Exhibit 99.3
THIS WARRANT AND THE SHARES OF NON-VOTING COMMON STOCK PURCHASABLE HEREUNDER
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD
OR OFFERED FOR SALE UNLESS REGISTERED UNDER SAID ACT AND ANY APPLICABLE STATE
SECURITIES LAWS OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
THIS WARRANT AND THE SHARES OF NON-VOTING COMMON STOCK PURCHASABLE HEREUNDER
ARE SUBJECT TO AND HAVE THE BENEFIT OF A WARRANTHOLDERS RIGHTS AGREEMENT
DATED AS OF JUNE 27, 1997 AMONG PUMPKIN LTD., PUMPKIN MASTERS HOLDINGS, INC.
AND THE STOCKHOLDERS AND WARRANTHOLDERS LISTED ON THE SIGNATURE PAGES
THEREOF, A COPY OF WHICH IS ON FILE WITH PUMPKIN LTD.
Dated: June 27, 1997
WARRANT
To Purchase 100 Shares of Non-Voting Common Stock of
PUMPKIN LTD.
Expiring June 27, 2007
THIS IS TO CERTIFY THAT, for value received, NATIONSCREDIT COMMERCIAL
CORPORATION or registered assigns ("Holder") is entitled to purchase from
PUMPKIN LTD., a Delaware corporation (the "Company"), at any time or from
time to time after 9:00 a.m., New York City time, on the date hereof and
prior to 5:00 p.m., New York City time, on the earlier of June 27, 2007 and
the Business Day preceding the date of redemption of this Warrant, at the
place where the Warrant Agency is located, at the Exercise Price, the number
of shares of Class B Common Stock, par value $0.01 per share (the "Non-Voting
Common Stock") of the Company shown above, all subject to adjustment and upon
the terms and conditions hereinafter provided, and is entitled also to
exercise the other appurtenant rights, powers and privileges hereinafter
described.
This Warrant is one of one or more warrants (the "Warrants") of the same
form and having the same terms as this Warrant, entitling the holders
initially to purchase up to an aggregate of 100 shares of Non-Voting Common
Stock. The Warrants have been issued pursuant to the Credit Agreement dated
as of June 27, 1997 (as amended from time to time, the "Credit Agreement")
among the
Company, Pumpkin Masters Holdings, Inc., a Delaware
corporation ("Holdings"), the Lenders listed on the signature pages thereof
and NationsCredit Commercial Corporation ("NationsCredit"), as Agent, and the
Holder is entitled to certain benefits as set forth therein and to certain
benefits described in the Warrantholders Rights Agreement. The Company shall
keep a copy of the Credit Agreement and the Warrantholders Rights Agreement,
and any amendments thereto, at the Warrant Agency and shall furnish, without
charge, copies thereof to the Holder upon request.
Certain terms used in this Warrant are defined in Article 6.
ARTICLE 1
Exercise of Warrants
SECTION 1.01. Method of Exercise. To exercise this Warrant in whole or
in part, the Holder shall deliver on any Business Day to the Company, at the
Warrant Agency, (a) this Warrant, (b) a written notice of such Holder's
election to exercise this Warrant, which notice shall specify the number of
shares of Non-Voting Common Stock to be purchased (which shall be a whole
number of shares if for less than all the shares then issuable hereunder),
the denominations of the share certificate or certificates desired and the
name or names in which such certificates are to be registered, and (c)
payment of the Exercise Price with respect to such shares. Such payment may
be made, at the option of the Holder, to be specified in such notice, either
(a) by cash, certified or bank cashier's check or wire transfer in an amount
equal to the product of (i) the Exercise Price times (ii) the number of
Warrant Shares as to which this Warrant is being exercised or (b) by
receiving from the Company the number of Warrant Shares equal to (i) the
number of Warrant Shares as to which this Warrant is being exercised minus
(ii) the number of Warrant Shares having a value, based on the Closing Price
on the trading day immediately prior to the date of such exercise, equal to
the product of (x) the Exercise Price times (y) the number of Warrant Shares
as to which this Warrant is being exercised; provided that the Holder may
make payment as set forth in clause (b) only if at the time this Warrant is
being exercised the Common Stock is listed or admitted for trading on a
national securities exchange or is traded in the over-the-counter market.
The Company shall, as promptly as practicable and in any event within seven
days after receipt of such documents and payment, execute and deliver or cause
to be executed and delivered, in accordance with such notice, a certificate or
certificates representing the aggregate number of shares of Non-Voting Common
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Stock specified in said notice together with cash in lieu of any fractions of
a share as provided in Section 1.3. The share certificate or certificates so
delivered shall be in such denominations as may be specified in such notice,
and shall be issued in the name of the Holder or such other name or names as
shall be designated in such notice. This Warrant shall be deemed to have been
exercised and such certificate or certificates shall be deemed to have been
issued, and such Holder or any other Person so designated to be named therein
shall be deemed for all purposes to have become a holder of record of shares,
as of the date the aforementioned notice and payment is received by the
Company. If this Warrant shall have been exercised only in part, the Company
shall, at the time of delivery of such certificate or certificates, deliver
to the Holder a new Warrant evidencing the rights to purchase the remaining
shares of Non-Voting Common Stock called for by this Warrant, which new
Warrant shall in all other respects be identical with this Warrant, or, at
the request of the Holder, appropriate notation may be made on this Warrant
which shall then be returned to the Holder. The Company shall pay all
expenses, taxes and other charges payable in connection with the preparation,
issuance and delivery of share certificates and new Warrants, except that, if
share certificates or new Warrants shall be registered in a name or names
other than the name of the Holder, funds sufficient to pay all transfer taxes
payable as a result of such transfer shall be paid by the Holder at the time
of delivery of the aforementioned notice of exercise or promptly upon receipt
of a written request of the Company for payment.
SECTION 1.02. Shares to Be Fully Paid and Nonassessable. All shares of
Non-Voting Common Stock issued upon the exercise of this Warrant and all
shares of Voting Common Stock issued upon the conversion of such Non-Voting
Common Stock shall be validly issued, fully paid and nonassessable and, if
such class of Common Stock is then listed on any national securities exchange
(as defined in the Exchange Act) or quoted on NASDAQ, shall be duly listed or
quoted thereon, as the case may be.
SECTION 1.03. No Fractional Shares Required to Be Issued. The Company
shall not be required to issue fractions of shares of Non-Voting Common Stock
upon exercise of this Warrant. If any fraction of a share would, but for this
SECTION, be issuable upon final exercise of this Warrant, in lieu of such
fractional share the Company shall pay to the Holder, in cash, an amount
equal to the same fraction of the Fair Market Value of the Company per share
of outstanding Common Stock on the Business Day immediately prior to the date
of such exercise.
SECTION 1.04. Share Legend. Each certificate for shares of Non-Voting
Common Stock issued upon exercise of this Warrant, unless at the time of
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exercise such shares are registered under the Securities Act, shall bear the
following legend:
"This security has not been registered under the Securities Act of
1933 and may not be sold or offered for sale unless registered under said
Act and any applicable state securities laws or unless an exemption from
such registration is available. This security is also subject to and has
the benefit of a Warrantholders Rights Agreement dated as of June 27, 1997
among Pumpkin Ltd., Pumpkin Masters Holdings, Inc. and the Stockholders and
Warrantholders listed on the signature pages thereof, copies of which are
on file with Pumpkin Ltd."
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon
completion of a public offering pursuant to a registration statement under
the Securities Act) shall also bear such legend unless, in the opinion of
counsel selected by the holder of such certificate (who may be an employee of
such holder) and reasonably acceptable to the Company, the securities
represented thereby need no longer be subject to restrictions on resale under
the Securities Act.
SECTION 1.05. Reservation. The Company has duly reserved and will keep
available for issuance upon exercise of the Warrants the total number of
Warrant Shares deliverable from time to time upon exercise of all Warrants
from time to time outstanding and the total number of shares of Voting Common
Stock deliverable upon conversion of such Warrant Shares to Voting Common
Stock. The Company will not change the Non-Voting Common Stock from par value
$0.01 per share to any higher par value which exceeds the Exercise Price then
in effect, and will reduce the par value of the Non-Voting Common Stock upon
any event described in Article 4 that provides for an increase in the number
of shares of Non-Voting Common Stock subject to purchase upon exercise of
this Warrant, in inverse proportion to and effective at the same time as such
number of shares is increased, but only to the extent that such increase in
the number of shares, together with all other such increases after the date
hereof, causes the aggregate Exercise Price of all Warrants (without giving
effect to any exercise or redemption thereof) to be greater than $1,000.
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ARTICLE 2
Warrant Agency; Transfer; Exchange and Replacement of Warrants
SECTION 2.01. Warrant Agency. As long as any of the Warrants remain
outstanding, the Company shall perform the obligations of and be the warrant
agency with respect to the Warrants (the "Warrant Agency") at its address set
forth in the Credit Agreement or at such other address as the Company shall
specify by notice to all Warrantholders.
SECTION 2.02. Ownership of Warrant. The Company may deem and treat the
person in whose name this Warrant is registered as the holder and owner
hereof (notwithstanding any notations of ownership or writing hereon made by
any person other than the Company) for all purposes and shall not be affected
by any notice to the contrary, until due presentment of this Warrant for
registration of transfer as provided in this Article 2.
SECTION 2.03. Transfer of Warrant. The Company agrees to maintain at the
Warrant Agency books for the registration of transfers of the Warrants, and
transfer of this Warrant and all rights hereunder shall be registered, in
whole or in part, on such books, upon surrender of this Warrant at the
Warrant Agency, together with a written assignment of this Warrant duly
executed by the Holder or its duly authorized agent or attorney, with (if the
Holder is a natural person) signatures guaranteed by a bank or trust company
or a broker or dealer registered with the NASD, and funds sufficient to pay
any transfer taxes payable upon such transfer. Upon surrender and, if
required, such payment, the Company shall execute and deliver a new Warrant
or Warrants in the name of the assignee or assignees and in the denominations
specified in the instrument of assignment (which shall be whole numbers of
shares only) and shall issue to the assignor a new Warrant evidencing the
portion of this Warrant not so assigned, and this Warrant shall promptly be
canceled.
SECTION 2.04. Division or Combination of Warrants. This Warrant may be
divided or combined with other Warrants upon presentment hereof and of any
Warrant or Warrants with which this Warrant is to be combined at the Warrant
Agency, together with a written notice specifying the names and denominations
(which shall be whole numbers of shares only) in which the new Warrant or
Warrants are to be issued, signed by the holders hereof and thereof or their
respective duly authorized agents or attorneys. Subject to compliance with
Section 2.03 as to any transfer or assignment which may be involved in the
division or combination, the Company shall execute and deliver a new Warrant
or Warrants
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in exchange for the Warrant or Warrants to be divided or combined in
accordance with such notice.
SECTION 2.05. Loss, Theft, Destruction of Warrant Certificates. Upon
receipt of evidence satisfactory to the Company of the ownership of and the
loss, theft, destruction or mutilation of any Warrant and, in the case of any
such loss, theft or destruction, upon receipt of indemnity or security
satisfactory to the Company (it being understood and agreed that if the
holder of such Warrant is NationsCredit, then a written agreement of
indemnity given by NationsCredit alone shall be satisfactory to the Company
and no further security shall be required) or, in the case of any such
mutilation, upon surrender and cancellation of such Warrant, the Company will
make and deliver, in lieu of such lost, stolen, destroyed or mutilated
Warrant, a new Warrant of like tenor and representing the right to purchase
the same aggregate number of shares of Non-Voting Common Stock.
SECTION 2.06. Expenses of Delivery of Warrants. The Company shall pay
all expenses, taxes (other than transfer taxes) and other charges payable in
connection with the preparation, issuance and delivery of Warrants hereunder.
ARTICLE 3
Certain Rights
SECTION 3.01. Rights and Obligations under the Warrantholders Rights
Agreement. This Warrant is entitled to the benefits and subject to the terms
of the Warrantholders Rights Agreement dated as of June 27, 1997 among the
Company, Holdings and the Stockholders and Warrantholders listed on the
signature pages thereof (as amended from time to time, the "Warrantholders
Rights Agreement"). The Company shall keep or cause to be kept a copy of the
Warrantholders Rights Agreement, and any amendments thereto, at the Warrant
Agency and shall furnish, without charge, copies thereof to the Holder upon
request.
SECTION 3.02. Determination of Fair Market Value. Subject to Section
3.03 hereof, each determination of Fair Market Value hereunder shall be made
in good faith by the Company. Upon each determination of Fair Market Value by
the Company hereunder, the Company shall promptly give notice thereof to all
Warrantholders, setting forth in reasonable detail the calculation of such
Fair Market Value and the method and basis of determination thereof (the
"Company Determination").
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SECTION 3.03. Contest and Appraisal Rights. (a) If the holders of
Warrants entitling such holders to purchase a majority of the Non-Voting
Common Stock subject to purchase upon exercise of Warrants at the time
outstanding (exclusive of Warrants then owned by the Company or any
Subsidiary (as defined in the Credit Agreement) or Affiliate (as defined in
the Credit Agreement) thereof (the "Required Interest") shall disagree with
the Company Determination and shall by notice to the Company given within 30
days after the Company's notice of the Company Determination (an "Appraisal
Notice") elect to dispute the Company Determination, such dispute shall be
resolved as set forth in subsection (b) of this Section.
(b) The Company shall within 30 days after receipt of an Appraisal
Notice pursuant to subsection (a) of this Section engage an investment bank
or other qualified appraisal firm reasonably acceptable to the Required
Interest (the "Appraiser") to make an independent determination of Fair
Market Value (the "Appraiser Determination"). The Appraiser Determination
shall be final and binding on the Company and all Warrantholders. If the
Company Determination and the Appraiser Determination differ by an amount of
10% or less of the Company Determination, then the costs of conducting the
appraisal shall be borne equally by the Company and the Warrantholders; if
the Company Determination is greater than the Appraiser Determination by more
than 10% of the Company Determination, then the costs of conducting the
appraisal shall be borne entirely by the Warrantholders; and if the Appraiser
Determination is greater than the Company Determination by more than 10% of
the Company Determination, then the costs of conducting the appraisal shall
be borne entirely by the Company; provided that in each case costs separately
incurred by the Company and any Warrantholders shall be separately borne by
them.
SECTION 3.04. Board Meetings. The Company shall give to the
Warrantholders notice of all meetings and actions by written consent of its
board of directors, at the same time and in the same manner as notice of any
meetings of such board is required to be given to directors who do not waive
such notice (or, if such meeting requires no notice, then 10 days written
notice thereof describing the matters upon which action is to be taken).
Warrantholders shall have the right to send, at their expense, two
representatives selected by them to each such meeting, who shall be permitted
to attend such meeting and any adjournments thereof (other than any portion
of such meeting devoted to discussion of the Warrantholders solely in their
respective capacities as holders of the Warrants).
SECTION 3.05. Financial Statements and Other Information. The Company
will, and will cause its Subsidiaries to, maintain a system of accounting
established and administered in accordance with sound business practices to
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permit preparation of financial statements in accordance with generally
accepted accounting principles ("GAAP"), and will deliver to each of the
Warrantholders:
(i) as soon as practicable and in any event within 30 days after the
end of each month, a consolidated balance sheet of the Company and its
Consolidated Subsidiaries as at the end of such month and the related
consolidated statements of operations and cash flows for such month, and
for the portion of the Fiscal Year ended at the end of such month setting
forth in each case in comparative form, for any such financial statements
for any month ended on or after June 30, 1998, the figures for the
corresponding periods of the previous Fiscal Year, all in reasonable
detail and certified by the chief financial officer of the Company as
fairly presenting in all material respects the financial condition and
results of operations of the Company and its Consolidated Subsidiaries
and as having been prepared in accordance with GAAP applied on a basis
consistent with the audited financial statements of the Company, subject
to changes resulting from audit and normal year-end adjustments and to
the absence of footnotes;
(ii) as soon as available and in any event within 90 days after
the end of each Fiscal Year, a consolidated balance sheet of the Company
and its Consolidated Subsidiaries as of the end of such Fiscal Year
and the related consolidated statements of operations, stockholders'
equity and cash flows for such Fiscal Year, setting forth in each case
(except with respect to the consolidated financial statements of the
Company as of and for the Fiscal Year ending December 31, 1997) in
comparative form the figures for the previous Fiscal Year, such
consolidated financial statements to be certified without qualification
by Deloitte & Touche, or other independent public accountants of
nationally recognized standing;
(iii) promptly following the filing thereof with the Secretary of
State of the State of Delaware, a copy of each amendment to, or
restatement of, the Certificate of Incorporation of the Company, and
promptly following the adoption thereof by the Company, a copy of each
amendment to, or restatement of, the By-laws of the Company;
(iv) as promptly as practicable following each meeting of the board
of directors of the Company, a copy of the minutes of such meeting, and
promptly following the execution by all of the directors on the board of
directors of the Company, a copy of each unanimous written consent of
directors in lieu of a meeting of the board of directors of the Company,
in
8
each case, including all exhibits and attachments, if any, to such
minutes or unanimous written consents; and
(v) with reasonable promptness, such other information and data
with respect to the Company or any of its Subsidiaries as from time to
time may be reasonably requested by any Warrantholder.
ARTICLE 4
Antidilution Provisions
SECTION 4.01. Adjustment Generally. The Exercise Price and the number of
shares of Non-Voting Common Stock (or other securities or property) issuable
upon exercise of this Warrant shall be subject to adjustment from time to
time upon the occurrence of certain events as provided in this Article 4;
provided that notwithstanding anything to the contrary contained herein, the
Exercise Price shall not be less than the par value of the Non-Voting Common
Stock, as such par value is reduced from time to time in accordance with
Section 1.05.
SECTION 4.02. Common Stock Reorganization. If the Company shall
subdivide its outstanding shares of Common Stock (or any class thereof) into
a greater number of shares or consolidate its outstanding shares of Common
Stock (or any class thereof) into a smaller number of shares (any such event
being called a "Common Stock Reorganization"), then (a) the Exercise Price
shall be adjusted, effective immediately after the effective date of such
Common Stock Reorganization, to a price determined by multiplying the
Exercise Price in effect immediately prior to such effective date by a
fraction, the numerator of which shall be the number of shares of Common
Stock outstanding on such effective date before giving effect to such Common
Stock Reorganization and the denominator of which shall be the number of
shares of Common Stock outstanding after giving effect to such Common Stock
Reorganization, and (b) the number of shares of Non-Voting Common Stock
subject to purchase upon exercise of this Warrant shall be adjusted,
effective at such time, to a number determined by multiplying the number of
shares of Non-Voting Common Stock subject to purchase immediately before such
Common Stock Reorganization by a fraction, the numerator of which shall be
the number of shares of Common Stock outstanding after giving effect to such
Common Stock Reorganization and the denominator of which shall be the number
of shares of Common Stock outstanding immediately before such Common Stock
Reorganization.
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SECTION 4.03. Common Stock Distribution. (a) If the Company shall issue,
sell or otherwise distribute any shares of Common Stock, other than pursuant
to a Common Stock Reorganization (which is governed by Section 4.02 hereof)
(any such event, including any event described in paragraphs (b) and (c)
below, being herein called a "Common Stock Distribution"), for a
consideration per share less than the Exercise Price then in effect or less
than the Fair Market Value of the Company per share of outstanding Common
Stock on a Fully Diluted Basis on the date of such Common Stock Distribution
(before giving effect to such Common Stock Distribution), then, effective
upon such Common Stock Distribution, the Exercise Price shall be reduced, if
such consideration per share shall be less then the Exercise Price then in
effect but not less than such Fair Market Value per share, to the lower of
the prices (calculated to the nearest one-thousandth of one cent) determined
as provided in clauses (i) and (ii) below or, if such consideration per share
shall be less than such Fair Market Value per share, to the lowest of the
prices (calculated to the nearest one-thousandth of one cent) determined as
provided in clauses (i), (ii) and (iii) below:
(i) if the Company shall receive any consideration for the Common
Stock issued, sold or distributed in such Common Stock Distribution,
the consideration per share of Common Stock received by the Company upon
such issue, sale or distribution;
(ii) by dividing (A) an amount equal to the sum of (1) the number
of shares of Common Stock outstanding immediately prior to such Common
Stock Distribution multiplied by the then existing Exercise Price, plus
(2) the consideration, if any, received by the Company upon such Common
Stock Distribution by (B) the total number of shares of Common Stock
outstanding immediately after such Common Stock Distribution; and
(iii) by multiplying the Exercise Price in effect immediately prior
to such Common Stock Distribution by a fraction, the numerator of which
shall be the sum of (A) the number of shares of Common Stock outstanding
immediately prior to such Common Stock Distribution multiplied by such
Fair Market Value per share on the date of such Common Stock
Distribution, plus (B) the consideration, if any, received by the Company
upon such Common Stock Distribution, and the denominator of which shall
be the product of (1) the total number of shares of Common Stock
outstanding immediately after such Common Stock Distribution multiplied
by (2) such Fair Market Value per share on the date of such Common Stock
Distribution.
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If any Common Stock Distribution shall require an adjustment to the
Exercise Price pursuant to the foregoing provisions of this paragraph (a),
including by operation of paragraph (b) or (c) below, then, effective at the
time such adjustment is made, the number of shares of Non-Voting Common Stock
subject to purchase upon exercise of this Warrant shall be increased to a
number determined by multiplying the number of shares of Non-Voting Common
Stock subject to purchase immediately before such Common Stock Distribution
by a fraction, the numerator of which shall be the number of shares of Common
Stock outstanding immediately after giving effect to such Common Stock
Distribution and the denominator of which shall be the sum of the number of
shares outstanding immediately before giving effect to such Common Stock
Distribution (both calculated on a Fully Diluted Basis) plus the number of
shares of Common Stock which the aggregate consideration received by the
Company with respect to such Common Stock Distribution would purchase at the
Fair Market Value of the Company per share of outstanding Common Stock on a
Fully Diluted Basis on the date of such Common Stock Distribution (before
giving effect to such Common Stock Distribution). In computing adjustments
under this paragraph, fractional interests in Common Stock shall be taken
into account to the nearest one-thousandth of a share.
The provisions of this paragraph (a), including by operation of
paragraph (b) or (c) below, shall not operate to increase the Exercise Price
or reduce the number of shares of Non-Voting Common Stock subject to purchase
upon exercise of this Warrant.
(b) If the Company shall issue, sell, distribute or otherwise grant in
any manner (including by assumption) any rights to subscribe for or to
purchase, or any warrants or options for the purchase of Common Stock or any
stock or securities convertible into or exchangeable for Common Stock (such
rights, warrants or options being herein called "Options" and such
convertible or exchangeable stock or securities being herein called
"Convertible Securities"), whether or not such Options or the rights to
convert or exchange any such Convertible Securities in respect of such
Options are immediately exercisable, and the price per share for which Common
Stock is issuable upon the exercise of such Options or upon conversion or
exchange of such Convertible Securities in respect of such Options
(determined by dividing (i) the aggregate amount, if any, received or
receivable by the Company as consideration for the granting of such Options,
plus the minimum aggregate amount of additional consideration payable to the
Company upon the exercise of all such Options, plus, in the case of Options
to acquire Convertible Securities, the minimum aggregate amount of additional
consideration, if any, payable upon the issuance or sale of such Convertible
Securities and upon the conversion or exchange thereof, by (ii) the total
maximum
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number of shares of Common Stock issuable upon the exercise of such Options
or upon the conversion or exchange of all such Convertible Securities
issuable upon the exercise of such Options) shall be less than the Exercise
Price then in effect or less than the Fair Market Value of the Company per
share of outstanding Common Stock on a Fully Diluted Basis on the date of
granting such Options (before giving effect to such grant), then, for
purposes of paragraph (a) above, the total maximum number of shares of Common
Stock issuable upon the exercise of such Options or upon conversion or
exchange of the total maximum amount of such Convertible Securities issuable
upon the exercise of such Options shall be deemed to have been issued as of
the date of granting of such Options and thereafter shall be deemed to be
outstanding and the Company shall be deemed to have received as consideration
of such price per share, determined as provided above, therefor. Except as
otherwise provided in paragraph (d) below, no additional adjustment of the
Exercise Price shall be made upon the actual exercise of such Options or upon
conversion or exchange of such Convertible Securities.
(c) If the Company shall issue, sell or otherwise distribute (including
by assumption) any Convertible Securities, whether or not the rights to
exchange or convert thereunder are immediately exercisable, and the price per
share for which Common Stock is issuable upon such conversion or exchange
(determined by dividing (i) the aggregate amount received or receivable by
the Company as consideration for the issuance, sale or distribution of such
Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the conversion or exchange
thereof, by (ii) the total maximum number of shares of Common Stock issuable
upon the conversion or exchange of all such Convertible Securities) shall be
less than the Exercise Price then in effect or less than the Fair Market
Value of the Company per share of outstanding Common Stock on a Fully Diluted
Basis on the date of such issuance, sale or distribution (before giving
effect to such issuance, sale or distribution), then, for purposes of
paragraph (a) above, the total maximum number of shares of Common Stock
issuable upon conversion or exchange of all such Convertible Securities shall
be deemed to have been issued as of the date of the issuance, sale or
distribution of such Convertible Securities and thereafter shall be deemed to
be outstanding and the Company shall be deemed to have received as
consideration such price per share, determined as provided above, therefor.
Except as otherwise provided in paragraph (d) below, no additional adjustment
of the Exercise Price shall be made upon the actual conversion or exchange of
such Convertible Securities.
(d) If (i) the purchase price provided for in any Option referred to in
paragraph (b) above or the additional consideration, if any, payable upon the
conversion or exchange of any Convertible Securities referred to in paragraph
(b)
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or (c) above or the rate at which any Convertible Securities referred to in
paragraph (b) or (c) above are convertible into or exchangeable for Common
Stock shall change at any time (other than under or by reason of provisions
designed to protect against dilution upon an event which results in a related
adjustment pursuant to this Article 4), or (ii) any of such Options or
Convertible Securities shall have terminated, lapsed or expired, the Exercise
Price then in effect shall forthwith be readjusted (effective only with
respect to any exercise of this Warrant after such readjustment) to the
Exercise Price which would then be in effect had the adjustment made upon the
issuance, sale, distribution or grant of such Options or Convertible
Securities been made based upon such changed purchase price, additional
consideration or conversion rate, as the case may be (in the case of any
event referred to in clause (i) of this paragraph (d)) or had such adjustment
not been made (in the case of any event referred to in clause (ii) of this
paragraph (d)).
(e) If the Company shall pay a dividend or make any other distribution
upon any capital stock of the Company payable in Common Stock, Options or
Convertible Securities, then, for purposes of paragraph (a) above, such
Common Stock, Options or Convertible Securities shall be deemed to have been
issued or sold without consideration.
(f) If any shares of Common Stock, Options or Convertible Securities
shall be issued, sold or distributed for cash, the consideration received
therefor shall be deemed to be the amount received by the Company therefor,
after deduction therefrom of any expenses incurred in connection therewith.
If any shares of Common Stock, Options or Convertible Securities shall be
issued sold or distributed for a consideration other than cash, the amount of
the consideration other than cash received by the Company shall be deemed to
be the Fair Market Value of such consideration, after deduction of any
expenses incurred in connection therewith. If any shares of Common Stock,
Options or Convertible Securities shall be issued in connection with any
merger in which the Company is the surviving corporation, the amount of
consideration therefor shall be deemed to be the Fair Market Value of such
portion of the assets and business of the non-surviving corporation as shall
be attributable to such Common Stock, Options or Convertible Securities, as
the case may be. If any Options shall be issued in connection with the
issuance and sale of other securities of the Company, together comprising one
integral transaction in which no specific consideration is allocated to such
Options by the parties thereto, such Options shall be deemed to have been
issued without consideration.
SECTION 4.04. Special Dividends. If the Company shall issue or
distribute to any holder or holders of shares of Common Stock evidences of
indebtedness,
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any other securities of the Company or any cash, property or other assets
(excluding a Common Stock Reorganization or a Common Stock Distribution),
whether or not accompanied by a purchase, redemption or other acquisition of
shares of Common Stock (any such nonexcluded event being herein called a
"Special Dividend"), (a) the Exercise Price shall be decreased, effective
immediately after the effective date of such Special Dividend, to a price
determined by multiplying the Exercise Price then in effect by a fraction,
the numerator of which shall be the Fair Market Value of the Company per
share of outstanding Common Stock as of such effective date less any cash and
the then Fair Market Value of any evidences of indebtedness, securities or
property or other assets issued or distributed in such Special Dividend with
respect to one share of Common Stock, and the denominator of which shall be
such Fair Market Value per share and (b) the number of shares of Non-Voting
Common Stock subject to purchase upon exercise of this Warrant shall be
increased to a number determined by multiplying the number of shares of
Non-Voting Common Stock subject to purchase immediately before such Special
Dividend by a fraction, the numerator of which shall be the Exercise Price in
effect immediately before such Special Dividend and the denominator of which
shall be the Exercise Price in effect immediately after such Special
Dividend. No adjustment pursuant to this Section 4.04 shall be made with
respect to the declaration or payment of any Restricted Payment (as defined
in the Credit Agreement) by the Company in accordance with Section 8.04(a) of
the Credit Agreement. A reclassification of Common Stock (other than a change
in par value, or from par value to no par value or from no par value to par
value) into shares of Common Stock and shares of any other class of stock
shall be deemed a distribution by the Company to the holders of such Common
Stock of such shares of such other class of stock and, if the outstanding
shares of Common Stock shall be changed into a larger or smaller number of
shares of Common Stock as part of such reclassification, a Common Stock
Reorganization.
SECTION 4.05. Capital Reorganizations. If there shall be any
consolidation or merger to which the Company is a party, other than a
consolidation or a merger of which the Company is the continuing corporation
and which does not result in any reclassification of, or change (other than a
Common Stock Reorganization) in, outstanding shares of Common Stock, or any
sale or conveyance of the property of the Company as an entirety or
substantially as an entirety, or any recapitalization of the Company (any
such event being called a "Capital Reorganization"), then, effective upon the
effective date of such Capital Reorganization, the Holder shall no longer
have the right to purchase Non-Voting Common Stock, but shall have instead
the right to purchase, upon exercise of this Warrant, the kind and amount of
shares of stock and other securities and property (including cash) which the
Holder would have owned or
14
have been entitled to receive pursuant to such Capital Reorganization if this
Warrant had been exercised immediately prior to the effective date of such
Capital Reorganization. As a condition to effecting any Capital
Reorganization, the Company or the successor or surviving corporation, as the
case may be, shall (a) execute and deliver to each Warrantholder and to the
Warrant Agency an agreement as to the Warrantholders' rights in accordance
with this Section 4.05, providing, to the extent of any right to purchase
equity securities hereunder, for subsequent adjustments as nearly equivalent
as may be practicable to the adjustments provided for in this Article 4 and
(b) provide each Regulation Y Holder with an opinion of counsel reasonably
satisfactory to such Regulation Y Holder and such other assurances as any
Regulation Y Holder may reasonably request to the effect that the ownership
and exercise by any Regulation Y Holder of this Warrant after giving effect
to such Capital Reorganization shall not be prohibited by the BHC Act or the
regulations thereunder. The provisions of this Section 4.05 shall similarly
apply to successive Capital Reorganizations.
SECTION 4.06. Adjustment Rules. Any adjustments pursuant to this Article
4 shall be made successively whenever an event referred to herein shall
occur, except that, notwithstanding any other provision of this Article 4, no
adjustment shall be made to the number of shares of Non-Voting Common Stock
to be delivered to each Holder (or to the Exercise Price) if such adjustment
represents less than 1% of the number of shares previously required to be so
delivered, but any lesser adjustment shall be carried forward and shall be
made at the time and together with the next subsequent adjustment which
together with any adjustments so carried forward shall amount to 1% or more
of the number of shares to be so delivered. No adjustment shall be made
pursuant to this Article 4 in respect of the issuance from time to time of
shares of Common Stock upon the exercise of any of the Warrants. If the
Company shall take a record of the holders of its Common Stock for any
purpose referred to in this Article 4, then (i) such record date shall be
deemed to be the date of the issuance, sale, distribution or grant in
question and (ii) if the Company shall legally abandon such action prior to
effecting such action, no adjustment shall be made pursuant to this Article 4
in respect of such action.
SECTION 4.07. Proceedings Prior to Any Action Requiring Adjustment. As a
condition precedent to the taking of any action which would require an
adjustment pursuant to this Article 4, the Company shall take any action
which may be necessary, including obtaining regulatory approvals or
exemptions, in order that (a) the Company may thereafter validly and legally
issue as fully paid and nonassessable all shares of Non-Voting Common Stock
which the holders of Warrants are entitled to receive upon exercise thereof
and (b) the ownership and
15
exercise of any Warrant by any Regulation Y Holder shall not be prohibited by
the BHC Act or the regulations thereunder.
SECTION 4.08. Notice of Adjustment. Not less than 10 nor more than 30
days prior to the record date or effective date, as the case may be, of any
action which requires or could reasonably be expected to require an
adjustment or readjustment pursuant to this Article 4, the Company shall give
notice to each Warrantholder of such event, describing such event in
reasonable detail and specifying the record date or effective date, as the
case may be, and, if determinable, the required adjustment and the
computation thereof. If the required adjustment is not determinable at the
time of such notice, the Company shall give notice to each Warrantholder of
such adjustment and computation promptly after such adjustment becomes
determinable.
ARTICLE 5
Purchase, Redemption and Cancellation of Warrants
SECTION 5.01. Purchase of Warrants by the Company. The Company shall
have the right or obligation to purchase or otherwise acquire Warrants at
such times, in such manner and for such consideration as set forth below.
SECTION 5.02. Mandatory Redemption of Warrants. (a) The Holder may (x) at
any time and from time to time on or after the earlier of (i) the fifth
anniversary of the Closing Date (as defined in the Credit Agreement) and (ii)
repayment in full of all principal of and premium and interest on the Notes
(as defined in the Credit Agreement) and the termination of the Commitments
under the Credit Agreement and (y) on or within 30 days after the date on
which the Company shall have delivered a Refinancing Notice (any such
redemption pursuant to this clause (y), a "Refinancing Redemption"), demand a
determination of the Redemption Price (a "Determination Notice") for purposes
of this Section 5.02. Within 30 days (or, in the case of a Refinancing
Redemption, 5 days) after the receipt of any Determination Notice from the
Holder, the Company shall give to the Holder notice of the Redemption Price,
including a reasonably detailed description of the method of calculation
thereof, determined as of the day of the Determination Notice. At any time
within 30 days (or, in the case of a Refinancing Redemption, 15 days) after
receipt of notice of the Redemption Price the Holder may demand redemption of
this Warrant, in whole or in part, at the Redemption Price by notice to the
Company, payable on the thirtieth Business Day after receipt of notice of
such demand (or, in the case of a Refinancing Redemption, on the closing date
of such refinancing) (any such date,
16
the "Redemption Due Date") in immediately available funds to the Holder upon
surrender of this Warrant at the Warrant Agency or, if requested by the
Holder, by wire transfer to any account in New York City specified by notice
to the Company. Thereupon, the right to purchase shares of Non-Voting Common
Stock theretofore represented by this Warrant as to which the Holder has
demanded (and the Company may effect) redemption shall terminate, and this
Warrant shall represent the right of the Holder to receive the full
Redemption Price from the Company in accordance with this Section 5.02(a).
The Holder's right to demand redemption of this Warrant pursuant to this
Section 5.02(a) shall be referred to hereinafter as the Holder's "Mandatory
Redemption Right".
(b) In addition, on or within 30 days after the date on which the
Company shall have delivered a Trigger Notice with respect to a Holdings
Trigger Event described in clauses (i), (ii) or (iii) of the definition
thereof, by notice to the Company the Holder may demand redemption of this
Warrant, in whole or in part, at the Trigger Redemption Price, payable on the
day of the consummation of the Holdings Trigger Event with respect to which
the Trigger Notice has been delivered in immediately available funds to the
Holder upon surrender of this Warrant at the Warrant Agency or, if requested
by the Holder, by wire transfer to any account in New York City specified by
notice to the Company. Thereupon, the right to purchase shares of Non-Voting
Common Stock theretofore represented by this Warrant as to which the Holder
has demanded (and the Company may effect) redemption shall terminate, and
this Warrant shall represent the right of the Holder to receive the Trigger
Redemption Price from the Company in accordance with this Section 5.02(b).
The occurrence of a Holdings Trigger Event described in clause (iv) of the
definition thereof shall not give the Holder any rights under this Section
5.02(b).
SECTION 5.03. Optional Redemption. (a) At any time and from time to time
prior to the completion of a Qualified IPO but after the fifth anniversary of
the Closing Date (as defined in the Credit Agreement), the Company shall have
the right to redeem all, but not less than all, of the outstanding Warrants
at the Optional Redemption Price, determined as of the day preceding the
notice of redemption. Irrevocable notice of such right of redemption shall be
given by the Company to all Warrantholders not more than 30 days nor less
than 15 days prior to the date scheduled for redemption, stating the date and
price, including a reasonably detailed description of the method of
calculation thereof, of redemption. Warrantholders may exercise Warrants
until 5:00 p.m., New York City time, on the Business Day preceding the date
of redemption set forth in a valid notice of redemption, at which time the
right to purchase shares of Non-Voting Common Stock theretofore represented
by this Warrant shall terminate, and this Warrant shall represent the right
of the Holder to receive the Optional
17
Redemption Price from the Company in immediately available funds upon
surrender of this Warrant at the Warrant Agency. If the Optional Redemption
Price shall be disputed pursuant to Section 3.03, the Company shall pay to
the affected Warrantholders on the redemption date the Optional Redemption
Price initially determined by it and shall thereafter make supplemental
payment of any increase (and the affected Warrantholder shall remit to the
Company any decrease) in the Optional Redemption Price upon resolution of
such dispute.
(b) In addition, on or within 30 days after the date on which the
Company shall have delivered a Trigger Notice with respect to a Redemption
Transfer, the Company shall have the right to redeem all, but not less than
all, of the outstanding Warrants at the Trigger Redemption Price with respect
to such Holdings Trigger Event. Irrevocable notice of such right of
redemption shall be given by the Company to all Warrantholders not more than
30 days nor less than 15 days prior to the date scheduled for redemption,
stating the date of such redemption, which shall be the date of consummation
of the Redemption Transfer; provided that such notice of redemption may
provide that the obligations of the Company to redeem the Warrants shall be
conditioned upon the consummation of the Redemption Transfer. Warrantholders
may exercise Warrants until 5:00 p.m., New York City time, on the Business
Day preceding the date of redemption set forth in a valid notice of
redemption, at which time the right to purchase shares of Non-Voting Common
Stock theretofore represented by this Warrant shall terminate, and this
Warrant shall represent the right of the Holder to receive the Trigger
Redemption Price from the Company in immediately available funds upon
surrender of this Warrant at the Warrant Agency.
SECTION 5.04. Cancellation of Warrants. All Warrants purchased, redeemed
or otherwise acquired by the Company shall thereupon be canceled and retired.
The Warrant Agency shall cancel any Warrant surrendered for exercise or
registration of transfer or exchange and deliver such canceled Warrants to
the Company.
SECTION 5.05. Notice of Refinancing and Holdings Trigger Events. The
Company shall give notice to each of the Warrantholders of (i) any intent by
the Company or the Company to refinance in their entirety the Notes (as
defined in the Credit Agreement) not less than 60 days prior to the proposed
closing date of such refinancing, setting forth such proposed closing date
and notifying each Warrantholder of its rights under Section 5.02(a) (such
notice, the "Refinancing Notice") and (ii) the proposed occurrence of any
Holdings Trigger Event not less than 60 days prior to the proposed date of
occurrence of such Holdings Trigger Event, setting forth the date of such
proposed event and, if such Holdings Trigger
18
event is an event described in clauses (i), (ii) or (iii) of the definition
thereof, notifying each Warrantholder of its rights under Section 5.02(b)
(such notice, the "Trigger Notice").
ARTICLE 6
Definitions
The following terms, as used in this Warrant, have the following
meanings:
"Adjusted EBITDA" means, for any period, EBITDA for such period
plus, to the extent deducted in determining such EBITDA, any fees paid
pursuant to the Management Agreement with respect to such period.
"Appraisal Notice" has the meaning set forth in Section 3.03(a).
"Appraiser" has the meaning set forth in Section 3.03(b).
"Appraiser Determination" has the meaning set forth in Section 3.03(b).
"Asset Purchase Agreement" has the meaning set forth in the Credit
Agreement.
"BHC Act" means the Bank Holding Company Act of 1956, as amended.
"Business Day" means any day excluding Saturday, Sunday and any day on
which banking institutions located in New York are authorized by law or other
governmental action to be closed, unless there shall have been an offering of
Common Stock registered under the Securities Act, in which case "Business
Day" means (a) if Common Stock is listed or admitted to trading on a national
securities exchange, a day on which the principal national securities
exchange on which the Common Stock is listed or admitted to trading is open
for business or (b) if Common Stock is not so listed or admitted to trading,
a day on which the New York Stock Exchange is open for business.
"Capital Reorganization" has the meaning set forth in Section 4.05.
"Closing Price" on any day with respect to shares of common stock of any
Person means (a) if such common stock is listed or admitted for trading on a
national securities exchange, the reported last sales price regular way or,
if no
19
such reported sale occurs on such day, the average of the closing bid and
asked prices regular way on such day, in each case as officially quoted or
reported on the principal national securities exchange on which such common
stock is listed or admitted to trading, or (b) if such common stock is not
listed or admitted to trading on any national securities exchange, the
average of the closing bid and asked prices in the over-the-counter market on
such day as reported by NASDAQ, the National Quotation Bureau, Inc. or any
nationally recognized comparable system or, if not so reported, as reported
by any New York Stock Exchange member firm selected by such Person for such
purpose.
"Common Stock" means the Voting Common Stock or the Non-Voting Common
Stock, or both, as the context may require.
"Common Stock Distribution" has the meaning set forth in Section 4.03(a).
"Common Stock Reorganization" has the meaning set forth in Section 4.02.
"Company" has the meaning set forth in the first paragraph of this
Warrant.
"Company Determination" has the meaning set forth in Section 3.02.
"Consolidated Total Debt" has the meaning specified in the Credit
Agreement.
"Convertible Securities" has the meaning set forth in Section 4.03(b).
"Credit Agreement" has the meaning set forth in the second paragraph of
this Warrant.
"Determination Notice" has the meaning set forth in Section 5.02(a).
"EBITDA" has the meaning specified in the Credit Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and any successor Federal statute, and the rules and regulations of the
Securities and Exchange Commission (or its successor) thereunder, all as the
same shall be in effect at the time.
20
"Exercise Price" means $.01 per share of the Non-Voting Common Stock,
subject to adjustment pursuant to Article 4.
"Fair Market Value" of any Person as at any date of determination shall be
the greatest of (i) the Fair Market Value at such date of such Person and its
Subsidiaries as a going concern, (ii) the liquidation value at such date of such
Person and its Subsidiaries, (iii) the consolidated net worth (or stockholders
equity) of such Person and its Subsidiaries as shown on its latest available
consolidated balance sheet of such Person and (iv) the result of (A) Adjusted
EBITDA for the twelve consecutive months most recently ended prior to such date
multiplied by 4 plus (B) cash and cash equivalents at such date minus (C)
Consolidated Total Debt at such date; provided that, for purposes of determining
"Fair Market Value" of the Company at any date, "Consolidated Total Debt" at
such date shall include (i) the average of the aggregate principal amount of the
Working Capital Loans outstanding on the last day of each month during the
twelve consecutive month period ended on or most recently prior to such date and
(ii) (x) if the Earnout Amount (as defined in the Asset Purchase Agreement) has
not yet been determined pursuant to Section 3.2.1 of the Asset Purchase
Agreement or otherwise extinguished before the date of the determination
thereof, the maximum amount which could be payable as the Earnout Amount and (y)
if the Earnout Amount has been determined pursuant to Section 3.2.1 of the Asset
Purchase Agreement, the Earnout Amount so determined, as reduced pursuant to
Sections 3.2.4 and 3.2.5 of the Asset Purchase Agreement. Notwithstanding the
foregoing, if, at any date of determination of the Fair Market Value of any
Person, the common stock of such Person shall then be publicly traded, the Fair
Market Value of such Person on such date for purposes of the foregoing clause
(i) shall be the Market Price on such date multiplied by the number of shares of
common stock of such Person outstanding at such date. Determination of the Fair
Market Value of any Person per share of common stock of such Person shall be
made without giving effect to any discount for (i) minority interest, (ii) any
lack of liquidity of such common stock due to the fact that there may be no
public market for such common stock, or (iii) the voting status of any class of
such common stock and, without limiting the generality of the foregoing, the
Fair Market Value per share of Common Stock shall be made without giving effect
for any lack of liquidity of such Common Stock or for the fact that, other than
Holdings, there are no holders of Common Stock.
"Fiscal Year" has the meaning set forth in the Credit Agreement.
"Fully Diluted Basis" means, with respect to any determination or
calculation, that such determination or calculation is performed on a fully
diluted
21
basis determined in accordance with generally accepted accounting principles
as in effect from time to time.
"Holder" has the meaning set forth in the first paragraph of this
Warrant.
"Holdings" has the meaning set forth in the second paragraph of this
Warrant.
"Holdings Common Stock" means the common stock, par value $0.01 per
share, of Holdings.
"Holdings Qualified IPO" means any sale of shares of Holdings Common
Stock by and for the account of Holdings pursuant to an underwritten initial
public offering registered under the Securities Act; provided that the
proceeds to Holdings (net of underwriters' discount, fees and other expenses
incurred by Holdings in connection therewith) from such sale of shares
exceeds $10,000,000.
"Holdings Trigger Event" means (i) a Holdings Qualified IPO at any time
prior to a Qualified IPO, (ii) any proposed transfer by Security Capital (as
defined in the Warrantholders Rights Agreement) or any Management Stockholder
(as defined in the Warrantholders Rights Agreement) or any of their
respective Affiliates (as defined in the Warrantholders Rights Agreement) of
its shares of Holdings Common Stock or any portion thereof to any Person
which requires delivery of a Transfer Notice (as defined in Section 2.04 of
the Warrantholders Rights Agreement) or (iv) a Redemption Transfer (as
defined in Section 2.05(b)(i) of the Warrantholders Rights Agreement).
"Mandatory Redemption Right" has the meaning set forth in Section 5.2(a).
"Market Price" as at any date of determination means the average of the
daily Closing Prices of a share of Common Stock for the shorter of (i) the 20
consecutive Business Days ending on the most recent Business Day prior to the
Time of Determination and (ii) the period commencing on the date next
succeeding the first public announcement of the issuance, sale, distribution,
grant or exercise in question through such most recent Business Day prior to
the Time of Determination. "Time of Determination" means the time and date of
the earliest of (x) the determination of the stockholders entitled to receive
such issuance, sale, distribution or grant, (y) the determination of the
Holders or the Company to exercise their respective rights set forth in
Sections 5.02(a) or 5.03 hereof and (z) the commencement of "ex-dividend"
trading in respect thereof.
22
"NASD" means The National Association of Securities Dealers, Inc.
"NASDAQ" means The National Association of Securities Dealers, Inc.
Automated Quotation System.
"NationsCredit" has the meaning set forth in the second paragraph of this
Warrant.
"Non-Voting Common Stock" has the meaning set forth in the first paragraph
of this Warrant, subject to change pursuant to Article 4.
"Optional Redemption Price" means, as of any date of determination, a price
for each share of Non-Voting Common Stock issuable upon exercise of the Warrants
equal to 110% of the Redemption Price, determined as of such date.
"Options" has the meaning set forth in Section 4.03(b).
"Person" means any natural person, corporation, limited partnership,
limited liability company, general partnership, joint stock company, joint
venture, association, company, trust, bank, trust company, land trust,
business trust or other organization, whether or not a legal entity, and any
government agency or political subdivision thereof.
"Qualified IPO" means any sale of shares of Common Stock by and for the
account of the Company pursuant to an underwritten initial public offering
registered under the Securities Act; provided that the proceeds to the
Company (net of underwriters' discount, fees and other expenses incurred by
the Company in connection therewith) from such sale of shares exceeds
$10,000,000.
"Redemption Due Date" has the meaning set forth in Section 5.02(a)
hereof.
"Redemption Price" means, as of any date of determination, a price
for each share of Non-Voting Common Stock issuable upon exercise of the
Warrants equal to the excess of (a)(i) the Fair Market Value of the Company
plus the aggregate Exercise Price of all Warrants either being redeemed or
then outstanding and not being redeemed divided by (ii) the number of shares
of Common Stock outstanding on a Fully Diluted Basis over (b) the Exercise
Price then in effect.
"Redemption Transfer" has the meaning set forth in the
Warrantholders Rights Agreement.
23
"Refinancing Notice" has the meaning set forth in Section 5.05 hereof.
"Regulation Y Holder" means the Holder or a holder of Warrant Shares, if
such Holder or holder of Warrant Shares has identified itself to the Company
as a bank holding company within the meaning of the BHC Act or a subsidiary
thereof subject to Regulation Y under the BHC Act. The Company acknowledges
that NationsCredit has identified itself to the Company as a "Regulation Y
Holder".
"Required Interest" has the meaning set forth in Section 3.03(a).
"Securities Act" means the Securities Act of 1933, as amended, and rules
and regulations of the Securities and Exchange Commission thereunder.
"Special Dividend" has the meaning set forth in Section 4.04.
"Subsidiary" of any Person means any corporation, partnership, limited
liability company, joint venture, association or other business entity of
which more than 50% of the total voting power of shares of stock or other
interests therein entitled to vote in the election of members of the board of
directors, partnership committee, board of managers or trustees or other
managerial body thereof is at the time owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of such
Person or a combination thereof. Unless otherwise specified, "Subsidiary"
means a Subsidiary of the Company and "Subsidiaries" means all Subsidiaries
of the Company.
"Trigger Redemption Price" means, as of any date of determination, an
amount equal to (i) the Trigger Fair Market Value Per Share times (ii) the
product of (A) a fraction, the numerator of which shall be the number of
shares of Common Stock for which this Warrant is exercisable at such date
(after giving effect to any adjustments pursuant to Article 4) or, if such
determination is being made with respect to any redemption of the Warrants in
part, the number of shares with respect to which this Warrant is being
redeemed and the denominator of which shall be the number of shares of Common
Stock outstanding at such time (calculated on a Fully Diluted Basis) times
(B) the number of shares of Holdings Common Stock outstanding at such date
(calculated on a Fully Diluted Basis).
"Trigger Fair Market Value Per Share" means (i) in the case of any
Holdings Trigger Event described in clause (i) or (ii) or (iv) of the
definition thereof, the highest consideration per share (if any) received by
Holdings or any stockholder of Holdings from the sale, exchange, transfer or
other disposition by it of Holdings Common Stock in connection with such
Holdings Trigger Event and (ii) in the case of any Holdings Trigger Event
24
described in clause (iii) of the definition thereof, the highest
consideration per share of Holdings Common Stock that would be received by
any stockholder of Holdings upon the disposition of all or substantially all
of the Holdings Common Stock or the assets of Holdings (determined by
reference to all of the consideration received by the stockholders of
Holdings (as stockholders) for that portion actually disposed of in
connection with such Holdings Trigger Event, or which would be received if
all of the consideration received by Holdings in connection with such
Holdings Trigger Event were distributed to the stockholders of Holdings), in
each case net of underwriting commissions and other costs and expenses
incurred in connection with any such Holdings Trigger Event and, if such
Holdings Trigger Event constitutes a sale or other transfer of assets, any
taxes payable with respect to such sale.
"Trigger Notice" has the meaning set forth in Section 5.05.
"Voting Common Stock" means the Class A common stock, par value $0.01
per share, of the Company.
"Warrant Agency" has the meaning set forth in Section 2.01.
"Warrant Shares" means the shares of Non-Voting Common Stock issuable
upon the exercise of the Warrants.
"Warrantholder" means a holder of a Warrant.
"Warrantholders Rights Agreement" has the meaning set forth in Section
3.01.
"Warrants" has the meaning set forth in the second paragraph of this
Warrant.
All references herein to "days" shall mean calendar days unless
otherwise specified.
25
ARTICLE 7
Miscellaneous
SECTION 7.01. Notices. Notices and other communications provided for
herein shall be in writing and may be given by mail, courier, confirmed telex
or facsimile transmission and shall, unless otherwise expressly required, be
deemed given when received or, if mailed, four Business Days after being
deposited in the United States mail with postage prepaid and properly
addressed. In the case of the Holder, such notices and communications shall
be addressed to its address as shown on the books maintained by the Warrant
Agency, unless the Holder shall notify the Warrant Agency that notices and
communications should be sent to a different address (or telex or facsimile
number), in which case such notices and communications shall be sent to the
address (or telex or facsimile number) specified by the Holder.
SECTION 7.02. Waivers, Amendments. No failure or delay of the Holder
in exercising any power or right hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. No notice or demand on the Company in any case shall entitle
the Company to any other or future notice or demand in similar or other
circumstances. The rights and remedies of the Holder are cumulative and not
exclusive of any rights or remedies which it would otherwise have. The
provisions of this Warrant may be amended, modified or waived with (and only
with) the written consent of the Company and the holders of Warrants
entitling such holders to purchase a majority of the Non-Voting Common Stock
subject to purchase upon exercise of such Warrants at the time outstanding
(exclusive of Warrants then owned by the Company or any Subsidiary or
Affiliate (as defined in the Credit Agreement) thereof); provided, however,
that no such amendment, modification or waiver shall, without the written
consent of the holders of all Warrants at the time outstanding, (a) change
the number of shares of Non-Voting Common Stock subject to purchase upon
exercise of this Warrant, the Exercise Price or provisions for payment
thereof or (b) amend, modify or waive the provisions of this Section or
Article 3 or 4 or Section 1.05, 5.02, 5.03 or 5.05. The provisions of the
Credit Agreement and the Warrantholders Rights Agreement may be amended,
modified or waived only in accordance with the respective provisions thereof.
Any such amendment, modification or waiver effected pursuant to and in
accordance with the provisions of this Section or the applicable provisions
of the Credit Agreement or the Warrantholders Rights Agreement shall be
binding upon the holders of all Warrants and Warrant Shares, upon each future
holder thereof
26
and upon the Company. In the event of any such amendment, modification or
waiver the Company shall give prompt notice thereof to all holders of
Warrants and Warrant Shares and, if appropriate, notation thereof shall be
made on all Warrants thereafter surrendered for registration of transfer or
exchange.
SECTION 7.03. GOVERNING LAW. THIS WARRANT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW).
SECTION 7.04. Transfer; Covenants to Bind Successor and Assigns. All
covenants, stipulations, promises and agreements in this Warrant contained by
or on behalf of the Company or the Holder shall bind its successors and
assigns, whether so expressed or not. This Warrant shall be transferable and
assignable by the Holder hereof in whole or from time to time in part to any
other Person in accordance with Section 2.03 hereof and the provisions of
this Warrant shall be binding upon and inure to the benefit of the Holder
hereof and its successors and assigns.
SECTION 7.05. Severability. In case any one or more of the provisions
contained in this Warrant shall be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired
thereby. The parties shall endeavor in good faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 7.06. Section Headings. The section headings used herein are
for convenience of reference only, are not part of this Warrant and are not
to affect the construction of or be taken into consideration in interpreting
this Warrant.
SECTION 7.07. Tax Basis. The Company and the Holder agree pursuant to
Proposed Treasury Regulation Section 1.1273-2 that, for Federal income tax
purposes, the aggregate issue price of the Tranche B Loans (as defined in the
Credit Agreement) and the aggregate purchase price for the Warrants are those
set forth in Section 3.05 of the Credit Agreement. Neither the Company nor
the Holder hereof shall voluntarily take any action inconsistent with the
agreement set forth in this Section 7.07.
27
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
in its corporate name by one of its officers thereunto duly authorized, and
its corporate seal to be hereunto affixed, attested by its Secretary or an
Assistant Secretary, all as of the day and year first above written.
PUMPKIN LTD.
By: /s/ Xxxxxx Xxxxxx
-----------------------------------
Title: Vice President
[Corporate Seal]
Attest:
_______________________
Name:
Title:
28
