DIMAC HOLDINGS, INC.
WARRANT AGREEMENT
This Warrant Agreement dated as of October 22, 1998 (this "Agreement") is
entered into by and among DIMAC Holdings, Inc., a Delaware corporation ("DIMAC
Holdings"), and the purchasers party hereto (each, a "Purchaser" and
collectively, the "Purchasers"). All capitalized terms used but not defined
herein shall have the respective meanings ascribed to such terms in the
Securities Purchase Agreement (as hereinafter defined).
WHEREAS, pursuant to a Securities Purchase Agreement dated as of the date
hereof (the "Securities Purchase Agreement") by and among DIMAC Holdings, DIMAC
Corporation, a Delaware corporation, and the Purchasers, DIMAC Holdings proposes
to issue to the Purchasers certain Warrants, as hereinafter described (the
"Warrants"), to purchase an aggregate of 28,205 shares (subject to adjustment)
of Common Stock (the "Common Stock"), $0.001 par value, of DIMAC Holdings (the
shares of Common Stock and other securities issuable upon exercise of the
Warrants being referred to herein as the "Warrant Shares");
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto agree as follows:
Section 1. Warrant Certificates. DIMAC Holdings will issue and deliver a
certificate or certificates evidencing the Warrants (the "Warrant Certificates")
pursuant to the terms of the Securities Purchase Agreement. Such Warrant
Certificates shall be substantially in the form set forth as Exhibit A attached
hereto. Warrant Certificates shall be dated the date of issuance by DIMAC
Holdings.
Section 2. Execution of Warrant Certificates. Warrant Certificates shall
be signed on behalf of DIMAC Holdings by its Chairman of the Board, Chief
Executive Officer, President or a Vice President. Each such signature upon
the Warrant Certificates may be in the form of a facsimile signature of the
present or any future Chairman of the Board, Chief Executive Officer,
President or Vice President, and may be imprinted or otherwise reproduced on
the Warrant Certificates and for that purpose DIMAC Holdings may adopt and
use the facsimile signature of any person who shall have been Chairman of the
Board, Chief Executive Officer, President or Vice President, notwithstanding
the fact that at the time the Warrant Certificates shall be delivered or
disposed of he shall have ceased to hold such office. Each Warrant
Certificate shall also be signed on behalf of DIMAC Holdings by a manual or
facsimile signature of its Secretary or an Assistant Secretary.
Section 3. Registration. DIMAC Holdings shall number and register the
Warrant Certificates and the Warrant Shares in registers (the "Warrant Register"
and the "Warrant Shares Register," respectively) as they are issued. DIMAC
Holdings may deem and treat the registered holder(s) from time to time of the
Warrant Certificates (the "Holders") as the absolute owner(s) thereof
(notwithstanding any notation of ownership or other writing thereon made by
anyone) for all purposes and shall not be affected by any notice to the
contrary. The Warrants shall be registered initially in such name or names as
the Purchasers shall designate.
Section 4. Restrictions on Transfer; Registration of Transfers. Prior to any
proposed transfer of the Warrants or the Warrant Shares, unless such transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "Securities Act"), the transferring Holder will, if
requested by DIMAC Holdings, deliver to DIMAC Holdings an opinion of counsel,
reasonably satisfactory in form and substance to DIMAC Holdings, to the effect
that the Warrants or Warrant Shares, as applicable, may be sold or otherwise
transferred without registration
under the Securities Act; provided, however, that with respect to transfers by a
Holder to its Affiliate or Affiliates, no such opinion shall be required. A
transfer made by a Holder which is a state-sponsored employee benefit plan to a
successor trust or fiduciary pursuant to a statutory reconstitution shall be
expressly permitted and no opinions of counsel shall be required in connection
therewith. Upon original issuance thereof, and until such time as the same shall
have been registered under the Securities Act or sold pursuant to Rule 144
promulgated thereunder (or any similar rule or regulation), each Warrant
Certificate shall bear the legend included on the first page of Exhibit A,
unless in the opinion of such counsel, such legend is no longer required by the
Securities Act or by the Stockholders Agreement, as applicable.
Subject to the conditions to transfer contained in the Stockholders
Agreement, DIMAC Holdings shall from time to time register the transfer of any
outstanding Warrant Certificates in the Warrant Register to be maintained by
DIMAC Holdings upon surrender thereof accompanied by a written instrument or
instruments of transfer in form reasonably satisfactory to DIMAC Holdings, duly
executed by the registered Holder or Holders thereof or by the duly appointed
legal representative thereof or by a duly authorized attorney. Upon any such
registration of transfer, a new Warrant Certificate shall be issued to the
transferee Holder(s) and the surrendered Warrant Certificate shall be canceled
and disposed of by DIMAC Holdings. Any attempted transfer in violation of the
Stockholders Agreement shall be null and void ab initio.
Notwithstanding any contrary provision of Section 5 of the Securities
Purchase Agreement, so long as any Warrants remain outstanding and so long as
DIMAC Holdings shall not have registered any of its securities pursuant to
Section 12 of the Securities Exchange Act of 1934, as amended, or filed a
registration statement pursuant to the requirements of the Securities Act, upon
written request, DIMAC Holdings will deliver to each Holder the financial
statements, reports and compliance certificates specified by Sections 5.2 and
5.3 of the Securities Purchase Agreement, regardless of whether any Notes (as
defined in the Securities Purchase Agreement) remain unpaid and outstanding.
Section 5. Warrants; Exercise of Warrants.
(a) Subject to the terms of this Agreement, each Holder shall have the
right, which may be exercised commencing on the date of issuance of the
Warrants and until 5:00 p.m., New York time, on October 22, 2009 (the
"Expiration Date"), to receive from DIMAC Holdings the number of fully paid
and nonassessable Warrant Shares (and such other consideration) which the
Holder may at the time be entitled to receive on exercise of such Warrants
and payment of the Exercise Price then in effect for such Warrant Shares.
Each Warrant not exercised prior to 5:00 p.m., New York time, on the
Expiration Date shall become void and all rights thereunder and all rights
in respect thereof under this Agreement shall cease as of such time. No
adjustments as to dividends will be made upon exercise of the Warrants,
except as otherwise expressly provided herein.
(b) In the event that Holders would have any obligation to sell their
Warrant Shares under the terms of the Stockholders Agreement if they were
holders of Common Stock, the Warrants shall be deemed exercised and the
Holders shall sell their Warrant Shares as required by the terms of the
Stockholders Agreement. If a Holder shall fail to comply with the terms of
this Agreement or the Stockholders Agreement in connection with the
surrender of Warrants or the sale of Warrant Shares as contemplated by the
Stockholders Agreement such Holder shall receive only the consideration
(without interest) which such Holder would have received had such Holder
complied with such terms and the Warrants shall cease to have any other
rights.
(c) The price at which each Warrant shall be exercisable (the "Exercise
Price") shall initially be $0.01 per share, subject to adjustment pursuant
to the terms hereof.
(d) A Warrant may be exercised upon surrender to DIMAC Holdings at its
office designated for such purpose (as provided for in Section hereof) of
the Warrant Certificate or Certificates to be exercised with the form of
election to purchase attached thereto duly filled in and signed, and upon
payment to DIMAC Holdings of the Exercise Price for the number of Warrant
Shares in respect of which such Warrants are then exercised. Payment of the
aggregate Exercise Price shall be made in cash or by certified or official
bank check payable to the order of DIMAC Holdings.
(e) Subject to the provisions of Section hereof, upon such surrender of
Warrant Certificates and payment of the Exercise Price, DIMAC Holdings
shall issue and cause to be delivered, as promptly as practicable, to or
upon the written order of the Holder and in such name or names as such
Holder may designate a certificate or certificates for the number of full
Warrant Shares issuable upon the exercise of such Warrants (and such other
consideration as may be deliverable upon exercise of such Warrants)
together with cash for fractional Warrant Shares as provided in Section
hereof. The certificate or certificates for such Warrant Shares shall be
deemed to have been issued and the person so named therein shall be deemed
to have become a holder of record of such Warrant Shares as of the date of
the surrender of such Warrants and payment of the Exercise Price,
irrespective of the date of delivery of such certificate or certificates
for Warrant Shares. DIMAC Holdings shall register the Warrant Shares in the
Warrant Shares Register, as provided in Section hereof, and shall from time
to time register the transfer of any outstanding Warrant Shares in the
Warrant Shares Register.
(f) Subject to the subsection (b) of this Section , each Warrant shall be
exercisable, at the election of the Holder thereof, either in full or from
time to time in part and, in the event that a Warrant Certificate is
exercised in respect of fewer than all of the Warrant Shares issuable on
such exercise at any time prior to the date of expiration of the Warrants,
a new certificate evidencing the remaining Warrant or Warrants will be
issued and delivered pursuant to the provisions of this Section and of
Section hereof.
(g) All Warrant Certificates surrendered upon exercise of Warrants shall
be cancelled and disposed of by DIMAC Holdings. DIMAC Holdings shall keep
copies of this Agreement and any notices given or received hereunder
available for inspection by the Holders during normal business hours at its
office.
(h) In addition to and without limiting the rights of the Holder under the
terms hereof, at a Holder's option, a Warrant Certificate may be exercised
by being exchanged in whole or in part at any time or from time to time
prior to the Expiration Date for a number of shares of Common Stock having
an aggregate Specified Value (as defined in subsection (g) of Section
hereof) on the date of such exercise equal to the difference between (x)
the Specified Value of the number of Warrant Shares in respect of which
such Warrant Certificate is then exercised and (y) the aggregate Exercise
Price for such shares in effect at such time. The following equation
illustrates how many Warrant Shares would then be issued upon exercise
pursuant to this subsection:
X = {(SV)(N) - (PSP)(N)} OVER {SV}
where:
SV = Specified Value per Warrant Share at date of exercise.
PSP = Per share Exercise Price at date of exercise.
N = Number of Warrant Shares in respect of which the Warrant
Certificate is being exercised by exchange.
X = Number of Warrant Shares issued upon exercise by exchange.
Upon any such exercise, the number of Warrant Shares purchasable upon
exercise of such Warrant Certificate shall be reduced by the number of
Warrant Shares so exchanged and, if a balance of purchasable Warrant Shares
remain after such exercise, DIMAC Holdings shall execute and deliver to the
holder hereof a new Warrant for such balance of Warrant Shares.
No payment of any cash or other consideration to DIMAC Holdings shall
be required from the Holder of a Warrant in connection with any exercise of
thereof by exchange pursuant to this subsection. Such exchange shall be
effective upon the date of receipt by DIMAC Holdings of the original
Warrant surrendered for cancellation and a written request from the Holder
thereof that the exchange pursuant to this subsection be made, or at such
later date as may be specified in such request. No fractional shares
arising out of the above formula for determining the number of Warrant
Shares issuable in such exchange shall be issued, and DIMAC Holdings shall
in lieu thereof make payment to the Holder of cash in the amount of such
fraction multiplied by the Specified Value of a Warrant Share on the date
of the exchange.
Section 6. Payment of Taxes. DIMAC Holdings will pay all documentary stamp
taxes and other governmental charges (excluding all foreign, federal or state
income, franchise, property, estate, inheritance, gift or similar taxes) in
connection with the issuance or delivery of the Warrants hereunder, as well as
all such taxes attributable to the initial issuance or delivery of Warrant
Shares upon the exercise of Warrants and payment of the Exercise Price. DIMAC
Holdings shall not, however, be required to pay any tax that may be payable in
respect of any subsequent transfer of the Warrants or any transfer involved in
the issuance and delivery of Warrant Shares in a name other than that in which
the Warrants to which such issuance relates were registered, and, if any such
tax would otherwise be payable by DIMAC Holdings, no such issuance or delivery
shall be made unless and until the person requesting such issuance has paid to
DIMAC Holdings the amount of any such tax, or it is established to the
reasonable satisfaction of DIMAC Holdings that any such tax has been paid.
Section 7. Mutilated or Missing Warrant Certificates. If a mutilated Warrant
Certificate is surrendered to DIMAC Holdings, or if the Holder of a Warrant
Certificate claims and submits an affidavit or other evidence satisfactory to
DIMAC Holdings to the effect that the Warrant Certificate has been lost,
destroyed or wrongfully taken, DIMAC Holdings shall issue a replacement Warrant
Certificate. If required by DIMAC Holdings such Holder must provide an indemnity
bond, or other form of indemnity, sufficient in the judgment of DIMAC Holdings
to protect DIMAC Holdings from any loss which it may suffer if a Warrant
Certificate is replaced. If any Purchaser or any other institutional Holder (or
nominee thereof) is the owner of any such lost, stolen or destroyed Warrant
Certificate, then the affidavit of an authorized officer of such owner, setting
forth the fact of loss, theft or destruction and of its ownership of the Warrant
Certificate at the time of such loss, theft or destruction shall be accepted as
satisfactory evidence thereof and no further indemnity shall be required as a
condition to the execution and delivery of a new Warrant Certificate other than
the unsecured written agreement of such owner to indemnify DIMAC Holdings or, at
the option of such Purchaser or other institutional Holder, an indemnity bond in
the amount of the Specified Value of
the Warrant Shares for which such Warrant Certificate was exercisable.
Section 8. Reservation of Warrant Shares. DIMAC Holdings shall at all times
reserve and keep available, free from preemptive rights (except as otherwise
provided herein), out of the aggregate of its authorized but unissued Common
Stock or its authorized and issued Common Stock held in its treasury, for the
purpose of enabling it to satisfy any obligation to issue Warrant Shares upon
exercise of Warrants, the maximum number of shares of Common Stock which may
then be deliverable upon the exercise of all outstanding Warrants, but such
shares of Common Stock shall be subject to the terms and conditions of the
Stockholders Agreement.
DIMAC Holdings or, if appointed, the transfer agent for the Common Stock
and each transfer agent for any shares of DIMAC Holdings' capital stock issuable
upon the exercise of any of the Warrants (collectively, the "Transfer Agent")
will be irrevocably authorized and directed at all times to reserve such number
of authorized shares as shall be required for such purpose. DIMAC Holdings shall
keep a copy of this Agreement on file with any such Transfer Agent. DIMAC
Holdings will supply any such Transfer Agent with duly executed certificates for
such purposes and will provide or otherwise make available all other
consideration that may be deliverable upon exercise of the Warrants. DIMAC
Holdings will furnish any such Transfer Agent a copy of all notices of
adjustments and certificates related thereto, transmitted to each Holder
pursuant to Section hereof.
Before taking any action which would cause an adjustment pursuant to
Section hereof to reduce the Exercise Price below the then par value (if any) of
the Warrant Shares, DIMAC Holdings shall take any corporate action which may, in
the opinion of its counsel, be necessary in order that DIMAC Holdings may
validly and legally issue fully paid and nonassessable Warrant Shares at the
Exercise Price as so adjusted.
DIMAC Holdings covenants that all Warrant Shares and other capital stock
issued upon exercise of Warrants will, upon payment of the Exercise Price
therefor and issue thereof, be validly authorized and issued, fully paid,
nonassessable, free of preemptive rights (except as may be granted by this
Agreement) and free, subject to Section hereof, from all taxes, liens, charges
and security interests with respect to the issue thereof, but such Warrant
Shares shall be subject to the terms and conditions of the Stockholders
Agreement.
Section 9. Adjustment of Exercise Price and Warrant Number. The number of
shares of Common Stock issuable upon the exercise of each Warrant (the "Warrant
Number") is initially one. The Warrant Number is subject to adjustment from time
to time upon the occurrence of the events enumerated in, or as otherwise
provided in, this Section .
(a) Adjustment for Change in Capital Stock. If DIMAC Holdings:
(i) pays a dividend or makes a distribution on its Common Stock in
shares of its Common Stock;
(ii) subdivides or reclassifies its outstanding shares of Common Stock
into a greater number of shares;
(iii) combines or reclassifies its outstanding shares of Common Stock
into a smaller number of shares;
(iv) makes a distribution on Common Stock in shares of its capital
stock other
than Common Stock; or
(v) issues by reclassification of its Common Stock any shares of its
capital stock (other than reclassifications arising solely as a result
of a change in the par value or no par value of the Common Stock);
then the Warrant Number in effect immediately prior to such action shall be
proportionately adjusted so that the Holder of any Warrant thereafter
exercised may receive the aggregate number and kind of shares of capital
stock of DIMAC Holdings which it would have owned immediately following
such action if such Warrant had been exercised immediately prior to such
action.
The adjustment shall become effective immediately after the record
date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or
reclassification.
Such adjustment shall be made successively whenever any event listed
above shall occur. If the occurrence of any event listed above results in
an adjustment under subsection (b) or (c) of this Section , no further
adjustment shall be made under this subsection (a).
DIMAC Holdings shall not issue shares of Common Stock as a dividend or
distribution on any class of capital stock other than Common Stock, unless
the Holders also receive such dividend or distribution on a ratable basis
or the appropriate adjustment to the Warrant Number is made under this
Section .
(b) Adjustment for Rights Issue. If DIMAC Holdings distributes (and
receives no consideration therefor) any rights, options or warrants
(whether or not immediately exercisable) to all holders of any class of its
Common Stock entitling them to purchase shares of Common Stock at a price
per share less than the Specified Value per share on the record date
relating to such distribution, the Warrant Number shall be adjusted in
accordance with the following formula:
W'=~W `TIMES` {O `+` N} OVER {O `+ `{{N `TIMES` P} OVER M}}
where:
W' = the adjusted Warrant Number.
W = the Warrant Number immediately prior to the record date
for any such distribution.
O = the number of shares of Common Stock outstanding on the
record date for any such distribution.
N = the number of additional shares of Common Stock issuable
upon exercise of such rights, options or warrants.
P = the exercise price per share of such rights, options or
warrants.
M = the Specified Value per share of Common Stock on the record
date for any such distribution.
The adjustment shall be made successively whenever any such rights,
options or warrants are issued and shall become effective immediately after
the record date for the determination of stockholders entitled to receive
the rights, options or warrants. If at the end of the period during which
such rights, options or warrants are exercisable, not all rights, options
or warrants shall have been exercised, the adjusted Warrant Number shall be
immediately readjusted to what it would have been if "N" in the above
formula had been the number of shares actually issued.
(c) Adjustment for Other Distributions. If DIMAC Holdings distributes to
all holders of any class of its Common Stock (i) any evidences of
indebtedness of DIMAC Holdings or any of its subsidiaries, (ii) any assets
of DIMAC Holdings or any of its subsidiaries, or (iii) any rights, options
or warrants to acquire any of the foregoing or to acquire any other
securities of DIMAC Holdings, the Warrant Number shall be adjusted in
accordance with the following formula:
W'=~W `TIMES` {M OVER {M`-`F}}
where:
W' = the adjusted Warrant Number.
W = the Warrant Number immediately prior to the record date
mentioned below.
M = the Specified Value per share of Common Stock on the record
date mentioned below.
F = the fair market value on the record date mentioned below of
the shares, the indebtedness, assets, rights, options or
warrants distributable to the holder of one share of Common
Stock.
The adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the
record date for the determination of stockholders entitled to receive the
distribution. If an adjustment is made pursuant to this subsection (c) as a
result of the issuance of rights, options or warrants and at the end of the
period during which any such rights, options or warrants are exercisable,
not all such rights, options or warrants shall have been exercised, the
adjusted Warrant Number shall be immediately readjusted as if "F" in the
above formula was the fair market value on the record date of the
indebtedness or assets actually distributed upon exercise of such rights,
options or warrants divided by the number of shares of Common Stock
outstanding on the record date.
This subsection does not apply to any transaction described in
subsection (a) of this Section or to rights, options or warrants referred
to in subsection (b) of this Section .
(d) Adjustment for Common Stock Issue. If DIMAC Holdings issues shares of
Common Stock for a consideration per share less than the Specified Value
per share on the date DIMAC Holdings fixes the offering price of such
additional shares, the Warrant Number shall be adjusted in accordance with
the following formula:
W'=~W `TIMES` {A OVER {O `+ `{P OVER M}}}
where:
W' = the adjusted Warrant Number.
W = the Warrant Number immediately prior to any such issuance.
O = the number of shares of Common Stock outstanding immediately
prior to the issuance of such additional shares of Common
Stock.
P = the aggregate consideration received for the issuance of
such additional shares of Common Stock.
M = the Specified Value per share of Common Stock on the date of
issuance of such additional shares.
A = the number of shares of Common Stock outstanding immediately
after the issuance of such additional shares of Common
Stock.
The adjustment shall be made successively whenever any such issuance
is made, and shall become effective immediately after such issuance.
This subsection (d) does not apply to any of the transactions
described in subsection (a) of this Section or the issuances described
below:
(i) The issuance of Common Stock upon the conversion, exercise or
exchange of any Convertible Securities (as defined below), including
the Warrants, outstanding on the date hereof or for which an
adjustment has been made pursuant to this Section ; or
(ii) (A) The grant of rights to purchase shares of Common Stock
representing, in the aggregate (taking into account all such grants
since October 22, 1998), up to 5% of the outstanding shares of Common
Stock, and the issuance of such shares of Common Stock upon exercise
of such rights, to directors or members of management of DIMAC
Holdings and its subsidiaries pursuant to management incentive plans,
stock option and stock purchase plans or agreements adopted by the
board of directors of DIMAC Holdings and (B) following the acquisition
by DIMAC Holdings of any of the rights or shares referred to in clause
(A) the reissuance of any such acquired rights and the issuance of
shares of Common Stock upon exercise thereof.
(e) Adjustment for Convertible Securities Issue. If DIMAC Holdings issues
any options, warrants or other securities convertible into or exchangeable
or exercisable for Common Stock ("Convertible Securities") (other than
securities issued in transactions described in subsection (b) or (c) of
this Section ) for a consideration per share of Common Stock initially
deliverable upon conversion, exchange or exercise of such securities less
than the Specified Value per share on the date of issuance of such
securities, the Warrant Number shall be adjusted in accordance with the
following formula:
W'=~W `TIMES` {O `+` D} OVER {O `+ `{P OVER M}}
where:
W' = the adjusted Warrant Number.
W = the Warrant Number immediately prior to any such issuance.
O = the number of shares of Common Stock outstanding immediately
prior to the issuance of such securities.
P = the sum of the aggregate consideration received for the
issuance of such securities and the aggregate minimum
consideration receivable by DIMAC Holdings for issuance of
Common Stock upon conversion or in exchange for, or upon
exercise of, such securities.
M = the Specified Value per share of Common Stock on the date
of issuance of such securities.
D = the maximum number of shares of Common Stock deliverable
upon conversion or in exchange for or upon exercise of such
securities at the initial conversion, exchange or exercise
rate.
The adjustment shall be made successively whenever any such issuance
is made, and shall become effective immediately after such issuance.
If all of the Common Stock deliverable upon conversion, exchange or
exercise of such securities has not been issued when the conversion,
exchange or exercise rights of such securities have expired or been
terminated, then the adjusted Warrant Number shall promptly be readjusted
to the adjusted Warrant Number which would then be in effect had the
adjustment upon the issuance of such securities been made on the basis of
the actual number of shares of Common Stock issued upon conversion,
exchange or exercise of such securities. If the aggregate minimum
consideration receivable by DIMAC Holdings for issuance of Common Stock
upon conversion or in exchange for, or upon exercise of, such securities
shall be increased by virtue of provisions therein contained or upon the
arrival of a specified date or the happening of a specified event, then the
Warrant Number shall promptly be readjusted to the Warrant Number which
would then be in effect had the adjustment upon the issuance of such
securities been made on the basis of such increased minimum consideration.
This subsection (e) does not apply to the issuance of the Warrants or
to any of the transactions described in paragraph (b) of this Section or
excluded from the provisions of paragraph (d) of this Section .
(f) Adjustment for Tender Offer. If DIMAC Holdings or any subsidiary of
DIMAC Holdings consummates a tender offer for any Common Stock and
purchases shares pursuant to such tender offer for an aggregate
consideration having a fair market value (as determined reasonably and in
good faith by the board of directors of DIMAC Holdings and described in a
board resolution) as of the last time (the "Expiration Time") that tenders
may be made pursuant to such tender offer (as it shall have been amended)
that, together with (i) the aggregate of the cash plus the fair market
value (as determined reasonably and in good faith by the board of directors
of DIMAC Holdings and described in a board resolution) of the consideration
paid in respect of any other tender offer by DIMAC Holdings or any
subsidiaries of DIMAC Holdings for any Common Stock consummated within the
12 months
preceding the Expiration Time and in respect of which no adjustment
pursuant to this subsection (f) has been made previously and (ii) the
aggregate amount of any distributions to all holders of Common Stock made
exclusively in cash within 12 months preceding the Expiration Time exceeds
5.0% of the product of the Specified Value per share immediately prior to
the Expiration Time times the number of shares of Common Stock outstanding
(including any tendered shares) at the Expiration Time, the Warrant Number
shall be adjusted in accordance with the following formula:
W'=~W `TIMES` {M `TIMES` (O `-` N)} OVER {(M `TIMES`O)`-F}
where:
W' = the adjusted Warrant Number.
W = the Warrant Number immediately prior to the Expiration Time.
M = the Specified Value per share of Common Stock immediately
prior to the Expiration Time.
O = the number of shares of Common Stock outstanding (including
any tendered shares) at the Expiration Time.
F = the fair market value of the aggregate consideration paid
for all shares of Common Stock purchased pursuant to the
tender offer.
N = the number of shares of Common Stock accepted for payment
in such tender offer.
If the number of shares accepted for payment in such tender offer or
the aggregate consideration payable therefor have not been finally
determined by the opening of business on the day following the Expiration
Time, the adjustment required by this subsection (f) shall, pending such
final determination, be made based upon the preliminary announced results
of such tender offer, and, after such final determination shall have been
made, the adjustment required by this subsection (f) shall be based upon
the number of shares accepted for payment in such tender offer and the
aggregate consideration payable therefor as so finally determined.
(g) "Specified Value" per share of Common Stock or of any other security
(herein collectively referred to as a "Security") at any date shall be:
(i) if the Security is not registered under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), (1) the value of the
Security determined in good faith by the board of directors of DIMAC
Holdings and certified in a board resolution, based on the most
recently completed arm's-length transaction between DIMAC Holdings and
a person other than an Affiliate of DIMAC Holdings in which such
determination is necessary and the closing of which occurs on such
date or shall
have occurred within the six months preceding such date, (2) if no
such transaction shall have occurred on such date or within such
six-month period, the value of the Security most recently determined
as of a date within the six months preceding such date by an
Independent Financial Expert or (3) if neither clause (1) nor (2) is
applicable, the value of the Security as mutually agreed by DIMAC
Holdings and Holders of at least a majority of the Warrants
outstanding; provided, however, that if DIMAC Holdings and such
Holders are unable to mutually agree upon such value, DIMAC Holdings
shall select an Independent Financial Expert who shall determine the
value of such Security;
(ii) if the Security is registered under the Exchange Act, the average
of the daily market prices for each business day during the period
commencing 10 business days before such date and ending on the date
one day prior to such date or, if the Security has been registered
under the Exchange Act for less than 30 consecutive business days
before such date, then the average of the daily market prices (as
hereinafter defined) for all of the business days before such date for
which daily market prices are available. If the market price is not
determinable for at least 15 business days in such period, the
Specified Value of the Security shall be determined as if the Security
was not registered under the Exchange Act; or
(iii) if the Security is registered under the Exchange Act and is
being sold in a firm commitment underwritten public offering
registered under the Securities Act, the public offering price of
such Security set forth on the cover page of the prospectus relating
to such offering.
The "market price" for any Security on each business day means: (A) if
such Security is listed or admitted to trading on any securities exchange,
the closing price, regular way, on such day on the principal exchange on
which such Security is traded, or if no sale takes place on such day, the
average of the closing bid and asked prices on such day or (B) if such
Security is not then listed or admitted to trading on any securities
exchange, the last reported sale price on such day, or if there is no such
last reported sale price on such day, the average of the closing bid and
the asked prices on such day, as reported by a reputable quotation source
designated by DIMAC Holdings. If there are no such prices on a business
day, then the market price shall not be determinable for such business day.
In the case of Common Stock, if more than one class of Common Stock is
outstanding, the "Specified Value" shall be the highest of the Specified
Values per share of such classes of Common Stock.
"Independent Financial Expert" shall mean a nationally recognized
investment banking firm selected by DIMAC Holdings (i) that does not (and
whose directors, officers, employees and Affiliates do not) have a direct
or indirect financial interest in DIMAC Holdings or any of its Affiliates,
(ii) that has not been, and, at the time it is called upon to serve as an
Independent Financial Expert under this Agreement is not (and none of whose
directors, officers, employees or Affiliates is) a promoter, director or
officer of DIMAC Holdings, (iii) that has not been retained by DIMAC
Holdings or any of its Affiliates for any purpose, other than to perform an
equity valuation, within the preceding twelve months, and (iv) that, in the
reasonable judgment of the board of directors of DIMAC Holdings, is
otherwise qualified to serve as an independent financial advisor. Any such
person may receive customary compensation and indemnification by DIMAC
Holdings for opinions or services it provides as an Independent Financial
Expert.
(h) Consideration Received. For purposes of any computation respecting
consideration received pursuant to subsections (d) and (e) of this
Section , the following shall apply:
(1) in the case of the issuance of shares of Common Stock for
cash, the consideration shall be the amount of such cash (without any
deduction being made for any commissions, discounts or other expenses
incurred by DIMAC Holdings for any underwriting of the issue or
otherwise in connection therewith);
(2) in the case of the issuance of shares of Common Stock for a
consideration in whole or in part other than cash, the consideration
other than cash shall be deemed to be the fair market value thereof
(irrespective of the accounting treatment thereof) as determined in
good faith by the board of directors of DIMAC Holdings; and
(3) in the case of the issuance of options, warrants or other
securities convertible into or exchangeable or exercisable for shares
of Common Stock, the aggregate consideration received therefor shall
be deemed to be the consideration received by DIMAC Holdings for the
issuance of such securities plus the additional minimum consideration,
if any, to be received by DIMAC Holdings upon the conversion, exchange
or exercise thereof (the consideration in each case to be determined
in the same manner as provided in clauses (1) and (2) of this
subsection).
(i) When De Minimis Adjustment May Be Deferred. No adjustment in the
Warrant Number need be made unless the adjustment would require an increase
or decrease of at least 0.5% in the Warrant Number. Any adjustment that is
not made shall be carried forward and taken into account in any subsequent
adjustment, provided that no such adjustment shall be deferred beyond the
date on which a Warrant is exercised.
All calculations under this Section shall be made to the nearest
1/100th of a share.
(j) Adjustment to Exercise Price. Upon each adjustment to the Warrant
Number pursuant to this Section , the Exercise Price shall be adjusted so
that it is equal to the Exercise Price in effect immediately prior to such
adjustment multiplied by a fraction, the numerator of which is the Warrant
Number in effect immediately prior to such adjustment, and the denominator
of which is the Warrant Number in effect immediately after such adjustment.
(k) When No Adjustment Required. If an adjustment is made upon the
establishment of a record date for a distribution subject to subsection
(a), (b) or (c) of this Section and such distribution is subsequently
cancelled, the Warrant Number and Exercise Price then in effect shall be
readjusted, effective as of the date when the board of directors of DIMAC
Holdings determines to cancel such distribution, to that which would have
been in effect if such record date had not been fixed.
To the extent the Warrants become convertible into cash, no adjustment
need be made thereafter as to the amount of cash into which such Warrants
are exercisable. Interest will not accrue on the cash.
(l) Notice of Adjustment. Whenever the Warrant Number or Exercise Price is
adjusted,
DIMAC Holdings shall provide the notices required by Section hereof.
(m) Voluntary Reduction. DIMAC Holdings from time to time may reduce the
Exercise Price by any amount for any period of time (including, without
limitation, permanently) if the period is at least 20 days and if the
reduction is irrevocable during the period.
Whenever the Exercise Price is reduced, DIMAC Holdings shall mail to
the Holders a notice of the reduction. DIMAC Holdings shall mail the notice
at least 15 days before the date the reduced Exercise Price takes effect.
The notice shall state the reduced Exercise Price and the period it will be
in effect.
A reduction of the Exercise Price under this subsection (m) (other
than a permanent reduction) does not change or adjust the Exercise Price
otherwise in effect for purposes of subsections (a), (b), (c), (d), (e), or
(f) of this Section .
(n) Reorganizations. In case of any capital reorganization, other than in
the cases referred to in subsections (a), (b), (c), (d), (e) or (f) of this
Section , or the consolidation or merger of DIMAC Holdings with or into
another corporation (other than a merger or consolidation in which DIMAC
Holdings is the continuing corporation and which does not result in any
reclassification of the outstanding shares of Common Stock into shares of
other stock or other securities or property), or the sale of the property
of DIMAC Holdings as an entirety or substantially as an entirety
(collectively, such actions being hereinafter referred to as
"Reorganizations"), there shall thereafter be deliverable upon exercise of
any Warrant (in lieu of the number of shares of Common Stock theretofore
deliverable) the number of shares of stock or other securities or property
to which a holder of the number of shares of Common Stock that would
otherwise have been deliverable upon the exercise of such Warrant would
have been entitled upon such Reorganization if such Warrant had been
exercised in full immediately prior to such Reorganization. In case of any
Reorganization, appropriate adjustment, as determined in good faith by the
board of directors of DIMAC Holdings, whose determination shall be
described in a duly adopted resolution certified by DIMAC Holdings'
Secretary or Assistant Secretary, shall be made in the application of the
provisions herein set forth with respect to the rights and interests of
Holders so that the provisions set forth herein shall thereafter be
applicable, as nearly as possible, in relation to any shares or other
property thereafter deliverable upon exercise of Warrants.
DIMAC Holdings shall not effect any such Reorganization unless prior
to or simultaneously with the consummation thereof the successor
corporation (if other than DIMAC Holdings) resulting from such
Reorganization or the corporation purchasing or leasing such assets or
other appropriate corporation or entity shall expressly assume, by a
supplemental Warrant Agreement or other acknowledgment executed and
delivered to the Holder(s), the obligation to deliver to each such Holder
such shares of stock, securities or assets as, in accordance with the
foregoing provisions, such Holder may be entitled to purchase, and all
other obligations and liabilities under this Agreement.
(o) Form of Warrants. Irrespective of any adjustments in the Exercise
Price or the number or kind of shares purchasable upon the exercise of the
Warrants, Warrants theretofore or thereafter issued may continue to express
the same price and number and kind of shares as are stated in the Warrants
initially issuable pursuant to this Agreement.
(p) Other Dilutive Events. In case any event shall occur as to which the
provisions of this Section are not strictly applicable but the failure to
make any adjustment would not fairly protect the purchase rights
represented by the Warrants in accordance with the essential intent and
principles of such sections, then, in each such case, DIMAC Holdings shall
make a good faith adjustment to the Exercise Price and Warrant Number into
which each Warrant is exercisable in accordance with the intent of this
Section and, upon the written request of the Holders of a majority of the
Warrants, shall appoint a firm of independent certified public accountants
of recognized national standing (which may be the regular auditors of DIMAC
Holdings), which shall give their opinion upon the adjustment, if any, on a
basis consistent with the essential intent and principles established in
this Section , necessary to preserve, without dilution, the purchase rights
represented by these Warrants. Upon receipt of such opinion, DIMAC Holdings
shall promptly mail a copy thereof to the Holder of each Warrant and shall
make the adjustments described therein.
(q) Miscellaneous. For purpose of this Section the term "shares of Common
Stock" shall mean (i) shares of any class of stock designated as Common
Stock of DIMAC Holdings as of the date of this Agreement, (ii) shares of
any other class of stock resulting from successive changes or
reclassification of such shares consisting solely of changes in par value,
or from par value to no par value, or from no par value to par value and
(iii) shares of Common Stock of DIMAC Holdings or options, warrants or
rights to purchase Common Stock of DIMAC Holdings or securities convertible
into or exchangeable for shares of Common Stock of DIMAC Holdings
outstanding on the date hereof and shares of Common Stock of DIMAC Holdings
issued upon exercise, conversion or exchange of such securities. In the
event that at any time, as a result of an adjustment made pursuant to this
Section , the Holders of Warrants shall become entitled to purchase any
securities of DIMAC Holdings other than, or in addition to, shares of
Common Stock, thereafter the number or amount of such other securities so
purchasable upon exercise of each Warrant shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Warrant Shares contained
in subsections (a) through (p) of this Section , inclusive, and the
provisions of Sections , , and hereof with respect to the Warrant Shares or
the Common Stock shall apply on like terms to any such other securities.
Section 10. Fractional Interests. DIMAC Holdings shall not be required to
issue fractional Warrant Shares on the exercise of Warrants. If more than one
Warrant shall be presented for exercise in full at the same time by the same
holder, the number of full Warrant Shares which shall be issuable upon the
exercise thereof shall be computed on the basis of the aggregate number of
Warrant Shares purchasable on exercise of the Warrants so presented. If any
fraction of a Warrant Share would, except for the provisions of this Section ,
be issuable on the exercise of any Warrants (or specified portion thereof),
DIMAC Holdings shall, pay an amount in cash equal to the fair market value of
the Warrant Share so issuable (as determined in good faith by the board of
directors of DIMAC Holdings), multiplied by such fraction.
Section 11. Notices to Holders. Upon any adjustment pursuant to Section
hereof, DIMAC Holdings shall promptly thereafter (i) cause to be filed with
DIMAC Holdings a certificate of an officer of DIMAC Holdings setting forth the
Warrant Number and Exercise Price after such adjustment and setting forth in
reasonable detail the method of calculation and the facts upon which
such calculations are based, and (ii) cause to be given to each of the Holders
at its address appearing on the Warrant Register written notice of such
adjustments. Where appropriate, such notice may be given in advance and included
as a part of the notice required to be mailed under the other provisions of this
Section.
In case:
(a) DIMAC Holdings shall authorize the issuance to all holders of shares
of Common Stock of rights, options or warrants to subscribe for or purchase
shares of Common Stock or of any other subscription rights or warrants;
(b) DIMAC Holdings shall authorize the distribution to all holders of
shares of Common Stock of assets, including cash, evidences of its
indebtedness, or other securities;
(c) of any consolidation or merger to which DIMAC Holdings is a party and
for which approval of any stockholders of DIMAC Holdings is required, or of
the conveyance or transfer of the properties and assets of DIMAC Holdings
substantially as an entirety, or of any reclassification or change of
Common Stock issuable upon exercise of the Warrants (other than a change in
par value, or from par value to no par value, or from no par value to par
value, or as a result of a subdivision or combination), or a tender offer
or exchange offer for shares of Common Stock;
(d) of the voluntary or involuntary dissolution, liquidation or winding up
of DIMAC Holdings;
(e) DIMAC Holdings proposes to take any action that would require an
adjustment to the Warrant Number or the Exercise Price pursuant to Section
hereof; or
(f) DIMAC Holdings proposes to take any action that would give rise to the
Holders' preemptive rights as specified in the Stockholders Agreement or
elsewhere.
then DIMAC Holdings shall cause to be given to each of the Holders at its
address appearing on the Warrant Register, at least 20 days prior to the
applicable record date hereinafter specified, or the date of the event in the
case of events for which there is no record date, in accordance with the
provisions of Section hereof, a written notice stating (i) the date as of which
the holders of record of shares of Common Stock to be entitled to receive any
such rights, options, warrants or distribution are to be determined, or (ii) the
initial expiration date set forth in any tender offer or exchange offer for
shares of Common Stock, or (iii) the date on which any such consolidation,
merger, conveyance, transfer, dissolution, liquidation or winding up is expected
to become effective or consummated, and the date as of which it is expected that
holders of record of shares of Common Stock shall be entitled to exchange such
shares for securities or other property, if any, deliverable upon such
reclassification, consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding up. The failure to give the notice required by this
Section or any defect therein shall not affect the legality or validity of any
distribution, right, option, warrant, consolidation, merger, conveyance,
transfer, dissolution, liquidation or winding up, or the vote upon any action.
Nothing contained in this Agreement or in any Warrant Certificate shall be
construed as conferring upon the Holders (prior to the exercise of such
Warrants) the right to vote or to consent or to receive notice as stockholder in
respect of the meetings of stockholders or the election of members of the board
of directors of DIMAC Holdings or any other matter, or any rights whatsoever
as stockholders of DIMAC Holdings; provided, however, that nothing in the
foregoing provision is intended to detract from any rights explicitly granted to
any Holder hereunder.
Section 12. Notices to DIMAC Holdings and Holders. All notices and other
communications provided for or permitted hereunder shall be made by
hand-delivery, first-class mail, telex, telecopier, or overnight air courier
guaranteeing next day delivery:
(a) if to Purchasers, TCW/Crescent Mezzanine, L.L.C., 00000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx 0000, Xxx Xxxxxxx, XX 00000, Telecopy No.: 000-000-0000,
Attention: Xxxx X. Xxxxxxx, with a copy to Skadden, Arps, Slate, Xxxxxxx &
Xxxx, 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000,
Telecopy number (000) 000-0000, Attention: Xxxxxxx X. Xxxxxx, Xx., Esq.;
and
(b) if to DIMAC Holdings, 0000 Xxxxxxxxx Xxxxxxxx Xxxx, Xxxxx X000,
Xxxxxxx, XX 00000, Telecopy No. 000-000-0000, Attention: Chief Financial
Officer, with a copy to XxXxxx De Leeuw & Co., 00 X. 00xx Xxxxxx., Xxx
Xxxx, Xxx Xxxx 00000, Telecopy No. (000) 000-0000, Attention: Xxxxx X. Xx,
with a copy to White & Case LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Telecopy No. (000) 000-0000, Attention: Xxxxx X. Xxxxxx, Esq.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed (so long as a
fax copy is sent and receipt acknowledged within two business days after
mailing); when answered back if telexed; when receipt acknowledged, if
telecopied; and the next business day after timely delivery to the courier, if
sent by overnight air courier guaranteeing next day delivery. The parties may
change the addresses to which notices are to be given by giving five days' prior
written notice of such change in accordance herewith.
Section 13. Certain Supplements and Amendments. DIMAC Holdings may from time
to time supplement or amend this Agreement without the approval of any Holders
in order to cure any ambiguity or to correct or supplement any provision
contained herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions in regard to matters or questions
arising hereunder which DIMAC Holdings may deem necessary or desirable; provided
that any such supplement or amendment shall not in any way adversely affect the
interests of the Holders.
Section 14. Successors. All the covenants and provisions of this Agreement by
or for the benefit of DIMAC Holdings shall bind and inure to the benefit of its
respective successors and assigns hereunder.
Section 15. Termination. This Agreement shall terminate if all Warrants have
been exercised pursuant to this Agreement.
Section 16. GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS AGREEMENT AND
ALL ISSUES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO PRINCIPLES
OF CONFLICTS OF LAW EXCEPT SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS
LAW); PROVIDED THAT DETERMINATIONS RELATING TO CORPORATE LAW SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE. TO THE
FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, DIMAC HOLDINGS
HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE COURT
SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT
SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY
SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE
WARRANTS, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. DIMAC
HOLDINGS IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO
UNDER APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY HOLDER OF A
WARRANT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST DIMAC HOLDINGS IN ANY OTHER
JURISDICTION.
Section 17. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than DIMAC Holdings and the
Holders any legal or equitable right, remedy or claim under this Agreement; but
this Agreement shall be for the sole and exclusive benefit of DIMAC Holdings and
the Holders.
Section 18. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
Section 19. Amendments and Waivers. Subject to Section hereof, DIMAC
Holdings agrees it will not solicit, request or negotiate for or with respect
to any proposed waiver or amendment of any of the provisions of this
Agreement or any Warrant unless each Holder (irrespective of the amount of
Warrants then owned by it) shall substantially concurrently be informed
thereof by DIMAC Holdings and shall be afforded the opportunity of
considering the same and shall be supplied by DIMAC Holdings with sufficient
information (including any offer of remuneration) to enable it to make an
informed decision with respect thereto which information shall be the same as
that supplied to each other Holder. DIMAC Holdings will not directly or
indirectly, pay or cause to be paid any remuneration whether by way of
supplement or additional interest fee or otherwise, to any Holder as
consideration for or as an inducement to the entering into by any Holder of
any waiver or amendment of any of the terms and provisions of this Agreement
or any Warrant unless such remunerations is concurrently paid on the same
terms, ratably to each Holder whether or not such Holder signs such waiver or
consent, provided that the foregoing is not intended to preclude the adoption
of any amendment or the giving of any waiver by the Holders of a majority of
the Warrants to the extent permitted by the other provisions of this Section.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
DIMAC HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Executive Officer
----------------------------------
Purchasers:
TCW/CRESCENT MEZZANINE PARTNERS, L.P.
TCW/CRESCENT MEZZANINE TRUST
TCW/CRESCENT MEZZANINE INVESTMENT PARTNERS, L.P.
By: TCW/CRESCENT MEZZANINE, L.L.C.,
its general partner or managing owner
By: /s/ Xxxx-Xxxx Xxxxxx
----------------------------------
Name: Xxxx-Xxxx Xxxxxx
----------------------------------
Title: Managing Director
----------------------------------
By: /s/ Xxxx X. Xxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxx
----------------------------------
Title: Managing Director
----------------------------------
Initial Bank Account and Wire Instructions:
-------------------------------------------
Bank of New York
000 Xxxxx Xxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxxxxx, XX 00000
ABA: 000-000-000
BNF: IOC 565
BBI: A/C#355-744
Account Name: Mezzanine Master Wire Account
Attention: Xxxxxxx Xxxx (000) 000-0000
Address for Notices:
--------------------
TCW/Crescent Mezzanine, LLC
00000 Xxxxx Xxxxxx Xxxxxxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxx
Telecopy No.: (310) 235-596
TCW LEVERAGED INCOME TRUST, L.P.
By: TCW ADVISORS (BERMUDA), LIMITED,
as General Partner
By: /s/ Xxxx-Xxxx Xxxxxx
----------------------------------
Name: Xxxx-Xxxx Xxxxxx
Title: Managing Director
By: TCW INVESTMENT MANAGEMENT COMPANY,
as Investment Advisor
By: /s/ Xxxx X. Xxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxx
Title: Managing Director
Initial Bank Account and Wire Instructions:
-------------------------------------------
Bank of New York
000 Xxxxx Xxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxxxxx, XX 00000
ABA: 000-000-000
BNF: IOC 565
BBI: A/C#355-744
Account Name: Mezzanine Master Wire Account
Attention: Xxxxxxx Xxxx (000) 000-0000
Address for Notices:
--------------------
TCW/Crescent Mezzanine, LLC
00000 Xxxxx Xxxxxx Xxxxxxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxx
Telecopy No.: (000) 000-0000
TCW SHARED OPPORTUNITY FUND II, L.P.
By: TCW INVESTMENT MANAGEMENT COMPANY,
its investment advisor
By: /s/ Xxxx-Xxxx Xxxxxx
----------------------------------
Name: Xxxx-Xxxx Xxxxxx
----------------------------------
Title: Managing Director
----------------------------------
By: /s/ Xxxx X. Xxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxx
----------------------------------
Title: Managing Director
----------------------------------
Initial Bank Account and Wire Instructions:
-------------------------------------------
Bank of New York
000 Xxxxx Xxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxxxxx, XX 00000
ABA: 000-000-000
BNF: IOC 565
BBI: A/C#355-744
Account Name: Mezzanine Master Wire Account
Attention: Xxxxxxx Xxxx (000) 000-0000
Address for Notices:
--------------------
TCW/Crescent Mezzanine, LLC
00000 Xxxxx Xxxxxx Xxxxxxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxx
Telecopy No.: (000) 000-0000
EXHIBIT A [Form of Warrant Certificate]
THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED ON OCTOBER
22, 1998, AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THE SECURITIES MAY NOT BE SOLD OR OFFERED FOR
SALE OR OTHERWISE DISTRIBUTED EXCEPT IN CONJUNCTION WITH AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT, OR IN
COMPLIANCE WITH RULE 144 OR PURSUANT TO ANOTHER EXEMPTION THEREFROM. THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A WARRANT AGREEMENT,
THE STOCKHOLDERS AGREEMENT (AS DEFINED BELOW) AND A SECURITIES PURCHASE
AGREEMENT, EACH DATED AS OF OCTOBER 22, 1998, AMONG THE ISSUER OF SUCH
SECURITIES ("DIMAC HOLDINGS"), THE PURCHASERS REFERRED TO THEREIN AND THE OTHER
PARTIES THERETO. THE TRANSFER OF THIS CERTIFICATE IS SUBJECT TO THE CONDITIONS
SPECIFIED IN SUCH AGREEMENTS AND DIMAC HOLDINGS RESERVES THE RIGHT TO REFUSE THE
TRANSFER OF THIS CERTIFICATE UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED WITH
RESPECT TO SUCH TRANSFER. A COPY OF SUCH AGREEMENTS WILL BE FURNISHED WITHOUT
CHARGE BY DIMAC HOLDINGS TO THE HOLDER HEREOF UPON WRITTEN REQUEST.
THE SHARES ISSUABLE UPON EXERCISE OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO THE PREFERENCES, POWERS, QUALIFICATIONS AND RIGHTS OF
EACH CLASS AND SERIES AS SET FORTH IN DIMAC HOLDINGS' CERTIFICATE OF
INCORPORATION. DIMAC HOLDINGS WILL FURNISH A COPY OF THE CERTIFICATE OF
INCORPORATION TO THE HOLDER OF THIS CERTIFICATE UPON WRITTEN REQUEST.
No. _____ ______ Warrants
Warrant Certificate
DIMAC HOLDINGS, INC.
This Warrant Certificate certifies that ___________________________, or
registered assigns, is the registered holder of the number of Warrants (the
"Warrants") set forth above to purchase Common Stock, $0.001 par value (the
"Common Stock"), of DIMAC Holdings, Inc., a Delaware corporation ("DIMAC
Holdings"). Each Warrant entitles the holder upon exercise to receive from DIMAC
Holdings one fully paid and nonassessable share of Common Stock (a "Warrant
Share"), at the initial exercise price (the "Exercise Price") of $.01, payable
in lawful money of the United States of America, upon surrender of this Warrant
Certificate and payment of the Exercise Price at the office of DIMAC Holdings
designated for such purpose, but only subject to the conditions set forth herein
and in the Warrant Agreement referred to hereinafter. The Exercise Price and
number of Warrant Shares issuable upon exercise of the Warrants are subject to
adjustment upon the occurrence of certain events, as set forth in the Warrant
Agreement. Each Warrant is exercisable at any time prior to 5:00 p.m., New York
time, on October 22, 2209.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants, and are issued or to be issued pursuant to a
Warrant Agreement dated as of October 22, 1998 (the "Warrant Agreement"), duly
executed and delivered by DIMAC Holdings, which Warrant Agreement is hereby
incorporated by reference in and made a part of this instrument and is hereby
referred to for a description of the rights, limitation of rights, obligations,
duties and immunities thereunder of DIMAC Holdings and the holders (the words
"holders" or "holder" meaning the registered holders or registered holder) of
the Warrants. A copy of the Warrant Agreement may be obtained by the holder
hereof upon written request to DIMAC Holdings. Capitalized terms used and not
defined herein shall have the meaning ascribed thereto in the Warrant Agreement.
The holder hereof may exercise the Warrants evidenced hereby under and
pursuant to the terms and conditions of the Warrant Agreement by surrendering
this Warrant Certificate, with the form of election to purchase
set forth hereon (and by this reference made a part hereof) properly completed
and executed, and, to the extent the Warrants are not being exchanged pursuant
to the Warrant exchange provisions of Section 5 of the Warrant Agreement,
together with payment of the Exercise Price in cash or by certified or bank
check at the office of DIMAC Holdings designated for such purpose. In the event
that upon any exercise of Warrants evidenced hereby the number of Warrants
exercised shall be less than the total number of Warrants evidenced hereby,
there shall be issued by DIMAC Holdings to the holder hereof or its registered
assignee a new Warrant Certificate evidencing the number of Warrants not
exercised.
The Warrant Agreement provides that upon the occurrence of certain events
the number of Warrant Shares issuable upon exercise of a Warrant and the
Exercise Price set forth on the face hereof may, subject to certain conditions,
be adjusted.
The holder hereof will have certain registration rights and other rights
and obligations with respect to the Warrant Shares as provided in the Amended
and Restated Stockholders Agreement dated as of October 22, 1998 by and among
DIMAC Holdings and the persons party thereto, as supplemented and modified
pursuant to the letter dated October 22, 1998 from DIMAC Holdings, XxXxxx De
Leeuw & Co. IV, L.P. and XxXxxx De Leeuw & Co. IV Associates, L.P. to the
Purchasers (such Amended and Restated Stockholders Agreement as so supplemented
and modified, being referred to herein as the "Stockholders Agreement"). Copies
of the Stockholders Agreement may be obtained by the holder hereof upon written
request to DIMAC Holdings.
Warrant Certificates, when surrendered at the office of DIMAC Holdings by
the registered holder thereof in person or by legal representative or attorney
duly authorized in writing, may be exchanged, in the manner and subject to the
limitations provided in the Warrant Agreement, but without payment of any
service charge, for another Warrant Certificate or Warrant Certificates of like
tenor evidencing in the aggregate a like number of Warrants.
Subject to the terms and conditions of the Warrant Agreement, upon due
presentation for registration of transfer of this Warrant Certificate at the
office of DIMAC Holdings a new Warrant Certificate or Warrant Certificates of
like tenor and evidencing in the aggregate a like number of Warrants shall be
issued to the transferee(s) in exchange for this Warrant Certificate, subject to
the limitations provided in the Warrant Agreement, without charge except for any
tax or other governmental charge imposed in connection therewith.
DIMAC Holdings may deem and treat the registered holder(s) thereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, of any distribution to the holder(s) hereof, and for all other
purposes, and DIMAC Holdings shall not be affected by any notice to the
contrary. Neither the Warrants nor this Warrant Certificate entitles any holder
hereof to any rights of a stockholder of DIMAC Holdings.
IN WITNESS WHEREOF, DIMAC Holdings has caused this Warrant Certificate to
be signed by its Chairman of the Board, Chief Executive Officer, President or
Vice President and by its Secretary or Assistant Secretary.
Dated: October 22, 1998
DIMAC HOLDINGS, INC.
By:
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Name:
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Title:
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By:
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Name:
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Title:
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FORM OF ELECTION TO PURCHASE
(To Be Executed Upon Exercise of Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to:
(Check Applicable Box)
- receive shares of Common Stock and herewith tenders
--------------
payment for such shares to the order of DIMAC Holdings, Inc. in the
amount of $ in accordance with the terms hereof.
------------
- exchange Warrants for shares of Common Stock and herewith tenders
Warrants to purchase shares of Common Stock as payment
---------------
for such number of shares of Common Stock as determined in accordance
with the Warrant exchange procedures of Section 5 of the Warrant
Agreement.
The undersigned requests that a certificate for such shares be registered
in the name of , whose address is
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and that such shares be delivered to
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, whose address is
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If said number of shares is less than all of the shares of Common Stock
purchasable hereunder, the undersigned requests that a new Warrant Certificate
representing the remaining balance of such shares be registered in the name of
, whose address is ,
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and that such Warrant Certificate be delivered to ,
----------------------------
whose address is
Signature(s):
------------------------
NOTE: The above signature(s) must correspond with
the name written upon the face of this
Warrant Certificate in every particular,
without alteration or enlargement or any
change whatever. If this Warrant is held of
record by two or more joint owners, all such
owners must sign.
Date:
--------------------
FORM OF ASSIGNMENT
(To be signed only upon assignment of Warrant Certificate)
FOR VALUE RECEIVED, hereby sells, assigns and
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transfers unto whose address is
----------------------------
and whose social security number or other
---------------------------------
identifying number is , the within Warrant Certificate,
-------------------------
together with all right, title and interest therein and to the Warrants
represented thereby, and does hereby irrevocably constitute and appoint
, attorney, to transfer said Warrant Certificate on
----------------------------
the books of the within-named corporation, with full power of substitution in
the premises.
Signature(s):
------------------------
NOTE: The above signature(s) must correspond with
the name written upon the face of this
Warrant Certificate in every particular,
without alteration or enlargement or any
change whatever. If this Warrant is held of
record by two or more joint owners, all such
owners must sign.
Date:
--------------------
