number of shares of Common Stock outstanding immediately before such Common
Stock Reorganization.
4.3 Capital Reorganization. If after the date of issuance of this
Warrant there shall be any consolidation or merger to which the Company is a
party, other than a consolidation or a merger in which the Company is a
continuing corporation and which does not result in any reclassification of, or
change (other than a Common Stock Reorganization or a change in par value) in,
outstanding shares of Common Stock, or any sale or conveyance of the property of
the Company as an entirety or substantially as an entirety (any such event being
called a "Capital Reorganization"), then, effective upon the effective date of
such Capital Reorganization, the Holder shall have the right to purchase, upon
exercise of this Warrant, the kind and amount of shares of stock and other
securities and property (including cash) which the Holder would have owned or
have
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been entitled to receive after such Capital Reorganization if this Warrant had
been exercised as permitted herein immediately prior to such Capital
Reorganization. As a condition to effecting any Capital Reorganization, the
Company or the successor or surviving corporation, as the case may be, shall
execute and deliver to the Holder an agreement as to the Holder's rights in
accordance with this Section 4.3, providing for subsequent adjustments as nearly
equivalent as may be practicable to the adjustments provided for in this Article
IV. The provisions of this Section 4.3 shall similarly apply to successive
Capital Reorganizations.
4.4 Certain Other Events. In the event of a Recapitalization Event, the
Holder shall be entitled to receive his proportionate share of any dividend,
distribution or other proceeds paid or payable to the holders of the Common
Stock in respect of the then unexercised portion of his Warrant (regardless of
whether relating to unvested or vested Warrants and in addition to any such
dividends, distribution or proceeds to which the Holder is entitled in respect
of any shares of Common Stock already purchased by the Holder upon any prior
exercise of any vested portion of his Warrant), determined as if such Holder had
exercised the then unexercised portion of his Warrant immediately prior to the
consummation of such Recapitalization Event; provided, however, that such
Holder, in order to receive and participate in the distribution proceeds from
such Recapitalization Event in relation to their Warrant, shall be required, as
a condition thereof, to exercise such Warrant in accordance with the terms
thereof. In connection with a Recapitalization Event, with respect to proceeds
attributable to the unexercised portion of any Warrant, the Company will
establish an unfunded bookkeeping account to reflect the participation in
distribution proceeds in relation to the Warrant, such that such proceeds are
paid to the Holder upon exercise of the Warrant at any time in accordance with
this Warrant (including in relation to any unvested Warrant at the time of the
Recapitalization Event which subsequently become A Warrant Vested or B Warrant
Vested). Any such proceeds attributable to unexercised Warrants upon the
termination or expiration of this Warrant will be paid to and become the
property of the Company. In addition, if any event occurs after the date of
issuance of this Warrant as to which the foregoing provisions of this Article IV
are not strictly applicable or, if strictly applicable, would not, in the good
faith judgment of the Board of Directors of the Company (the "Board"), fairly
protect the purchase rights of the Holder in accordance with the essential
intent and principles of such provisions, then the Board 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 the Board, to protect such purchase rights as aforesaid.
4.5 Adjustment Rules.
(a) Any adjustments pursuant to this Article IV shall be made
successively whenever an event referred to herein shall occur.
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(b) If the Company shall set a record date to determine the holders of
shares of Common Stock for purposes of a Common Stock Reorganization or Capital
Reorganization, and shall legally abandon such action prior to effecting such
action, then no adjustment shall be made pursuant to this Article IV in respect
of such action.
(c) No adjustment in the amount of shares purchasable upon exercise of
this Warrant or in either of the Exercise Prices shall be made hereunder unless
such adjustment increases or decreases such amount or price by one percent or
more, but any such 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 serve to adjust such amount or price by
one percent or more.
(d) No adjustment in the Exercise Price shall be made hereunder if such
adjustment would reduce the exercise price to an amount below par value of the
Common Stock, which par value shall initially be $.01 per share of Common Stock.
4.6 Notice of Adjustment. The Company shall give the Holder reasonable
notice of the record date or effective date, as the case may be, of any action,
which requires or might require an adjustment or readjustment pursuant to this
Article IV. Such notice shall describe such event in reasonable detail and
specify the record date or effective date, as the case may be, and, if
determinable, the required adjustment and the computation thereof. If the
required adjustment is not determinable at the time of such notice, the Company
shall give reasonable notice to the Holder of such adjustment and computation
promptly after such adjustment becomes determinable.
ARTICLE V
DEFINITIONS
The following terms, as used in this Warrant, have the following
respective meanings:
"A Exercise Price" means for a particular exercise of the A Warrant, a
per share price of $0.01, as such per share price may be adjusted from time to
time pursuant to Article IV hereof.
"B Exercise Price" means for a particular exercise of the B Warrant, a
per share price of $1,000.00, as such per share price may be adjusted from time
to time pursuant to Article IV hereof.
"A Warrant Vested" shall be determined by reference to a vesting
schedule, such that prior to February 1, 2004, none of the A Warrant will be
deemed vested for this purpose, and from and after February 1, 2004, all of the
A Warrant will be deemed vested for this purpose, provided, that such vesting
may be accelerated as provided in the introduction hereto.
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"X Xxxxxxx Vested" shall be determined by reference to a vesting
schedule, such that prior to January 1, 2004, none of the B Warrant will be
deemed vested for this purpose, and from and after January 1, 2004, the amount
of the B Warrant that will be deemed vested for this purpose will equal the
amount of shares issuable upon exercise of the B Warrant multiplied by a
fraction, the numerator of which is the number of full months elapsed since
January 1, 2004, and the denominator of which is 60, such that all of the B
Warrant will be deemed vested for this purpose as of February 1, 2009, provided,
that such vesting may be accelerated as provided in the introduction hereto.
"Business Day" shall mean (a) if any class of Common Stock is listed or
admitted to trading on a national securities exchange, a day on which the
principal national securities exchange on which such class of Common Stock is
listed or admitted to trading is open for business or (b) if no class of Common
Stock is so listed or admitted to trading, a day on which the New York Stock
Exchange is open for business.
"Buy-Sell Agreement" is defined in Section 3.1.
"Capital Reorganization" shall have the meaning set forth in Section
4.3.
"Change of Control" shall have the meaning set forth in the Employment
Agreement.
"Closing Price" with respect to any security on any day means (a) if
such security is listed or admitted for trading on a national securities
exchange, the reported last sales price regular way or, if no such reported sale
occurs on such day, the average of the closing bid and asked prices regular way
on such day, in each case as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which such class of security is listed or admitted to
trading, or (b) if such security is not listed or admitted to trading on any
national securities exchange, the last quoted sales price, or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter market
on such day as reported by NASDAQ or any comparable system then in use or, if
not so reported, as reported by any New York Stock Exchange member firm
reasonably selected by the Company for such purpose.
"Common Stock" shall have the meaning set forth in the first paragraph
of this Warrant.
"Common Stock Reorganization" shall have the meaning set forth in
Section 4.2.
"Company" shall have the meaning set forth in the first paragraph of
this Warrant.
"Employment Agreement" means the Employment Agreement, dated the date
hereof, by and between the Company and the Holder.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and any similar or successor federal statute, and the rules and regulations of
the Securities and Exchange Commission (or its successor) thereunder, all as the
same shall be in effect at the time.
"Exercise Price" shall mean the A Exercise Price and/or B Exercise
Price, as applicable.
"Fair Market Value" means, for purposes of fractional shares, the fair
market value of the business or property in question, as determined in good
faith by the Board, provided, however, that the Fair Market Value of any
security for which a Closing Price is available shall be the Market Price of
such security.
"Holder" shall have the meaning set forth in the first paragraph of
this Warrant. The term Holders shall refer to all Holders of Warrants.
"Lead Underwriter" shall have the meaning set forth in the Buy-Sell
Agreement.
"Market Price", with respect to any security on any day means the
average of the daily Closing Prices of a share or unit of such security for the
20 consecutive Business Days ending on the most recent Business Day for which a
Closing Price is available; provided, however, that in the event that, in the
case of Common Stock, the Market Price is determined during a period following
the announcement by the Company of any subdivision, combination or
reclassification of Common Stock or the record date for such subdivision,
combination or reclassification, then, and in each such case, the Market Price
shall be appropriately adjusted to reflect the current market price per share
equivalent of Common Stock.
"NASDAQ" means The National Association of Securities Dealers, Inc.
Automated Quotation System.
"Person" means an individual, corporation, limited liability company,
partnership, limited partnership, syndicate, person (including, without
limitation, a "person" as defined in Section 1 3(d)(3) of the Exchange Act),
trust, association or other legal entity or government, political subdivision,
agency or instrumentality of a government.
"Personal Representative" means, with respect to any individual, any
executor, administrator, trustee, guardian or other legal representative of such
individual.
"QPO Lock-Up" shall have the meaning set forth in the Atrium
Corporation 2003 Stock Option Plan.
"Qualified Public Offering" shall have the meaning set forth in the
Buy-Sell Agreement.
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"Recapitalization Event" shall have the meaning set forth in the Atrium
Corporation 2003 Stock Option Plan.
"Sale of the Company" shall have the meaning set forth in the Buy-Sell
Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended, and
any similar or successor federal statute, and the rules and regulations of the
Securities and Exchange Commission (or its successor) thereunder, all as the
same shall be in effect at the time.
"Specified Holders" means (i) KAT Holdings, L.P. and any other
investment partnership or entity managed or controlled by Kenner & Company, Inc.
and/or its Affiliates, (ii) UBS Capital Americas II, LLC and/or its Affiliates,
(iii) ML IBK Positions, Inc. and/or its Affiliates, (iv) any partners, members
or investors (either directly or indirectly through any investment partnerships
or entities) in the entities described in clauses (i), (ii) and (iii) above who
are distributees of investments held by the entities described in clauses (i),
(ii) and (iii) above, (v) any immediate family members or lineal descendents, or
trusts or other entities for their benefit in respect of the Persons described
in clauses (i), (ii), (iii) and (iv) above, and (vi) any Affiliates in respect
of the Persons described in clauses (i), (ii), (iii) and (iv) above.
"Stockholders Agreement" shall have the meaning set forth in Section
3.1.
"Termination of Employment" shall have the meaning set forth in the
Buy-Sell Agreement.
"Warrant Agency" shall have the meaning set forth in Section 2.1.
"Warrant" shall have the meaning set forth in the first paragraph of
this Warrant. The term "Warrants" shall also refer to the Warrants resulting in
any subdivision of this Warrant.
ARTICLE VI
MISCELLANEOUS
6.1 Notices. All notices, requests, consents and other communications
provided for herein shall be in writing and shall be effective upon delivery in
person, faxed or telecopied, or mailed by certified or registered mail, return
receipt requested, postage pre-paid, to the addresses specified on the signature
pages hereto or, in any case, at such other address or addresses as shall have
been furnished in writing to the Company (in the case of a Holder) or to the
Holder (in the case of the Company) in accordance with the provisions of this
paragraph.
6.2 Waivers; Amendments. No failure or delay of the Holder in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Holder are cumulative and not
exclusive of any rights or remedies which it would otherwise have. The
provisions of this Warrant may be amended, modified or waived with (and only
with) the written consent of the Company and Holders who collectively hold
Warrants to purchase a majority of the Common Stock subject to purchase upon
exercise of such Warrants at the time outstanding.
Any such amendment, modification or waiver effected pursuant to this
Section 6.2 shall be binding upon the Holders, upon each future Holder thereof
and upon the Company. In the event of any such amendment, modification or waiver
the Company shall give prompt notice thereof to all Holders and, if appropriate,
notation thereof shall be made on all Warrants thereafter surrendered for
registration of transfer or exchange.
No notice or demand on the Company in any case shall entitle the
Company to any other or further notice or demand in similar or other
circumstances.
6.3 Governing Law. This Warrant shall be construed in accordance with
and governed by the laws of the State of Delaware.
6.4 Severability. In case any one or more of the provisions contained
in this Warrant shall be invalid, illegal or unenforceable in any respect, the
validity, legality or enforceability of the remaining provisions contained
herein and therein shall not in any way be affected or impaired thereby. The
parties shall endeavor in good faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
6.5 Section Headings. The section headings used herein are for
convenience of reference only, are not part of this Warrant and are not to
affect the construction of or be taken into consideration in interpreting this
Warrant.
6.6 No Rights as Stockholder. This Warrant shall not entitle the Holder
to any rights as a stockholder of the Company.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
in its corporate name by one of its officers thereunto duly authorized, all as
of the day and year first above written.
Atrium Corporation (successor by merger of
KAT Holdings, Inc. and Atrium Corporation)
Address: By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
ACCEPTED AND AGREED TO:
-----------------------------
Name: Xxxx X. Xxxx
Address: 000 Xxxxx Xxxxxxxx
Xxxxxxx, XX 00000
-13-
ANNEX A
SUBSCRIPTION NOTICE
(To be executed upon exercise of Warrant)
TO ATRIUM CORPORATION
The undersigned hereby irrevocably elects to exercise the attached
Warrant, and to purchase thereunder, in exercise of the A Warrant, ________
shares of Common Stock (all of which are A Warrant Vested), and/or in exercise
of the B Warrant, ________ shares of Common Stock (all of which are B Warrant
Vested) in exchange for payment of an Exercise Price in an aggregate amount
equal to $________.
Please issue a certificate or certificates for such shares of Common
Stock in the following name or names and denominations:
If said number of shares shall not be all the shares issuable upon
exercise of the attached Warrant, a new Warrant is to be issued in the name of
the undersigned for the balance remaining of such shares less any fraction of a
share paid in cash.
Dated: , 20
----------------- ---
--------------------------------
Note: The above signature
should correspond exactly
with the name on the face
of the attached Warrant or
with the name of the
assignee appearing in the
assignment form below.
A-1
ANNEX B
CERTIFICATION
The undersigned hereby certifies to Atrium Corporation that he, she or
it is:
a. an "accredited investor" as that term is defined in
Regulation D promulgated pursuant to the Securities
Act or any successor regulation, as such provisions
may be in effect on the date hereof, and is an
"accredited investor" pursuant to Section 501 of such
provision; and
b. is knowledgeable, sophisticated and experienced in
business and financial matters and in securities
similar to the Common Stock; is aware of the
limitation on the transfer of the Common Stock
imposed by applicable securities laws and any
limitations on transfer imposed by contracts with the
Company or others; and has had access to, or been
furnished with, all information about the Common
Stock and the Company deemed necessary to conclude
that he, she or it has the ability to bear the
economic risk of the investment in the Common Stock
and to afford the complete loss of such investment.
IN WITNESS WHEREOF, the undersigned has executed this CERTIFICATION
this ____ day of _______________, 20__.
For Individuals: For Entities:
--------------------------- ------------------------------------
Signature Printed Name of Entity
By:
--------------------------- ---------------------------------
Printed Name Name:
-------------------------------
Title:
------------------------------
B-1
