PRIDE, INC.
and
PRIDE AUTOMOTIVE GROUP, INC.
SPECIAL WARRANT
WARRANT AGREEMENT
Dated as of , 1998
AGREEMENT dated as of , 1993, between Pride, Inc., a Delaware corporation
(hereinafter the "Company"), and PRIDE AUTOMOTIVE GROUP, INC., a Delaware
Corporation (hereinafter "Pride").
WHEREAS, the Company is has filed a registration statement for the sale of
up to 1,267,500 share of its common stock (inclusive of shares of common stock
which are issuable upon the exercise of the Underwriters' over-Allotment Option
and exclusive of 170,000 shares of common stock being offered and sold by
certain Selling Shareholders); and
WHEREAS, the sale of such shares will reduce Pride's ownership of the
Company to below 50% from 53.1% before such offering; and
WHEREAS, Pride and the Company have agreed that it is in the best interests
of both companies that Pride have the option to obtain at least 50% ownership of
the Company; and
WHEREAS, the Company desires to grant a Warrant to Pride which Warrant
shall entitle Pride to purchase up to 1,250,000 shares of common stock of the
Company (the "Common Shares") at an exercise price of $4.40 each during the
twenty-four month period commencing with the date of the Company's Prospectus
(the "Special Warrant").
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto agree as follows:
Section 1. Exercise of Special Warrants. Subject to the provisions of this
Agreement, Pride shall have the right, which may be exercised during a
twenty-four month period commencing with the date of the Company's Prospectus
(the "Term"), to purchase up to 1,250,000 fully paid and non-assessable Common
Shares, upon surrender to the Company, of this Special Warrant, with the form of
election to purchase duly filled in and signed, and upon payment to the order of
the Company for the Special Warrant exercise price,
determined in accordance with Section 2 herein, for the number of shares in
respect of which such Special Warrant is then exercised. Payment of such Special
Warrant Price shall be made in cash or by certified check or bank draft or
postal or express money order, payable in United States Dollars to the order of
the Company. The Special Warrants shall expire at the close of business on
_____________. Upon such surrender of Special Warrants, and payment of the
Warrant Price as aforesaid, the Company shall issue and cause to be delivered
with all reasonable dispatch to or upon the written order of Pride, a
certificate or certificates for the largest number of whole Common Shares so
purchased upon the exercise of such Special Warrant. The Company shall not be
required to issue any fraction of a Share of Common Stock or make any cash or
other adjustment in respect of any fraction of a Common Share otherwise issuable
upon such surrender. The rights of purchase represented by the Special Warrant
shall be exercisable, at the election of Pride, only to the extent provided in
Section 3 herein. In the event that the Special Warrant is exercised in respect
of less than all of the Shares specified therein at any time prior to the date
of expiration of the Special Warrant, a new Special Warrant or Special Warrants
will be issued to Pride for the remaining number of shares specified in the
Special Warrant so surrendered.
Section 2. Special Warrant Price. This Special Warrant shall allow Pride to
purchase shares of the Company's Common Stock at a price of $4.40 per whole
Share, subject to the limitations set forth herein. Payment of the Special
Warrant Price shall be made to the Company upon exercise by Pride of the Special
Warrant. The common shares issuable to Pride upon its exercise of this Special
Warrant shall be restricted shares, which may not be transferred or sold by
Pride unless registered under the Securities Act of 1933 or pursuant to an
exemption from registration.
Section 3. Limitation on Exercise of Special Warrant. The Special Warrant
may only be exercised by Pride during the term hereof in accordance with the
provisions herein contained.
Section 4. Adjustments. The Special Warrant Price and number of Common
Shares subject to this Special Warrant shall be adjusted from time to time as
hereinafter set forth.
(A) If the Company shall at any time subdivide its outstanding Common
Shares by recapitalization, reclassification, split-up thereof, or other such
issuance without additional consideration, the Special Warrant Price immediately
prior to such subdivision shall be proportionately decreased and, if the Company
shall at any time combine the outstanding Common Shares by recapitalization,
reclassification or combination thereof, the Special Warrant Price immediately
prior to such combination shall be proportionately increased. Any such
adjustment to the Special Warrant Price or the corresponding adjustment to the
Special
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Warrant Price shall become effective at the close of business on the record date
for such subdivision or combination.
(B) In case at any time the Company shall declare a dividend or make any
other distribution upon any stock of the Company payable in Common Stock, then
such Common Stock issuable in payment of such dividend or distribution shall be
deemed to have been issued or sold without consideration.
(C) Upon any adjustment of the Special Warrant Price as hereinabove
provided, the number of Common Shares issuable upon exercise of this Special
Warrant shall be changed to the number of Shares determined by dividing (i) the
aggregate Special Warrant Price payable for the purchase of all Shares issuable
upon exercise of this Special Warrant immediately prior to such adjustment by
(ii) the Special Warrant Price per Share in effect immediately after such
adjustment.
Section 5. Notices. Any notice pursuant to this Agreement to be given or
made by the Warrant Agent or by the registered holder of any Special Warrant to
the Company shall be sufficiently given or made if sent by first class mail,
postage prepaid, addressed (until another address is filed in writing by the
Company with the Warrant Agent) as follows:
Pride, Inc.
Pride House
Watford Metro Centre, Tolpits Lane
Watford Hertordshire
WD1 8SB England
Pride Automotive Group, Inc.
Pride House
Watford Metro Centre, Tolpits Lane
Watford Hertordshire
WD1 8SB England
Copy to:
Xxxxxxx & Xxxxxxx, Esqs.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Section 6. New York Contract. This Agreement shall be deemed to be a
contract made under the laws of the State of New York and for all purposes shall
be construed in accordance with the laws of said State.
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Section 7. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall be considered an original.
Section 8. Effectiveness. This Agreement shall be deemed binding and
therefore in effect as of, and subject to the effective date of the Registration
Statement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
PRIDE, INC.
By:
Xxxx Xxxxxxxx, President
Attest:
Xxxx Xxxxxxxx, Secretary
PRIDE AUTOMOTIVE GROUP, INC.
By:
Xxxx Xxxxxxxx, President
Attest:
Xxxx Xxxxxxxx, Secretary
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