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EXHIBIT 10.5
NEITHER THIS WARRANT NOR THE SECURITIES FOR WHICH IT IS EXERCISABLE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE SECURITIES
LAWS, AND NO TRANSFER OF THIS WARRANT OR THE SECURITIES ISSUABLE UPON ITS
EXERCISE MAY BE MADE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER
SUCH LAWS OR THE AVAILABILITY OF EXEMPTIONS FROM THE REGISTRATION PROVISIONS
THEREOF. MOREOVER, THIS WARRANT AND THE SECURITIES FOR WHICH IT IS EXERCISABLE
ARE SUBJECT TO RESTRICTIONS ON TRANSFER AND CERTAIN OTHER RESTRICTIONS SET FORTH
IN A TAG-ALONG, TRANSFER RESTRICTION AND BRING-ALONG AGREEMENT DATED AS OF
NOVEMBER 28, 1995, AS AMENDED (WHICH AGREEMENT IS ON FILE WITH THE COMPANY'S
SECRETARY).
TWEETER HOME ENTERTAINMENT GROUP, INC.
June 5, 1998 Certificate No. 4
STOCK PURCHASE WARRANT
104,928 Shares of Common Stock
THIS WARRANT IS BEING ISSUED IN EXCHANGE FOR A NEW ENGLAND AUDIO CO., INC.
COMMON STOCK PURCHASE WARRANT DATED MAY 30, 1997.
This is to certify that, for value received, Exeter Venture Lenders,
L.P. (the "Initial Holder"), its registered successors and assigns, is entitled
upon the due exercise hereof to purchase (subject to adjustment as provided in
the Purchase Agreement) 104,928 shares of the Common Stock, $.01 par value (such
stock, together with such other securities or properties as may be issued upon
the exercise hereof, being referred to herein as the "Stock"), of Tweeter Home
Entertainment Group, Inc., a Delaware corporation (the "Company"), for the price
of $.002 per share (the "Exercise Price") and to exercise the other rights,
powers and privileges provided for herein, all upon the terms and subject to the
conditions specified herein.
1. CERTAIN DEFINITIONS. Capitalized terms used herein and not
otherwise defined shall have the meanings assigned to such terms in that certain
Warrant Purchase Agreement dated as of May 30, 1997 between New England Audio
Co., Inc., the Initial Holder and certain other parties (the "Purchase
Agreement") unless the context otherwise requires.
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2. EXERCISE. This Warrant may be exercised by the registered
Holder hereof at any time during the period commencing on the date hereof and
ending at 5:00 p.m., Boston, Massachusetts time on the Expiration Date specified
in Paragraph 9 by surrender of this Warrant at the Company's principal offices
at 00 Xxxxxx Xxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (or such other address as the
Company may advise the Holder by notice given in the manner provided in the
Purchase Agreement), with the form of election to subscribe attached hereto as
ANNEX A duly executed and upon tender to the Company of the Exercise Price. Upon
the date the Company receives all of the foregoing from the Holder this Warrant
shall be deemed to have been exercised and the Holder exercising the same to
have become a holder of record of shares of Stock purchased hereunder for all
purposes and certificates for such shares shall be delivered to such Holder or
its transferee within a reasonable time (not exceeding ten business days) after
this Warrant shall have been exercised. If an exercise of this Warrant is for
less than all of the Stock then, concurrently with its delivery of such
certificates, the Company shall deliver to such Holder (or, so long as such
Holder has also complied with Paragraph 6, its transferee) a new warrant or
warrants which shall be of like tenor and date as this Warrant and shall
represent in the aggregate the right to subscribe for and purchase the remaining
number of shares which may be subscribed for and purchased hereunder.
3. PAYMENT OF EXERCISE PRICE. Upon any exercise of this Warrant
the Exercise Price may be paid, in the sole discretion of the Holder, by (a)
tendering the same to the Company in cash, (b) setting-off the same against any
debt owed by the Company to the Holder or (c) tendering to the Company such
number of shares of Stock issuable upon the exercise of this Warrant as have a
value equal to the Exercise Price. If the Holder shall choose option (b) or (c)
above then, in lieu of tendering the Exercise Price upon the exercise this
Warrant, it shall tender to the Company a notice specifying the manner in which
it has elected to pay the Exercise Price.
4. TAXES. If any tax (other than income tax) is payable by the
Holder by reason of the issuance of any certificates representing Stock, such
tax shall be paid by the Company; provided, that the Company shall not be
required to pay any tax which may be payable in respect of the issuance of any
such certificate in a name other than that of the registered Holder of this
Warrant, and the Company shall not be required to issue any such certificate in
a name other than such Holder's unless and until any tax payable by reason of
such issuance has been paid.
5. WARRANT REGISTER. The Company shall at all times while any
portion of this Warrant remains outstanding and exercisable keep and maintain at
its principal office a register (the "Warrant Register") in which the
registration, transfer and exchange of this Warrant shall be recorded. The
Company shall not at any time, except upon the dissolution, liquidation or
winding up of the Company, close such register so as to result in preventing or
delaying the exercise, transfer or exchange of this Warrant. If at any time the
Company shall appoint an agent (the "Warrant Agent") to maintain such register,
the Company shall promptly give notice in the manner provided in the Purchase
Agreement to the registered Holder hereof of the name of such Warrant Agent and
of the place or places at which this Warrant may be presented for transfer,
exchange or exercise. The terms of the agreement between the Company and any
Warrant Agent at any time in effect will be in conformity with the terms of this
Warrant and the Purchase Agreement.
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6. TRANSFER. Subject to compliance with applicable securities
laws and with the restrictions on transfer set forth in the Amended and Restated
Tag-Along, Transfer Restriction and Bring-Along Agreement among the Company, as
assignee of New England Audio Co., Inc., and certain of its shareholders, as
amended, this Warrant and all rights hereunder are transferable on the books of
the Company by the registered Holder hereof in person or by duly authorized
attorney upon surrender of this Warrant at the address set forth in Paragraph 2,
together with the form of transfer authorization attached hereto as ANNEX B duly
executed. Absent any such transfer, the Company may deem and treat the
registered Holder of this Warrant at any time as the absolute owner hereof for
all purposes and shall not be affected by any notice to the contrary.
7. EXCHANGE. This Warrant is exchangeable, upon the surrender
hereof by the Holder at the address set forth in Paragraph 2 together with the
form of exchange authorization attached hereto as ANNEX C duly executed, for new
warrants in such denominations as the Holder shall designate at the time of
surrender for exchange (but not for less than 10% of the shares of Stock for
which this Warrant is originally exerciseable), which new warrants shall be of
like tenor and date and shall represent in the aggregate the right to subscribe
for and purchase the number of shares which may be subscribed for and purchased
hereunder.
8. LOST, STOLEN, MUTILATED, OR DESTROYED WARRANTS. If this
Warrant shall become lost, stolen, mutilated or destroyed the Company shall
issue a new warrant of like denomination, tenor and date as this Warrant upon
its receipt from the Holder of reasonably satisfactory evidence of such event
and assurances that the Holder will indemnify the Company on account of any loss
incurred by the Company which is occasioned by such event. Any such new warrant
shall constitute an original contractual obligation of the Company whether or
not the allegedly lost, stolen, mutilated or destroyed warrant shall be at any
time enforceable by anyone.
9. EXPIRATION. This Warrant shall expire and be of no further
force and effect on the date (the "Expiration Date") which is the earlier to
occur of (a) the date when the Company has fully complied with Paragraph 2
hereof, in the event of a complete exercise hereof or (b) the earlier to occur
of (i) May 30, 2007 or (ii) the fourth anniversary of the date on which Senior
Subordinate Promissory Notes issued under the Note Purchase Agreement have been
paid in full.
10. MANDATORY EXERCISE. Notwithstanding any other provision
hereof, the Holder shall, upon the request of the Company, fully exercise this
Warrant concurrently with the closing of a Qualified Public Offering.
11. WARRANT PURCHASE AGREEMENT. The terms of the Purchase
Agreement, as they relate to this Warrant, are incorporated by reference in this
Warrant as fully as if the same were set forth herein.
12. APPLICABLE LAW. The validity, interpretation and performance
of this Warrant shall be governed by the laws of the State of Delaware.
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13. SUCCESSORS AND ASSIGNS. This Warrant and the rights evidenced
hereby shall inure to the benefit of and be binding upon the successors and
permitted assigns of the Company and the Holder.
14. NOTICES. All notices and other correspondence which is
required or may be given hereunder shall be given in the manner and to the
addresses specified in the Purchase Agreement.
WITNESS the due execution of this Stock Purchase Warrant as of the date
first written above with the intent to be legally bound.
TWEETER HOME ENTERTAINMENT GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxx
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Title: President
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ANNEX A
to Warrant
[SUBSCRIPTION FORM TO BE EXECUTED UPON EXERCISE OF THE WARRANT]
The undersigned registered holder of the within Warrant hereby (1)
subscribes for _____________ shares which the undersigned is entitled to
purchase under the terms of the within Warrant, (2) makes the full cash payment
therefor called for by the within Warrant, and (3) directs that the shares
issuable upon exercise of said Warrant be issued as follows:
__________________________________
(Name)
Signature: _______________________
Dated: ___________________________
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ANNEX B
to Warrant
[TO BE EXECUTED TO EFFECT A TRANSFER OF THE WARRANT]
FOR VALUE RECEIVED ____________________________ hereby sells, assigns,
and transfers unto ____________________________________________________________
_______________________________________________________________________________,
the right to purchase ___________________ shares evidenced by the within
Warrant, and does hereby irrevocably constitute and appoint ________________ to
transfer such right on the books of Company, with full power of substitution.
__________________________________
(Name)
Signature: _______________________
Dated: ___________________________
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ANNEX C
to Warrant
[TO BE EXECUTED TO EFFECT AN EXCHANGE OF THE WARRANT]
The undersigned registered holder of the within Warrant hereby directs
the Company to exchange said Warrant for like warrants in the following
denominations: _______________________.
__________________________________
(Name)
Signature: _______________________
Dated: ___________________________
