EXHIBIT 10.26
EXECUTION COPY
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WARRANT AGREEMENT
Between
CHART INDUSTRIES, INC.
and
THE HOLDERS PARTY HERETO
Dated as of December 31, 2002
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS AND ACCOUNTING MATTERS......................................... 1
SECTION 1.01. Definitions...................................................... 1
SECTION 1.02. Terms Generally.................................................. 7
SECTION 1.03. Accounting Terms and Determinations.............................. 7
ARTICLE II PURCHASE AND SALE OF WARRANTS............................................. 8
SECTION 2.01. Authorization and Issuance of Warrant Stock and Warrants......... 8
SECTION 2.02. Issuance of Warrants............................................. 8
SECTION 2.03. Purchase for Initial Holders' Account............................ 8
SECTION 2.04. Securities Act Compliance........................................ 9
SECTION 2.05. Listing.......................................................... 9
ARTICLE III REPRESENTATIONS AND WARRANTIES........................................... 9
SECTION 3.01. Existence; Qualification......................................... 10
SECTION 3.02. No Breach........................................................ 10
SECTION 3.03. Corporate Action................................................. 10
SECTION 3.04. Approvals........................................................ 10
SECTION 3.05. Investment Company Act........................................... 11
SECTION 3.06. Public Utility Holding Company Act............................... 11
SECTION 3.07. Capitalization................................................... 11
SECTION 3.08. Private Offering................................................. 12
SECTION 3.09. Litigation....................................................... 12
SECTION 3.10. Brokers.......................................................... 12
SECTION 3.11. SEC Documents; Financial Statements.............................. 12
ARTICLE IV RESTRICTIONS ON TRANSFERABILITY........................................... 13
SECTION 4.01. Transfers Generally.............................................. 13
SECTION 4.02. Transfers of Restricted Securities Pursuant to Registration
Statement and Exemptions................................................... 13
SECTION 4.03. Restrictive Legends.............................................. 13
SECTION 4.04. Termination of Restrictions...................................... 14
SECTION 4.05. Dispositions of Warrants and Warrant Stock....................... 14
SECTION 4.06. Provisions Applicable to Regulated Holders....................... 15
SECTION 4.07. Provisions Applicable to Related Persons......................... 16
ARTICLE V ADJUSTMENTS OF STOCK UNITS................................................. 16
SECTION 5.01. Subdivisions and Combinations.................................... 17
SECTION 5.02. Issuance of Common Stock......................................... 17
SECTION 5.03. Issuance of Other Securities, Rights or Obligations.............. 18
SECTION 5.04. Superseding Adjustment........................................... 19
SECTION 5.05. Other Provisions Applicable to Adjustments....................... 20
(i)
SECTION 5.06. Merger, Consolidation or Disposition of Assets................... 20
SECTION 5.07. Other Action Affecting Common Stock.............................. 20
SECTION 5.08. Exclusions from Adjustment....................................... 21
SECTION 5.09. Notice of Adjustments............................................ 21
SECTION 5.10. Notice of Certain Corporate Action............................... 21
ARTICLE VI REGISTRATION RIGHTS....................................................... 22
SECTION 6.01. Demand and Piggyback Registrations............................... 22
SECTION 6.02. Hold-Back Agreements; Cutbacks................................... 24
SECTION 6.03. Registration Procedures.......................................... 26
SECTION 6.04. Registration Expenses............................................ 29
SECTION 6.05. Indemnification.................................................. 29
SECTION 6.06. No Other Registration Rights..................................... 32
ARTICLE VII TAG-ALONG SALE........................................................... 32
SECTION 7.01. Tag-Along Rights................................................. 32
SECTION 7.02. Procedures....................................................... 34
SECTION 7.03. Amendment of Article VII......................................... 34
ARTICLE VIII HOLDERS' RIGHTS......................................................... 34
SECTION 8.01. Delivery Expenses................................................ 34
SECTION 8.02. Taxes............................................................ 34
SECTION 8.03. Replacement of Instruments....................................... 35
SECTION 8.04. Indemnification.................................................. 35
SECTION 8.05. Inspection Rights................................................ 36
ARTICLE IX OTHER COVENANTS OF THE ISSUER............................................. 36
SECTION 9.01. Financial Statements, Etc........................................ 36
SECTION 9.02. Related Party Transactions....................................... 36
SECTION 9.03. Restrictions on Performance...................................... 37
SECTION 9.04. Modification of Other Equity Documents........................... 37
SECTION 9.05. Reservation and Authorization of Common Stock.................... 37
SECTION 9.06. Notice of Expiration Date........................................ 38
SECTION 9.07. Documentation of Subsequent Warrants............................. 38
ARTICLE X MISCELLANEOUS.............................................................. 38
SECTION 10.01. Waiver........................................................... 38
SECTION 10.02. Notices.......................................................... 38
SECTION 10.03. Expenses, Etc.................................................... 39
SECTION 10.04. Amendments, Etc.................................................. 39
SECTION 10.05. Successors and Assigns........................................... 39
SECTION 10.06. Survival......................................................... 39
SECTION 10.07. Specific Performance............................................. 39
SECTION 10.08. Captions......................................................... 40
SECTION 10.09. Counterparts..................................................... 40
(ii)
SECTION 10.10. Governing Law.................................................... 40
SECTION 10.11. Severability..................................................... 40
SECTION 10.12. Entire Agreement................................................. 40
SECTION 10.13. Rights of Holders of Warrants.................................... 40
SCHEDULES
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Schedule 2.02 - Allocation of Warrants
Schedule 3.07(a) - Existing Convertible Securities and Options
Schedule 3.07(b) - Existing Registration Rights
ANNEXES
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Annex 1 - Form of Warrant
Annex 2 - Form of Assignment
Annex 3 - Form of Joinder Agreement
(iii)
WARRANT AGREEMENT dated as of December 31, 2002 between CHART
INDUSTRIES, INC., a company duly organized and validly existing under the laws
of the State of Delaware (the "Issuer"), and each Person named under the caption
"INITIAL HOLDERS" on the signature pages hereof (each an "Initial Holder" and,
collectively, the "Initial Holders").
WHEREAS, the Issuer, certain of its subsidiaries and the Initial
Holders (or their respective affiliates) are parties to a Credit Agreement dated
as of April 12, 1999 (as amended and in effect, the "Credit Agreement";
references to the Credit Agreement herein shall apply whether or not the Credit
Agreement is then in force and without regard to amendments thereto unless such
amendments thereto have been consented to by the Required Holders), providing,
subject to the terms and conditions thereof, for the extension of credit by the
Initial Holders (or such affiliates) to the Issuer.
WHEREAS, pursuant to the requirements of Section 6.12 of the Credit
Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Issuer has agreed to issue one
or more Warrants (as hereinafter defined) to each Initial Holder providing for
the purchase of shares of Common Stock (as hereinafter defined), in the manner
hereinafter provided.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
SECTION 1.01. Definitions. As used in this Agreement, the following
terms shall have the following meanings:
"Affiliate" means, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Board" means the Board of Directors of the Issuer.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to remain close.
"Commission" means the Securities and Exchange Commission or any other
similar or successor agency of the federal government administering the
Securities Act and/or the Exchange Act.
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"Common Stock" means the Issuer's Common Stock, par value $.01 per
share, as constituted on the Issuance Date and any stock into which such Common
Stock may thereafter be converted or changed, and also shall include any other
stock of the Issuer of any other class, which is not preferred as to dividends
or assets over any other class of any other stock of the Issuer. References
herein and in the Warrants to the Common Stock outstanding "on a fully diluted
basis" at any time means the number of shares of Common Stock then issued and
outstanding, assuming full conversion, exercise and exchange of all Convertible
Securities and "in the money" Options (as of the relevant date of determination)
that are exchangeable for, or exercisable or convertible into, Common Stock,
including the Warrants. All references to Common Stock herein shall be subject
to appropriate adjustment by reason of any stock dividend, split, reverse split,
combination, recapitalization or any similar corporate transaction.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" shall have meanings correlative thereto.
"Convertible Securities" means evidences of indebtedness, interests or
other securities or rights which are exchangeable for or exercisable or
convertible into shares of Common Stock either immediately or upon the arrival
of a specified date or the occurrence of a specified event, but shall not
include Options.
"Credit Agreement" has the meaning specified in the recital of this
Agreement.
"Current Market Value" means, on any date, (i) the average of the daily
market prices for each day during the 10 consecutive trading days ending on the
last trading day prior to such date or (ii) if the applicable securities are not
publicly traded or are not registered under the Exchange Act, the fair value of
such securities as reasonably determined in good faith by the Board. The market
price for each such Business Day shall be the last sale price on such day as
reported in the Consolidated Transaction Reporting System or as reported for
such day by The Wall Street Journal, as applicable, or if such last sale price
is not available, the average of the closing bid and asked prices as reported in
either such system, or in any other case in which such price is not available,
the average of the closing bid and asked prices quoted for such day as reported
by The Wall Street Journal and the National Quotation Bureau pink sheets.
"Current Warrant Price" means, as at any date, the amount per share of
Common Stock equal to the quotient resulting from dividing the Exercise Price
per Stock Unit in effect on such date by the number of shares (including any
fractional share) of Common Stock comprising a Stock Unit on such date.
"Demand Notice" has the meaning specified in Section 6.01(a).
"Demand Registration" has the meaning specified in Section 6.01(a).
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"Exchange Act" means the Securities Exchange Act of 1934, as amended,
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.
"Exercise Price" has the meaning specified in the form of the Warrant
attached as Annex 1.
"Expiration Date" has the meaning specified in the form of the Warrant
attached as Annex 1.
"Financial Statements" has the meaning specified in Section 3.11.
"GAAP" means generally accepted accounting principles, consistently
applied throughout the specified period.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory, monetary or administrative powers or functions of or
pertaining to government.
"Holder" means any Person (including, without limitation, each Initial
Holder) who acquires Warrants or Warrant Stock pursuant to the provisions of
this Agreement, including any transferees of Warrants or Warrant Stock, and any
successor thereto; provided that a holder of Warrants or Warrant Stock purchased
pursuant to an effective registration statement, pursuant to Rule 144 or
pursuant to any other sale of securities in a public trading market shall not be
deemed a Holder. No Person shall be a Holder unless a Warrant has been
effectively assigned to such Person.
"Immediate Family" means, with respect to any Person who is a natural
person, such Person's children, siblings and parents, but only if such child,
sibling or parent lives in such Person's home.
"Indemnified Party" has the meaning specified in Section 6.05(c).
"Indemnifying Party" has the meaning specified in Section 6.05(c).
"Initial Holder" has the meaning specified in the preamble of this
Agreement.
"Issuance Date" means December 31, 2002.
"Issuer" has the meaning specified in the preamble of this Agreement.
"Joinder Agreement" has the meaning specified in Section 7.01(c).
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"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For purposes of this Agreement, a Person shall be deemed to own subject to a
Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement relating to such asset.
"Loans" has the meaning assigned to such term in the Credit Agreement.
"Losses" has the meaning specified in Section 6.05(a).
"NASD" means the National Association of Securities Dealers.
"Notes" means the promissory notes of the Issuer issued pursuant to the
Credit Agreement.
"NYSE" means the New York Stock Exchange.
"Option" means any warrant, option or other right to subscribe for or
purchase shares of Common Stock.
"Option Plans" means any stock option plan, stock grant plan,
restricted stock plan, stock bonus plan, stock purchase, stock option or
employment arrangement or any other equity compensation arrangement approved
from time to time by the Board.
"Other Equity Documents" means the certificate of incorporation of the
Issuer, the by-laws of the Issuer and any other instrument or document of
organization or governance of the Issuer.
"Other Holder" means any Person who acquires Other Warrants or Other
Warrant Stock, including any transferees of Other Warrants or Other Warrant
Stock; provided that a holder of Other Warrants or Other Warrant Stock purchased
pursuant to an effective registration statement, pursuant to Rule 144 or
pursuant to any other sale of securities in a public trading market shall not be
deemed an Other Holder.
"Other Warrant" and "Other Warrants" means (i) the warrants to purchase
Common Stock issued pursuant to the Warrant Agreement dated as of June 28, 2002
between the Issuer and the holders party thereto and (ii) the warrants to
purchase Common Stock issued pursuant to the Warrant Agreement dated as of
September 30, 2002 between the Issuer and the holders party thereto.
"Other Warrant Stock" means all shares of Common Stock issuable from
time to time upon exercise of the Other Warrants.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
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"Piggyback Notice" has the meaning specified in Section 6.01(a).
"Piggyback Registration" has the meaning specified in Section 6.01(a).
"Principal Shareholder" means, at any time, any Shareholder which
either alone or together with its Related Parties owns 20% or more of the Common
Stock on a fully diluted basis.
"Registration Expenses" has the meaning specified in Section 6.04.
"Related Parties" means (a) with respect to any Person who is a natural
person, (i) such Person's spouse, any member of such Person's Immediate Family
and any trust or similar arrangement for the benefit of such Person, such
Person's spouse or any member of such Person's Immediate Family and (ii) any
other Person (other than the Issuer or any of its Subsidiaries or any Person
organized for charitable purposes) that is not a natural person and of which
such Person owns or controls at least 20% of the voting equity interests, and
(b) with respect to any Person who is not a natural person, any Subsidiary or
Affiliate of such Person (other than the Issuer or any of its Subsidiaries or
any Person organized for charitable purposes); provided that "Related Parties"
shall not include any employee benefit plan.
"Related Person" has the meaning specified in Section 4.07.
"Required Holders" means the holders of a majority of the sum of (a)
Warrant Stock issued or issuable upon exercise of the Warrants and held by the
Holders and (b) Other Warrant Stock issued or issuable upon exercise of the
Other Warrants and held by Other Holders. For purposes of giving notices,
waivers and consents hereunder, holders of Warrants shall be deemed holders of
the Warrant Stock issued on exercise thereof and holders of Other Warrants shall
be deemed holders of the Other Warrant Stock issued on exercise thereof.
"Restricted Certificate" means a certificate for Warrant Stock or
Warrants bearing or required to bear the restrictive legend set forth in Section
4.03.
"Restricted Securities" means Restricted Warrant Stock and Restricted
Warrants.
"Restricted Warrants" means Warrants evidenced by a Restricted
Certificate.
"Restricted Warrant Stock" means Warrant Stock evidenced by a
Restricted Certificate.
"Revolving Credit Loan" has the meaning assigned to such term in the
Credit Agreement.
"Rights Agreement" means the Rights Agreement, dated as of May 1, 1998,
as amended, between the Issuer and National City Bank, as rights agent.
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"Rule 144" means Rule 144 promulgated by the Commission under the
Securities Act (or any successor or similar rule then in force).
"Rule 144A" means Rule 144A promulgated by the Commission under the
Securities Act (or any successor or similar rule then in force).
"SEC Documents" has the meaning specified in Section 3.11.
"Securities" means the Common Stock and any other equity securities of
the Issuer of any kind or class.
"Securities Act" means the Securities Act of 1933, as amended, 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.
"Seller" has the meaning specified in Section 6.01(a).
"Seller Notice" has the meaning specified in Section 6.01(a).
"Shareholder" means any Person who directly or indirectly owns any
shares of Common Stock (including Warrant Stock issued upon exercise of a
Warrant).
"Stock Unit" means one share of Common Stock, as such Common Stock is
constituted on the date hereof, and thereafter means such number of shares
(including any fractional shares) of Common Stock and other securities, cash or
other property as shall result from the adjustments specified in Article V.
"Subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) that is, as of such date,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent.
"Tag-Along Participation Notice" has the meaning specified in Section
7.02.
"Tag-Along Sale" has the meaning specified in Section 7.01(a).
"Tag-Along Sale Notice" has the meaning specified in Section 7.02.
"Tag-Along Seller" has the meaning specified in Section 7.01(a).
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"Term Loans" has the meaning assigned to such term in the Credit
Agreement.
"underwritten registration" or "underwritten offering" means a
registration in which securities of the Issuer are sold to an underwriter for
reoffering to the public.
"Warrant" and "Warrants" means the Warrants issued by the Issuer
pursuant to this Agreement as of December 31, 2002, evidencing rights to
purchase up to an aggregate of 773,133 Stock Units (which Warrants (together
with the Other Warrants and Other Warrant Stock issued before the date hereof)
represent, as of December 31, 2002, 10% in the aggregate of the outstanding
shares of Common Stock on a fully diluted basis), and all Warrants issued upon
transfer, division or combination of, or in substitution for, any such Warrants
issued pursuant to this Agreement.
"Warrant Stock" means all shares of Common Stock, as constituted on the
Issuance Date, issuable from time to time upon exercise of the Warrants.
SECTION 1.02. Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person (other than a Holder) shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits, Annexes and Schedules shall
be construed to refer to Articles and Sections of, and Exhibits, Annexes and
Schedules to, this Agreement or the Warrant, as the case may be, and (e) the
words "asset" and "property" shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.
SECTION 1.03. Accounting Terms and Determinations. Except as otherwise
may be expressly provided herein, all accounting terms used herein shall be
interpreted, and all financial statements and certificates and reports as to
financial matters required to be delivered to the Holders hereunder shall be
prepared, in accordance with GAAP. All calculations made for the purposes of
determining compliance with the terms of this Agreement shall (except as
otherwise may be expressly provided herein) be made by application of GAAP.
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ARTICLE II
PURCHASE AND SALE OF WARRANTS
SECTION 2.01. Authorization and Issuance of Warrant Stock and Warrants.
The Issuer has authorized: (a) the issuance of Warrants evidenced by warrant
certificates in the form of Annex 1; and (b) the issuance of such number of
shares of Common Stock as shall be necessary to permit the Issuer to comply with
its obligations to issue shares of Common Stock pursuant to the Warrants.
SECTION 2.02. Issuance of Warrants. As of December 31, 2002, in
satisfaction of the Issuer's obligations under Section 6.12(a)(iii) of the
Credit Agreement:
(a) the Issuer shall issue to each Initial Holder (or its Affiliate or
nominee), for no additional consideration, a Warrant evidencing the right
to purchase such number of Stock Units as is set forth opposite the name of
such Initial Holder (or its Affiliate or nominee) on Schedule 2.02;
(b) the Issuer shall deliver to each Initial Holder a single
certificate for the Warrants issued pursuant to clause (a) above,
registered in the name of such Initial Holder, except that, if any Initial
Holder shall notify the Issuer in writing prior to such issuance that it
desires certificates for such Warrants to be issued in other denominations
or registered in the name or names of any Affiliate, nominee or nominees of
such Initial Holder (other than a Related Person), then the certificates
for such Warrants shall be issued to such Initial Holder in the
denominations and registered in the name or names specified in such notice
(and each such Affiliate or nominee shall be deemed a Holder); and
(c) the Issuer shall deliver to the Initial Holders a legal opinion
from counsel to the Issuer, addressed to the Initial Holders and in form
and substance satisfactory to JPMorgan Chase Bank.
SECTION 2.03. Purchase for Initial Holders' Account. Each Initial
Holder represents and warrants to the Issuer as follows:
(a) Such Initial Holder is acquiring the Warrants and the Warrant Stock
for investment for its own account, without a view to, or for resale in
connection with, any distribution thereof in violation of the Securities
Act or other applicable securities laws, all without prejudice, however, to
the right of such Initial Holder at any time, in accordance with this
Agreement, lawfully to sell or otherwise to dispose of all or any part of
the Warrants or the Warrant Stock held by it.
(b) Such Initial Holder (i) is an "accredited investor" within the
meaning of Regulation D promulgated under the Securities Act and (ii) is in
a financial position to
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hold the Warrant to be issued to it hereunder and the Warrant Stock
relating thereto for an indefinite time and is able to bear the economic
risk and withstand a complete loss of its investment in the Issuer.
(c) All documents, records or books pertaining to this investment have
been made available for inspection by such Initial Holder, its attorneys
and/or its accountants. Such Initial Holder understands that such Initial
Holder and/or its representatives have had the opportunity to ask questions
of, and receive answers from, the Issuer or one or more persons acting on
the Issuer's behalf concerning the offering of the Warrants and the Warrant
Stock and the business of the Issuer and all such questions have been
answered to such Initial Holder's full satisfaction.
(d) Such Initial Holder is not the "beneficial owner", either alone or
together with its "affiliates" or "associates" (as those terms are defined
in the Exchange Act), of 5% or more of the outstanding shares of Common
Stock as constituted on the Issuance Date.
SECTION 2.04. Securities Act Compliance. Such Initial Holder
understands that the Issuer has not registered the Warrants or the Warrant Stock
under the Securities Act or applicable state securities laws, and such Initial
Holder agrees that neither the Warrants nor the Warrant Stock shall be sold or
transferred or offered for sale or transfer without registration or
qualification under the Securities Act or applicable state securities laws or
the availability of an exemption therefrom, all as more fully provided in
Article IV, and such Initial Holder understands that the Warrants and the
Warrant Stock will bear a legend to such effect and the Issuer will make a
notation on its transfer books to such effect.
SECTION 2.05. Listing. Prior to the issuance of Warrant Stock upon the
exercise of a Warrant, the Issuer shall use best efforts to secure the listing
of such shares of Warrant Stock upon each of the national securities exchange or
automated quotation system, if any, upon which shares of Common Stock are then
listed (subject to official notice of issuance upon the exercise of such
Warrant) and shall maintain, so long as any other shares of Common Stock shall
be so listed, such listing of all shares of Warrant Stock from time to time
issuable upon the exercise of a Warrant; and the Issuer shall use best efforts
to so list on each national securities exchange or automated quotation system,
and shall maintain such listing of, any other shares of capital stock of the
Issuer issuable upon the exercise of a Warrant if and so long as shares of the
same class shall be so listed on such national securities exchange or automated
system.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Issuer represents and warrants as follows:
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SECTION 3.01. Existence; Qualification. The Issuer is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization. The Issuer is duly qualified, licensed or admitted to do business
and is in good standing as a foreign corporation in every jurisdiction where the
failure to be so qualified would have a material adverse effect on the business,
financial condition, operations, assets, prospects, liabilities or
capitalization of the Issuer and has all requisite corporate power and authority
to transact its business as now conducted in all such jurisdictions.
SECTION 3.02. No Breach. Assuming the truth and accuracy of the Initial
Holders' representation contained in Section 2.03(d), the execution, delivery
and performance of this Agreement and the Warrants by the Issuer and the
consummation by it of the transactions contemplated hereby and thereby will not
(a) violate the certificate of incorporation or by-laws or any other instrument
or document of organization or governance of the Issuer, (b) violate, or result
in a breach of or default under, any other material instrument or agreement to
which the Issuer is a party or is bound, (c) violate any judgment, order,
injunction, decree or award against or binding upon the Issuer, (d) result in
the creation of any material Lien upon any of the properties or assets of the
Issuer, or (e) (assuming the truth and accuracy of the Initial Holders'
representations contained in Sections 2.03 and 2.04) violate any law, rule or
regulation relating to the Issuer.
SECTION 3.03. Corporate Action. Assuming the truth and accuracy of the
Initial Holders' representation contained in Section 2.03(d), the Issuer has all
necessary corporate power and authority to execute, deliver and perform its
obligations under this Agreement and the Warrants; the execution, delivery and
performance by the Issuer of this Agreement and the Warrants have been duly
authorized by all necessary action (including all Shareholder action) on the
part of the Issuer; this Agreement and the Warrants being issued on the date
hereof have been duly executed and delivered by the Issuer and constitute the
legal, valid and binding obligations of the Issuer, enforceable against the
Issuer in accordance with their respective terms, except as enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors rights generally and by
general equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or law); the Warrant Stock covered by the
Warrants has been duly and validly authorized and reserved for issuance and
shall, when paid for, issued and delivered in accordance with the Warrants, be
duly and validly issued, fully paid and nonassessable and free and clear of any
Liens (other than those imposed by applicable securities laws); and none of the
Warrant Stock issued pursuant to the terms hereof will be in violation of any
preemptive rights of any Shareholder.
SECTION 3.04. Approvals. Assuming the truth and accuracy of the Initial
Holders' representation contained in Section 2.03(d), except (a) in connection
with the registration of the Warrant Stock pursuant to Article VI or (b) for any
necessary stock exchange approvals, no authorizations, approvals or consents of,
and no filings or registrations with, any Governmental Authority or any other
Person (except for Persons who are Principal Shareholders or Related Parties
thereof who shall be required to enter into a Joinder Agreement on or after the
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date of execution of this Agreement) are necessary for the execution, delivery
or performance by the Issuer of this Agreement or the Warrants or for the
validity or enforceability thereof. Any such action required to be taken as a
condition to the execution and delivery of this Agreement, or the execution,
issuance and delivery of the Warrants, has been duly taken by all such
Governmental Authorities or other Persons, as the case may be.
SECTION 3.05. Investment Company Act. The Issuer is not an
"investment company", or a company "controlled by" an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
SECTION 3.06. Public Utility Holding Company Act. The Issuer is
not a "holding company", or an "affiliate" of a "holding company" or a
"subsidiary company" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
SECTION 3.07. Capitalization. (a) As of the date hereof, the
authorized capital stock of the Issuer consists of 60,000,000 shares of Common
Stock, par value $.01 per share, and 1,000,000 shares of Preferred Stock, par
value $.01 per share, of which 25,554,061 shares of Common Stock have been
issued and are outstanding (and 153,648 shares of Common Stock are held in
treasury). Except (i) for the Warrants issued hereunder, (ii) as set forth in
Schedule 3.07(a) and (iii) Section 6.12 of the Credit Agreement, the Issuer does
not have outstanding any Convertible Securities or Options exercisable or
convertible into or exchangeable for any interests or other equity rights of the
Issuer, nor does it have outstanding any agreements providing for the issuance
of, or any commitments to issue, any Convertible Securities or Options.
(b) Other than this Agreement, Section 6.12 of the Credit
Agreement, the Warrant Agreement dated as of June 28, 2002 between the Issuer
and the holders party thereto, the Warrant Agreement dated as of September 30,
2002 between the Issuer and the holders party thereto or as set forth in
Schedule 3.07(b), there is not in effect on the date hereof any agreement by the
Issuer pursuant to which any holders of debt or equity securities of the Issuer
have a right to cause the Issuer to register such securities under the
Securities Act. None of the agreements listed on Schedule 3.07(b) contains any
provision that conflict or are inconsistent with the rights granted under
Article VI.
(c) Except for this Agreement, there is not in effect on the date
hereof any agreement by the Issuer or any of its Shareholders that (i) restricts
the transferability of the Warrants and/or the Warrant Stock (whether or not in
connection with a transfer of the Loans), (ii) restricts the transferability of
the right of the Holder in this Agreement to any transferee of all or a portion
of the Holder's Warrants and/or Warrant Stock, or (iii) requires any consent or
other approval of any Person to the exercise of the Warrant by the Holder or the
issuance of Warrant Stock upon such exercise.
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12
SECTION 3.08. Private Offering. Assuming the truth and accuracy of
the Initial Holders' representations and warranties contained in Sections 2.03
and 2.04, the issuance and sale of the Warrants to the Holders hereunder are
exempt from the registration and prospectus delivery requirements of the
Securities Act.
SECTION 3.09. Litigation. (a) There is no action, suit, proceeding
or investigation pending or, to the knowledge of the Issuer, threatened against
the Issuer or any of its Subsidiaries before any Governmental Authority seeking
to enjoin the transactions contemplated by this Agreement or the Warrants or
that involve this Agreement or the transactions contemplated herein.
(b) Except for the matters disclosed in Schedule IV to the Credit
Agreement or the SEC Documents, there are no actions, suits or proceedings by or
before any arbitrator or Governmental Authority now pending against or, to the
knowledge of the Issuer, threatened against or affecting the Issuer or any of
its Subsidiaries as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to result in a material adverse effect on the
business, assets, liabilities, operations, material contracts, prospects or
condition, financial or otherwise, of the Issuer and its Subsidiaries taken as a
whole.
SECTION 3.10. Brokers. All negotiations relative to this Agreement
and the transactions contemplated hereby have been carried out by the Issuer
directly with the Initial Holders without the intervention of any Person on
behalf of the Issuer in such manner as to give rise to any valid claim by any
Person against the Initial Holders or any other Holder for a finder's fee,
brokerage commission or similar payment.
SECTION 3.11. SEC Documents; Financial Statements. The Issuer has
filed in a timely manner all documents that the Issuer was required to file
since January 1, 2000 with the Commission under Sections 13, 14(a) and 15(d) of
the Exchange Act. As of their respective filing dates, all documents filed by
the Issuer since January 1, 2000 with the Commission (the "SEC Documents")
complied in all material respects with the requirements of the Exchange Act or
the Securities Act, as applicable. None of the SEC Documents as of their
respective dates contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. The financial statements of the Issuer included in the SEC
Documents (the "Financial Statements") comply as to form in all material
respects with applicable accounting requirements and with the published rules
and regulations of the Commission with respect thereto. The Financial Statements
have been prepared in accordance with GAAP and fairly present the consolidated
financial position of the Issuer and its Subsidiaries at the dates thereof and
the consolidated results of their operations and consolidated cash flows for the
periods then ended (subject, in the case of unaudited statements, to the lack of
full footnote disclosure and to normal, recurring adjustments).
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13
ARTICLE IV
RESTRICTIONS ON TRANSFERABILITY
SECTION 4.01. Transfers Generally. The Restricted Securities shall
be transferable only upon the conditions specified in this Article IV and in
Article VI, which conditions are intended to ensure compliance with the
provisions of the Securities Act and applicable state securities laws in respect
of the transfer of any Restricted Securities.
SECTION 4.02. Transfers of Restricted Securities Pursuant to
Registration Statement and Exemptions. The Restricted Securities may be offered
or sold by the Holder thereof pursuant to an effective registration statement
under the Securities Act and applicable state securities laws or a valid
exemption therefrom (including, without limitation, to the extent applicable,
Rule 144 or Rule 144A and applicable exemptions from state securities laws).
SECTION 4.03. Restrictive Legends. Unless and until otherwise
permitted by this Article IV, each certificate for the Warrants issued under
this Agreement, each certificate for any Warrants issued to any subsequent
transferees of any such certificate, each certificate for any Warrant Stock
issued upon exercise of any Warrant and each certificate for any Warrant Stock
issued to any subsequent transferee of any such certificate, shall be stamped or
otherwise imprinted with a legend in substantially the following form:
"THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO THE RESTRICTIONS SPECIFIED IN THAT CERTAIN WARRANT
AGREEMENT DATED AS OF DECEMBER 31, 2002 (THE "WARRANT AGREEMENT")
BETWEEN CHART INDUSTRIES, INC., A DELAWARE CORPORATION (THE
"ISSUER"), AND THE HOLDERS PARTY THERETO FROM TIME TO TIME AS
MODIFIED AND SUPPLEMENTED AND IN EFFECT FROM TIME TO TIME, AND NO
TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE SHALL
BE VALID OR EFFECTIVE UNTIL SUCH RESTRICTIONS HAVE LAPSED OR BEEN
FULFILLED, RELEASED OR WAIVED. A COPY OF THE FORM OF THE WARRANT
AGREEMENT IS ON FILE AND MAY BE INSPECTED AT THE PRINCIPAL
EXECUTIVE OFFICE OF THE ISSUER. THE HOLDER OF THIS CERTIFICATE, BY
ACCEPTANCE OF THIS CERTIFICATE, AGREES TO BE BOUND BY THE
PROVISIONS OF THE WARRANT AGREEMENT.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE
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14
SECURITIES LAWS, AND ACCORDINGLY, SUCH SECURITIES MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE
WITH THE REGISTRATION OR QUALIFICATION PROVISIONS OF APPLICABLE
FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS
THEREFROM."
SECTION 4.04. Termination of Restrictions. All of the restrictions
imposed by this Article IV upon the transferability of the Restricted Securities
shall cease and terminate as to any particular Restricted Security when such
Restricted Security shall have been effectively registered under the Securities
Act and applicable state securities laws and sold by the Holder thereof in
accordance with such registration or sold under and pursuant to Rule 144 or is
eligible to be sold under and pursuant to paragraph (k) of Rule 144. Whenever
the restrictions imposed by this Article IV shall terminate as to any Restricted
Security as hereinabove provided, the Holder thereof shall, upon written
request, be entitled to receive from the Issuer, without expense, a new
certificate evidencing such Restricted Security not bearing the restrictive
legend otherwise required to be borne by a certificate evidencing such
Restricted Security, provided that the Holder thereof shall have furnished the
Issuer with such certificates and opinions as the Issuer shall have reasonably
requested.
SECTION 4.05. Dispositions of Warrants and Warrant Stock. (a)
Subject to compliance with the Securities Act, applicable state securities laws
and the requirement as to placement of a legend on certificates for Restricted
Securities specified in Section 4.03, any Holder shall have the right to
transfer any or all of its Restricted Securities to any Person. The Person to
which Restricted Securities are transferred pursuant to the immediately
preceding sentence shall be deemed to be a Holder of such Restricted Securities
and bound by the provisions of this Agreement applicable to the Holders so long
as such Person continues to own any of the Restricted Securities so transferred
to it.
(b) In connection with any transfer of any Warrant, the Holder
shall surrender such Warrant to the Issuer, together with a written assignment
of such Warrant duly executed by the Holder hereof or such Holder's agent or
attorney-in-fact. Such written assignment shall be in the form of the Assignment
attached as Annex 2. Upon such surrender and receipt by the Issuer of a written
agreement, in form reasonably satisfactory to the Issuer, of the assignee
agreeing to be bound by this Agreement to the same extent as such Holder was so
bound, the Issuer shall execute and deliver a new Warrant or Warrants in the
name of the assignee and in the denominations specified in such instrument of
assignment, and the original Warrant shall promptly be canceled.
(c) Any Warrant may be exchanged for other Warrants of the same
series upon presentation to the Issuer, together with a written notice
specifying the denominations in which new Warrants are to be issued, signed by
the Holder thereof. The Issuer shall execute and deliver a new Warrant or
Warrants to such Holder in exchange for the Warrant or Warrants to be
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15
divided or combined in accordance with such notice. The Issuer shall pay
all expenses and other charges (including taxes, to the extent required by
Section 8.02) payable in connection with the preparation, issuance, delivery,
transfer or exchange of the Warrants.
(d) The Issuer shall maintain books for the registration and
transfer of the Warrants, and shall allow each Holder of Warrants to inspect
such books at such reasonable times as such Holder shall request.
SECTION 4.06. Provisions Applicable to Regulated Holders. (a)
Notwithstanding anything in this Agreement or the Warrants to the contrary, no
Holder that is subject to the provisions of 12 USC 24 (Seventh) or a similar
provision of state law or any regulation that generally limits the ability of a
bank to own equity interests of another Person, or that is subject to Regulation
Y of the Board of Governors of the Federal Reserve System (or any successor
regulation thereto) ("Regulation Y") or that is affiliated with any entity
subject to the provisions of Regulation Y (if such Affiliate directly or
indirectly holds securities of the Issuer) (any such Holder being referred to
herein as a "Regulated Holder") and no transferee of such Regulated Holder may
exercise the Warrants for a number of shares of Warrant Stock that would permit
such Regulated Holder, together with its Affiliates and transferees, to own or
control a number of shares of Warrant Stock greater than that permitted by
applicable law including Regulation Y (and, for purposes of this restriction, a
reasoned opinion of counsel to such Holder and reasonably acceptable to the
Issuer based on facts and circumstances deemed appropriate by such counsel to
the effect that such Holder may lawfully own or control such number of shares
shall be conclusive).
(b) The Issuer shall not, without 15 days' prior written notice to
each Holder, directly or indirectly, purchase, redeem, retire or otherwise
acquire any shares of Common Stock if, as a result of such purchase, redemption,
retirement or other acquisition and after giving effect to the exercise of all
outstanding Warrants, a Holder, together with its Affiliates, shall own or
control, or shall be deemed to own or control, in the aggregate a greater number
of securities of any kind issued by the Issuer than are permitted under
applicable law, including Regulation Y.
(c) In the event of any underwritten public offering of Restricted
Securities in which a Regulated Holder is participating, the Issuer shall
provide reasonable assistance to the underwriter in ensuring that any Warrants
or Warrant Stock sold by such Holder are widely disseminated.
(d) In the event that a Regulated Holder determines that there is
a Regulatory Problem (as defined below), the Issuer agrees to use commercially
reasonable efforts to take all such actions as are within its control and
reasonably required by such Regulated Holder in order (i) to effectuate and
facilitate any transfer by any Regulated Holder (or any of its Affiliates) of
any Warrant or Warrant Stock then held by such Regulated Holder to any Person
designated by such Regulated Holder and (ii) to permit such Regulated Holder (or
any of its Affiliates) to exchange all or a portion of any voting security then
held by it on a share-for-share basis for shares of a non-voting security of the
Issuer, which non-voting security shall convey equivalent
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16
economic benefits to those of such Warrants or Warrant Stock and include
equivalent anti-dilution protection and otherwise shall be identical in all
respects to the voting security exchanged for it, except that it shall be
non-voting and shall be convertible into a voting security on such terms as are
required by such Regulated Holder in light of regulatory considerations then
prevailing. Such actions may include, but shall not necessarily be limited to,
entering into such additional agreements, adopting such amendments to the
certificate of incorporation and bylaws of the Issuer subject to required
Shareholder approvals and taking such additional actions as are reasonably
requested by any Regulated Holder in order to effectuate the intent of the
foregoing. For purposes of this Agreement, a "Regulatory Problem" means any set
of facts or circumstances wherein it has been asserted by any Governmental
Authority (or any Regulated Holder believes that there is a substantial risk of
such assertion) that any Regulated Holder is not entitled to hold, or exercise
any significant right with respect to, any Warrant or Warrant Stock held by it.
Any exchange referred to in clause (ii) above shall occur as soon as reasonably
practicable but in any event within 60 days after written notice by the affected
Regulated Holder to the Issuer (or such earlier date if required to comply with
applicable law so long as such Regulated Holder has provided reasonable prior
notice of such date to the Issuer).
(e) At the request of the Issuer, at the time of the exercise of
any Warrant by any Holder such Holder shall notify the Issuer in writing as to
(i) whether such Holder is a Regulated Holder and (ii) if such Holder is a
Regulated Holder, the aggregate amount of Common Stock, Convertible Securities
and Options then owned or controlled by such Holder and its Affiliates, provided
that any failure or delay by any Holder in providing such notification shall not
affect in any way the obligations of the Issuer hereunder or with respect to any
Warrant or Warrant Stock.
SECTION 4.07. Provisions Applicable to Related Persons.
Notwithstanding any other provision of this Agreement or a Warrant, no Holder
may exercise a Warrant (or any substitute security issued under Section 4.06(d))
if such Holder is then the "beneficial owner", either alone or together with its
"affiliates" and "associates" (as those terms are defined in the Exchange Act),
of 5% or more of the then outstanding shares of Common Stock as constituted on
the Issuance Date (a "Related Person"), unless (a) such transaction is approved
by the Shareholders in accordance with Article VI of the Issuer's certificate of
incorporation or (b) the Issuer's certificate of incorporation previously has
been amended to remove such Article and its requirements. If reasonably
requested by such Related Person in writing, and subject to applicable fiduciary
duties of the Board, the Issuer will use commercially reasonable efforts to
secure the approval of the Shareholders to such exercise under such Article at
the next regularly scheduled Shareholder meeting of the Issuer, provided that
such Related Person provides all information to the Issuer about such Related
Person and such transaction reasonably required under the Exchange Act to be
included in the Issuer's proxy statement for such meeting and, if required,
consents to the inclusion of such information in such proxy statement.
ARTICLE V
ADJUSTMENTS OF STOCK UNITS
Warrant Agreement
17
SECTION 5.01. Subdivisions and Combinations. If at any time the
Issuer shall:
(a) pay a dividend or other distribution of Common Stock;
(b) subdivide or reclassify its outstanding shares of Common
Stock into a larger number of shares of Common Stock; or
(c) combine its outstanding shares of Common Stock into a smaller
number of shares of Common Stock;
then immediately after the occurrence of any such event the number of shares of
Warrant Stock comprising a Stock Unit shall be adjusted so as to equal the
number of shares of Warrant Stock which each Holder would have been entitled to
receive with respect to such Stock Unit if such Holder had exercised the Warrant
immediately prior to the occurrence of such event (or, in the case of any such
dividend or distribution, immediately prior to the record date therefor).
SECTION 5.02. Issuance of Common Stock. In case at any time the
Issuer (i) shall issue or sell shares of Common Stock and (ii) the consideration
per share of Common Stock to be paid upon such issuance or sale is less than the
Current Market Value per share of Common Stock in effect on the date of such
issuance or sale, then the number of shares of Warrant Stock comprising a Stock
Unit shall be adjusted to be that number determined by multiplying the number of
shares of Warrant Stock comprising a Stock Unit immediately prior to the date of
such issuance or sale by a fraction (not to be less than one) (A) the numerator
of which shall be equal to the product of (x) the number of shares of Common
Stock outstanding after giving effect to such issuance or sale and (y) the
Current Market Value per share of Common Stock determined immediately prior to
the date of such issuance or sale and (B) the denominator of which shall be
equal to the sum of (x) the product of (1) the number of shares of Common Stock
outstanding immediately prior to the date of such issuance or sale and (2) the
Current Market Value per share of Common Stock determined immediately prior to
the date of such issuance or sale and (y) the aggregate consideration to be
received by the Issuer for the total number of shares of Common Stock to be
issued or sold. Aggregate consideration for purposes of the preceding clause
(B)(y) shall be determined as follows: in case any shares of Common Stock shall
be issued or sold for cash, the consideration received therefor shall be deemed
to be the amount payable to the Issuer therefor (without deduction therefrom of
any expenses incurred or any underwriting commissions or concessions or
discounts or, in the case of a private placement thereof, finders' fees or
commissions paid or allowed by the Issuer in connection therewith). In case any
shares of Common Stock shall be issued or sold for a consideration other than
cash payable to the Issuer, the consideration received therefor shall be deemed
to be the fair market value thereof as reasonably determined in good faith by
the Board (without deduction therefrom of any expenses incurred or any
underwriting commissions or concessions or discounts or, in the case of a
private placement thereof, finders' fees or commissions paid or allowed by the
Issuer in connection therewith). In case any shares of Common Stock shall be
issued in connection with any merger of another corporation into the Issuer, the
amount of consideration therefor shall be
Warrant Agreement
18
deemed to be the fair market value of such portion of the assets of such merged
corporation as the Board shall reasonably determine to be attributable to such
shares of Common Stock.
SECTION 5.03. Issuance of Other Securities, Rights or Obligations.
In case at any time the Issuer (i) shall issue or sell options to purchase or
rights to subscribe for Common Stock or securities directly or indirectly
convertible into or exchangeable for Common Stock (or options or rights with
respect to such securities) and (ii) the consideration per share for which
Common Stock is deliverable upon exercise of such options or rights or
conversion or exchange of such securities (determined by dividing (x) the total
amount received or receivable by the Issuer in consideration of such issuance or
sale, plus the aggregate amount of consideration (if any) payable to the Issuer
upon such exercise, conversion or exchange, by (y) the total number of shares of
Common Stock necessary to effect the exercise, conversion or exchange of all
such options, rights or securities) shall be less than the Current Market Value
per share of Common Stock in effect on the date of such issuance or sale, then
the number of shares of Warrant Stock comprising a Stock Unit shall be adjusted
on the date of such issuance or sale to be that number determined by multiplying
the number of shares of Warrant Stock comprising a Stock Unit immediately prior
to the date of such issuance or sale by a fraction (not to be less than one) (i)
the numerator of which shall be equal to the product of (A) the total number of
shares of Common Stock outstanding after giving effect to the exercise,
conversion or exchange of all such options, rights or securities to be issued in
such transaction and (B) the Current Market Value per share of Common Stock
determined immediately before such date and (ii) the denominator of which shall
be equal to the sum of (A) the product of (1) the total number of shares of
Common Stock outstanding immediately prior to the date of such issuance or sale
and (2) the Current Market Value per share of the Common Stock determined
immediately prior to the date of such issuance or sale and (B) the aggregate
consideration per share (determined as set forth in subsection (ii)(x) and (y)
above) for which Common Stock is deliverable upon exercise, conversion or
exchange of such options, rights or securities. Aggregate consideration for
purposes of the preceding clause (B) shall be determined as follows: In case any
options, rights or convertible or exchangeable securities (or options or rights
with respect thereto) shall be issued or sold, or exercisable, convertible or
exchangeable for cash, the consideration received therefor shall be deemed to be
the amount payable to the Issuer (determined as set forth in subsection (ii)(x)
and (y) above) therefor (without deduction therefrom of any expenses incurred or
any underwriting commissions or concessions or discounts or, in the case of a
private placement thereof, finders' fees or commissions paid or allowed by the
Issuer in connection therewith). In case any such options, rights or securities
shall be issued or sold, or exercisable, convertible or exchangeable for a
consideration other than cash payable to the Issuer, the consideration received
therefor (determined as set forth in subsection (ii)(x) and (y) above) shall be
deemed to be the fair market value thereof as reasonably determined in good
faith by the Board (without deduction therefrom of any expenses incurred or any
underwriting commissions or concessions or discounts or, in the case of a
private placement thereof, finders' fees or commissions paid or allowed by the
Issuer in connection therewith). In case any such options, rights or securities
shall be issued or sold, or exercisable, convertible or exchangeable in
connection with any merger of another corporation into the Issuer, the amount of
consideration
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19
therefor shall be deemed to be the fair market value of such portion of the
assets of such merged corporation as the Board shall reasonably determine to be
attributable to such options, rights or securities.
SECTION 5.04. Superseding Adjustment. If at any time after any
adjustment in the number of shares of Warrant Stock comprising a Stock Unit
shall have been made on the basis of the issuance of any options or rights, or
convertible or exchangeable securities (or options or rights with respect to
such securities) pursuant to Section 5.03:
(a) the options or rights shall expire prior to exercise or the
right to convert or exchange any such securities shall terminate; or
(b) the consideration per share for which shares of Common Stock
are issuable pursuant to the terms of such options or rights or
convertible or exchangeable securities shall be increased or decreased,
other than under or by reason of provisions designed to protect against
dilution,
such previous adjustment shall be rescinded and annulled, and thereupon a
recomputation shall be made of the effect of such options or rights or
convertible or exchangeable securities with respect to shares of Common Stock on
the basis of:
(A) treating the number of shares of Common Stock, if
any, theretofore actually issued or issuable pursuant
to the previous exercise, conversion or exchange of
such options, rights or securities as having been
issued on the date or dates of such exercise,
conversion or exchange and for the aggregate
consideration actually received and receivable
therefor, and
(B) treating any such options, rights or securities which
then remain outstanding as having been granted or
issued immediately after the time of such increase or
decrease for the aggregate consideration per share
for which shares of Common Stock are issuable upon
exercise, conversion or exchange of such options,
rights or securities.
To the extent called for by the foregoing provisions of this Section 5.04 on the
basis aforesaid, a new adjustment in the number of shares of Warrant Stock
comprising a Stock Unit shall be made in accordance with Section 5.03,
determined using the Current Market Value as determined at the time of the
previous adjustment, which new adjustment shall supersede the previous
adjustment so rescinded and annulled. If the exercise, conversion or exchange
price provided for in any such option, right or security shall decrease at any
time under or by reason of provisions designed to protect against dilution and
there has been no anti-dilution adjustment under this Article V related to the
same event, then in the case of the delivery of shares of Common Stock upon the
exercise, conversion or exchange of any such option, right or security, the
Stock Unit
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20
purchasable upon the exercise of a Warrant shall forthwith be adjusted (using a
weighted average basis in accordance with the formula set forth in Section 5.03
and using the Current Market Value as determined at the time of initial issuance
or sale thereof) in the manner which would have been obtained had the adjustment
made upon issuance of such option, right or security been made upon the basis of
the issuance of (and the aggregate consideration received for) the shares of
Common Stock delivered as aforesaid.
SECTION 5.05. Other Provisions Applicable to Adjustments. The
following provisions shall be applicable to the making of adjustments of the
number of shares of Warrant Stock comprising a Stock Unit:
(a) The sale or other disposition of any issued shares of Common
Stock owned or held by or for the account of the Issuer (other than to
the Holders hereunder) shall be deemed to be an issuance thereof for
purposes of this Article V.
(b) In computing adjustments under this Article V, fractional
interests in Common Stock shall be taken into account to the nearest
one-thousandth of a share.
(c) If the Issuer shall take a record of the holders of its Common
Stock for the purpose of entitling them to receive a dividend or
distribution or subscription or purchase rights and shall, thereafter
and before the distribution thereof, abandon its plan to pay or deliver
such dividend, distribution, subscription or purchase rights, then no
adjustment shall be required by reason of the taking of such record and
any such adjustment previously made in respect thereof shall be
rescinded and annulled.
SECTION 5.06. Merger, Consolidation or Disposition of Assets. If
the Issuer shall merge or consolidate with another Person, or shall sell,
transfer or otherwise dispose of all or substantially all of its assets to
another Person and pursuant to the terms of such merger, consolidation or
disposition of assets, cash, shares of common stock or other securities of the
successor or acquiring Person, or property of any nature is to be received by or
distributed to the holders of Common Stock, then each outstanding Warrant shall
automatically (effective as of the consummation of such merger, consolidation or
sale, transfer or disposition), without any further action on the part of the
Holder thereof, be converted into the right to receive (whether or not such
Holder exercises such Warrant) the amount of cash or other consideration it
would have been entitled to receive if such Holder had exercised such Warrant
(to the extent not previously exercised) immediately prior to the occurrence of
such merger, consolidation, sale, transfer or disposition, net of the aggregate
exercise price of such Warrant, and such Warrant shall thereupon be deemed to
have been exercised and be canceled.
SECTION 5.07. Other Action Affecting Common Stock. If at any time
or from time to time the Issuer shall take any action affecting its Common
Stock, other than an action described in any of the foregoing subsections of
this Article V or an action taken in the ordinary course of the Issuer's
business and consistent with past practice, then, unless in the reasonable
opinion of the Board such action will not have a material adverse effect upon
the rights of the
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21
Holders of the Warrants, the number of shares of Warrant Stock comprising a
Stock Unit shall be adjusted in such manner and at such time as the Board shall
in good faith determine to be equitable in the circumstances.
SECTION 5.08. Exclusions from Adjustment. Anything to the contrary
herein notwithstanding, no adjustment to the number of shares of Warrant Stock
comprising a Stock Unit shall be made as a result of, or in connection with, the
issuance of (a) any Common Stock, Convertible Security or Option pursuant to an
Option Plan or any Common Stock or Convertible Securities issuable or issued
upon the conversion, exchange or exercise of any such Convertible Security or
Option (so long as the issuance, conversion, exchange or exercise price for such
Common Stock, Convertible Security or Option is not less than the closing price
for the Common Stock on the date of grant or the next preceding trading day on
which a trade occurred), (b) any Common Stock issued pursuant to the Issuer's
Amended and Restated 1997 Stock Bonus Plan as in effect on the date hereof, (c)
any Common Stock or other securities pursuant to the exercise, conversion or
exchange of Convertible Securities or Options outstanding on the Issuance Date
and listed in Schedule 3.07(a), (d) any Common Stock, Convertible Securities or
Options pursuant to any merger transaction involving the Issuer or any of its
Subsidiaries or as consideration for the acquisition by the Issuer or any of its
Subsidiaries of the capital stock or assets of any other Person (or any
securities issued upon exercise or conversion thereof), (e) any rights to
purchase securities issued with respect to each share of Common Stock pursuant
to the Rights Agreement or (f) any Other Warrants or any Common Stock or other
securities issued upon the exercise or conversion of the Warrants or the Other
Warrants.
SECTION 5.09. Notice of Adjustments. Whenever the number of shares of
Warrant Stock comprising a Stock Unit shall be adjusted pursuant to this
Agreement, the Issuer shall forthwith obtain a certificate signed by the
Issuer's chief financial officer, setting forth, in reasonable detail, the event
requiring the adjustment and the method by which such adjustment was calculated
and specifying the number of shares of Warrant Stock comprising a Stock Unit,
after giving effect to such adjustment. The Issuer shall promptly cause a signed
copy of such certificate to be delivered to each Holder. The Issuer shall keep
at its office copies of all such certificates and cause the same to be available
for inspection at said office during normal business hours by any Holder or any
prospective purchaser of Warrants designated by any Holder.
SECTION 5.10. Notice of Certain Corporate Action. If the Issuer shall
propose (i) to pay any dividend to the holders of its Common Stock or to make
any other distribution to the holders of its Common Stock; (ii) to offer to all
holders of its Common Stock rights to subscribe for or to purchase any
additional shares of its Common Stock (or options or rights with respect
thereto) (other than rights under the Rights Agreement); (iii) to effect any
reclassification of its Common Stock; (iv) to effect any capital reorganization;
(v) to effect any consolidation, merger or sale, transfer or other disposition
of all or substantially all of its assets; (vi) to effect the liquidation,
dissolution or winding up of the Issuer; or (vii) to take any other action which
would require an adjustment to the number of shares of Warrant Stock comprising
a Stock Unit to be made in accordance with this Article V, then, in each such
case, the Issuer shall give to
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each Holder of Warrants a notice of such proposed action as soon as reasonably
practicable prior to the date of the relevant transaction, which shall specify
the date on which a record is to be taken for the purposes of such dividend,
distribution or rights offer, or the date on which such reclassification,
issuance, reorganization, consolidation, merger, sale, transfer, disposition,
liquidation, dissolution or winding up is to take place and the date of
participation therein by the holders of Common Stock, if any such date is to be
fixed, and shall also set forth such facts with respect thereto as shall be
reasonably necessary to indicate the effect of such action on the Common Stock,
and the number of shares of Warrant Stock which will comprise a Stock Unit after
giving effect to any adjustment which will be required as a result of such
action. The failure to give such notice, or any defect therein, shall not affect
the legality or validity of any dividend, distribution, right, option, warrant,
reclassification, reorganization, consolidation, merger, sale, transfer,
disposition, liquidation, dissolution or winding up, or the vote upon any such
action.
ARTICLE VI
REGISTRATION RIGHTS
SECTION 6.01. Demand and Piggyback Registrations. (a) Either (i) upon
receipt of notice (a "Demand Notice") from the Holders and/or Other Holders of
at least 25% of the sum of (I) the Warrant Stock issued or issuable upon
exercise of the Warrants (for which purpose, Holders of Warrants shall be deemed
holders of the Warrant Stock issued on exercise thereof) and (II) the Other
Warrant Stock issued or issuable upon exercise of the Other Warrants (for which
purpose, Other Holders of Other Warrants shall be deemed holders of the Other
Warrant Stock issued on exercise thereof) given at any time requesting that the
Issuer effect the registration of such Warrant Stock and Other Warrant Stock
held by such Holders and/or Other Holders, or (ii) whenever the Issuer gives
notice (a "Piggyback Notice") that it proposes to effect the registration of all
or any part of the Common Stock under the Securities Act (except pursuant to
registrations on Form S-4 or Form S-8 promulgated by the Commission or any
successor or similar forms thereto) (whether for its own account or for the
benefit of Shareholders other than holders of the Warrants, the Warrant Stock,
Other Warrants or Other Warrant Stock), the Issuer shall promptly, and in any
event at least 20 days prior to the effective date of the proposed registration
statement, give written notice of such proposed registration to all Holders and
Other Holders. Each Holder or Other Holder that wishes to register its Warrant
Stock or Other Warrant Stock, as the case may be, in such registration (each, a
"Seller") shall, within 15 days after receipt of such notice from the Issuer,
deliver to the Issuer a notice (a "Seller Notice") stating that such Seller
wishes to participate therein and setting forth the number of shares of Warrant
Stock or Other Warrant Stock that such Seller desires to include in such
registration. The Issuer thereupon shall, subject to Section 6.01(b) as
expeditiously as practicable, use its best efforts to effect the registration
under the Securities Act of such Warrant Stock and Other Warrant Stock (any such
registration effected or undertaken pursuant to a Demand Notice being herein
referred to as a "Demand Registration" and any such registration of Warrant
Stock or Other Warrant Stock effected in connection with a Piggyback Notice
being herein referred to as a "Piggyback
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23
Registration"); provided that (w) the Issuer shall not be required to effect
more than three Demand Registrations (and each Demand Registration effected
under the registration rights of the Other Holders evidenced by the agreements
under which the Other Warrants are issued shall be considered a Demand
Registration for purposes of the limitation set forth in this clause (w)), (x)
there shall be no limit on the number of Piggyback Registrations, (y) no Demand
Registration or Piggyback Registration shall be available hereunder at any time
after the fifth anniversary of the Issuance Date and (z) the Issuer shall not be
required to honor a request for a Demand Registration pursuant to which a
registration statement would be declared effective prior to the expiration of
120 days following the last effective date of any previous registration
statement pursuant to Section 6.01(a) (or pursuant to a comparable provision in
an agreement under which Other Warrants are issued). In the event that (i) the
amount of securities proposed to be sold by Sellers pursuant to a Demand Notice
shall be reduced pursuant to Section 6.02(a) to an amount which is less than 75%
of the amount of securities originally proposed to be sold by Sellers, or (ii)
any Demand Notice shall be withdrawn by the Holders and Other Holders originally
giving such Demand Notice at any time prior to the filing by the Issuer of a
preliminary registration statement in connection with such Demand Notice, then,
in such event, no right to a Demand Registration shall be deemed to have been
exercised or forfeited and such Demand Notice shall not operate to reduce the
Issuer's obligation to effect Demand Registrations on the terms provided herein.
(b) The Issuer may defer the filing (but not the preparation) of a
registration statement required by Section 6.01(a)(i) until a date not later
than 105 days after the date of the Demand Notice if at the time the Issuer
receives the Demand Notice, (i) the Issuer is conducting or is actively pursuing
a public offering of equity securities, (ii) the Issuer or any of its
Subsidiaries is engaged in confidential negotiations or other confidential
business activities, disclosure of which would be required in such registration
statement, and the Board determines in good faith that such disclosure would be
materially detrimental to the Issuer and its Shareholders or would have a
material adverse effect on any such confidential negotiations or other
confidential business activities or (iii) the Board determines in good faith
that there is a valid business purpose or reason for delaying filing. A deferral
of the filing of a registration statement pursuant to this Section 6.01(b) shall
be lifted, and the requested registration statement shall be filed forthwith, if
the event which resulted in such deferral is terminated (or, in the case of
negotiations of the type referred to in clause (ii) above, such negotiations are
disclosed). In order to defer the filing of a registration statement pursuant to
this Section 6.01(b), the Issuer shall promptly (but in any event within 10
days), upon determining to seek such deferral, deliver to each Seller a
certificate signed by an executive officer of the Issuer setting forth a
statement of the reason for such deferral and an approximation of the
anticipated delay, which information the Sellers shall treat as confidential.
Within 20 days after receiving such certificate, Sellers holding a majority in
interest of the Warrant Stock and Other Warrant Stock for which registration was
previously requested may withdraw such request by giving notice of such
withdrawal to the Issuer; if withdrawn, the Demand Notice shall be deemed not to
have been made for all purposes of this Agreement. The Issuer may not invoke its
right to defer the filing of a registration statement under this Section 6.01(b)
more than once in any twelve-month period.
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24
(c) Neither the Issuer nor any of its security holders (other than
holders of the Warrants, the Warrant Stock, the Other Warrants or the Other
Warrant Stock) shall have the right to include any of the Issuer's securities in
a registration statement to be filed as part of a Demand Registration unless (i)
such securities are of the same class or series as the securities covered by
such registration statement and (ii) if such Demand Registration is an
underwritten offering, the Issuer or such security holders, as applicable, agree
in writing to sell, subject to Section 6.02, their securities on the same terms
and conditions as apply to the securities being sold. If any security holders of
the Issuer (other than holders of the Warrants, the Warrant Stock, the Other
Warrants or the Other Warrant Stock) register securities in a Demand
Registration in accordance with this Section 6.01(c), such holders shall pay the
fees and expenses of their own counsel and their pro rata share, on the basis of
the respective amounts of the securities included in such registration on behalf
of each such security holder, of the expenses to be paid pursuant to Section
6.04 if such expenses are not paid by the Issuer for any reason.
(d) If a Demand Registration involves an underwritten offering, the
Issuer shall have the right to select the investment banker(s) and managing
underwriter(s) to administer such offering, which investment banker(s) or
managing underwriter(s), as the case may be, shall be reasonably acceptable to
the holders of at least 50% of the Warrant Stock and Other Warrant Stock to be
included in such Demand Registration.
SECTION 6.02. Hold-Back Agreements; Cutbacks. (a) Each holder of
Warrant Stock or Other Warrant Stock that is covered by a registration statement
filed pursuant to Section 6.01 agrees, if requested by the managing underwriters
in an underwritten offering, not to effect any public sale or distribution of
securities of the Issuer of the same class as the securities included in such
registration statement, including a sale pursuant to Rule 144 under the
Securities Act (except as part of such underwritten registration), during the
15-day period prior to, and during the 90-day period beginning on, the closing
date of each underwritten offering made pursuant to such registration statement,
to the extent timely notified in writing by the Issuer or the managing
underwriters; provided that such holders of Warrant Stock and Other Warrant
Stock shall be subject to the hold-back restrictions of this Section 6.02(a) (i)
only once during any twelve-month period and (ii) unless such underwriter(s)
otherwise agree, only if each holder of equity securities of the Issuer which is
a party to a registration rights agreement with the Issuer entered into on or
after the date hereof, and each holder of equity securities purchased from the
Issuer (which is party to a registration rights agreement with the Issuer
entered into) at any time after the date of this Agreement (other than in a
public offering), shall have agreed, to the extent permitted by law, not to
effect any such public sale or distribution of such securities (including a sale
under Rule 144), during such period, except as part of such underwritten
registration.
The foregoing provisions shall not apply to any Holder of Warrant
Stock or Other Holder of Other Warrant Stock if such holder is prevented by
applicable statute or regulation from entering into any such agreement; provided
that such holder shall undertake, in its request to participate in any such
underwritten offering, not to effect any public sale or distribution of any
Warrant Stock or Other Warrant Stock held by such holder and covered by a
registration
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25
statement commencing on the date of sale of the Warrant Stock or Other Warrant
Stock, as the case may be, unless it has provided 45 days prior written notice
of such sale or distribution to the underwriter or underwriters.
(b) The Issuer agrees not to effect any public or private offer, sale
or distribution of any of its equity securities or any class or series of its
capital stock having a preference in liquidation or with respect to dividends,
including a sale pursuant to Regulation D under the Securities Act (other than
any such sale or distribution of such securities in connection with any merger
or consolidation by the Issuer or any subsidiary of the Issuer or the
acquisition by the Issuer or a subsidiary of the Issuer of the capital stock or
substantially all the assets of any other Person or in connection with any
employee stock option or other benefit plan), during the 10-day period prior to,
and during the 90-day period beginning with, the effectiveness of a registration
statement filed under Section 6.01 to the extent timely notified in writing by
any Holder of Warrant Stock, any Other Holder of Other Warrant Stock or the
managing underwriters in an underwritten offering (except as part of such
offering if permitted, or pursuant to registrations on Forms S-4 or S-8 or any
successor form to such registration Forms).
(c) In connection with any registration hereunder in which more than
one security holder has a right to request registration of its Common Stock, in
the event that such registration involves an underwritten offering and the
managing underwriter or underwriters participating in such offering advise the
security holders participating in such offering that the total number of shares
of Common Stock to be included in such offering exceeds the amount that can be
sold in (or during the time of) such offering without delaying or jeopardizing
the success of such offering (including the price per share of Common Stock),
then the total number of shares of Warrant Stock, Other Warrant Stock and all
other shares of Common Stock which have registration rights with respect to such
registration to be offered for the account of all security holders shall be
reduced to a number deemed satisfactory by such managing underwriter or
underwriters, provided that the shares of Common Stock to be excluded shall be
determined in the following sequence: there shall be excluded (i) first, shares
of Common Stock held by security holders of the Issuer requesting and legally
entitled to include such shares of Common Stock in such registration pursuant to
a "piggyback" registration (other than the holders of Warrant Stock and/or Other
Warrant Stock), on a pro rata basis (based upon the number of shares of Common
Stock requested (or proposed) to be registered by each such holder, (ii) second,
to the extent requesting to be included pursuant to a Piggyback Registration,
Warrant Stock and Other Warrant Stock, on a pro rata basis (based upon the
number of shares of Warrant Stock and Other Warrant Stock requested to be
included in such registration), (iii) third, shares of Common Stock held by
security holders of the Issuer requesting and legally entitled to include such
shares of Common Stock in such registration pursuant to a "demand" registration
(other than the holders of Warrant Stock and/or Other Warrant Stock), on a pro
rata basis (based upon the number of shares of Common Stock requested (or
proposed) to be registered by each such holder and (iv) fourth, to the extent
requesting to be included pursuant to a Demand Registration, Warrant Stock and
Other Warrant Stock, on a pro rata basis (based upon the number of shares of
Warrant Stock and Other Warrant Stock requested to be included in such
registration).
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26
SECTION 6.03. Registration Procedures. If and whenever the Issuer is
required by the provisions of Section 6.01(a)(i) or, with respect to subsections
(d), (g), (h), (i), (j), (k) and (n) of this Section 6.03, by the provisions of
Section 6.01(a)(i) or 6.01(a)(ii), to use its best efforts to effect the
registration of any of its securities under the Securities Act, the Issuer
shall, as expeditiously as possible,
(a) prepare and file with the Commission a registration statement with
respect to such securities and use its best efforts to cause such
registration statement to become and remain effective for a period of not
less than 90 days to permit the sale of such securities in accordance with
the plan of distribution chosen by the Seller or Sellers and the
underwriter, if any;
(b) 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 and to comply with the provisions of the Securities Act
with respect to the sale or other disposition of all securities covered by
such registration statement;
(c) promptly notify each Seller and the underwriter or underwriters,
if any:
(i) when such registration statement or any prospectus used in
connection therewith, or any amendment or supplement thereto, has been
filed and, with respect to such registration statement or any
post-effective amendment thereto, when the same has become effective;
(ii) of any written comments from the Commission with respect to
any filing referred to in clause (i) above and of any written request
by the Commission for amendments or supplements to such registration
statement or prospectus;
(iii) of the notification to the Issuer by the Commission of its
initiation of any proceeding with respect to the issuance by the
Commission of, or of the issuance by the Commission of, any stop order
suspending the effectiveness of such registration statement; and
(iv) of the receipt by the Issuer of any notification with
respect to the suspension of the qualification of any securities for
sale under the applicable securities or blue sky laws of any
jurisdiction;
(d) furnish to each Seller such registration statement and of each
amendment and supplement thereto (including all exhibits and documents
incorporated by reference therein) and such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents, as such
Seller may reasonably request in order to facilitate the public sale or
other disposition of the securities owned by such Seller;
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27
(e) use its best efforts to register or qualify the securities covered
by such registration statement under such other securities or blue sky laws
of such jurisdictions within the United States as each Seller shall
reasonably request, and do such other reasonable acts and things as may be
requested of it to enable such Seller to consummate the public sale or
other disposition in such jurisdictions of the securities owned by such
Seller, except that the Issuer shall not for any such purpose be required
to qualify to do business as a foreign corporation in any jurisdiction
wherein it is not otherwise required to be so qualified;
(f) use its best efforts to cause the securities covered by such
registration statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the
Seller or Sellers thereof to consummate the disposition of such securities;
(g) notify each Seller of any 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 Issuer's becoming aware that the
prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under
which they were made (upon receipt of which each Seller agrees to forthwith
cease making offers and sales of such securities pursuant to such
prospectus and to deliver to the Issuer any copies of such prospectus then
in the possession of such Seller), and at the request of any such Seller
promptly prepare and furnish to such Seller a reasonable number of copies
of a prospectus supplemented or amended so that, as thereafter delivered to
the purchasers of such securities, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances under which they were
made;
(h) make available to its security holders, as soon as reasonably
practicable, an earnings statement covering the period of at least twelve
months, but not more than eighteen months, beginning with one of the first
three months after the effective date of the registration statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act;
(i) otherwise use its best efforts to comply with all applicable rules
and regulations of the Commission;
(j) use its best efforts to list such securities on any securities
exchange on which the Common Stock is then listed, or, if not so listed, on
a national securities exchange, if the listing of such securities is then
permitted under the rules of such exchange;
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28
(k) provide a transfer agent and registrar for all the securities
covered by such registration statement not later than the effective date of
such registration statement;
(l) enter into such agreements and take such other actions as the
Seller or Sellers shall reasonably request in order to expedite or
facilitate the disposition of such securities;
(m) obtain an opinion from the Issuer's counsel and a "cold comfort"
letter from the Issuer's independent public accountants in customary form
and covering such matters as the Seller or Sellers shall reasonably
request;
(n) make available for inspection by any Seller of securities covered
by such registration statement, by any underwriter participating in any
disposition to be effected pursuant to such registration statement and by
any attorney, accountant or other agent retained by any such Seller or any
such underwriter, all pertinent financial and other records, pertinent
corporate documents and properties of the Issuer, and cause all of the
Issuer's officers, directors and employees to supply all information
reasonably requested by any such Seller, underwriter, attorney, accountant
or agent in connection with such registration statement; and
(o) permit any Seller of securities covered by such registration
statement to require the insertion therein of material, furnished to the
Issuer in writing, which in the reasonable judgment of such Seller should
be included.
If any such registration or comparable statement refers to any Seller by name or
otherwise as the holder of any securities of the Issuer, then such Seller shall
have the right to require (x) the insertion therein of language, in form and
substance satisfactory to such Seller, to the effect that the holding by such
Seller of such securities is not to be construed as a recommendation by such
Seller of the investment quality of the Issuer's securities covered thereby and
that such holding does not imply that such Seller will assist in meeting any
future financial requirements of the Issuer, or (y) in the event that such
reference to such Seller by name or otherwise is not required by the Securities
Act or the Commission, the deletion of the reference to such Seller.
The Issuer may require each Seller of securities to, and each such
Seller, as a condition to including securities in such registration, shall,
furnish the Issuer with such information and affidavits regarding such Seller
and the distribution of such securities as the Issuer may from time to time
reasonably request in writing in connection with such registration. No Seller
may participate in any underwritten registration hereunder unless such Seller
(x) agrees to sell such Seller's securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (y) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements and these
registration rights.
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29
Each Seller of securities agrees that upon receipt of any notice from
the Issuer of the happening of any event of the kind described in Section
6.03(g), such Seller will forthwith discontinue such Seller's disposition of
securities pursuant to the registration statement relating to such securities
until such Seller's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 6.03(g) and, if so directed by the Issuer,
will deliver to the Issuer (at the Issuer's expense) all copies, other than
permanent file copies, then in such Seller's possession of any prospectus
relating to such securities at the time of receipt of such notice.
SECTION 6.04. Registration Expenses. All expenses incident to the
Issuer's performance of or compliance with this Article VI, including without
limitation all (i) registration and filing fees, fees and expenses associated
with filings required to be made with the NYSE or NASD, (ii) fees and expenses
of compliance with securities or blue sky laws (including reasonable fees and
disbursements of counsel for the underwriters, if any, or selling holders in
connection with blue sky qualifications of the Warrant Stock and Other Warrant
Stock and determination of their eligibility for investment under the laws of
such jurisdictions as the managing underwriters, if any, or holders of a
majority of the Warrant Stock and the Other Warrant Stock being sold may
reasonably designate, provided that the Holders and the Other Holders
collectively shall be entitled to reimbursement for only one counsel in
connection with each registration), (iii) printing expenses (including expenses
of printing certificates for the Warrant Stock and the Other Warrant Stock in a
form eligible for deposit with The Depository Trust Company and of printing
prospectuses), (iv) fees and disbursements of counsel for the Issuer and
customary out of pocket expenses and fees paid by issuers to the extent provided
for in an underwriting agreement or otherwise (excluding discounts, commissions
or fees of underwriters, selling brokers, dealer managers or similar securities
industry professionals relating to the distribution of the Warrant Stock and
Other Warrant Stock, transfer taxes or legal expenses of any Person other than
the Issuer and the selling holders), (v) the cost of securities acts liability
insurance if the Issuer so desires and (vi) fees and expenses of other Persons
retained by the Issuer (all such expenses being herein called "Registration
Expenses") will be borne by the Issuer regardless of whether the Registration
Statement becomes effective. Each holder of Warrant Stock and Other Warrant
Stock will pay any fees or disbursements of counsel to such holder and all
underwriting discounts and commissions and transfer taxes, if any, and other
fees, costs and expenses of such holder (other than Registration Expenses)
relating to the sale or disposition of such holder's Warrant Stock or Other
Warrant Stock, as the case may be. The Issuer, in any event, will pay the
Issuer's own internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the expense of any annual audit, the fees and expenses incurred in connection
with the listing of the securities to be registered on each securities exchange
on which similar securities issued by the Issuer are then listed, rating agency
fees and the fees and expenses of any Person, including special experts,
retained by the Issuer.
SECTION 6.05. Indemnification. (a) In the event of any registration of
any of its securities under the Securities Act pursuant to this Article VI, the
Issuer shall, to the full extent permitted by law, indemnify and hold harmless
each Seller of such securities, its directors,
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30
officers and employees, and each other Person, if any, who controls such Seller
within the meaning of Section 15 of the Securities Act, against any losses,
claims, damages, liabilities or expenses ("Losses") to which such Seller or any
such director, officer or controlling Person may become subject under the
Securities Act or otherwise, insofar as such Losses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any registration statement under
which such securities were registered under the Securities Act, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein (in the case of a prospectus, in light of the circumstances
under which there were made) not misleading, and shall reimburse such Seller or
such director, officer or controlling Person for any legal or any other expenses
reasonably incurred by such Seller or such director, officer or controlling
Person in connection with investigating or defending any such Loss; provided
that the Issuer shall not be liable in any such case to the extent that any such
Loss arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
preliminary prospectus, final prospectus, summary prospectus or amendment or
supplement in reliance upon and in conformity with written information furnished
by such Seller to the Issuer stating that it is for inclusion therein by such
Seller; provided further that with respect to any untrue statement or omission
or alleged untrue statement or omission made in any preliminary prospectus, the
indemnity agreement contained in this paragraph shall not apply to the extent
that any such Loss results from the fact that a current copy of the prospectus
was not sent or given to the Person asserting any such Loss at or prior to the
written confirmation of the sale of the securities concerned to such Person if
the Issuer had prior thereto given such Seller the notice referred to in Section
6.03(g) and provided to such Seller a supplemented or amended prospectus as
contemplated by Section 6.03(g), and such current copy of the prospectus would
have cured the defect giving rise to such Loss. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
such Seller or such director, officer or controlling Person, and shall survive
the transfer of such securities by such Seller.
(b) Each Seller of securities which are included in a registration
statement hereunder, as a condition to including securities in such registration
statement, shall, to the full extent permitted by law, indemnify and hold
harmless the Issuer, its directors and officers and each other Person, if any,
who controls the Issuer within the meaning of Section 15 of the Securities Act,
against any Losses to which the Issuer or any such director, officer or
controlling Person may become subject under the Securities Act or otherwise,
insofar as such Losses (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in such registration statement, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein (in the case of a prospectus, in the light of the circumstances under
which they were made) not misleading, if such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon
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31
and in conformity with written information furnished by such Seller to the
Issuer stating that it is specifically for use therein; provided, however, that
the obligation to provide indemnification pursuant to this Section 6.05(b) shall
be several, and not joint and several, among such Sellers on the basis of the
number of securities included by each in such registration statement and the
aggregate amount which may be recovered from any holder of securities pursuant
to the indemnification provided for in this Section 6.05(b) in connection with
any sale of securities shall be limited to the total proceeds received by such
holder from the sale of such securities. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of the
Issuer or any such other Person and shall survive the transfer of such
securities by such Seller.
(c) Promptly after receipt by any Person entitled to indemnification
under this Section (an "Indemnified Party") of notice of the commencement of any
action, such Person shall, if a claim in respect thereof is to be made against
any other Person (an "Indemnifying Party") for indemnity under this Section
6.05, notify the Indemnifying Party in writing of the commencement thereof; but
the omission so to notify the Indemnifying Party shall not relieve it from any
liability which it may have to any Indemnified Party, except to the extent that
the Indemnifying Party is prejudiced thereby. The Indemnifying Party may, upon
being notified of such action, assume the defense thereof, with counsel
satisfactory to such Indemnified Party, and, after such assumption, the
Indemnifying Party shall not be liable to such Indemnified Party under this
Section 6.05 for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such Indemnified Party, in connection with
the defense thereof; provided, however, that the Indemnifying Party may not
assume the defense of the action, and shall remain liable to the Indemnified
Party for its legal expenses of counsel and other expenses, in the event that
the Indemnified Party reasonably determines that a conflict of interest may
exist between the Indemnified Party and the Indemnifying Party. No Indemnifying
Party shall consent to entry of any judgment or enter into any settlement of the
relevant claim or litigation without the consent of the Indemnified Party which
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation.
(d) If the indemnification provided for in this Section 6.05 is
unenforceable although available, or insufficient to hold harmless an
Indemnified Party hereunder for any Losses (or actions in respect thereof) in
respect of which the provisions of Section 6.05(a) or (b) would otherwise apply
by their terms, then the Indemnifying Party shall contribute to the amount paid
or payable by such Indemnified Party as a result of such Losses (or actions in
respect thereof) 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 hand in connection with the statements or omissions which resulted in such
Losses (or actions in respect thereof), as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
relates to information supplied by the Indemnifying Party on the one hand or
such Indemnified Party on the other hand and the parties' relative intent,
knowledge, access to information and opportunity
Warrant Agreement
32
to correct or prevent such statement or omission. The parties agree that it
would not be just and equitable if contribution pursuant to this subsection were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in this
subsection. The amount paid or payable as a result of the Losses (or actions in
respect thereof) referred to above in this subsection shall be deemed to include
any legal or other expenses reasonably incurred by such Indemnified Party in
connection with investigating or defending any such action or claim. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
SECTION 6.06. No Other Registration Rights. The Issuer shall not
hereafter, without the consent of the Required Holders, grant any registration
rights to any holder of Securities in respect of such Securities if such
registration rights would rank senior to, or otherwise adversely affect, the
registration rights granted in this Article VI. This Section 6.06 shall not
prohibit the grant of registration rights to others on a "pari passu" basis with
those granted in this Article VI.
ARTICLE VII
TAG-ALONG SALE
SECTION 7.01. Tag-Along Rights. (a) If at any time prior to the third
anniversary of the Issuance Date any Principal Shareholder or any Related Party
thereof (each a "Tag-Along Seller") shall enter into an agreement to effect, or
effect or propose to effect, any sale, transfer or other disposition of Common
Stock owned by such Principal Shareholder or Related Party to any other Person
(a "Tag-Along Sale"), each Holder of Warrants or Warrant Stock shall have the
right, but not the obligation, to participate in such Tag-Along Sale by selling
up to the number of shares (on an aggregate basis) of Warrant Stock issued upon
exercise of Warrants equal to the product of (i) the total number of shares (on
an aggregate basis) of Common Stock proposed to be sold in the proposed
Tag-Along Sale multiplied by (ii) a fraction, the numerator of which is equal to
the number of shares (on an aggregate basis) of Warrant Stock owned by such
Holder immediately prior to such Tag-Along Sale, and the denominator of which is
equal to (A) the number of shares (on an aggregate basis) of Common Stock (and
Common Stock then issuable under Options and Convertible Securities) owned by
the Tag-Along Seller immediately prior to such Tag-Along Sale plus (B) the
number of shares (on an aggregate basis) of Warrant Stock owned by such Holder
together with the number of shares (on an aggregate basis) of Common Stock (and
Common Stock then issuable under Options and Convertible Securities) owned by
any holder thereof who has similar "tag-along" rights and elects to exercise
such rights in connection with the Tag-Along Sale, in each case immediately
prior to the Tag-Along Sale. Any such sales by such Holder shall be on the same
terms and conditions as the proposed Tag-Along Sale by the Tag-Along Seller,
except such Holder shall not be required to make any representations or
warranties other than with respect to (x) its title to and ownership of the
shares of Warrant Stock to be sold by it in such Tag-Along Sale, (y) such
Holder's power and authority to effect such transfer and (z) such matters
pertaining to compliance with securities law
Warrant Agreement
33
as the transferee of such Warrant Stock may reasonably require. As a condition
to participating in such Tag-Along Sale, any such Holder proposing to sell
Warrant Stock in such sale must exercise its Warrants to acquire Common Stock
representing such Warrant Stock. No Person shall have the right to sell Warrants
in any Tag-Along Sale.
(b) Notwithstanding the foregoing, the provisions of Sections 7.01(a)
and 7.02 shall not apply to the following:
(I) any transfer, sale or disposition of any shares of Common Stock
by any Principal Shareholder or any Related Party thereof:
(i) to any Related Party of such Principal Shareholder (or, in
the case of any such Related Party, to such Principal Shareholder),
provided that prior to the consummation of such transfer, sale or
disposition, the transferee (if not already party to a Joinder
Agreement) shall have entered into a Joinder Agreement);
(ii) in connection with any tender offer or other disposition of
Common Stock in connection with any business combination involving
the Issuer in which the Shareholders generally shall have the right
to participate;
(iii) by gift, to trusts and family partnerships for estate or
charitable planning purposes, by will or as a result of inheritance
laws;
(iv) in a registered public offering; and
(II) any other transfer, sale or disposition of any shares of Common
Stock by any Principal Shareholder or any Related Party thereof (other than
those permitted under clause (I) above); provided that the total aggregate
number of shares transferred, sold or disposed of by such Principal
Shareholder and its Related Parties under this clause (II) after the
Issuance Date shall not be more than 10% of the then issued and outstanding
Common Stock on a fully diluted basis.
(c) On the date of execution of this Agreement the Issuer shall
deliver to the Initial Holders a joinder agreement substantially in the form
attached hereto as Annex 3 (a "Joinder Agreement"), executed by each Principal
Shareholder and each Related Party of such Principal Shareholder that owns
Common Stock, pursuant to which such parties will agree to be bound by the
provisions of this Article VII. As a condition to the validity of any sale,
disposition or other transfer of any Common Stock by any Person which has
executed and delivered a Joinder Agreement pursuant to this Section 7.01(c) to
any other Person which, after giving effect thereto, together with its Related
Parties would constitute a Principal Shareholder, such other Person (and each of
its Related Parties that owns Common Stock) shall execute and deliver to the
Issuer and each Holder a Joinder Agreement.
Warrant Agreement
34
SECTION 7.02. Procedures. If a Tag-Along Seller is participating in a
Tag-Along Sale, at least 30 days before the proposed date thereof, the Issuer
shall provide each Holder of Warrants or Warrant Stock with written notice of
such Tag-Along Sale (a "Tag-Along Sale Notice") setting forth in reasonable
detail the consideration per share to be paid by the transferee, the number of
shares to be sold and the other terms and conditions of the Tag-Along Sale. Each
Holder of Warrants or Warrant Stock wishing to participate in the Tag-Along Sale
shall provide written notice (a "Tag-Along Participation Notice") to such
Tag-Along Seller and to the Issuer within 15 days of the date the Tag-Along Sale
Notice is deemed to have been received by such Holder. The Tag-Along
Participation Notice shall set forth the number of shares (on an aggregate
basis) of Warrant Stock, if any, such Holder elects to include in the Tag-Along
Sale. If a Holder, or Holders, of Warrants or Warrant Stock has elected to
participate in a Tag-Along Sale, the Tag-Along Seller shall reduce, to the
extent necessary, the number of shares of Common Stock that it is entitled to
sell in the Tag-Along Sale to permit the Holder, or Holders, of Warrants or
Warrant Stock to participate in the Tag-Along Sale and the Holder, or Holders,
of Warrant or Warrant Stock so electing shall sell in the Tag-Along Sale such
number of shares identified in its Tag-Along Participation Notice. If the
Tag-Along Participation Notice is not received from a Holder within the 15-day
period specified above, the Tag-Along Seller shall have the right to sell or
otherwise transfer the shares of Common Stock to the proposed transferee without
any participation by such Holder, but only (i) on the terms and conditions
stated in the Tag-Along Sale Notice, and (ii) if the sale or transfer of such
shares of Common Stock is consummated not later than 60 days after the end of
such 15-day period specified above.
SECTION 7.03. Amendment of Article VII. No provision of this Article
VII may be amended without the written consent of each of the Principal
Shareholders and its Related Parties which is subject to the requirements of
this Article VII.
ARTICLE VIII
HOLDERS' RIGHTS
SECTION 8.01. Delivery Expenses. If any Holder surrenders any
certificate for Warrants or Warrant Stock to the Issuer or a transfer agent of
the Issuer for exchange for instruments of other denominations or registered in
another name or names, the Issuer shall cause such new instruments to be issued
and shall pay the cost of delivering to or from the office of such Holder from
or to the Issuer or its transfer agent, duly insured, the surrendered instrument
and any new instruments issued in substitution or replacement for the
surrendered instrument.
SECTION 8.02. Taxes. The Issuer shall pay all taxes (other than
federal, state, local or foreign income, gross receipts, excise, severance,
capital stock, franchise, profits, withholding, personal property, sales,
use, transfer, registration, value added and alternative or add-on minimum
taxes) which may be payable in connection with the execution and delivery
of this Agreement or the issuance of the Warrants and Warrant Stock
hereunder or in connection with any modification of this Agreement or the
Warrants and shall hold each Holder harmless
Warrant Agreement
35
without limitation as to time against any and all liabilities with respect to
all such taxes. The obligations of the Issuer under this Section 8.02 shall
survive any redemption, repurchase or acquisition of Warrants or Warrant Stock
by the Issuer, any termination of this Agreement, and any cancellation or
termination of the Warrants.
SECTION 8.03. Replacement of Instruments. Upon receipt by the Issuer
of evidence reasonably satisfactory to it of the ownership of and the loss,
theft, destruction or mutilation of any certificate or instrument evidencing any
Warrants or Warrant Stock, and
(a) in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it (provided that if the Common Stock is not at the time
publicly traded and the owner of the same is any Holder or an institutional
lender or investor, its own agreement of indemnity shall be deemed to be
satisfactory), or
(b) in the case of mutilation, upon surrender or cancellation thereof,
the Issuer, at its expense, shall execute, register and deliver, in lieu
thereof, a new certificate or instrument for (or covering the purchase of)
an equal number of Warrants or Warrant Stock.
SECTION 8.04. Indemnification. The Issuer shall indemnify and hold
harmless each of the Holders and each of their respective directors, officers,
employees, shareholders, Affiliates and agents (each, an "indemnified person")
on demand from and against any and all losses, claims, damages, liabilities (or
actions or other proceedings commenced or threatened in respect thereof) and
expenses that arise out of, result from, or in any way relate to, any claim,
proceeding or other action made, brought or threatened against an indemnified
person relating to this Agreement or the Warrants, or in connection with the
other transactions contemplated hereby, and to reimburse each indemnified
person, upon its demand, for any reasonable legal or other expenses incurred in
connection with investigating, defending or participating in the defense of any
such loss, claim, damage, liability, action or other proceeding (whether or not
such indemnified person is a party to any action or proceeding out of which any
such expenses arise), other than any of the foregoing claimed by any indemnified
person to the extent incurred by reason of the gross negligence or willful
misconduct of such indemnified person. No indemnified person shall be
responsible or liable to either the Issuer or any other Person for any damages
which may be alleged as a result of or relating to this Agreement or the
Warrants (other than in connection with a breach of this Agreement), or in
connection with the other transactions contemplated hereby and thereby. Any
claim for indemnity in connection with or relating to a registration of
securities pursuant to Article VI shall be governed by Section 6.05, without
regard to the provisions of this Section 8.04. No indemnified person shall
consent to entry of any judgment or enter into any settlement of the relevant
claim or litigation without the consent of the Issuer (such consent not to be
unreasonably withheld) that does not include as an unconditional term thereof
the giving by the claimant or plaintiff to the Issuer of a release from all
liability in respect to such claim or litigation.
Warrant Agreement
36
SECTION 8.05. Inspection Rights. At any time prior to the fifth
anniversary of the Issuance Date, the Issuer shall afford, and shall cause its
Subsidiaries to afford, any Holder or its authorized agents, access, at
reasonable times, upon reasonable prior notice, (a) to inspect the books and
records of the Issuer and its Subsidiaries, (b) to discuss with management of
the Issuer and its Subsidiaries the business and affairs of the Issuer and its
Subsidiaries and (c) to inspect the properties of the Issuer and its
Subsidiaries, subject in each case to the provisions of Section 10.12(b) of the
Credit Agreement. At the request of the Issuer, if a Holder is not bound by such
Section 10.12(b), such Holder shall execute and deliver a confidentiality
agreement with the Issuer on substantially the same terms as set forth in said
Section 10.12(b).
ARTICLE IX
OTHER COVENANTS OF THE ISSUER
The Issuer agrees with each Holder that, so long as any of the Warrants
and/or Warrant Stock shall be outstanding and held by a Holder, provided that
the covenants set forth below shall expire not later than the fifth anniversary
of the Issuance Date:
SECTION 9.01. Financial Statements, Etc. The Issuer covenants that it
will file the reports required to be filed by it under the Securities Act and
the Exchange Act and the rules and regulations adopted by the Commission
thereunder (or, if it is not required to file such reports, it will, upon the
request of the Required Holders, make publicly available other information so
long as necessary to permit sales pursuant to Rule 144 under the Securities
Act), and it will take such further action as any Holder may reasonably request,
all to the extent required from time to time to enable such Holder to sell
Warrants or Warrant Stock without registration under the Securities Act within
the limitation of the exemptions provided by (a) Rule 144 under the Securities
Act, as such Rule may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the Commission. Upon the request of any Holder,
the Issuer will deliver to such Holder a written statement as to whether it has
complied with such information and filing requirements.
SECTION 9.02. Related Party Transactions. The Issuer and its
Subsidiaries shall not, directly or indirectly, enter into any agreement or
transaction with any stockholder owning 10% or more of the Common Stock then
outstanding, officer or director of the Issuer, or any "affiliate" or
"associate" of such persons (as such terms are defined in rules and regulations
promulgated under the Securities Act), including, without limitation, any
agreement or transaction providing for the transfer of assets to, transfer of
opportunities in the Issuer's business to, rental of property from, or otherwise
requiring payments to, any such person or entity, without in each case the
approval of at least a majority of the members of the Board or a committee
thereof duly appointed to act with respect to such matter on behalf of the Board
having no interest in such agreement or transaction.
Warrant Agreement
37
SECTION 9.03. Restrictions on Performance. The Issuer shall not at any
time enter into an agreement or other instrument limiting in any manner its
ability to perform its obligations under this Agreement or the Warrants, or
making such performance or the issuance of Warrant Stock upon the exercise of
any Warrant a default under any such agreement or instrument.
SECTION 9.04. Modification of Other Equity Documents. The Issuer shall
not amend or consent to any modification, supplement or waiver of any provision
of any Other Equity Documents in any manner which would have a material adverse
effect on the holders of Warrants or Warrant Stock, in each case without the
prior written consent of the Required Holders. Without limiting the generality
of the foregoing, the Issuer shall not amend, or consent to any modification,
supplement or waiver of any provision of any Other Equity Documents in a way
which would (i) restrict the transferability of the Warrants or the Warrant
Stock, (ii) restrict the transferability of the rights of any Holder in this
Agreement to any transferee of all or a portion of such Holder's Warrants and/or
Warrant Stock or (iii) require any consent or other approval of any Person to
the exercise of the Warrants by any Holder or the issuance of Warrant Stock upon
such exercise.
SECTION 9.05. Reservation and Authorization of Common Stock. The
Issuer shall at all times reserve and keep available for issue upon the exercise
or conversion of Warrants such number of its authorized but unissued shares of
Common Stock as will be sufficient to permit the exercise in full of all
outstanding Warrants. The Issuer shall not amend the provisions of its
certificate of incorporation governing the Common Stock other than (i) to
increase or decrease the number of shares of authorized capital stock (subject
to the provisions of the preceding sentence) or (ii) to decrease the par value
of any shares of Common Stock. All shares of Common Stock which shall be so
issuable, when issued upon exercise of any Warrant and payment of the applicable
Exercise Price therefor in accordance with the terms of this Warrant, shall be
duly and validly issued, fully paid and nonassessable and free and clear of any
Liens (other than those arising under operation of applicable securities laws).
Before taking any action which would result in an adjustment in the
number of shares of Common Stock comprising a Stock Unit or which would cause an
adjustment reducing the Current Warrant Price per share of Common Stock below
the then par value, if any, of the shares of Common Stock issuable upon exercise
of the Warrants, the Issuer shall take any corporate action which is necessary
in order that the Issuer may validly and legally issue fully paid and
nonassessable shares of Common Stock free and clear of any Liens (other than
those arising under operation of applicable securities laws) upon the exercise
of all the Warrants immediately after the taking of such action.
Before taking any action which would result in an adjustment in the
number of shares of Common Stock comprising a Stock Unit or in the Current
Warrant Price per share of Common Stock, the Issuer shall obtain all such
authorizations or exemptions thereof, or consents thereto, as may be necessary
from any public regulatory body or bodies having jurisdiction thereof.
Warrant Agreement
38
Promptly following the execution of this Agreement, the Issuer will
use best efforts to list on each national securities exchange on which any
Common Stock may at any time be listed, subject to official notice of issuance
upon exercise of the Warrants, and will maintain such listing of, all shares of
Common Stock from time to time issuable upon the exercise of the Warrants, and
as soon as reasonably practicable following completion of each such listing the
Issuer will notify the Holders thereof.
SECTION 9.06. Notice of Expiration Date. The Issuer shall give to each
Holder notice of the Expiration Date. Such notice may be given by the Issuer not
less than 30 days but not more than 60 days prior to the Expiration Date;
provided that if the Issuer fails to give timely notice, the Expiration Date
will be extended to the date which is 30 days after the day on which such notice
is deemed received.
SECTION 9.07. Documentation of Subsequent Warrants. The Issuer and the
Initial Holders agree that the Issuer shall document any additional warrants to
purchase shares of Common Stock granted hereafter pursuant to Section 6.12 of
the Credit Agreement in substantially the same form as the Warrants issued
hereunder and pursuant to a warrant agreement in substantially the same form as
this Agreement.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Waiver. No failure on the part of any Holder to
exercise and no delay in exercising, and no course of dealing with respect to,
any right, power or privilege under this Agreement or the Warrants shall operate
as a waiver thereof, nor shall any single or partial exercise of any right,
power or privilege under this Agreement or the Warrant preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The remedies provided herein are cumulative and not exclusive of any remedies
provided by law.
SECTION 10.02. Notices. (a) All notices, requests and other
communications provided for herein and in the Warrants (including any waivers or
consents under this Agreement and the Warrants) shall be given or made in
writing, (i) to any party hereto, delivered to the intended recipient at the
"Address for Notices" specified below its name on the signature pages hereof;
or, as to any party, at such other address as shall be designated by such party
in a written notice to each other party, or (ii) to any other Person who is the
registered Holder of any Warrants or Warrant Stock, to the address for such
Holder as it appears in the stock or warrant ledger of the Issuer.
(b) All such notices, requests and other communications shall be
deemed received on the date on which they are personally delivered, sent by
courier guaranteeing overnight delivery or sent by registered or certified mail,
return receipt requested, postage prepaid, in each case given or addressed as
aforesaid.
Warrant Agreement
39
SECTION 10.03. Expenses, Etc. The Issuer agrees to pay or reimburse
the Holders for: (a) all reasonable out-of-pocket costs and expenses of the
Holders (including the reasonable fees and expenses of Milbank, Tweed, Xxxxxx &
XxXxxx LLP, special New York counsel to JPMorgan Chase Bank and its Affiliates,
but not the fees and expenses of counsel to any other Holder), in connection
with (i) the negotiation, preparation, execution and delivery of this Agreement
and the issuance of Warrants hereunder and (ii) any amendment, modification or
waiver of (or consents in respect of) any of the terms of this Agreement and/or
the Warrants; and (b) all costs and expenses of the Holders (including
reasonable legal fees and expenses) in connection with (i) any default by the
Issuer hereunder or under the Warrants or any enforcement proceedings resulting
therefrom and (ii) the enforcement of this Section 10.03.
SECTION 10.04. Amendments, Etc. Except as otherwise expressly provided
in this Agreement, any provision of this Agreement and any Warrant or Warrant
certificate issued hereunder may be amended or modified only by an instrument in
writing signed by the Issuer and the Required Holders; provided that (a) the
consent of the holders of any class of Warrant Stock or Warrants shall not be
required with respect to any amendment or waiver which does not affect the
rights or benefits of such class under this Agreement, and (b) no such amendment
or waiver shall, without the written consent of all Holders of such Warrant
Stock and Warrants at the time outstanding, amend this Section 10.04.
SECTION 10.05. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
SECTION 10.06. Survival. All representations and warranties made by
the Issuer herein or in any certificate or other instrument delivered by it or
on its behalf under this Agreement shall be considered to have been relied upon
by the Holders and shall survive the issuance of the Warrants or the Warrant
Stock regardless of any investigation made by or on behalf of the Holders. All
statements in any such certificate or other instrument so delivered shall
constitute representations and warranties by the Issuer hereunder. All
representations and warranties made by the Holders herein shall be considered to
have been relied upon by the Issuer and shall survive the issuance to the
Holders of the Warrants or the Warrant Stock regardless of any investigation
made by the Issuer or on its behalf.
SECTION 10.07. Specific Performance. Damages in the event of breach of
this Agreement by a Holder or the Issuer would be difficult, if not impossible,
to ascertain, and it is therefore agreed that each Holder and the Issuer, in
addition to and without limiting any other remedy or right it may have, will
have the right to an injunction or other equitable relief in any court of
competent jurisdiction, enjoining any such breach, and enforcing specifically
the terms and provisions hereof, and each Holder and the Issuer hereby waives
any and all defenses it may have on the ground of lack of jurisdiction or
competence of the court to grant such an injunction or other equitable relief.
The existence of this right will not preclude the Holders or the Issuer from
pursuing any other rights and remedies at law or in equity which the Holders or
the Issuer may have.
Warrant Agreement
40
SECTION 10.08. Captions. The captions and section headings appearing
herein are included solely for convenience of reference and are not intended to
affect the interpretation of any provision of this Agreement.
SECTION 10.09. Counterparts. This Agreement may be executed in any
number of counterparts, all of which when taken together shall constitute one
and the same instrument and any of the parties hereto may execute this Agreement
by signing any such counterpart signature page or counterpart.
SECTION 10.10. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the law of the State of New York without giving
effect to the conflicts of law principles thereof, except to the extent that New
York conflicts of laws principles would apply the Delaware General Corporation
Law to matters relating to corporations organized thereunder.
SECTION 10.11. Severability. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under any present or future law,
and if the rights or obligations of any party hereto under this Agreement will
not be materially and adversely affected thereby, (a) such provision will be
fully severable, (b) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
(c) the remaining provisions of this Agreement will remain in full force and
effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom and (d) in lieu of such illegal, invalid
or unenforceable provision, there will be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible.
SECTION 10.12. Entire Agreement. This Agreement supersedes all prior
discussions and agreements between the parties with respect to the subject
matter hereof and, together with the Warrants, contains the sole and entire
agreement between the parties hereto with respect to the subject matter hereof.
SECTION 10.13. Rights of Holders of Warrants. Nothing herein or in any
Warrant shall be construed as conferring upon any Holder of Warrants in its
capacity as such (prior to the exercise of such Warrants) the right to vote or
to consent or to receive notice as a Shareholder in respect of meetings of
Shareholders or the election of directors of the Issuer or any other matter, or
any rights whatsover as Shareholders.
Warrant Agreement
41
IN WITNESS WHEREOF, the parties hereto have duly executed this
Warrant Agreement as of the date first above written.
CHART INDUSTRIES, INC.
By /s/ Xxxxxxx X. Xxxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Financial Officer and Treasurer
Address for Notices:
Chart Industries, Inc.
0000 Xxxxxxxxxxx Xx.
Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000
Attention: Chief Financial Officer
Warrant Agreement
42
INITIAL HOLDERS
JPMORGAN CHASE BANK
By /s/ Xxxxx X. Xxxxx
-------------------------------------------
Name:
Title:
Address for Notices:
XX Xxxxxx Chase Bank
000 Xxxx Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Warrant Agreement
43
NATIONAL CITY BANK
By /s/ Xxxxxx X. XxXxxxx
------------------------------------------
Name: Xxxxxx X. XxXxxxx
Title: Senior Vice President
Address for Notices:
National City Bank
0000 Xxxx Xxxxx Xxxxxx - Xxx. 0000
Xxxxxxxxx, XX 00000-0000
Warrant Agreement
44
BANK ONE NA
By Xxxx X. Xxxxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President
Address for Notices:
Bank One NA
IL1-0631
0 Xxxx Xxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxx Xxxxxxxx
Warrant Agreement
45
XXX XXXXXX PRIME RATE INCOME TRUST
By: Xxx Xxxxxx Advisory Investment Corp.
By /s/ Xxxxxxxxx Xxxxxxxx
------------------------------------------
Name: Xxxxxxxxx Xxxxxxxx
Title: Vice President
Address for Notices:
Xxx Xxxxxx
Xxx Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx
-and-
State Street Bank & Trust
Corporate Trust Department
X.X. Xxx 000
Xxxxxx, XX 00000
Attn: Xxxx Xxxxxxxx
Warrant Agreement
46
SENIOR DEBT PORTFOLIO
By: Boston Management and Research,
as Investment Advisor
By /s/ Payson X. Xxxxxxxxx
------------------------------------------
Name Payson X. Xxxxxxxxx
Title: Vice President
Address for Notices:
Senior Debt Portfolio
c/o Boston Management and Research
000 Xxxxx Xxxxxx, 0/xx/ Xxxxx
Xxxxxx, XX 00000
Warrant Agreement
47
U.S. BANK NATIONAL ASSOCIATION
By /s/ Xxxxx X. Xxxxx
----------------------------------------
Name: Xxxxx X. Xxxxx
Title: Assistant Vice President
Address for Notices:
Xxxxx X. Xxxxx, CFA
AVP
U.S. Bank - Special Assets
BC - MN - H22A
000 Xxxxxxxx Xxxx
Xxxxxxxxxxx, XX 00000
Ph: 612-303-4505
Fax: 000-000-0000
Email: xxxxxx.xxxxx@xxxxxx.xxx
Warrant Agreement
00
XXXXX XXXX XX XXXXXXXXXX, N.A.
By /s/ Xxxxxx Xxxxx
-------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
Address for Notices:
Union Bancal Equities
Attention: Xxxxxxx Xxxxxxx, V.P.
000 Xxxxx Xxxxxxxx Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxxxxx, XX 00000
(000) 000-0000
Warrant Agreement
49
GENERAL ELECTRIC CAPITAL CORPORATION
By /s/ Xxxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Duly Authorized Signatory
Address for Notices:
Xxxxxx X. xxx Xxxxx
General Electric Capital Corporation
0 Xxxx Xxxxx Xxxx, Xxxxxxxx 0X
Xxxxxxxx, XX 00000
-and-
Xxxxxx Xxxxxxxxx
UBS Xxxxx Xxxxxx
1285 Avenue of the Americas
00/xx/ Xxxxx
Xxx Xxxx, XX 00000-0000
Warrant Agreement
50
ENDEAVOUR, LLC
by PPM America, Inc, its attorney-in-fact
By /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
Address for Notices:
PPM America, Inc.
000 X. Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Warrant Agreement
51
CITIZENS BANK OF MASSACHUSETTS
By /s/ Xxxxxxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxxxxxx X. Xxxxxx
Title: Vice President
Address for Notices:
Citizens Bank of Massachusetts
00 Xxxxx Xxxxxx / XXX 000
Xxxxxx, XX 00000
Telephone: 000-000-0000
Fax: 000-000-0000
Warrant Agreement
52
BANK AUSTRIA CREDITANSTALT CORPORATE
FINANCE, INC.
By /s/ A. N. Xxxxxx
---------------------------------------
Name: A. N. Xxxxxx
Title: Senior Vice President
By /s/ Xxxx Xxxx
---------------------------------------
Name: Xxxx Xxxx
Title: Associate Director
Address for Notices:
HVB Credit Advisors -
Special Asset Advisory
000 Xxxx 00/xx/ Xxxxxx
Xxx Xxxx, XX 00000-0000
Warrant Agreement
53
FIRST MERIT BANK N.A.
By /s/ Xxxx Xxxx Xxxxxxxxxx
---------------------------------------
Name: Xxxx Xxxx Xxxxxxxxxx
Title: Vice President
Address for Notices:
FirstMerit Bank
000 X. Xxxxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: X. Xxxxxxx
Warrant Agreement
54
KEYBANK NATIONAL ASSOCIATION
By /s/ Xxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
Address for Notices:
Attn: Xxxxxx Xxxxx
OH-01-27-0504
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Warrant Agreement
55
KZH RIVERSIDE LLC
By /s/ Xxxxx Xxx
---------------------------------------
Name: Xxxxx Xxx
Title: Authorized Agent
Address for Notices:
Xxxxxxxx Xxxxxx
KZH RIVERSIDE LLC
c/o JPMorgan Chase Bank
000 Xxxx 00/xx/ Xxxxxx 00/xx/ Xxxxx
Xxx Xxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
E-Mail: xxxxxxxx.x.xxxxxx@xxxxxxxx.xxx
Warrant Agreement
56
KZH STERLING LLC
By /s/ Xxxxx Xxx
---------------------------------------
Name: Xxxxx Xxx
Title: Authorized Agent
Address for Notices:
Xxxxxxxx Xxxxxx
KZH STERLING LLC
c/o JPMorgan Chase Bank
000 Xxxx 00/xx/ Xxxxxx 00/xx/ Xxxxx
Xxx Xxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
E-Mail: xxxxxxxx.x.xxxxxx@xxxxxxxx.xxx
Warrant Agreement
57
KZH CYPRESSTREE - 1 LLC
By /s/ Xxxxx Xxx
---------------------------------------
Name: Xxxxx Xxx
Title: Authorized Agent
Address for Notices:
Xxxxxxxx Xxxxxx
KZH CypressTree-1 LLC
c/o JPMorgan Chase Bank
000 Xxxx 00/xx/ Xxxxxx 00/xx/ Xxxxx
Xxx Xxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
E-Mail: xxxxxxxx.x.xxxxxx@xxxxxxxx.xxx
Warrant Agreement
58
X.X. XXXXXX SECURITIES INC., as agent for
JPMorgan Chase Bank
By /s/ Xxxx Xxxxx
--------------------------------------
Name: Xxxx Xxxxx
Title: Authorized Signatory
Address for Notices:
Xxxxxxx Xxxxxx
1 Chase Xxxxxxxxx Xxxxx
0/xx/ Xxxxx
Xxx Xxxx, XX 00000
Warrant Agreement
59
CENTURION CDO I, LIMITED
By: American Express Asset Management
Group Inc. as Collateral Manager
By /s/ Xxxxxx Xxxxxxxxx
---------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Director - Operations
Address for Notices:
Xxxxx Canky
American Express Asset Management
000 X Xxxxxxxxx Xxxx. Xxx. 000
Xx Xxxxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
E-Mail: xxxxx.x.xxxxx@xxxx.xxx
Warrant Agreement
60
CENTURION CDO II, LTD.
By: American Express Asset Management
Group Inc. as Collateral Manager
By /s/ Xxxxxx Xxxxxxxxx
---------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Director - Operations
Address for Notices:
Xxxxx Canky
American Express Asset Management
000 X Xxxxxxxxx Xxxx. Xxx. 000
Xx Xxxxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
E-Mail: xxxxx.x.xxxxx@xxxx.xxx
Warrant Agreement
61
CENTURION CDO III, Limited
By: American Express Asset Management
Group Inc. as Collateral Manager
By /s/ Xxxxxx Xxxxxxxxx
---------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Director - Operations
Address for Notices:
Xxxxx Canky
American Express Asset Management
000 X Xxxxxxxxx Xxxx. Xxx. 000
Xx Xxxxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
E-Mail: xxxxx.x.xxxxx@xxxx.xxx
Warrant Agreement
62
CENTURION CDO VI, LTD.
By: American Express Asset Management
Group Inc. as Collateral Manager
By /s/ Xxxxxx Xxxxxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Director - Operations
Address for Notices:
Xxxxx Canky
American Express Asset Management
000 X Xxxxxxxxx Xxxx. Xxx. 000
Xx Xxxxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
E-Mail: xxxxx.x.xxxxx@xxxx.xxx
Warrant Agreement
63
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By /s/ Xxxxxx Xxxxxxxxx
---------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Managing Director
Address for Notices:
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
4 World Financial Center
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxxxxx
Warrant Agreement
Schedule 2.02
Allocation of Warrants
Each Initial Holder (or its Affiliate or nominee) shall receive Warrants to
purchase that number of Stock Units set forth below opposite such Initial
Holder's (or its Affiliate's or nominee's) name:
------------------------------------------------------------------------------------------
INITIAL HOLDER NUMBER OF STOCK UNITS
-------------- ---------------------
------------------------------------------------------------------------------------------
JPMORGAN CHASE BANK 64,856
------------------------------------------------------------------------------------------
NATIONAL CITY BANK 64,119
------------------------------------------------------------------------------------------
BANK ONE, NA 55,819
------------------------------------------------------------------------------------------
XXX XXXXXX PRIME RATE INCOME TRUST 49,555
------------------------------------------------------------------------------------------
SENIOR DEBT PORTFOLIO 52,555
------------------------------------------------------------------------------------------
U.S. BANK NATIONAL ASSOCIATION 32,096
------------------------------------------------------------------------------------------
UNION BANCAL EQUITIES, INC. 42,215
------------------------------------------------------------------------------------------
GE CAPITAL CFE, INC. 39,416
------------------------------------------------------------------------------------------
ENDEAVOUR, LLC 35,732
------------------------------------------------------------------------------------------
CITIZENS FINANCIAL GROUP, INC. 36,960
------------------------------------------------------------------------------------------
BANK AUSTRIA CREDITANSTALT CORPORATE FINANCE, INC. 23,821
------------------------------------------------------------------------------------------
FIRSTMERIT BANK, N.A. 30,769
------------------------------------------------------------------------------------------
KEYBANK NATIONAL ASSOCIATION 23,821
------------------------------------------------------------------------------------------
KZH RIVERSIDE LLC 5,310
------------------------------------------------------------------------------------------
KZH STERLING LLC 26,277
------------------------------------------------------------------------------------------
KZH CYPRESSTREE - 1 LLC 13,139
------------------------------------------------------------------------------------------
JPMORGAN CHASE BANK 23,764
------------------------------------------------------------------------------------------
Schedule 2.02 to Warrant Agreement
2
-------------------------------------------------------------------------------------
CENTURION CDO I, LIMITED 2,785
-------------------------------------------------------------------------------------
CENTURION CDO II, LTD. 6,951
-------------------------------------------------------------------------------------
CENTURION CDO III, LIMITED 2,779
-------------------------------------------------------------------------------------
CENTURION CDO VI, LTD. 2,785
-------------------------------------------------------------------------------------
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED 137,609
-------------------------------------------------------------------------------------
TOTAL: 773,133
-------------------------------------------------------------------------------------
Schedule 2.02 to Warrant Agreement
Schedule 3.07(a)
Existing Convertible Securities and Options
1. Convertible Securities and/or Options:
a. Warrants held by Chase Manhattan Bank to purchase an aggregate of 10,742
shares of Common Stock.
b. Warrants held by CIT Group/Equity Investments, Inc. to purchase an
aggregate of 12,434 shares of Common Stock.
c. Warrants held by the holders party to the Warrant Agreement dated as of
June 28, 2002, to purchase an aggregate of 513,559 shares of Common Stock.
d. Warrants held by the holders party to the Warrant Agreement dated as of
September 30, 2002, to purchase an aggregate of 1,353,531 shares of Common
Stock.
e. Rights under the Rights Agreement.
2. Options:
Shares Subject to
-----------------
Plan Outstanding Options
---- -------------------
a. Key Employees Stock Option Plan and
Second Amended and Restated 1997 Stock Option
and Incentive Plan 1,652,281
b. 2000 Executive Incentive Stock Option Plan 324,166
c. 1994 Stock Option Plan for Outside Directors 4,500
d. 1995 Stock Option Plan for Outside Directors 7,500
e. 1996 Stock Option Plan for Outside Directors 236,250
f. Rights under the Rights Agreement.
3. Amended and Restated Voluntary Deferred Income Plan: 75,037 shares 4.
Commitments to issue securities:
a. Contingent commitment to issue warrants to purchase an aggregate of
1,000,000 shares of Common Stock pursuant to the Indemnification and
Warrant Purchase Agreement, dated
Schedule 3.07(a) to Warrant Agreement
2
April 12, 1999, between the Issuer, MVE Holdings, Inc. and each of the
former members of MVE Investors, LLC.
b. Contingent and non-contingent commitments to issue securities pursuant to
the Issuer's 401(k) Investment and Savings Plan, 1996 Stock Option Plan for
Outside Directors and Amended and Restated 1997 Stock Bonus Plan.
c. Customary offers before the date hereof to grant Options to employees in
connection with an offer of employment.
d. Obligations to issue securities under the Rights Agreement.
Schedule 3.07(a) to Warrant Agreement
Schedule 3.07(b)
Existing Registration Rights
1. Registration rights granted to Chase Manhattan Bank and The CIT
Group/Equity Investments, Inc. pursuant to the Registration Rights
Agreement, dated August 30, 1991, among Cryenco Holdings, Inc, The CIT
Group/Equity Investments, Inc. and Chemical Bank.
2. Registration rights granted to the former members of MVE Investors LLC
pursuant to the Warrant Agreement, dated as of April 12, 1999, between the
Issuer and the parties thereto.
Schedule 3.07(b) to Warrant Agreement
Annex 1 to Warrant Agreement
[Form of Warrant]
WARRANT
THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT
TO THE RESTRICTIONS SPECIFIED IN THAT CERTAIN WARRANT AGREEMENT DATED AS OF
DECEMBER 31, 2002 (THE "WARRANT AGREEMENT") BETWEEN CHART INDUSTRIES, INC.,
A DELAWARE CORPORATION (THE "ISSUER"), AND THE HOLDERS PARTY THERETO FROM
TIME TO TIME AS MODIFIED AND SUPPLEMENTED AND IN EFFECT FROM TIME TO TIME,
AND NO TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE SHALL BE
VALID OR EFFECTIVE UNTIL SUCH RESTRICTIONS HAVE LAPSED OR BEEN FULFILLED,
RELEASED OR WAIVED. A COPY OF THE FORM OF THE WARRANT AGREEMENT IS ON FILE
AND MAY BE INSPECTED AT THE PRINCIPAL EXECUTIVE OFFICE OF THE ISSUER. THE
HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF THIS CERTIFICATE, AGREES TO BE
BOUND BY THE PROVISIONS OF THE WARRANT AGREEMENT.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS, AND ACCORDINGLY, SUCH SECURITIES MAY NOT BE TRANSFERRED,
SOLD OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE REGISTRATION OR
QUALIFICATION PROVISIONS OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR
APPLICABLE EXEMPTIONS THEREFROM.
No. of Stock Units Covered Hereby: [__] Warrant No. [_]
WARRANT
to Purchase Common Stock of
CHART INDUSTRIES, INC.
THIS IS TO CERTIFY THAT [___________], or its registered assigns (the
"Holder"), is entitled to purchase in whole or in part from time to time from
CHART INDUSTRIES, INC., a Delaware corporation (the "Issuer"), at any time prior
to 5:00 p.m., New York time, on the third anniversary of the date hereof (as it
may be extended pursuant to Section 9.06 of the Warrant Agreement, the
"Expiration Date"),[____] Stock Units at a purchase price of $0.750 per Stock
Unit (the "Exercise Price"), subject to the terms and conditions hereinbelow
Warrant
- 2 -
provided. All capitalized terms unless otherwise defined herein shall have the
meanings set forth in the Warrant Agreement.
On and after the date hereof and until 5:00 p.m., New York time, on the
Expiration Date, the Holder may exercise this Warrant, on one or more occasions,
on any Business Day, in whole or in part, by delivering to the Issuer:
(a) a written notice of the Holder's election to exercise this
Warrant, which notice shall specify the number of Stock Units to be
purchased (the "Exercise Notice");
(b) payment of the aggregate Exercise Price for the number of Stock
Units as to which this Warrant is being exercised (payable as set forth
below); and
(c) this Warrant.
The Exercise Price shall be payable (a) in cash or by certified or
official bank check payable to the order of the Issuer or by wire transfer of
immediately available funds to the account of the Issuer, (b) by delivery (or
causing to be delivered) to the Issuer of Loans held by the Holder (or any of
its Affiliates) and outstanding under, and the Note, if any, evidencing the same
issued pursuant to, the Credit Agreement (provided that, if such Holder (or any
such Affiliate or Affiliates) shall hold both Term Loans and Revolving Credit
Loans, such Loans so delivered by such Holder shall consist of a ratable portion
of the Term Loans and Revolving Credit Loans held by such Holder and/or its
Affiliates; and any such Loans so delivered shall deemed to be paid for purposes
of the Credit Agreement, with such payment in the case of such Term Loans being
applied in inverse order of the maturity thereof), with such securities being
credited against the Exercise Price in an amount equal to the aggregate
principal amount of such Loans (plus unpaid and accrued interest) so delivered,
or (c) by delivery of this Warrant Certificate to the Issuer for cancellation in
accordance with the following formula: in exchange for the number of shares of
Common Stock issuable on the exercise of the Warrants that are being exercised
at such time, the Holder shall receive such number of shares of Common Stock as
is equal to the product of (i) the number of shares of Common Stock issuable
upon exercise of the Warrants being exercised at such time multiplied by (ii) a
fraction, the numerator or which is the Current Market Value per share of Common
Stock at such time minus the Exercise Price per share of Common Stock at such
time, and the denominator of which is the Current Market Value per share of
Common Stock at such time. Such Exercise Notice shall be substantially in the
form of Exhibit A hereto. Upon receipt thereof, the Issuer shall, as promptly as
practicable and in any event within 5 Business Days thereafter, execute or cause
to be executed and deliver or cause to be delivered to the Holder a certificate
or certificates representing the aggregate number of shares of Warrant Stock and
other securities issuable upon such exercise and any other property to which the
Holder is entitled.
The certificate or certificates for Warrant Stock so delivered shall
be in such denominations as may be specified in the Exercise Notice and shall be
registered in the name of the Holder or such other name or names as shall be
designated in such Exercise Notice. Such certificate or certificates shall be
deemed to have been issued and the Holder or any other Person
Warrant
- 3 -
so designated to be named therein shall be deemed to have become a holder of
record of Warrant Stock, including, to the extent permitted by law, the right to
vote Warrant Stock or to consent or to receive notice as a Shareholder, as of
the date on which the last of the Exercise Notice, payment of the Exercise Price
and this Warrant is received by the Issuer as aforesaid, and all taxes required
to be paid by the Holder, if any, pursuant to the Warrant Agreement, prior to
the issuance of Stock Units have been paid. If this Warrant shall have been
exercised only in part, the Issuer shall, at the time of delivery of the
certificate or certificates representing Warrant Stock and other securities,
execute and deliver to the Holder a new Warrant evidencing the rights of the
Holder to purchase the unpurchased Stock Units called for by this Warrant, which
new Warrant shall in all other respects be identical with this Warrant, or, at
the request of the Holder, appropriate notation may be made on this Warrant and
the same returned to the Holder.
The Issuer shall not be required to issue a fractional amount of
Warrant Stock upon exercise of this Warrant. As to any fraction of a share of
Warrant Stock which the Holder would otherwise be entitled to purchase upon such
exercise, the Issuer shall pay a cash adjustment in respect of such final
fraction in an amount equal to the same fraction of the Current Market Value per
share of Warrant Stock on the date of exercise.
If reasonably requested by the Issuer in connection with the exercise
of this Warrant, the Holder shall deliver to the Issuer a certification of
taxpayer identification number or similar form so requested by the Issuer.
This Warrant shall be governed by, and construed in accordance with,
the law of the State of New York without giving effect to the conflicts of law
principles thereof, except to the extent that New York conflicts of laws
principles would apply the Delaware General Corporation Law to matters relating
to corporations organized thereunder.
Warrant
- 4 -
IN WITNESS WHEREOF, the Issuer has duly executed this Warrant.
Dated: December 31, 2002
CHART INDUSTRIES, INC.
By ______________________________
Name:
Title:
Attest:
______________________________
Secretary
Warrant
Exhibit A to Warrant
FORM OF EXERCISE
(To be executed by the registered holder hereof)
The undersigned registered owner of this Warrant irrevocably exercises
this Warrant for the purchase of [___] Stock Units of CHART INDUSTRIES, INC., a
Delaware corporation, and herewith makes payment therefor [in cash, as provided
in clause (a) of the third paragraph of this Warrant] [by delivery of any Loans,
as provided in clause (b) of the third paragraph of this Warrant] [by delivery
of the Warrant Certificate(s) for cancellation in accordance with the formula
provided in clause (c) of the third paragraph of this Warrant], all at the price
and on the terms and conditions specified in this Warrant, and requests that
certificates for the shares of Common Stock be issued in accordance with the
instructions given below, and, if such Stock Units shall not include all of the
Stock Units to which the Holder is entitled under this Warrant, that a new
Warrant of like tenor and date for the unpurchased balance of the Stock Units
issuable hereunder be delivered to the undersigned.
Dated: _____________, 200_
_____________________________________
(Signature of Registered Holder)
Instructions for issuance and
registration of Common Stock:
_____________________________________
Name of Registered Holder
(please print)
Social Security or Other Identifying
Number: _____________________________
Please deliver certificate to
the following address:
_______________________________________
Street
_______________________________________
City, State and Zip Code
Form of Exercise
Annex 2 to Warrant Agreement
FORM OF ASSIGNMENT
(To be executed by the registered holder hereof)
FOR VALUE RECEIVED, the undersigned registered owner of this Warrant
hereby sells, assigns and transfers unto the assignee named below all the rights
of the undersigned under this Warrant and the related Warrant Agreement with
respect to the number of shares of Warrant Stock covered thereby set forth
hereinbelow unto:
Name of Assignee Address Number of Stock Units
-------------------------------------------------------------------
Dated: ____________, 200_
_________________________________
Signature of Registered Holder
_________________________________
Name of Registered Holder
(Please Print)
Witness:
_________________________
Form of Assignment
Annex 3 to Warrant Agreement
[Form of Joinder Agreement]
JOINDER AGREEMENT, dated as of [_______], 200[_] between CHART INDUSTRIES,
INC., a Delaware corporation (the "Issuer"), and the other parties signatories
hereto (this "Joinder Agreement").
A. Reference is made to that certain Warrant Agreement dated as of December
31, 2002 (as modified and supplemented and in effect from time to time,
the "Warrant Agreement"), between the Issuer and the Initial Holders.
Each capitalized term used but not defined herein shall have the meaning
assigned to such term in the Warrant Agreement; and
B. Section 7.01(c) of the Warrant Agreement requires that the Issuer shall
deliver to the Initial Holders this Joinder Agreement executed by the
Issuer, each Principal Shareholder and each Related Party thereof that
owns Common Stock.
In consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
undersigned hereby agrees that:
1. The undersigned: (a) is delivering this Joinder Agreement pursuant to
Section 7.01(c) of the Warrant Agreement and (b) acknowledges receipt of a copy
of the Warrant Agreement.
2. The undersigned hereby agrees to be bound by the provisions of Article
VII of the Warrant Agreement (but no other provisions thereof).
IN WITNESS WHEREOF, the undersigned has signed this Joinder Agreement as of
the date first above written.
[________________]
By:___________________________________
Name:
Title:
Form of Joinder Agreement
- 2 -
Acknowledged and Agreed to as
of the date first above written:
CHART INDUSTRIES, INC.
By:____________________________
Name:
Title:
Form of Joinder Agreement
