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EXHIBIT 4.34
THIRD AMENDMENT TO WARRANT AGREEMENT
THIS THIRD AMENDMENT TO WARRANT AGREEMENT (this "Amendment") is made
as of the 20th day of August, 1997, by and among The Cerplex Group, Inc., a
Delaware corporation (the "COMPANY") and each of the holders of warrants listed
on Schedule A hereto, each of which is herein referred to as a "HOLDER" and
collectively as the "HOLDERS".
RECITALS:
A. The Company and the Holders entered into a Warrant Agreement
dated as of April 15, 1996, as amended by a Waiver and Amendment Agreement
dated as of October 31, 1996 and a Second Amendment to Warrant Agreement dated
as of April 9, 1997 (as in effect prior to the effectiveness of this Amendment,
the "EXISTING WARRANT AGREEMENT").
B. The Holders are the holders of all of the Warrants (as such
term is defined in the Existing Warrant Agreement) outstanding as of the date
hereof.
C. The Company has requested that the Existing Warrant Agreement
be amended, as more particularly provided herein, and the Holders have agreed
to amend the Existing Warrant Agreement as set forth herein.
AGREEMENT:
NOW THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINED TERMS.
As used in this Amendment, the following terms have the respective
meanings specified below:
"AMENDMENT, THIS" -- means this Third Amendment to Warrant Agreement.
"COMPANY" -- the introductory sentence.
"EXISTING WARRANT AGREEMENT" -- Recital A.
"HOLDERS" -- the introductory sentence.
SECTION 2. AMENDMENTS TO EXISTING WARRANT AGREEMENT.
2.1 AMENDMENT TO SECTION 3.1(B). Section 3.1(b) of the Existing
Warrant Agreement is hereby amended and restated in its entirety to read as
follows:
"(b) ENFORCEABILITY OF OBLIGATIONS. This
Agreement and the Warrant Certificates issued on the date hereof have
been, and any Warrants issued after the date hereof will be, duly
authorized, executed and delivered by the Company. This Agreement,
the Warrant Certificates and the Warrants constitute, or upon
execution
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and delivery will constitute, the legal, valid and binding obligations
of the Company, enforceable in accordance with their respective terms,
except:
"(i) as such enforceability may be limited by
bankruptcy, insolvency or other similar laws affecting the
enforceability of creditors' rights generally; and
"(ii) as such enforceability may be subject to the
availability of equitable remedies.
"The holders of the Warrants are entitled to the benefits of this Agreement."
2.2 AMENDMENT TO SECTION 4.1(D)(I). The introductory paragraph to
Section 4.1(d)(i) of the Existing Warrant Agreement is hereby amended and
restated in its entirety to read as follows:
"(d) ISSUANCES OF COMMON STOCK AND OTHER
SECURITIES.
"(i) In the event that the Company shall issue or
sell shares of Common Stock, or rights, options, warrants or
convertible or exchangeable Securities containing the right to
subscribe for or purchase shares of Common Stock (excluding
Excluded Securities, as defined in Section 4.1(d)(ii) hereof)
at a price per share of Common Stock lower than the Reference
Price in effect on the date (the "ADJUSTMENT DATE") of such
issuance or sale, then the Purchase Price in effect
immediately after the Adjustment Date shall be determined by
multiplying the Purchase Price in effect immediately prior to
such Adjustment Date by the quotient of:"
The remainder of Section 4.1(d)(i) of the Existing Warrant Agreement shall
remain in effect without amendment.
2.3 AMENDMENT TO SECTION 4.1(D)(II). Section 4.1(d)(ii) of the
Existing Warrant Agreement is hereby amended and restated in its entirety to
read as follows:
"(ii) "EXCLUDED SECURITIES" shall mean and include:
"(A) shares of Common Stock, rights,
options, warrants or convertible or exchangeable
Securities issued in any of the transactions
described in Section 4.1(a), Section 4.1(b), Section
4.1(c) or Section 4.1(e) hereof and with respect to
which an adjustment to the Purchase Price has been
made in accordance with any of such Sections;
"(B) shares of Common Stock issuable upon
exercise of the Warrants (including, without
limitation, the Additional Warrants);
"(C) shares of Common Stock issuable upon
exercise of rights, options or warrants or conversion
or exchange of convertible or
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exchangeable Securities issued or sold under
circumstances which caused an adjustment pursuant to
this Section 4.1(d);
"(D) rights to acquire shares of Common
Stock, and shares of Common Stock issuable upon
exercise of such rights, issued to employees of the
Company and it Subsidiaries pursuant to any employee
stock purchase plan maintained by the Company or any
of its Subsidiaries, provided that any such rights
issued pursuant to any such plan and any shares of
Common Stock issuable upon the exercise thereof
which, in the aggregate, exceed, at the time of the
issuance thereof, two percent (2%) of the Fully
Diluted Outstanding Common Stock, determined at such
time, shall not constitute Excluded Securities;
"(E) shares of Common Stock and/or
rights, options, warrants or convertible or
exchangeable Securities (and the shares of Common
Stock issuable upon the exercise of such rights,
options, warrants or convertible or exchangeable
Securities), provided that (1) such shares of Common
Stock and/or rights, options, warrants or convertible
or exchangeable Securities are issued in connection
with one or more private placements of equity
Securities of the Company effected on or prior to
July 15, 1996, (2) the total aggregate consideration
paid in cash in respect of such shares of Common
Stock and/or rights, options, warrants or convertible
or exchangeable Securities is not more than
$8,000,000, (3) all such shares of Common Stock
together with all shares of Common Stock issuable
upon the exercise of any of such rights, options,
warrants or convertible or exchangeable Securities
shall not, in the aggregate, exceed 12% of Fully
Diluted Outstanding Common Stock, determined as of
April 16, 1996, and (4) the sale of such shares of
Common Stock and/or rights, options, warrants or
convertible or exchangeable Securities is done on an
arm's-length basis and the setting of the exercise,
strike or conversion prices in respect of such
rights, options, warrants or convertible or
exchangeable Securities is done on an arm's-length
basis;
"(F) warrants issued on or prior to
August 20, 1997, to any holder of the senior or
subordinated indebtedness, warrants issued on or
after the date hereof pursuant to provisions
comparable to Section 4.4(a), Section 4.4(b) or
Section 4.4(c) hereof contained in any agreement
between the Company and such holders pursuant to
which such senior or subordinated indebtedness is
issued and shares of Common Stock issuable upon the
exercise of any such Warrants; and
"(G) shares of Common Stock, rights,
options, warrants or convertible or exchangeable
Securities issued in any of the transactions
described in Sections 4.4(a), Section 4.4(b) or
Section 4.4(c) hereof and with respect to which
additional Warrants have been issued in accordance
with any of such Sections."
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2.4 AMENDMENT TO SECTION 4.1(E). Section 4.1(e) of the Existing
Warrant Agreement is hereby amended by adding the following sentence at the end
of such section"
"For purposes of determining the number of shares subject to any
Warrant with respect to any adjustments made pursuant to this Section
4.1(e), the Company shall make the adjustments provided for in Section
4.4 in respect of any issuances of Employee Options or Director
Options that occurred during the period from the date of the last
determination pursuant to such Section to the date immediately prior
to such consolidation, merger, sale or conveyance."
2.5 AMENDMENT TO SECTION 4.1(I). Section 4.1(i) of the Existing
Warrant Agreement is hereby amended and restated in its entirety to read as
follows:
"(i) EXPIRATION OF RIGHTS, OPTIONS, ETC.
"(i) Upon the expiration of any rights, options,
warrants or conversion or exchange privileges referred to
above in this Section 4.1 without the exercise thereof, the
Purchase Price and the number of shares of Common Stock
purchasable upon the exercise of each Warrant shall be
readjusted and shall thereafter be such as such Purchase Price
and such number of shares of Common Stock would have been had
they been originally adjusted (or had the original adjustment
not been required, as the case may be) as if:
"(A) the only shares of Common Stock so
issued were the shares of Common Stock, if any,
actually issued or sold upon the exercise of such
rights, options, warrants or conversion or exchange
privileges; and
"(B) such shares of Common Stock, if any,
were issued or sold for the consideration actually
received by the Company upon such exercise plus the
aggregate consideration, if any, actually received by
the Company for the issuance, sale or grant of all of
such rights, options, warrants or conversion or
exchange privileges whether or not exercised;
"provided that no such readjustment shall have the effect of
increasing the Purchase Price by an amount in excess of the
amount of the reduction initially made in respect of the
issuance, sale, or grant of such rights, options, warrants or
conversion or exchange privileges.
"(ii) In the event that during any calendar quarter
after August 20, 1997, any Employee Option, Director Option or
portion thereof expires without the exercise thereof and the
issuance of any such Employee Option or Director Option had
resulted in the issuance of Additional Warrants pursuant to
Section 4.4(a) hereof, the number of shares of Common Stock
purchasable upon the exercise of the Additional Warrants shall
be reduced as of the first day of the next succeeding calendar
quarter by the number of shares of Common Stock
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subject to such terminated or expired Employee Option,
Director Option or portion thereof."
2.6 AMENDMENT TO SECTION 4. Section 4 of the Existing Warrant
Agreement is hereby amended by adding a new Section 4.4 at the end thereof,
such Section 4.4 to read in its entirety as follows:
"4.4 ISSUANCE OF ADDITIONAL WARRANTS.
"(a) GRANT OF EMPLOYEE OPTIONS AND DIRECTOR OPTIONS. In
the event that, during any calendar quarter after August 20, 1997:
"(i) Employee Options (other than Employee Options
issued in a transaction described in Section 4.1(d) hereof)
are issued and the aggregate number of such Employee Options
plus all other Employee Options issued on or prior to the date
of such issuance, other than Terminated Employee Options,
exceeds the then effective Employee Option Threshold; or
"(ii) Director Options (other than Director Options
issued in a transaction described in Section 4.1(d) hereof)
are issued and the aggregate number of such Director Options
plus all other Director Options issued on or prior to the date
of such issuance, other than Terminated Director Options,
exceeds the Director Option Threshold;
"then the Company shall, as of the first day of the next succeeding
calendar quarter, issue Additional Warrants to the holders of the
Warrants on a pro rata basis covering that number of shares equal to
the product of the Dilution Percentage multiplied by the number of the
Employee Options or Director Options, as the case may be, issued
during such period (or, with respect to the first calendar quarter in
which the number of Employee Options or Director Options issued during
such quarter plus the aggregate number of Employee Options and
Director Options, as the case may be, issued on or prior to the date
of such issuance other than Terminated Employee Options or Terminated
Director Options, as the case may be, exceeds the then effective
Employee Option Threshold or the Director Option Threshold, as the
case may be, the amount such excess).
"(b) ISSUANCES IN CONNECTION WITH CONVERSION OF SENIOR
DEBT. In the event that, on or after August 20, 1997:
"(i) all or any portion of the principal amount of
the Senior Debt is converted into shares of Common Stock, or
Securities convertible into or exchangeable for shares of
Common Stock; and
"(ii) the Post-Conversion Market Price per share of
Common Stock following such conversion is less than the
Measurement Price per share of Common Stock prior to such
conversion;
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"the Company shall issue Additional Warrants to the holders of
the Warrants on a pro rata basis covering that number of
shares equal to:
"(A) the product of:
"(1) the difference between the
Post-Conversion Market Price per share of Common
Stock and the Measurement Price per share of Common
Stock; multiplied by
"(2) the total number of shares of Common
Stock issuable upon exercise of the Warrants held by
such holders immediately prior to such issuance;
"divided by
"(B) the Post-Conversion Market Price per share of
Common Stock;
"provided, however, that in no event shall the number of Warrants
issued pursuant to this Section 4.4(b) as a result of any single
issuance of shares of Common Stock, or Securities convertible into or
exchangeable for shares of Common Stock to the holders of the Senior
Debt exceed the product of:
"(y) the aggregate number of shares of Common
Stock issued or issuable pursuant to such convertible or
exchangeable Securities to the holders of the Senior Debt
Warrants with respect to such single issuance; multiplied by
"(z) a fraction, the numerator of which is the
number of shares of Common Stock underlying the Warrants
outstanding immediately prior to such issuance and the
denominator of which is the Fully Diluted Outstanding Common
Stock;
"and provided further that no Warrants shall be issued pursuant to
this provision in connection with any transaction in which both the
holders of the Senior Debt convert all or any portion of the aggregate
principal amount of the Senior Debt into shares of Common Stock, or
Securities convertible into or exchangeable for shares of Common
Stock, and the holders of the Warrants convert all or a portion of the
aggregate principal amount of indebtedness then outstanding under the
Notes into shares of Common Stock or Securities convertible into or
exchangeable for shares of Common Stock. The Initial Purchase Price
of such Warrants shall be the Post-Conversion Market Price per share.
"(c) ISSUANCE OF OTHER SECURITIES TO HOLDERS OF SENIOR
DEBT. In the event that, on or after August 20, 1997, rights, options
or warrants containing the right to subscribe for or purchase shares
of Common Stock are issued to the holders of the Senior Debt Warrants
(other than in a transaction described in Section 4.1(d) hereof), the
Company shall issue Additional Warrants to the holders of the Warrants
on a pro rata basis covering that number of shares equal to the
product of:
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"(i) the aggregate number of shares of Common
Stock underlying the rights, options or warrants issued to the
holders of the Senior Debt Warrants; multiplied by
"(ii) a fraction, the numerator of which is the
number of shares of Common Stock underlying the Warrants
outstanding immediately prior to such issuance are exercisable
and the denominator of which is the Fully Diluted Outstanding
Common Stock;
"and provided further that no Warrants shall be issued pursuant to
this provision in connection with any transaction in which both the
holders of the Senior Debt Warrants and the holders of the Warrants
are issued shares of Common Stock or rights, options or warrants
containing the right to subscribe for or purchase shares of Common
Stock pursuant to a negotiated transaction as opposed to pursuant to
this Section 4.4(c). The Initial Purchase Price of such Warrants
shall be the per share exercise price of the rights, options or
warrants in respect of which such Additional Warrants are being
issued.
"(d) EXCLUDED ISSUANCES OF SECURITIES TO HOLDERS OF SENIOR
DEBT WARRANTS. Notwithstanding the foregoing, no Warrants shall be
issued pursuant to Sections 4.4(a), 4.4(b) or 4.4(c) hereof as result
of any issuance of additional Warrants to the holders of the Senior
Debt Warrants pursuant to provisions comparable to Section 4.4(a),
Section 4.4(b) or Section 4.4(c) hereof contained in any agreement
between the Company and such holders pursuant to which such Senior
Debt Warrants are issued."
2.7 ADDITIONS TO SECTION 5.1. The following additional defined
terms shall be added to Section 5.1 of the Existing Warrant Agreement, each in
its appropriate alphabetical position:
"ADDITIONAL WARRANTS -- means any additional Warrants issued
pursuant to the terms of Section 4.4 hereof."
"AVERAGE CLOSING BID PRICE -- means, with respect to any
period and any class of Common Stock, the per share price of such
class determined as follows:
"(a) the average daily closing bid prices of such
class of Common Stock on each trading day during such period,
as officially reported on the principal national securities
exchange on which such class of Common Stock is then listed or
admitted to trading; or
"(b) if such class of Common Stock is not then
listed or admitted to trading on any national securities
exchange, the average of the last reported bid prices for each
trading day during such period of such class of Common Stock."
"CLOSING BID PRICE - means, with respect to any date and any
class of Common Stock, the per share price determined as follows:
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"(a) the closing bid prices on such date, as
officially reported on the principal national securities
exchange on which such class of Common Stock is then listed or
admitted to trading; or
"(b) if such class of Common Stock is not then
listed or admitted to trading on any national securities
exchange, the last reported bid price of such class of Common
Stock on such date."
"DILUTION PERCENTAGE -- means the percentage interest in the
fully-diluted equity of the Company represented by all Warrants on
August 21, 1997; provided however, that in the event that any of the
Warrants are exercised after August 20, 1997, the Dilution Percentage
shall be reduced by multiplying the then-effective Dilution Percentage
by a fraction, the numerator of which is the number of Warrants
remaining immediately following such exercise and the denominator of
which is the number of Warrants outstanding immediately prior to such
exercise."
"DIRECTOR OPTIONS -- means rights, options, warrants or
convertible or exchangeable Securities containing the right to
subscribe for or purchase shares of Common Stock issued to any
directors of the Company or any of its Subsidiaries who were members
of the Board of Directors of the Company or any of its Subsidiaries as
of August 20, 1997; provided, however, that:
"(a) rights, warrants, options or convertible or
exchangeable Securities purchased from the Company to acquire
shares of the Common Stock in a bona fide arm's-length
transaction for consideration at least equal to the Reference
Price;
"(b) any rights, options, warrants or convertible
or exchangeable securities purchased from Persons other than
the Company or its Subsidiaries to acquire shares of Common
Stock; and
"(c) any shares of the Series B Preferred Stock
held by any employees, officers or directors of the Company or
any of its Subsidiaries on the August 20, 1997;
"shall not constitute Director Options."
"DIRECTOR OPTION THRESHOLD -- means 1,460,424 shares, as such
number may be adjusted from time to time to reflect any subdivision or
combination of shares of Common Stock."
"EMPLOYEE OPTIONS -- means rights, options, warrants or
convertible or exchangeable Securities containing the right to
subscribe for or purchase shares of Common Stock issued to any
employees, officers or directors of Company or any of its
Subsidiaries, including, without limitation, Employee Options issued
to Xxxxxxx Xxxxxxx as consideration for his services as President and
Chief Executive Officer of the Company; provided, however, that:
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"(a) rights, warrants, options or convertible or
exchangeable Securities purchased from the Company to acquire
shares of Common Stock in a bona fide arm's-length transaction
for consideration at least equal to the Reference Price;
"(b) any rights, options, warrants or convertible
or exchangeable securities acquired from Persons other than
the Company or its Subsidiaries to acquire shares of Common
Stock; and
"(c) any shares of the Series B Preferred Stock
held by any employees, officers or directors of the Company or
any of its Subsidiaries on August 20, 1997;
"shall not constitute Employee Options."
"EMPLOYEE OPTION THRESHOLD -- means 7,302,121 shares, as such
number may be adjusted from time to time to reflect any subdivision or
combination of shares of Common Stock; provided, however, that in the
event that Additional Warrants are issued pursuant to Section 4.4(a)
during any calendar quarter after August 20, 1997, the Employee Option
Threshold shall be increased by the number of Director Options issued
during the immediately preceding calendar quarter (or, with respect to
the first calendar quarter during which the number of Director Options
exceeds the Director Option Threshold, the amount of such excess)."
"MEASUREMENT PRICE - means, with respect to any date and any
class of Common Stock, the average of the daily Closing Bid Prices of
such class of Common Stock for five (5) consecutive trading days prior
to the public announcement of any conversion of any Senior Debt;
provided, however, that the date on which such public announcement is
made shall not be considered a trading day."
"POST-CONVERSION MARKET PRICE - means, with respect to any
date and any class of Common Stock, the average of the daily Closing
Bid Prices of such class of Common Stock for five (5) consecutive
trading days after the filing of a Current Report on Form 8-K with
respect to any conversion of any Senior Debt; provided, however, that
the date on which such Current Report on Form 8-K is filed shall not
be considered a trading day."
"SENIOR DEBT -- has the meaning provided in the Note Purchase
Agreement."
"SENIOR DEBT WARRANTS -- means all warrants initially issued
to the holders of the Senior Debt and any additional warrants issued
pursuant to any agreement between the Company and the holders of the
Senior Debt pursuant to which such warrants were issued."
"SERIES B PREFERRED STOCK -- means the Series B Preferred
Stock of the Company as provided for in its certificate of
incorporation."
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"TERMINATED DIRECTOR OPTIONS -- means any Director Options
issued on or prior to the August 20, 1997 that have been exercised or
have terminated or expired prior to the August 20, 1997."
"TERMINATED EMPLOYEE OPTIONS -- means any Employee Options
issued on or prior to the August 20, 1997 that have been exercised or
have terminated or expired prior to the August 20, 1997."
2.8 AMENDMENTS TO SECTION 5.1. Each of the following definitions
shall amend and restate in its entirety to corresponding definition contained
in the Existing Warrant Agreement.
"INITIAL PURCHASE PRICE -- means:
"(a) with respect to the Warrants issued on the
date hereof, Fifty-Nine Cents ($0.59) per share;
"(b) with respect to any Warrants issued pursuant
to Section 4.4(a), the Average Closing Bid Price of a share of
Common Stock during the calendar quarter in respect of which
the adjustment is being made;
"(c) with respect to any Warrants issued pursuant
to Section 4.4(b), the Post-Conversion Market Price per share;
and
"(d) with respect to any Warrants issued pursuant
to Section 4.4(c) hereof, the per share exercise price of the
rights, options or warrants in respect of which the Additional
Warrants are being issued."
"WARRANTS -- all Warrants issued under this Agreement,
including, without limitation, all Additional Warrants."
2.9 AMENDMENT TO FORM OF WARRANT. For the avoidance of doubt, any
Warrant Certificates issued evidencing Additional Warrants issued pursuant to
Section 4.4 shall bear the actual Initial Purchase Price thereof in the first
paragraph of such Warrant Certificate in lieu of the price reflected in the
form of Warrant contained in Exhibit A to the Existing Warrant Agreement.
SECTION 3. MISCELLANEOUS.
3.1 GOVERNING LAW.
This Amendment shall be governed by, and construed and enforced in
accordance with, internal New York law.
3.2 DUPLICATE ORIGINALS.
Two or more duplicate originals of this Amendment may be signed by the
parties, each of which shall be an original but all of which together shall
constitute one and the same
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instrument. This Amendment may be executed in one or more counterparts and
shall be effective when at least one counterpart shall have been executed by
each party hereto, and each set of counterparts which, collectively, show
execution by each party hereto shall constitute one duplicate original.
3.3 EFFECT OF THIS AMENDMENT.
Except as specifically provided in this Amendment, no terms or
provisions of the Existing Warrant Agreement have been modified or changed by
this Amendment and the terms and provisions of the Existing Warrant Agreement,
as amended hereby, shall continue in full force and effect. This Amendment and
the amendments contained herein shall have and be in effect on and after the
date hereof.
3.4 SECTION HEADINGS.
The titles of the sections hereof appear as a matter of convenience
only, do not constitute a part of this Amendment and shall not affect the
construction hereof.
[REMAINDER OF PAGE INTENTIONALLY BLANK. NEXT PAGE IS SIGNATURE PAGE.]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed on their behalf by a duly authorized officer or agent thereof, as
the case may be, as of the date first above written.
THE CERPLEX GROUP, INC.
By_______________________________
Name:
Title:
THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY
By_______________________________
Name:
Title:
XXXX XXXXXXX MUTUAL LIFE
INSURANCE COMPANY
By_______________________________
Name:
Title:
NORTH ATLANTIC SMALLER COMPANIES
INVESTMENT TRUST PLC
By_______________________________
Name:
Title:
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SCHEDULE A
Schedule of Holders
The Northwestern Mutual Life Insurance Company
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Xxxx Xxxxxxx Mutual Life Insurance Company
Xxxx Xxxxxxx Place
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
North Atlantic Smaller Companies Trust PLC
c/o X.X. Xxxxxx & Co., Ltd.
00 Xxxx Xxxxx
Xxxxxx, Xxxxxxx XX0X0XX
Schedule A-1
