EXHIBIT 4
WARRANT AGREEMENT
THIS WARRANT AGREEMENT (the "Agreement") is made and entered
into as of ________________, 2001 between XXXX XX Holding Corp., a
Delaware corporation (the "Company") and FS Equity Partners III, L.P., a
Delaware limited partnership ("FSEP"), and FS Equity Partners
International, L.P., a Delaware limited partnership ("FSEP
International," and together with FSEP, the "FS Parties").
WHEREAS, pursuant to that certain Agreement and Plan of
Reorganization, dated as of May 14, 1997 by and among CB Xxxxxxx Xxxxx
Services, Inc. (successor to CB Commercial Real Estate Services Group,
Inc.) ("CBRE"), Xxxx Real Estate Services ("KRES") and the other parties
listed therein, KRES merged with a subsidiary of CBRE and the holders of
shares of common stock of KRES, including the FS Parties, and options
exercisable into shares of common stock of KRES received warrants (the
"Old Warrants") to purchase up to an aggregate of 500,000 shares of the
Common Stock of CBRE;
WHEREAS, pursuant to that certain Agreement and Plan of Merger
(the "Merger Agreement"), dated as of February 23, 2001, by and among,
CBRE, the Company and XXXX XX Corp., a Delaware corporation and wholly
owned subsidiary of the Company ("Acquiror"), the Acquiror will merge
with and into CBRE, such that CBRE shall become a wholly owned subsidiary
of the Company; and
WHEREAS, pursuant to that certain Contribution and Voting
Agreement, dated as of February 23, 2001, by and among, the Company, the
FS Parties and the other parties thereto, upon the Closing, among other
things, (i) the Company shall cancel the Old Warrants, and (ii) the FS
Parties shall receive, in the aggregate, warrants (the "Warrants") to
purchase up to an aggregate of [number of shares of Common Stock equal to the
number that represents the same percentage of the total outstanding shares
of Common Stock immediately after consummation of the Merger (with respect
to the Company) as the warrants to acquire 364,884 shares of CBRE Common
Stock entitled Xxxxxxx Xxxxxx immediately prior to the consummation of
the Merger (with respect to CBRE] shares (the "Warrant Shares") of
the Common Stock, par value $.01 per share (the "Common Stock"), of the
Company.
NOW THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows
(capitalized terms used herein and not otherwise defined have the
meanings ascribed thereto in the Merger Agreement):
SECTION 1. Optional Exercise of Warrant.
Subject to the terms of this Agreement, each holder of a
Warrant may, at any time on and after August 26, 2007, but not later than
August 27, 2007 (the "Expiration Date"), exercise this Warrant in whole
at any time or in part from time to time for the number of Warrant Shares
which such holder is then entitled to purchase hereunder.
Each holder of a Warrant may exercise such Warrant, in whole
or in part by either of the following methods:
(a) delivering to the Company at its office maintained for
such purpose pursuant to Section 12(d): (i) a written notice of
such holder's election to exercise this Warrant, which notice shall
specify the number of Warrant Shares to be purchased, (ii) this
Warrant and (iii) a sum equal to the Exercise Price (as set forth
in the Warrant Certificate attached hereto) therefor payable in
immediately available funds; or
(b) The holder of this Warrant may also exercise this
Warrant, in whole or in part, in a "cashless" or "net-issue"
exercise by delivering to the Company at its office maintained for
such purpose pursuant to Section 12(d): (i) a written notice of
such holder's election to exercise this Warrant, which notice shall
specify the number of Warrant Shares to be delivered to such holder
and the number of Warrant Shares with respect to which this Warrant
is being surrendered in payment of the aggregate Exercise Price for
the Warrant Shares to be delivered to the holder, and (ii) the
Warrant. For purposes of this provision, all Warrant Shares as to
which the Warrant is surrendered will be attributed a value equal
to (x) the current market price per share of Common Stock
(determined in the manner set forth in Section 7(f)) minus (y) the
current Exercise Price per share of Common Stock.
Such notice may be in the form of Election to Purchase set out
at the end of this Warrant Agreement. Upon delivery thereof, together
with the Warrant and the Exercise Price, as applicable, and such holder
becoming a party to the Stockholders' Agreement, dated as of the date
hereof (the "Stockholder Agreement"), by and among the Company, the FS
Parties and the other parties thereto if such holder shall not already be
a party thereto, the Company shall cause to be executed and delivered to
such holder within five business days a certificate or certificates
representing the aggregate number of fully-paid and nonassessable shares
of Common Stock issuable upon such exercise.
The stock certificate or certificates for Warrant Shares so
delivered shall be in such denominations as may be specified in said
notice and shall be registered in the name of such holder or such other
name or names as shall be designated in said 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 to have
become a holder of record of such shares, including to the extent
permitted by law the right to vote such shares or to consent or to
receive notice as a stockholder (subject to the terms of the
Stockholders' Agreement), as of the time said notice is delivered to the
Company as aforesaid; provided that such shares shall be subject to the
provisions of the Stockholders' Agreement. If a Warrant shall have been
exercised only in part, the Company shall, at the time of delivery of
said certificate or certificates, deliver to such holder a new Warrant
dated the date it is issued, evidencing the rights of such holder to
purchase the remaining Warrant Shares called for by this Warrant, which
new Warrant shall in all other respects be identical with this Warrant,
or, at the request of such holder, appropriate notation may be made on
this Warrant and the Warrant shall be returned to such holder.
All Warrant Shares issuable upon the exercise of a Warrant
shall be validly issued, fully paid and nonassessable and free from all
liens and other encumbrances thereon, other than liens or other
encumbrances created by the holder thereof or the restrictions set forth
in the Stockholders' Agreement.
The Company will not close its books against the transfer of a
Warrant or of any Warrant Shares in any manner which interferes with the
timely exercise of a Warrant. The Company will from time to time take
all such action as may be necessary to assure that the par value per
share of the unissued Common Stock acquirable upon exercise of a Warrant
is at all times equal to or less than the Exercise Price then in effect.
SECTION 2. Automatic Exercise of Warrant.
Notwithstanding the prior delivery of a notice pursuant to
Section 1 hereto, in the event an Automatic Exercise Event (as defined
below) occurs prior to the Expiration Date, without any action by the
Company or the FS Parties, the Warrants shall automatically be exercised
in a "cashless" or "net issue" exercise pursuant to which (i) the
Exercise Price shall be paid to the Company entirely in Warrant Shares
(or such other consideration as set forth in Section 7(l) hereto), which
for purposes of this provision, will be attributed a value equal to (x)
the current market price per share of Common Stock (determined in the
manner set forth in Section 7(f)) to the holders thereof minus (y) the
current Exercise Price per share of Common Stock, and (ii) the Company,
subject to the following paragraph of this Section 2, shall deliver to
the holders thereof the number of Warrant Shares remaining after
subtracting the Exercise Price; provided, however that if, upon an
Automatic Exercise Event, the amount set forth in subclause (y) of the
foregoing clause (i) shall be equal to or greater than the amount set
forth in subclause (x) of the foregoing clause (i), then the Warrants,
without any action by the Company or the FS Parties, shall be cancelled
and shall cease to represent the right to receive any Warrant Shares or
other security, property or asset of the Company or any surviving entity.
As soon as practicable after an Automatic Exercise Event, the
Company shall deliver a notice of such Automatic Exercise Event to each
of the holders of the Warrants. Upon delivery of the Warrants to the
Company by a holder thereof and such holder becoming a party to the
Stockholders' Agreement, if such holder shall not already be a party
thereto, the Company shall cause to be executed and delivered to such
holder within five business days a certificate or certificates
representing the aggregate number of fully-paid and nonassessable shares
of Common Stock issuable as a result of such Automatic Exercise Event.
The stock certificate or certificates for Warrant Shares so
delivered shall be in such denominations as may be specified by the
Warrant holders and shall be registered in the name of such holder or
such other name or names as shall be designated by the Warrant holders .
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 to have become a holder of record of such shares, including to
the extent permitted by law the right to vote such shares or to consent
or to receive notice as a stockholder (subject to the terms of the
Stockholders' Agreement), as of the time of the Automatic Exercise Event;
provided that such shares shall be subject to the provisions of the
Stockholders' Agreement.
All Warrant Shares issuable upon an Automatic Exercise Event
shall be validly issued, fully paid and nonassessable and free from all
liens and other encumbrances thereon, other than liens or other
encumbrances created by the holder thereof or the restrictions set forth
in the Stockholders' Agreement.
The Company will not close its books against the transfer of a
Warrant or of any Warrant Shares in any manner which interferes with the
exercise of a Warrant pursuant to an Automatic Exercise Event. The
Company will from time to time take all such action as may be necessary
to assure that the par value per share of the unissued Common Stock
acquirable upon exercise of a Warrant pursuant to an Automatic Exercise
Event is at all times equal to or less than the Exercise Price then in
effect.
For purposes of this Agreement, an "Automatic Exercise Event"
shall mean either (a) the completion of a sale of shares of any class of
the Common Stock to the public pursuant to an effective registration
statement (other than a registration statement on Form S-8 or any similar
or successor form) filed under the Securities Act pursuant to which the
Company becomes listed on a national securities exchange or on the NASDAQ
Stock Market (the "Initial Public Offering"), (b) any "person" or
"group," (each as defined in Rules 13d-3 and 13d-5 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) other than XXXX
Capital Partners, L.P. ("XXXX") and its affiliates, is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act), directly or indirectly, of more than 50% of the total
voting power of the outstanding voting stock of the Company, including by
way of merger, consolidation or otherwise, and XXXX and its affiliates
cease to control the Company's Board of Directors, (c) any sale of all or
substantially all of the assets of the Company and its subsidiaries to
any "person" or "group," (each as defined in Rules 13d-3 and 13d-5 under
the Exchange Act) other than XXXX and its affiliates, or (d) any merger,
consolidation or other transaction or series or related transactions
after the consummation of which the shares owned by the holders of the
Company's outstanding voting stock possessing a majority of the voting
power to elect the Company's Board of Directors immediately prior to the
occurrence of such transaction or transactions cease to constitute a
majority of the Company's outstanding voting stock possessing the voting
power to elect the Company's Board of Directors (or equivalent governing
body).
SECTION 3. Transfer, Division and Combination.
The Warrants are, and all rights thereunder are, transferable,
in whole or in part, on the books of the Company to be maintained for
such purpose, upon (a) surrender of a Warrant at the office of the
Company maintained for such purpose pursuant to Section 12(d), together
with a written assignment of such Warrant duly executed by the holder
thereof or its agent or attorney and payment of funds sufficient to pay
any stock transfer taxes payable upon the making of such transfer, and
(b) a signed agreement by the assignee or assignees to become a party to
the Stockholders' Agreement prior to the exercise of such Warrant. Upon
such surrender and, if required, such payment, the Company shall, execute
and deliver a new Warrant or Warrants in the name of the assignee or
assignees and in the denominations specified in such instrument of
assignment, and the surrendered Warrant shall promptly be canceled. If
and when a Warrant is assigned in blank, the Company may (but shall not
be obligated to) treat the bearer thereof as the absolute owner of such
Warrant for all purposes and the Company shall not be affected by any
notice to the contrary. A Warrant, if properly assigned in compliance
with this Section 2, may be exercised by an assignee for the purchase of
shares of Common Stock without having a new Warrant issued.
A Warrant may, be divided or combined with other Warrants upon
presentation at the aforesaid office of the Company, together with a
written notice specifying the names and denominations in which new
Warrants are to be issued, signed by the holder hereof or its agent or
attorney. Subject to compliance with the preceding paragraph, as to any
transfer which may be involved in such division or combination, the
Company shall execute and deliver a new Warrant or Warrants in exchange
for the Warrant or Warrants to be divided or combined in accordance with
such notice.
The Company agrees to maintain at its aforesaid office books
for the registration and transfer of the Warrants.
SECTION 4. Payment of Taxes.
The Company will pay all documentary stamp taxes attributable
to the initial issuance of Warrant Shares upon the exercise of Warrants;
provided, however, that the Company shall not be required to pay any tax
or taxes which may be payable in respect of any transfer involved in the
issue of any Warrant Certificates or any certificates for Warrant Shares
in a name other than that of the registered holder of a Warrant
Certificate surrendered upon the exercise of a Warrant, and the Company
shall not be required to issue or deliver such Warrant Certificates
unless or until the person or persons requesting the issuance thereof
shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been
paid.
SECTION 5. Mutilated or Missing Warrant Certificates.
In case any of the Warrant Certificates shall be mutilated,
lost, stolen or destroyed, the Company may in its discretion issue, in
exchange and substitution for and upon cancellation of the mutilated
Warrant Certificate, or in lieu of and substitution for the Warrant
Certificate lost, stolen or destroyed, a new Warrant Certificate of like
tenor and representing an equivalent number of Warrants, but only upon
receipt of evidence satisfactory to the Company of such loss, theft or
destruction of such Warrant Certificate and indemnity, if requested, also
satisfactory to them. Applicants for such substitute Warrant
Certificates shall also comply with such other reasonable regulations and
pay such other reasonable charges as the Company may prescribe.
SECTION 6. Reservation of Warrant Shares.
The Company will at all times reserve and keep available, free
from preemptive rights, out of the aggregate of its authorized but
unissued Common Stock or its authorized and issued Common Stock held in
its treasury, for the purpose of enabling it to satisfy any obligation to
issue Warrant Shares upon exercise of Warrants, the maximum number of
shares of Common Stock which may then be deliverable upon the exercise of
all outstanding Warrants.
The Company or, if appointed, the transfer agent for the
Common Stock (the "Transfer Agent") and every subsequent transfer agent
for any shares of the Company's capital stock issuable upon the exercise
of any of the rights of purchase aforesaid will be irrevocably authorized
and directed at all times to reserve such number of authorized shares as
shall be required for such purpose. The Company will keep a copy of this
Agreement on file with the Transfer Agent and with every subsequent
transfer agent for any shares of the Company's capital stock issuable
upon the exercise of the rights of purchase represented by the Warrants.
The Company will furnish such Transfer Agent a copy of all notices of
adjustments and certificates related thereto transmitted to each holder
pursuant to Section 9 hereof.
SECTION 7. Adjustment of Exercise Price.
The Exercise Price and the number of Warrant Shares issuable
upon the exercise of each Warrant are subject to adjustment from time to
time upon the occurrence of the events enumerated in this Section 7. For
purposes of this Section 7, "Common Stock" means shares now or hereafter
authorized of any class of common stock of the Company and any other
stock of the Company, however designated, that has the right (subject to
any prior rights of any class or series of preferred stock) to
participate in any distribution of the assets or earnings of the Company
without limit as to per share amount.
(a) Adjustment for Change in Capital Stock.
If the Company:
(1) pays a dividend or makes a distribution on its
Common Stock in shares of its Common Stock;
(2) subdivides its outstanding shares of Common Stock
into a greater number of shares;
(3) combines its outstanding shares of Common Stock into
a smaller number of shares;
(4) makes a distribution on its Common Stock in shares
of its capital stock other than Common Stock; or
(5) issues by reclassification of its Common Stock any
shares of its capital stock;
then the Exercise Price in effect immediately prior to such action and
the number and kind of shares into which a Warrant is exercisable shall
all be adjusted appropriately so that the holder of any Warrant
thereafter exercised may receive the aggregate number and kind of shares
of capital stock of the Company which he would have owned immediately
following such action if such Warrant had been exercised immediately
prior to such action.
The adjustment shall become effective immediately after the
record date in the case of a dividend or distribution and immediately
after the effective date in the case of a subdivision, combination or
reclassification.
If after an adjustment a holder of a Warrant upon exercise of
it may receive shares of two or more classes of capital stock of the
Company, the Board of Directors of the Company shall determine the
allocation of the adjusted Exercise Price between the classes of capital
stock. After such allocation, the exercise privilege and the Exercise
Price of each class of capital stock shall thereafter be subject to
adjustment on terms comparable to those applicable to Common Stock in
this Section.
Such adjustment shall be made successively whenever any event
listed above shall occur.
(b) Adjustment for Rights Issue.
If the Company distributes any rights, options or warrants to
all holders of its Common Stock entitling them for a period expiring
within 60 days after the record date for such distribution to purchase
shares of Common Stock at a price per share less than the current market
price per share on that record date, the Exercise Price shall be adjusted
in accordance with the formula:
O + N x P
_______
E' = E x M
_______
O + N
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
O = the number of shares of Common Stock outstanding on
the record date.
N = the number of additional shares of Common Stock
offered pursuant to such rights issue.
P = the offering price per share of the additional
shares.
M = the current market price per share of Common Stock
on the record date.
The adjustment shall be made successively whenever any such
rights, options or warrants are issued and shall become effective
immediately after the record date for the determination of stockholders
entitled to receive the rights, options or warrants. If at the end of
the period during which such rights, options or warrants are exercisable,
not all rights, options or warrants shall have been exercised, the
Exercise Price shall be immediately readjusted to what it would have been
if "N" in the above formula had been the number of shares actually
issued.
(c) Adjustment for Other Distributions.
If the Company distributes to all holders of its Common Stock
any assets (excluding cash) or debt securities or any rights or warrants
to purchase debt securities, assets or other securities, the Exercise
Price shall be adjusted in accordance with the formula:
E' = E x M - F
_____
M
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
M = the current market price per share of Common Stock
on the record date mentioned below.
F = the aggregate fair market value on the record date
of the assets, securities, rights or warrants
divided by the number of outstanding shares of
Common Stock on the record date for such
distribution. The Board of Directors of the Company
shall determine the fair market value.
The adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the
record date for the determination of stockholders entitled to receive the
distribution.
(d) Adjustment for Common Stock Issue:
If the Company issues shares of Common Stock for a
consideration per share less than the current market price per share on
the date the Company fixes the offering price of such additional shares,
the Exercise Price shall be adjusted in accordance with the formula:
P
_
E' = E x O + M
______
A
where:
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares outstanding immediately prior
to the issuance of such additional shares.
P = the aggregate consideration received for the
issuance of such additional shares.
M = the current market price per share on the date of
issuance of such additional shares.
A = the number of shares outstanding immediately after
the issuance of such additional shares.
The adjustment shall be made successively whenever any such
issuance is made, and shall become effective immediately after such
issuance.
This subsection (d) does not apply to:
(1) any of the transactions described in subsections (b)
and (c) of this Section 7,
(2) the exercise of Warrants, or the conversion or
exchange of other securities convertible into, or exchangeable or
exercisable for, Common Stock,
(3) Common Stock issued to the Company's employees under
bona fide employee benefit plans adopted by the Board of Directors
and approved by the holders of Common Stock when required by law,
if such Common Stock would otherwise be covered by this subsection
(d),
(4) Common Stock issued upon the exercise of rights or
warrants issued to the holders of Common Stock,
(5) Common Stock issued to shareholders of any person
which merges into the Company in proportion to their stock holdings
of such person immediately prior to such merger, upon such merger,
(6) Common Stock issued in a bona fide public offering
pursuant to a firm commitment underwriting,
(7) Common Stock issued in a bona fide private placement
to, or through a placement agent which is, a member firm of the
National Association of Securities Dealers, Inc., or
(8) Common Stock issued as a dividend on any preferred
stock in accordance with the stated terms of such preferred stock
and in lieu of cash dividends otherwise payable on such preferred
stock pursuant to the instrument under which the preferred stock
was issued.
(e) Adjustment for Convertible Securities Issue.
If the Company issues any securities convertible into or
exchangeable or exercisable for Common Stock (other than securities
issued in transactions described in subsections (b) and (c) of this
Section 7) for a consideration per share of Common Stock initially
deliverable upon conversion or exchange of such securities less than the
current market price per share on the date of issuance of such
securities, the Exercise Price shall be adjusted in accordance with this
formula:
P
_
E' = E x O + M
_____
O + D
where:
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares outstanding immediately prior
to the issuance of such securities.
P = the aggregate consideration received for the
issuance of such securities.
M = the current market price per share of Common Stock
on the date of issuance of such securities.
D = the maximum number of shares deliverable upon
conversion or in exchange for such securities at the
initial conversion or exchange rate.
The adjustment shall be made successively whenever any such
issuance is made, and shall become effective immediately after such
issuance.
If all of the Common Stock deliverable upon conversion or
exchange of such securities has not been issued when such securities are
no longer outstanding, then the Exercise Price shall promptly be
readjusted to the Exercise Price which would then be in effect had the
adjustment upon the issuance of such securities been made on the basis of
the actual number of shares of Common Stock issued upon conversion or
exchange of such securities.
This subsection (e) does not apply to:
(1) convertible securities issued to shareholders of any
person which merges into the Company, or with a subsidiary of the
Company, in proportion to their stock holdings of such person
immediately prior to such merger, upon such merger,
(2) convertible securities issued in a bona fide public
offering pursuant to a firm commitment underwriting,
(3) convertible securities issued in a bona fide private
placement through a placement agent which is a member firm of the
National Association of Securities Dealers, Inc.,
(4) rights, warrants and convertible and exchangeable
securities outstanding on or prior to the date of issuance of the
Warrant, or
(5) convertible securities or warrants issued in
connection with the incurrence of debt by the Company or any of its
subsidiaries, so long as the fair value allocable to such
convertible securities or warrants (taking into account the terms
of the debt), together with any consideration payable to the
Company upon conversion or exercise of such convertible securities
or warrants, treating such convertible securities or warrants on an
as converted basis, is no less than the then current market price
of Common Stock on the date of issuance of such convertible
securities or warrants.
(f) Current Market Price.
Subject to the last two sentences of this subsection (f), in
subsections (b), (c), (d) and (e) of this Section 7, the current market
price per share of Common Stock on any date is the average of the Quoted
Prices of the Common Stock for 30 consecutive trading days commencing 45
trading days before the date in question. The "Quoted Price" of the
Common Stock is the last reported sales price of the Common Stock as
reported by NASDAQ National Market, or if the Common Stock is listed on a
securities exchange, the last reported sales price of the Common Stock on
such exchange which shall be for consolidated trading if applicable to
such exchange, or if neither so reported or listed, the last reported bid
price of the Common Stock. In the absence of one or more such quotations
(including, without limitation, during the period prior to the Initial
Public Offering), the Board of Directors of the Company shall determine
the current market price on the basis of such quotations, if available,
or other valuation information as it in good faith considers appropriate.
In the event of the Initial Public Offering, the current market price per
share of Common Stock shall be the Quoted Price on the day of such
Initial Public Offering.
(g) Consideration Received.
For purposes of any computation respecting consideration
received pursuant to subsections (d) and (e) of this Section 7, the
following shall apply:
(1) in the case of the issuance of shares of Common Stock for
cash, the consideration shall be the amount of such cash, provided that
in no case shall any deduction be made for any commissions, discounts or
other expenses incurred by the Company for any underwriting of the issue
or otherwise in connection therewith;
(2) in the case of the issuance of shares of Common Stock for
a consideration in whole or in part other than cash, the consideration
other than cash shall be deemed to be the fair market value thereof as
determined in good faith by the Board of Directors (irrespective of the
accounting treatment thereof), whose determination shall be conclusive;
and
(3) in the case of the issuance of securities convertible
into or exchangeable for shares, the aggregate consideration received
therefor shall be deemed to be the consideration received by the Company
for the issuance of such securities plus the additional minimum
consideration, if any, to be received by the Company upon the conversion
or exchange thereof (the consideration in each case to be determined in
the same manner as provided in clauses (1) and (2) of this subsection).
(h) When De Minimis Adjustment May Be Deferred.
No adjustment in the Exercise Price need be made unless the
adjustment would require on increase or decrease of at least 1% in the
Exercise Price. Any adjustments that are not made shall be carried
forward and taken into account in any subsequent adjustment.
All calculations under this Section shall be made to the
nearest cent or nearest 1/100th of a share as the case may be.
(i) When No Adjustment Required.
No adjustment need be made for a transaction referred to in
subsection (a), (b), (c), (d) or (e) of this Section 7 if Warrant holders
are permitted to participate in the transaction (without being required
to exercise their Warrants in order to do so) on a basis and with notice
that the Board of Directors of the Company determines to be fair and
appropriate in light of the basis and notice on which holders of Common
Stock participate in the transaction.
No adjustment need be made for rights to purchase Common Stock
pursuant to a Company plan for reinvestment of dividends or interest.
No adjustment need be made for a change in the par value or no
par value of the Common Stock.
To the extent the Warrants become convertible into cash, no
adjustment need be made thereafter as to the cash. Interest will not
accrue on the cash.
(j) Notice of Adjustment.
Whenever the Exercise Price is adjusted, the Company shall
provide the notices required by Section 9 hereof.
(k) Voluntary Reduction.
The Company from time to time may reduce the Exercise Price by
any amount for any period of time if the period is at least 20 days and
if the reduction is irrevocable during the period; provided, however,
that in no event may the Exercise Price be less than the par value of a
share of Common Stock.
Whenever the Exercise Price is reduced, the Company shall mail
to Warrant holders a notice of the reduction. The Company shall mail the
notice at least 15 days before the date the reduced Exercise Price takes
effect. The notice shall state the reduced Exercise Price and the period
it will be in effect.
A reduction of the Exercise Price pursuant to this clause (k)
does not change or adjust the Exercise Price otherwise in effect for
purposes of subsections (a), (b), (c), (d) and (e) of this Section 7.
(l) Reorganization of Company.
If the Company consolidates or merges with or into, or sells,
transfers or leases all or substantially all of its assets to, any person
(including, without limitation, in a transaction that is an Automatic
Exercise Event), upon consummation of such transaction the Warrants shall
automatically become exercisable (or, in the event of an Automatic
Exercise Event, be exercised) for the kind and amount of securities, cash
or other assets which the holder of a Warrant would have owned
immediately after the consolidation, merger, sale, transfer or lease if
the holder had exercised the Warrant immediately before the effective
date of the transaction. Unless such transaction shall have been an
Automatic Exercise Event, concurrently with the consummation of such
transaction, the corporation formed by or surviving any such
consolidation or merger, if other than the Company, or the person to
which such transfer, sale or lease shall have been made, shall enter into
a supplemental Warrant Agreement so providing and further providing for
adjustments which shall be as nearly equivalent as may be practical to
the adjustments provided for in this Section. The successor Company
shall mail to warrant holders a notice describing the supplemental
Warrant Agreement.
If the issuer of securities deliverable upon exercise of
Warrants under the supplemental Warrant Agreement is an affiliate of the
formed, surviving, transferee or lessee corporation, that issuer shall
join in the supplemental Warrant Agreement.
If this subsection (l) applies, subsections (a), (b), (c), (d)
and (e) of this Section 7 do not apply.
(m) Determinations Conclusive.
Any determination that the Company or the Board of Directors
of the Company must make pursuant to subsection (a), (c), (d), (e), (f),
(g) or (i) of this Section 7 is conclusive, provided the Board of
Directors has acted reasonably.
(n) When Issuance or Payment May Be Deferred.
In any case in which this Section 7 shall require that an
adjustment in the Exercise Price be made effective as of a record date
for a specified event, the Company may elect to defer until the
occurrence of such event (i) issuing to the holder of any Warrant
exercised after such record date the Warrant Shares and such securities
or assets, if any, issuable upon such exercise over and above the Warrant
Shares and such securities or assets, if any, issuable upon such exercise
on the basis of the Exercise Price and (ii) paying to such holder any
amount in cash in lieu of a fractional share pursuant to Section 8;
provided, however, that the Company shall deliver to such holder a due
xxxx or other appropriate instrument evidencing such holder's right to
receive such additional warrant Shares, other capital stock and cash upon
the occurrence of the event requiring such adjustment.
(o) Adjustment in Number of Shares.
Upon each adjustment of the Exercise Price pursuant to this
Section 7, each Warrant outstanding prior to the making of the adjustment
in the Exercise Price shall thereafter evidence the right to receive upon
payment of the adjusted Exercise Price that number of shares of Common
Stock (calculated to the nearest hundredth) obtained from the following
formula:
N' = N x E
___
E'
where:
N' = the adjusted number of Warrant Shares issuable upon
exercise of a Warrant by payment of the adjusted
Exercise Price.
N = the number of Warrant Shares previously issuable
upon exercise of a Warrant by payment of the
Exercise Price prior to adjustment.
E' = the adjusted Exercise Price.
E = the Exercise Price prior to adjustment.
SECTION 8. Fractional Interests.
The Company shall not be required to issue fractional Warrant
Shares on the exercise of Warrants. If more than one Warrant shall be
presented for exercise in full at the same time by the same holder, the
number of full Warrant Shares which shall be issuable upon the exercise
thereof shall be computed on the basis of the aggregate number of Warrant
Shares purchasable on exercise of the Warrants so presented. If any
fraction of a Warrant Share would, except for the provisions of this
Section 8 be issuable on the exercise of any Warrants (or specified
portion thereof), the Company shall pay an amount in cash equal to the
current Exercise Price, multiplied by such fraction.
SECTION 9. Notices to Warrant Holders.
Upon any adjustment of the Exercise Price pursuant to Section
7, the Company shall promptly thereafter cause to be given to each of the
registered holders of the Warrant Certificates at its address appearing
on the Warrant register written notice of such adjustment by first-class
mail, postage prepaid. Where appropriate, such notice may be given in
advance and included as a part of the notice required to be mailed under
the other provisions of this Section 7.
In case:
(a) the Company shall authorize the issuance to all holders
of shares of Common Stock of rights, options or warrants to
subscribe for or purchase shares of Common Stock or of any other
subscription rights or warrants; or
(b) the Company shall authorize the distribution to all
holders of shares of Common Stock of evidences of indebtedness or
assets, including cash dividends or cash distributions payable out
of consolidated current or retained earnings, but not including
dividends payable in shares of Common Stock or distributions
referred to in subsection (a) of Section 7 hereof; or
(c) of any consolidation or merger to which the Company is a
party and of which approval of any shareholders of the Company is
required, or of the conveyance, sale, transfer or lease of the
properties and assets of the Company substantially as an entirety,
or of any reclassification or change of Common Stock issuable upon
exercise of the Warrants (other than a change in par value, or from
par value to no par value, or from no par value to par value, or as
a result of a subdivision or combination), or a tender offer or
exchange offer for shares of Common Stock; or
(d) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company; or
(e) the Company proposes to take any action (other than actions
of the character described in Section 7(a)) that would require an
adjustment of the Exercise Price pursuant to Section 7;
then the Company shall cause to be given to each of the registered
holders of the Warrant Certificates at his address appearing on the
Warrant register, at least 20 days (or 10 days in any case specified in
clause (a) or (b) above) prior to the applicable record date hereinafter
specified, or promptly in the case of events for which there is no record
date, by first-class mail, postage prepaid, a written notice stating (i)
the date as of which the holders of record of shares of Common Stock to
be entitled to receive any such rights, options, warrants or distribution
are to be determined, or (ii) the initial expiration date set forth in
any tender offer or exchange offer for shares of Common Stock, or (iii)
the date on which any such consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding up is expected to become effective or
consummated, and the date as of which it is expected that holders of
record of shares of Common Stock shall be entitled to exchange such
shares for securities or other property, if any, deliverable upon such
reclassification, consolidation, merger, conveyance, sale, transfer,
lease, dissolution, liquidation, winding up or other action. The failure
to give the notice required by this Section 9 or any defect therein shall
not affect the legality or validity of any distribution, right, option,
warrant, consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding up, or the vote upon any action.
Nothing contained in this Agreement or in any of the Warrant
Certificates shall be construed as conferring upon the holders thereof
the right to vote or to consent or to receive notice as shareholders in
respect of the meetings of shareholders or the election of directors of
the Company or any other matter or any rights whatsoever as shareholders
of the Company.
SECTION 10. Amendments.
The terms of this Warrant Agreement and the Warrants may be
amended by the Company, and the observance of any term herein or therein
may be waived, but only with the written consent of the holders of
Warrants representing a majority in number of the total Warrant Shares at
the time purchasable upon the exercise of all then outstanding Warrants,
provided that no such action may change the Exercise Price (other than in
accordance with Section 7(k) hereof) without the written consent of all
holders of Warrants affected thereby.
SECTION 11. Miscellaneous.
(a) Issue Date. The provisions of this Warrant shall be
construed and shall be given effect in all respects as if it had
been issued and delivered by the Company on the date hereof.
(b) Successors. This Warrant shall be binding upon any
successors or assigns of the Company.
(c) Governing Law. This Warrant shall be governed by and
construed in accordance with the laws of the State of Delaware.
(d) Office of the Company. So long as the Warrants remain
outstanding, the Company shall maintain an office where the
Warrants may be presented for exercise, transfer, division and
combination. Such office shall be at 000 Xxxxx Xxxxxxxxx
Xxxxxxxxx, Xx Xxxxxxx, Xxxxxxxxxx 00000-0000, unless and until the
Company shall designate and maintain another office for such
purposes, in which case the Company shall deliver notice of such
change to all holders of outstanding Warrants in the manner set
forth herein.
(e) Headings. The headings used in this Warrant are used for
convenience only and are not to be considered in construing or
interpreting this agreement.
(f) Notices. Unless otherwise provided, any notice required
or permitted under this Warrant shall be given in writing and shall
be deemed effectively given upon personal delivery to the party to
be notified or three days after being sent via air courier, in all
cases addressed to the party to be notified at the address
indicated for such party on the signature page hereof, or at such
other address as such party may designate by ten days advance
written notice to the other party. Notwithstanding the foregoing,
notice may be given by telex or facsimile provided that appropriate
confirmation of receipt is received.
(g) Saturdays, Sundays, Holidays. If the last or appointed
day for the taking of any action or the expiration of any right
required or granted herein shall be a Saturday or a Sunday or shall
be a legal holiday in the State of California, then such action may
be taken or such right may be exercised on the next succeeding day
not a legal holiday.
EXHIBIT B
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
XXXX XX HOLDING CORP.
By: ______________________________
Name:
Title:
FS EQUITY PARTNERS III, L.P.
By: FS Capital Partners, L.P.
Its: General Partner
By: FS Holdings, Inc.
Its: General Partner
By: ______________________________
Name:
Title:
FS EQUITY PARTNERS INTERNATIONAL, L.P.
By: FS&Co. International, L.P.
Its: General Partner
By: FS International Holdings Limited
Its: General Partner
By: ___________________________________
Name:
Title:
EXHIBIT B
ELECTION TO PURCHASE
(To Be Executed Upon Exercise Of Warrant Pursuant To Section 1)
The undersigned hereby irrevocably elects to exercise the
right represented by this Warrant Certificate, to receive __________
shares of Common Stock and hereby tenders payment for such shares [to the
order of XXXX XX Holding Corp. by cash or immediately available funds in
the amount of $ _______] [by delivery to the Company of __________
Warrant Shares with respect to which this Warrant is being surrendered in
payment of the aggregate Exercise Price for the Warrant Shares to be
delivered to the holder] in accordance with the terms hereof. The
undersigned requests that a certificate for such shares be registered in
the name of __________________, whose address is __________________. If
said number of shares is less than all of the shares of Common Stock
purchasable hereunder, the undersigned requests that a new Warrant
Certificate representing the remaining balance of such shares be
registered in the name of____________________, whose address is
______________________, and that such Warrant Certificate be delivered to
__________________, whose address is____________________.
Date: _______________________________
_____________________________________
Print Name
_____________________________________
Signature Guaranteed
EXHIBIT B
EXERCISABLE ON OR AFTER AUGUST 26, 2007
AND ON OR BEFORE AUGUST 27, 2007
OR UPON AN AUTOMATIC EXERCISE EVENT
No.______ _________ Warrants
WARRANT CERTIFICATE
XXXX XX HOLDING CORP
This Warrant Certificate certifies that ___________________,
or registered assigns, is the registered holder of ___________________
Warrants expiring ___________________ (the "Warrants") to purchase shares
of Common Stock (the "Common Stock") of XXXX XX Holding Corp. (the
"Company"). Each Warrant entitles the holder, (i) unless an Automatic
Exercise Event shall occur on or prior to August 27, 2007,_upon exercise
to receive from the Company on or after August 26, 2007 and on or before
5:00 p.m. Los Angeles Time on August 27, 2007 one fully paid and
nonassessable share of Common Stock (a "Warrant Share") at the initial
exercise price (the "Exercise Price") of $30.00, payable in lawful money
of the United States of America or in Warrant Shares by "cashless
exercise," upon surrender of this Warrant Certificate and payment of the
Exercise Price at the principal office of the Company, but only subject
to the conditions set forth herein and in the Warrant Agreement referred
to on the reverse hereof, or (ii) upon the occurrence of an Automatic
Exercise Event on or prior to August 27, 2007, to receive automatically
from the Company a Warrant Share at the Exercise Price, payable by
"cashless exercise," upon surrender of this Warrant Certificate and
payment of the Exercise Price at the principal office of the Company, but
only subject to the conditions set forth herein and in the Warrant
Agreement referred to on the reverse hereof. The Exercise Price and
number of Warrant Shares issuable upon exercise of the Warrants are
subject to adjustment upon the occurrence of certain events set forth in
the Warrant Agreement.
Except in connection with an Automatic Exercise Event, no
warrant may be exercised before August 26, 2007 or after 5:00 PM, Los
Angeles time, on August 27, 2007 and to the extent not exercised by, or
an Automatic Exercise Event shall not have occurred by, such time, such
Warrants shall become void.
This Warrant Certificate shall be governed and construed in
accordance with the internal laws of the State of Delaware.
IN WITNESS WHEREOF, XXXX XX Holding Corp. has caused this
Warrant Certificate to be signed by its President and by its Secretary,
each by his signature or a facsimile of his signature.
Dated: ____________________
By: _________________________
President
By: _________________________
Secretary
EXHIBIT B
[FORM OF WARRANT CERTIFICATE]
[REVERSE]
The Warrants evidenced by this Warrant Certificate are part of
a duly authorized issue of Warrants expiring August 27, 2007 entitling
the holder on exercise to receive shares of Common Stock, of the Company
(the "Common Stock"), $.01 par value, and are issued or to be issued
pursuant to a Warrant Agreement dated as of ______________, 2001 (the
"Warrant Agreement"), duly executed and delivered by the Company, which
Warrant Agreement is hereby incorporated by reference in and made a part
of this instrument and is hereby referred to for a description of the
rights, limitation of rights, obligations, duties and immunities
thereunder of the Company and the holders (the words "holders" or
"holder" meaning the registered holders or registered holder) of the
Warrants. A copy of the Warrant Agreement may be obtained by the holder
hereof upon written request to the Company.
Unless an Automatic Exercise Event shall occur on or prior to
August 27, 2007, warrants may be exercised at any time on or after August
26, 2007 and on or before August 27, 2007. The holder of Warrants
evidenced by this Warrant Certificate may exercise them, subject to the
limitations set forth in the Warrant Agreement, by surrendering this
Warrant Certificate, with the form of election to purchase set forth
hereon properly completed and executed, together with payment of the
Exercise Price in cash or immediately available funds or in Warrant
Shares by "cashless exercise," at the principal office of the Company.
In the event that upon any exercise of Warrants evidenced hereby the
number of Warrants exercised shall be less than the total number of
Warrants evidenced hereby, there shall be issued to the holder hereof or
his assignee a new Warrant Certificate evidencing the number of Warrants
not exercised.
Upon the occurrence of an Automatic Exercise Event on or prior
to August 27, 2007, the Warrants evidenced by this Warrant Certificate
shall automatically be exercised, subject to the limitations set forth in
the Warrant Agreement, and the holder thereof shall be entitled to
receive, upon surrendering this Warrant Certificate, together with
payment of the Exercise Price in Warrant Shares by "cashless exercise,"
at the principal office of the Company, the number of Warrant Shares
resulting after subtracting such Exercise Price.
The Warrant Agreement provides that upon the occurrence of
certain events the Exercise Price and the number of Warrant Shares into
which this Warrant is exercisable set forth on the face hereof may,
subject to certain conditions, be adjusted. No fractions of a share of
Common stock will be issued upon the exercise of any Warrant, but the
Company will pay the cash value thereof determined as provided in the
Warrant Agreement. No adjustment shall be made for any dividends on any
Common Stock issuable upon exercise of this Warrant.
Warrant Certificates, where surrendered at the principal
office of the Company by the registered holder thereof in person or by
legal representative or attorney duly authorized in writing, may be
exchanged, in the manner and subject to the limitations provided in the
Warrant Agreement, but without payment of any service charge, for another
Warrant Certificate or Warrant Certificates of like tenor evidencing in
the aggregate a like number of Warrants.
Upon due presentation for registration of transfer of this
Warrant Certificate at the principal office of the Company a new Warrant
Certificate or Warrant Certificates of like tenor and evidencing in the
aggregate a like number of Warrants shall be issued to the transferee(s)
in exchange for this Warrant Certificate, subject to the limitations
provided in the Warrant Agreement (including, without limitation,
delivery to the Company of the written agreement of such transferee(s) to
become party to the Stockholders' Agreement, dated as of _______ ___,
2001, by and among the Company and the other parties thereto, if such
transferee(s) are not already party thereto, prior to receipt from the
Company of any Warrant Shares as a result of the exercise of the Warrants
represented by such Warrant Certificate), without charge except for any
tax or other governmental charge imposed in connection therewith.
The Company may deem and treat the registered holder(s) hereof
as the absolute owner(s) of this Warrant Certificate (notwithstanding any
notation of ownership or other writing hereon made by anyone), for the
purpose of any exercise hereof, of any distribution to the holder(s)
hereof, and for all other purposes, and the Company shall not be affected
by any notice to the contrary. Neither the Warrants nor this Warrant
Certificate entitle any holder hereof to any rights of a stockholder of
the Company.
____________________
[FN]
The signature must be guaranteed by a bank or trust company having an office in
Los Angeles, California, or by a firm having membership on the New York Stock
Exchange.
