Exhibit 4.1
WARRANT AGREEMENT
between
HLI HOLDING COMPANY, INC.
and
MELLON INVESTOR SERVICES LLC
as Warrant Agent
Dated as of June 2, 2003
TABLE OF CONTENTS
Page
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1. Definitions.....................................................................................1
2. ISSUANCE OF WARRANTS............................................................................5
2.1. Issuance.............................................................................5
2.2. Share Amount.........................................................................5
2.3. Form of Warrant Certificate..........................................................5
2.4. Execution of Warrant Certificate.....................................................5
2.5. Countersignature of Warrant Certificates.............................................5
3. EXERCISE OF WARRANT.............................................................................6
3.1. Manner of Exercise; Payment of the Purchase Price....................................6
3.2. When Exercise Effective..............................................................6
3.3. Delivery of Stock Certificates, etc.; Charges, Taxes and Expenses....................6
4. ADJUSTMENT OF COMMON STOCK ISSUABLE UPON EXERCISE AND EXERCISE PRICE............................7
4.1. Adjustment of Number of Shares.......................................................7
4.2. Issuance of Additional Shares of Common Stock........................................8
4.3. Extraordinary Dividends and Distributions............................................8
4.4. Treatment of Options and Convertible Securities......................................9
4.5. Treatment of Stock Dividends, Stock Splits, etc.....................................11
4.6. Adjustment for Reclassification, Exchange and Substitution..........................11
4.7. Computation of Consideration........................................................11
4.8. Adjustments for Combinations, etc...................................................12
4.9. De Minimis Adjustments..............................................................13
4.10. Abandoned Dividend or Distribution..................................................13
4.11. Shareholder Rights Plan.............................................................13
5. CONSOLIDATION OR MERGER........................................................................14
5.1. Adjustments for Consolidation or Merger.............................................14
5.2. Assumption of Obligations...........................................................14
6. REDEMPTION RIGHTS..............................................................................14
6.1. Redemption Rights with Respect to Unexercised Warrants..............................14
6.2. Notice of Redemption................................................................15
6.3. Effect of Notice of Redemption......................................................15
6.4. Funding of Redemption Amount........................................................15
6.5. Payment of Warrants Called for Redemption...........................................16
7. No Dilution or Impairment......................................................................16
8. CERTIFICATE as to Adjustments..................................................................16
9. NOTICES OF CORPORATE ACTION....................................................................17
10. Registration RIGHTS............................................................................18
11. Reservation of Stock, etc......................................................................18
12. REGISTRATION AND TRANSFER OF WARRANTS, ETC.....................................................19
12.1. Warrant Register; Ownership of Warrants.............................................19
12.2. Transfer of Warrants................................................................19
12.3. Replacement of Warrants.............................................................19
12.4. Adjustments to Purchase Price and Number of Shares..................................19
12.5. Fractional Shares...................................................................19
13. WARRANT AGENT..................................................................................20
13.1. Obligations Binding.................................................................20
13.2. No Liability........................................................................20
13.3. Instructions........................................................................21
13.4. Agents..............................................................................21
13.5. Cooperation.........................................................................21
13.6. Agent Only..........................................................................21
13.7. Right to Counsel....................................................................21
13.8. Compensation; Indemnification.......................................................21
13.9. Accounting..........................................................................22
13.10. No Conflict.........................................................................22
13.11. Resignation; Termination............................................................22
13.12. Change of Warrant Agent.............................................................23
13.13. Successor Warrant Agent.............................................................23
13.14. Reliance on Certificate.............................................................24
14. Remedies; Specific Performance.................................................................24
15. No Rights or Liabilities as Shareholder........................................................24
16. Notices........................................................................................24
17. Amendments.....................................................................................25
18. Descriptive Headings, Etc......................................................................25
19. GOVERNING LAW..................................................................................26
20. Judicial Proceedings...........................................................................26
21. EXPIRATION.....................................................................................26
WARRANT AGREEMENT
THIS WARRANT AGREEMENT, is made and entered into as of June 2,
2003 (the "Agreement"), by and between HLI Holding Company, Inc., a Delaware
corporation to be renamed Xxxxx Lemmerz International, Inc. on the Effective
Date (as defined in the Plan) (the "Company"), and Mellon Investor Services
LLC, a New Jersey limited liability company, as Warrant Agent (the "Warrant
Agent").
WITNESSETH:
WHEREAS, in connection with the reorganization of Xxxxx Lemmerz
International, Inc. ("Old Xxxxx") (predecessor in interest to the Company) and
pursuant to the Modified First Amended Joint Plan of Reorganization, dated as
of April 9, 2003, as such may be modified and amended (the "Plan"), filed by
Old Xxxxx and its affiliated debtors and debtors in possession with the
Bankruptcy Court (as defined herein) and in connection with Old Xxxxx' Chapter
11 Case (as defined herein), the Company proposes to issue Series A warrants
entitling the holders thereof to purchase an aggregate of up to 957,447 shares
of Common Stock (as defined herein), at a price of $25.83 per share, subject
to adjustment as provided herein (the "Warrants"), to the holders of Class 6
Subordinated Note Claims (as defined in the Plan) partially in exchange for
such Class 6 Subordinated Note Claims; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of
the Company, and the Warrant Agent is willing to act, in connection with the
issuance, transfer, exchange, replacement, and exercise of the Warrants and
other matters as provided herein; and
WHEREAS, the Company desires to enter into this Agreement to set
forth the terms and conditions of the Warrants and the rights of the holders
thereof.
NOW, THEREFORE, in consideration of the foregoing premises and of
the mutual agreements set forth herein, the Company and the Warrant Agent
hereby agree as follows:
1. DEFINITIONS. As used herein, the following terms shall have the
meanings indicated:
"Additional Shares of Common Stock" shall mean all shares
(including treasury shares) of Common Stock issued or sold (or, pursuant to
Section 4.4 or 4.5, deemed to be issued) by the Company after the date hereof,
whether or not subsequently reacquired or retired by the Company, other than:
(a) (i) shares issued upon the exercise of the Warrants and the
Series B Warrants (as defined in the Plan) and (ii) such number of
additional shares as may become issuable upon the exercise of the
Warrants or the Series B Warrants by reason of adjustments required
pursuant to the anti-dilution provisions applicable to the Warrants and
Series B Warrants as in effect on the date hereof;
(b) shares of Common Stock issued upon the exercise of options
granted or to be granted pursuant to the Company's Long Term Incentive
Plan (as defined in the Plan) and the Company's Employee Retention Plan
(as defined in the Plan) (such number subject to adjustment to reflect
any stock split, stock dividend, reclassification or other transaction
having a similar effect); and
(c) all other shares of Common Stock issued pursuant to the terms
of the Plan (including shares of Common Stock underlying the preferred
stock being issued pursuant to the terms of the Plan).
"Agreement" shall have the meaning set forth in the Preamble.
"Bankruptcy Code" shall mean title 11 of the United States Code,
11 U.S.C. ss. 101, et seq., as now in effect or hereafter amended.
"Bankruptcy Court" shall mean the United States Bankruptcy Court
for the District of Delaware.
"Business Day" shall mean any day other than a Saturday or a
Sunday or a day on which commercial banking institutions in the City of New
York are authorized by law to be closed. Any reference to "days" (unless
Business Days are specified) shall mean calendar days.
"Chapter 11 Case" shall mean the case under Chapter 11 of the
Bankruptcy Code concerning the Company which was commenced on December 5,
2001.
"Close of Business" on any given date shall mean 5:00 p.m., New
York City time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 p.m., New York City time, on the next
succeeding Business Day.
"Commission" shall mean the Securities and Exchange Commission or
any successor agency having jurisdiction to enforce the Securities Act.
"Common Stock" shall mean the Company's Common Stock, par value
$.01 per share.
"Company" shall have the meaning assigned to it in the Preamble,
such term to include any Person which shall succeed to or assume the
obligations of the Company hereunder in compliance with Section 5.
"Convertible Securities" shall mean any evidences of indebtedness,
shares of stock (other than Common Stock) or other securities directly or
indirectly convertible into or exchangeable for Additional Shares of Common
Stock.
"Current Market Price" shall mean, on any date specified herein,
the average of the daily Market Price during the 20 consecutive trading days
commencing 30 trading days before such date, except that, if on any such date
the shares of the subject securities are not listed or admitted for trading on
any national securities exchange or quoted in Nasdaq over-the-counter market,
the Current Market Price shall be the Market Price on such date.
"Distribution Date" shall have the meaning set forth in Section
4.11.
"Effective Date" shall mean the date of this Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations thereunder, or any
successor statute.
"Expiration Date" shall have the meaning assigned to it in
Section 21.
"Extraordinary Event" shall mean an event in which the Company
consolidates, merges or combines with or into any other Person (whether or not
the Company is the continuing or surviving entity) or effects a similar
transaction and holders of Common Stock receive consideration with respect to
such transaction other than solely capital stock or other securities of the
Company, any surviving entity, or the parent entity of the surviving entity.
"Fair Value" shall mean, on any date specified herein (i) in the
case of cash, the dollar amount thereof, (ii) in the case of Warrants, a
Black-Sholes valuation performed by a nationally recognized independent
investment banking firm selected by the Board of Directors of the Company, and
(ii) in all other cases, the fair value thereof (as of a date which is within
20 days of the date as of which the determination is to be made) determined by
a nationally recognized independent investment banking firm selected by the
Board of Directors of the Company, which determination in each case shall be
final, conclusive and binding upon the Company and the holder of each Warrant.
"Issue Date" shall have the meaning assigned to it in Section 2.1.
"Market Price" shall mean, on any date specified herein, the
amount per share of the subject security, equal to (i) the average weighted
sale price of such security, regular way, on such date or, in case no such
sale takes place on such date, the average of the closing bid and asked prices
thereof regular way on such date, in either case as officially reported on the
principal national securities exchange on which such security is then listed
or admitted for trading, (ii) if such security is not then listed or admitted
for trading on any national securities exchange but is designated as a
national market system security by the NASD, the average weighted trading
price of the security on such date, (iii) if there shall have been no trading
on such date or if the security is not so designated, the average of the
closing bid and asked prices of the security on such date as shown by the NASD
automated quotation system, or (iv) if such security is not then listed or
admitted for trading on any national exchange or quoted in the
over-the-counter market (or in the case of property other than securities),
the Fair Value.
"NASD" shall mean the National Association of Securities Dealers,
Inc.
"Options" shall mean any rights, options or warrants to subscribe
for, purchase or otherwise acquire either Additional Shares of Common Stock or
Convertible Securities.
"Other Securities" shall mean any stock (other than Common Stock)
and other securities of the Company or any other Person (corporate or
otherwise) which the holders of the Warrants at any time shall be entitled to
receive, or shall have received, upon the exercise of the Warrants, in lieu of
or in addition to Common Stock, or which at any time shall be issuable or
shall have been issued in exchange for or in replacement of Common Stock or
Other Securities pursuant to Section 5 or otherwise.
"Paying Agent" shall have the meaning set forth in Section 6.2.
"Person" shall mean any individual, firm, partnership,
corporation, trust, joint venture, association, joint stock company, limited
liability company, unincorporated organization or any other entity or
organization, including a government or agency or political subdivision
thereof, and shall include any successor (by merger or otherwise) of such
entity.
"Plan" shall have the meaning set forth in the Preamble.
"Public Offering" shall mean the sale of Common Stock to the
public in a firmly underwritten offering pursuant to an effective registration
statement filed under the Securities Act.
"Purchase Price" shall mean initially $25.83 per share of Common
Stock, subject to adjustment and readjustment from time to time as provided in
Section 4, and, as so adjusted or readjusted, shall remain in effect until a
further adjustment or readjustment thereof is required by Section 4.
"Redemption Amount" shall have the meaning assigned to it in
Section 6.1.
"Redemption Date" shall mean the date on which the Company
determines it shall redeem the unexercised Warrants in accordance with
Section 6.
"Rights" shall have the meaning assigned to it in Section 4.11.
"Securities Act" shall mean the Securities Act of 1933, as amended
from time to time, and the rules and regulations thereunder, or any successor
statute.
"Transfer Agent" shall have the meaning assigned to it in
Section 11.
"Warrant Agent" shall have the meaning assigned to it in the
Preamble, such term to include any Person which shall succeed to or assume
the obligations of the Warrant Agent hereunder in compliance with Section 13.
"Warrant Certificates" shall have the meaning assigned to it in
Section 2.3.
"Warrants" shall have the meaning set forth in the Preamble.
2. ISSUANCE OF WARRANTS.
2.1. Issuance. Pursuant to the terms of the Plan, on the
Effective Date (the "Issue Date") the Company shall authorize an account to
hold the aggregate of 957,447 Warrants to be issued and distributed to the
holders of Class 6 Subordinated Note Claims in accordance with the terms of
the Plan.
2.2. Share Amount. The number of shares of Common Stock
purchasable upon exercise of the Warrants shall initially be one share of
Common Stock for each Warrant exercised, subject to adjustment from and
after the Issue Date as provided in Section 4 of this Agreement.
2.3. Form of Warrant Certificate. The Warrants shall be
evidenced by certificates substantially in the form attached hereto as
Exhibit A (the "Warrant Certificate"). Each Warrant Certificate shall be
dated as of the date on which it is countersigned by the Warrant Agent,
which shall be on the Issue Date or, in the event of a division, exchange,
substitution or transfer of any of the Warrants, on the date of such event.
The Warrant Certificate may have such legends and endorsements stamped,
printed, lithographed, or engraved thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any law or with any rule or
regulation pursuant thereto.
2.4. Execution of Warrant Certificate. Warrant Certificates
shall be executed on behalf of the Company by its Chairman of the Board,
Vice Chairman of the Board, Chief Executive Officer, President, any Vice
President, Treasurer or Secretary, either manually or by facsimile
signature printed thereon. In case any such officer of the Company whose
signature shall have been placed upon any Warrant Certificate shall cease
to be such officer of the Company before countersignature by the Warrant
Agent or issuance and delivery thereof, such Warrant Certificate
nevertheless may be countersigned by the Warrant Agent and issued and
delivered with the same force and effect as though such person had not
ceased to be such officer of the Company.
2.5. Countersignature of Warrant Certificates. Warrant
Certificates shall be manually countersigned by an authorized signatory of
the Warrant Agent and shall not be valid for any purpose unless so
countersigned. Such manual countersignature shall constitute conclusive
evidence of such authorization. Notwithstanding anything to the contrary
contained herein, upon receipt of a Warrant Certificate which has been
executed on behalf of the Company, the Warrant Agent is hereby authorized
and instructed to countersign, in accordance with the provisions of this
Section 2.5, and deliver any such new Warrant Certificates, as directed in
writing by the Company and as and when required pursuant to the provisions
of this Agreement. Each Warrant Certificate shall, when manually
countersigned by an authorized signatory of the Warrant Agent, entitle the
registered holder thereof to exercise the rights as the holder of the
number of Warrants set forth thereon, subject to the provisions of this
Agreement.
3. EXERCISE OF WARRANT.
3.1. Manner of Exercise; Payment of the Purchase Price. (a) A
Warrant may be exercised by the holder thereof, in whole or in part, at any
time or from time to time prior to the Expiration Date, by surrendering to
the Warrant Agent at its office designated for such purposes, such Warrant
Certificate with the form of Election to Purchase Shares attached hereto as
Exhibit B (or a reasonable facsimile thereof) duly executed by the
registered holder or holders thereof or by the duly appointed legal
representative thereof or by a duly authorized attorney, such signature to
be guaranteed by an eligible institution, and accompanied by payment of the
Purchase Price for the number of shares of Common Stock specified in such
form.
(b) Payment of the Purchase Price may be made in United States
currency by delivery of a certified check or bank draft payable to the
order of the Company or by wire transfer to the Company.
3.2. When Exercise Effective. The exercise of a Warrant shall
be deemed to have been effected immediately prior to the Close of Business
on the later of (a) the Business Day on which the Warrant Certificate shall
have been surrendered to the Warrant Agent and (b) the Business Day on
which the Purchase Price shall have been received by the Company as
provided in Section 3.1, and at such time the Person or Persons in whose
name or names any certificate or certificates for shares of Common Stock
(or Other Securities) shall be issuable upon such exercise as provided in
Section 3.3 shall be deemed to have become the holder or holders of record
thereof for all purposes.
3.3. Delivery of Stock Certificates, etc.; Charges, Taxes and
Expenses. (a) As soon as practicable after each exercise of a Warrant, in
whole or in part, and in any event within five Business Days thereafter,
the Company shall issue in the name of and deliver to the holder thereof
or, subject to the Plan, as the holder may direct,
(i) a certificate or certificates for the number of
shares of Common Stock (or Other Securities issued by the
Company) to which the holder shall be entitled upon such
exercise, which shares shall be validly issued, fully paid and
nonassessable, plus, at the Company's option, in lieu of
issuance of any fractional share to which the holder would
otherwise be entitled, if any, (1) a check for the amount of
cash equal to the same fraction multiplied by the Current
Market Price per share on the date of the Warrant exercise or
(2) the Company shall aggregate all such fractional shares of
Common Stock (or Other Securities issued by the Company) into a
whole number of shares and sell such aggregated fractional
shares on behalf of the holders otherwise entitled thereto in a
public or private sale and distribute, on a pro rata basis, the
net cash proceeds therefrom to such holders, it being
understood that while the Company will use its reasonable
efforts to secure the best available sale price for such
aggregated fractional shares, such price shall not necessarily
be the highest price obtainable for such shares; and
(ii) in case such exercise is for less than all of the
shares of Common Stock (or Other Securities issued by the
Company) purchasable under such Warrant, a new Warrant
Certificate (or certificate for Warrants of like tenor) for the
balance of the shares of Common Stock (or Other Securities
issued by the Company) purchasable hereunder.
(b) The Company will pay all taxes and other governmental
charges required by law attributable to the initial issuance of shares upon
the exercise of Warrants; provided, however, that the Company shall not be
required to pay any tax or taxes or other charges which may be payable in
respect of any transfer involved in the issue of any Warrant Certificates
or any certificates for shares of Common Stock or Other Securities in a
name other than that of the registered holder of a Warrant Certificate
surrendered upon the exercise of a Warrant, and the Company shall not be
required to issue or deliver such Warrant Certificates unless or until the
Person or Persons requesting the issuance thereof shall have paid to the
Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid. The Warrant Agent
shall have no duty or obligation to verify that such taxes and/or
governmental charges have been paid.
4. ADJUSTMENT OF COMMON STOCK ISSUABLE UPON EXERCISE AND
EXERCISE PRICE.
4.1. Adjustment of Number of Shares. Upon each adjustment of
the Purchase Price as a result of the calculations made in this Section 4,
such affected Warrant Certificate shall thereafter evidence the right to
receive, at the adjusted Purchase Price, that number of shares of Common
Stock (calculated to the nearest one-hundredth of a share) obtained by
dividing (i) the product of the aggregate number of shares covered by such
Warrant immediately prior to such adjustment and the Purchase Price in
effect immediately prior to such adjustment of the Purchase Price by (ii)
the Purchase Price in effect immediately after such adjustment of the
Purchase Price.
4.2. Issuance of Additional Shares of Common Stock. In case the
Company at any time or from time to time after the date hereof shall issue
or sell Additional Shares of Common Stock (including Additional Shares of
Common Stock deemed to be issued pursuant to Section 4.4 or 4.5 but
excluding Additional Shares of Common Stock purchasable upon exercise of
Rights referred to in Section 4.11) other than in a Public Offering,
without consideration or for a consideration per share less than the
Current Market Price in effect immediately prior to such issue or sale,
then, and in each such case, the Purchase Price shall be reduced,
concurrently with such issue or sale, to a price (calculated to the nearest
..001 of a cent) determined by the Company by multiplying such Purchase
Price by a fraction
(a) the numerator of which shall be the sum of (i) the number
of shares of Common Stock outstanding immediately prior to such issue
or sale and (ii) the number of shares of Common Stock which the
aggregate consideration received by the Company for the total number
of such Additional Shares of Common Stock so issued or sold would
purchase at the Current Market Price in effect immediately prior to
such issuance, and
(b) the denominator of which shall be the number of shares of
Common Stock outstanding immediately after such issue or sale,
provided that, for the purposes of this Section 4.2, (x) immediately after any
Additional Shares of Common Stock are deemed to have been issued pursuant to
Section 4.4 or 4.5, such Additional Shares shall be deemed to be outstanding,
and (y) treasury shares shall not be deemed to be outstanding.
4.3. Extraordinary Dividends and Distributions. In case the
Company at any time or from time to time after the date hereof shall
declare, order, pay or make a dividend or other distribution (including,
without limitation, any distribution of other or additional stock or other
securities, cash (other than regularly scheduled cash dividends payable out
of consolidated earnings or earned surplus of the Company, determined in
accordance with generally accepted accounting principles) or property or
Options by way of dividend or spin-off, reclassification, recapitalization
or similar corporate rearrangement) on the Common Stock other than (a) a
dividend payable in Additional Shares of Common Stock or (b) a dividend of
Rights referred to in Section 4.11 hereof, then, in each such case, the
Purchase Price in effect immediately prior to the Close of Business on the
record date fixed for the determination of holders of any class of
securities entitled to receive such dividend or distribution shall be
reduced, effective as of the Close of Business on such record date, to a
price determined by the Company by multiplying such Purchase Price by a
fraction.
(x) the numerator of which shall be the Current Market Price of
the Common Stock in effect on such record date or, if the Common Stock
trades on an ex-dividend basis, on the date prior to the commencement of
ex-dividend trading, less the Current Market Price of the Common Stock, in
the case of a security, or the Fair Value in all other cases, of such
dividend or distribution applicable to one share of Common Stock, and
(y) the denominator of which shall be such Current Market Price
of the Common Stock.
4.4. Treatment of Options and Convertible Securities. In case
the Company at any time or from time to time after the date hereof shall
issue, sell, grant or assume, or shall fix a record date for the
determination of holders of any class of securities of the Company entitled
to receive, any Options or Convertible Securities (whether or not the
rights thereunder are immediately exercisable), then, and in each such
case, the maximum number of Additional Shares of Common Stock (as set forth
in the instrument relating thereto, without regard to any provisions
contained therein for a subsequent adjustment of such number) issuable upon
the exercise of such Options or, in the case of Convertible Securities and
Options therefor, the conversion or exchange of such Convertible
Securities, shall be deemed to be Additional Shares of Common Stock issued
as of the time of such issue, sale, grant or assumption or, in case such a
record date shall have been fixed, as of the Close of Business on such
record date (or, if the Common Stock trades on an ex-dividend basis, on the
date prior to the commencement of ex-dividend trading), provided that such
Additional Shares of Common Stock shall not be deemed to have been issued
unless (i) the consideration per share (determined pursuant to Section 4.7)
of such shares would be less than the Current Market Price in effect on the
date of and immediately prior to such issue, sale, grant or assumption or
immediately prior to the Close of Business on such record date (or, if the
Common Stock trades on an ex-dividend basis, on the date prior to the
commencement of ex-dividend trading), as the case may be, and (ii) such
Additional Shares of Common Stock are not purchasable pursuant to Rights
referred to in Section 4.11, and provided, further, that in any such case
in which Additional Shares of Common Stock are deemed to be issued:
(a) whether or not the Additional Shares of Common Stock
underlying such Options or Convertible Securities are deemed to be
issued, no further adjustment of the Purchase Price shall be made
upon the subsequent issue or sale of Convertible Securities or shares
of Common Stock upon the exercise of such Options or the conversion
or exchange of such Convertible Securities, except in the case of any
such Options or Convertible Securities which contain provisions
requiring an adjustment, subsequent to the date of the issue or sale
thereof, of the number of Additional Shares of Common Stock issuable
upon the exercise of such Options or the conversion or exchange of
such Convertible Securities by reason of (x) a change of control of
the Company, (y) the acquisition by any Person or group of Persons of
any specified number or percentage of the voting securities of the
Company or (z) any other event or occurrence, such as a reset of
pricing with respect to the conversion of Convertible Securities;
(b) if such Options or Convertible Securities by their terms
provide, with the passage of time or otherwise, for any increase in
the consideration payable to the Company, or decrease in the number
of Additional Shares of Common Stock issuable, upon the exercise,
conversion or exchange thereof (by change of rate or otherwise), the
Purchase Price computed upon the original issue, sale, grant or
assumption thereof (or upon the occurrence of the record date, or
date prior to the commencement of ex-dividend trading, as the case
may be, with respect thereto), and any subsequent adjustments based
thereon, shall, upon any such increase or decrease becoming
effective, be recomputed to reflect such increase or decrease insofar
as it affects such Options, or the rights of conversion or exchange
under such Convertible Securities, which are outstanding at such
time;
(c) upon the expiration (or purchase by the Company and
cancellation or retirement) of any such Options which shall not have
been exercised or the expiration of any rights of conversion or
exchange under any such Convertible Securities which (or purchase by
the Company and cancellation or retirement of any such Convertible
Securities the rights of conversion or exchange under which) shall
not have been exercised, the Purchase Price computed upon the
original issue, sale, grant or assumption thereof (or upon the
occurrence of the record date, or date prior to the commencement of
ex-dividend trading, as the case may be, with respect thereto), and
any subsequent adjustments based thereon, shall, upon such expiration
(or such cancellation or retirement, as the case may be), be
recomputed as if:
(i) in the case of Options for Common Stock or Convertible
Securities, the only Additional Shares of Common Stock
issued or sold were the Additional Shares of Common
Stock, if any, actually issued or sold upon the exercise
of such Options or the conversion or exchange of such
Convertible Securities and the consideration received
therefor was the consideration actually received by the
Company for the issue, sale, grant or assumption of all
such Options, whether or not exercised, plus the
consideration actually received by the Company upon such
exercise, or for the issue or sale of all such
Convertible Securities which were actually converted or
exchanged, plus the additional consideration, if any,
actually received by the Company upon such conversion or
exchange, and
(ii) in the case of Options for Convertible Securities, only
the Convertible Securities, if any, actually issued or
sold upon the exercise of such Options were issued at the
time of the issue or sale, grant or assumption of such
Options, and the consideration received by the Company
for the Additional Shares of Common Stock deemed to have
then been issued was the consideration actually received
by the Company for the issue, sale, grant or assumption
of all such Options, whether or not exercised, plus the
consideration deemed to have been received by the Company
(pursuant to Section 4.7) upon the issue or sale of such
Convertible Securities with respect to which such Options
were actually exercised;
(d) no readjustment pursuant to subdivision (b) or (c) above
shall have the effect of increasing the Purchase Price by an amount
in excess of the amount of the adjustment thereof originally made in
respect of the issue, sale, grant or assumption of such Options or
Convertible Securities; and
(e) in the case of any such Options which expire by their terms
not more than 30 days after the date of issue, sale, grant or
assumption thereof, no adjustment of the Purchase Price shall be made
until the expiration or exercise of all such Options, whereupon such
adjustment shall be made in the manner provided in Subsection (c)
above.
4.5. Treatment of Stock Dividends, Stock Splits, etc. In case
the Company at any time or from time to time after the date hereof shall
declare or pay any dividend on the Common Stock payable in Common Stock, or
shall effect a subdivision of the outstanding shares of Common Stock into a
greater number of shares of Common Stock (by reclassification or otherwise
than by payment of a dividend in Common Stock), then, and in each such
case, Additional Shares of Common Stock shall be deemed to have been issued
(and adjustments shall be made pursuant to Sections 4.1 and 4.2) (a) in the
case of any such dividend, immediately after the Close of Business on the
record date for the determination of holders of any class of securities
entitled to receive such dividend, or (b) in the case of any such
subdivision, at the Close of Business on the day immediately prior to the
day upon which such corporate action becomes effective.
4.6. Adjustment for Reclassification, Exchange and Substitution
If at any time after the date hereof while any Warrants remain
outstanding, the shares of Common Stock issuable upon exercise of the
Warrants are changed into the same or a different number of shares of any
class or classes of stock and an appropriate adjustment shall not otherwise
have been made pursuant to Section 4 hereto, each Warrant will thereafter
represent the right to acquire such number and kind of securities as would
have been issuable as a result of exercise of each Warrant and the Purchase
Price therefore shall be appropriately adjusted.
4.7. Computation of Consideration. For the purposes of this
Section 4,
(a) the consideration for the issue or sale of any Additional
Shares of Common Stock shall, irrespective of the accounting
treatment of such consideration,
(i) insofar as it consists of cash, be computed at the
total amount of cash received by the Company, without deducting
any expenses paid or incurred by the Company or any commissions
or compensation paid or concessions or discounts allowed to
underwriters, dealers or others performing similar services in
connection with such issue or sale,
(ii) insofar as it consists of property other than cash,
be computed at the Current Market Price, in the case of a
security, and Fair Value in all other cases, at the time of
such issue or sale, and
(iii) in case Additional Shares of Common Stock are
issued or sold together with other stock or securities or other
assets of the Company for a consideration which covers both, be
the portion of such consideration so received, computed as
provided in clauses (i) and (ii) above, allocable to such
Additional Shares of Common Stock, such allocation to be
determined in the same manner that the Fair Value of property
not consisting of cash is to be determined as provided in the
definition of "Fair Value" herein;
(b) Additional Shares of Common Stock deemed to have been
issued pursuant to Section 4.4, relating to Options and Convertible
Securities, shall be deemed to have been issued for a consideration
per share determined by dividing:
(i) the total amount, if any, received or receivable by
the Company as consideration for the issue, sale, grant or
assumption of the Options or Convertible Securities in
question, plus the minimum aggregate amount of additional
consideration (as set forth in the instruments relating
thereto, without regard to any provision contained therein for
a subsequent adjustment of such consideration to protect
against dilution) payable to the Company upon the exercise in
full of such Options or the conversion or exchange of such
Convertible Securities or, in the case of Options for
Convertible Securities, the exercise of such Options for
Convertible Securities and the conversion or exchange of such
Convertible Securities, in each case computing such
consideration as provided in the foregoing subdivision (a),
by
--
(ii) the maximum number of shares of Common Stock (as set
forth in the instruments relating thereto, without regard to
any provision contained therein for a subsequent adjustment of
such number to protect against dilution) issuable upon the
exercise of such Options or the conversion or exchange of such
Convertible Securities; and
(c) Additional Shares of Common Stock deemed to have been
issued pursuant to Section 4.5, relating to stock dividends, stock
splits, etc., shall be deemed to have been issued for no
consideration.
4.8. Adjustments for Combinations, etc. In case the outstanding
shares of Common Stock shall be combined or consolidated, by reverse stock
split, by reclassification or otherwise, into a lesser number of shares of
Common Stock, the Purchase Price in effect immediately prior to such
combination or consolidation shall, concurrently with the effectiveness of
such combination or consolidation, be proportionately increased.
4.9. De Minimis Adjustments. If the amount of any adjustment of
the Purchase Price per share required pursuant to this Section 4 would be
less than one tenth (1/10) of one percent (1%) of the Purchase Price, such
amount shall be carried forward and adjustment with respect thereto made at
the time of and together with any subsequent adjustment which, together
with such amount and any other amount or amounts so carried forward, shall
aggregate a change in the Purchase Price of at least one tenth (1/10) of
one percent (1%) of such Purchase Price. All calculations under a Warrant
shall be made to the nearest one-hundredth of a share, as the case may be.
4.10. Abandoned Dividend or Distribution. If the Company shall
take a record of the holders of its Common Stock for the purpose of
entitling them to receive a dividend or other distribution (which results
in an adjustment to the Purchase Price under the terms of this Agreement)
and shall, thereafter, and before such dividend or distribution is paid or
delivered to shareholders entitled thereto, legally abandon its plan to pay
or deliver such dividend or distribution, then any adjustment made to the
Purchase Price and number of shares of Common Stock purchasable upon
Warrant exercise by reason of the taking of such record shall be reversed,
and any subsequent adjustments, based thereon, shall be recomputed.
4.11. Shareholder Rights Plan. Notwithstanding the foregoing,
in the event that the Company shall distribute "poison pill" rights
pursuant to a "poison pill" shareholder rights plan (the "Rights"), the
Company shall, in lieu of making any adjustment pursuant to Section 4.2,
make proper provision so that each holder who exercises a Warrant after the
record date for such distribution and prior to the expiration or redemption
of the Rights shall be entitled to receive upon such exercise, in addition
to the shares of Common Stock issuable upon such exercise, a number of
Rights to be determined as follows: (i) if such exercise occurs on or prior
to the date for the distribution to the holders of Rights of separate
certificates evidencing such Rights (the "Distribution Date"), the same
number of Rights to which a holder of a number of shares of Common Stock
equal to the number of shares of Common Stock issuable upon such exercise
at the time of such exercise would be entitled in accordance with the terms
and provisions of and applicable to the Rights; and (ii) if such exercise
occurs after the Distribution Date, the same number of Rights to which a
holder of the number of shares into which the Warrant so exercised was
exercisable immediately prior to the Distribution Date would have been
entitled on the Distribution Date in accordance with the terms and
provisions of and applicable to the Rights.
5. CONSOLIDATION OR MERGER.
5.1. Adjustments for Consolidation or Merger. In case the
Company after the date hereof shall consolidate or merge with or into any
other Person and in connection with such consolidation or merger, the
Common Stock or Other Securities shall be changed into or exchanged for
stock or other securities of the Company, the surviving Person, or the
Parent of the surviving Person, as the case may be, then, and in the case
of each such transaction, proper provision shall be made so that, upon the
basis and the terms and in the manner provided in this Agreement, the
holder of a Warrant, upon the exercise thereof at any time after the
consummation of such transaction, shall be entitled to receive the kind and
amount of such securities to which such holder would actually have been
entitled as a shareholder upon such consummation if such holder had
exercised such Warrant immediately prior thereto, subject to adjustments
(subsequent to such consummation) as nearly equivalent as possible to the
adjustments provided for in Sections 4 through 6.
5.2. Assumption of Obligations. Notwithstanding anything
contained in this Agreement or the Plan to the contrary, the Company shall
not effect any of the transactions described in Section 5.1 unless, prior
to the consummation thereof, each Person (other than the Company) which may
be required to issue any stock or other securities upon the exercise of a
Warrant as provided herein shall assume or agree, by written instrument
delivered to, and reasonably satisfactory to, the holder of such Warrant,
(a) the obligations of the Company under such Warrant (and if the Company
shall survive the consummation of such transaction, such assumption shall
be in addition to, and shall not release the Company from, any continuing
obligations of the Company under such Warrant), (b) to the extent that the
stock or other securities of a Person (other than the Company) described in
Section 5.1 for which the Warrant would be exercisable do not constitute
freely tradeable securities, to immediately register such securities under
the Securities Act or provide holders with demand and other customary
registration rights under the Securities Act with respect to such
securities, and (c) the obligation to deliver to the holder such shares of
stock or other securities as, in accordance with the foregoing provisions
of this Section 5, the holder may be entitled to receive, which shares of
stock or other securities shall be, when issued, duly authorized, validly
issued, fully paid and nonassessable. Nothing in this Section 5 shall be
deemed to authorize the Company to enter into any transaction not otherwise
permitted by the Plan.
6. REDEMPTION RIGHTS.
6.1. Redemption Rights with Respect to Unexercised Warrants. In
the case of an Extraordinary Event, the Company shall redeem all
unexercised Warrants no later than 30 days after the consummation of the
Extraordinary Event for an amount per Warrant equal to the greater of the
following amounts:
(i) the Fair Value of the consideration paid to the
holders of Common Stock in the Extraordinary Event less the
Purchase Price;
(ii) the Fair Value of the Warrants determined as of the
consummation of the Extraordinary Event; or
(iii) $0.01.
Such amount, as determined in the proceeding sentence, the "Redemption
Amount."
6.2. Notice of Redemption. With respect to any redemption of
the Warrants in accordance with this Section 6, at least 30 days but not
more than 60 days before the Redemption Date, the Company shall mail a
notice of redemption by first-class mail to each holder of unexercised
Warrants as it appears on the register of the Company.
The notice shall identify the unexercised Warrants to be
redeemed and shall state:
(i) the Redemption Date;
(ii) the Redemption Amount;
(iii) the name and address of the agent who will be
making the payments contemplated by Section 6.1 (the "Paying
Agent"); and
(iv) that the unexercised Warrants called for redemption
must be surrendered to the Paying Agent on or prior to the
Redemption Date in order to collect the Redemption Amount.
6.3. Effect of Notice of Redemption. Once notice of redemption
is mailed, Warrants called for redemption shall become eligible for
redemption on the Redemption Date and in accordance with Section 6.2, at
the Redemption Amount. Upon surrender of any Warrants to the Paying Agent,
such Warrants shall be paid at the Redemption Amount. Notice of redemption
shall be deemed to be given when mailed, whether or not the holder of the
Warrant receives the notice. In any event, failure to give such notice, or
any defect therein, shall not affect the validity of the proceedings for
the redemption of Warrants held by any Warrant holders to whom such notice
was properly given.
6.4. Funding of Redemption Amount. From time to time as
appropriate the Company shall fund to the Paying Agent (or, if the Company
is acting as its own Paying Agent, shall segregate and hold in trust) money
sufficient to pay the Redemption Amount on such Warrants as they are
surrendered.
6.5. Payment of Warrants Called for Redemption. If notice of
redemption has been given in the manner provided above, the Warrants
specified in such notice to be redeemed shall become eligible for
redemption on the Redemption Date at the Redemption Amount stated therein.
On the Redemption Date, the Company shall place funds sufficient to pay the
Redemption Amount on all outstanding warrants in trust for the holders of
the Warrants until a date 90 days after the Redemption Date and after such
date such Warrants shall be deemed cancelled and no Warrant surrendered
thereafter shall be eligible for the Redemption Amount. Upon surrender of
any Warrant for redemption in accordance with a notice of redemption, such
Warrant shall be paid and redeemed by the Company at the Redemption Amount.
7. No Dilution or Impairment. The Company shall not, by
amendment of its certificate of incorporation or through any consolidation,
merger, reorganization, transfer of assets, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Agreement, but will
at all times in good faith assist in the carrying out of all such terms and
in the taking of all such action as may be necessary or appropriate in
order to protect the rights of the holder of a Warrant against dilution or
other impairment. Without limiting the generality of the foregoing, the
Company (a) shall not permit the par value of any shares of stock
receivable upon the exercise of a Warrant to exceed the amount payable
therefor upon such exercise, (b) shall take all such action as may be
necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable shares of stock, free from all taxes,
liens, security interests, encumbrances, preemptive rights and charges on
the exercise of the Warrants from time to time outstanding and (c) shall
not take any action which results in any adjustment of the Purchase Price
if the total number of shares of Common Stock (or Other Securities)
issuable after the action upon the exercise of all of the Warrants would
exceed the total number of shares of Common Stock (or Other Securities)
then authorized by the Company's certificate of incorporation and available
for the purpose of issue upon such exercise.
8. CERTIFICATE as to Adjustments. In each case of any
adjustment, readjustment, increase or reduction described with respect to
the shares of Common Stock (or Other Securities) issuable upon the exercise
of a Warrant, including with respect to the Purchase Price, or as to the
maximum number of Additional Shares of Common Stock, or the number or kind
of securities the Warrant shall represent, as each is described in Sections
4 and 5 (in each such case, an "Adjustment"), the Company at its expense
shall promptly compute such Adjustment in accordance with the terms of this
Agreement and prepare a certificate signed by the Chairman of the Board of
Directors of the Company and the Chief Financial Officer or Treasurer of
the Company setting forth such Adjustment showing in reasonable detail the
method of calculation thereof and the facts upon which such Adjustment is
based, including a statement of (a) the consideration received or to be
received by the Company for any Additional Shares of Common Stock issued or
sold or deemed to have been issued, (b) the number of shares of Common
Stock outstanding or deemed to be outstanding, and (c) the Purchase Price
in effect immediately prior to such issue or sale and as adjusted and
readjusted (if required by Section 4) on account thereof. The Company shall
forthwith mail a copy of each such certificate to the Warrant Agent and
shall, upon the written request at any time of any holder of a Warrant,
furnish to such holder a like certificate. The Company shall also keep
copies of all such certificates at its principal office and shall cause the
same to be available for inspection at such office during normal business
hours by any holder of a Warrant or any prospective purchaser of a Warrant
designated by the holder thereof. The Warrant Agent shall not be deemed to
have knowledge of any such Adjustment unless and until it shall have
received such certificate from the Company, and the Warrant Agent shall be
fully protected in relying on any such Adjustment or other statements
contained in such certificate and shall have no duty or obligation to
investigate or inquire as to whether such Adjustment is accurate.
9. NOTICES OF CORPORATE ACTION. In the event of:
(a) any taking by the Company of a record of the holders of any
class of securities for the purpose of determining the holders
thereof who are entitled to receive any dividend (other than a
regularly scheduled cash dividend payable out of consolidated
earnings or earned surplus of the Company, determined in accordance
with generally accepted accounting principles, in an amount not
exceeding the amount in excess of 110% of the immediately preceding
cash dividend for such period) or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of
any class or any other securities or property, or to receive any
other right, or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the
Company, any consolidation or merger involving the Company and any
other Person, any transaction or series of transactions in which more
than 50% of the voting securities of the Company are transferred to
another Person, or any transfer, sale or other disposition of all or
substantially all the assets of the Company to any other Person, or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
the Company shall mail to each holder of a Warrant a notice specifying (i) the
date or expected date on which any such record is to be taken for the purpose
of such dividend, distribution or right, and the amount and character of such
dividend, distribution or right, and (ii) the date or expected date on which
any such reorganization, reclassification, recapitalization, consolidation,
merger, transfer, sale, disposition, dissolution, liquidation or winding-up is
to take place and the time, if any such time is to be fixed, as of which the
holders of record of Common Stock (or Other Securities) shall be entitled to
exchange their shares of Common Stock (or Other Securities) for the securities
or other property deliverable upon such reorganization, reclassification,
recapitalization, consolidation, merger, transfer, dissolution, liquidation or
winding-up. Such notice shall be mailed not less than 10 days prior to the
date therein specified.
10. Registration RIGHTS. If any shares of Common Stock or Other
Securities required to be reserved for purposes of exercise of a Warrant
require registration with or approval of any governmental authority under
any federal or state law before such shares may be issued upon exercise or
sold thereafter, the Company shall, at its expense and as expeditiously as
possible, use commercially reasonable efforts to cause such securities to
be duly registered or approved, as the case may be. At any such time as the
Common Stock is listed on any national securities exchange, the Company
shall, at its expense, obtain promptly and maintain the approval for
listing on each such exchange, upon official notice of issuance, the shares
of Common Stock issuable upon exercise of the then outstanding Warrants and
maintain the listing of such shares after their issuance; and the Company
shall also list on such national securities exchange, shall register under
the Exchange Act and shall maintain such listing of, any Other Securities
that at any time are issuable upon exercise of the Warrants, if and at the
time that any securities of the same class shall be listed on such national
securities exchange by the Company.
11. Reservation of Stock, etc. The Company shall at all times
reserve and keep available, solely for issuance and delivery upon exercise
of the Warrants, the number of shares of Common Stock (or Other Securities)
from time to time issuable upon exercise of all Warrants at the time
outstanding. All shares of Common Stock (or Other Securities) issuable upon
exercise of any Warrants shall be duly authorized and, when issued upon
such exercise, shall be validly issued and, in the case of shares, fully
paid and nonassessable with no liability on the part of the holders
thereof, and, in the case of all securities, shall be free from all taxes,
liens, security interests, encumbrances, preemptive rights and charges. The
Company will ensure that the transfer agent for the Common Stock, which may
be the Company ("Transfer Agent"), and every subsequent Transfer Agent for
any shares of the Company's capital stock issuable upon the exercise of any
of the purchase rights represented by a Warrant, are hereby irrevocably
authorized and directed at all times until the Expiration Date to reserve
such number of authorized and unissued shares as shall be requisite for
such purpose. The Company shall keep copies of a Warrant on file with the
Warrant Agent and with every subsequent Transfer Agent for any shares of
the Company's capital stock issuable upon the exercise of the rights of
purchase represented by a Warrant. The Company shall supply such Transfer
Agent with duly executed stock certificates for such purpose. All Warrant
Certificates surrendered upon the exercise of the rights thereby evidenced
shall be canceled, and such canceled Warrants shall constitute sufficient
evidence of the number of shares of stock which have been issued upon the
exercise of such Warrants. Subsequent to the Expiration Date, no shares of
stock need be reserved in respect of any unexercised Warrant.
12. REGISTRATION AND TRANSFER OF WARRANTS, ETC.
12.1. Warrant Register; Ownership of Warrants. Each Warrant
issued by the Company shall be numbered and shall be registered in a
warrant register (the "Warrant Register") as it is issued and transferred,
which Warrant Register shall be maintained by the Warrant Agent. The
Company and the Warrant Agent shall be entitled to treat the Person listed
as the registered holder of any Warrant on the Warrant Register as the
owner in fact thereof for all purposes and shall not be bound to recognize
any equitable or other claim to or interest in such Warrant on the part of
any other Person, and shall not be affected by any notice to the contrary,
except that, if and when any Warrant is properly assigned in blank, the
Company and the Warrant Agent may (but shall not be obligated to) treat the
bearer thereof as the owner of such Warrant for all purposes. A Warrant, if
properly assigned, may be exercised by a new holder without a new Warrant
first having been issued.
12.2. Transfer of Warrants. Subject to compliance with
applicable securities laws, a Warrant and all rights thereunder are
transferable in whole or in part, without charge to the holder thereof,
upon surrender of such Warrant with a properly executed Form of Assignment
attached hereto as Exhibit C at the designated office of the Warrant Agent.
Upon any partial transfer, the Company shall at its expense issue and
deliver to the holder a new Warrant Certificate of like tenor, in the name
of the holder, which shall be exercisable for such number of shares of
Common Stock with respect to which rights under such Warrant were not so
transferred.
12.3. Replacement of Warrants. On receipt by the Company of
evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of a Warrant Certificate and, in the case of any
such loss, theft or destruction of a Warrant Certificate, on delivery of an
indemnity agreement satisfactory in form and amount to the Company and the
Warrant Agent or, in the case of any such mutilation, on surrender of such
Warrant Certificate to the Warrant Agent and cancellation thereof, the
Company at its expense shall execute and deliver, in lieu thereof, a new
Warrant Certificate of like tenor.
12.4. Adjustments to Purchase Price and Number of Shares.
Notwithstanding any adjustment in the Purchase Price or in the number or
kind of shares of Common Stock purchasable upon exercise of a Warrant, any
Warrant theretofore or thereafter issued may continue to express the same
number and kind of shares of Common Stock as are stated in this Warrant, as
initially issued.
12.5. Fractional Shares. Notwithstanding any adjustment
pursuant to Section 4 in the number of shares of Common Stock or Other
Securities covered by a Warrant or any other provision of this Agreement,
the Company shall not be required to issue fractions of shares upon
exercise of a Warrant or to distribute Warrant Certificates which evidence
fractional shares. In lieu of fractional shares, the Company shall make
payment to the holder, at the time of exercise of a Warrant as herein
provided, in an amount in cash equal to such fraction multiplied by the
Current Market Price of a share of Common Stock or Other Security on the
date of Warrant exercise.
13. WARRANT AGENT.
13.1. Obligations Binding. The Warrant Agent undertakes only
the duties and obligations expressly imposed by this Agreement upon the
terms and conditions set forth herein, and no implied covenants or
obligations shall be read into this Agreement against the Warrant Agent,
whose duties and obligations shall be determined solely by the express
provisions hereof. The Company, and the holders of Warrants by their
acceptance thereof, shall be bound by all of such terms and conditions.
13.2. No Liability. The Warrant Agent shall not by
countersigning Warrant Certificates or by any other act hereunder be
accountable with respect to or be deemed to make any representations as to
the validity or authorization of the Warrants or the Warrant Certificates
(except as to its countersignature thereon), as to the validity,
authorization, or value (or kind or amount) of any Common Stock or any
other property delivered or deliverable upon exercise of any Warrant, or as
to the Purchase Price of such Common Stock, Additional Shares of Common
Stock, securities, or other property. The Warrant Agent shall not (a) be
liable for any recital or statement of fact contained herein or in the
Warrant Certificates or for any action taken, suffered, or omitted by the
Warrant Agent in good faith in the belief that any Warrant Certificate or
any other document or any signature is genuine or properly authorized, (b)
be responsible for determining whether any facts exist that may require any
adjustment of the Purchase Price and the number of shares of Common Stock
purchasable upon exercise of Warrants, or with respect to the nature or
extent of any such adjustments when made, or with respect to the method of
adjustment employed, (c) be responsible for any failure on the part of the
Company to issue, transfer, or deliver any Common Stock or property upon
the surrender of any Warrant or Warrant Certificate for the purpose of
exercise or to comply with any other of the Company's covenants and
obligations contained in this Agreement or in the Warrant Certificates, or
(d) be liable to the Company or any other Person whatsoever for any action
taken, suffered or omitted in connection with this Agreement except for its
own gross negligence, bad faith or willful misconduct (which gross
negligence, bad faith or willful misconduct must be determined by a final,
non-appealable order, judgment, decree or ruling of a court of competent
jurisdiction). Anything to the contrary notwithstanding, in no event shall
the Warrant Agent be liable for special, punitive, indirect, consequential
or incidental loss or damage of any kind whatsoever (including but not
limited to lost profits), even if the Warrant Agent has been advised of the
likelihood of such loss or damage. Any liability of the Warrant Agent under
this Agreement will be limited to the amount of annual fees paid by the
Company to the Warrant Agent.
13.3. Instructions. The Warrant Agent is hereby authorized to
accept instructions with respect to the performance of its duties hereunder
from the Chairman of the Board, Vice Chairman of the Board, President, any
Vice President, Treasurer or any Assistant Treasurer of the Company, and to
apply to any such officer for advice or instructions. The Warrant Agent
shall not be liable for any action taken, suffered, or omitted by it in
accordance with the instructions of any such officer or for any delay in
acting while waiting for those instructions.
13.4. Agents. The Warrant Agent may execute and exercise any of
the rights and powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys, agents, or employees,
provided reasonable care has been exercised in the selection and in the
continued employment of any such attorney, agent, or employee. The Warrant
Agent shall not be under any obligation or duty to institute, appear in, or
defend any action, suit, or legal proceeding in respect hereof, but this
provision shall not affect the power of the Warrant Agent to take such
action as the Warrant Agent may consider proper. The Warrant Agent shall
promptly notify the Company in writing of any claim made or action, suit,
or proceeding instituted against the Warrant Agent arising out of or in
connection with this Agreement.
13.5. Cooperation. The Company will perform, execute,
acknowledge, and deliver or cause to be performed, executed, acknowledged,
and delivered all such further acts, instruments, and assurances as may
reasonably be required by the Warrant Agent in order to enable the Warrant
Agent to carry out or perform its duties under this Agreement.
13.6. Agent Only. The Warrant Agent shall act solely as agent.
13.7. Right to Counsel. The Warrant Agent may at any time
consult with legal counsel satisfactory to it (who may be legal counsel for
the Company) and the Warrant Agent shall incur no liability or
responsibility to the Company, to any Warrant holder, or to any other
Person, for any action taken, suffered, or omitted by the Warrant Agent in
good faith in accordance with the opinion or advice of such counsel.
13.8. Compensation; Indemnification. The Company agrees to pay
the Warrant Agent reasonable compensation for its services hereunder (as
more fully described in Exhibit A) and to reimburse the Warrant Agent for
its reasonable expenses and counsel fees and other disbursements incurred
in the preparation, delivery, amendment, administration and execution of
this Agreement and the exercise and performance of its duties hereunder;
and further agrees to indemnify the Warrant Agent for, and hold it harmless
against, any loss, liability, damage, fine, penalty, claim, demand,
settlement or expense, including, but not limited to, judgments, costs, and
reasonable counsel fees, for any action taken, suffered, or omitted by the
Warrant Agent in connection with the acceptance, administration, exercise
and performance of its duties and powers hereunder, except for any such
liabilities that arise as a result of the Warrant Agent's gross negligence,
bad faith or willful misconduct (which gross negligence, bad faith or
willful misconduct must be determined by a final, non-appealable order,
judgment, decree or ruling of a court of competent jurisdiction). The costs
and expenses incurred in enforcing this right of indemnification shall be
paid by the Company. The provisions of this Section 13 shall survive the
termination of this Agreement, the exercise or expiration of the Warrants,
and the resignation, replacement or removal of the Warrant Agent.
13.9. Accounting. The Warrant Agent shall account promptly to
the Company with respect to Warrants exercised and concurrently pay to the
Company all moneys received by the Warrant Agent on behalf of the Company
on the purchase of shares of Common Stock through the exercise of Warrants.
13.10. No Conflict. The Warrant Agent and any stockholder,
director, officer, or employee of the Warrant Agent may buy, sell, or deal
in any of the Warrants or other securities of the Company or become
pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or otherwise act
as fully and freely as though it were not Warrant Agent under this
Agreement. Nothing herein shall preclude the Warrant Agent from acting in
any other capacity for the Company or for any other Person.
13.11. Resignation; Termination. The Warrant Agent may resign
its duties and be discharged from all further duties (subject to Section
13.8) after giving 30 days prior written notice to the Company. The Company
may remove the Warrant Agent upon 30 days written notice, and the Warrant
Agent shall thereupon in like manner be discharged from all further duties
hereunder. The Company shall cause to be mailed (by first class mail,
postage prepaid) to each registered holder of a Warrant at such holder's
last address as shown on the register of the Company, at the Company's
expense, a copy of such notice of resignation or notice of removal, as the
case may be. Upon such resignation or removal the Company shall promptly
appoint in writing a new warrant agent. If the Company shall fail to make
such appointment within a period of thirty (30) days after it has been
notified in writing of such resignation by the resigning Warrant Agent or
after such removal, then the holder of any Warrant may apply to any court
of competent jurisdiction for the appointment of a new warrant agent.
Pending appointment of a successor to the Warrant Agent, either by the
Company or by such a court, the duties of the Warrant Agent shall be
carried out by the Company. Any successor warrant agent, whether appointed
by the Company or by such a court, shall be a (i) Person, incorporated
under the laws of the United States or of any state thereof and authorized
under such laws to exercise corporate trust or shareholder service powers,
be subject to supervision and examination by Federal or state authority,
and have a combined capital and surplus of not less than $100,000,000 as
set forth in its most recent published annual report of condition, or (ii)
be an affiliate of the Person described in clause (i) of this sentence.
After acceptance in writing of such appointment by the new warrant agent it
shall be vested with the same powers, rights, duties, and responsibilities
as if it had been originally named herein as the Warrant Agent, without any
further assurance, conveyance, act, or deed; but if for any reason it shall
be necessary or expedient to execute and deliver any further assurance,
conveyance, act, or deed, the same shall be done at the expense of the
Company and shall be legally and validly executed and delivered by the
resigning or removed Warrant Agent. Not later than the effective date of
any such appointment the Company shall file notice thereof with the
resigning or removed Warrant Agent and shall forthwith cause a copy of such
notice to be mailed (by first class mail, postage prepaid) to each
registered holder of a Warrant at such holder's last address as shown on
the register of the Company. Failure to give any notice provided for in
this Section 13.11, or any defect in any such notice, shall not affect the
legality or validity of the resignation of the Warrant Agent or the
appointment of a new warrant agent, as the case may be.
13.12. Change of Warrant Agent. If at any time the name of the
Warrant Agent shall be changed and at such time any of the Warrant
Certificates shall have been countersigned but not delivered, the Warrant
Agent may adopt the countersignature under its prior name and deliver
Warrant Certificates so countersigned; and if at that time any of the
Warrant Certificates shall not have been countersigned, the Warrant Agent
may countersign such Warrant Certificates either in its prior name or in
its changed name; and in all such cases such Warrant Certificates shall
have the full force and effect provided in the Warrant Certificates and
this Agreement.
13.13. Successor Warrant Agent. Any Person into which the
Warrant Agent or any new warrant agent may be merged or any Person
resulting from any consolidation to which the Warrant Agent or any new
warrant agent shall be a party or any Person succeeding to all or
substantially all the agency business of the Warrant Agent or any new
warrant agent shall be a successor Warrant Agent under this Agreement
without any further act; provided, that such Person would be eligible for
appointment as a new warrant agent under the provisions of Section 13.11.
The Company shall promptly cause notice of the succession as Warrant Agent
of any such successor Warrant Agent to be mailed (by first class mail,
postage prepaid) to each registered holder of a Warrant at its last address
as shown on the register of the Company.
13.14. Reliance on Certificate. Whenever in the performance of
its duties under this Agreement the Warrant Agent shall deem it necessary
or desirable that any fact or matter (including without limitation, the
Purchase Price or the number of shares of Common Stock to be issued) be
proved or established by the Company prior to taking, suffering or omitting
to take any action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by any one of
the Chairman of the Board, Vice Chairman of the Board, President, any Vice
President, Treasurer or any Assistant Treasurer of the Company, and
delivered to the Warrant Agent; and such certificate shall be full and
complete authorization and protection to the Warrant Agent and the Warrant
Agent shall incur no liability for or in respect of any action taken,
suffered or omitted by it under the provisions of this Agreement in
reliance upon such certificate. Only with respect to the Warrant Agent, in
the event that a provision of this Agreement conflicts with the Plan, this
Agreement shall govern.
14. Remedies; Specific Performance. The Company stipulates that
there would be no adequate remedy at law to the holder of a Warrant in the
event of any default or threatened default by the Company in the
performance of or compliance with any of the terms of a Warrant and
accordingly, the Company agrees that, in addition to any other remedy to
which the holder may be entitled at law or in equity, the holder shall be
entitled to seek to compel specific performance of the obligations of the
Company under such Warrant, without the posting of any bond, in accordance
with the terms and conditions of this Agreement in any court of the United
States or any State thereof having jurisdiction, and if any action should
be brought in equity to enforce any of the provisions of this Agreement,
the Company shall not raise the defense that there is an adequate remedy at
law. A delay or omission by the holder hereto in exercising any right or
remedy accruing upon any such breach shall not impair the right or remedy
or constitute a waiver of or acquiescence in any such breach. No remedy
shall be exclusive of any other remedy. All available remedies shall be
cumulative.
15. No Rights or Liabilities as Shareholder. Nothing contained
in this Agreement or a Warrant Certificate shall be construed as conferring
upon the holder thereof any rights as a shareholder of the Company or as
imposing any obligation on the holder to purchase any securities or as
imposing any liabilities on the holder as a shareholder of the Company,
whether such obligation or liabilities are asserted by the Company or by
creditors of the Company.
16. Notices. All notices and other communications (and
deliveries) provided for or permitted hereunder shall be made in writing by
hand delivery, telecopier, any courier guaranteeing overnight delivery or
first class registered or certified mail, return receipt requested, postage
prepaid, addressed (a) if to the Company, to the attention of its Chief
Executive Officer at its principal office located at 00000 Xxxxxxxxxx
Xxxxx, Xxxxxxxxxx, Xxxxxxxx, 00000, or such other address as may hereafter
be designated in writing by the Company to the holder in accordance with
the provisions of this Section, (b) if to the holder, at its address as it
appears in the Warrant Register, or (c) if to the Warrant Agent, at its
designated office located at 00 Xxxxxxxxxx Xxxx, Xxxxxxxxxx Xxxx, XX 00000,
or such other address as may hereafter be designated in writing by the
Warrant Agent in accordance with the provisions of this Section.
All such notices and communications (and deliveries) shall be
deemed to have been duly given: at the time delivered by hand, if
personally delivered; when receipt is acknowledged, if telecopied; on the
next Business Day, if timely delivered to a courier guaranteeing overnight
delivery; and five days after being deposited in the mail, if sent first
class or certified mail, return receipt requested, postage prepaid;
provided, that the exercise of any Warrant shall be effective in the manner
provided in Section 3.
17. Amendments. A Warrant and any term thereof may not be
amended, modified, supplemented or terminated, and waivers or consents to
departures from the provisions hereof may not be established, without the
written consent of the Company and the individual holder of a Warrant. All
Warrants may be amended by the written consent of the Company and the
holders of Warrants representing at least a majority of the shares of
Common Stock issuable upon exercise of all of the Warrants then
outstanding; provided however, that with respect to any amendment,
modification, supplement, termination or waiver of any provisions of a
Warrant that would adversely affect the rights of any individual holder, as
compared to the rights of any other holders, the Company shall seek from
each holder adversely affected, a consent in writing to such amendment,
modification, supplement, termination or waiver of such provisions of such
Warrant, which consent may be withheld by the individual holder in its sole
discretion. If the Company is unable to obtain a consent from each holder
whose rights would be adversely affected by the proposed amendment,
modification, supplement, termination or waiver of provisions of a Warrant,
then such amendment, modification, supplement, termination or waiver of
provisions of such Warrant shall not be adopted by the Company. This
Agreement may only be amended with the prior written consent of the Company
and the Warrant Agent.
18. Descriptive Headings, Etc. The headings in this Agreement
are for convenience of reference only and shall not limit or otherwise
affect the meaning of terms contained herein. Unless the context of this
Agreement otherwise requires: (a) words of any gender shall be deemed to
include each other gender; (b) words using the singular or plural number
shall also include the plural or singular number, respectively; (c) the
words "hereof", "herein" and "hereunder" and words of similar import when
used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement, and Section and paragraph
references are to the Sections and paragraphs of this Agreement unless
otherwise specified; (d) the word "including" and words of similar import
when used in this Agreement shall mean "including, without limitation,"
unless otherwise specified; (e) "or" is not exclusive; and (f) provisions
apply to successive events and transactions.
19. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York (without
giving effect to the conflict of laws principles thereof).
20. Judicial Proceedings. Any legal action, suit or proceeding
brought against the Company with respect to this Agreement may be brought
in any federal court of the Southern District of New York or any state
court located in New York County, State of New York, and by execution and
delivery of this Agreement, the Company hereby irrevocably and
unconditionally waives any claim (by way of motion, as a defense or
otherwise) of improper venue, that it is not subject personally to the
jurisdiction of such court, that such courts are an inconvenient forum or
that this Agreement or the subject matter may not be enforced in or by such
court. The Company hereby irrevocably and unconditionally consents to the
service of process of any of the aforementioned courts in any such action,
suit or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, at its address set forth or provided for
in Section 16, such service to become effective 10 days after such mailing.
Nothing herein contained shall be deemed to affect the right of any party
to serve process in any manner permitted by law or commence legal
proceedings or otherwise proceed against any other party in any other
jurisdiction to enforce judgments obtained in any action, suit or
proceeding brought pursuant to this Section.
21. EXPIRATION. The right to exercise this Warrant shall expire
at 5:00 p.m., New York City time, on June 3, 2006 (the "Expiration Date").
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, as of the day and year first above written.
HLI HOLDING COMPANY, INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: General Counsel and Secretary
MELLON INVESTOR SERVICES LLC, as
Warrant Agent
By: /s/ Xxxxxx Xxxxxxxxxx
---------------------------------
Name: Xxxxxx Xxxxxxxxxx
Title:
EXHIBIT A to
Warrant Agreement
[FORM OF FACE OF WARRANT CERTIFICATE]
Warrant Number of Warrant(s):
No. _____________ ________________
Exercisable During the Period Commencing June 3, 2003
and Terminating at 5:00 p.m. June 3, 2006
WARRANT TO PURCHASE
COMMON STOCK
OF
[NEW HOLDCO]
This Certifies that FOR VALUE RECEIVED or registered assigns,
is the owner of the number of WARRANTS set forth above, each of which
represents the right, at any time after June 3, 2003 and on or before the
later of 5:00 p.m., New York City time, on June 3, 2006, to purchase from
Xxxxx Lemmerz International, Inc., a Delaware corporation (the "Company"),
at the price of $25.83 (the "Purchase Price"), one share of Common Stock,
$.01 par value, of the Company as such stock was constituted as of June 3,
2003 , subject to adjustment as provided in the warrant agreement by and
between Mellon Investor Services LLC (the "Warrant Agent") and the Company,
dated as of May 28, 2003 (the "Warrant Agreement") upon surrender hereof,
with the subscription form on the reverse hereof duly executed, by hand or
by mail to the Warrant Agent at 00 Xxxxxxxxxx Xxxx, Xxxxxxxxxx Xxxx, XX
00000, or any, or to any successor thereto, as the warrant agent under the
Warrant Agreement, at the office of such successor maintained for such
purpose (or, if such exercise shall be in connection with a Public Offering
(as such term and other capitalized terms used herein are defined in the
Warrant Agreement) of shares of such Common Stock subject to the Warrant
Agreement, at the location at which the Company shall have agreed to
deliver such securities), and simultaneous payment in full (by certified or
official bank or bank cashier's check payable to the order of the Company,
if applicable) of the Purchase Price in respect of each Warrant represented
by this Warrant Certificate that is so exercised, all subject to the terms
and conditions hereof and of the Warrant Agreement.
Upon any partial exercise of the Warrants represented by this
Warrant Certificate, there shall be issued to the holder hereof a new
Warrant Certificate representing the Warrants that were not exercised.
This Warrant Certificate is issued under and in accordance with
a Warrant Agreement and is subject to the terms and provisions contained
therein, all of which terms and provisions the holder of this Warrant
Certificate consents to by acceptance hereof. Copies of the Warrant
Agreement are on file at the above-mentioned office of the Warrant Agent
and may be obtained by writing to the Warrant Agent.
The Company shall not be required to issue fractions of shares
upon exercise of a Warrant or to distribute certificates which evidence
fractional shares. In lieu of fractional shares, the Company shall make
payment to the holder, at the time of exercise of a Warrant as herein
provided, in an amount in cash equal to such fraction multiplied by the
Current Market Price of a share of Common Stock or Other Security on the
date of Warrant exercise.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS
WARRANT SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR
ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
Dated: XXXXX LEMMERZ INTERNATIONAL, INC.
By: _______________________________
Title:
Countersigned:
MELLON INVESTOR SERVICES LLC,
as Warrant Agent
By:_________________________
Authorized Signatory
o [FORM OF REVERSE OF WARRANT CERTIFICATE]
x XXXXX LEMMERZ INTERNATIONAL, INC.
The transfer of this Warrant Certificate and all rights
hereunder is registrable by the registered holder hereof, in whole or part,
on the register of the Company upon surrender of this Warrant Certificate
at the office or agency of the Company or the office of the Warrant Agent
maintained for such purpose at 00 Xxxxxxxxxx Xxxx, Xxxxxxxxxx Xxxx, XX
00000, duly endorsed or accompanied by a written instrument of transfer
duly executed and in form satisfactory to the Company and the Warrant
Agent, by the registered holder hereof or his attorney duly authorized in
writing and upon payment of any necessary transfer tax or other
governmental charge imposed upon such transfer or registration thereof.
Upon any partial transfer, the Company will cause to be delivered to such
holder a new Warrant Certificate or Certificates with respect to any
portion not so transferred.
This Warrant Certificate may be exchanged at the office or
agency of the Company or the office of the Warrant Agent maintained for
such purpose at 00 Xxxxxxxxxx Xxxx, Xxxxxxxxxx Xxxx, XX 00000, for Warrant
Certificates representing the same aggregate number of Warrants, each new
Warrant Certificate to represent such number of Warrants as the holder
hereof shall designate at the time of such exchange.
Prior to the exercise of the Warrants represented hereby, the
holder of this Warrant Certificate, as such, shall not be entitled to any
rights of a stockholder of the Company, including, but not limited to, the
right to vote, to receive dividends or other distributions, to exercise any
preemptive right or, except as provided in the Warrant Agreement, to
receive any notice of meetings of stockholders, and shall not be entitled
to receive notice of any proceedings of the Company except as provided in
the Warrant Agreement. Nothing contained herein shall be construed as
imposing any liabilities upon the holder of this Warrant Certificate to
purchase any securities or as a stockholder of the Company, whether such
liabilities are asserted by the Company or by creditors or stockholders of
the Company or otherwise.
This Warrant Certificate shall be void and all rights
represented hereby shall cease unless exercised by the close of business on
June 3, 2006.
This Warrant Certificate shall not be valid for any purpose
until it shall have been manually countersigned by an authorized signatory
of the Warrant Agent.
Witness the facsimile seal of the Company and the signature of
its duly authorized officer.
EXHIBIT B to
Warrant Agreement
[FORM OF]
ELECTION TO PURCHASE SHARES
The undersigned hereby irrevocably elects to exercise the
Warrant to purchase ____ shares of Common Stock, par value $______ per
share ("Common Stock"), of XXXXX LEMMERZ INTERNATIONAL, INC. and hereby
makes payment of $_______ therefor. The undersigned hereby requests that
certificates for such shares be issued and delivered as follows:
ISSUE TO: ___________________________________________________________________
(NAME)
_____________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
_____________________________________________________________________________
(SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER)
DELIVER TO: _________________________________________________________________
(NAME)
_____________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
If the number of shares of Common Stock purchased hereby is
less than the number of shares of Common Stock covered by the Warrant, the
undersigned requests that a new Warrant representing the number of shares of
Common Stock not so purchased be issued and delivered as follows:
ISSUE TO: ___________________________________________________________________
(NAME OF HOLDER)
_____________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
DELIVER TO: _________________________________________________________________
(NAME OF HOLDER)
_____________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
Dated: [NAME OF HOLDER]
By ____________________________
Name:
Title:
EXHIBIT C to
Warrant Agreement
[FORM OF] ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers unto the Assignee named below all of the rights of the
undersigned to purchase Common Stock, par value $.01 per share ("Common
Stock") of XXXXX LEMMERZ INTERNATIONAL, INC. represented by the Warrant,
with respect to the number of shares of Common Stock set forth below:
Name of Assignee Address No. of Shares
---------------- ------- -------------
and does hereby irrevocably constitute and appoint ________ Attorney to make
such transfer on the books of XXXXX LEMMERZ INTERNATIONAL, INC. maintained for
that purpose, with full power of substitution in the premises.
Dated: [NAME OF HOLDER]
By: ____________________________
Name:
Title:
