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EXHIBIT 4.9
THIS WARRANT AND THE SHARES OF COMMON STOCK PURCHASABLE HEREUNDER HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS AND MAY
NOT BE SOLD OR OFFERED FOR SALE UNLESS REGISTERED UNDER SAID ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION
IS AVAILABLE. THIS WARRANT AND THE SHARES OF VOTING COMMON STOCK PURCHASABLE
HEREUNDER ARE SUBJECT TO AND HAVE THE BENEFIT OF (1) AN AMENDED AND RESTATED
STOCKHOLDER AGREEMENT DATED AS OF THE DATE HEREOF, AMONG MCE COMPANIES, INC. AND
THE STOCKHOLDERS LISTED ON THE SIGNATURE PAGES THEREOF, WHICH CONTAINS CERTAIN
RESTRICTIONS ON TRANSFER, AND (2) A REGISTRATION RIGHTS AGREEMENT, DATED AS OF
THE DATE HEREOF, AMONG MCE COMPANIES, INC. AND THE STOCKHOLDERS AND
WARRANTHOLDERS LISTED ON THE SIGNATURE PAGES THEREOF, A COPY OF WHICH IS ON FILE
WITH MCE COMPANIES, INC.
Dated: July 28, 1999
WARRANT
To Purchase 4,726.80 Shares of Common Stock, without par value plus any
Additional Exercise Amount (as hereinafter defined)
provided for herein of
MCE COMPANIES, INC.
Expiring on the earlier of (i) July 28, 2009 or (ii) the
date which is six years after the date on which the Company's 8% Promissory
Notes due July 28, 2004 in the aggregate principal amount of $4,000,000 shall be
paid in full
THIS IS TO CERTIFY THAT, for value received, ROCKY MOUNTAIN
MEZZANINE FUND II, L.P., a Colorado limited partnership, or registered assigns
("Holder") is entitled to purchase from MCE COMPANIES, INC., a Michigan
corporation (together with its successors, the "Company"), at any time or from
time to time after 9:00 a.m., Cleveland, Ohio time, on and after the earlier of
(a) the date on which a Triggering Event (as hereinafter defined) shall occur or
(b) July 28, 2004, and prior to 5:00 p.m., Cleveland, Ohio time, and on the
earlier of (i) July 28, 2009, (ii) the date which is six years after the date on
which the Company's 8% Promissory Notes due July 28, 2004 in the aggregate
principal amount of $4,000,000 shall be paid in full or (iii) the Business Day
preceding the date of redemption of this Warrant, at the place where the Warrant
Agency is located, at the Exercise Price, the number of shares of Common
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Stock, without par value per share (the "Common Stock") of the Company
shown above, all subject to adjustment and upon the terms and conditions
hereinafter provided, and is entitled also to exercise the other appurtenant
rights, powers and privileges hereinafter described.
This Warrant is one of one or more warrants (the "Warrants")
of the same form and having similar terms, entitling the holders initially to
purchase up to an aggregate of 13,130 shares of Common Stock (the "Original
Exercise Amount"), as the number of shares of Common Stock subject to the
Warrants that are to be issued upon the exercise of the Warrants may be
increased as provided in Section 5.5 of this Warrant (the "Additional Exercise
Amount"). The Warrants have been issued pursuant to the Senior Subordinated Note
and Warrant Purchase Agreement dated as of July 28, 1999 (as amended from time
to time, the "Purchase Agreement") among the Company and the purchasers listed
on the signature pages thereof, and the Holder is entitled to certain benefits
and is subject to certain obligations as set forth therein and to certain
benefits and certain obligations described in the Stockholder Agreement and the
Registration Rights Agreement (as those terms are hereinafter defined). The
Company shall keep copies of the Purchase Agreement, the Stockholder Agreement,
and the Registration Rights Agreement, and any amendments thereto, at the
Warrant Agency and shall furnish, without charge, copies thereof to the Holder
upon request.
Certain terms used in this Warrant are defined in Article VII.
ARTICLE I
EXERCISE OF WARRANTS
1.1. Method of Exercise. To exercise this Warrant in whole or
in part, the Holder shall deliver on any Business Day to the Company at the
Warrant Agency, (a) this Warrant, (b) a written notice of such Holder's election
to exercise this Warrant, which notice shall specify the number of shares of
Common Stock to be purchased (which shall be a minimum of 10 whole shares if for
less than all the shares then issuable hereunder), the denominations of the
share certificate or certificates desired and the name or names in which such
certificates are to be registered, and (c) payment of the Exercise Price with
respect to such shares. Such payment may be made, at the option of the Holder,
either (a) by cash, certified or bank cashier's check or wire transfer in an
amount equal to the product of (i) the Exercise Price times (ii) the number of
Warrant Shares as to which this Warrant is being exercised or (b) at any time on
or after the date of consummation of the initial public offering of the Common
Stock by receiving from the Company the number of Warrant Shares equal to (i)
the number of Warrant Shares as to which this Warrant is being exercised minus
(ii) the number of Warrant Shares having a value, based on (x) on the date of
consummation of the initial public offering of the Common Stock, the public
offering price thereof and (y) thereafter the Closing Price on the trading day
immediately prior to the date of such exercise, equal to the product of (x)
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the Exercise Price times (y) the number of Warrant Shares as to which
this Warrant is being exercised.
The Company shall, as promptly as practicable and in any event
within seven days after receipt of such notice and payment, 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 together with cash in lieu of any
fractions of a share as provided in Section 1.3. The share certificate or
certificates so delivered shall be in such denominations as may be specified in
such notice, and shall be issued in the name of the Holder or such other name or
names as shall be designated in such notice. This Warrant shall be deemed to
have been exercised and 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
shares, as of the date the aforementioned notice and payment is received by the
Company. If this Warrant shall have been exercised only in part, the Company
shall, at the time of delivery of such certificate or certificates, deliver to
the Holder a new Warrant evidencing the rights to purchase the remaining shares
of Common Stock called for by this Warrant, 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 and other charges payable
in connection with the preparation, issuance and delivery of share certificates
and new Warrants, except that, if share certificates or new Warrants 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.
1.2. 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, if such class of Common Stock is then listed
on any national securities exchange (as defined in the Exchange Act) or quoted
on NASDAQ, shall be duly listed or quoted thereon, as the case may be.
1.3. No Fractional Shares Required 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 final exercise of this Warrant, in lieu of such fractional share
the Company may, at its option, pay to the Holder, in cash, an amount equal to
the same fraction of the Fair Market Value of the Company per share of
outstanding Common Stock on the Business Day immediately prior to the date of
such exercise.
1.4. 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 and may not be sold or offered for sale unless
registered under said Act and any applicable state securities
laws or unless an exemption from such registration is
available."
In addition, each such certificate shall bear the legend set forth in Section 6
of the Stockholder Agreement.
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 offering 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 (who may be an employee of such
holder) and reasonably acceptable to the Company, the securities represented
thereby need no longer be subject to restrictions on resale under the Securities
Act.
1.5. Reservation. The Company has duly reserved and will keep
available for issuance upon exercise of the Warrants the total number of Warrant
Shares deliverable from time to time upon exercise of all Warrants from time to
time outstanding and the total number of shares of Common Stock deliverable upon
conversion of such Warrant Shares to Common Stock.
ARTICLE II
WARRANT AGENCY; TRANSFER, EXCHANGE AND
REPLACEMENT OF WARRANTS
2.1. Warrant Agency. As long as any of the Warrants remain
outstanding, the Company shall perform the obligations of and be the warrant
agency with respect to the Warrants (the "Warrant Agency") at its address set
forth in the Credit Agreement or at such other address as the Company shall
specify by notice to all Warrantholders.
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 Company) for all purposes and shall not be affected by any notice
to the contrary, until due presentment of this Warrant for registration of
transfer as provided in this Article II.
2.3. Registration of Warrants. The Company agrees to maintain
at the Warrant Agency books for the registration of transfers of the Warrants,
and any transfer of this Warrant and all rights hereunder pursuant to and in
accordance with Section 2.7 below shall be registered, in whole or in part, on
such books, upon surrender of this Warrant at the Warrant Agency, together with
a written assignment of this Warrant duly
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executed by the Holder or its duly authorized agent or attorney, with (if the
Holder is a natural person) signatures guaranteed by a bank or trust company or
a broker or dealer registered with the NASD, and funds sufficient to pay any
transfer taxes payable upon such transfer. Upon 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 the
instrument of assignment (which shall be whole numbers of shares only) and shall
issue to the assignor a new Warrant evidencing the portion of this Warrant not
so assigned, and this Warrant shall promptly be canceled.
2.4. Division or Combination of Warrants. This Warrant may be
divided or combined with other Warrants held by the Holder upon presentment
hereof and of any Warrant or Warrants with which this Warrant is to be combined
at the Warrant Agency, together with a written notice specifying the names and
denominations (which shall be whole numbers of shares only) in which the new
Warrant or Warrants are to be issued, signed by the Holder hereof or its
respective duly authorized agents or attorneys. Subject to compliance with
Sections 2.3 and 2.7 as to any transfer or assignment which may be involved in
the 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.
2.5. Loss, Theft, Destruction of Warrant Certificates. Upon
receipt of evidence satisfactory to the Company of the ownership of and the
loss, theft, destruction or mutilation of any Warrant and, in the case of any
such loss, theft or destruction, upon receipt of indemnity or security
satisfactory to the Company (it being understood and agreed that if the holder
of such Warrant is the Purchaser, then a written agreement of indemnity given by
the Purchaser alone shall be satisfactory to the Company and no further security
shall be required) 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.
2.6. Expenses of Delivery of Warrants. The Company shall pay
all expenses, taxes (other than transfer taxes) and other charges payable in
connection with the preparation, issuance and delivery of Warrants hereunder.
2.7. Restrictions on Transfer.
(a) General Restriction. The Warrants shall be transferable
only upon satisfaction of the conditions set forth in this Section 2.7 and any
applicable provisions of the Stockholder Agreement.
(b) Transfer Notice; Opinion. Prior to any transfer of any
Warrants, the transferor thereof shall deliver (i) if reasonably determined by
the Company to be necessary with respect to such transfer, an opinion addressed
to the Company of counsel nominated by the transferor and reasonably acceptable
to the Company (which may be in-house counsel for a Purchaser), that such
transfer may be effected without registration of such Warrants under the
Securities Act, and (ii) the written agreement of the proposed
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transferee to be bound by all of the provisions of the Stockholder Agreement and
the Registration Rights Agreement.
ARTICLE III
CERTAIN RIGHTS
3.1. Rights and Obligations under the Stockholder Agreement
and the Registration Rights Agreement. This Warrant is entitled to the benefits
and subject to the terms of each of the Stockholder Agreement dated as of July
23, 1996, among the Company and the Stockholders listed on the signature pages
thereof, as amended, modified or supplemented from time to time, and the
Registration Rights Agreement dated as of the date hereof, among the Company and
the stockholders and/or warrantholders listed on the signature pages thereof, as
amended, modified or supplemented from time to time (the "Stockholder
Agreement," and the "Registration Rights Agreement," respectively).
3.2. Board Meetings. The Company will hold at least four
regular meetings of the Board of Directors of the Company during each calendar
year at such times and places (or via telephone conference) as shall be
determined from time to time by the Board of Directors. The Company shall give
to the Holder notice of all meetings and actions by written consent of the Board
of Directors of the Company and each committee thereof, at the same time and in
the same manner as notice of any meetings of such board or committees is
required to be given to directors who do not waive such notice (or, if such
action requires no notice, then 10 days written notice thereof describing the
matters upon which action is to be taken). So long as the purchasers (or their
respective successor or assigns) under the Senior Subordinated Note and Warrant
Purchase Agreement, dated July 23, 1996, as amended, modified or supplemented
from time to time, among the Company, National City Capital Corporation and
Xxxxxxx Xxxxxx Mezzanine Fund, L.P. (the "1996 Agreement") have the right to
send two representatives selected by them to each such meeting, Holder shall
have no additional rights to send representatives selected by it to such
meetings. If, however, such rights are no longer in full force and effect under
the 1996 Agreement, then the Holders of the Warrants shall have the right to
send two representatives selected by them to each such meeting, who shall be
permitted to attend, at the expense of the Company, such meeting and any
adjournments thereof, provided that in no event shall the holders of the
Securities be entitled to send more than two representatives in the aggregate
(in addition to the number of Directors to which the Purchasers are entitled)
pursuant to the terms of this Agreement, the Warrants or the Stockholder
Agreement.
3.3 Financial Statements and Other Information. The Company
will, and will cause its Subsidiaries to, deliver to any Holder:
(a) as soon as practicable and in any event within 30 days
after the end of each fiscal quarter, a consolidated and consolidating balance
sheet of the Company and
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its Subsidiaries as at the end of such fiscal quarter and the related statements
of operations and cash flows for such fiscal quarter and for the portion of the
fiscal year ended at the end of such fiscal quarter, setting forth in each case
in comparative form the revenues and the other figures for the corresponding
periods of the previous fiscal year, all in reasonable detail and certified by
the chief financial officer of the Company as fairly presenting the financial
condition and results of operations of the Company and as having been prepared
in accordance with generally accepted accounting principles applied on a basis
consistent with the audited financial statements of the Company, subject to
changes resulting from audit and normal year-end adjustments;
(b) as soon as available and in any event within 90 days after
the end of each fiscal year, a balance sheet of the Company and its Subsidiaries
as of the end of such fiscal year and the related consolidated statements of
operations, stockholders' equity and cash flows for such fiscal year, setting
forth in each case in comparative form the revenues and the other figures for
the previous fiscal year, certified by Ernst & Young LLP, or other independent
public accountants of nationally recognized standing;
(c) promptly following the filing thereof with the Department
of Consumer and Industry Services of the State of Michigan, a copy of each
amendment to, or restatement of, the Articles of Incorporation of the Company,
and promptly following the adoption thereof by the Company, a copy of each
amendment to, or restatement of, the By-laws of the Company;
(d) as promptly as practicable following each meeting of the
board of directors of the Company, a copy of the minutes of such meeting, and
promptly following the execution by all of the directors on the board of
directors of the Company, a copy of each unanimous written consent of directors
in lieu of a meeting of the board of directors of the Company, in each case,
including all exhibits and attachments, if any, to such minutes or unanimous
written consents; and
(e) with reasonable promptness, such other information and
data with respect to the Company or any of its Subsidiaries as from time to time
may be reasonably requested by such Warrantholders holding the Required
Interest.
ARTICLE IV
ANTIDILUTION PROVISIONS
4.1. Adjustment 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; provided, that
the Exercise Price and the number of shares of Common Stock issuable upon
exercise of this Warrant shall not be adjusted pursuant to this Article IV with
respect to the exercise of the Management Options.
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4.2. Common Stock Reorganization. If the Company shall
subdivide its outstanding shares of Common Stock (or any class thereof) into a
greater number of shares or consolidate its outstanding shares of Common Stock
(or any class thereof) into a smaller number of shares (any such event being
called a "Common Stock Reorganization"), then (a) the Exercise Price shall be
adjusted, effective immediately after the effective date of such Common Stock
Reorganization, to a price determined by multiplying the Exercise Price in
effect immediately prior to such effective date by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding on such
effective 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 this Warrant shall
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 of Common Stock 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. Common Stock Distribution. (a) If the Company shall
issue, sell or otherwise distribute any shares of Common Stock, other than
pursuant to a Common Stock Reorganization (which is governed by Section 4.2
hereof) (any such event, including any event described in paragraphs (b) and (c)
below, being herein called a "Common Stock Distribution"), for a consideration
per share less than the Exercise Price then in effect or less than the Fair
Market Value of the Company per share of outstanding Common Stock on a Fully
Diluted Basis on the date of such Common Stock Distribution (before giving
effect to such Common Stock Distribution), then, effective upon such Common
Stock Distribution, the Exercise Price shall be reduced, if such consideration
per share shall be less then the Exercise Price then in effect but not less than
such Fair Market Value per share, to the lower of the prices (calculated to the
nearest one-thousandth of one cent) determined as provided in clauses (i) and
(ii) below or, if such consideration per share shall be less than such Fair
Market Value per share, to the lowest of the prices (calculated to the nearest
one-thousandth of one cent) determined as provided in clauses (i), (ii) and
(iii) below:
(i) if the Company shall receive any consideration for the
Common Stock issued, sold or distributed in such Common Stock
Distribution, the consideration per share of Common Stock received by
the Company upon such issue, sale or distribution;
(ii) by dividing (A) an amount equal to the sum of (1) the
number of shares of Common Stock outstanding immediately prior to such
Common Stock Distribution multiplied by the then existing Exercise
Price, plus (2) the consideration, if any, received by the Company upon
such Common Stock Distribution by (B) the total number of shares of
Common Stock outstanding immediately after such Common Stock
Distribution; and
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(iii) by multiplying the Exercise Price in effect immediately
prior to such Common Stock Distribution by a fraction, the numerator of
which shall be the sum of (A) the number of shares of Common Stock
outstanding immediately prior to such Common Stock Distribution
multiplied by such Fair Market Value per share on the date of such
Common Stock Distribution, plus (B) the consideration, if any, received
by the Company upon such Common Stock Distribution, and the denominator
of which shall be the product of (1) the total number of shares of
Common Stock outstanding immediately after such Common Stock
Distribution multiplied by (2) such Fair Market Value per share on the
date of such Common Stock Distribution.
If any Common Stock Distribution shall require an adjustment
to the Exercise Price pursuant to the foregoing provisions of this paragraph
(a), including by operation of paragraph (b) or (c) below, then, effective at
the time such adjustment is made, the number of shares of Common Stock subject
to purchase upon exercise of this Warrant shall be increased to a number
determined by multiplying the number of shares of Common Stock subject to
purchase immediately before such Common Stock Distribution by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding
immediately after giving effect to such Common Stock Distribution and the
denominator of which shall be the sum of the number of shares of Common Stock
outstanding immediately before giving effect to such Common Stock Distribution
(both calculated on a Fully Diluted Basis) plus the number of shares of Common
Stock which the aggregate consideration received by the Company with respect to
such Common Stock Distribution would purchase at the Fair Market Value of the
Company per share of outstanding Common Stock on a Fully Diluted Basis on the
date of such Common Stock Distribution (before giving effect to such Common
Stock Distribution). In computing adjustments under this paragraph, fractional
interests in Common Stock shall be taken into account to the nearest
one-thousandth of a share.
The provisions of this paragraph (a), including by operation
of paragraph (b) or (c) below, shall not operate to increase the Exercise Price
or reduce the number of shares of Common Stock subject to purchase upon exercise
of this Warrant.
(b) If the Company shall issue, sell, distribute or otherwise
grant in any manner (including by assumption) any rights to subscribe for or to
purchase, or any warrants or options for the purchase of Common Stock or any
stock or securities convertible into or exchangeable for Common Stock (such
rights, warrants or options being herein called "Options" and such convertible
or exchangeable stock or securities being herein called "Convertible
Securities"), whether or not such Options or the rights to convert or exchange
any such Convertible Securities in respect of such Options are immediately
exercisable, and the price per share for which Common Stock is issuable upon the
exercise of such Options or upon conversion or exchange of such Convertible
Securities in respect of such Options (determined by dividing (i) the aggregate
amount, if any, received or receivable by the Company as consideration for the
granting of such Options, plus the minimum aggregate amount of additional
consideration payable to the Company upon the exercise of all such Options,
plus, in the case of Options to acquire Convertible Securities, the minimum
aggregate amount of additional consideration, if
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any, payable upon the issuance or sale of such Convertible Securities and upon
the conversion or exchange thereof, by (ii) the total maximum number of shares
of Common Stock issuable upon the exercise of such Options or upon the
conversion or exchange of all such Convertible Securities issuable upon the
exercise of such Options) shall be less than the Exercise Price then in effect
or less than the Fair Market Value of the Company per share of outstanding
Common Stock on a Fully Diluted Basis on the date of granting such Options
(before giving effect to such grant), then, for purposes of paragraph (a) above,
the total maximum number of shares of Common Stock issuable upon the exercise of
such Options or upon conversion or exchange of the total maximum amount of such
Convertible Securities issuable upon the exercise of such Options shall be
deemed to have been issued as of the date of granting of such Options and
thereafter shall be deemed to be outstanding and the Company shall be deemed to
have received as consideration of such price per share, determined as provided
above, therefor. Except as otherwise provided in paragraph (d) below, no
additional adjustment of the Exercise Price shall be made upon the actual
exercise of such Options or upon conversion or exchange of such Convertible
Securities.
(c) If the Company shall issue, sell or otherwise distribute
(including by assumption) any Convertible Securities, whether or not the rights
to exchange or convert thereunder are immediately exercisable, and the price per
share for which Common Stock is issuable upon such conversion or exchange
(determined by dividing (i) the aggregate amount received or receivable by the
Company as consideration for the issuance, sale or distribution of such
Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the conversion or exchange
thereof, by (ii) the total maximum number of shares of Common Stock issuable
upon the conversion or exchange of all such Convertible Securities) shall be
less than the Exercise Price then in effect or less than the Fair Market Value
of the Company per share of outstanding Common Stock on a Fully Diluted Basis on
the date of such issuance, sale or distribution (before giving effect to such
issuance, sale or distribution), then, for purposes of paragraph (a) above, the
total maximum number of shares of Common Stock issuable upon conversion or
exchange of all such Convertible Securities shall be deemed to have been issued
as of the date of the issuance, sale or distribution of such Convertible
Securities and thereafter shall be deemed to be outstanding and the Company
shall be deemed to have received as consideration such price per share,
determined as provided above, therefor. Except as otherwise provided in
paragraph (d) below, no additional adjustment of the Exercise Price shall be
made upon the actual conversion or exchange of such Convertible Securities.
(d) If (i) the purchase price provided for in any Option
referred to in paragraph (b) above or the additional consideration, if any,
payable upon the conversion or exchange of any Convertible Securities referred
to in paragraph (b) or (c) above or the rate at which any Convertible Securities
referred to in paragraph (b) or (c) above are convertible into or exchangeable
for Common Stock shall change at any time (other than under or by reason of
provisions designed to protect against dilution upon an event which results in a
related adjustment pursuant to this Article IV), or (ii) any of such Options or
Convertible Securities shall have terminated, lapsed or expired, the Exercise
Price then in effect shall forthwith be readjusted to the Exercise Price which
would then be in effect,
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and the number of shares of Common Stock then subject to purchase upon exercise
of the Warrant shall be readjusted to the number of shares of Common Stock which
would then be subject to purchase upon exercise of this Warrant (in each case
effective only with respect to any exercise of this Warrant after such
readjustment), had the adjustment made upon the issuance, sale, distribution or
grant of such Options or Convertible Securities been made based upon such
changed purchase price, additional consideration or conversion rate, as the case
may be (in the case of any event referred to in clause (i) of this paragraph
(d)) or had such adjustment not been made (in the case of any event referred to
in clause (ii) of this paragraph (d)).
(e) If the Company shall pay a dividend or make any other
distribution upon any capital stock of the Company payable in Common Stock,
Options or Convertible Securities, then, for purposes of paragraph (a) above,
such Common Stock, Options or Convertible Securities shall be deemed to have
been issued or sold without consideration.
(f) If any shares of Common Stock, Options or Convertible
Securities shall be issued, sold or distributed for cash, the consideration
received therefor shall be deemed to be the gross amount received by the Company
therefor. If any shares of Common Stock, Options or Convertible Securities shall
be issued sold or distributed for a consideration other than cash, the amount of
the consideration other than cash received by the Company shall be deemed to be
the Fair Market Value of such consideration, after deduction of any expenses
incurred in connection therewith. If any shares of Common Stock, Options or
Convertible Securities shall be issued in connection with any merger in which
the Company is the surviving corporation, the amount of consideration therefor
shall be deemed to be the Fair Market Value of such portion of the assets and
business of the non-surviving corporation as shall be attributable to such
Common Stock, Options or Convertible Securities, as the case may be. If any
Options shall be issued in connection with the issuance and sale of other
securities of the Company, together comprising one integral transaction in which
no specific consideration is allocated to such Options by the parties thereto,
such Options shall be deemed to have been issued without consideration.
4.4. Special Dividends. If the Company shall issue or
distribute to any holder or holders of shares of Common Stock evidences of
indebtedness, any other securities of the Company or any cash, property or other
assets (excluding a Common Stock Reorganization or a Common Stock Distribution),
whether or not accompanied by a purchase, redemption or other acquisition of
shares of Common Stock (any such nonexcluded event being herein called a
"Special Dividend"), (a) the Exercise Price shall be decreased, effective
immediately after the effective date of such Special Dividend, to a price
determined by multiplying the Exercise Price then in effect by a fraction, the
numerator of which shall be the Fair Market Value of the Company per share of
outstanding Common Stock as of such effective date less any cash and the then
Fair Market Value of any evidences of indebtedness, securities or property or
other assets issued or distributed in such Special Dividend with respect to one
share of Common Stock, and the denominator of which shall be such Fair Market
Value per share and (b) the number of shares of Common Stock subject to purchase
upon exercise of this Warrant shall be increased to a number determined by
multiplying the number of shares of
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Common Stock subject to purchase immediately before such Special Dividend by a
fraction, the numerator of which shall be the Exercise Price in effect
immediately before such Special Dividend and the denominator of which shall be
the Exercise Price in effect immediately after such Special Dividend. A
reclassification of Common Stock (other than a change in par value, or from par
value to no par value or from no par value to par value) into shares of Common
Stock and shares of any other class of stock shall be deemed a distribution by
the Company to the holders of such Common Stock of such shares of such other
class of stock and, if the outstanding shares of Common Stock shall be changed
into a larger or smaller number of shares of Common Stock as part of such
reclassification, a Common Stock Reorganization.
4.5. Capital Reorganizations. If there shall be any
consolidation or merger to which the Company is a party, other than a
consolidation or a merger of which the Company is the continuing corporation and
which does not result in any reclassification of, or change (other than a Common
Stock Reorganization) 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, or any recapitalization of the Company (any such event being called a
"Capital Reorganization"), then, effective upon the effective date of such
Capital Reorganization, the Holder shall no longer have the right to purchase
Common Stock, but shall have instead 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 been
entitled to receive pursuant to such Capital Reorganization if this Warrant had
been exercised immediately prior to the effective date of 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 each Warrantholder and to the Warrant Agency an agreement
as to the Warrantholders' rights in accordance with this Section 4.5, providing,
to the extent of any right to purchase equity securities hereunder, for
subsequent adjustments as nearly equivalent as may be practicable to the
adjustments provided for in this Article IV. The provisions of this Section 4.5
shall similarly apply to successive Capital Reorganizations.
4.6. Adjustment Rules. Any adjustments pursuant to this
Article IV shall be made successively whenever an event referred to herein shall
occur, except that, notwithstanding any other provision of this Article IV, no
adjustment shall be made to the number of shares of Common Stock to be delivered
to each Holder (or to the Exercise Price) if such adjustment represents less
than one percent (1%) of the number of shares previously required to be so
delivered, but any lesser adjustment shall be carried forward and shall be made
at the time and together with the next subsequent adjustment which together with
any adjustments so carried forward shall amount to one percent (1%) or more of
the number of shares to be so delivered. No adjustment shall be made pursuant to
this Article IV in respect of the issuance from time to time of shares of Common
Stock upon the exercise of any of the Warrants. If the Company shall take a
record of the holders of its Common Stock for any purpose referred to in this
Article IV, then (i) such record date shall be deemed to be the date of the
issuance, sale, distribution or grant in question and (ii) if the Company shall
legally abandon such action prior to effecting such action, no adjustment shall
be made pursuant to this Article IV in respect of such action.
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4.7. Proceedings Prior to Any Action Requiring Adjustment. As
a condition precedent to the taking of any action which would require an
adjustment pursuant to this Article IV, the Company shall take any action which
may be necessary, including obtaining regulatory approvals or exemptions, in
order that the Company may thereafter validly and legally issue as fully paid
and nonassessable all shares of Common Stock which the holders of Warrants are
entitled to receive upon exercise thereof.
4.8. Notice of Adjustment. Not less than 10 nor more than 30
days prior to 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, the Company shall give notice to each Warrantholder of such
event, describing such event in reasonable detail and specifying 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 notice to each
Warrantholder of such adjustment and computation promptly after such adjustment
becomes determinable.
ARTICLE V
PURCHASE OF WARRANTS; INCREASE OF WARRANT SHARES
5.1. Purchase of Warrants by the Company. The Company shall
have the obligation to purchase or otherwise acquire Warrants at such times, in
such manner and for such consideration as set forth below.
5.2. Put Rights. The Holder shall:
(a) at any time and from time to time on or after the date on
which a Triggering Event shall occur, have the right (the "Put Right") to sell
back to the Company its Warrant Shares at the greater of (i) the Fair Market
Value of all such Warrant Shares or (ii) the cash amount determined by
application of the following formula:
[(EBITDA times 5) - Term Debt - Minimum Revolving Debt -
Preferred Stock + Cash] times Applicable Percentage
(b) Within thirty (30) days of the Company's receipt of
notification from the Holder that it wishes to exercise its Put Right (the "Put
Notification"), the Company shall repurchase such number of Warrant Shares then
held by the Holder as shall be specified in the Put Notification (the
"Repurchase Date"). The repurchase price for each Share (the "Repurchase Price")
shall be paid in cash on the Repurchase Date or, at the option of the Holder, in
the form of an unsecured promissory note in form reasonably satisfactory to the
Holder maturing in one year and bearing interest at the rate of eight percent
(8%) per annum].
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(c) Surrender the certificate(s) representing Warrant Shares
being repurchased to the Company and thereupon the Repurchase Price for such
Warrant Shares shall be paid to the order of the person whose name appears on
such certificate(s) and each surrendered certificate shall be canceled and
retired.
5.3. Termination of Put Rights; Limitation. Notwithstanding
anything herein to the contrary, (a) the Put Rights shall terminate upon the
closing of a Qualified IPO, and (b) the Holder shall have the right to exercise
no more than three (3) Put Rights.
5.4. Cancellation of Warrants. All Warrants purchased,
redeemed or otherwise acquired by the Company shall thereupon be canceled and
retired. The Warrant Agency shall cancel any Warrant surrendered for exercise or
registration of transfer or exchange and deliver such canceled Warrants to the
Company.
5.5 Increase of Warrant Shares. If the Company has not
redeemed or repurchased all of the Holder Warrant Shares on or prior to July 28,
2004, then on July 29, 2004 and on each July 28, October 28, January 28, and
April 28, thereafter (each a "Warrant Share Increase Date"), on which any of the
Holder Warrant Shares have not been redeemed or repurchased by the Company, then
the number of shares of Common Stock that are subject to this Warrant shall
automatically, and without any act of the Company or its Board of Directors,
increase by an amount equal to the product of:
(a) the number of shares of outstanding Common Stock of the
Company on a Fully Diluted Basis as of July 28, 2004; and
(b) .32% (provided that, in the event that this Warrant is
transferred or assigned, the percentage set forth in this subsection (b) shall
be adjusted on a pro rata basis among the Warrants issued as a result of such
transfer or assignment so that the aggregate sum of such percentages set forth
in all of the Warrants resulting from the transfer or assignment of this Warrant
shall equal .32%) multiplied by a fraction, the numerator of which shall be the
number of Holder Warrant Shares that have not been redeemed (excluding those
shares attributable to the Additional Exercise Amount) and the denominator of
which shall be the initial number of Holder Warrant Shares (i.e., 4,726.80,
assuming no adjustments pursuant to Article IV hereof).
ARTICLE VI
REDUCTION OF WARRANT SHARES
6.1 Reduction of Original Exercise Amount in First Year. If
during the period commencing on the date hereof and terminating on the first
anniversary of the date hereof, (a) the Company closes a Qualified IPO covering
the offer and sale of shares of Common Stock in the United States, and (b) based
on the offering price per share of such Qualified IPO, the value of all
outstanding and issued Common Stock of the Company has a value of not less than
$100,000,000, then, in the case of (a) and (b), the Original Exercise Amount
shall be reduced to 5,092 shares of Common Stock, and each
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Warrant shall be reduced proportionately. Accordingly, in such event, this
Warrant may be exercisable into 1,833.12 shares of Common Stock plus any
Additional Exercise Amount, subject to adjustment as provided herein.
6.2 Reduction of Original Exercise Amount in Second Year. If
during the period commencing on the first anniversary of the date hereof and
terminating on the second anniversary of the date hereof, (a) the Company closes
a Qualified IPO covering the offer and sale of shares of Common Stock in the
United States, and (b) based on the offering price per share of such Qualified
IPO, the value of all outstanding and issued Common Stock of the Company has a
value of not less than $100,000,000, then, in the case of (a) and (b), the
Original Exercise Amount shall be reduced to 9,049 shares of Common Stock, and
each Warrant shall be reduced proportionately. Accordingly, in such event, this
Warrant may be exercisable into 3,257.64 shares of Common Stock plus any
Additional Exercise Amount, subject to adjustment as provided herein.
ARTICLE VII
DEFINITIONS
The following terms, as used in this Warrant, have the
following meanings:
"Additional Exercise Amount" has the meaning set forth in the
second paragraph of this Warrant.
"Applicable Percentage" means the percentage equity ownership
of the Holder in the Company represented by the Warrant Shares being put to the
Company, assuming exercise of the Warrants into Common Shares.
"Business Day" means any day excluding Saturday, Sunday and
any day on which banking institutions located in New York are authorized by law
or other governmental action to be closed, unless there shall have been an
offering of Common Stock registered under the Securities Act, in which case
"Business Day" means (a) if Common Stock is listed or admitted to trading on a
national securities exchange, a day on which the principal national securities
exchange on which the Common Stock is listed or admitted to trading is open for
business or (b) if Common Stock is not so listed or admitted to trading, a day
on which the New York Stock Exchange is open for business.
"Capital Reorganization" has the meaning set forth in Section
4.5.
"Cash" shall mean cash or cash equivalents then on the balance
sheet of the Company.
"Common Stock" has the meaning set forth in the first
paragraph of this Warrant, subject to change pursuant to Article IV.
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"Company" has the meaning set forth in the first paragraph of
this Warrant.
"Closing Price" on any day means (a) if Common Stock 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 on the principal national securities exchange on which Common Stock is
listed or admitted to trading, or (b) if Common Stock is not listed or admitted
to trading on any national securities exchange, the average of the closing bid
and asked prices in the over-the-counter market on such day as reported by
NASDAQ or any comparable system or, if not so reported, as reported by any New
York Stock Exchange member firm selected by the Company for such purpose.
"Common Stock Distribution" has the meaning set forth in
Section 4.3(a).
"Common Stock Reorganization" has the meaning set forth in
Section 4.2.
"Company" means Microwave Components Enterprises, Inc., a
Michigan corporation, together with its successors.
"Convertible Securities" has the meaning set forth in Section
4.3(b).
"Determination Notice" has the meaning set forth in Section
5.2.
"EBITDA" shall mean annual consolidated earnings of the
Company and all of its Subsidiaries before income tax, depreciation and
amortization, and before extraordinary, non-recurring and non-operating income
and expense, computed in accordance with GAAP at the end of the Company's most
recent four full fiscal quarters immediately preceding the Repurchase Date. For
purposes of determining EBITDA, the Company agrees, at the request of the
Holders, to have the Company's financial statements audited at the expense of
the Company by an independent public accounting firm acceptable to the Holders.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and any 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" means $.01 per share of the Common Stock,
subject to adjustment pursuant to Article IV.
"Fair Market Value" as at any date of determination means the
fair market value of the business or property or services in question as of such
date, as determined in good faith by the Board of Directors of the Company. If
the Holders disagree with such determination, the Holders shall select a pool of
three independent investment banking firms which are nationally or regionally
recognized and which are not affiliated with the Holder, from which the Company
shall select one such firm to appraise such fair market value. The determination
of such investment banking firm shall be binding. All
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expenses of such investment banking firm shall be borne by the Company. The Fair
Market Value of the Company as at any date of determination shall be the
greatest of (i) the Fair Market Value at such date of the Company and its
Subsidiaries as a going concern, (ii) the liquidation value at such date of the
Company and its Subsidiaries and (iii) the consolidated net worth of the Company
and its Subsidiaries as shown on its latest available consolidated balance sheet
of the Company. Notwithstanding the foregoing, if, at any date of determination
of the Fair Market Value of the Company, the Common Stock shall then be publicly
traded, the Fair Market Value of the Company on such date shall be the greater
of (a) the amount determined in accordance with the immediately preceding
sentence and (b) the Market Price on such date multiplied by the number of
shares of Common Stock then outstanding. Determination of the Fair Market Value
of the Company per share of Common Stock, shall be on a Fully Diluted Basis made
without giving effect to any discount for (i) minority interest, or (ii) any
lack of liquidity of the Common Stock due to the fact that there may be no
public market for the Common Stock; provided, however, that in the event the
Common Stock shall not then be publicly traded, the Fair Market Value shall
reflect the appropriate multiple for comparable privately held companies.
"Fully Diluted Basis" means, with respect to any determination
or calculation, that such determination or calculation is performed on a fully
diluted basis (assuming the issuance of all shares issuable under any then
outstanding options, warrants or convertible securities of any kind) determined
in accordance with generally accepted accounting principles as in effect from
time to time.
"GAAP" means generally accepted accounting principles, as in
effect on the date hereof.
"Holder" has the meaning set forth in the first paragraph of
this Warrant.
"Holder Warrant Shares" means the Warrant Shares issued or to
be issued pursuant to this Warrant.
"Management Options" means the options granted to certain key
employees of the Company or any of its Subsidiaries for the purchase of not more
than five percent (5%) of the Common Stock on a Fully Diluted Basis.
"Mandatory Redemption Right" has the meaning set forth in
Section 5.2.
"Market Price" as at any date of determination means the
average of the daily Closing Prices of a share of Common Stock for the shorter
of (i) the 20 consecutive Business Days ending on the most recent Business Day
prior to the Time of Determination and (ii) the period commencing on the date
next succeeding the first public announcement of the issuance, sale,
distribution, grant or exercise in question through such most recent Business
Day prior to the Time of Determination. "Time of Determination" means the time
and date of the earliest of (x) the determination of the stockholders entitled
to receive such issuance, sale, distribution or grant, (y) the determination of
the Holders or the Company to exercise their respective rights set forth
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in Sections 5.2 or 5.3 hereof and (z) the commencement of "ex-dividend" trading
in respect thereof.
"Minimum Revolving Debt" means, with respect to any revolving
debt of the Company and its Subsidiaries on a consolidated basis for purposes of
GAAP, an amount equal to the sum of the lowest principal amount of outstanding
revolving debt of each of the Company and its Subsidiaries during the
twelve-month period immediately preceding the date in question.
"NASD" means The National Association of Securities Dealers,
Inc.
"NASDAQ" means the Nasdaq Stock Market.
"Options" has the meaning set forth in Section 4.3(b).
"Original Exercise Amount" has the meaning set forth in the
second paragraph of this Warrant.
"Person" means any natural person, corporation, limited
partnership, general partnership, joint stock company, joint venture,
association, company, trust, bank, trust company, land trust, business trust or
other organization, whether or not a legal entity, and any government agency or
political subdivision thereof.
"Preferred Stock" means, with respect to the issued and
outstanding Series A Preferred Stock of the Company, the book value thereof as
set forth on the most recent audited financial statements of the Company and its
Subsidiaries delivered to the Holder in accordance with Section 8.01(b) of the
Purchase Agreement.
"Purchase Agreement" has the meaning set forth in the second
paragraph of this Warrant.
"Put Notification" has the meaning set forth in Section 5.2
hereof.
"Put Right" has the meaning set forth in Section 5.2 hereof.
"Qualified IPO" means any sale of shares of Common Stock by
and for the account of the Company pursuant to an underwritten initial public
offering registered under the Securities Act resulting on the date of closing in
net proceeds to the Company and selling holders of Common Stock of an amount not
less than $20,000,000, which offering is managed by an independent investment
banking firm that (i) is nationally or regionally recognized, and (ii) has a net
worth, determined in accordance with GAAP, of at least $25,000,000.
"Registration Rights Agreement" has the meaning set forth in
Section 3.1 hereto.
"Repurchase Date" has the meaning set forth in Section 5.2
hereof.
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"Repurchase Price" has the meaning set forth in Section 5.2
hereof.
"Securities Act" means the Securities Act of 1933, as amended,
and rules and regulations of the Securities and Exchange Commission thereunder.
"Special Dividend" has the meaning set forth in Section 4.4.
"Stockholder Agreement" has the meaning set forth in Section
3.1.
"Subsidiary" of any Person means any corporation, partnership,
joint venture, association or other business entity of which more than fifty
percent (50%) of the total voting power of shares of stock or other interests
therein entitled to vote in the election of members of the board of directors,
partnership committee, board of managers or trustees or other managerial body
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of such Person or a combination
thereof. Unless otherwise specified, "Subsidiary" means a Subsidiary of the
Company and "Subsidiaries" means all Subsidiaries of the Company.
"Term Debt" means the aggregate principal amount of any senior
and subordinated term debt of the Company and its Subsidiaries on a consolidated
basis for purposes of GAAP that is outstanding at the time in question.
"Triggering Event" means (i) an underwritten public offering
pursuant to an effective registration statement under the Securities Act
covering the offer and sale of shares of Common Stock, (ii) a merger or
consolidation into or with any other entity which results in the exchange of
outstanding shares of the Company for securities or other consideration issued
or paid or caused to be issued or paid by any such entity or affiliate thereof,
(iii) a sale, transfer or other disposition of all or substantially all of the
assets of the Company, (iv) a Qualified IPO or (v) the occurrence of an Event of
Default (as defined in the Purchase Agreement).
"Warrant Agency" has the meaning set forth in Section 2.1.
"Warrant Shares" means the shares of Common Stock that are
issued or to be issued upon the exercise of the Warrants, consisting of the
shares of Common Stock that constitute the Original Exercise Amount and the
Additional Exercise Amount.
"Warrantholder" means a holder of a Warrant.
"Warrants" has the meaning set forth in the second paragraph
of this Warrant.
All references herein to "days" shall mean calendar days
unless otherwise specified.
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ARTICLE VIII
MISCELLANEOUS
8.1. Notices. Notices and other communications provided for
herein shall be in writing and may be given by mail, overnight courier,
confirmed telex or facsimile transmission and shall, unless otherwise expressly
required, be deemed given when received or, if mailed, four Business Days after
being deposited in the United States mail (via first class) with postage
prepaid, certified mail, return receipt requested and properly addressed. In the
case of the Holder, such notices and communications shall be addressed to its
address as shown on the books maintained by the Warrant Agency, unless the
Holder shall notify the Warrant Agency that notices and communications should be
sent to a different address (or telex or facsimile number), in which case such
notices and communications shall be sent to the address (or telex or facsimile
number) specified by the Holder.
8.2. 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 the holders of Warrants entitling
such holders to purchase a majority of the Common Stock subject to purchase upon
exercise of such Warrants at the time outstanding (exclusive of Warrants then
owned by the Company or any Subsidiary (as defined in the Purchase Agreement) or
Affiliate (as defined in the Purchase Agreement) thereof); provided, however,
that no such amendment, modification or waiver shall, without the written
consent of the holders of all Warrants at the time outstanding, (a) change the
number of shares of Common Stock subject to purchase upon exercise of this
Warrant, the Exercise Price or provisions for payment thereof or (b) amend,
modify or waive the provisions of this Section 8.2 or Article III, IV or V or
Section 1.5. The provisions of the Purchase Agreement may be amended, modified
or waived only in accordance with the respective provisions thereof.
Any such amendment, modification or waiver effected pursuant
to and in accordance with the provisions of this Section or the applicable
provisions of the Purchase Agreement shall be binding upon the holders of all
Warrants and Warrant Shares, 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 of Warrants and Warrant Shares
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 future notice or demand in similar or other
circumstances.
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8.3. GOVERNING LAW. THIS WARRANT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF MICHIGAN (WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW).
8.4. Transfer; Covenants to Bind Successor and Assigns. All
covenants, stipulations, promises and agreements in this Warrant contained by or
on behalf of the Company or the Holder shall bind its successors and assigns,
whether so expressed or not. This Warrant shall be transferable and assignable
by the Holder hereof in whole or from time to time in part to any other Person
and the provisions of this Warrant shall be binding upon and inure to the
benefit of the Holder hereof and its successors and assigns.
8.5. 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 and enforceability of the remaining provisions
contained herein 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 prov0isions.
8.6. 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.
8.7. Tax Basis. The Company and the Holder agree pursuant to
Proposed Treasury Regulation Section 1.1273-2 that, for Federal income tax
purposes, the aggregate issue price of the Notes (as defined in the Purchase
Agreement) and the aggregate purchase price for the Warrants are those set forth
in Section 2.04 of the Purchase Agreement. Neither the Company nor the Holder
hereof shall voluntarily take any action inconsistent with the agreement set
forth in this Section 8.7.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed in its corporate name by one of its officers thereunto duly authorized,
and its corporate seal to be hereunto affixed, attested by its Secretary or an
Assistant Secretary, all as of the day and year first above written.
MCE COMPANIES, INC.
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxx
Title: President
Attest:
/s/ J. Xxxxxxx Xxxxxxx
-----------------------
Name: J. Xxxxxxx Xxxxxxx
Title: Assistant Secretary
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FIRST AMENDMENT TO WARRANT
THIS FIRST AMENDMENT TO WARRANT, dated as of October 13,
2000, is entered into by MCE COMPANIES, INC., a Michigan corporation (the
"Company"), in favor of ROCKY MOUNTAIN MEZZANINE FUND II, L.P. (the "Holder").
WITNESSETH THAT:
WHEREAS, the Company issued to the Holder a Warrant, dated
July 28, 1999, to purchase 4,726.80 shares of common stock, without par value
(the "Common Stock"), of the Company (the "Warrant"); and
WHEREAS, the Company and the Holder desire to amend the
Warrant as set forth herein;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements contained herein, the parties hereto agree as
follows:
1. Effect of Amendment; Definitions.
Effective upon the closing of the transactions contemplated by
that certain Equity Underwriting Agreement to be entered into by the Company,
certain warrantholders and the several underwriters named therein, the Warrant
shall be and hereby is amended as provided in Section 2 hereof. Except as
expressly amended in Section 2 hereof, the Warrant shall continue in full force
and effect in accordance with its respective provisions on the date hereof. As
used in the Warrant, the terms "this Warrant", "herein", "hereinafter",
"hereto", "hereof", and words of similar import shall, unless the context
otherwise requires, mean the Warrant as amended and modified by this Amendment.
2. Amendments.
(A) As a result of the consummation of a 99-for-1 stock
dividend on the outstanding Common Stock and after giving effect to Section 6.2
of the Warrant prior to the date hereof, the first page of the Warrant shall be
amended by deleting the number "4,726.80" and substituting in lieu thereof
"325,764".
(B) The Warrant shall be amended by deleting Sections
5.1, 5.2, 5.3, 5.4 and 5.5 and Sections 6.1 and 6.2.
3. Miscellaneous.
(A) This Amendment shall be construed in accordance with
and governed by the laws of the State of Michigan, without reference to
principles of conflict of laws.
(B) The acceptance, acknowledgment and agreement by the
Holder of this Amendment shall not constitute, or be deemed to be or construed
as, a waiver of any right, power or remedy of the Holder, or a waiver of any
provision of the Warrant.
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(C) This Amendment may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument. The Company agrees to pay
on demand all costs and expenses of the Holder, including reasonable attorneys'
fees and expenses, in connection with the preparation, execution and delivery of
this Amendment.
IN WITNESS WHEREOF, the Company has caused this Amendment to
be executed in its corporate name by one of its officers thereunto duly
authorized, and its corporate seal to be hereunto affixed, attested by its
Secretary or an Assistant Secretary, all as of the day and year first above
written.
MCE COMPANIES, INC.
By: /s/ Xxxx X. Xxxxxxx
--------------------
Name: Xxxx X. Xxxxxxx
Title: President
Attest:
/s/ Xxx X. Xxxxxxx
--------------------------
Name: Xxx X. Xxxxxxx
Title: CFO
The foregoing Amendment to Warrant is hereby acknowledged, accepted and
agreed to by the undersigned as of the 13th day of October, 2000.
ROCKY MOUNTAIN MEZZANINE FUND II,
L.P.
By: Rocky Mountain Capital Partners
LLP, its General Partner
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------
Title: General Partner
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