EXHIBIT 4.6
The issuance and sale of shares upon the exercise of this Warrant have not
been registered under the Securities Act of 1933, as amended, and
accordingly neither this Warrant nor any such shares may be transferred in
the absence of such registration or an exemption therefrom under such Act.
This Warrant and such shares may be transferred only in compliance with the
conditions specified in this Warrant.
JP FOODSERVICE, INC.
Common Stock Purchase Warrant
Expiring September 30, 2005
No. W- __________, 1997
CUSIP No.
JP FOODSERVICE, INC., a Delaware corporation (herein, together with its
successors and assigns, the "Company"), for value received, hereby certifies
that _________________________________________, or registered assigns, is
entitled to purchase from the Company _______ duly authorized, validly issued,
fully paid and nonassessable shares of Common Stock, par value $.01 per share
(the "Common Stock"), of the Company at the purchase price per share of
$________, at any time or from time to time prior to 5:00 p.m., New York City
time, on September 30, 2005 (or such other date as may be determined pursuant to
section 16), all subject to the terms, conditions and adjustments set forth
below in this Warrant.
This Warrant is one of the Common Stock Purchase Warrants (the "Warrants,"
such term to include all such warrants issued in exchange or substitution
therefor) originally issued by the Company in connection with the transactions
contemplated by the Agreement and Plan of Merger dated as of June 30, 1997, as
amended, among the Company, Xxxxxx Acquisition Corp. and Xxxxxx-Xxxxxx, Inc. In
connection with such transactions, the Warrants were issued in replacement of
Common Stock Purchase Warrants dated May 17, 1996 of Xxxxxx-Xxxxxx, Inc.
evidencing the right to purchase an aggregate of 336,637 shares of common stock
of Xxxxxx-Xxxxxx, Inc. The Warrants originally so issued evidence rights to
purchase an aggregate of 260,893 shares of Common Stock subject to adjustment as
provided herein. Certain capitalized terms used in this Warrant are defined in
section 12; references to a "section" are, unless otherwise specified, to one of
the sections of this Warrant.
1. Exercise of Warrant. 1.1. Manner of Exercise. This Warrant may be
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exercised by the holder hereof, in whole or in part, during normal business
hours on any Business Day, by surrender of this Warrant to the Company at its
principal office maintained pursuant to section 11.2(a), accompanied by (i) a
subscription in substantially the form attached to this Warrant (or a reasonable
facsimile thereof) duly executed by such holder, (ii) payment, in cash or by
certified or official bank check payable to the order of the Company in the
amount obtained by multiplying (a) the number of shares of Common Stock (without
giving effect to any adjustment thereof) designated in such subscription by (b)
$________, whereupon such holder shall be entitled to receive the number of duly
authorized, validly issued, fully paid and nonassessable shares of Common Stock
(or Other Securities determined as provided in sections 2 through 4) and (iii)
the written representation by such holder that: (a) such holder is acquiring the
Common Stock being acquired by it pursuant to the exercise of this Warrant for
its own account for investment and not with a view to the distribution of such
Common Stock in violation of the Securities Act; and (b) (A) if such holder is
an insurance company, such holder is not acquiring the Common Stock or any
interest therein with assets allocated to any separate account maintained by
such holder in which any employee benefit plan (or its related trust) has any
interest or (B) if such holder is a bank, no part of the funds used to acquire
the Common Stock will be drawn from any trust fund or other account held by such
holder in which any employee benefit plan has any interest. As used in this
section, the terms "employee benefit plan" and "separate account" shall have the
respective meanings assigned thereto in Section 3 of the Employee Retirement
Income Security Act of 1974, as amended.
1.2. When Exercise Effective. Each exercise of this Warrant shall be deemed
-----------------------
to have been effected immediately prior to the close of business on the Business
Day on which this Warrant shall have been surrendered to the Company as provided
in section 1.1, and at such time the Person or Persons in whose name or names
any certificate or certificates for shares of Common Stock (or Other Securities)
shall be issuable upon such exercise as provided in section 1.3 shall be deemed
to have become the holder or holders or record thereof.
1.3. Delivery of Stock Certificates, etc. As soon as practicable after the
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exercise of this Warrant, in whole or in part, and in any event within ten
Business Days thereafter, the Company at its expense (including the payment by
it of any applicable issue taxes) will cause to be issued in the name of and
delivered to the holder hereof or, subject to section 8, as such holder (upon
payment by such holder of any applicable transfer taxes) may direct, (a) a
certificate or certificates for the number of duly authorized, validly issued,
fully paid and nonassessable shares of Common Stock (or Other Securities) to
which such holder shall be entitled upon such exercise plus, in lieu of any
fractional share to which such holder would otherwise be entitled, cash in an
amount equal to the same fraction of the Market Price per share on the Business
Day next preceding the date of such exercise and (b) in case such exercise is in
part only, a new Warrant or Warrants of like tenor, calling in the aggregate on
the face or faces thereof for issuance of the number of
2
shares of Common Stock equal (without giving effect to any adjustment therein)
to the number of such shares called for on the face of this Warrant minus the
number of such shares so designated by such holder upon such exercise as
provided in section 1.1.
2. Adjustment of Common Stock Issuable Upon Exercise. 2.1. General; Warrant
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Price. The number of shares of Common Stock which the holder of this Warrant
-----
shall be entitled to receive upon each exercise hereof shall be determined by
multiplying the number of shares of Common Stock which would otherwise (but for
the provisions of this section 2) be issuable upon such exercise, as designated
by the holder hereof pursuant to section 1.1, by a fraction of which (a) the
numerator is $________ and (b) the denominator is the Warrant Price in effect on
the date of such exercise. The "Warrant Price" shall initially be $________ per
share, shall be adjusted and readjusted from time to time as provided in this
section 2 and, as so adjusted or readjusted, shall remain in effect until a
further adjustment or readjustment thereof is required by this section 2.
2.2. Adjustment of Warrant Price; Issuance of Additional Shares of Common
--------------------------------------------------------------------
Stock and Dividends. (a) In case the Company at any time or from time to time
-------------------
after the date hereof shall issue or sell Additional Shares of Common Stock
(including Additional Shares of Common Stock deemed to be issued pursuant to
section 2.3 or 2.4) without consideration or for a consideration per share less
than the Current Market Price, then, and in each such case, subject to section
2.7, such Warrant Price shall be reduced, concurrently with such issue or sale,
to a price (calculated to the nearest .001 of a cent) determined by multiplying
such Warrant Price by a fraction
(i) the numerator of which shall be (A) the number of shares of Common
Stock outstanding immediately prior to such issue or sale plus (B) the number
of shares of Common Stock which the aggregate consideration received by the
Company for the total number of such Additional Shares of Common Stock so
issued or sold would purchase at the Current Market Price per share, and
(ii) the denominator of which shall be the number of shares of Common Stock
outstanding immediately after such issue or sale,
provided that, for the purposes of this section 2.2, (x) immediately after any
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Additional Shares of Common Stock are deemed to have been issued pursuant to
section 2.3 or 2.4, such Additional Shares of Common Stock shall be deemed to be
outstanding, and (y) treasury shares shall not be deemed to be outstanding and
the disposition of any thereof by the Company shall be considered an issuance or
sale of Additional Shares of Common Stock for purposes of this section 2.
(b) Extraordinary Dividends and Other Distributions. In case the Company at
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any time or from time to time after the date hereof shall declare, order,
3
pay or set apart any sum or property for or make a dividend or other
distribution (including, without limitation, any distribution of other or
additional stock or other securities or property or Options by way of dividend
or spinoff, reclassification, recapitalization or similar corporate
rearrangement) on the Common Stock, other than any regular periodic dividend,
payable in cash out of earned surplus or net profits for the year in which the
dividend is incurred or the previous year, and other than a dividend payable in
Additional Shares of Common Stock (in which case the provisions of section 2.4
shall apply), then, and in each such case, subject to section 2.7, at the
irrevocable option of the Company made at the time of the notice referred to in
section 6(a), either
(A) the Warrant Price in effect immediately prior to the close
of business on the record date fixed for the determination
of holders of any class of securities entitled to receive
such dividend or distribution shall be reduced, effective as
of the close of business on such record date, to a price
(calculated to the nearest .001 of a cent) determined by
multiplying such Warrant Price by a fraction:
(x) the numerator of which shall be the Current Market
Price in effect on such record date or, if the Common
Stock trades on an ex-dividend basis, on the date prior
to the commencement of ex-dividend trading, less the
amount of such dividend or distribution (as determined
in good faith in accordance with section 2.5 by a
resolution of the Board of Directors of the Company)
applicable to one share of Common Stock, and
(y) the denominator of which shall be such Current Market
Price in effect on such record date or, if the Common
Stock trades on an ex-dividend basis, on the date prior
to the commencement of ex-dividend trading; or
(B) the Company shall pay over to each holder of Warrants,
immediately upon exercise thereof by such holder on or after
the payment date for such dividend or distribution, the
securities and other property (including cash) which such
holder would have received (together with all distributions
thereon) if such holder had exercised, immediately prior to
the record date fixed in connection with such dividend, the
Warrants held by it, and the Company shall take whatever
steps are necessary or appropriate to keep in reserve at all
times such securities and other property (including cash) as
shall be required to
4
fulfill its obligations hereunder in respect of the shares
issuable upon the exercise of all the Warrants.
2.3. Treatment of Options and Convertible Securities. In case the Company at
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any time or from time to time after the date hereof shall issue, sell, grant or
assume, or shall fix a record date for the determination of holders of any class
of securities entitled to receive, any Options or Convertible Securities, then,
and in each such case, the maximum number of Additional Shares of Common Stock
(as set forth in the instrument relating thereto, without regard to any
provisions contained therein for a subsequent adjustment of such number)
issuable upon the exercise of such Options or, in the case of Convertible
Securities and Options therefor, the conversion or exchange of such Convertible
Securities shall be deemed to be Additional Shares of Common Stock issued
as of the time of such issue, sale, grant or assumption or, in case such a
record date shall have been fixed, as of the close of business on such record
date (or, if the Common Stock trades on an ex-dividend basis, on the
date prior to the commencement of ex-dividend trading), provided that such
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Additional Shares of Common Stock shall not be deemed to have been issued unless
the consideration per share (determined pursuant to section 2.5) of such shares
would be less than the Current Market Price on the date of and immediately prior
to such issue, sale, grant, or assumption or immediately prior to the close of
business on such record date (or, if the Common Stock trades on an ex-dividend
basis, on the date prior to the commencement of ex-dividend trading), as the
case may be, and provided, further, that in any such case in which Additional
-------- -------
Shares of Common Stock are deemed to be issued,
(a) no further adjustment of the Warrant Price shall be made upon the
subsequent issue or sale of shares of Common Stock upon the exercise of
such Options or the conversion or exchange of such Convertible Securities;
(b) if such Options or Convertible Securities by their terms provide,
with the passage of time or otherwise, for any increase in the
consideration payable to the Company, or decrease in the number of
Additional Shares of Common Stock issuable, upon the exercise, conversion
or exchange thereof (by change of rate or otherwise), the Warrant Price
computed upon the original issue, sale, grant or assumption thereof (or
upon the occurrence of the record date, or date prior to the commencement
of ex-dividend trading, as the case may be, with respect thereto), and any
subsequent adjustments based thereon, shall, upon any such increase or
decrease becoming effective, be recomputed to reflect such increase or
decrease insofar as it affects such Options, or the rights of conversion or
exchange under such Convertible Securities, which are outstanding at such
time;
(c) upon the expiration (or purchase by the Company and cancellation or
retirement) of any such Options which shall not have been exercised or the
expiration of any rights of conversion or exchange under any such
Convertible Securities which (or purchase by the Company and any
5
cancellation or retirement of any such Convertible Security the rights of
conversion or exchange under which) shall not have been exercised, the
Warrant Price computed upon the original issue, sale, grant or assumption
thereof (or upon the occurrence of the record date, or date prior to the
commencement of ex-dividend trading, as the case may be, with respect
thereto), and any subsequent adjustments based thereon, shall, upon such
expiration (or such cancellation or retirement, as the case may be), be
recomputed as if (i) in the case of such Convertible Securities or Options
for Common Stock, the only Additional Shares of Common Stock issued or sold
were the Additional Shares of Common Stock, if any, actually issued or sold
upon the exercise of such Options or the conversion or exchange of such
Convertible Securities and the consideration received therefor was the
consideration actually received by the Company for the issue, sale, grant
or assumption of all such Options, whether or not exercised, plus the
consideration actually received by the Company upon such exercise, or for
the issuance or sale of all such Convertible Securities which were actually
converted or exchanged, plus the additional consideration, if any, actually
received by the Company upon such conversion or exchange; and (ii) in the
case of such Options for Convertible Securities, only the Convertible
Securities, if any, actually issued or sold upon the exercise thereof were
issued at the time of the issuance, sale, grant or assumption of such
Options, and the consideration received by the Company for the Additional
Shares of Common Stock deemed to have then been issued was the
consideration actually received by the Company for the issuance, sale,
grant or assumption of all such Options, whether or not exercised, plus the
consideration deemed to have been received by the Company (pursuant to
section 2.5) upon the issuance or sale of the Convertible Securities with
respect to which such Options were actually exercised;
(d) no readjustment pursuant to subdivision (b) or (c) above shall have
the effect of increasing the Warrant Price by an amount in excess of the
amount of the adjustment thereof originally made in respect of the issue,
sale, grant or assumption of such Options or Convertible Securities;
provided, however, that this provision shall take into account
-----------------
intervening adjustments made to the Warrant Price pursuant to other
provisions of section 2; and
(e) in the case of any such Options which expire by their terms not
more than 45 days after the date of issue, sale, grant or assumption
thereof, no adjustment of the Warrant Price shall be made until the
expiration or exercise of all such Options, whereupon such adjustment shall
be made in the manner provided in subdivision (c) above.
2.4. Treatment of Stock Dividends, Stock Splits, etc. In case the Company at
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any time or from time to time after the date hereof shall declare or pay any
dividend on the Common Stock payable in Common Stock, or shall effect a
subdivision of the outstanding shares of Common Stock into a greater number of
6
shares of Common Stock (by reclassification or otherwise than by payment of a
dividend in Common Stock), then, and in each such case, Additional Shares of
Common Stock shall be deemed to have been issued (a) in the case of any such
dividend, immediately after the close of business on the record date for the
determination of holders of any class of securities entitled to receive such
dividend, or (b) in the case of any such subdivision, at the close of business
on the day immediately prior to the day upon which such corporate action becomes
effective.
2.5. Computation of Consideration. For the purposes of this section 2,
----------------------------
(a) the consideration for the issuance or sale of any Additional Shares of
Common Stock shall, irrespective of the accounting treatment of such
consideration:
(i) insofar as it consists of cash, be computed at the net amount of cash
received by the Company,
(ii) insofar as it consists of property (including securities) other than
cash, be computed at the fair market value thereof at the time of such
issuance or sale, as determined in good faith by a resolution of the Board of
Directors of the Company, and
(iii) in case Additional Shares of Common Stock are issued or sold together
with other stock or securities or other assets of the Company for a
consideration which covers both, be the portion of such consideration so
received, computed as provided in clauses (i) and (ii) above, allocable to
such Additional Shares of Common Stock, all as determined in good faith by a
resolution of the Board of Directors of the Company;
(b) Additional Shares of Common Stock deemed to have been issued pursuant to
section 2.3, relating to Options and Convertible Securities, shall be deemed to
have been issued for a consideration per share determined by dividing
(i) the total amount, if any, received and receivable by the Company as
consideration for the issue, sale, grant or assumption of the Options or
Convertible Securities in question, plus the minimum aggregate amount of
additional consideration (as set forth in the instruments relating thereto,
without regard to any provision contained therein for a subsequent adjustment
of such consideration to protect against dilution) payable to the Company upon
the exercise in full of such Options or the conversion or exchange of such
Convertible Securities or, in the case of Options for Convertible Securities,
the exercise of such Options for Convertible Securities and the conversion
7
or exchange of such Convertible Securities, in each case computing such
consideration as provided in the foregoing subdivision (a),
by
(ii) the maximum number of shares of Common Stock (as set forth in the
instruments relating thereto, without regard to any provision contained
therein for a subsequent adjustment of such number to protect against
dilution) issuable upon the exercise of such Options or the conversion or
exchange of such Convertible Securities; and
(c) Additional Shares of Common Stock deemed to have been issued pursuant to
section 2.4, relating to stock dividends, stock splits, etc., shall be deemed
to have been issued for no consideration.
2.6. Adjustments for Combinations, etc. In case the outstanding shares of
----------------------------------
Common Stock shall be combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of Common Stock, the Warrant Price in
effect immediately prior to such combination or consolidation shall,
concurrently with the effectiveness of such combination or consolidation, be
proportionately increased.
2.7. Minimum Adjustment of Warrant Price. If the amount of any adjustment of
-----------------------------------
the Warrant Price required pursuant to this section 2 would be less than one
percent (1%) of the Warrant Price in effect at the time such adjustment is
otherwise so required to be made, such amount shall be carried forward and
adjustment with respect thereto made at the time of and together with any
subsequent adjustment which, together with such amount and any other amount or
amounts so carried forward, shall aggregate at least one percent (1%) of such
Warrant Price; provided, however, that upon the exercise of any Warrant, all
-----------------
necessary adjustments (calculated to the nearest .001 of a cent) not theretofore
made to the Warrant Price relating thereto by reason of the initial clause of
this sentence, up to and including the date of such exercise, shall be made.
3. Consideration, Merger, etc. 3.1. Adjustments for Consolidation, Merger,
--------------------------- --------------------------------------
Sale of Assets, Reorganization, etc. In case the Company after the date hereof
------------------------------------
(a) shall consolidate with or merge into any other Person and shall not be the
continuing or surviving corporation of such consolidation or merger, or (b)
shall permit any other Person to consolidate with or merge into the Company and
the Company shall be the continuing or surviving Person but, in connection with
such consolidation or merger, the Common Stock shall be changed into or
exchanged for stock or other securities of any other Person or cash or any other
property, or (c) shall sell, lease or transfer or otherwise dispose of all or
substantially all of its properties or assets to any other Person and thereafter
shall be dissolved, or (d) shall effect a capital reorganization or
reclassification (other than a
8
reclassification described in Section 2.4 or 2.6) of the Common Stock then, and
in the case of each such transaction, proper provision shall be made so that,
upon the basis and the terms and in the manner provided in this Warrant, the
holder of this Warrant, upon the exercise hereof at any time after the
consummation of such transaction, shall be entitled to receive (at the aggregate
Warrant Price in effect at the time of such consummation for all Common Stock
issuable upon such exercise immediately prior to such consummation), in lieu of
the Common Stock issuable upon such exercise prior to such consummation, the
stock and other securities, cash and property to which such holder would have
been entitled upon such consummation if such holder had exercised the rights
represented by this Warrant immediately prior thereto, subject to adjustments
(subsequent to such corporate action) as nearly equivalent as possible to the
adjustments provided for in section 2 and this section 3.
3.2. Assumption of Obligations. Notwithstanding anything contained in the
-------------------------
Warrants to the contrary, the Company will not effect any of the transactions
described in clauses (a) through (d) of section 3.1 unless, prior to the
consummation thereof, each Person (other than the Company) which may be required
to deliver any stock, securities, cash or property upon the exercise of this
Warrant as provided herein shall assume, by written instrument delivered to, and
reasonably satisfactory to, the holders of at least a majority of the shares of
Common Stock issuable upon exercise of all the then outstanding Warrants, (a)
the obligations of the Company under this Warrant (and if the Company shall
survive the consummation of such transaction, such assumption shall be in
addition to, and shall not release the Company from, any continuing obligations
of the Company under this Warrant), and (b) the obligation to deliver to such
holder such shares of stock, securities, cash or property as, in accordance with
the foregoing provisions of this section 3, such holder may be entitled to
receive, and such Person shall have similarly delivered to such holder an
opinion of counsel for such Person, which counsel shall be reasonably
satisfactory to the holders of at least a majority of the shares of Common Stock
issuable upon exercise of all the then outstanding Warrants, stating that this
Warrant shall thereafter continue in full force and effect and the terms hereof
(including, without limitation, all of the provisions of this section 3) shall
be applicable to the stock, securities, cash or property which such Person may
be required to deliver upon any exercise of this Warrant or the exercise of any
rights pursuant hereto.
3.3. Other Dilutive Events. In case any event shall occur as to which the
---------------------
provisions of section 2 or section 3 are not strictly applicable but the failure
to make any adjustment would not, in the reasonable opinion of the holders of a
majority of the shares of Common Stock issuable upon exercise of the Warrants or
the Company, fairly protect the purchase rights represented by any Warrant in
accordance with the essential intent and principles of such sections, then, in
each such case, upon the written request of the holders of a majority of the
shares of Common Stock issuable upon exercise of the Warrants, the Company
shall, at its cost and expense, appoint a firm of independent certified public
accountants of
9
national standing (which may be the regular auditors of the Company), which
shall give their opinion upon the adjustment, if any, on a basis consistent with
the essential intent and principles established in sections 2 and 3, necessary
to preserve, without dilution, the purchase rights represented by such Warrant.
Upon receipt of such opinion, the Company will promptly mail a copy thereof to
each holder of Warrants and upon the request of the holders of a majority of the
shares of Common Stock issuable upon exercise of the Warrants, shall make the
adjustments described therein.
4. Prohibited Actions. The Company will not, by amendment of its certificate
------------------
or articles of incorporation or through any consolidation, merger,
reorganization, transfer of assets, dissolution, issuance or sale of securities
or any other voluntary action, avoid the observance or performance of any of the
terms of this Warrant. Without limiting the generality of the foregoing, the
Company (a) will not permit the par value of any shares of Common Stock
receivable upon the exercise of this Warrant to exceed the amount payable
therefor upon such exercise, (b) will take all such action as may be necessary
or appropriate in order that the Company may validly and legally issue fully
paid and nonassessable shares of Common Stock on the exercise of the Warrants
from time to time outstanding and (c) will not take any action which results in
any adjustment of the Warrant Price if the total number of shares of Common
Stock (or Other Securities) issuable after the action upon the exercise of all
of the Warrants would exceed the total number of shares of Common Stock (or
Other Securities) then authorized by the Company's certificate or articles of
incorporation and available for the purpose of issue upon such exercise.
5. Report as to Adjustments. In each case of any adjustment or readjustment
------------------------
in the shares of Common Stock (or Other Securities) issuable upon the exercise
of this Warrant, the Company will promptly compute such adjustment or
readjustment in accordance with the terms of this Warrant and prepare a report
setting forth such adjustment or readjustment and showing in reasonable detail
the method of calculation thereof and the facts upon which such adjustment or
readjustment is based, including a statement of (a) the number of shares of
Common Stock outstanding or deemed to be outstanding, (b) the Warrant Price in
effect immediately prior to such adjustment and as adjusted and readjusted (if
required by section 2) on account thereof, and (c) the consideration received or
to be received by the Company for any Additional Shares of Common Stock issued
or sold or deemed to have been issued. The Company will mail, within 30 days of
such event requiring such adjustment, a copy of each such report to each holder
of a Warrant and will, upon the written request at any time of any holder of a
Warrant, furnish to such holder a like report setting forth the Warrant Price at
the time in effect and showing in reasonable detail how it was calculated. The
Company will also keep copies of all such reports and the reports referred to in
the last sentence of this section 5 at its principal office and will cause the
same to be available for inspection at such office during normal business hours
by any holder of a Warrant or its representatives or any prospective purchaser
of a Warrant designated by the
10
holder thereof. In addition to the report referred to above, the holders of not
less than a majority of the Common Stock issuable upon exercise of the
outstanding Warrants may request the Company, at the Company's cost and expense,
to cause independent certified public accountants of national standing (which
may be the regular auditors of the Company) to verify such computation and will
deliver to each holder a report showing in reasonable detail how such
verification was effected.
6. Notices of Corporate Action. In the event of
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(a) any taking by the Company of a record of the holders of any class of
securities for the purpose of determining the holders thereof who are entitled
to receive any dividend (other than an initial or any subsequent regular
periodic dividend, payable in cash out of earned surplus or net profits for
the year in which the dividend is incurred or the previous year) or other
distribution, or any right to subscribe for, purchase or otherwise acquire any
shares of stock of any class or any other securities or property, or to
receive any other right, which notice in the case of a dividend or
distribution of the type described in section 2.2 shall inform each holder of
a Warrant of the Company's option under such section, or
(b) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any consolidation or
merger involving the Company and any other Person or any transfer of all or
substantially all the assets of the Company to any other Person, or
(c) any voluntary or involuntary dissolution, liquidation or winding up
of the Company,
the Company will mail to each holder of a Warrant a notice specifying (i) the
date or expected date on which any such record is to be taken for the purpose of
such dividend, distribution or right, and the amount and character of such
dividend, distribution or right, and (ii) the date or expected date on which any
such reorganization, reclassification, recapitalization, consolidation, merger,
transfer, dissolution, liquidation or winding up is to take place and the time,
if any such time is to be fixed, as of which the holders of record of Common
Stock (or Other Securities) shall be entitled to exchange their shares of Common
Stock (or Other Securities) for the securities or other property deliverable
upon such reorganization, reclassification, recapitalization, consolidation,
merger, transfer, dissolution, liquidation or winding up. Such notice shall be
mailed at least 20 days prior to the date therein specified.
7. Registration of Common Stock. If any shares of Common Stock required to
----------------------------
be reserved for purposes of exercise of this Warrant require registration with
or approval of any governmental authority under any federal or state law
11
(other than the Securities Act) before such shares may be issued upon exercise,
the Company will, at its expense and as expeditiously as possible, use its best
efforts to cause such shares to be duly registered or approved, as the case may
be. At any such time, but only for so long, as Common Stock is registered under
the Exchange Act and listed on any national securities exchange, the Company
will, at its expense, obtain promptly and maintain the approval for listing in
each such exchange, upon official notice of issuance, the shares of Common Stock
issuable upon exercise of the then outstanding Warrants and maintain the listing
of such shares after their issuance; and the Company will also list on such
national securities exchange, will register under the Exchange Act and will
maintain, for so long as any shares of Common Stock are listed, such listing of,
any Other Securities that at any time are issuable upon exercise of the
Warrants, if and at the time that any securities of the same class shall be
listed on such national securities exchange by the Company.
8. Restrictions on Transfer. 8.1. Restrictive Legends. Except as otherwise
------------------------ -------------------
permitted by this section 8, each Warrant (including each Warrant issued upon
the transfer of any Warrant) shall be stamped or otherwise imprinted with a
legend in substantially the following form:
"The issuance and sale of shares upon the exercise of this Warrant have
not been registered under the Securities Act of 1933, as amended, and
accordingly neither this Warrant nor any such shares may be transferred in the
absence of such registration or any exemption therefrom under such Act. This
Warrant and such shares may be transferred only in compliance with the
conditions specified in this Warrant."
Except as otherwise permitted by this section 8, each certificate for Common
Stock (or Other Securities) issued upon the exercise of any Warrant, and each
certificate issued upon the transfer of any such Common Stock (or Other
Securities), shall be stamped or otherwise imprinted with a legend in
substantially the following form:
"The issuance and sale of the securities represented by this certificate
have not been registered under the Securities Act of 1933, as amended, and
such securities may not be transferred except pursuant to an effective
registration statement, or an exemption from registration, under said Act."
8.2. Notice of Proposed Transfer; Opinions of Counsel. Prior to any transfer
------------------------------------------------
of any Restricted Securities which are not registered under an effective
registration statement under the Securities Act, the holder thereof will give
written notice to the Company of such holder's intention to effect such transfer
and to comply in all other respects with this section 8.2. Each such notice (1)
shall describe the manner and circumstances of the proposed transfer and (2) be
12
accompanied by (a) an opinion of counsel for the holder or, if agreed to by
the Board of Directors of the Company, an opinion of counsel to the Company,
which opinion shall be reasonably satisfactory to the Company or (b) a no-action
letter from the Commission addressed to the Company, such holder or either of
their counsel to the effect that no registration statement is required because
of the availability of an exemption from registration under the Securities Act.
8.3. Termination of Restrictions. The restrictions imposed by this section 8
---------------------------
upon the transferability of Restricted Securities shall cease and terminate as
to any particular Restricted Securities (a) when such securities shall have been
effectively registered under the Securities Act or (b) when, in the opinion of
counsel for the holder thereof, which opinion shall be reasonably satisfactory
to the Company, such restrictions are no longer required in order to insure
compliance with the Securities Act. Whenever such restrictions shall cease and
terminate as to any Restricted Securities, the holder thereof shall be entitled
to receive from the Company, without expense (other than applicable transfer
taxes, if any), new securities of like tenor not bearing the applicable legends
required by section 8.1.
8.4. Expenses; Benefits to Certain Transferees. The Company will pay the
-----------------------------------------
reasonable fees, expenses and disbursements of counsel for the holder of
Restricted Securities (other than in-house counsel) and counsel for the Company
in connection with all opinions rendered pursuant to this section 8.
9. Availability of Information. The Company will comply with the reporting
---------------------------
requirements of Section 13 and 15(d) of the Exchange Act and will comply with
all other public information reporting requirements of the Commission (including
Rule 144 promulgated by the Commission under the Securities Act) from time to
time in effect and relating to the availability of an exemption from the
Securities Act for the sale of any Restricted Securities. The Company will also
cooperate with each holder of any Restricted Securities in supplying such
information as may be necessary for such holder to complete and file any
information reporting forms presently or hereafter required by the Commission as
a condition to the availability of an exemption from the Securities Act for the
sale of any Restricted Securities. The Company will furnish to each holder of
any Warrants, within 15 days upon their becoming available, copies of all
financial statements, reports, notices and proxy statements sent or made
available generally by the Company to its stockholders, and copies of all
regular and periodic reports filed by the Company with any securities exchange
or with the Commission. If the Company is not required to file such reports
with the Commission, it shall furnish to each holder of any Warrants, (i) as
soon as practicable after the end of each fiscal year (but not later than 120
days), audited consolidated financial statements of the Company together with
the report of the independent certified public accountant, (ii) as soon as
practicable after the end of each of the first three quarters of each fiscal
year (but not later than 60 days), consolidated financial information and
statements of the Company for such quarter, and (iii) material disclosure items
the Company would be required to disclose pursuant to Form 8-K (or a successor
form)
13
under the Exchange Act, but only when and to the extent the Company provides
such information to any of its lenders or other securityholders or to any
lenders or securityholders of its Affiliates.
10. Reservation of Stock, etc. The Company will at all times reserve and
-------------------------
keep available, solely for issuance and delivery upon exercise of the Warrants,
the number of shares of Common Stock (or Other Securities) from time to time
issuable upon exercise of all Warrants at the time outstanding. All such
securities issuable upon exercise of any Warrants shall be duly authorized and,
when issued upon such exercise, shall be validly issued and, in the case of
shares, fully paid and nonassessable with no liability on the part of the
holders thereof.
11. Ownership, Transfer and Substitution of Warrants. 11.1. Ownership of
------------------------------------------------ ------------
Warrants. The Company may treat the person in whose name any Warrant is
--------
registered on the register kept at the principal office of the Company as the
owner and holder thereof for all purposes, notwithstanding any notice to the
contrary, except that, if and when any Warrant is properly assigned in blank,
the Company may (but shall not be obligated to) treat the bearer thereof as the
owner of such Warrant for all purposes, notwithstanding any notice to the
contrary. Subject to section 8, a Warrant, if properly assigned, may be
exercised by a new holder without a new Warrant first having been issued.
11.2. Office; Transfer and Exchange of Warrants.
-----------------------------------------
(a) The Company will maintain its principal office within the continental
boundaries of the United States and all notices, presentations and demands
in respect of this Warrant may be made upon it at such location.
(b) Upon the surrender of any Warrant, properly endorsed, for registration of
transfer or for exchange at the principal office of the Company, the Company at
its expense will (subject to compliance with section 8, if applicable) execute
and deliver to or upon the order of the holder thereof a new Warrant or
Warrants of like tenor, in the name of such holder or as such holder (upon
payment by such holder of any applicable transfer taxes) may direct, calling in
the aggregate on the face or faces thereof for the number of shares of Common
Stock called for on the face or faces of the Warrant or Warrants so
surrendered.
11.3. Replacement of Warrants. Upon receipt of evidence reasonably
-----------------------
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Warrant (which, in the case of a holder of a Warrant which is an insurance
company (as defined in the Securities Act), an investment company registered
under the Investment Company Act of 1940, any employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act of 1974, any
domestic or foreign bank, savings and loan association (as defined in Section
14
(a)(1)(vi) of Rule 144A under the Securities Act) or an original holder of this
Warrant and its nominee (an "institutional holder"), may be a written statement
as to such loss, theft, destruction or mutilation, which statement shall be
reasonably satisfactory in form and substance to the Company) and, in the case
of any such loss, theft or destruction of any Warrant, upon delivery of
indemnity (which, in the case of an institutional holder of a Warrant, may be
such holder's unsecured written agreement of indemnity) reasonably satisfactory
to the Company in form and amount or, in the case of any such mutilation, upon
surrender of such Warrant for cancellation at the principal office of the
Company, the Company at its expense will execute and deliver, in lieu thereof, a
new Warrant of like tenor.
12. Definitions. As used herein, unless the context otherwise requires, the
-----------
following terms have the following respective meanings:
Additional Shares of Common Stock: All shares (including treasury shares) of
---------------------------------
Common Stock issued or sold (or deemed issued or sold pursuant to section 2.3 or
2.4) by the Company after the date hereof, whether or not subsequently
reacquired or retired by the Company, other than shares issued upon the exercise
of the Warrants.
Affiliate: With respect to a Person, any other Person that directly, or
---------
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, such Person.
Business Day: Any day other than a Saturday or a Sunday or a day on which
------------
commercial banking institutions in the City of New York are authorized by law to
be closed. Any reference to "days" (unless Business Days are specified) shall
mean calendar days.
Commission: The Securities and Exchange Commission or any other federal
----------
agency at the time administering the Securities Act.
Common Stock: As defined in the introduction to this Warrant, such term to
------------
include any stock into which such Common Stock shall have been changed or any
stock resulting from any reclassification of such Common Stock, and all other
stock of any class or classes (however designated) of the Company the holders of
which have the right, without limitation as to amount, either to all or to a
share of the dividends and liquidating dividends after the payment of dividends
and distributions on any shares entitled to preference.
Company: As defined in the introduction to this Warrant, such term to include
-------
any corporation which shall succeed to or assume the obligations of the Company
hereunder in compliance with section 3.
15
Convertible Securities: Any evidences of indebtedness, shares of stock (other
----------------------
than Common Stock) or other securities directly or indirectly convertible into
or exchangeable for Common Stock.
Current Market Price: On any date specified herein, the average daily Market
--------------------
Price during the period of the most recent 20 days, ending on such date, on
which the national securities exchanges were open for trading, except that if no
Common Stock is then listed or admitted to trading on any national securities
exchange or quoted in the over-the-counter market, the Current Market Price
shall be the Market Price on such date.
Exchange Act: The Securities Exchange Act of 1934, or any similar federal
------------
statute, and the rules and regulations of the Commission thereunder, all as the
same shall be in effect at the time.
Independent Financial Expert: A nationally recognized investment banking firm
----------------------------
that does not have a direct or indirect financial interest in the Company or any
of its affiliates and has not been and, at the time it is called upon to give
independent financial advice to the Company, is not (and none of whose
directors, officers, employees or affiliates is) a promoter, director or officer
of the Company or any of its affiliates, and has not been retained to provide,
within the past two years, any advice or opinions to the Company or any of its
affiliates except as an Independent Financial Expert.
Initiating Holders: Any holder or holders of Registrable Securities holding
------------------
at least a majority of the Registrable Securities by number of shares at the
time and initiating a request pursuant to section 20.1 for the registration of
all or part of such holder's or holders' Registrable Securities.
Market Price: On any date specified herein, the amount per share of the
------------
Common Stock, equal to (a) the last sale price of such Common Stock, regular
way, on such date or, if no such sale takes place on such date, the average of
the closing bid and asked prices thereof on such date, in each case as
officially reported on the principal national securities exchange on which such
Common Stock is then listed or admitted to trading, or (b) if such Common Stock
is not then listed or admitted to trading on any national securities exchange
but is designated as a national market system security by the NASD, the last
trading price of the Common Stock on such date, or (c) if there shall have been
no trading on such date or if the Common Stock is not so designated, the average
of the closing bid and asked prices of the Common Stock on such date as shown by
the NASD automated quotation system, or (d) if such Common Stock is not then
listed or admitted to trading on any national exchange or quoted in the over-
the-counter market, the fair value thereof determined in good faith by the Board
of Directors of the Company as of the last day of the most recently completed
fiscal quarter of the Company; provided that, at the request of the holders of a
--------
majority of the outstanding Warrants, such fair value determined by the Board of
Directors must be confirmed
16
in writing to the holders by an Independent Financial Expert, which shall be
selected by the Board of Directors of the Company, and retained on customary
terms and conditions and at the expense of the Company, the Independent
Financial Expert shall use one or more valuation methods that the Independent
Financial Expert, in its best professional judgment, determines to be most
appropriate. The Independent Financial Expert shall consult with management of
the Company in order to allow management to comment on the Independent Financial
Expert's valuation.
NASD: The National Association of Securities Dealers, Inc.
----
Options: Rights, options and warrants, except for any rights, options or
-------
warrants distributed to members of the management of the Company or any direct
or indirect subsidiary of the Company, to subscribe for, purchase or otherwise
acquire Common Stock or Convertible Securities.
Other Securities: Any stock (other than Common Stock) and other securities of
----------------
the Company or any other Person (corporate or otherwise) which the holders of
the Warrants at any time shall be entitled to receive, or shall have received,
upon the exercise of the Warrants, in lieu of or in addition to Common Stock, or
which at any time shall be issuable or shall have been issued in exchange for or
in replacement of Common Stock or Other Securities pursuant to section 3 or
otherwise.
Person: A corporation, an association, a partnership, an organization, a
------
business, an individual, a government or political subdivision thereof or a
governmental agency.
Registrable Securities: All shares of Common Stock issued or issuable upon
----------------------
exercise of the Warrants and any other securities of the Company or any of its
subsidiaries issued in exchange for, upon a reclassification, combination or
subdivision of, or in a distribution with respect to, such Common Stock or in
connection with a merger, consolidation or other reorganization of the Company.
As to any particular Registrable Securities that have been issued, such
securities shall cease to be Registrable Securities when (i) a registration
statement with respect to the sale of such securities shall have become
effective under the Securities Act and such securities shall have been disposed
of under such registration statement, (ii) such securities have been distributed
to the public pursuant to Rule 144 promulgated under the Securities Act, (iii)
such securities shall have been otherwise transferred or disposed of, new
certificates therefor not bearing a legend restricting further transfer shall
have been delivered by the Company and subsequent transfer or disposition of
such securities shall not require registration or qualification of such
securities under the Securities Act or any similar state law then in force, or
(iv) such securities shall have ceased to be outstanding.
17
Registration Expenses: Any and all out-of-pocket expenses incident to the
---------------------
Company's performance of or compliance with section 20 hereof, including,
without limitation, all Commission, stock exchange or NASD registration, filing
and listing fees, all fees and expenses of complying with securities and blue
sky laws (including the reasonable fees and disbursements of counsel in
connection with blue sky qualifications and NASD filings), all fees and expenses
of the transfer agent and registrar for the Common Stock, all printing expenses,
the fees and disbursements of counsel for the Company and the Company's
independent public accountants, including the expenses of any special audits
and/or "cold comfort" letters required by or incident to such performance and
compliance, and the reasonable fees and disbursements of one counsel retained by
the holders of Registrable Securities being registered to represent such group
of holders (which counsel shall be satisfactory to the holders of a majority of
the shares of Registrable Securities being registered), but excluding
underwriting discounts and commissions and applicable transfer and documentary
stamp taxes, if any, which shall be borne by the seller of the securities in all
cases.
Registration Rights Agreement: The Registration Rights Agreement dated as of
-----------------------------
May 17, 1996 among Xxxxxx-Xxxxxx, Inc., Xxxxxxx Xxxxx Capital Appreciation
Partnership No. B-XVIII, L.P., Xxxxxxx Xxxxx KECALP L.P. 1994, ML Offshore LBO
Partnership No. B-XVIII, ML IBK Positions, Inc., MLCP Associates L.P. No. II,
Xxxxxxx Xxxxx KECALP L.P. 1991, Xxxxxxx Xxxxx Capital Appreciation Partnership
No. XIII, L.P., ML Offshore LBO Partnership No. XIII, ML Employees LBO
Partnership No. I, L.P., Xxxxxxx Xxxxx KECALP L.P. 1987, Merchant Banking L.P.
No. II, MLCP Associates L.P. No. IV, The Equitable Life Assurance Society of the
United States, Equitable Deal Flow Fund, L.P., Equitable Variable Life Insurance
Company and Xxxxx X. Xxxxxxxx.
Restricted Securities: All of the following: (a) any Warrants bearing the
---------------------
applicable legend or legends referred to in section 8.1, (b) any shares of
Common Stock which have been issued upon the exercise of Warrants and which are
evidenced by a certificate or certificates bearing the applicable legend or
legends referred to in such section and (c) any shares of Common Stock which are
at the time issuable upon the exercise of Warrants and which, when so issued,
will be evidenced by a certificate or certificates bearing the applicable legend
or legends referred to in such section.
Securities Act: The Securities Act of 1933, or any similar federal statute,
--------------
and the rules and regulations of the Commission thereunder, all as the same
shall be in effect at the time.
Stockholders Securities: Securities proposed to be sold by those stockholders
-----------------------
who exercise their registration rights pursuant to section 4 of the Registration
Rights Agreement.
Warrant Price: As defined in section 2.1.
-------------
18
Warrants: As defined in the introduction to this Warrant.
--------
13. No Rights or Liabilities as Stockholder. Nothing contained in this
---------------------------------------
Warrant shall be construed as conferring upon the holder hereof any rights as a
stockholder of the Company or as imposing any obligation on such holder to
purchase any securities or as imposing any liabilities on such holder as a
stockholder of the Company, whether such obligation or liabilities are asserted
by the Company or by creditors of the Company.
14. Notices. All notices and other communications under this Warrant shall
-------
be in writing and shall be mailed by registered or certified mail, return
receipt requested, addressed (a) if to any holder of any Warrant, at the
registered address of such holder as set forth in the register kept at the
principal office of the Company, or (b) if to the Company, to the attention of
its Senior Vice President and General Counsel at its principal office, provided
--------
that the exercise of any Warrant shall be effective in the manner provided in
section 1.
15. Miscellaneous. This Warrant shall be construed and enforced in
-------------
accordance with and governed by the laws of the State of New York. The section
headings in this Warrant are for purposes of convenience only and shall not
constitute a part hereof. In case any provision in this Warrant shall be
invalid, illegal or unenforceable, the validity, legality or enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
16. Expiration. The right to exercise this Warrant shall expire at 5:00
----------
p.m., New York City time, on the earlier of (i) September 30, 2005 and (ii) the
registration pursuant to section 20 of all of the shares of Common Stock
issuable upon exercise of this Warrant or the termination of the restrictions on
such shares described in section 8.3(b), provided the holders of the Warrants
receive 30 days' notice of the termination of such restrictions. The Company
shall give notice to the holder of this Warrant on September 30, 2004 and
September 1, 2005 if the right to exercise this Warrant will expire pursuant to
paragraph (i); provided that, if the Company shall fail to give notice on
--------
September 1, 2005, this Warrant shall not expire until 5:00 p.m., New York City
time, on a date 30 days after the date the Company shall give such notice of the
expiration of the right to exercise this Warrant.
17. Persons Benefitting. This Warrant shall be binding upon and inure to the
-------------------
benefit of the Company and its respective successors, assigns, beneficiaries,
executors and administrators, and the holder from time to time of this Warrant.
Nothing in this Agreement is intended or shall be construed to confer upon any
Person, other than the Company and the holder of this Warrant, any right, remedy
or claim under or by reason of this Warrant or any part hereof.
19
18. Amendments. The Company may, with the consent of the holders of at least
----------
75% of the outstanding Warrants, by supplemental agreement or otherwise, make
any amendments to this Warrant, including section 3.3; provided, however,
-------- -------
without the consent of every holder affected thereby, the Company may not amend
the definition of Warrant Price or amend Sections 2 or 3 (except section 3.3) of
this Warrant.
19. Payments to Warrantholders. Any payment by the Company with respect to
--------------------------
the Warrants shall be made at the principal office of the Company, located on
the date hereof, at 0000 Xxxxxxxx Xxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx 00000.
20. Registration Rights. 20.1. Registration on Request.
------------------- -----------------------
(a) Request. Upon the written request of one or more Initiating Holders,
-------
requesting that the Company effect the registration under the Securities Act of
all or part of such Initiating Holders' Registrable Securities and specifying
the intended method of disposition thereof, the Company will promptly give
written notice of such requested registration to all registered holders of
Registrable Securities, and thereupon the Company will use its best efforts to
effect the registration under the Securities Act of
(i) the Registrable Securities which the Company has been so requested to
register by such Initiating Holders for disposition in accordance with the
intended method of disposition stated in such request,
(ii) all other Registrable Securities the holders of which shall have
made a written request to the Company for registration thereof within 30 days
after the giving of such written notice by the Company (which request shall
specify the intended method of disposition of such Registrable Securities),
and
(iii) all shares of Common Stock which the Company or any other holder of
Common Stock may elect to register in connection with the offering of
Registrable Securities pursuant to this section 20.1,
all to the extent requisite to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Registrable Securities and the
additional shares of Common Stock, if any, so to be registered.
No written request may be made pursuant to this section 20.1 prior to the
eighth anniversary of September 4, 1992. Subject to section 20.1(e), the
Company shall not be obligated to effect more than one registration pursuant to
this paragraph whether or not all outstanding Registrable Securities are
included in such registration.
20
(b) Expenses. The Company will pay all Registration Expenses incurred in
--------
connection with any registration requested pursuant to this section 20.1, and
underwriting discounts and commissions and transfer taxes and documentary stamp
taxes, if any, relating to the sale or disposition by a holder of Registrable
Securities shall be paid by such holder.
(c) Effective Registration Statement. A registration requested pursuant to
--------------------------------
this section 20.1 shall not be deemed to have been effected (i) unless a
registration statement with respect thereto has become effective and
remained effective for the period set forth in section 20.3(ii), provided
--------
that a registration which does not become effective after the Company has filed
a registration statement with respect thereto solely by reason of the refusal
to proceed of the Initiating Holders (other than any refusal to proceed based
upon advice of their counsel that the registration statement contains any
untrue statement of a material fact or omits to state a material fact necessary
to make the statements therein not misleading) shall be deemed to have been
effected by the Company at the request of such Initiating Holders, (ii) if
after it has become effective, such registration is interfered with by any stop
order, injunction or other order or requirement of the Commission or other
governmental agency or court for any reason, or (iii) if the conditions to
closing specified in the purchase agreement or underwriting agreement entered
into in connection with such registration are not satisfied, other than by
reason of some act or omission by such Initiating Holders.
(d) Selection of Underwriters. If a requested registration pursuant to this
-------------------------
section 20.1 involves an underwritten offering, the underwriter or underwriters
thereof shall be selected by the Company, provided, that each managing
--------
underwriter shall be a nationally recognized investment banking firm.
(e) Priority in Requested Registrations. If a requested registration pursuant
-----------------------------------
to section 20.1 involves an underwritten offering, and the managing underwriter
shall advise the Company in writing (with a copy to each holder of Registrable
Securities requesting registration) that, in its opinion, the number of
securities requested to be included in such registration (including securities
of the Company which are not Registrable Securities) exceeds the number which
can be sold in such offering (i) within a price range acceptable to the holders
of majority of the Registrable Securities so requested to be included or (ii)
without otherwise materially and adversely affecting the offering of the shares
being sold, then the Company will include in such registration, to the extent
of the number which the Company is so advised can be sold in such offering, (A)
first, all Registrable Securities requested to be registered, and second,
----- ------
securities the Company proposes to sell and other securities of the Company
included in such registration by the holders thereof and (B) in case the number
of Registrable Securities the registration of which
21
shall have been requested by all holders thereof shall in the aggregate exceed
the maximum number of shares specified by such managing underwriter, the
Registrable Securities the registration of which shall have been requested by
each holder thereof shall be included in such registration on a pro rata basis
--- ----
in the proportion that such Registrable Securities the registration of which
shall have been requested by such holder bears to the aggregate Registrable
Securities the registration of which shall have been requested by all holders
thereof. To the extent Registrable Securities are not included in the
registration as a result of this section 20.1(e), the right of the holders
thereof to register such Registrable Securities pursuant to this section 20.1
shall not be deemed to have been effected.
20.2. Incidental Registration.
-----------------------
(a) Right to Include Registrable Securities. If the Company at any time
---------------------------------------
proposes to register any of its Common Stock under the Securities Act (other
than a registration (i) on Form S-4, S-8 or any similar forms, (ii) in
connection with the acquisition by the Company of another company or (iii)
relating to shares of Common Stock issuable upon exercise of employee stock
options or in connection with any employee benefit or similar plan of the
Company), for sale, whether or not for its own account, on a form and in a
manner that would permit registration of Registrable Securities for sale to the
public under the Securities Act, it will give notice (the "Registration
Notice") to the holders of Registrable Securities at least 40 calendar days
prior to the anticipated filing date of the registration statement relating to
such registration of its intention to do so, describing such securities and
specifying the form and manner of the proposed registration (including, without
limitation, (x) whether such registration will be in connection with an
underwritten offering of the Common Stock and, if so, the identity of the
investment banker (or investment bankers) managing the offering (collectively,
the "managing underwriter") and whether such offering will be pursuant to a
"best efforts" or "firm commitment" underwriting and (y) the price (net of any
underwriting commissions, discounts and the like) at which the Registrable
Securities, if any, are reasonably expected to be sold if disclosure of such
price is acceptable to the managing underwriter). Upon the written request of
any such holder of Registrable Securities (a "Requesting Holder") to include in
such proposed registration Registrable Securities for sale for his account,
which notice is delivered to the Company within 30 calendar days after the
Registration Notice is deemed to be given and which request shall specify the
number of Registrable Securities intended to be disposed of by such Requesting
Holder, the Company will effect the registration under the Securities Act of
all of the Registrable Securities that the Company has been so requested to
register; provided, however, that:
-------- -------
22
(i) if, at any time after giving such written notice of its intention to
register any securities and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason not to register such securities, the Company shall
give written notice of such determination to each Requesting Holder, and
thereupon shall be relieved of its obligation to register any Registrable
Securities in connection with such registration (but not from its obligation
to pay the Registration Expenses in connection therewith);
(ii) if such registration involves a firm commitment or best efforts
underwritten offering (an "Underwritten Offering"), all Requesting Holders
must sell their Registrable Securities to the underwriters selected by the
Company on the same terms and conditions as apply to the Company or the other
selling stockholders and must enter into the underwriting agreement which the
Company or the other selling stockholders enter into and any other related
agreements; and
(iii) in case of a determination by the Company or the other selling
stockholders to delay the registration of its equity securities, the Company
shall be permitted to delay the registration of such Registrable Securities
for the same period as the delay in registering such other equity securities.
(b) Expenses. The Registration Expenses incurred in connection with each
--------
registration of Registrable Securities requested pursuant to this section 20.2
shall be paid by the Company, and each Requesting Holder shall pay all
underwriting discounts and commissions and transfer taxes and documentary stamp
taxes, if any, relating to the sale or disposition by such holder of
Registrable Securities pursuant to a registration statement effected pursuant
to this section 20.2.
(c) Priority in Incidental Registration. If a registration pursuant to this
-----------------------------------
section 20.2 involves an Underwritten Offering and the managing underwriter
advises the Company that, in its judgment, the number of shares proposed to be
included in such offering (including all Registrable Securities) exceeds the
number which can be sold without having an adverse effect on such offering,
including the price at which such securities can be sold, then the Company will
promptly so advise each Requesting Holder and will include in such registration
(i) first, the securities the Company or the person initiating such
-----
registration proposes to sell and (ii) second, the number of such Registrable
------
Securities and the number of Stockholders Securities, if any, requested to be
included in such registration that, in the opinion of such managing
underwriter, can be sold without having the adverse effect referred
23
to above, such amount to be allocated pro rata among all such Requesting
Holders and the holders of such Stockholders Securities.
(d) Selection of Underwriters. In connection with any Underwritten Offering
-------------------------
pursuant to this section 20.2, the Company shall have the right to select
the managing underwriter with respect to the offering.
(e) No registration effected under this section 20.2 shall relieve the Company
of its obligations to effect any registration pursuant to section 20.1.
20.3. Registration Procedures. If and whenever the Company is required to
-----------------------
use its best efforts to effect or cause the registration of any Registrable
Securities under the Securities Act as provided in section 20.1 or 20.2, the
Company will, as expeditiously as possible:
(i) prepare and file with the Commission, in the case of a registration
pursuant to section 20.1, within 150 days after the request by the Initiating
Holders to register their Registrable Securities, a registration statement
with respect to such Registrable Securities on any form for which the Company
then qualifies or which counsel for the Company shall deem appropriate, as the
case may be, and which form shall be available for the sale of the Registrable
Securities in accordance with the intended methods of distribution thereof,
and use its best efforts to cause such registration statement to become and
remain effective; provided that before filing with the Commission a
--------
registration statement or prospectus or any amendments or supplements thereto,
the Company will (A) furnish to one counsel, selected by the holders of a
majority of the Registrable Securities covered by such registration statement,
copies of all such documents proposed to be filed, which documents will be
subject to the timely review of such counsel, and (B) notify each holder of
Registrable Securities covered by such registration statement of (x) any
request by the Commission to amend such registration statement or amend or
supplement any prospectus, or (y) any stop order issued or threatened by the
Commission, and take all reasonable actions required to prevent the entry of
such stop order or to remove it if entered;
(ii) prepare and file with the Commission such amendments and supplements
to such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective for a period
of not less than 180 days or such shorter period which will terminate when all
Registrable Securities covered by such registration statement have been sold
(but not before the expiration of the 90-day period referred to in Section
4(3) of the Securities Act and Rule 174, or any successor thereto, thereunder,
if applicable) and comply with the provisions of the
24
Securities Act with respect to the disposition of all securities covered by
such registration statement during such period in accordance with the intended
methods of disposition by the seller or sellers thereof set forth in such
registration statement;
(iii) furnish to each seller of Registrable Securities covered by the
registration statement and to each underwriter, if any, of such Registrable
Securities, without charge, such number of copies of such registration
statement, each amendment and supplement thereto (in each case including all
exhibits thereto), and the prospectus included in such registration statement
(including each preliminary prospectus), and such other documents, as such
holder may reasonably request, in order to facilitate the public sale or other
disposition of the Registrable Securities owned by such holder;
(iv) use its best efforts to register or qualify such Registrable
Securities covered by such registration statement under such other securities
or blue sky laws of such jurisdictions as any seller thereof, and underwriter,
if any, of Registrable Securities covered by such registration statement
reasonably requests and do any and all other acts and things which may be
reasonably necessary or advisable to enable such seller and each underwriter,
if any, to consummate the disposition in such jurisdictions of the Registrable
Securities owned by such holder; provided, however, that the Company shall not
-------- -------
for any such purpose be required to (A) qualify to do business as a foreign
corporation in any jurisdiction where, but for the requirements of this
section 20.3(iv), it is not then so qualified, (B) subject itself to taxation
in any such jurisdiction, or (C) take any action which would subject it to
consent to general or unlimited service of process in any such jurisdiction
where it is not then so subject;
(v) use its best efforts to cause such Registrable Securities covered by
such registration statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Company to enable the seller or sellers thereof
to consummate the disposition of such Registrable Securities;
(vi) immediately notify each seller of Registrable Securities covered by
such registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of any
event which comes to the Company's attention if, as a result of such event,
the prospectus included in such registration statement, as then in effect,
includes any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements made therein, in the light of
the circumstances
25
under which they were made, not misleading and, at the request of any such
seller, deliver a reasonable number of copies of an amended or supplemental
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus shall not include
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading;
(vii) otherwise use its best efforts to comply with all applicable rules
and regulations of the Commission and make available to its security holders,
in each case as soon as practicable, an earnings statement covering a period
of at least twelve months, beginning with the first day of the Company's first
full fiscal quarter after the effective date of the registration statement (as
the term "effective date" is defined in Rule 158(c) under the Securities Act),
which earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act including, at the option of the Company, Rule 158 thereunder;
(viii) use its reasonable best efforts to cause all such Registrable
Securities to be listed on a national securities exchange or the National
Association of Securities Dealers National Market System, as the case may be,
and to enter into such customary agreements including a listing application
and indemnification agreement in customary form, provided that the applicable
--------
listing requirements are satisfied, and to provide a transfer agent and
registrar for such Registrable Securities covered by such registration
statement no later than the effective date of such registration statement;
(ix) use its best efforts to obtain a "cold comfort" letter from the
independent public accountants for the Company in customary form and covering
matters of the type customarily covered by such letters as the holders of a
majority of the Registrable Securities being sold reasonably request and
provided that such request is reasonable in the managing underwriter's point
of view;
(x) execute and deliver all instruments and documents (including, in an
Underwritten Offering, an underwriting agreement in customary form) and take
such other actions and obtain such certificates and opinions as the holders of
a majority of the Registrable Securities being sold reasonably request in
order to effect an underwritten public offering of such Registrable
Securities; the Company may require each seller of Registrable Securities as
to which any registration is being effected to furnish to the Company such
information regarding such seller and the distribution of such Registrable
Securities as the Company may from time to time
26
reasonably request in writing in connection with effecting such offering;
(xi) permit any seller which the Board of Directors determines in good
faith after consultation with such seller and its advisors to be a controlling
person of the Company (within the meaning of the Securities Act or the
Exchange Act) to participate in the preparation of such registration statement
and to include therein material, furnished to the Company in writing, which in
the reasonable judgment of such seller should be included and which is
acceptable to the Company.
Each seller of Registrable Securities will, upon receipt of any notice from
the Company of the happening of any event of the kind described in section
20.3(vi), forthwith discontinue disposition of the Registrable Securities
pursuant to the registration statement covering such Registrable Securities
until such seller's receipt of the copies of the supplemented or amended
prospectus contemplated by section 20.3(vi), and, if so directed by the Company,
such seller will deliver to the Company (at the Company's expense) all copies,
other than permanent file copies, then in such seller's possession, of the
prospectus covering such Registrable Securities at the time of receipt of such
notice.
20.4. Underwritten Offerings.
----------------------
(a) If a registration pursuant to section 20.1 or 20.2 involves an
Underwritten Offering, each holder of Registrable Securities agrees, whether or
not such holder's Registrable Securities are included in such registration, not
to effect any public sale or distribution, including any sale pursuant to Rule
144 under the Securities Act, of any Registrable Securities, or of any security
convertible into or exchangeable or exercisable for any Registrable Securities
(other than as part of such Underwritten Offering), without the consent of the
managing underwriter, during a period commencing seven calendar days before and
ending 90 calendar days (or such number of days as the managing underwriter
shall designate, but not more than 180 days) after the effective date of such
registration.
(b) The Company agrees, if so required by the managing underwriter, not to
effect any public sale or distribution of Common Stock or securities convertible
into Common Stock during the seven days prior to and the 60 days after any
Underwritten Offering pursuant to section 20.1 has become effective, except as
part of such Underwritten Offering and except pursuant to registrations on Form
S-4 or S-8 or any similar forms.
(c) If requested by the underwriters for any underwritten offering by holders
of Registrable Securities pursuant to a registration requested under section
20.1, the Company will enter into an underwriting agreement
27
with such underwriters for such offering, such agreement to be reasonably
satisfactory in substance and form to the Company, each such holder and the
underwriters, and to contain such representations and warranties by the Company
and such other terms as are generally prevailing in agreements of this type,
including, without limitation, indemnities to the effect and to the extent
provided in section 20.5. The holders of the Registrable Securities will
cooperate with the Company in the negotiation of the underwriting agreement and
will give consideration to the reasonable suggestions of the Company regarding
the form thereof. The holders of Registrable Securities to be distributed by
such underwriters shall be parties to such underwriting agreement.
20.5. Indemnification.
---------------
(a) Indemnification by the Company. In the event of any registration of any
------------------------------
securities of the Company under the Securities Act pursuant to section 20.1 or
20.2, the Company will, and it hereby does, indemnify and hold harmless, to the
extent permitted by law, the holders of any Registrable Securities covered by
such registration statement, its directors, trustees and officers or general and
limited partners (and directors, trustees and officers thereof and, if such
holder is a portfolio or investment fund, its investment advisors or agents),
each other Person who participates as an underwriter in the offering or sale of
such securities and each other Person, if any, who controls such holder or any
such underwriter within the meaning of the Securities Act, as follows:
(i) against any and all loss, liability, claim, damage or expense, joint
or several, arising out of or based upon an untrue statement or alleged untrue
statement of a material fact contained, on the effective date thereof, in any
registration statement (or any amendment or supplement thereto), including all
documents incorporated therein by reference, or in any preliminary prospectus
or prospectus (or any amendment or supplement thereto) or the omission or
alleged omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense, joint
or several, to the extent of the aggregate amount paid in settlement of any
litigation, or investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, if
such settlement is effected with the written consent of the Company; and
28
(iii) against any and all expense reasonably incurred by them in
connection with investigating, preparing or defending against any litigation,
or investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under subparagraph (i) or (ii) above;
provided, however, that this indemnity does not apply to any loss, liability,
-------- -------
claim, damage or expense to the extent arising out of an untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of any underwriter or such holder expressly for use in the preparation of
any registration statement (or any amendment thereto) or any preliminary
prospectus or prospectus (or any amendment or supplement thereto); and provided,
--------
further, that the Company will not be liable to (i) any Person who participates
-------
as an underwriter in the offering or sale of Registrable Securities or any other
Person, if any, who controls such underwriter within the meaning of the
Securities Act or (ii) any such holder, in each case, under the indemnity
agreement in this section 20.5(a), with respect to any preliminary prospectus or
the final prospectus or the final prospectus as amended or supplemented, as the
case may be, to the extent that any such loss, liability, claim, damage or
expense of such underwriter or controlling Person or such holder results from
the fact that such underwriter or holder sold Registrable Securities to a Person
to whom there was not sent or given, at or prior to the written confirmation of
such sale, a copy of the final prospectus or of the final prospectus as then
amended or supplemented, whichever is most recent, if the Company has previously
furnished copies thereof to such underwriter or holder. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of such holder or any such director, trustee, officer, general or limited
partner, investment advisor or agent, underwriter or controlling Person and
shall survive the transfer of such securities by such holder.
(b) Indemnification by the Sellers. The Company may require, as a
------------------------------
condition to including any Registrable Securities in any registration statement
filed in accordance with section 20.1 or 20.2, that it shall have received an
undertaking, reasonably satisfactory to it, from the prospective seller of such
Registrable Securities or any underwriter, to indemnify and hold harmless (in
the same manner and to the same extent as set forth in section 20.5(a)) the
Company and its directors, officers and controlling Persons, and their
respective directors, officers, general and limited partners, managing
directors, and, in the case of an undertaking from a prospective seller of
Registrable Securities, any underwriter, and their respective controlling
Persons with respect to any statement or alleged statement in or omission or
alleged omission from such registration statement, any
29
preliminary, final or summary prospectus contained therein, or any amendment or
supplement, if such statement or alleged statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such seller or underwriter,
specifically stating that it is for use in the preparation of such registration
statement, preliminary, final or summary prospectus or amendment or supplement.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company, any seller, or any
underwriter, as the case may be, or any of their respective directors, trustees,
officers, controlling Persons, general or limited partners or managing directors
and shall survive the transfer of such securities by such underwriter. The
obligations of the Company and such sellers pursuant to this section 20.5 are to
be several; provided, however, that, with respect to each claim pursuant to this
-------- -------
section 20.5, the Company shall be liable for the full amount of such claim and
each such seller's maximum liability under this section shall be limited to an
amount equal to the net proceeds actually received by such seller (after
deducting any underwriting discount and expenses) from the sale of Registrable
Securities being sold pursuant to such registration statement or prospectus by
such seller.
(c) Notices of Claims, etc. Promptly after receipt by an indemnified party
----------------------
hereunder of written notice of the commencement of any action or proceeding
involving a claim referred to in this section 20.5, such indemnified party will,
if a claim in respect thereof is to be made against an indemnifying party, give
written notice to the latter of the commencement of such action; provided,
--------
however, that the failure of any indemnified party to give notice as provided
-------
herein shall not relieve the indemnifying party of its obligations under this
section 20.5, except to the extent that the indemnifying party is actually
prejudiced by such failure to give notice. In case any such action is brought
against an indemnified party, the indemnifying party will be entitled to
participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified, to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party will not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof, unless in such indemnified
party's reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, in which case the
indemnifying party shall not be liable for the fees and expenses of (i) more
than one counsel for all holders of Registrable Securities selected by a
majority of the holders of Registrable Securities being registered, (ii) more
than one counsel for the underwriters or (iii) more than one counsel for the
Company in connection with any one action or separate but similar or related
actions. An indemnifying party who is not entitled to, or elects not to, assume
the defense of a claim will not be obligated to pay the fees and
30
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim, in which event the indemnifying party shall be obligated to pay the fees
and expenses of such additional counsel or counsels.
The indemnifying party will not, without the prior written consent of each
indemnified party, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action, suit or proceeding in respect of
which indemnification may be sought hereunder (whether or not such indemnified
party or any Person who controls such indemnified party is a party to such
claim, action, suit or proceeding), unless such settlement, compromise or
consent includes an unconditional release of such indemnified party from all
liability arising out of such claim, action, suit or proceeding.
Notwithstanding anything to the contrary set forth herein, and without
limiting any of the rights set forth above, in any event any party will have the
right to retain, at its own expense, counsel with respect to the defense of a
claim; provided, however, that such counsel shall be required to
-------- -------
cooperate with any counsel retained by the Company, unless they are adverse
parties.
(d) Other Indemnification. The Company and each seller of Registrable
---------------------
Securities shall provide for the foregoing indemnity (with appropriate
modifications) in any underwriting agreement with respect to any required
registration or other qualification of securities under any federal or state law
or regulation of any governmental authority other than the Securities Act.
31
20.6. Contribution. If the indemnification provided for in section 20.5 is
------------
unavailable or insufficient to hold harmless an indemnified party under section
20.5(a) or (b), then each indemnifying party shall contribute to the amount paid
or payable by such indemnified party as a result of the losses, claims, damages
or liabilities referred to in section 20.5(a) or (b) in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one
hand and the indemnified party on the other in connection with statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations, including,
without limitation, the relative benefits received by each party from the
offering of the Registrable Securities, the parties' relative knowledge and
access to information concerning the matter with respect to which the claim was
asserted and the opportunity to correct and prevent any statement or omission.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the indemnifying party or the indemnified party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statements or omission. The parties hereto agree that it
would not be just and equitable if contributions pursuant to this section 20.6
were to be determined by pro rata or per capita allocation (even if the
underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to in the first sentence of this section 20.6. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this section 20.6 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim (which
shall be limited as provided in section 20.5(c) if the indemnifying party has
assumed the defense of any such action in accordance with the provisions
thereof) which is the subject of this section 20.6. Promptly after receipt by
an indemnified party under this section 20.6 of notice of the commencement of
any action against such party in respect of which a claim for contribution may
be made against an indemnifying party under this section 20.6, such indemnified
party shall notify the indemnifying party in writing of the commencement thereof
if the notice specified in section 20.5(c) has not been given with respect to
such action; provided that the omission so to notify the indemnifying party
--------
shall not relieve the indemnifying party from any liability which it may have to
any indemnified party otherwise under this section 20.6, except to the extent
that the indemnifying party is actually prejudiced by such failure to give
notice. The Company and each holder of Registrable Securities agrees with each
other and the underwriters of the Registrable Securities, if requested by such
underwriters, that (i) the underwriters' portion of such contribution shall not
exceed the underwriting discount and (ii) the amount of such contribution of a
seller of Registrable Securities shall not exceed an amount equal to the net
proceeds actually received by such seller from the sale of Registrable
Securities in the offering to which the losses, liabilities, claims, damages or
expenses of the indemnified parties relate. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f)
32
of the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
JP FOODSERVICE, INC.
By:
-------------------------------
Chairman and Chief
Executive Officer
[Seal]
------------------------------
Secretary
33
FORM OF SUBSCRIPTION
--------------------
[To be executed only upon exercise of Warrant]
To JP FOODSERVICE, INC.
The undersigned registered holder of the within Warrant hereby irrevocably
exercises such Warrant for, and purchases thereunder, shares of Common
Stock of JP FOODSERVICE, INC. and herewith makes payment of $ therefor,
and requests that the certificates for such shares be issued in the name of, and
delivered to , whose address is .
Dated:
------------------------------
(Signature must conform in all
respects to name of holder as
specified on the face of
Warrant)
------------------------------
(Street Address)
------------------------------
(City) (State) (Zip Code)
34
FORM OF ASSIGNMENT
------------------
[To be executed only upon transfer of Warrant]
For valued received, the undersigned registered holder of the within Warrant
hereby sells, assigns and transfers unto the rights represented by
such Warrant to purchase shares of Common Stock of JP FOODSERVICE, INC.
to which such Warrant relates, and appoints Attorney to make such
transfer on the books of JP FOODSERVICE, INC. maintained for such purpose, with
full power of substitution in the premises.
Dated:
------------------------------
(Signature must conform in all
respects to name of holder as
specified on the face of
Warrant)
------------------------------
(Street Address)
-----------------------------
(City) (State) (Zip Code)
Signed in the presence of:
--------------------------
35
