EXHIBIT 8
EXHIBIT B
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WARRANT AGREEMENT
THIS WARRANT AGREEMENT (the "Agreement") is made and entered into as
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of ___________ ____, 2001 between XXXX XX Holding Corp., a Delaware corporation
(the "Company") and FS Equity Partners III, L.P., a Delaware limited partnership
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("FSEP"), and FS Equity Partners International, L.P., a Delaware limited
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partnership ("FSEP International," and together with FSEP, the "FS Parties").
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WHEREAS, pursuant to that certain Agreement and Plan of
Reorganization, dated as of May 14, 1997 by and among CB Xxxxxxx Xxxxx Services,
Inc. (successor to CB Commercial Real Estate Services Group, Inc.) ("CBRE"),
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Xxxx Real Estate Services ("KRES") and the other parties listed therein, KRES
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merged with a subsidiary of CBRE and the holders of shares of common stock of
KRES, including the FS Parties, and options exercisable into shares of common
stock of KRES received warrants (the "Old Warrants") to purchase up to an
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aggregate of 500,000 shares of the Common Stock of CBRE;
WHEREAS, pursuant to that certain Agreement and Plan of Merger (the
"Merger Agreement"), dated as of February 23, 2001, by and among, CBRE, the
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Company and XXXX XX Corp., a Delaware corporation and wholly owned subsidiary of
the Company ("Acquiror"), the Acquiror will merge with and into CBRE, such that
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CBRE shall become a wholly owned subsidiary of the Company; and
WHEREAS, pursuant to that certain Contribution and Voting Agreement,
dated as of February 23, 2001, by and among, the Company, the FS Parties and the
other parties thereto, upon the Closing, among other things, (i) the Company
shall cancel the Old Warrants, and (ii) the FS Parties shall receive, in the
aggregate, warrants (the "Warrants") to purchase up to an aggregate number of
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shares of Common Stock equal to the number that represents the same percentage
of total outstanding shares of Common Stock immediately after consummation of
the Merger (with respect to the Company) as the warrants to acquire 364,884
shares of CBRE Common Stock entitled Xxxxxxx Xxxxxx immediately prior to the
consummation of Merger (with respect to CBRE)(the "Warrant Shares") of the
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Common Stock, par value $.01 per share (the "Common Stock"), of the Company.
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NOW THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows (capitalized
terms used herein and not otherwise defined have the meanings ascribed thereto
in the Merger Agreement):
SECTION 1. Optional Exercise of Warrant.
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Subject to the terms of this Agreement, each holder of a Warrant may,
at any time on and after August 26, 2007, but not later than August 27, 2007
(the "Expiration Date"), exercise this Warrant in whole at any time or in part
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from time to time for the number of Warrant Shares which such holder is then
entitled to purchase hereunder.
Each holder of a Warrant may exercise such Warrant, in whole or in
part by either of the following methods:
(a) delivering to the Company at its office maintained for such
purpose pursuant to Section 12(d): (i) a written notice of such holder's
election to exercise this Warrant, which notice shall specify the number of
Warrant Shares to be purchased, (ii)
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the Warrant Certificate attached hereto) therefor payable in immediately
available funds; or
(b) The holder of this Warrant may also exercise this Warrant, in
whole or in part, in a "cashless" or "net-issue" exercise by delivering to
the Company at its office maintained for such purpose pursuant to Section
12(d): (i) a written notice of such holder's election to exercise this
Warrant, which notice shall specify the number of Warrant Shares to be
delivered to such holder and the number of Warrant Shares with respect to
which this Warrant is being surrendered in payment of the aggregate
Exercise Price for the Warrant Shares to be delivered to the holder, and
(ii) the Warrant. For purposes of this provision, all Warrant Shares as to
which the Warrant is surrendered will be attributed a value equal to (x)
the current market price per share of Common Stock (determined in the
manner set forth in Section 7(f)) minus (y) the current Exercise Price per
share of Common Stock.
Such notice may be in the form of Election to Purchase set out at the
end of this Warrant Agreement. Upon delivery thereof, together with the Warrant
and the Exercise Price, as applicable, and such holder becoming a party to the
Stockholders' Agreement, dated as of the date hereof (the "Stockholder
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Agreement"), by and among the Company, the FS Parties and the other parties
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thereto if such holder shall not already be a party thereto, the Company shall
cause to be executed and delivered to such holder within five business days a
certificate or certificates representing the aggregate number of fully-paid and
nonassessable shares of Common Stock issuable upon such exercise.
The stock certificate or certificates for Warrant Shares so delivered
shall be in such denominations as may be specified in said notice and shall be
registered in the name of such holder or such other name or names as shall be
designated in said notice. 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 to have become a holder of record of such shares,
including to the extent permitted by law the right to vote such shares or to
consent or to receive notice as a stockholder (subject to the terms of the
Stockholders' Agreement), as of the time said notice is delivered to the Company
as aforesaid; provided that such shares shall be subject to the provisions of
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the Stockholders' Agreement. If a Warrant shall have been exercised only in
part, the Company shall, at the time of delivery of said certificate or
certificates, deliver to such holder a new Warrant dated the date it is issued,
evidencing the rights of such holder to purchase the remaining Warrant Shares
called for by this Warrant, which new Warrant shall in all other respects be
identical with this Warrant, or, at the request of such holder, appropriate
notation may be made on this Warrant and the Warrant shall be returned to such
holder.
All Warrant Shares issuable upon the exercise of a Warrant shall be
validly issued, fully paid and nonassessable and free from all liens and other
encumbrances thereon, other than liens or other encumbrances created by the
holder thereof or the restrictions set forth in the Stockholders' Agreement.
The Company will not close its books against the transfer of a Warrant
or of any Warrant Shares in any manner which interferes with the timely exercise
of a Warrant. The Company will from time to time take all such action as may be
necessary to assure that the par
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value per share of the unissued Common Stock acquirable upon exercise of a
Warrant is at all times equal to or less than the Exercise Price then in effect.
SECTION 2. Automatic Exercise of Warrant.
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Notwithstanding the prior delivery of a notice pursuant to Section 1
hereto, in the event an Automatic Exercise Event (as defined below) occurs prior
to the Expiration Date, without any action by the Company or the FS Parties, the
Warrants shall automatically be exercised in a "cashless" or "net issue"
exercise pursuant to which (i) the Exercise Price shall be paid to the Company
entirely in Warrant Shares (or such other consideration as set forth in Section
7(l) hereto), which for purposes of this provision, will be attributed a value
equal to (x) the current market price per share of Common Stock (determined in
the manner set forth in Section 7(f)) to the holders thereof minus (y) the
current Exercise Price per share of Common Stock, and (ii) the Company, subject
to the following paragraph of this Section 2, shall deliver to the holders
thereof the number of Warrant Shares remaining after subtracting the Exercise
Price; provided, however that if, upon an Automatic Exercise Event, the amount
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set forth in subclause (y) of the foregoing clause (i) shall be equal to or
greater than the amount set forth in subclause (x) of the foregoing clause (i),
then the Warrants, without any action by the Company or the FS Parties, shall be
cancelled and shall cease to represent the right to receive any Warrant Shares
or other security, property or asset of the Company or any surviving entity.
As soon as practicable after an Automatic Exercise Event, the Company
shall deliver a notice of such Automatic Exercise Event to each of the holders
of the Warrants. Upon delivery of the Warrants to the Company by a holder
thereof and such holder becoming a party to the Stockholders' Agreement, if such
holder shall not already be a party thereto, the Company shall cause to be
executed and delivered to such holder within five business days a certificate or
certificates representing the aggregate number of fully-paid and nonassessable
shares of Common Stock issuable as a result of such Automatic Exercise Event.
The stock certificate or certificates for Warrant Shares so delivered
shall be in such denominations as may be specified by the Warrant holders and
shall be registered in the name of such holder or such other name or names as
shall be designated by the Warrant holders. 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 to have become a holder of record
of such shares, including to the extent permitted by law the right to vote such
shares or to consent or to receive notice as a stockholder (subject to the terms
of the Stockholders' Agreement), as of the time of the Automatic Exercise Event;
provided that such shares shall be subject to the provisions of the
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Stockholders' Agreement.
All Warrant Shares issuable upon an Automatic Exercise Event shall be
validly issued, fully paid and nonassessable and free from all liens and other
encumbrances thereon, other than liens or other encumbrances created by the
holder thereof or the restrictions set forth in the Stockholders' Agreement.
The Company will not close its books against the transfer of a Warrant
or of any Warrant Shares in any manner which interferes with the exercise of a
Warrant pursuant to an Automatic Exercise Event. The Company will from time to
time take all such action as may be
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necessary to assure that the par value per share of the unissued Common Stock
acquirable upon exercise of a Warrant pursuant to an Automatic Exercise Event is
at all times equal to or less than the Exercise Price then in effect.
For purposes of this Agreement, an "Automatic Exercise Event" shall
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mean either (a) the completion of a sale of shares of any class of the Common
Stock to the public pursuant to an effective registration statement (other than
a registration statement on Form S-8 or any similar or successor form) filed
under the Securities Act pursuant to which the Company becomes listed on a
national securities exchange or on the NASDAQ Stock Market (the "Initial Public
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Offering"), (b) any "person" or "group," (each as defined in Rules 13d-3 and
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13d-5 under the Securities Exchange Act of 1934, as amended (the "Exchange
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Act")) other than XXXX Capital Partners, L.P. ("XXXX") and its affiliates, is or
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becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act), directly or indirectly, of more than 50% of the total voting
power of the outstanding voting stock of the Company, including by way of
merger, consolidation or otherwise, and XXXX and its affiliates cease to control
the Company's Board of Directors, (c) any sale of all or substantially all of
the assets of the Company and its subsidiaries to any "person" or "group," (each
as defined in Rules 13d-3 and 13d-5 under the Exchange Act) other than XXXX and
its affiliates, or (d) any merger, consolidation or other transaction or series
or related transactions after the consummation of which the shares owned by the
holders of the Company's outstanding voting stock possessing a majority of the
voting power to elect the Company's Board of Directors immediately prior to the
occurrence of such transaction or transactions cease to constitute a majority of
the Company's outstanding voting stock possessing the voting power to elect the
Company's Board of Directors (or equivalent governing body).
SECTION 3. Transfer, Division and Combination.
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The Warrants are, and all rights thereunder are, transferable, in
whole or in part, on the books of the Company to be maintained for such purpose,
upon (a) surrender of a Warrant at the office of the Company maintained for such
purpose pursuant to Section 12(d), together with a written assignment of such
Warrant duly executed by the holder thereof or its agent or attorney and payment
of funds sufficient to pay any stock transfer taxes payable upon the making of
such transfer, and (b) a signed agreement by the assignee or assignees to become
a party to the Stockholders' Agreement prior to the exercise of such Warrant.
Upon such 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 such instrument of assignment, and the
surrendered Warrant shall promptly be canceled. If and when a Warrant is
assigned in blank, the Company may (but shall not be obligated to) treat the
bearer thereof as the absolute owner of such Warrant for all purposes and the
Company shall not be affected by any notice to the contrary. A Warrant, if
properly assigned in compliance with this Section 2, may be exercised by an
assignee for the purchase of shares of Common Stock without having a new Warrant
issued.
A Warrant may, be divided or combined with other Warrants upon
presentation at the aforesaid office of the Company, together with a written
notice specifying the names and denominations in which new Warrants are to be
issued, signed by the holder hereof or its agent or attorney. Subject to
compliance with the preceding paragraph, as to any transfer which may be
involved in such division or combination, the Company shall execute and deliver
a new
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Warrant or Warrants in exchange for the Warrant or Warrants to be divided or
combined in accordance with such notice.
The Company agrees to maintain at its aforesaid office books for the
registration and transfer of the Warrants.
SECTION 4. Payment of Taxes.
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The Company will pay all documentary stamp taxes attributable to the
initial issuance of Warrant Shares upon the exercise of Warrants; provided,
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however, that the Company shall not be required to pay any tax or taxes which
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may be payable in respect of any transfer involved in the issue of any Warrant
Certificates or any certificates for Warrant Shares in a name other than that of
the registered holder of a Warrant Certificate surrendered upon the exercise of
a Warrant, and the Company shall not be required to issue or deliver such
Warrant Certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
SECTION 5. Mutilated or Missing Warrant Certificates.
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In case any of the Warrant Certificates shall be mutilated, lost,
stolen or destroyed, the Company may in its discretion issue, in exchange and
substitution for and upon cancellation of the mutilated Warrant Certificate, or
in lieu of and substitution for the Warrant Certificate lost, stolen or
destroyed, a new Warrant Certificate of like tenor and representing an
equivalent number of Warrants, but only upon receipt of evidence satisfactory to
the Company of such loss, theft or destruction of such Warrant Certificate and
indemnity, if requested, also satisfactory to them. Applicants for such
substitute Warrant Certificates shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Company may prescribe.
SECTION 6. Reservation of Warrant Shares.
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The Company will at all times reserve and keep available, free from
preemptive rights, 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.
The Company or, if appointed, the transfer agent for the Common Stock
(the "Transfer Agent") and every subsequent transfer agent for any shares of the
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Company's capital stock issuable upon the exercise of any of the rights of
purchase aforesaid will be irrevocably authorized and directed at all times to
reserve such number of authorized shares as shall be required for such purpose.
The Company will keep a copy of this Agreement on file with the Transfer Agent
and with every subsequent transfer agent for any shares of the Company's capital
stock issuable upon the exercise of the rights of purchase represented by the
Warrants. The Company will furnish such Transfer Agent a copy of all notices of
adjustments and certificates related thereto transmitted to each holder pursuant
to Section 9 hereof.
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SECTION 7. Adjustment of Exercise Price.
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The Exercise Price and the number of Warrant Shares issuable upon the
exercise of each Warrant are subject to adjustment from time to time upon the
occurrence of the events enumerated in this Section 7. For purposes of this
Section 7, "Common Stock" means shares now or hereafter authorized of any class
of common stock of the Company and any other stock of the Company, however
designated, that has the right (subject to any prior rights of any class or
series of preferred stock) to participate in any distribution of the assets or
earnings of the Company without limit as to per share amount.
(a) Adjustment for Change in Capital Stock.
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If the Company:
(1) pays a dividend or makes a distribution on its Common Stock
in shares of its Common Stock;
(2) subdivides its outstanding shares of Common Stock into a
greater number of shares;
(3) combines its outstanding shares of Common Stock into a
smaller number of shares;
(4) makes a distribution on its Common Stock in shares of its
capital stock other than Common Stock; or
(5) issues by reclassification of its Common Stock any shares of
its capital stock;
then the Exercise Price in effect immediately prior to such action and the
number and kind of shares into which a Warrant is exercisable shall all be
adjusted appropriately so that the holder of any Warrant thereafter exercised
may receive the aggregate number and kind of shares of capital stock of the
Company which he 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.
If after an adjustment a holder of a Warrant upon exercise of it may
receive shares of two or more classes of capital stock of the Company, the Board
of Directors of the Company shall determine the allocation of the adjusted
Exercise Price between the classes of capital stock. After such allocation, the
exercise privilege and the Exercise Price of each class of capital stock shall
thereafter be subject to adjustment on terms comparable to those applicable to
Common Stock in this Section.
Such adjustment shall be made successively whenever any event listed
above shall occur.
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(b) Adjustment for Rights Issue.
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If the Company distributes any rights, options or warrants to all
holders of its Common Stock entitling them for a period expiring within 60 days
after the record date for such distribution to purchase shares of Common Stock
at a price per share less than the current market price per share on that record
date, the Exercise Price shall be adjusted in accordance with the formula:
O + N x P
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E' = E x M
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O + N
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where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
O = the number of shares of Common Stock outstanding on the
record date.
N = the number of additional shares of Common Stock offered
pursuant to such rights issue.
P = the offering price per share of the additional shares.
M = the current market price per share of Common Stock on
the record date.
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 Exercise Price 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.
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If the Company distributes to all holders of its Common Stock any
assets (excluding cash) or debt securities or any rights or warrants to purchase
debt securities, assets or other securities, the Exercise Price shall be
adjusted in accordance with the formula:
E' = E x M - F
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M
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
M = the current market price per share of Common Stock on
the record date mentioned below.
F = the aggregate fair market value on the record date of
the assets, securities, rights or warrants divided by
the number of outstanding shares of Common Stock on the
record date
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for such distribution. The Board of Directors of the
Company shall determine the fair market value.
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.
(d) Adjustment for Common Stock Issue:
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If the Company issues shares of Common Stock for a consideration per
share less than the current market price per share on the date the Company fixes
the offering price of such additional shares, the Exercise Price shall be
adjusted in accordance with the formula:
P
-
E' = E x O + M
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A
where:
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares outstanding immediately prior to
the issuance of such additional shares.
P = the aggregate consideration received for the issuance
of such additional shares.
M = the current market price per share on the date of
issuance of such additional shares.
A = the number of shares outstanding immediately after the
issuance of such additional shares.
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:
(1) any of the transactions described in subsections (b) and (c)
of this Section 7,
(2) the exercise of Warrants, or the conversion or exchange of
other securities convertible into, or exchangeable or exercisable for,
Common Stock,
(3) Common Stock issued to the Company's employees under bona
fide employee benefit plans adopted by the Board of Directors and approved
by the holders of Common Stock when required by law, if such Common Stock
would otherwise be covered by this subsection (d),
(4) Common Stock issued upon the exercise of rights or warrants
issued to the holders of Common Stock,
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(5) Common Stock issued to shareholders of any person which
merges into the Company in proportion to their stock holdings of such
person immediately prior to such merger, upon such merger,
(6) Common Stock issued in a bona fide public offering pursuant
to a firm commitment underwriting,
(7) Common Stock issued in a bona fide private placement to, or
through a placement agent which is, a member firm of the National
Association of Securities Dealers, Inc., or
(8) Common Stock issued as a dividend on any preferred stock in
accordance with the stated terms of such preferred stock and in lieu of
cash dividends otherwise payable on such preferred stock pursuant to the
instrument under which the preferred stock was issued.
(e) Adjustment for Convertible Securities Issue.
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If the Company issues any securities convertible into or exchangeable
or exercisable for Common Stock (other than securities issued in transactions
described in subsections (b) and (c) of this Section 7) for a consideration per
share of Common Stock initially deliverable upon conversion or exchange of such
securities less than the current market price per share on the date of issuance
of such securities, the Exercise Price shall be adjusted in accordance with this
formula:
P
-
E' = E x O + M
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O + D
where:
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares outstanding immediately prior to
the issuance of such securities.
P = the aggregate consideration received for the issuance
of such securities.
M = the current market price per share of Common Stock on
the date of issuance of such securities.
D = the maximum number of shares deliverable upon
conversion or in exchange for such securities at the
initial conversion or exchange 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 or exchange of
such securities has not been issued when such securities are no longer
outstanding, then the Exercise Price shall promptly be readjusted to the
Exercise Price which would then be in effect had the
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adjustment upon the issuance of such securities been made on the basis of the
actual number of shares of Common Stock issued upon conversion or exchange of
such securities.
This subsection (e) does not apply to:
(1) convertible securities issued to shareholders of any person
which merges into the Company, or with a subsidiary of the Company, in
proportion to their stock holdings of such person immediately prior to such
merger, upon such merger,
(2) convertible securities issued in a bona fide public offering
pursuant to a firm commitment underwriting,
(3) convertible securities issued in a bona fide private
placement through a placement agent which is a member firm of the National
Association of Securities Dealers, Inc.,
(4) rights, warrants and convertible and exchangeable securities
outstanding on or prior to the date of issuance of the Warrant, or
(5) convertible securities or warrants issued in connection with
the incurrence of debt by the Company or any of its subsidiaries, so long
as the fair value allocable to such convertible securities or warrants
(taking into account the terms of the debt), together with any
consideration payable to the Company upon conversion or exercise of such
convertible securities or warrants, treating such convertible securities or
warrants on an as converted basis, is no less than the then current market
price of Common Stock on the date of issuance of such convertible
securities or warrants.
(f) Current Market Price.
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Subject to the last two sentences of this subsection (f), in
subsections (b), (c), (d) and (e) of this Section 7, the current market price
per share of Common Stock on any date is the average of the Quoted Prices of the
Common Stock for 30 consecutive trading days commencing 45 trading days before
the date in question. The "Quoted Price" of the Common Stock is the last
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reported sales price of the Common Stock as reported by NASDAQ National Market,
or if the Common Stock is listed on a securities exchange, the last reported
sales price of the Common Stock on such exchange which shall be for consolidated
trading if applicable to such exchange, or if neither so reported or listed, the
last reported bid price of the Common Stock. In the absence of one or more such
quotations (including, without limitation, during the period prior to the
Initial Public Offering), the Board of Directors of the Company shall determine
the current market price on the basis of such quotations, if available, or other
valuation information as it in good faith considers appropriate. In the event
of the Initial Public Offering, the current market price per share of Common
Stock shall be the Quoted Price on the day of such Initial Public Offering.
(g) Consideration Received.
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For purposes of any computation respecting consideration received
pursuant to subsections (d) and (e) of this Section 7, the following shall
apply:
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(1) in the case of the issuance of shares of Common Stock for
cash, the consideration shall be the amount of such cash, provided that in
no case shall any deduction be made for any commissions, discounts or other
expenses incurred by the Company 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 as determined
in good faith by the Board of Directors (irrespective of the accounting
treatment thereof), whose determination shall be conclusive; and
(3) in the case of the issuance of securities convertible into
or exchangeable for shares, the aggregate consideration received therefor
shall be deemed to be the consideration received by the Company for the
issuance of such securities plus the additional minimum consideration, if
any, to be received by the Company upon the conversion or exchange thereof
(the consideration in each case to be determined in the same manner as
provided in clauses (1) and (2) of this subsection).
(h) When De Minimis Adjustment May Be Deferred.
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No adjustment in the Exercise Price need be made unless the adjustment
would require on increase or decrease of at least 1% in the Exercise Price. Any
adjustments that are not made shall be carried forward and taken into account in
any subsequent adjustment.
All calculations under this Section shall be made to the nearest cent
or nearest 1/100th of a share as the case may be.
(i) When No Adjustment Required.
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No adjustment need be made for a transaction referred to in subsection
(a), (b), (c), (d) or (e) of this Section 7 if Warrant holders are permitted to
participate in the transaction (without being required to exercise their
Warrants in order to do so) on a basis and with notice that the Board of
Directors of the Company determines to be fair and appropriate in light of the
basis and notice on which holders of Common Stock participate in the
transaction.
No adjustment need be made for rights to purchase Common Stock
pursuant to a Company plan for reinvestment of dividends or interest.
No adjustment need be made for a change in the par value or no par
value of the Common Stock.
To the extent the Warrants become convertible into cash, no adjustment
need be made thereafter as to the cash. Interest will not accrue on the cash.
(j) Notice of Adjustment.
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Whenever the Exercise Price is adjusted, the Company shall provide the
notices required by Section 9 hereof.
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(k) Voluntary Reduction.
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The Company from time to time may reduce the Exercise Price by any
amount for any period of time if the period is at least 20 days and if the
reduction is irrevocable during the period; provided, however, that in no event
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may the Exercise Price be less than the par value of a share of Common Stock.
Whenever the Exercise Price is reduced, the Company shall mail to
Warrant holders a notice of the reduction. The Company 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 pursuant to this clause (k) does not
change or adjust the Exercise Price otherwise in effect for purposes of
subsections (a), (b), (c), (d) and (e) of this Section 7.
(l) Reorganization of Company.
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If the Company consolidates or merges with or into, or sells,
transfers or leases all or substantially all of its assets to, any person
(including, without limitation, in a transaction that is an Automatic Exercise
Event), upon consummation of such transaction the Warrants shall automatically
become exercisable (or, in the event of an Automatic Exercise Event, be
exercised) for the kind and amount of securities, cash or other assets which the
holder of a Warrant would have owned immediately after the consolidation,
merger, sale, transfer or lease if the holder had exercised the Warrant
immediately before the effective date of the transaction. Unless such
transaction shall have been an Automatic Exercise Event, concurrently with the
consummation of such transaction, the corporation formed by or surviving any
such consolidation or merger, if other than the Company, or the person to which
such transfer, sale or lease shall have been made, shall enter into a
supplemental Warrant Agreement so providing and further providing for
adjustments which shall be as nearly equivalent as may be practical to the
adjustments provided for in this Section. The successor Company shall mail to
warrant holders a notice describing the supplemental Warrant Agreement.
If the issuer of securities deliverable upon exercise of Warrants
under the supplemental Warrant Agreement is an affiliate of the formed,
surviving, transferee or lessee corporation, that issuer shall join in the
supplemental Warrant Agreement.
If this subsection (l) applies, subsections (a), (b), (c), (d) and (e)
of this Section 7 do not apply.
(m) Determinations Conclusive.
-------------------------
Any determination that the Company or the Board of Directors of the
Company must make pursuant to subsection (a), (c), (d), (e), (f), (g) or (i) of
this Section 7 is conclusive, provided the Board of Directors has acted
reasonably.
(n) When Issuance or Payment May Be Deferred.
----------------------------------------
13
In any case in which this Section 7 shall require that an adjustment
in the Exercise Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event (i)
issuing to the holder of any Warrant exercised after such record date the
Warrant Shares and such securities or assets, if any, issuable upon such
exercise over and above the Warrant Shares and such securities or assets, if
any, issuable upon such exercise on the basis of the Exercise Price and (ii)
paying to such holder any amount in cash in lieu of a fractional share pursuant
to Section 8; provided, however, that the Company shall deliver to such holder a
-------- -------
due xxxx or other appropriate instrument evidencing such holder's right to
receive such additional warrant Shares, other capital stock and cash upon the
occurrence of the event requiring such adjustment.
(o) Adjustment in Number of Shares.
------------------------------
Upon each adjustment of the Exercise Price pursuant to this Section 7,
each Warrant outstanding prior to the making of the adjustment in the Exercise
Price shall thereafter evidence the right to receive upon payment of the
adjusted Exercise Price that number of shares of Common Stock (calculated to the
nearest hundredth) obtained from the following formula:
N' = N x E
----
E'
where:
N' = the adjusted number of Warrant Shares issuable upon
exercise of a Warrant by payment of the adjusted
Exercise Price.
N = the number of Warrant Shares previously issuable upon
exercise of a Warrant by payment of the Exercise Price
prior to adjustment.
E' = the adjusted Exercise Price.
E = the Exercise Price prior to adjustment.
SECTION 8. Fractional Interests.
--------------------------------
The Company 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 8 be issuable on the exercise of any Warrants (or
specified portion thereof), the Company shall pay an amount in cash equal to the
current Exercise Price, multiplied by such fraction.
SECTION 9. Notices to Warrant Holders.
-------- ----------------------------
Upon any adjustment of the Exercise Price pursuant to Section 7, the
Company shall promptly thereafter cause to be given to each of the registered
holders of the Warrant Certificates at its address appearing on the Warrant
register written notice of such adjustment by
14
first-class mail, postage prepaid. 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 7.
In case:
(a) the Company 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; or
(b) the Company shall authorize the distribution to all holders of
shares of Common Stock of evidences of indebtedness or assets, including
cash dividends or cash distributions payable out of consolidated current or
retained earnings, but not including dividends payable in shares of Common
Stock or distributions referred to in subsection (a) of Section 7 hereof;
or
(c) of any consolidation or merger to which the Company is a party
and of which approval of any shareholders of the Company is required, or of
the conveyance, sale, transfer or lease of the properties and assets of the
Company 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; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(e) the Company proposes to take any action (other than actions of
the character described in Section 7(a)) that would require an adjustment
of the Exercise Price pursuant to Section 7;
then the Company shall cause to be given to each of the registered holders of
the Warrant Certificates at his address appearing on the Warrant register, at
least 20 days (or 10 days in any case specified in clause (a) or (b) above)
prior to the applicable record date hereinafter specified, or promptly in the
case of events for which there is no record date, by first-class mail, postage
prepaid, 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, sale, transfer, lease, dissolution,
liquidation, winding up or other action. The failure to give the notice
required by this Section 9 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.
15
Nothing contained in this Agreement or in any of the Warrant
Certificates shall be construed as conferring upon the holders thereof the right
to vote or to consent or to receive notice as shareholders in respect of the
meetings of shareholders or the election of directors of the Company or any
other matter or any rights whatsoever as shareholders of the Company.
SECTION 10. Amendments.
-----------------------
The terms of this Warrant Agreement and the Warrants may be amended by
the Company, and the observance of any term herein or therein may be waived, but
only with the written consent of the holders of Warrants representing a majority
in number of the total Warrant Shares at the time purchasable upon the exercise
of all then outstanding Warrants, provided that no such action may change the
Exercise Price (other than in accordance with Section 7(k) hereof) without the
written consent of all holders of Warrants affected thereby.
SECTION 11. Miscellaneous.
--------------------------
(a) Issue Date. The provisions of this Warrant shall be construed
----------
and shall be given effect in all respects as if it had been issued and
delivered by the Company on the date hereof.
(b) Successors. This Warrant shall be binding upon any successors or
----------
assigns of the Company.
(c) Governing Law. This Warrant shall be governed by and construed
-------------
in accordance with the laws of the State of Delaware.
(d) Office of the Company. So long as the Warrants remain outstanding
---------------------
the Company shall maintain an office where the Warrants may be presented
for exercise, transfer, division and combination. Such office shall be at
000 Xxxxx Xxxxxxxxx Xxxxxxxxx, Xx Xxxxxxx, Xxxxxxxxxx 00000-0000, unless
and until the Company shall designate and maintain another office for such
purposes, in which case the Company shall deliver notice of such change to
all holders of outstanding Warrants in the manner set forth herein.
(e) Headings. Theadings used in this Warrant are used for convenience
--------
only and are not to be considered in construing or interpreting this
agreement.
(f) Notices. Unless otherwise provided, any notice required or
-------
permitted under this Warrant shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or
three days after being sent via air courier, in all cases addressed to the
party to be notified at the address indicated for such party on the
signature page hereof, or at such other address as such party may designate
by ten days advance written notice to the other party. Notwithstanding the
foregoing, notice may be given by telex or facsimile provided that
appropriate confirmation of receipt is received.
(g) Saturdays, Sundays, Holidays. If the last or appointed day for
----------------------------
the taking of any action or the expiration of any right required or granted
herein shall be a Saturday
16
or a Sunday or shall be a legal holiday in the State of California, then
such action may be taken or such right may be exercised on the next
succeeding day not a legal holiday.
EXHIBIT B
---------
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
XXXX XX HOLDING CORP.
By: ____________________________________
Name:
Title:
FS EQUITY PARTNERS III, L.P.
By: FS Capital Partners, L.P.
Its: General Partner
By: FS Holdings, Inc.
Its: General Partner
By: ____________________________________
Name:
Title:
FS EQUITY PARTNERS INTERNATIONAL, L.P.
By: FS&Co. International, L.P.
Its: General Partner
By: FS International Holdings Limited
Its: General Partner
By: ____________________________________
Name::
Title:
EXHIBIT B
---------
ELECTION TO PURCHASE
(To Be Executed Upon Exercise Of Warrant Pursuant To Section 1)
The undersigned hereby irrevocably elects to exercise the right
represented by this Warrant Certificate, to receive __________ shares of Common
Stock and hereby tenders payment for such shares [to the order of XXXX XX
Holding Corp. by cash or immediately available funds in the amount of $ _______]
[by delivery to the Company of __________ Warrant Shares with respect to which
this Warrant is being surrendered in payment of the aggregate Exercise Price for
the Warrant Shares to be delivered to the holder] in accordance with the terms
hereof. The undersigned requests that a certificate for such shares be
registered in the name of __________________, whose address is
__________________. 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 ______________________, and
that such Warrant Certificate be delivered to __________________, whose address
is____________________.
Date: ____________________________
__________________________________
Print Name
__________________________________
Signature Guaranteed/*/
__________________________
/*/ The signature must be guaranteed by a bank or trust company having an office
in Los Angeles, California, or by a firm having membership on the New York
Stock Exchange.
EXHIBIT B
---------
EXERCISABLE ON OR AFTER AUGUST 26, 2007
AND ON OR BEFORE AUGUST 27, 2007
OR UPON AN AUTOMATIC EXERCISE EVENT
No. _____ _________ Warrants
WARRANT CERTIFICATE
XXXX XX HOLDING CORP.
This Warrant Certificate certifies that ________________________, or
registered assigns, is the registered holder of ___________________ Warrants
expiring ___________________ (the "Warrants") to purchase shares of Common Stock
--------
(the "Common Stock") of XXXX XX Holding Corp. (the "Company"). Each Warrant
------------ -------
entitles the holder, (i) unless an Automatic Exercise Event shall occur on or
prior to August 27, 2007, upon exercise to receive from the Company on or after
August 26, 2007 and on or before 5:00 p.m. Los Angeles Time on August 27, 2007
one fully paid and nonassessable share of Common Stock (a "Warrant Share") at
-------------
the initial exercise price (the "Exercise Price") of $30.00, payable in lawful
--------------
money of the United States of America or in Warrant Shares by "cashless
exercise," upon surrender of this Warrant Certificate and payment of the
Exercise Price at the principal office of the Company, but only subject to the
conditions set forth herein and in the Warrant Agreement referred to on the
reverse hereof, or (ii) upon the occurrence of an Automatic Exercise Event on or
prior to August 27, 2007, to receive automatically from the Company a Warrant
Share at the Exercise Price, payable by "cashless exercise," upon surrender of
this Warrant Certificate and payment of the Exercise Price at the principal
office of the Company, but only subject to the conditions set forth herein and
in the Warrant Agreement referred to on the reverse hereof. The Exercise Price
and number of Warrant Shares issuable upon exercise of the Warrants are subject
to adjustment upon the occurrence of certain events set forth in the Warrant
Agreement.
Except in connection with an Automatic Exercise Event, no warrant may
be exercised before August 26, 2007 or after 5:00 PM, Los Angeles time, on
August 27, 2007 and to the extent not exercised by, or an Automatic Exercise
Event shall not have occurred by, such time, such Warrants shall become void.
This Warrant Certificate shall be governed and construed in accordance
with the internal laws of the State of Delaware.
IN WITNESS WHEREOF, XXXX XX Holding Corp. has caused this Warrant
Certificate to be signed by its President and by its Secretary, each by his
signature or a facsimile of his signature.
Dated: _____________
By: _____________________
President
By: _____________________
Secretary
EXHIBIT B
---------
[FORM OF WARRANT CERTIFICATE]
[REVERSE]
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants expiring August 27, 2007 entitling the holder on
exercise to receive shares of Common Stock, of the Company (the "Common Stock"),
------------
$.01 par value, and are issued or to be issued pursuant to a Warrant Agreement
dated as of _________ ____, 2001 (the "Warrant Agreement"), duly executed and
-----------------
delivered by the Company, 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 the Company 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 the Company.
Unless an Automatic Exercise Event shall occur on or prior to August
27, 2007, warrants may be exercised at any time on or after August 26, 2007 and
on or before August 27, 2007. The holder of Warrants evidenced by this Warrant
Certificate may exercise them, subject to the limitations set forth in the
Warrant Agreement, by surrendering this Warrant Certificate, with the form of
election to purchase set forth hereon properly completed and executed, together
with payment of the Exercise Price in cash or immediately available funds or in
Warrant Shares by "cashless exercise," at the principal office of the Company.
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 to the holder hereof or his assignee a new Warrant
Certificate evidencing the number of Warrants not exercised.
Upon the occurrence of an Automatic Exercise Event on or prior to
August 27, 2007, the Warrants evidenced by this Warrant Certificate shall
automatically be exercised, subject to the limitations set forth in the Warrant
Agreement, and the holder thereof shall be entitled to receive, upon
surrendering this Warrant Certificate, together with payment of the Exercise
Price in Warrant Shares by "cashless exercise," at the principal office of the
Company, the number of Warrant Shares resulting after subtracting such Exercise
Price.
The Warrant Agreement provides that upon the occurrence of certain
events the Exercise Price and the number of Warrant Shares into which this
Warrant is exercisable set forth on the face hereof may, subject to certain
conditions, be adjusted. No fractions of a share of Common stock will be issued
upon the exercise of any Warrant, but the Company will pay the cash value
thereof determined as provided in the Warrant Agreement. No adjustment shall be
made for any dividends on any Common Stock issuable upon exercise of this
Warrant.
Warrant Certificates, where surrendered at the principal office of the
Company 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.
Upon due presentation for registration of transfer of this Warrant
Certificate at the principal office of the Company 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
(including, without limitation, delivery to the Company of the written agreement
of such transferee(s) to become party to the Stockholders' Agreement, dated as
of _______ ___, 2001, by and among the Company and the other parties thereto, if
such transferee(s) are not already party thereto, prior to receipt from the
Company of any Warrant Shares as a result of the exercise of the Warrants
represented by such Warrant Certificate), without charge except for any tax or
other governmental charge imposed in connection therewith.
The Company may deem and treat the registered holder(s) hereof 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 the Company shall not be affected by any notice to the contrary.
Neither the Warrants nor this Warrant Certificate entitle any holder hereof to
any rights of a stockholder of the Company.
