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EXHIBIT 99.2
WARRANT AGREEMENT
THIS WARRANT AGREEMENT (this "Agreement") is dated October 25, 1996, by and
among Belmont Homes, Inc., a Mississippi corporation (the "Company"), and The
Xxxxxxx Companies, a Florida corporation ("Xxxxxxx").
In consideration of the cancellation on this date of the management
agreement between Xxxxxxx and Bellcrest Homes, Inc., a Georgia corporation being
acquired on this date by the Company, the Company has agreed to issue to
Xxxxxxx, and Xxxxxxx has agreed to acquire, warrants (the "Warrants") to
purchase up to 50,000 shares of the common stock, par value $.10 per share, of
the Company (the "Common Stock").
In consideration of the foregoing and for the purpose of defining the terms
and provisions of the Warrants and the respective rights and obligations
thereunder of the Company and Xxxxxxx, each of the parties hereto agrees as
follows:
1. GRANT AND SALE. The Company hereby grants and sells to Xxxxxxx, and
Xxxxxxx hereby agrees to acquire, the right to purchase, at any time during the
Exercise Period (as hereinafter defined), 50,000 shares of Common Stock at an
exercise price of $22.00 per share. Xxxxxxx shall pay the purchase price for the
Warrants by wire transfer of immediately available funds to an account
designated by the Company.
2. EXERCISE PERIOD. The Warrants shall be exercisable in whole or in part,
upon the date of this Agreement, and such right shall expire on the five-year
anniversary of the date of this Agreement (the "Exercise Period").
3. TRANSFER RESTRICTED. The Warrants may not be sold, assigned, disposed of
or otherwise transferred.
4. STATUS OF XXXXXXX. Xxxxxxx shall not be deemed the holder of the Common
Stock purchasable upon the exercise thereof for any purpose, nor shall anything
contained herein be construed to confer upon Xxxxxxx any of the rights of a
holder of Common Stock until the Warrant shall have been exercised and the
Common Stock purchasable upon the exercise thereof shall have been issued and
delivered as provided herein.
5. EXERCISE OF WARRANTS. (a) In the event that Xxxxxxx elects to exercise
all or any portion of the Warrants, Xxxxxxx shall give written notice of
exercise to the Company at any time during the Exercise Period (the "Exercise
Notice"). Exercise may be made of all or any part of the Warrants. If less than
all of the Warrants are exercised, the Company will, upon the closing of such
exercise, execute and deliver to Xxxxxxx an amended form of this Agreement
(dated the date hereof) evidencing the Warrants not so exercised.
(b) The closing of the purchase and sale of shares of Common Stock pursuant
to an exercise of one or more Warrants (the "Closing") shall occur at the
offices of Xxxxxx Xxxxxxx Xxxxxx & Xxxxx, A Professional Limited Liability
Company, 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxxxxxxx 00000 and at such
time and on such date as shall be specified by Xxxxxxx in the Exercise
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Notice (but in no event earlier than two or later than ten business days after
delivery of the Exercise Notice). At the Closing (i) Xxxxxxx shall surrender the
original copy of this Agreement and pay to the Company the applicable exercise
price in respect of the Warrants being exercised, and (ii) the Company will
deliver to Xxxxxxx a stock certificate or stock certificates representing the
shares of Common Stock being purchased pursuant to the exercise of the Warrant,
accompanied by duly executed stock powers or assignments.
(c) Upon exercise of the Warrants, Xxxxxxx will have no obligation to make
any capital contribution to the Company other than the exercise price payable
upon exercise as set forth in Section 1 hereof. The Company will pay all
transfer or stamp taxes, if any, in respect of the issuance of Common Stock upon
exercise of the Warrants.
6. ADJUSTMENT. In the event of any change in the outstanding shares of
Common Stock by reason of any stock dividend, stock split, reverse stock split,
recapitalization, combination, exchange of shares, merger, consolidation,
reorganization or the like or any other change in the corporate or capital
structure of the Company that would have the effect of altering any of the
rights of Xxxxxxx hereunder, the number of shares of Common Stock subject to the
Warrants and the exercise price of each Warrant shall be adjusted equitably and
appropriately so as to restore Xxxxxxx to its rights hereunder.
7. MISCELLANEOUS. The Warrants and any provision hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
Company and Xxxxxxx. The Warrants and all conditions and provisions hereof shall
inure to the benefit of, and be binding upon, the Company and Xxxxxxx. The
headings herein are for purposes of reference only and shall not affect the
meaning or construction of any of the provisions hereof.
8. COVENANTS OF THE COMPANY. The Company covenants that it will at all
times during the Exercise Period reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock, solely for
the purpose of issue upon exercise of Warrants as herein provided, such number
of shares of Common Stock as shall then be issuable upon the exercise of all
outstanding Warrants. The issuance and delivery of the Warrants and this
Agreement (and the obligations of the Company set forth therein) have been duly
authorized by all necessary corporate action on the part of the Company. The
Company covenants that all shares of Common Stock which shall be so issuable
shall, upon such issue, be duly and validly issued and fully-paid and
nonassessable.
9. APPLICABLE LAW. This Agreement and each Warrant issued hereunder and all
rights arising hereunder shall be governed by the laws of the State of
Mississippi, regardless of the law that might be applied under principles of
conflicts of law.
10. NOTICES. Any notice, demand or delivery authorized by this Agreement
shall be sufficiently given or made when mailed if sent by first-class mail,
postage prepaid, addressed to the parties hereto at their respective addresses
as set forth in the Stock Purchase Agreement by and among the Company and
Xxxxxxx (among others) of even date herewith. The Company agrees to give Xxxxxxx
written notice, by facsimile or next day delivery, promptly following the public
announcement by the Company of the record date for any (i) cash dividend (or
other similar distribution) with respect to its common stock, (ii) any
consolidation, merger or share exchange of the Company with and into
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another corporation, or of the sale of all or substantially all of the assets of
the Company other than in the ordinary course of business, and (iii) the
involuntary or voluntary dissolution, liquidation or winding up of the Company.
IN WITNESS WHEREOF, the Company has caused these presents to be signed by
its duly authorized representative, as of the date first above written.
BELMONT HOMES, INC. THE XXXXXXX COMPANIES
By: /s/ Xxxxxx Xxxxxxx By: /s/ X. Xxxxx Xxxx
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Xxxxxx Xxxxxxx, President
Name: X. Xxxxx Xxxx
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Title: President/CEO
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