EXHIBIT 10.4
SECOND AMENDED AND RESTATED WARRANT
October _, 2003
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAW OF ANY STATE AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR
PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH
ACT AND SUCH LAWS.
Warrant to Purchase 226,407
Shares of Common Stock
MERCURY AIR GROUP, INC.
COMMON STOCK PURCHASE WARRANT
Void after September 9, 2006
Mercury Air Group, Inc. (the "Company"), a Delaware corporation, hereby
certifies that for value received, Allied Capital Corporation, a Maryland
corporation ("Allied"), or its successors or assigns (the "Holder"), is entitled
to purchase, subject to the terms and conditions hereinafter set forth, an
aggregate of 226,407 fully paid and nonassessable shares of Common Stock (as
hereinafter defined) of the Company, at an exercise price of $6.08 per share
(the "Purchase Price"), subject to adjustment as provided herein, at any time or
from time to time beginning on the date hereof and prior to 5:00 P.M., New York
City time, on September 9, 2006 (the "Expiration Date").
This Second Amended and Restated Warrant amends and restates the
Warrant issued pursuant to the Securities Purchase Agreement (the "Purchase
Agreement"), dated as of September 10, 1999, between Mercury Air Group, Inc. and
WMF, as amended, and is subject to the terms thereof. Capitalized terms used
herein and not otherwise defined shall have the respective meanings assigned to
such terms in the Purchase Agreement. The Holder is entitled to the rights and
subject to the obligations contained in the Purchase Agreement, the
Stockholders' Agreement and the Registration Rights Agreement relating to this
Warrant and the shares of Common Stock issuable upon exercise of this Warrant.
1. DEFINITIONS. For the purposes of this Warrant, the following
terms shall have the meanings indicated:
"Applicable Price" shall mean the higher of (a) the Current Market
Price per share of Common Stock on the applicable record or other relevant date
and (b) the Dilution Price.
"Business Day" shall mean any day other than a Saturday, Sunday or
other day on which commercial banks in the City of New York are authorized or
required by law or executive order to close.
"Closing Price" shall mean, with respect to each share of Common Stock
for any day, (a) the last reported sale price regular way or, in case no such
sale takes place on such day, the average of the closing bid and asked prices
regular way, in either case as reported on the principal national securities
exchange on which the Common Stock is listed or admitted for trading or (b) if
the Common Stock is not listed or admitted for trading on any national
securities exchange, the last reported sale price or, in case no such sale takes
place on such day, the average of the highest reported bid and the lowest
reported asked quotation for the Common Stock, in either case as reported on the
NASDAQ or a similar service if NASDAQ is no longer reporting such information.
"Common Stock" means the common stock, par value $.01 per share, of the
Company, and any class of stock resulting from successive changes or
reclassification of such Common Stock.
"Company" has the meaning ascribed to such term in the first paragraph
of this Warrant.
"Current Market Price" shall be determined in accordance with
Subsection 3(e).
"Dilution Price" shall mean, with respect to each share of Common
Stock, $7.484, subject to appropriate adjustment for events described in
Subsection 3(a).
"Exercise Date" has the meaning ascribed to such term in Subsection
2(d).
"Expiration Date" has the meaning ascribed to such term in the first
paragraph of this Warrant.
"Holder" has the meaning ascribed to such term in the first paragraph
and Section 9 of this Warrant.
"Issued Warrant Shares" means any shares of Common Stock issued upon
exercise of the Warrant.
"NASDAQ" shall mean the Automatic Quotation System of the National
Association of Securities Dealers, Inc.
"Person" shall mean any individual, firm, corporation, limited
liability company, partnership, trust, incorporated or unincorporated
association, joint venture, joint stock company, government (or an agency or
political subdivision thereof) or other entity of any kind, and shall include
any successor (by merger or otherwise) of such entity.
"Purchase Agreement" has the meaning ascribed to such term in the
second paragraph of this Warrant.
"Purchase Price" has the meaning ascribed to such term in the first
paragraph of this Warrant.
"Stockholders' Agreement" means the Stockholders' Agreement
substantially in the form attached to the Purchase Agreement as Exhibit E.
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"Warrant" shall mean this Warrant and any subsequent Warrant issued
pursuant to the terms of this Warrant.
"Warrant Register" has the meaning ascribed to such term in Subsection
9(c).
2. EXERCISE OF WARRANT.
(a) Exercise. This Warrant may be exercised, in whole or
in part, at any time or from time to time during the period beginning on the
date hereof and ending on the Expiration Date, by surrendering to the Company at
its principal office this Warrant, with the form of Election to Purchase Shares
(the "Election to Purchase Shares") attached hereto as Exhibit A duly executed
by the Holder and accompanied by payment of the Purchase Price for the number of
shares of Common Stock specified in such form.
(b) Delivery of Shares; Payment of Purchase Price. As
soon as practicable after surrender of this Warrant and receipt of payment, the
Company shall promptly issue and deliver to the Holder a certificate or
certificates for the number of shares of Common Stock set forth in the Election
to Purchase Shares, in such name or names as may be designated by such Holder,
along with a check for the amount of cash to be paid in lieu of issuance of
fractional shares, if any. Payment of the Purchase Price may be made as follows
(or by any combination of the following): (i) in United States currency by cash
or delivery of a certified check, bank draft or postal or express money order
payable to the order of the Company, (ii) by assigning to the Company all or any
part of the unpaid principal amount of the WMF Note held by the Holder in a
principal amount equal to the Purchase Price, (iii) by surrender of a number of
shares of Common Stock held by the Holder equal to the quotient obtained by
dividing (A) the Purchase Price payable with respect to the portion of this
Warrant then being exercised by (B) the Current Market Price per share of Common
Stock on the Exercise Date, or (iv) by cancellation of any portion of this
Warrant with respect to the number of shares of Common Stock equal to the
quotient obtained by dividing (A) the aggregate Purchase Price payable with
respect to the portion of this Warrant then being exercised by (B) the
difference between (1) Current Market Price per share of Common Stock on the
Exercise Date, and (2) the Purchase Price per share of Common Stock.
(c) Partial Exercise. If this Warrant is exercised for
less than all of the shares of Common Stock purchasable under this Warrant, the
Company shall cancel this Warrant upon surrender hereof and shall execute and
deliver to the Holder a new Warrant of like tenor for the balance of the shares
of Common Stock purchasable hereunder.
(d) When Exercise Effective. The exercise of this Warrant
shall be deemed to have been effective immediately prior to the close of
business on the Business Day on which this Warrant is surrendered to and the
Purchase Price is received by the Company as provided in this Section 2 (the
"Exercise Date") and the Person in whose name any certificate for shares of
Common Stock shall be issuable upon such exercise, as provided in Subsection
2(b), shall be deemed to be the record holder of such shares of Common Stock for
all purposes on the Exercise Date.
(e) Issued Warrant Shares Fully Paid, Nonassessable. The
Company shall take
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all actions necessary to ensure that following exercise of this Warrant in
accordance with the provisions of this Section 2, the Issued Warrant Shares
issued hereunder shall, without further action by the Holder, be fully paid and
nonassessable.
(f) Continued Validity. A Holder of shares of Common
Stock issued upon the exercise of this Warrant, in whole or in part, shall
continue to be entitled to all of the rights and subject to all of the
obligations set forth in Section 9.
3. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES. The
Purchase Price and the number of shares of Common Stock issuable upon exercise
of this Warrant shall be adjusted from time to time upon the occurrence of the
following events:
(a) Dividend, Subdivision, Combination or
Reclassification of Common Stock. If the Company shall, at any time or from time
to time, (i) declare a dividend on the Common Stock payable in shares of its
capital stock (including Common Stock), (ii) subdivide the outstanding Common
Stock into a larger number of shares of Common Stock, (iii) combine the
outstanding Common Stock into a smaller number of shares of its Common Stock, or
(iv) issue any shares of its capital stock in a reclassification of the Common
Stock (including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing corporation), then in each such
case, the Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of capital stock issuable on
such date shall be proportionately adjusted so that the Holder of any Warrant
exercised after such date shall be entitled to receive, upon payment of the same
aggregate amount as would have been payable before such date, the aggregate
number and kind of shares of capital stock which, if such Warrant had been
exercised immediately prior to such date, such Holder would have owned upon such
exercise and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification. Any such adjustment shall become effective
immediately after the record date of such dividend or the effective date of such
subdivision, combination or reclassification. Such adjustment shall be made
successively whenever any event listed above shall occur. If a dividend is
declared and such dividend is not paid, the Purchase Price shall again be
adjusted to be the Purchase Price in effect immediately prior to such record
date (giving effect to all adjustments that otherwise would be required to be
made pursuant to this Section 3 from and after such record date).
(b) Issuance of Rights to Purchase Common Stock Below
Current Market Price or Dilution Price. If the Company shall, at any time or
from time to time, fix a record date for the issuance of rights, options or
warrants to all holders of Common Stock entitling them to subscribe for or
purchase Common Stock, or securities convertible into Common Stock at a price
per share of Common Stock or having a conversion price per share of Common Stock
if a security is convertible into Common Stock (determined in either such case
by dividing (x) the total consideration payable to the Company upon exercise,
conversion or exchange of such rights, options, warrants or other securities
convertible into Common Stock by (y) the total number of shares of Common Stock
covered by such rights, options, warrants or other securities convertible into
Common Stock) which is lower than either the Current Market Price per share of
Common Stock on such record date (or, if an ex-dividend date has been
established for such record date, on the day next preceding such ex-dividend
date) or the Dilution Price, then, the
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Purchase Price shall be reduced to the price determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the sum of the number of shares of Common Stock
outstanding on such record date plus the number of additional shares of Common
Stock which the aggregate offering price of the total number of shares of Common
Stock so to be offered (or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at the Applicable Price
and the denominator of which shall be the number of shares of Common Stock
outstanding on such record date plus the number of additional shares of Common
Stock to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible). In case such price for
subscription or purchase may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration shall be
determined in good faith by the Board of Directors of the Company. Any such
adjustment shall become effective immediately after the record date for such
rights or warrants. Such adjustment shall be made successively whenever such a
record date is fixed. If such rights, options or warrants are not so issued, the
Purchase Price shall be adjusted to the Purchase Price that otherwise would be
in effect but for the fact such record date was fixed (giving effect to all
adjustments that otherwise would be required to be made pursuant to this Section
3 from and after such record date).
(c) Certain Distributions. If the Company shall, at any
time or from time to time, fix a record date for the distribution to all holders
of Common Stock (including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing corporation) of
evidences of indebtedness, assets or other property (other than regularly
scheduled cash dividends or cash distributions payable out of consolidated
earnings or earned surplus or dividends payable in capital stock for which
adjustment is made under Subsection 3(a)) or subscription rights, options or
warrants (excluding those referred to in Subsection 3(b)), then the Purchase
Price shall be reduced to the price determined by multiplying the Purchase Price
in effect immediately prior to such record date by a fraction (which shall in no
event be less than zero), the numerator of which shall be the Current Market
Price per share of Common Stock on such record date (or, if an ex-dividend date
has been established for such record date, on the next day preceding such
ex-dividend date), less the fair market value (as determined in good faith by
the Board of Directors of the Company) of the portion of the assets, evidences
of indebtedness, other property, subscription rights or warrants so to be
distributed applicable to one share of Common Stock and the denominator of which
shall be such Current Market Price per share of Common Stock. Any such
adjustment shall become effective immediately after the record date for such
distribution. Such adjustments shall be made successively whenever such a record
date is fixed. In the event that such distribution is not so made, the Purchase
Price shall be adjusted to the Purchase Price in effect immediately prior to
such record date (giving effect to all adjustments that otherwise would be
required to be made pursuant to this Section 3 from and after such record date).
(d) Issuance of Common Stock Below Current Market Price
or Dilution Price.
(i) If the Company shall, at any time and from
time to time, after the date hereof, directly or indirectly, sell or issue
shares of Common Stock (regardless of whether originally issued or from the
Company's treasury), or rights, options, warrants or convertible or exchangeable
securities containing the right to subscribe for or purchase shares of Common
Stock) at a price per share of Common Stock (determined, in the case of rights,
options, warrants
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or convertible or exchangeable securities, by dividing (x) the total
consideration received or receivable by the Company in consideration of the sale
or issuance of such rights, options, warrants or convertible or exchangeable
securities, plus the total consideration payable to the Company upon exercise or
conversion or exchange thereof, by (y) the total number of shares of Common
Stock covered by such rights, options, warrants or convertible or exchangeable
securities) which is lower than either the Current Market Price per share of
Common Stock or the Dilution Price immediately prior to such sale or issuance,
then, subject to clause 3(d)(ii), the Purchase Price shall be reduced to a price
determined by multiplying the Purchase Price in effect immediately prior thereto
by a fraction, the numerator of which shall be the sum of the number of shares
of Common Stock outstanding immediately prior to such sale or issuance plus the
number of shares of Common Stock which the aggregate consideration received
(determined as provided below) for such sale or issuance would purchase at the
Applicable Price and the denominator of which shall be the total number of
shares of Common Stock outstanding immediately after such sale or issuance. Such
adjustment shall be made successively whenever such sale or issuance is made.
For the purposes of such adjustments, the shares of Common Stock which the
holder of any such rights, options, warrants, or convertible or exchangeable
securities shall be entitled to subscribe for or purchase shall be deemed to be
issued and outstanding as of the date of such sale or issuance and the
consideration "received" by the Company therefor shall be deemed to be the
consideration actually received or receivable by the Company (plus any
underwriting discounts or commissions in connection therewith) for such rights,
options, warrants or convertible or exchangeable securities, plus the
consideration stated in such rights, options, warrants or convertible or
exchangeable securities to be payable to the Company for the shares of Common
Stock covered thereby. If the Company shall sell or issue shares of Common Stock
for a consideration consisting, in whole or in part, of property other than cash
or its equivalent, then in determining the "price per share of Common Stock" and
the "consideration" received or receivable by or payable to the Company for
purposes of the first sentence and the immediately preceding sentence of this
Subsection 3(d), the fair value of such property shall be determined in good
faith by the Board of Directors of the Company. The determination of whether any
adjustment is required under this Subsection 3(d) by reason of the sale and
issuance of rights, options, warrants or convertible or exchangeable securities
and the amount of such adjustment, if any, shall be made only at the time of
such issuance or sale and not at the subsequent time of issuance of shares of
Common Stock upon the exercise of such rights to subscribe or purchase.
(ii) No adjustment shall be made to the Purchase
Price pursuant to clause 3(d)(i) in connection with the issuance of (A) shares
issued upon exercise of this Warrant; or (B) options to purchase an aggregate of
70,847 shares of Common Stock granted on or after December 30, 2002, if such
shares would otherwise be included in clause 3(d)(i).
(iii) Notwithstanding any provision in Section 3
to the contrary and without limitation to any other provision contained in
Section 3, in the event any securities of the Company (other than this Warrant),
including, without limitation, those securities set forth as exceptions in
Subsection 3(d)(ii) (for purposes of this Subsection, collectively, the "Subject
Securities"), are amended or otherwise modified by operation of its terms or
otherwise (including, without limitation, by operation of such Subject
Securities' anti-dilution provisions, other than anti-dilution provisions
substantially similar to those set forth in Subsection 3(d)(i)) in any manner
whatsoever that results in (i) the reduction of the exercise, conversion or
exchange
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price of such Subject Securities payable upon the exercise for, or conversion or
exchange into, Common Stock or other securities exercisable for, or convertible
or exchangeable into, Common Stock and/or (ii) such Subject Securities becoming
exercisable for, or convertible or exchangeable into (A) more shares or dollar
amount of such Subject Securities which are, in turn exercisable for, or
convertible or exchangeable into, Common Stock, or (B) more shares of Common
Stock, then such amendment or modification shall be treated for purposes of
Section 3 as if the Subject Securities which have been amended or modified have
been terminated and new securities have been issued with the amended or modified
terms. The Company shall make all necessary adjustments (including successive
adjustments if required) to the Purchase Price in accordance with Section 3, but
in no event shall the Purchase Price be greater than it was immediately prior to
the application of this Subsection to the transaction in question. On the
expiration or termination of any such amended or modified Subject Securities for
which adjustment has been made pursuant to the operation of the provisions of
this Subsection under Section 3(b) or 3(d), as the case may be, without such
Subject Securities having been exercised, converted or exchanged in full
pursuant to their terms, the adjusted Purchase Price shall be appropriately
readjusted in the manner specified in such Section.
(e) Determination of Current Market Price. For
the purpose of any computation under Subsections (b), (c) or (d) of this Section
3 or any other provision of this Warrant, the Current Market Price per share of
Common Stock on any date shall be deemed to be the average of the daily Closing
Prices per share of Common Stock for the 10 consecutive trading days commencing
15 trading days before such date. If on any such date the shares of Common Stock
are not listed or admitted for trading on any national securities exchange or
quoted by NASDAQ or a similar service, then the Company, on the one hand, and
Allied on the other hand, shall each promptly appoint as an appraiser an
individual who shall be a member of a nationally recognized investment banking
firm. Each appraiser shall be instructed to, within 30 days of appointment,
determine the Current Market Price per share of Common Stock which shall be
deemed to be equal to the fair market value per share of Common Stock as of such
date. If the two appraisers are unable to agree on the Current Market Price per
share of Common Stock within such 30 day period, then the two appraisers, within
10 days after the end of such 30 day period shall jointly select a third
appraiser. The third appraiser shall, within 30 days of its appointment,
determine, in good faith, the Current Market Price per share of Common Stock and
such determination shall be controlling. If any party fails to appoint an
appraiser or if one of the two initial appraisers fails after appointment to
submit its appraisal within the required period, the appraisal submitted by the
remaining appraiser shall be controlling. The cost of the foregoing appraisals
shall be shared one-half by the Company and one-half by Allied, provided,
however, in the event a third appraiser is utilized and one of the two initial
appraisals (but not the other initial appraisal) is greater than or less than
the appraisal by such third appraiser by 10% or more, then the cost of all of
the foregoing appraisals shall be borne by the party who appointed the appraiser
who made such initial appraisal.
(f) De Minimis Adjustments. No adjustment in the
Purchase Price shall be made if the amount of such adjustment would result in a
change in the Purchase Price per share of less than $0.05, but in such case any
adjustment that would otherwise be required to be made shall be carried forward
and shall be made at the time of and together with the next subsequent
adjustment, which together with any adjustment so carried forward, would result
in a change in the Purchase Price of $0.05 per share or more. If the Company
shall, at any time or from time to
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time, issue Common Stock by way of dividends on any stock of the Company or
subdivide or combine the outstanding shares of the Common Stock, such amount of
$0.05 (as theretofore increased or decreased, if such amounts shall have been
adjusted in accordance with the provisions of this clause) shall forthwith be
proportionately increased in the case of a combination or decreased in the case
of a subdivision or stock dividend so as appropriately to reflect the same.
Notwithstanding the provisions of the first sentence of this Subsection 3(f),
any adjustment postponed pursuant to this Subsection 3(f) shall be made no later
than the earlier of (i) three years from the date of the transaction that would,
but for the provisions of the first sentence of this Section 3(f), have required
such adjustment, (ii) an Exercise Date or (iii) the Expiration Date.
(g) Adjustments to Other Shares. In the event
that at any time, as a result of an adjustment made pursuant to Subsection 3(a),
the Holder shall become entitled to receive, upon exercise of this Warrant, any
shares of capital stock of the Company other than shares of Common Stock, the
number of such other shares so receivable upon exercise of this Warrant shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the shares of Common
Stock contained in Subsections 3(a), (b), (c) and (d), inclusive, and the
provisions of Sections 2, 5, 6 and 7 with respect to the shares of Common Stock
shall apply on like terms to any such other shares.
(h) Adjustment of Number of Shares Issuable Upon
Exercise. Upon each adjustment of the Purchase Price as a result of the
calculations made in Subsections 3(a), (b), (c) or (d), this Warrant shall
thereafter evidence the right to receive, at the adjusted Purchase Price, that
number of shares of Common Stock (calculated to the nearest one-hundredth)
obtained by dividing (x) the product of the aggregate number of shares of Common
Stock covered by this Warrant immediately prior to such adjustment and the
Purchase Price in effect immediately prior to such adjustment of the Purchase
Price by (y) the Purchase Price in effect immediately after such adjustment of
the Purchase Price.
(i) Reorganization, Reclassification, Merger and
Sale of Assets. If there occurs any capital reorganization or any
reclassification of the Common Stock of the Company, the consolidation or merger
of the Company with or into another Person (other than a merger or consolidation
of the Company in which the Company is the continuing corporation and which does
not result in any reclassification or change of outstanding shares of its Common
Stock) or the sale or conveyance of all or substantially all of the assets of
the Company to another Person, then the Holder will thereafter be entitled to
receive, upon the exercise of this Warrant in accordance with the terms hereof,
the same kind and amounts of securities (including shares of stock) or other
assets, or both, which were issuable or distributable to the holders of
outstanding Common Stock of the Company upon such reorganization,
reclassification, consolidation, merger, sale or conveyance, in respect of that
number of shares of Common Stock then deliverable upon the exercise of this
Warrant if this Warrant had been exercised immediately prior to such
reorganization, reclassification, consolidation, merger, sale or conveyance;
and, in any such case, appropriate adjustments (as determined in good faith by
the Board of Directors of the Company) shall be made to assure that the
provisions hereof (including provisions with respect to changes in, and other
adjustments of, the Purchase Price) shall thereafter be applicable, as nearly as
reasonably may be practicable, in relation to any securities or other assets
thereafter deliverable upon exercise of this Warrant.
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4. CERTIFICATE AS TO ADJUSTMENTS. Whenever the Purchase Price and
the number of shares of Common Stock issuable, or the securities or other
property deliverable, upon the exercise of this Warrant shall be adjusted
pursuant to the provisions hereof, the Company shall promptly give written
notice thereof to the Holder, in accordance with Section 13, in the form of a
certificate signed by the Chairman of the Board, President or one of the Vice
Presidents of the Company, and by the Chief Financial Officer, Treasurer or one
of the Assistant Treasurers of the Company, stating the adjusted Purchase Price,
the number of shares of Common Stock issuable, or the securities or other
property deliverable, upon exercise of the Warrant and setting forth in
reasonable detail the method of calculation and the facts requiring such
adjustment and upon which such calculation is based. Each adjustment shall
remain in effect until a subsequent adjustment is required.
5. FRACTIONAL SHARES. Notwithstanding an adjustment pursuant to
Section 3(h) in the number of shares of Common Stock covered by this Warrant or
any other provision of this Warrant, the Company shall not be required to issue
fractions of shares upon exercise of this Warrant or to distribute certificates
which evidence fractional shares. In lieu of fractional shares, the Company may
make payment to the Holder, at the time of exercise of this Warrant as herein
provided, of an amount in cash equal to such fraction multiplied by the greater
of the Current Market Price of a share of Common Stock on the Exercise Date and
the Dilution Price.
6. NOTICE OF PROPOSED ACTIONS. In case the Company shall propose
at any time or from time to time (a) to declare or pay any dividend payable in
stock of any class to the holders of Common Stock or to make any other
distribution to the holders of Common Stock (other than a regularly scheduled
cash dividend), (b) to offer to the holders of Common Stock rights or warrants
to subscribe for or to purchase any additional shares of Common Stock or shares
of stock of any class or any other securities, rights or options, (c) to effect
any reclassification of its Common Stock, (d) to effect any consolidation,
merger or sale, transfer or other disposition of all or substantially all of the
property, assets or business of the Company which would, if consummated, adjust
the Purchase Price or the securities issuable upon exercise of the Warrants, (e)
to effect the liquidation, dissolution or winding up of the Company, or (f) to
take any other action that would require a vote of the Company's stockholders,
then, in each such case, the Company shall give to the Holder, in accordance
with Section 13, a written notice of such proposed action, which shall specify
(i) the record date for the purposes of such stock dividend, distribution of
rights or warrants or vote of the stockholders of the Company, or if a record is
not to be taken, the date as of which the holders of shares of Common Stock of
record to be entitled to such dividend, distribution of rights or warrants, or
vote is to be determined, or (ii) the date on which such reclassification,
consolidation, merger, sale, transfer, disposition, liquidation, dissolution or
winding up is expected to become effective, and such notice shall be so given as
promptly as possible but in any event at least ten (10) Business Days prior to
the applicable record, determination or effective date specified in such notice.
7. NO DILUTION OR IMPAIRMENT. The Company will not, by amendment
of its Certificate of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other action, avoid or seek to avoid the observance or performance of any of the
terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the Holder of this
Warrant against
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dilution or other impairment. Without limiting the generality of the foregoing,
the Company (a) will not increase the par value of any shares of stock
receivable on the exercise of this Warrant above the amount payable therefor on
such exercise, (b) will at all times reserve and keep available the maximum
number of its authorized shares of Common Stock, free from all preemptive rights
therein, which will be sufficient to permit the full exercise of this Warrant,
and (c) will take all such action as maybe necessary or appropriate in order
that all shares of Common Stock as may be issued pursuant to the exercise of
this Warrant will, upon issuance, be duly and validly issued, fully paid and
nonassessable, and free from all taxes, liens and charges with respect to the
issue thereof.
8. REPLACEMENT OF WARRANTS. On receipt by the Company of an
affidavit of an authorized representative of the Holder stating the
circumstances of the loss, theft, destruction or mutilation of this Warrant (and
in the case of any such mutilation, on surrender and cancellation of such
Warrant), the Company at its expense will promptly execute and deliver, in lieu
thereof, a new Warrant of like tenor which shall be exercisable for a like
number of shares of Common Stock. If required by the Company, such Holder must
provide an indemnity bond or other indemnity sufficient in the judgment of the
Company to protect the Company from any loss which it may suffer if a lost,
stolen or destroyed Warrant is replaced.
9. RESTRICTIONS ON TRANSFER.
(a) Subject to the provisions of this Section 9, this
Warrant may be transferred or assigned, in whole or in part, by the Holder at
any time, and from time to time. The term "Holder" as used herein shall also
include any transferee of this Warrant whose name has been recorded by the
Company in the Warrant Register (as hereinafter defined). Each transferee of the
Warrant or the Common Stock issuable upon the exercise of the Warrant
acknowledges that the Warrant or the Common Stock issuable upon the exercise of
the Warrant has not been registered under the Securities Act and may be
transferred only pursuant to an effective registration under the Securities Act
or pursuant to an applicable exemption from the registration requirements of the
Securities Act.
(b) With respect to a transfer that should occur prior to
the time that the Warrant or the Common Stock issuable upon the exercise thereof
is registered under the Securities Act, such Holder shall request an opinion of
counsel (which shall be rendered by counsel reasonably acceptable to the
Company) that the proposed transfer may be effected without registration or
qualification under any Federal or state securities or blue sky law. Counsel
shall, as promptly as practicable, notify the Company and the Holder of such
opinion and of the terms and conditions, if any, to be observed in such
transfer, whereupon the Holder shall be entitled to transfer this Warrant or
such shares of Common Stock (or portion thereof), subject to any other
provisions and limitations of this Warrant. In the event this Warrant shall be
exercised as an incident to such transfer, such exercise shall relate back and
for all purposes of this Warrant be deemed to have occurred as of the date of
such notice regardless of delays incurred by reason of the provisions of this
Section 9 which may result in the actual exercise on any later date.
(c) The Company shall maintain a register (the "Warrant
Register") in its principal office for the purpose of registering the Warrant
and any transfer thereof, which
~Allied Warrant
10
register shall reflect and identify, at all times, the ownership of any interest
in the Warrant. Upon the issuance of this Warrant, the Company shall record the
name of the initial purchaser of this Warrant in the Warrant Register as the
first Holder. Upon surrender for registration of transfer or exchange of this
Warrant together with a properly executed Form of Assignment attached hereto as
Exhibit B at the principal office of the Company, the Company shall, at its
expense, execute and deliver one or more new Warrants of like tenor which shall
be exercisable for a like aggregate number of shares of Common Stock, registered
in the name of the Holder or a transferee or transferees.
(d) Notwithstanding any provision in this Warrant to the
contrary, the Holder shall not sell, assign, or otherwise transfer to any Person
(a "Transferee") any Issued Warrant Shares prior to the Expiration Date unless
such Transferee agrees in writing to be bound in the same manner as the Holder
by the provisions of this Section 9.
10. NO RIGHTS OR LIABILITY AS A STOCKHOLDER. This Warrant does not
entitle the Holder hereof to any voting rights or other rights as a stockholder
of the Company. No provisions hereof, in the absence of affirmative action by
the Holder hereof to purchase Common Stock, and no enumeration herein of the
rights or privileges of the Holder shall give rise to any liability of such
Holder as a stockholder of the Company.
11. CHARGES, TAXES AND EXPENSES. Issuance of certificates for
shares of Common Stock upon the exercise of this Warrant shall be made without
charge to the Holder hereof for any issue or transfer tax, or other incidental
expense, in respect of the issuance or delivery of such certificates or the
securities represented thereby, all of which taxes and expenses shall be paid by
the Company.
12. AMENDMENT OR WAIVER. This Warrant and any term hereof may be
amended, waived, discharged or terminated only by and with the written consent
of the Company and the Holder.
13. NOTICES. Any notice or other communication (or delivery)
required or permitted hereunder shall be made in writing and shall be by
registered mail, return receipt requested, telecopier, courier service or
personal delivery to the Company at its principal office as specified in Section
11.2 of the Purchase Agreement and to the Holder at its address as it appears in
the Warrant Register. All such notices and communications (and deliveries) shall
be deemed to have been duly given: when delivered by hand, if personally
delivered; when delivered by courier, if delivered by commercial overnight
courier service; five Business Days after being deposited in the mail, postage
prepaid, if mailed; and when receipt is acknowledged, if telecopied.
14. CERTAIN REMEDIES. The Holder shall be entitled to an
injunction or injunctions to prevent breaches of the provisions of this Warrant
and to enforce specifically the terms and provisions of this Warrant in any
court of the United States or any state thereof having jurisdiction, this being
in addition to any other remedy to which such Holder may be entitled at law or
in equity.
15. GOVERNING LAW. This Warrant shall be governed by and construed
in accordance with the laws of the State of New York, without regard to the
principles of conflicts of law of
~Allied Warrant
11
such State (including giving effect to GOL Section 5-1401).
16. HEADINGS. The headings in this Warrant are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
MERCURY AIR GROUP, INC.
By: -s-[ILLEGIBLE]
---------------------
Name: [ILLEGIBLE]
Title:[ILLEGIBLE]
~Allied Warrant
12
EXHIBIT A TO COMMON STOCK
PURCHASE WARRANT
ELECTION TO PURCHASE SHARES
The undersigned hereby irrevocably elects to exercise the Warrant to
purchase __________ shares of Common Stock, par value $.01 per share ("Common
Stock"), of Mercury Air Group, Inc. (the "Company") and hereby [makes payment of
$___________________________ therefor] [or] [makes payment therefor by
assignment to the Company pursuant to Section 2(b)(ii) of the Warrant of
$____________________ aggregate principal amount of WMF Note (as defined in the
Warrant)] [or] [makes payment therefore by surrendering pursuant to Section
2(b)(iii) _________________________ shares of Common Stock of the Company] [or]
[makes payment therefor by cancellation pursuant to Section 2(b)(iv) of a
portion of the Warrant with respect t o_______________________ shares of Common
Stock]. The undersigned hereby requests that certificates for such shares be
issued and delivered as follows:
ISSUE TO:_______________________________________________________________________
(NAME)
________________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
________________________________________________________________________________
(SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER)
DELIVER TO:_____________________________________________________________________
(NAME)
________________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
If the number of shares of Common Stock purchased hereby is less than
the number of shares of Common Stock covered by the Warrant, the undersigned
requests that a new Warrant representing the number of shares of Common Stock
not purchased be issued and delivered as follows:
ISSUE TO:_______________________________________________________________________
(NAME)
________________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
________________________________________________________________________________
(SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER)
DELIVER TO:_____________________________________________________________________
(NAME)
A-l
________________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
Dated: [NAME OF XXXXXX(1)]
By:_______________________
Name:
Title:
---------
1. Name of Xxxxxx must conform in all respects to name of Xxxxxx as specified
on the face of the Warrant
A-2
EXHIBIT B TO COMMON STOCK
PURCHASE WARRANT
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers unto the Assignee named below all of the rights of the undersigned to
purchase Common Stock, par value $0.01 per share ("Common Stock"), of Mercury
Air Group, Inc. represented by the Warrant, with respect to the number of shares
of Common Stock set forth below:
Name of Assignee Address No. of Shares
and does hereby irrevocably constitute and appoint
_______________________________________________________ Attorney to make such
transfer on the books of Mercury Air Group, Inc. maintained for that purpose,
with full power of substitution in the premises.
Dated: [NAME OF XXXXXX (1)]
By:_______________________
Name:
Title:
---------
1. Name of Xxxxxx must conform in all respects to name of Xxxxxx as specified
on the face of the Warrant.
B-1
