NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
LAWS AND MAY NOT BE TRANSFERRED IN VIOLATION OF SUCH ACT OR LAWS, THE RULES AND
REGULATIONS THEREUNDER OR THE PROVISIONS OF THIS WARRANT.
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF ARE SUBJECT TO A
STOCKHOLDERS AGREEMENT (A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY). NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION OF THIS WARRANT OR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF MAY
BE MADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF SUCH STOCKHOLDERS AGREEMENT.
THE HOLDER OF THIS WARRANT AGREES TO BE BOUND BY ALL OF THE PROVISIONS OF SUCH
STOCKHOLDERS AGREEMENT.
No. of Shares of Common Stock: ____________________
FORM OF WARRANT
TO PURCHASE COMMON STOCK OF
CLUBCORP, INC.
THIS IS TO CERTIFY THAT _________________, or registered assigns, is
entitled at any time prior to the Expiration Date (as hereinafter defined), to
purchase from CLUBCORP, INC., a Delaware corporation (the "Company"),
_______________ (________) shares of Common Stock (as hereinafter defined and
subject to adjustment as provided herein), in whole or in part, including
fractional parts, at a purchase price of $17.00 per share (subject to adjustment
as set forth herein), all on the terms and conditions and pursuant to the
provisions hereinafter set forth.
ARTICLE 1.
Defined Terms
SECTION 1.1 Definitions.Capitalized terms used and not defined herein
shall have the meanings assigned to them in the Stock Purchase Agreement. As
used herein, the following terms shall have the following meanings:
"Affiliate" means, with respect to any Person, any other Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with, such specified Person, for so
long as such Person remains so associated to the specified Person.
"Board" means the Board of Directors of the Company.
"Business Day" means any day that is not a Saturday, a Sunday or other
day on which banks are required or authorized by law to be closed in The City of
New York or Dallas, Texas.
"Cashless Exercise Ratio" means a fraction, the numerator of which is
the excess of the Market Value per share of Common Stock on the date of exercise
over the Exercise Price per share as of the date of exercise and the denominator
of which is the Market Value per share of the Common Stock on the date of
exercise.
"Common Stock" means the common stock, par value $.01 per share, of
the Company, together with any other equity securities that may be issued by the
Company in substitution therefor.
"control" (including the terms "controlled by" and "under common
control with"), with respect to the relationship between or among two or more
Persons, means the possession, directly or indirectly, of the power to direct or
cause the direction of the affairs or management of a Person, whether through
the ownership of voting securities, as trustee or executor, by contract or
otherwise.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exercise Price" means, at any date herein, the price at which a share
of Common Stock may be purchased pursuant to this Warrant on such date. On the
date of original issuance of this Warrant, the Exercise Price is $17.00 per
share of Common Stock.
"Expiration Date" means the tenth anniversary of the Closing Date.
"Group" shall have the meaning assigned to it in Section 13(d)(3) of
the Exchange Act.
"Holder" means the duly registered holder of this Warrant under the
terms hereof.
"Independent Investment Banking Firm" means an investment banking firm
of nationally recognized standing that is, in the reasonable judgment of the
Person engaging such firm, qualified to perform the task for which it has been
engaged.
"Majority Holders" shall mean the Holders of Warrants exercisable for
in excess of 50% of the aggregate number of shares of Common Stock then
purchasable upon exercise of all Warrants, whether or not then exercisable.
"Market Value" means, (a) with respect to capital stock or other
equity securities, the last reported sales price on the date of determination
or, in case no such sale takes place on such day, the average of the closing bid
and asked prices regular way for such day, in each case (i) on the principal
national securities exchange on which the shares of such capital stock or other
equity interest are listed or to which such shares are admitted for trading or
(ii) if such capital stock or other equity interest is not listed or admitted
for trading on a national securities exchange, in the over-the-counter market as
reported by the National Association of Securities Dealers, Inc. National Market
System ("NASDAQ") or any comparable system, or (iii) if such capital stock or
other equity interest is not listed on NASDAQ or a comparable system, as
furnished by two members of the National Association of Securities Dealers, Inc.
("NASD") selected from time to time in good faith by the Board for that purpose;
provided, however, that with respect only to the Common Stock, so long as the
Purchasers shall have consent rights under Section 5.3 of the Stockholders
Agreement, in lieu of the foregoing provision of this clause (iii), the Market
Value of the Common Stock shall be the most recently determined Formula Price as
approved pursuant to Section 5.3(xvi) of the Stockholders Agreement, unless the
Company or the Purchasers object to the use of the Formula Price, in which case,
the Market Value shall be determined in accordance with the following sentence.
In the absence of all of the foregoing, or if for any other reason the Market
Value per share cannot be determined pursuant to the foregoing provisions or if
the consideration to be received by the holders of Common Stock consists of
evidences of indebtedness, other property, warrants, options or subscription of
purchase rights, the Market Value shall be the fair market value thereof as
determined by an Independent Investment Banking Firm selected by the Purchasers
and reasonably acceptable to the Company. The Company shall bear the fees and
expenses of any Independent Investment Banking Firm involved in the
determination of Market Value. Any determination of the Market Value of the
Common Stock by an Independent Investment Banking Firm shall be made on the
basis of a public market valuation of the Company without any control premium.
For the purpose of any computation of Market Value under Article 3 and Section
2.5, the "Market Value" per share of Common Stock (in cases where the Market
Value is determined based on a trading price in accordance with clauses (i)
through (iii) above) at any date shall be (x) for purposes of Section 2.5, the
last reported sales price on the Business Day immediately prior to the date of
the exercise of this Warrant pursuant to Article 2 and (y) for purposes of
Article 3, the average of the last reported sales prices for the shorter of (i)
the 5 consecutive trading days ending seven trading days on the exchange or
market specified in the second succeeding sentence prior to the Time of
Determination (as defined below) and (ii) the period commencing on the date next
succeeding the first public announcement of the issuance, sale, distribution or
granting in question through such last full trading day prior to the Time of
Determination. For purposes of any computation under Article 3 and Section 2.5,
the "Market Value" per share of Common Stock, if determined by reference to the
Formula Price, shall be calculated based on the most recently determined Formula
Price. The term "Time of Determination" as used herein shall be the time and
date of the earlier to occur of (A) the date as of which the Market Value is to
be computed and (B) the last full trading day on such exchange or market before
the commencement of "ex-dividend" trading in the Common Stock relating to the
event giving rise to the adjustment required by Article 3.
"Person" means any individual, corporation, limited liability company,
limited or general partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivisions thereof or any Group comprised of two or more of the foregoing.
"Purchasers" means collectively, Cypress Merchant Banking Partners
L.P., a Delaware limited partnership, Cypress Offshore Partners L.P., a Cayman
Islands exempt limited partnership, Cypress Merchant Banking Partners II L.P., a
Delaware limited partnership, Cypress Merchant Banking Partners II C.V., a
"commanditaire vennootschap" in accordance with Netherlands Law, and 55th Street
Partners II L.P., a Delaware limited partnership.
"SEC" means the U.S. Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Stock Purchase Agreement" means the Stock Purchase Agreement, dated
as of October 26, 1999, among the Xxxxxx Xxxxxx Trust #1, the Xxxxxx Xxxxxx
Trust #2, The Xxxxxx Foundation, The Xxxxxx and Xxxxx Xxxxxx Foundation, the
Company and the Purchasers.
"Stockholders Agreement" means the Stockholders Agreement, dated as of
__________ __, 1999, by and among Xxxxxx X. Xxxxxx, Xx., Xxxxxxxx Xxxxxx Xxxxx,
Xxxxxx X. Xxxxxx, Xx., the Xxxxxx Xxxxxx Trust #1, the Xxxxxx Xxxxxx Trust #2,
the Xxxxx Xxxxxx Trust #1, the Xxxxx Xxxxxx Trust #2, The Xxxxxx Foundation, The
Xxxxxx and Xxxxx Xxxxxx Foundation, the Purchasers and the Company, as the same
may be amended from time to time.
"Warrant Shares" means the shares of Common Stock of the Company
received, or issued and received, as the case may be, upon exercise of the
Warrants.
"Warrants" means this Warrant, and the warrants issued to the other
Purchasers on the date hereof and all warrants issued upon transfer, division or
combination of, or in substitution for, any thereof. All Warrants shall at all
times be identical as to terms and conditions and date, except as to the number
of shares of Common Stock for which they may be exercised.
ARTICLE 2.
Exercise Terms
SECTION 2.1 Exercise Periods. At any time from and after the date of
this Warrant and until 5:00 p.m., New York City time, on the Expiration Date,
the Holder may exercise this Warrant, on any Business Day, for all or any part
of the number of shares of Common Stock purchasable hereunder.
SECTION 2.2 Expiration. This Warrant shall terminate and become void
as of the earlier of (i) 5:00 p.m., New York City time, on the Expiration Date
and (ii) the time and date this Warrant is exercised. The Company shall give
notice not less than 90, and not more than 120, days prior to the Expiration
Date to the Holder hereof to the effect that this Warrant will terminate and
become void as of the close of business on the Expiration Date. This Warrant
shall terminate and become void after the Expiration Date, notwithstanding the
Company's failure to give such notice.
SECTION 2.3 Manner of Exercise. (a) In order to exercise this
Warrant, in whole or in part, Holder shall deliver to the Company at its
principal office at 0000 XXX Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000 or at the
office or agency designated by the Company pursuant to Article 6, (i) a written
notice of Holder's election to exercise this Warrant, which notice shall specify
the number of Warrant Shares to be purchased and shall be substantially in the
form of the subscription form appearing at the end of this Warrant as Exhibit A,
(ii) payment of the Exercise Price for the number of Warrant Shares in respect
of which such Warrant is then exercised; provided, that no such payment need be
delivered if the Holder elects to exercise the Warrant pursuant to the Cashless
Exercise provided in subsection (b) below, and (iii) this Warrant. Payment of
the Exercise Price shall be made in cash or by certified or official bank check
payable to the order of the Company or by wire transfer of funds to an account
designated by the Company for such purpose. The rights represented by this
Warrant shall be exercisable at the election of the Holders thereof either in
full at any time or in part from time to time and, in the event that this
Warrant is surrendered for exercise in respect of less than all the Warrant
Shares purchasable on such exercise at any time prior to the Expiration Date,
the Company shall, at the time of delivery of the certificate or certificates
representing the Warrant Shares, deliver to the Holder a new Warrant evidencing
the rights of Holder to purchase the unpurchased shares of Common Stock 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.
(b) In lieu of payment of the Exercise Price in cash, at the
option of the Holder, as indicated on the subscription form appearing at the end
of this Warrant as Exhibit A, the Holder may demand that the Company reduce the
number of shares of Common Stock to be delivered to such Holder upon exercise of
the Warrants then being exercised so that the Holder receives a number of shares
of Common Stock equal to the product of (1) the number of shares of Common Stock
for which such Warrant would otherwise then be nominally exercised if payment of
the Exercise Price as of the date of exercise were being made in cash and (2)
the Cashless Exercise Ratio. An exercise of a Warrant in accordance with this
clause (b) is herein called a "Cashless Exercise". The Holder may use the
Cashless Exercise option whether or not this Warrant is being exercised in full
or in part.
SECTION 2.4 Issuance of Warrant Shares. Subject to Section 2.5, upon
the surrender of this Warrant and payment of the per share Exercise Price (or in
accordance with Section 2.3(b)), as set forth in Section 2.3, the Company shall,
as promptly as practicable, and in any event within five (5) Business Days
thereafter, issue or cause there to be issued and deliver or cause to be
delivered to or upon the written order of the Holder and in such name or names
as the Holder may designate in the notice provided pursuant to Section 2.3, a
certificate or certificates for the number of full Warrant Shares so purchased
upon the exercise of such Warrants or other securities or property to which it
is entitled, registered or otherwise to the Person or Persons entitled to
receive the same, together with cash as provided in Section 2.5 in respect of
any fractional Warrant Shares otherwise issuable upon such exercise. Such
certificate or certificates shall be deemed to have been issued and any Person
so designated to be named therein shall be deemed to have become a holder of
record of such Warrant Shares as of the date of the delivery of the notice
provided pursuant to Section 2.3, the surrender of this Warrant and, subject to
Section 2.3(b), payment of the per share Exercise Price.
SECTION 2.5 Fractional Warrant Shares. The Company shall not be
required to issue fractional Warrant Shares on the exercise of Warrants. If any
fraction of a Warrant Share would, except for the provisions of this Section
2.5, be issuable on the exercise of this Warrant (or specified portion thereof),
the Company shall pay an amount in cash equal to the Market Value for one
Warrant Share on the Business Day immediately preceding the date the Warrant is
exercised, multiplied by such fraction, computed to the nearest whole cent. For
purposes of determining the Market Value, if in accordance with such term, an
Independent Investment Banking Firm would be required to be hired to determine
the Market Value and but for this Section 2.5, an Independent Investment Banking
Firm is not otherwise required to be retained to determine Market Value at such
time, then Market Value shall be determined in good faith by the Board.
SECTION 2.6 Reservation of Warrant Shares. (a) The Company shall at
all times on and following the Closing Date keep reserved out of its authorized
shares of Common Stock a number of shares of Common Stock sufficient to provide
for the exercise in full of all outstanding Warrants. The registrar for the
Common Stock shall at all times on and following the Closing Date and until the
Expiration Date, or the time at which all Warrants have been exercised or
canceled, reserve such number of authorized shares as shall be required for such
purpose. All Warrant Shares which may be issued upon exercise of this Warrant
shall be duly and validly authorized, validly issued, fully paid, nonassessable,
free of preemptive rights and free from all Encumbrances (as defined in the
Stock Purchase Agreement).
(b) Before taking any action which would cause an adjustment pursuant
to Article 3 to reduce the Exercise Price below the then par value (if any) of
the Common Stock, the Company shall take any and all corporate action which may,
in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable shares of Common Stock at
the Exercise Price as so adjusted.
SECTION 2.7 Compliance with Law. If any shares of Common Stock
required to be reserved for purposes of exercise of Warrants would require,
under any other federal or state law or applicable governing rule or regulation
of any national securities exchange, registration with or approval of any
governmental authority, or listing on any such national securities exchange
before such shares may be issued upon exercise, the Company will cause such
shares to be duly registered or approved by such governmental authority or
listed on the relevant national securities exchange, at its expense.
SECTION 2.8 Continued Validity. A Holder of Warrant Shares shall
continue to be entitled with respect to such shares to all rights and subject to
all obligations to which it would have been entitled or subject as Holder under
Section 4.5 and Article 8 of this Warrant. The Company will, at the time of
each exercise of this Warrant, in whole or in part, upon the request of the
Holder of the Warrant Shares issued upon such exercise hereof, acknowledge in
writing in form reasonably satisfactory to such Holder, its continuing
obligation to afford to such Holder all such rights; provided, however, that if
such Holder shall fail to make any such request, such failure shall not affect
the continuing obligation of the Company to afford to such Holder all such
rights.
ARTICLE 3.
Adjustment Provisions
SECTION 3.1 Changes in Common Stock. In the event that at any time
or from time to time after the date hereof, the Company shall (i) pay a dividend
or make a distribution on its Common Stock in shares of its Common Stock or
other shares of capital stock, (ii) subdivide its outstanding shares of Common
Stock into a larger number of shares of Common Stock, (iii) combine its
outstanding shares of Common Stock into a smaller number of shares of Common
Stock or (iv) increase or decrease the number of shares of Common Stock
outstanding by reclassification of its Common Stock (in each case, other than a
transaction to which Section 3.4 is applicable), then the number of shares of
Common Stock purchasable upon exercise of this Warrant immediately after the
happening of such event shall be adjusted so that, after giving effect to such
adjustment, the Holder of this Warrant shall be entitled to receive the number
of shares of Common Stock upon exercise that such Holder would have owned or
have been entitled to receive had this Warrant been exercised immediately prior
to the happening of the events described above (or, in the case of a dividend or
distribution of Common Stock, immediately prior to the record date therefor),
and the Exercise Price shall be adjusted in inverse proportion. An adjustment
made pursuant to this Section 3.1 shall become effective immediately after the
effective date, retroactive to the record date therefor in the case of a
dividend or distribution in shares of Common Stock, and shall become effective
immediately after the effective date in the case of a subdivision, combination
or reclassification.
SECTION 3.2 Cash Dividends and Other Distributions. In case at any
time or from time to time after the date hereof, the Company shall distribute to
all holders of Common Stock (i) any dividend or other distribution of cash,
evidences of its indebtedness, shares of its capital stock or any other
properties or securities or (ii) any options, warrants or other rights to
subscribe for or purchase any of the foregoing (other than, in each case set
forth in (i) and (ii), (x) any dividend or distribution described in Section 3.1
or, (y) any rights, options, warrants or securities described in Section 3.3),
then (i) the number of shares of Common Stock purchasable upon the exercise of
this Warrant shall be increased to a number determined by multiplying the number
of shares of Common Stock purchasable upon the exercise of this Warrant
immediately prior to the record date for any such dividend or distribution by a
fraction, (A) the numerator of which shall be the Market Value per share of
Common Stock on the record date for such distribution, and (B) the denominator
of which shall be such Market Value per share of Common Stock less the sum of
(x) any cash distributed per share of Common Stock and (y) the fair value (the
"Fair Value") (as determined in good faith by the Board, whose determination
shall be evidenced by a board resolution, a certified copy of which will be sent
to Holders) of the portion, if any, of the distribution applicable to one share
of Common Stock consisting of evidences of indebtedness, shares of stock,
securities, other property, warrants, options or subscription or purchase rights
and (ii) the Exercise Price shall be adjusted to a number determined by dividing
the Exercise Price immediately prior to such record date by the above fraction.
Such adjustments shall be made whenever any distribution is made and shall
become effective as of the date of distribution, retroactive to the record date
for any such distribution; provided, however, that the Company is not required
to make an adjustment pursuant to this Section 3.2 if at the time of such
distribution the Company makes the same distribution to Holders of Warrants as
it makes to holders of Common Stock pro rata based on the number of shares of
Common Stock for which such Warrants are exercisable. No adjustment shall be
made pursuant to this Section 3.2 which shall have the effect of decreasing the
number of shares of Common Stock purchasable upon exercise of each Warrant or
increasing the Exercise Price.
SECTION 3.3 Rights Issue. In the event that at any time or from time
to time after the date hereof, the Company shall issue, sell, distribute or
otherwise grant any rights to subscribe for or to purchase, or any options or
warrants for the purchase of, or any securities convertible or exchangeable
into, Common Stock to all holders of Common Stock, entitling such holders to
subscribe for or purchase shares of Common Stock or stock or securities
convertible into Common Stock, whether or not immediately exercisable,
convertible or exchangeable, as the case may be, and the subscription or
purchase price per share of Common Stock or the price per share of Common Stock
issuable upon exercise, conversion or exchange thereof is lower at the record
date for such issuance than the then Market Value per share of Common Stock, the
number of shares of Common Stock thereafter purchasable upon the exercise of
this Warrant shall be determined by multiplying the number of shares of Common
Stock purchasable upon the exercise of this Warrant prior to the record date by
a fraction, (A) the numerator of which shall be the number of shares of Common
Stock outstanding on the date of issuance of such rights, options, warrants or
securities plus the number of additional shares of Common Stock offered for
subscription or purchase or into or for which such securities are convertible or
exchangeable, and (B) the denominator of which shall be the number of shares of
Common Stock outstanding on the date of issuance of such rights, options,
warrants or securities plus the total number of shares of Common Stock which
could be purchased at the Market Value with the aggregate consideration received
through the issuance of such rights, warrants, options, or convertible
securities. In the event of any such adjustment, the Exercise Price shall be
adjusted to a number determined by dividing the Exercise Price immediately prior
to such date of issuance by the above fraction. Such adjustment shall be made
whenever such rights, options or warrants are issued and shall become effective
retroactively immediately after the record date for the determination of
stockholders entitled to receive such rights, options, warrants or securities.
If the Company at any time shall issue two or more securities as a
unit and one or more of such securities shall be rights, options or warrants for
or securities convertible or exchangeable into, Common Stock subject to this
Section 3.3, the consideration allocated to each such security shall be
determined in good faith by a Board resolution, a certified copy of which shall
be delivered to the Holder.
SECTION 3.4 Reorganization, Reclassification, Merger, Consolidation
or Disposition of Assets. In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another Person
(where the Company is not the surviving entity or where there is a change in or
distribution with respect to the Common Stock of the Company), or sell, transfer
or otherwise dispose of all or substantially all its property, assets or
business to another Person and, pursuant to the terms of such reorganization,
reclassification, merger, consolidation or disposition of assets, shares of
common stock of the successor or acquiring Person, or any cash, shares of stock
or other securities or property of any nature whatsoever (including warrants or
other subscription or purchase rights) in addition to or in lieu of common stock
of the successor or acquiring Person ("Other Property"), are to be received by
or distributed to the holders of Common Stock of the Company, then each Holder
shall have the right thereafter to receive, upon exercise of such Warrant, the
number of shares of common stock of the successor or acquiring Person or of the
Company, if it is the surviving entity, and Other Property receivable upon or as
a result of such reorganization, reclassification, merger, consolidation or
disposition of assets by a holder of the number of shares of Common Stock for
which this Warrant is exercisable immediately prior to such event. In case of
any such reorganization, reclassification, merger, consolidation or disposition
of assets, the successor or acquiring Person (if other than the Company) shall
expressly assume the due and punctual observance and performance of each and
every covenant and condition of this Warrant to be performed and observed by the
Company and all the obligations and liabilities hereunder, subject to such
modifications as may be deemed appropriate (as determined by resolution of the
Board) in order to provide for adjustments of shares of the Common Stock for
which this Warrant is exercisable which shall be as nearly equivalent as
practicable to the adjustments provided for in this Article 3. For purposes of
this Section 3.4 "common stock of the successor or acquiring Person" shall
include stock of such Person of any class which is not preferred as to dividends
or assets over any other class of stock of such Person and which is not subject
to redemption and shall also include any evidences of indebtedness, shares of
stock or other securities which are convertible into or exchangeable for any
such stock, either immediately or upon the arrival of a specified date or the
happening of a specified event and any warrants or other rights to subscribe for
or purchase any such stock. The foregoing provisions of this Section 3.4 shall
similarly apply to successive reorganizations, reclassifications, mergers,
consolidations or dispositions of assets.
SECTION 3.5 Issuance of Additional Shares of Common Stock. If at any
time the Company shall issue or sell any additional shares of Common Stock for
gross consideration in an amount per additional share of Common Stock less than
the Market Value, then (i) the number of shares of Common Stock for which this
Warrant is exercisable shall be adjusted to equal the product obtained by
multiplying the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such issue or sale by a fraction (A) the
numerator of which shall be the number of shares of Common Stock outstanding
immediately after such issue or sale, and (B) the denominator of which shall be
the sum of (1) the number of shares of Common Stock outstanding immediately
prior to such issue or sale, and (2) the number of shares of Common Stock which
could be purchased at such Market Value with the aggregate consideration
received from the issuance or sale of the additional shares of Common Stock and
(ii) the Exercise Price shall be adjusted to equal (A) the Exercise Price
immediately prior to such issue or sale multiplied by the number of shares of
Common Stock for which this Warrant is exercisable immediately prior to such
issue or sale divided by (B) the number of shares for which this Warrant is
exercisable immediately after such adjustment. For the purposes of this Section
3.5, the date as of which the Market Value per share of Common Stock shall be
computed shall be the earlier of (a) the date on which the Company shall enter
into a firm contract for the issuance of such additional shares of Common Stock
or (b) the date of actual issuance of such additional shares of Common Stock.
SECTION 3.6 Other Events. If any event occurs as to which the
foregoing provisions of this Article 3 are not strictly applicable or, if
strictly applicable, would not, in the good faith judgment of the Board, fairly
and adequately protect the purchase rights of the Warrants in accordance with
the essential intent and principles of such provisions, then the Board shall
make such adjustments in the application of such provisions, in accordance with
such essential intent and principles, as shall be reasonably necessary, in the
good faith opinion of the Board, to protect such purchase rights as aforesaid.
SECTION 3.7 Superseding Adjustment. Upon the expiration of any
rights, options, warrants or conversion or exchange privileges which resulted in
the adjustments pursuant to this Article 3, if any thereof shall not have been
exercised, the number of Warrant Shares purchasable upon the exercise of each
Warrant shall be readjusted as if (A) the only shares of Common Stock issuable
upon exercise of such rights, options, warrants, conversion or exchange
privileges were the shares of Common Stock, if any, actually issued upon the
exercise of such rights, options, warrants or conversion or exchange privileges
and (B) shares of Common Stock actually issued, if any, were issuable for the
consideration actually received by the Company upon such exercise plus the
aggregate consideration, if any, actually received by the Company for the
issuance, sale or grant of all such rights, options, warrants or conversion or
exchange privileges whether or not exercised and the Exercise Price shall be
readjusted inversely; provided, however, that no such readjustment shall (except
by reason of an intervening adjustment under Section 3.1 or, if applicable,
Section 3.6) have the effect of decreasing the number of Warrant Shares
purchasable upon the exercise of each Warrant or increasing the Exercise Price
by an amount in excess of the amount of the adjustments to the number of Warrant
Shares purchasable and the Exercise Price initially made in respect of the
issuance, sale or grant of such rights, options, warrants or conversion or
exchange privileges.
SECTION 3.8 Minimum Adjustment. The adjustments required by the
preceding Sections of this Article 3 shall be made whenever and as often as any
specified event requiring an adjustment shall occur, except that no adjustment
of the Exercise Price or the number of shares of Common Stock purchasable upon
exercise of the Warrants that would otherwise be required shall be made (except
in the case of a subdivision or combination of shares of Common Stock, as
provided for in Section 3.1) unless and until such adjust-ment either by itself
or with other adjustments not previously made increases or decreases by at least
1% the Exercise Price or the number of shares of Common Stock purchasable upon
exercise of the Warrants immediately prior to the making of such adjustment.
Any adjustment representing a change of less than such minimum amount shall be
carried forward and made as soon as such adjustment, together with other
adjustments required by this Article 3 and not previously made, would result in
a minimum adjustment. For the purpose of any adjustment, any specified event
shall be deemed to have occurred at the close of business on the date of its
occurrence. In computing adjustments under this Article 3, fractional interests
in Common Stock shall be taken into account to the nearest one-hundredth of a
share.
SECTION 3.9 Other Provisions Regarding Adjustments. In the event
that at any time, as a result of an adjustment made pursuant to Section 3.1
hereof, the holder of this Warrant shall become entitled to receive any shares
of capital stock of the Company other than shares of Common Stock, thereafter
the number of such other shares of capital stock so receivable upon exercise of
this Warrant shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to the
Common Stock contained in Article 3 and the provisions contained elsewhere
herein with respect to Common Stock shall apply on like terms to any such other
shares.
SECTION 3.10 Challenge to Good Faith. Whenever the Board shall be
required to make a determination in good faith of the Fair Value of any item
under this Article 3, such determination may be challenged in good faith by the
Majority Holders, and any dispute shall be resolved by an Independent Investment
Banking Firm selected by the Company and reasonably acceptable to such Majority
Holders. The expenses of any challenge made by the Majority Holders hereunder
shall be borne by the Company; provided that if the Investment Banking Firm
determines that the Fair Value as determined by the Board is reasonable, then
the expenses of any challenge shall be borne by the Majority Holders.
SECTION 3.11 Notice of Adjustment. Whenever the Exercise Price or
the number of shares of Common Stock and other property, if any, purchasable
upon exercise of Warrants is adjusted, as herein provided, the Company shall
deliver to the Holders a certificate of a firm of independent accountants (who
may be the regular accountants employed by the Company) or the Chief Financial
Officer of the Company setting forth, in reasonable detail, the event requiring
the adjustment and the method by which such adjustment was calculated (including
a description of the basis on which the Board determined the fair market value
of any evidences of indebtedness, other securities or property or warrants or
other subscription or purchase rights), and specifying the Exercise Price and
the number of shares of Common Stock purchasable upon exercise of Warrants after
giving effect to such adjustment.
SECTION 3.12 Notice of Certain Transactions. In the event that the
Company shall resolve or agree (a) to pay any dividend payable in securities of
any class to the holders of its Common Stock or to make any other distribution
to the holders of its Common Stock, (b) to offer the holders of its Common Stock
rights to subscribe for or to purchase any securities convertible into shares of
Common Stock or shares of Common Stock or shares of stock of any class or any
other securities, rights or options, or (c) to effect any reclassification of
its Common Stock, capital reorganization, merger, consolidation or disposition
of assets, the Company shall within 5 days send to the Holders, a notice of such
proposed action or offer, such notice to be mailed to the Holders, which shall
specify the record date for the purposes of such dividend, distribution or
rights, or the date such issuance or event 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 briefly indicate the effect of such action on the Common Stock
and on the number and kind of any other shares of stock and on other property,
if any, and the number of shares of Common Stock and other property, if any,
purchasable upon exercise of each Warrant and the Exercise Price after giving
effect to any adjustment which will be required as a result of such action.
Such notice shall be given by the Company as promptly as possible.
ARTICLE 4.
Transfer, Division and Combination
SECTION 4.1 Transfer. Subject to compliance with Section 4.5,
transfer of this Warrant and all rights hereunder, in whole or in part, shall be
registered on the books of the Company to be maintained for such purpose, upon
surrender of this Warrant at the principal office of the Company referred to in
Section 2.3 or the office or agency designated by the Company pursuant to
Article 6, together with a written assignment of this Warrant substantially in
the form of Exhibit B hereto duly executed by Holder or its agent or attorney
and funds sufficient to pay any transfer taxes payable upon the making of such
transfer. Upon such surrender and, if required, such payment, the Company
shall, subject to Section 4.5, execute and deliver a new Warrant or Warrants in
the name of the assignee or assignees and in the denomination specified in such
instrument of assignment, and shall issue to the assignor a new Warrant
evidencing the portion of this Warrant not so assigned, and this Warrant shall
promptly be cancelled. A Warrant, if properly assigned in compliance with
Section 4.5, may be exercised by a new Holder for the purchase of shares of
Common Stock without having a new Warrant issued. If requested by the Company,
a new Holder shall acknowledge in writing, in form reasonably satisfactory to
the Company, such Holder's continuing obligations under Section 4.5 and Article
8.
SECTION 4.2 Division and Combination. Subject to Section 4.5, this
Warrant may be divided or combined with other Warrants upon presentation hereof
at the aforesaid office or agency of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by Holder or its agent or attorney. Subject to compliance with Section
4.1 and with Section 4.5, as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in
accordance with such notice.
SECTION 4.3 Expenses. The Company shall prepare, issue and deliver
at its own expense (other than transfer taxes) the new Warrant or Warrants under
this Article 4.
SECTION 4.4 Maintenance of Books. The Company agrees to maintain, at
its aforesaid office or agency, books for the registration or transfer of the
Warrants.
SECTION 4.5 Restriction on. (a) This Warrant and the Warrant Shares
issuable upon exercise hereof are subject in all respects to the terms and
conditions of the Stockholders Agreement. No transfer, sale, assignment,
hypothecation or other disposition of this Warrant or the Warrant Shares
issuable upon exercise hereof may be made except in accordance with the
provisions of the Stockholders Agreement (it being understood that any transfer
of Common Stock permitted under the provisions of the Stockholders Agreement
shall be a permitted transfer with respect to this Warrant and the Warrant
Shares). The Holder, by acceptance of this Warrant, agrees to be bound by the
applicable provisions of the Stockholders Agreement and all applicable benefits
of the Stockholders Agreement shall inure to such Holder.
(b) (i) Except as otherwise provided in this Section 4.5, each
certificate for Warrant Shares initially issued upon the exercise of this
Warrant, and each certificate for Warrant Shares issued to any transferee of any
such certificate, shall be stamped or otherwise imprinted with a legend in
substantially the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND
MAY NOT BE TRANSFERRED IN VIOLATION OF SUCH ACT OR LAWS OR THE RULES AND
REGULATIONS THEREUNDER."
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
STOCKHOLDERS AGREEMENT (A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY). NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION OF THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT IN
ACCORDANCE WITH THE PROVISIONS OF SUCH STOCKHOLDERS AGREEMENT. THE HOLDER OF
THESE SECURITIES AGREES TO BE BOUND BY ALL OF THE PROVISIONS OF SUCH
STOCKHOLDERS AGREEMENT."
(ii) Except as otherwise provided in this Section 4.5, each Warrant
shall be stamped or otherwise imprinted with a legend in substantially the
following form:
"NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS AND MAY NOT BE TRANSFERRED IN VIOLATION OF SUCH ACT OR LAWS, THE
RULES AND REGULATIONS THEREUNDER OR THE PROVISIONS OF THIS WARRANT."
"THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF ARE
SUBJECT TO A STOCKHOLDERS AGREEMENT (A COPY OF WHICH IS ON FILE WITH THE
SECRETARY OF THE COMPANY). NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION
OR OTHER DISPOSITION OF THIS WARRANT OR THE SECURITIES ISSUABLE UPON EXERCISE
HEREOF MAY BE MADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF SUCH STOCKHOLDERS
AGREEMENT. THE HOLDER OF THIS WARRANT AGREES TO BE BOUND BY ALL OF THE
PROVISIONS OF SUCH STOCKHOLDERS AGREEMENT."
(c) Notwithstanding the provisions of Section 4.5(b), (i) the Company
shall deliver Warrants or certificates for Warrant Shares without the first
paragraph of the legend set forth in any such clause if the securities referred
to in such clause shall have been registered under the Securities Act or if such
legend is otherwise not required under the Securities Act, and if such legend
has been set forth on any previously delivered certificates, such legend shall
be removed from any certificates at the request of the Holder if the securities
referred to in such clause have been registered under the Securities Act, or if
such legend is not otherwise required under the Securities Act, and (ii) the
Company shall deliver Warrants or certificates for Warrant Shares without the
second paragraph of the legend set forth in such clause if such legend is no
longer required pursuant to the terms of the Stockholders Agreement.
ARTICLE 5.
Loss or Mutilation
Upon receipt by the Company from any Holder of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of this Warrant and indemnity reasonably satisfactory to it (it being
understood that the written agreement of the Purchaser shall be sufficient
indemnity) and in case of mutilation upon surrender and cancellation hereof, the
Company will execute and deliver in lieu hereof a new Warrant of like tenor to
such Holder (without expense to the Holder); provided, in the case of
mutilation, no indemnity shall be required if this Warrant in identifiable form
is surrendered to the Company for cancellation.
ARTICLE 6.
Office of the Company
As long as any of the Warrants remain outstanding, the Company shall
maintain an office or agency (which may be the principal executive offices of
the Company) where the Warrants may be presented for exercise, registration of
transfer, division or combination as provided in this Warrant.
ARTICLE 7.
Limitation of Liability
No provision hereof, in the absence of affirmative action by the
Holder hereof to purchase shares of Common Stock, and no enumeration herein of
the rights or privileges of the Holder hereof, shall give rise to any liability
of such Holder for the purchase price of any Common Stock or as a stockholder of
the Company, whether such liability is asserted by the Company or by creditors
of the Company.
ARTICLE 8.
Miscellaneous
SECTION 8.1 Nonwaiver and Expenses. No course of dealing or any
delay or failure to exercise any right hereunder on the part of the Holder
hereof shall operate as a waiver of such right or otherwise prejudice such
Holder's rights, powers or remedies. If the Company fails to make, when due,
any payments provided for hereunder, or fails to comply with any other provision
of this Warrant, the Company shall pay to the Holder hereof such amounts as
shall be sufficient to cover any reasonable costs and expenses including, but
not limited to, reasonable attorneys' fees, including those of appellate
proceedings, incurred by such Holder in collecting any amounts due pursuant
hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.
SECTION 8.2 Financial Information. The Company will file on or
before the required date (including any permitted extensions) all required
regular or periodic reports (pursuant to the Exchange Act) with the Commission
and the Company will deliver to each Holder of a Warrant or Warrant Shares
promptly upon their becoming available one copy of each report, notice or proxy
statement sent by the Company to its stockholders generally.
SECTION 8.3 Unexercised Warrants. Except as otherwise specifically
required herein, holders of unexercised Warrants are not entitled (i) to receive
dividends or other distributions, (ii) to receive notice of or vote at any
meeting of the stockholders, (iii) to consent to any action of the stockholders,
(iv) to receive notice of any other proceedings of the Company or (v) to
exercise any other rights as stockholders of the Company.
SECTION 8.4 Amendment. This Warrant and all other Warrants may be
amended with the written consent of the Company and the Majority Holders;
provided, however, that no such Warrant may be amended to reduce the number of
shares of Common Stock for which such Warrant is exercisable or to increase the
Exercise Price (before giving effect to any adjustment as provided therein)
without the prior written consent of the Holder thereof. In determining whether
the Holders of the required number of Warrants have concurred in any direction,
waiver or consent, Warrants owned by the Company or any Subsidiary of the
Company shall be disregarded and deemed not to be outstanding. Also, subject to
the foregoing, only Warrants outstanding at the time shall be considered in any
such determination.
SECTION 8.5 Notices. Any notice or communication shall be in writing
and delivered in person or mailed by first-class mail to the addresses set forth
in the Stock Purchase Agreement with respect to the Company and the Holder on
the date hereof and if to any subsequent Holder, at its last known address
appearing on the books of the Company maintained for such purposes.
The Company and any Holder by notice to the other may designate
additional or different addresses for subsequent notices or communications.
SECTION 8.6 Remedies. The Company and the Holder hereof each
stipulates that the remedies at law of each party hereto in the event of any
default or threatened default by the other party in the performance or
compliance with any of the terms of this Warrant are not and will not be
adequate and that, to the fullest extent permitted by law, such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
SECTION 8.7 Governing Law. The laws of the State of New York shall
govern this Warrant.
SECTION 8.8 Successors. Subject to Section 4.5 hereof, this Warrant
and the rights evidenced hereby shall inure to the benefit of and be binding
upon the successors and assigns of the Company and the Holder hereof, and shall
be enforceable by any such successors and assigns.
SECTION 8.9 Counterparts. This Warrant Agreement may be executed in
any number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
SECTION 8.10 Table of Contents. The table of contents and headings
of the Articles and Sections of this Warrant Agreement have been inserted for
convenience of reference only, are not intended to be considered a part hereof
and shall not modify or restrict any of the terms or provisions hereof.
SECTION 8.11 Severability. The provisions of this Warrant are
severable, and if any clause or provision shall be held invalid, illegal or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Warrant in any jurisdiction.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed and its corporate seal to be impressed hereon and attested by its
Secretary or an Assistant Secretary.
CLUBCORP, INC.
By:
Name:
Title:
Attest:
___________________________________
Name:
Title:
