EXHIBIT 99.2
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR
QUALIFIED UNDER ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT IN COMPLIANCE
WITH THE REGISTRATION REQUIREMENTS OF SUCH ACT AND THE REGISTRATION OR
QUALIFICATION REQUIREMENTS OF SUCH STATE SECURITIES LAWS OR PURSUANT TO AN
EXEMPTION FROM SUCH REGISTRATION AND QUALIFICATION.
WARRANT NO. LL-2 September 11, 2002
OVERHILL FARMS, INC.
WARRANT TO PURCHASE 57.57 SHARES OF COMMON STOCK
FOR VALUE RECEIVED, OVERHILL FARMS, INC., a Nevada corporation (the
"Company"), hereby certifies that XXXXXX XXXXXXXXX CAPITAL PARTNERS II, L.P., a
California limited partnership ("LLCP"), or its assigns (collectively, the
"Holder"), is entitled to purchase, on the terms and subject to the conditions
contained herein, 57.57 shares (as such number of shares may be adjusted from
time to time, the "Warrant Shares") of Common Stock, par value $0.01 per share,
of the Company ("Common Stock"), at an exercise price of $0.01 per Warrant Share
(the "Warrant Purchase Price") at any time and from time to time during the
Exercise Period (as such term is defined below). The number of Warrant Shares
issuable upon exercise of this Warrant to Purchase 57.57 Shares of Common Stock
(this "Warrant") and the Warrant Purchase Price shall be subject to adjustment
from time to time as provided herein.
This Warrant is the "Fifth Amendment Warrant" referred to in, and is
being issued by the Company in connection with the execution and delivery of,
that certain Fifth Amendment to Securities Purchase Agreement dated as of
September 11, 2002, which further amends that certain Securities Purchase
Agreement dated as of November 24, 1999, by and among the Company, Overhill
Corporation (formerly known as Polyphase Corporation), Overhill L.C. Ventures,
Inc. and LLCP, as amended by a Consent and First Amendment to Securities
Purchase Agreement dated as of August 23, 2000, and as further amended by a
Second Amendment to Securities Purchase Agreement dated as of January 11, 2002,
a Consent and Third Amendment dated as of January 31, 2002, a Fourth Amendment
to Securities Purchase Agreement dated as of June 28, 2002, and such Fifth
Amendment (as so amended and as further amended from time to time, the
"Securities Purchase Agreement").
This Warrant is subject to the following terms and conditions:
1. DEFINITIONS. Unless otherwise indicated in this Warrant,
capitalized terms used and not otherwise defined in this Warrant have the
meanings ascribed to them in
the Securities Purchase Agreement. In addition, the following capitalized terms
have the following meanings:
"Board of Directors" means the Board of Directors of the Company.
"Common Stock" has the meaning set forth in the preamble.
"Company" has the meaning set forth in the preamble.
"Convertible Securities" means, when used in this Agreement, any
securities or other obligations issued or issuable by the Company or any other
Person that are exercisable or exchangeable for, or convertible into, any
Capital Stock of the Company.
"Current Market Price" per share of Common Stock means, as of any
specified date on which the Common Stock is publicly traded, the average of the
daily market prices of the Common Stock over the twenty (20) consecutive trading
days immediately preceding (and not including) such date. The `daily market
price' for each such trading day shall be (i) the closing sales price on such
day on the principal securities exchange on which the Common Stock is then
listed or admitted to trading or on Nasdaq, as applicable, (ii) if no sale takes
place on such day on any such securities exchange or system, the average of the
closing bid and asked prices, regular way, on such day for the Common Stock as
officially quoted on any such securities exchange or system, (iii) if the Common
Stock is not then listed or admitted to trading on any securities exchange or
system, the last reported sale price, regular way, on such day for the Common
Stock, or if no sale takes place on such day, the average of the closing bid and
asked prices for the Common Stock on such day, as reported by Nasdaq or the
National Quotation Bureau, and (iv) if the Common Stock is not then listed or
admitted to trading on any securities exchange and if no such reported sale
price or bid and asked prices are available, the average of the reported high
bid and low asked prices on such day, as reported by a reputable quotation
service, or a newspaper of general circulation in the City of Los Angeles, State
of California, customarily published on each Business Day. If the daily market
price cannot be determined for the twenty (20) consecutive trading days
immediately preceding such date in the manner specified in the foregoing
sentence, then the Common Stock shall not be deemed to be publicly traded as of
such date.
"Designated Office" means, at any time, the principal executive
offices of the Company at such time.
"Dilutive Issuance" has the meaning set forth in Section 3.8(g).
"Dispute Notice" has the meaning set forth in the definition of Fair
Market Value.
"DOJ" has the meaning set forth in Section 2.3.
"Equity Repurchase Option Agreement" means that certain Equity
Repurchase Option Agreement dated as of September 11, 2002, between the Company
and LLCP, as amended from time to time.
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"Excluded Securities" means, collectively, (i) any shares of Common
Stock or Option Rights issued in any of the transactions described in Sections
3.1, 3.2, 3.3 or 3.5, (ii) shares of Common Stock issued upon exercise, exchange
or conversion of (A) any Option Rights outstanding on the date hereof or (B) any
Option Rights issued after the date hereof for which an adjustment is made
pursuant to Section 3.4 or for which no adjustment is required to be made under
Section 3.4, (iii) any Warrant Shares, (iv) any Warrant Shares (as such term is
defined in the November 1999 Warrant (as such term is defined in the Equity
Repurchase Option Agreement)), (v) shares of Common Stock issuable upon
conversion of the shares of Series A Preferred Stock beneficially owned by the
Holder and (vi) shares of Common Stock issued pursuant to a bona fide public
offering pursuant to an effective registration statement declared effective by
the Commission under the Securities Act.
"Exercise Notice" has the meaning set forth in Section 2.1.
"Exercise Period" means the period commencing on the date hereof and
ending on (and including) the Expiration Date.
"Expiration Date" means a date that is the tenth anniversary of the
date of this Warrant.
"Fair Market Value" per Warrant Share (or share of Common Stock)
means, as of any specified date:
(i) if the Common Stock is publicly traded on such date,
the greater of (x) the Current Market Price per share as of such
date and (y) a price per share equal to the Formula-Based
Repurchase Price; provided, however, that, for purposes of
calculating the Formula-Based Repurchase Price, the "Measurement
Date" shall be the last day of the calendar month immediately
preceding the calendar month in which the Exercise Notice is
delivered; or
(ii) if the Common Stock is not publicly traded (or deemed
not to be publicly traded) on such date, a price per share equal
to the Formula-Based Repurchase Price; provided, however, that,
for purposes of calculating the Formula-Based Repurchase Price,
the "Measurement Date" shall be the last day of the calendar
month immediately preceding the calendar month in which the
Exercise Notice is delivered.
Whenever the Company is required or permitted to make a
determination of the Fair Market Value of a Warrant Share (or share of Common
Stock), the Holder may challenge or otherwise dispute such determination. If the
Holder wishes to challenge or otherwise dispute such determination, it shall
furnish a written notice to the Company to such effect (a "Dispute Notice"). If
the Holder delivers a Dispute Notice to the Company and, thereafter, the Company
and the Holder cannot resolve the dispute within ten (10)
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days after delivery of the Dispute Notice, Fair Market Value shall be determined
by an independent certified public accounting firm of recognized national
standing selected by the mutual written agreement of the Company and the Holder;
provided, however, that if the Company and the Holder are unable to mutually
select such accounting firm within ten (10) days after the date upon which the
right or obligation to select an accounting firm arises, each of the Company and
the Holder shall, within three (3) Business Days thereafter, select one
accounting firm, and the two (2) selected firms shall, within three (3) Business
Days after their selection, select a third accounting firm which shall make the
relevant determination (which determination shall be final and binding upon the
parties). Within thirty (30) days after its selection, the third accounting firm
shall conduct a review of the books and records of the Company and its
Subsidiaries for purposes of determining the Fair Market Value and shall deliver
to the Company and the Holder in writing its determination thereof, prepared in
reasonable detail, and, if requested by either party, the workpapers prepared in
completing its review and determination thereof. All fees, costs and expenses
incurred by the Company and the Holder in connection with any such
determination, and any challenge or dispute thereof, shall be paid by the
Company; provided, however, that the Company and the Holder shall share equally
all such fees, costs and expenses if, after the Holder delivers a Dispute Notice
to the Company, the difference between Fair Market Value as determined pursuant
to the procedures set forth in this paragraph and Fair Market Value as
determined by the Board of Directors is less than five percent (5.0%) of Fair
Market Value as determined by the Board of Directors.
"Formula-Based Repurchase Price" has the meaning set forth in the
Equity Repurchase Option Agreement.
"FTC" has the meaning set forth in Section 2.3.
"Holder" has the meaning set forth in the preamble.
"HSR Act" has the meaning set forth in Section 2.3.
"Option Rights" means, when used in this Warrant, any Convertible
Securities, or any warrants, options or other rights to subscribe for or
purchase, or obligations to issue, any Capital Stock of the Company, including
any options or similar rights issued or issuable under any employee stock option
plan, pension plan or other employee benefit plan of the Company.
"Other Property" has the meaning set forth in Section 3.5.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated by the SEC thereunder, all as the same shall
be in effect at the time.
"Securities Purchase Agreement" has the meaning set forth in the
preamble of this Warrant.
"Warrant" means this Warrant, any amendment of this Warrant, and any
warrants issued upon transfer, division or combination of, or in substitution
for, this Warrant or any other such warrant. All such Warrants shall at all
times be identical as to terms and conditions and date, except as to the number
of Warrant Shares for which they may be exercised.
"Warrant Purchase Price" has the meaning set forth in the preamble of
this Warrant (as adjusted in accordance with the terms of this Warrant).
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"Warrant Shares" has the meaning set forth in the preamble.
2. EXERCISE.
2.1 Exercise; Delivery of Certificates. Subject to the
provisions of Section 2.3, this Warrant may be exercised at the option of the
Holder, in whole or in part, at any time and from time to time during the
Exercise Period, by (a) delivering to the Company at the Designated Office (i) a
Notice of Exercise, in substantially the form attached as Exhibit A (the
"Exercise Notice"), duly completed and signed by the Holder, and (ii) this
Warrant, and (b) paying the Warrant Purchase Price pursuant to Section 2.2 for
the number of Warrant Shares being purchased. The Warrant Shares being purchased
under this Warrant shall be deemed to have been issued to the Holder, as the
record owner of such Warrant Shares, as of the close of business on the date on
which payment therefor is made by the Holder pursuant to Section 2.2.
Certificates representing the Warrant Shares so purchased shall be delivered to
the Holder within three (3) Business Days after this Warrant has been exercised
(or, if applicable, after the conditions set forth in Section 2.3 have been
satisfied); provided, however, that in the case of a purchase of less than all
of the Warrant Shares issuable upon exercise of this Warrant, the Company shall
cancel this Warrant and also, within three (3) Business Days after this Warrant
has been surrendered, execute and deliver to the Holder a new Warrant of like
tenor representing the number of unexercised Warrant Shares. Each certificate
representing the number of Warrant Shares issued or issuable upon exercise of
this Warrant shall be registered in the name of the Holder or, subject to
compliance with Applicable Law, such other name as shall be designated by the
Holder.
2.2 Payment of Warrant Price. Payment of the Warrant Purchase
Price may be made, at the option of the Holder, by (i) certified or official
bank check, (ii) cash or wire transfer, (iii) if the Fair Market Value of one
Warrant Share is greater than the Exercise Price, instructing the Company to
withhold and cancel a number of Warrant Shares then issuable upon exercise of
this Warrant with respect to which the excess of the Fair Market Value over the
Warrant Purchase Price for such canceled Warrant Shares is at least equal to the
Warrant Purchase Price for the Warrant Shares being purchased (the "cashless
exercise" procedures), (iv) surrendering to the Company shares of Common Stock
previously acquired by the Holder with a Fair Market Value equal to the Warrant
Purchase Price for the shares then being purchased or (v) any combination of any
of the foregoing. If the Holder elects to exercise this Warrant using the
"cashless exercise" procedures set forth in clause (iii) above, the Warrant
Shares being purchased thereby shall be deemed to have been acquired by the
Holder as of the date upon which the Exercise Notice is delivered to the
Designated Office.
2.3 Antitrust Notification. If the Holder determines, in its
sole judgment upon the advice of counsel, that an exercise of this Warrant
pursuant to the terms hereof would be subject to the provisions of the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), the Company shall, within seven (7) Business Days after receiving notice
from the Holder of the applicability of the HSR Act, file with the United States
Federal Trade Commission (the "FTC") and the United States Department of Justice
(the "DOJ") the notification and report form and any supplemental information
required to be filed by it pursuant to the HSR Act in connection with the
exercise of this Warrant. Any such notification and report form and supplemental
information will be in full
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compliance with the requirements of the HSR Act. The Company will furnish to the
Holder promptly (but in no event more than two (2) Business Days) such
information and assistance as the Holder may reasonably request in connection
with the preparation of any filing or submission required to be filed by the
Holder under the HSR Act. The Company shall respond promptly after receiving any
inquiries or requests for additional information from the FTC or the DOJ (and in
no event more than three (3) Business Days after receipt of such inquiry or
request). The Company shall keep the Holder apprised periodically and at the
Holder's request of the status of any communications with, and any inquiries or
requests for additional information from, the FTC or the DOJ. The Company shall
bear all filing or other fees required to be paid by the Company and the Holder
(or the "ultimate parent entity" of the Holder, if any) under the HSR Act or any
other Applicable Law in connection with such filings and all costs and expenses
(including attorneys' fees and expenses) incurred by the Company and the Holder
in connection with the preparation of such filings and responses to inquiries or
requests. In the event that this Section 2.3 is applicable to any exercise of
this Warrant, the purchase by the Holder of the Warrant Shares subject to the
Exercise Notice, and the payment by the Holder of the Warrant Purchase Price,
shall be subject to the expiration or earlier termination of the waiting period
under the HSR Act.
2.4 Fractional Shares. No fractional shares shall be issued
upon the exercise of this Warrant as a consequence of any adjustment pursuant
hereto. All Warrant Shares (including fractional shares) issuable upon exercise
of this Warrant may be aggregated for purposes of determining whether the
exercise would result in the issuance of any fractional share. If, after
aggregation, the exercise would result in the issuance of a fractional share,
the Company shall, in lieu of issuance of any fractional share, pay to the
Holder otherwise entitled to such fraction a sum in cash equal to the product
resulting from multiplying the then current Fair Market Value per Warrant Share
by such fraction.
3. ADJUSTMENTS TO THE NUMBER OF WARRANT SHARES AND TO THE WARRANT
PURCHASE PRICE. The number of Warrant Shares issuable upon exercise of this
Warrant and the Warrant Purchase Price shall be subject to adjustment from time
to time as set forth in this Section 3.
3.1 Stock Dividends, Subdivisions and Combinations. If at any
time the Company:
(a) pays a dividend or other distribution on its Common
Stock, without consideration, in shares of Common Stock or shares of
any other class or series of Capital Stock,
(b) subdivides (by stock split, reclassification or
otherwise) its outstanding shares of Common Stock into a larger number
of shares of Common Stock, or
(c) combines (by reverse stock split or otherwise) its
outstanding shares of Common Stock into a smaller number of shares of
Common Stock,
then the number of Warrant Shares purchasable upon exercise of this Warrant
immediately prior to the record date for such dividend or distribution or the
effective date of such
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subdivision or combination shall be adjusted so that the Holder shall thereafter
be entitled to receive upon exercise of this Warrant the kind and number of
shares of Common Stock that the Holder would have owned or have been entitled to
receive immediately after such record date or effective date had this Warrant
been exercised immediately prior to such record date or effective date. Any
adjustment made pursuant to this Section 3.1 shall become effective immediately
after the effective date of such event, but be retroactive to the record date,
if any, for such event.
Upon any adjustment of the number of Warrant Shares
purchasable upon the exercise of this Warrant as herein provided, the Warrant
Purchase Price per share shall be adjusted by multiplying the Warrant Purchase
Price immediately prior to such adjustment by a fraction, the numerator of which
shall be the number of Warrant Shares purchasable upon the exercise of this
Warrant immediately prior to such adjustment and the denominator of which shall
be the number of Warrant Shares so purchasable immediately thereafter.
3.2 Issuance of Option Rights. If at any time the Company
issues or distributes (without payment of any consideration) to all holders of
its Common Stock any Option Rights, then the Company shall also issue or
distribute such Option Rights to the Holder as if this Warrant had been
exercised immediately prior to the record date for such issuance.
3.3 Distribution of Assets or Securities. If at any time the
Company makes a distribution to its stockholders (other than in connection with
the liquidation, dissolution or winding up of the Company covered by Section
4.6) of any assets or securities other than those referred to in Sections 3.1,
3.2 or 3.5, the Warrant Purchase Price shall be adjusted and shall be equal to
the Warrant Purchase Price in effect immediately prior to the close of business
on the date fixed for the determination of stockholders entitled to receive such
distribution multiplied by a fraction (which shall not be less than zero), the
numerator of which shall be the Fair Market Value per share of Common Stock on
the date fixed for such determination, less the then fair market value of the
portion of the assets, or the fair market value of the portion of the
securities, as the case may be, so distributed applicable to one share of Common
Stock, and the denominator of which shall be the Fair Market Value per share of
Common Stock. Such adjustment to the Warrant Purchase Price shall become
effective immediately prior to the opening of business on the day immediately
following the date fixed for the determination of stockholders entitled to
receive such distribution. Upon any adjustment in the Warrant Purchase Price as
provided in this Section 3.3, the number of shares of Common Stock issuable upon
the exercise of this Warrant shall also be adjusted and shall be equal to the
number of Warrant Shares issuable upon exercise of this Warrant immediately
prior to such adjustment multiplied by a fraction, the numerator of which is the
Warrant Purchase Price in effect immediately prior to such adjustment and the
denominator of which is the Warrant Purchase Price as so adjusted.
3.4 Issuance of Equity Securities at Less Than Fair Market
Value. If at any time the Company sells or issues any shares of Common Stock or
Option Rights (excluding the Excluded Securities) at a price per share of Common
Stock (determined in the case of Option Rights by dividing (x) the total amount
receivable by the Company in consideration of the sale and issuance of such
Option Rights, plus the total consideration
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payable to the Company upon exercise, conversion or exchange thereof, by (y) the
maximum number of shares of Common Stock issuable upon conversion, exercise or
exchange of such Option Rights), that is lower than the Fair Market Value per
share of Common Stock in effect immediately prior to such sale and issuance,
then the Warrant Purchase Price shall be adjusted (calculated to the nearest
$.001) so that it shall equal the price determined by multiplying the Warrant
Purchase Price in effect immediately prior thereto by a fraction, the numerator
of which shall be (A) the number of shares of Common Stock outstanding
immediately prior to such sale and issuance plus (B) the number of shares of
Common Stock which the aggregate consideration received by the Company
(determined as provided below) for such sale or issuance would purchase at such
Fair Market Value per share, and the denominator of which shall be (I) the total
number of shares of Common Stock outstanding (or deemed to be outstanding as
provided below) immediately after such sale or issuance plus (II) the number of
shares of Common Stock or Option Rights so issued. Adjustments shall be made
successively whenever such an issuance is made.
For the purposes of such adjustments, the shares of Common Stock
which the holder of any such Option Rights shall be entitled to subscribe for or
purchase shall be deemed to be issued and outstanding as of the date of the sale
and issuance of such Option Rights and the consideration received by the Company
therefor shall be deemed to be the consideration actually received by the
Company for such Option Rights, plus the consideration or premiums stated in
such Option Rights to be paid to acquire the shares of Common Stock covered
thereby.
Upon any adjustment in the Warrant Purchase Price as provided in
the penultimate paragraph above, the number of shares of Common Stock
purchasable upon the exercise of this Warrant shall also be adjusted and shall
be that number determined by multiplying the number of Warrant Shares issuable
upon exercise immediately prior to such adjustment by a fraction, the numerator
of which is the Warrant Purchase Price in effect immediately prior to such
adjustment and the denominator of which is the Warrant Purchase Price as so
adjusted.
If at any time the Company sells and issues any shares of Common
Stock or Option Rights containing the right to subscribe for or purchase shares
of Common Stock for a consideration consisting, in whole or in part, of property
(other than cash or cash equivalents) or services, then in determining the
"price per share of Common Stock" and the "consideration received by the
Company" for purposes of the preceding paragraphs of this Section 3.4, the Board
of Directors shall determine, in good faith, the fair market value of such
property or services, subject to the Holder's rights under Section 3.8(e). There
shall be no adjustment of the Warrant Purchase Price in respect of the Common
Stock pursuant to this Section 3.4 if the amount of such adjustment is less than
$0.001 per share of Common Stock; provided, however, that any adjustments which
by reason of this provision are not required to be made shall be carried forward
and taken into account in any subsequent adjustment.
3.5 Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets. If at any time the Company reorganizes its capital,
reclassifies its capital stock, consolidates, merges or combines with or into
another Person (where the Company is not the surviving corporation or where
there is any change whatsoever in, or
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distribution with respect to, the outstanding Common Stock), or the Company
sells, transfers or otherwise disposes of all or substantially all of its
property, assets or business to another Person, other than in a transaction
provided for in Sections 3.1, 3.2, 3.3, 3.4 or 3.6, and, pursuant to the terms
of such reorganization, reclassification, consolidation, merger, combination,
sale, transfer or other disposition of assets, (i) shares of common stock of the
successor or acquiring Person or the Company (if it is the surviving
corporation) or (ii) any cash, shares of stock or other securities or property
of any nature whatsoever (including warrants or other subscription or purchase
rights) in addition to or in lieu of common stock of the successor or acquiring
Person or the Company ("Other Property") are to be received by or distributed to
the holders of Common Stock who are holders immediately prior to such
transaction, then the Holder shall have the right thereafter to receive, upon
exercise of this Warrant, the number of shares of Common Stock, common stock of
the successor or acquiring Person, and/or Other Property which a holder of the
number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event would have owned or received immediately after
and as a result of such event. In such event, the aggregate Warrant Purchase
Price otherwise payable for the Warrant Shares issuable upon exercise of this
Warrant shall be allocated among such securities and Other Property in
proportion to the respective fair market values of such securities and Other
Property as determined in good faith by the Board of Directors, subject to the
Holder's rights under Section 3.8(e).
In case of any such event, the successor or acquiring Person (if
other than the Company) shall expressly assume the due and punctual observance
and performance of each and every covenant and condition of this Warrant to be
performed and observed by the Company and all the obligations and liabilities
hereunder, subject to such modifications as the Holder may approve in writing
(and memorialized by resolutions of the Board of Directors) in order to provide
for adjustments of any shares of common stock of such successor or acquiring
Person for which this Warrant thus becomes exercisable, which modifications
shall be as equivalent as practicable to the adjustments provided for in this
Section 3.5. For purposes of this Section 3, "common stock of the successor or
acquiring Person" shall include stock or other equity securities, or securities
that are exercisable or exchangeable for or convertible into equity securities,
of such corporation, or other securities if such Person is not a corporation, of
any class that is not preferred as to dividends or assets over any other class
of stock of such corporation or Person and that is not subject to redemption and
shall also include any evidences of indebtedness, shares of stock or other
securities that are convertible into or exchangeable for any such stock, either
immediately or upon the arrival of a specified date or the happening of a
specified event and any warrants or other rights to subscribe for or purchase
any such stock. The foregoing provisions of this Section 3.5 shall similarly
apply to successive reorganizations, reclassifications, consolidations, mergers,
sales, transfers and other dispositions of assets.
3.6 Dissolution, Total Liquidation or Winding-Up. If at any
time there is a voluntary or involuntary dissolution, total liquidation or
winding-up of the Company, other than as contemplated by Section 3.5, then the
Company shall cause to be mailed (by registered or certified mail, return
receipt requested, postage prepaid) to the Holder at the Holder's address as
shown on the Warrant register, at the earliest practicable time (and, in any
event, not less than thirty (30) calendar days before any date set for
definitive action), written notice of the date on which such dissolution,
liquidation or winding-up shall take
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place, as the case may be. Such notice shall also specify the date as of which
the record holders of shares of Common Stock shall be entitled to exchange their
shares for securities, money or other property deliverable upon such
dissolution, liquidation or winding-up, as the case may be. On such date, the
Holder shall be entitled to receive upon surrender of this Warrant the cash or
other property, less the Warrant Purchase Price for this Warrant then in effect,
that the Holder would have been entitled to receive had this Warrant been
exercised immediately prior to such dissolution, liquidation or winding-up. Upon
receipt of the cash or other property, any and all rights of the Holder to
exercise this Warrant shall terminate in their entirety. If the cash or other
property distributable in the dissolution, liquidation or winding-up has a fair
market value which is less than the Warrant Purchase Price for this Warrant then
in effect, this Warrant shall terminate and be of no further force or effect
upon the dissolution, liquidation or winding-up.
3.7 Other Dilutive Events. If any event occurs as to which the
other provisions of this Section 3 are not strictly applicable but as to which
the failure to make any adjustment would not protect the purchase rights
represented by this Warrant in accordance with the intent and principles hereof,
then, in each such case, the Holder may appoint on behalf of the Company an
investment banking or accounting firm of recognized national standing which
shall give its opinion as to the adjustment, if any, on a basis consistent with
the intent and principles established herein, necessary to preserve the purchase
rights represented by this Warrant. Upon receipt of such opinion, the Company
will mail (by registered or certified mail, return receipt requested, postage
prepaid) a copy thereof to the Holder within three (3) Business Days and shall
make the adjustments described therein. The fees and expenses of such investment
banking or accounting firm shall be borne by the Company.
3.8 Other Provisions Applicable to Adjustments Under this
Section. The following provisions shall be applicable to the adjustments
provided for pursuant to this Section 3:
(a) When Adjustments To Be Made. The adjustments required
by this Section 3 shall be made whenever and as often as any specified
event requiring such an adjustment shall occur. For the purpose of any
such adjustment, any specified event shall be deemed to have occurred
at the close of business on the date of its occurrence.
(b) Record Date. If the Company fixes a record date of
the holders of Common Stock for the purpose of entitling them to (i)
receive a dividend or other distribution payable in shares of Common
Stock or in shares of any other class or series of capital stock or
securities convertible into or exchangeable for Common Stock or shares
of any other class or series of capital stock or (ii) subscribe for or
purchase shares of Common Stock or such other shares or securities,
then all references in this Section 3 to the date of the issuance or
sale of such shares of Common Stock or such other shares or securities
shall be deemed to be references to that record date.
(c) When Adjustment Not Required. If the Company fixes a
record date of the holders of its Common Stock for the purpose of
entitling them to
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receive a dividend or distribution or subscription or purchase rights
to which the provisions of Section 3.1 would apply, but shall,
thereafter and before the distribution to stockholders, legally
abandon its plan to pay or deliver such dividend, distribution,
subscription or purchase rights, then thereafter no adjustment shall
be required by reason of the taking of such record and any such
adjustment previously made in respect thereof shall be rescinded and
annulled.
(d) Notice of Adjustments. Whenever the number of
shares of Common Stock for which this Warrant is exercisable or the
Warrant Purchase Price shall be adjusted or recalculated pursuant to
this Section 3, the Company shall immediately prepare a certificate to
be executed by the chief financial officer of the Company setting
forth, in reasonable detail, the event requiring the adjustment or
recalculation and the method by which such adjustment or recalculation
was calculated, specifying the number of shares of Common Stock for
which this Warrant is exercisable and (if such adjustment was made
pursuant to Section 3.5) describing the number and kind of any other
shares of stock or Other Property for which this Warrant is
exercisable, and any related change in the Warrant Purchase Price,
after giving effect to such adjustment, recalculation or change. The
Company shall mail (by registered or certified mail, return receipt
requested, postage prepaid) a signed copy of the certificate to be
delivered to the Holder within three (3) Business Days of the event
which caused the adjustment or recalculation. The Company shall keep
at the Designated Office copies of all such certificates and cause
them to be available for inspection at the Designated Office during
normal business hours by the Holder or any prospective transferee of
this Warrant designated by the Holder.
(e) Challenge to Good Faith Determination. Whenever the
Board of Directors is required or permitted to make a determination of
fair market value under this Warrant, the Holder may challenge or
dispute such determination. If the Holder wishes to challenge or
dispute any such fair market value determination, it shall furnish
written notice to the Company of its intention to do so. If the
Company and the Holder cannot resolve the dispute between or among
themselves, then such dispute shall be submitted for final
determination to an independent certified public accounting firm
pursuant to the procedures set forth in the last paragraph of the
definition of Fair Market Value. All fees, costs and expenses incurred
by the Company and the Holder in connection with any such
determination, and any challenge or dispute thereof, shall be paid by
the Company; provided, however, that the Company and the Holder shall
share equally all such fees, costs and expenses if, after the Holder
delivers a Dispute Notice to the Company, the difference between (a)
the fair market value as determined pursuant to the procedures set
forth in the last paragraph of the definition of Fair Market Value and
(b) fair market value as determined by the Board of Directors is less
than five percent (5.0%) of the fair market value determined by the
Board of Directors.
(f) Independent Application. Except as otherwise provided
herein, all subsections of this Section 3 are intended to operate
independently of one another (but without duplication). If an event
occurs that requires the application of more than one subsection, all
applicable subsections shall be given independent effect without
duplication.
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(g) Other Anti-Dilution Provisions. To the extent that
LLCP or any of its Affiliates holds this Warrant, in whole or in part,
at any time at which the Company takes any action which would have
resulted in an adjustment to the Warrant Purchase Price, or the number
of shares of Common Stock issuable pursuant to this Warrant (in either
event, a "Dilutive Issuance"), then, to the extent that LLCP has
exercised all or any portion of this Warrant prior to such time, the
Company shall immediately issue to LLCP upon such Dilutive Issuance,
without the payment of any further consideration of any kind, such
number of additional shares of Common Stock as shall equal the
difference between (i) the number of shares of Common Stock issuable
upon exercise of this Warrant to the extent held unexercised by LLCP
at such time after giving effect to the adjustment thereto resulting
from such Dilutive Issuance and (ii) the number of shares of Common
Stock which would have been issuable upon exercise of this Warrant
after giving effect to such Dilutive Issuance if this Warrant had not
been exercised in any part.
4. MISCELLANEOUS.
4.1 Restrictive Legend. This Warrant and, unless registered
under the Securities Act, any Warrant Shares issued upon exercise hereof shall
bear a legend in substantially the following form (in addition to any legends
required under applicable state securities laws):
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR REGISTERED OR QUALIFIED UNDER ANY APPLICABLE STATE
SECURITIES LAWS, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT IN COMPLIANCE WITH THE
REGISTRATION REQUIREMENTS OF SUCH ACT AND THE REGISTRATION OR
QUALIFICATION REQUIREMENTS OF SUCH STATE SECURITIES LAWS OR
PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION AND
QUALIFICATION.
The legend shall be appropriately modified upon issuance of
certificates for shares of Common Stock. Upon request of the holder of a Common
Stock certificate, the Company shall issue to that holder a new certificate free
of the foregoing legend, if, with such request, such holder provides the Company
with an opinion of counsel reasonably acceptable to the Company (provided that
Irell & Xxxxxxx LLP shall be deemed to be acceptable to the Company) to the
effect that the securities evidenced by such certificate may be sold without
restriction under Rule 144 (or any other rule permitting resales of securities
without restriction) promulgated under the Securities Act.
4.2 Holder Entitled to Benefits Under Other Agreements. The
Holder shall be entitled to certain rights, benefits and privileges with respect
to this Warrant and the Warrant Shares pursuant to the terms of the Securities
Purchase Agreement, the Registration Rights Agreement (it being understood that
the Warrant Shares constitute "Registrable
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Securities" thereunder), the Investor Rights Agreement and certain other
Investment Documents.
4.3 Other Covenants. Without limiting the generality of
Section 4.2, the Company covenants and agrees that, so long as this Warrant
remains outstanding or any Warrant Shares are issuable upon exercise of this
Warrant, the Company will perform and comply with all of the following covenants
for the express benefit of the Holder: (a) the Warrant Shares have been duly
authorized and shall, upon issuance in accordance with the terms of this
Warrant, be duly and validly issued, fully paid and non-assessable; (b) the
Holder shall, upon the exercise of this Warrant in accordance with the terms
hereof, receive good and marketable title to the Warrant Shares, free and clear
of all voting and other trust arrangements to which the Company is a party or by
which it is bound, preemptive rights of any stockholder or any liens,
encumbrances, equities and claims whatsoever, including all Taxes, Liens and
other charges with respect to the issuance thereof; (c) the Company shall
reserve for issuance a sufficient number of authorized but unissued shares of
Common Stock, or other securities or property for which this Warrant may then be
exercisable, to permit this Warrant (or if this Warrant has been divided, all
outstanding Warrants) to be exercised in full; (d) the Company shall deliver to
the Holder the information and reports described in Section 1.3 of Annex A of
the Securities Purchase Agreement as contemplated therein; (e) the Company shall
extend to the Holder the investment monitoring and other rights set forth in the
Investor Rights Agreement, provided that the rights set forth in Section 1.1 of
the Investor Rights Agreement with respect to Board of Director representation
may not be assigned by LLCP to any assignee of this Warrant without the prior
written consent of the Company; and (f) the Company shall provide each Holder
with notice of all corporate actions in the same manner and to the same extent
as the shareholders of the Company.
4.4 Issue Tax. The issuance of shares of Common Stock upon the
exercise of this Warrant shall be made without charge to the Holder for any
issue tax in respect thereof.
4.5 Closing Of Books. The Company will at no time close its
transfer books against the transfer of this Warrant or of any Warrant Shares in
any manner which interferes with the timely exercise hereof.
4.6 No Voting Rights; Limitation Of Liability. Except as
expressly set forth in this Warrant, nothing contained in this Warrant shall be
construed as conferring upon the Holder (a) the right to vote or consent as a
stockholder in respect of meetings of stockholders for the election of directors
of the Company or any other matter, (b) the right to receive dividends, except
as set forth in Section 3, or (c) any other rights as a stockholder of the
Company, except as provided in the Investor Rights Agreement. No provisions
hereof, in the absence of affirmative action by the Holder to purchase shares of
Common Stock, and no mere enumeration herein of the rights or privileges of the
Holder, shall give rise to any liability of the Holder for the Warrant Purchase
Price or as a shareholder of the Company, whether such liability is asserted by
the Company or by its creditors.
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4.7 Modification And Waiver. This Warrant and any of its
provisions may be amended, changed, waived, discharged or terminated only by an
instrument in writing signed by the party against which enforcement is sought.
4.8 Notices. All notices, requests, demands and other
communications which are required or may be given under this Warrant shall be in
writing and shall be deemed to have been duly given if transmitted by telecopier
with receipt acknowledged, or upon delivery, if delivered personally or by
recognized commercial courier with receipt acknowledged, or upon the expiration
of seventy-two (72) hours after mailing, if mailed by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:
(a) If to the Holder, at:
x/x Xxxxxx Xxxxxxxxx Capital Partners, Inc.
000 Xxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(b) If to any other Holder, at:
such Holder's address as shown on the books of the
Company.
(c) If to the Company, at:
Overhill Farms, Inc.
0000 X. Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
or at such other address or addresses as the Holder or the Company, as the case
may be, may specify by written notice given in accordance with this Section 4.8.
4.9 Successors and Assigns. The Company may not assign
any of its rights, or delegate any of its obligations, under this Warrant
without the prior written consent of the Holder (which consent may be withheld
for any reason or no reason at all). Subject to the requirements of Applicable
Law, the Holder may assign this Warrant, in whole or in part, at any time or
from time to time, without the consent of the Company. Each assignment of this
Warrant shall be registered on the books of the Company to be maintained for
such purpose upon surrender of this Warrant at the Designated Office, together
with appropriate instruments of assignment, duly completed and executed. Upon
such surrender, the Company shall within three (3) Business Days, at its own
expense, execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees specified in such assignment and in the denominations
specified therein and this Warrant shall promptly be canceled. If any portion of
this Warrant is not being assigned, the Company shall, at its own expense,
within three (3) Business Days issue to the Holder a new
- 14 -
Warrant evidencing the portion not so assigned. If the Holder assigns this
Warrant to one or more Persons, any decisions that the Holder is entitled to
make at any time hereunder shall be made by the Holders holding more than fifty
percent (50.0%) of the aggregate number of Warrant Shares issuable upon exercise
of all of the then exercisable Warrants.
This Warrant shall be binding upon and inure to the
benefit of the Company, the Holder and their respective successors and permitted
assigns, and shall include, with respect to the Company, any Person succeeding
the Company by merger, consolidation, combination or acquisition of all or
substantially all of the Company's assets, and in such case, except as expressly
provided herein and in the Securities Purchase Agreement, all of the obligations
of the Company hereunder shall survive such merger, consolidation, combination
or acquisition.
4.10 Captions; Construction and Interpretation. The headings in
this Warrant are for convenience of reference only, do not constitute a part of
this Warrant and are not to be considered in construing or interpreting this
Warrant. All section, preamble, recital, exhibit, schedule, clause and party
references contained in this Warrant are to this Warrant unless otherwise
stated. Unless the context of this Warrant or any other Investment Document
clearly requires otherwise, the use of the word "including" is not limiting and
the use of the word "or" has the inclusive meaning represented by the phrase
"and/or." References in this Warrant to any agreement, other document or law "as
amended" or "as amended from time to time," or amendments of any document or
law, shall include any amendments, supplements, restatements, replacements,
renewals, refinancings, waivers or other modifications.
4.11 Lost Warrant or Certificates. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant or of a stock certificate evidencing any Warrant
Shares and, in the case of any such loss, theft or destruction, upon receipt of
an indemnity reasonably satisfactory to the Company or, in the case of any such
mutilation, upon surrender and cancellation of this Warrant or a stock
certificate, the Company shall make and deliver to the Holder, within three (3)
Business Days of receipt by the Company of such documentation, a new Warrant or
stock certificate, of like tenor, in lieu of the lost, stolen, destroyed or
mutilated Warrant or stock certificate.
4.12 No Impairment. The Company shall not by any action,
including amending its charter documents or regulations or through any
reorganization, reclassification, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary 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 actions as may be necessary or appropriate to
protect the rights of the Holder against impairment. Without limiting the
generality of the foregoing, the Company will (i) not increase the par value (if
any) of any shares of Common Stock receivable upon the exercise of this Warrant
above the amount payable therefor upon such exercise immediately prior to such
increase in par value, (ii) take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable shares of Common Stock upon the exercise of this Warrant, free
and clear of all liens, encumbrances, equities and claims, and (iii) use its
best efforts to obtain all such authorizations, exemptions or consents from any
public
- 15 -
regulatory body having jurisdiction thereof as may be necessary to enable
the Company to perform its obligations under this Warrant.
4.13 Governing Law. IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS WARRANT AND THE RIGHTS AND
OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS
MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO CHOICE OF LAW OR CONFLICTS
OF LAW PRINCIPLES.
4.14 Remedies. If the Company fails to perform, comply with or
observe any covenant or agreement to be performed, complied with or observed by
it under this Warrant, the Holder may proceed to protect and enforce its rights
by suit in equity or action at law, whether for specific performance of any term
contained in this Warrant or for an injunction against the breach of any such
term or in aid of the exercise of any power granted in this Warrant or to
enforce any other legal or equitable right, or to take any one or more of such
actions. The Company agrees to pay all fees, costs, and expenses, including fees
and expenses of attorneys, accountants and other experts retained by the Holder,
and all fees, costs and expenses of appeals, incurred or expended by the Holder
in connection with the enforcement of this Warrant or the collection of any sums
due hereunder, whether or not suit is commenced. None of the rights, powers or
remedies conferred under this Warrant shall be mutually exclusive, and each
right, power or remedy shall be cumulative and in addition to any other right,
power or remedy whether conferred by this Warrant or now or hereafter available
at law, in equity, by statute or otherwise.
4.15 WAIVER OF JURY TRIAL. EACH PARTY HEREBY KNOWINGLY,
INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL,
WAIVES, RELINQUISHES AND FOREVER FORGOES THE RIGHT TO A TRIAL BY JURY IN ANY
ACTION, SUIT OR OTHER PROCEEDING BASED UPON, ARISING OUT OF OR IN ANY WAY
RELATING TO (a) THIS WARRANT, THE SECURITIES PURCHASE AGREEMENT OR ANY OTHER
INVESTMENT DOCUMENT, INCLUDING ANY PRESENT OR FUTURE AMENDMENT THEREOF, OR ANY
OF THE TRANSACTIONS CONTEMPLATED BY OR RELATED THERETO, OR (b) ANY CONDUCT, ACT
OR OMISSION OF THE PARTIES OR THEIR AFFILIATES (OR ANY OF THEM) WITH RESPECT TO
THIS WARRANT, THE SECURITIES PURCHASE AGREEMENT OR ANY OTHER INVESTMENT
DOCUMENTS, INCLUDING ANY PRESENT OR FUTURE AMENDMENT THEREOF, WHETHER SOUNDING
IN CONTRACT, TORT OR OTHERWISE, REGARDLESS OF WHICH PARTY INITIATES SUCH ACTION,
SUIT OR OTHER PROCEEDING; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY
SUCH ACTION, SUIT OR OTHER PROCEEDING SHALL BE DECIDED BY A COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES TO THE
WAIVER OF ANY RIGHT THEY MIGHT OTHERWISE HAVE TO TRIAL BY JURY.
- 16 -
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
and issued by its duly authorized representatives on the date first above
written.
COMPANY
OVERHILL FARMS, INC., a Nevada corporation
By: /s/ XXXXX XXXXX
-----------------------------------------
Xxxxx Xxxxx
President and Chief Executive Officer
By: /s/ XXXXXXX X. XXXXXXX
-----------------------------------------
Xxxxxxx X. Xxxxxxx
Vice President and Chief Financial Officer
- 17 -
EXHIBIT A
FORM OF
NOTICE OF EXERCISE
Pursuant to Section 2.1 of that certain Amended and Restated Warrant
(No. LL-2) to Purchase 57.57 Shares of Common Stock dated September 11, 2002
(the "Warrant"), issued by Overhill Farms, Inc., a Nevada corporation (the
"Company"), the undersigned Holder hereby irrevocably elects to exercise the
Warrant to purchase ___________________________ (_______) shares of Common Stock
at a Warrant Purchase Price of $_____ per share or an aggregate Warrant Purchase
Price of $_________.
[If the Holder has determined upon advice of counsel that compliance
with the HSR Act is required, include the following sentences: "The undersigned
has determined that this exercise is subject to the HSR Act and requests that
the Company file the requisite notification and report form with, and pay all
requisite filing fees to, the FTC and the DOJ as promptly as possible. The
purchase of the shares described above and the payment of the Warrant Purchase
Price are subject to the expiration or earlier termination of the waiting period
under the HSR Act."]
Pursuant to Section 2.2 of the Warrant, payment of the Warrant
Purchase Price is being made as follows (check as applicable):
___ The undersigned tenders payment as follows:
___ Certified or official bank check in the amount of$______;
___ Cash or wire transfer in the amount of $___________; or
___ Surrender of __________________ shares of Common Stock.
___ The undersigned hereby tenders payment through the "cashless
exercise" procedures set forth in Section 2.1 of the Warrant.
Accordingly, the undersigned hereby instructs the Company to
withhold and cancel ________ Warrant Shares otherwise issuable to
the undersigned upon exercise of the Warrant as provided herein
as payment in full for ___________ Warrant Shares to be issued to
the undersigned. No other consideration is being delivered in
connection with the exercise of the Warrant.
The undersigned hereby requests that [if the Holder has determined
upon advice of counsel that compliance with the HSR Act is required, include the
following phrase: "upon the expiration or earlier termination of the waiting
period under the HSR Act"] a certificate(s) for __________ shares of Common
Stock be issued in the name of _________________________ and delivered within
three (3) Business Days to ____________________ at the address set forth below.
The undersigned hereby represents that it is acquiring the Warrant
Shares for its own account and not with a view to or for resale in connection
with any distribution thereof in violation of applicable securities laws.
Dated: _______________ ______________________________________________
Name of the Holder (must conform precisely
to the name specified on the
face of this Warrant)
______________________________________________
Signature of authorized representative of the
Holder
______________________________________________
Print or type name of authorized
representative
Employer Tax Identification Number:__________________
Address of the Holder:_______________________________
_______________________________
_______________________________
