EXHIBIT 10.32
Neither this Warrant, nor the shares of Class A Common Stock to be issued upon
exercise hereof, have been registered under the Securities Act of 1933, as
amended (the "SECURITIES ACT" as defined below) or qualified under the
California Corporate Securities Law of 1968 (the "Law"), and this Warrant has
been, and the shares of Class A Common Stock to be issued upon exercise hereof
will be, acquired for investment and not with a view to, or for resale in
connection with, any distribution thereof. No such sale or other disposition may
be made without an effective registration statement under the Securities Act and
qualification under the Law related thereto or an opinion of counsel reasonably
satisfactory to the Company (as that term is defined below) and its counsel,
that said registration and qualification are not required under the Securities
Act and the Law, respectively.
No. of Stock Units: 440,215 Warrant No. 7A
WARRANT
to Purchase
Class A Common Stock
of
PORTOLA PACKAGING, INC.
THIS IS TO CERTIFY THAT XXXXXX FINANCIAL, INC., or registered
assigns, is entitled, at any time from the date hereof until 5:00 P.M., Chicago,
Illinois time, on the Warrant Expiration Date (as defined below), to purchase
from PORTOLA PACKAGING, INC., a Delaware corporation, four hundred forty
thousand two hundred fifteen (440,215) Stock Units, in whole or in part, at a
purchase price of $2.50 per Stock Unit (adjusted as provided below), all on the
terms and conditions and pursuant to the provisions hereinafter provided.
This Warrant is issued in substitution for that certain
Warrant No. 3A dated as of October 9, 1992, issued by Cap Snap Co., a California
corporation (the predecessor corporation to the Company (as hereinafter
defined)) to Xxxxxx Financial, Inc.
SECTION 1. DEFINITIONS. The terms defined in this Section,
whenever used in this Warrant, shall, unless the context otherwise requires,
have the respective meanings hereinafter specified.
"ADDITIONAL SHARES OF NONPREFERRED STOCK" means all shares of
NonPreferred Stock issued by the Company after the date hereof, other than
(1) the Warrant Stock,
(2) Option Stock, and
(3) shares of Class B Stock issued to officers,
directors, employees and consultants of the Company pursuant to stock
options outstanding on the date hereof that were granted in accordance
with the Company's 1988 Stock Option Plan.
"AFFILIATE" of any entity means a Person which directly or
indirectly through one or more intermediaries controls, or is controlled by, or
is under common control with, such entity. The term "control," as used with
respect to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of Voting securities, by contract or
otherwise.
"BASE RATE" has the meaning assigned to such term in the
Subordinated Loan Agreement.
43
"BUSINESS DAY" means a day other than a Saturday, Sunday or
legal holiday in the State of Illinois or the State of California.
"CHASE WARRANT" means Warrant No. 6A issued as of the date
hereof by the Company to Chase Manhattan Capital Corporation, providing for the
purchase of 2,052,526 Stock Units referred to therein (issued in substitution
for Warrant No. 5A, dated October 9, 1992, issued by Cap Snap Co. (the
predecessor to the Company) to Chase Manhattan Investment Holdings, Inc.), and
all Warrants issued upon transfer, division or combination, or in substitution
for, any thereof.
"CLASS A STOCK" means the Company's authorized Class A Common
Stock, without par value, as constituted on the date of original issue of this
Warrant, and any Common Stock into which such Class A Common Stock may
thereafter be changed or which may be issued to the holders of shares of Class A
Common Stock upon any reclassification thereof.
"CLASS B STOCK" means, collectively, the Class B Stock,
Series 1 and the Class B Stock, Series 2.
"CLASS B STOCK, SERIES 1" means the Company's authorized
Class B Common Stock, Series 1, without par value, as constituted on the date of
original issue of this Warrant and any Common Stock into which such Class B
Common Stock, Series 1 may thereafter be changed or which may be issued to the
holders of shares of such Class B Common Stock, Series 1 upon any
reclassification thereof.
"CLASS B STOCK, SERIES 2" means the Company's authorized
Class B Common Stock, Series 2, without par value, as constituted on the date of
original issue of this Warrant and any Common Stock into which such Class B
Common Stock, Series 2 may thereafter be changed or which may be issued to the
holders of shares of such Class B Common Stock, Series 2 upon any
reclassification thereof.
"COMMISSION" means the Securities and Exchange Commission or
any other governmental body then administering the Securities Act.
"COMMON STOCK" means the Company's authorized Common Stock,
without par value, irrespective of class unless otherwise specified, as
constituted on the date of original issue of this Warrant, and any shares of
stock into which such Common Stock may thereafter be changed, or that may be
issued in respect of, in exchange for, or in substitution of such Common Stock
by reason of any stock splits, Stock dividends, distributions, mergers,
consolidations or other like events and shall also include stock of the Company
of any other class, which is not preferred as to dividends or assets over any
other class of stock of the Company and which is not subject to redemption,
issued to the holders of shares of Common Stock upon any reclassification
thereof.
"COMPANY" means Portola Packaging, Inc., a Delaware
corporation, and any successor corporation by merger or otherwise.
"CONVERTIBLE SECURITIES" means evidences of indebtedness,
shares of stock or other securities which are convertible into or exchangeable
for Additional Shares of Nonpreferred Stock, either immediately or upon the
arrival of a specified date or the happening of a specified event.
"CREDIT AND SECURITY AGREEMENT" means the Amended and
Restated Credit and Security Agreement between the Company, the lenders party
thereto from time to time and Xxxxxx Financial, Inc., as agent for such lenders,
dated as of the date hereof, as amended, supplemented or restated from time to
time.
44
"CURRENT MARKET PRICE" per share of Common Stock for the
purposes of any provision of this Warrant at the date herein specified shall be
determined as set forth below. (A) If on such date the Class B Stock is
registered under the Exchange Act, the Current Market Price per share shall be
deemed to be the average of the daily market prices for 30 consecutive Business
Days commencing 45 Business Days before such date. The market price for each
such Business Day shall be, if the Class B Stock is traded on a national
securities exchange, its last sale price on the preceding Business Day or, if
there was no sale on that day, the last sale price on the next preceding
Business Day on which there was a sale, all as made available over the
Consolidated Last Sale Reporting System of the CTA Plan or, if the Class B Stock
is not then eligible for reporting over such system, its last sale price on the
preceding Business Day on such national securities exchange or, if there was no
sale on that day, on the next preceding Business Day on which there was a sale
on such exchange or, if the principal market for the Class B Stock is the
over-the-counter market, but the Class B Stock is not then eligible for
reporting over the Consolidated Last Sale Reporting System of the CTA Plan, but
the Class B Stock is quoted on the National Association of Securities Dealers
Automated Quotations System ("NASDAQ"), the last sale price reported on NASDAQ
on the preceding Business Day or, if the Class B Stock is an issue for which
last sale prices are not reported on NASDAQ, the closing bid quotation on such
day, but, in each of the next preceding two cases, if the relevant NASDAQ price
or quotation did not exist on such day, then the price or quotation on the next
preceding Business Day in which there was such a price or quotation, but if the
Class B Stock is not reported or quoted on NASDAQ, the highest bid quotation as
quoted in any of The Wall Street Journal, the National Quotation Bureau pink
sheets, the Xxxxxx Xxxxxxx & Co., Incorporated quotation sheets, quotation
sheets of registered marketmakers and, if necessary, dealers' telephone
quotations. (B) If on such date the Class B Stock is not registered under the
Exchange Act, the Current Market Price per share of Common Stock shall be (1)
the value of the Class B Stock determined in good faith in the most recently
completed arm's-length transaction between the Company and an unaffiliated third
party in which transaction the aggregate amount of cash consideration received
by the Company is not less than $500,000 and in which such determination is
necessary and the closing which shall have occurred within six months preceding
such date, or (2) if no such transaction shall have occurred within the six
months preceding such date, the fair market value of the Class B Stock
determined by mutual agreement between the Company and the holder of this
Warrant, or (3) if the Company and the holder of this Warrant are unable to
agree as to the fair market value of the Class B Stock, the fair market value of
the Common Stock determined as follows. Each of the Company and the holder of
this Warrant shall submit the exact amount that it believes constitutes the fair
market value of the Class B Stock to an Independent Financial Expert selected by
the Board of Directors of the Company. Such Independent Financial Expert shall
thereupon select such fair market value as proposed by the Company or such fair
market value as proposed by the holder of this Warrant, but shall select no
other amount, and the fair market value so selected shall be conclusively deemed
to be the fair market value of the Common Stock of each class for the purposes
of any provision of this Warrant as at such date of determination. The fair
market value of the Common Stock shall be determined by the Company, the holder
of this Warrant or such Independent Financial Expert, as the case may be, based
upon the fair market value of 100% of the Company if sold as a going concern.
Such valuation may take into account, among other factors, the amount of
leverage of the Company, its earnings, book value, cash flow and prospects as
well as prevailing multiples paid for similar entities and value levels of
similar, publicly traded entities. The reasonable fees and expenses of such
Independent Financial Expert for making its determination shall be paid by the
Company if such Independent Financial Expert selects the fair market value
proposed by the holder of this Warrant, or by the holder of this Warrant if such
Independent Financial Expert selects the fair market value as proposed by the
Company.
"CURRENT WARRANT PRICE" per share of Class A Stock, for the
purpose of any provision of this Warrant at the date herein specified, means the
amount equal to the quotient resulting from dividing the purchase price per
Stock Unit in effect on such date by the number of shares (including any
fractional share) of Class A Stock comprising a Stock Unit on such date.
45
"EXCHANGE ACT" means the Securities Exchange Act of 1934 as
amended.
"EXERCISE PRICE" means the price per share of Common Stock
set forth in the preamble to this Warrant, as such price may be adjusted
pursuant to the provisions hereof.
"INDEPENDENT FINANCIAL EXPERT" means: (1) an investment
banking firm or other Person mutually acceptable to the Company and the holder
of this Warrant; or (2) if the Company and the holder of this Warrant are unable
to agree upon a particular expert as aforesaid, a nationally recognized
investment banking firm, ranking in the top ten (as determined by the Securities
Dealers Association or a similar securities information data company) as lead
manager for primary common stock offerings in the year prior to the year in
which it is called upon to give independent financial advice to the Company as
described herein and that does not (and whose affiliates do not) have a direct
or indirect financial interest in the Company, that has not been and at the time
it is called upon to give independent financial advice to the Company, is not
(and none of whose affiliates is) a promoter, director or officer of the
Company. or any of its affiliates or an underwriter with respect to any of the
securities of the Company, and that does not provide any advice or opinions to
the Company except as an Independent Financial Expert.
"INITIAL PUBLIC OFFERING" shall mean the first underwritten
public offering and sale of Common Stock pursuant to an effective registration
statement under the Securities Act, provided that (i) the aggregate offering
price in connection with such public offering shall be at least $10,000,000 and
(ii) after giving effect to such offering and sale and any previous public
offerings of Common Stock, at least 20% of the issued and outstanding Common
Stock shall be publicly traded.
"INSTITUTIONAL INVESTOR" means a bank, savings bank, savings
and loan association, insurance company, pension plan, investment company,
investment banking company or other financial institution subject to federal or
state regulation or any other organization or entity commonly regarded as an
institutional investor.
"NET BOOK VALUE" as of any date means (i) the total
consolidated assets of the Company and its Subsidiaries, MINUS (ii) the total
consolidated liabilities of the Company and its Subsidiaries, PLUS (iii) the
amount of cash and the fair value of any other property receivable upon exercise
or conversion of outstanding options, warrants (other than this Warrant),
Convertible Securities and other rights to subscribe for or purchase any
Additional Share of Nonpreferred Stock, whether or not the rights to exchange or
convert thereunder are immediately exercisable, all determined in accordance
with generally accepted accounting principles, consistently applied, but
excluding from clause (ii) any contingent liability with respect to any
contingent repurchase obligations under outstanding warrants (including this
Warrant), options, puts, Convertible Securities or other securities.
"NONPREFERRED STOCK" means the Class A Stock and the Class B
Stock and shall also include stock of the Company of any other class which is
not preferred as to dividends or assets over any other class of stock of the
Company and which is not subject to redemption.
OPTION STOCK" means not more than 1,000,000 shares of Class B
Stock issued or issuable (pursuant to stock options) to officers, directors,
employees and consultants of the Company pursuant to stock options granted
thereto from time to time after the date hereof by the Board of Directors of the
Company in accordance with the Company's 1988 Stock Option Plan (or any
successor stock option plan), provided that in each case the option exercise
price at the time of such grant is not less than the higher of (i) the fair
market value of such shares in the reasonable opinion of the Board of Directors
of the Company and (ii) the Current Warrant Price.
"PERSON" means a corporation, an association, a partnership,
a joint venture, an organization, a business, an individual, government or
political subdivision thereof or a governmental body.
46
"RESTRICTED CERTIFICATE" means each certificate for
Nonpreferred Stock bearing the restrictive legend set forth in SECTION 9A.
"RESTRICTED STOCK" means shares of Nonpreferred Stock
evidenced by a Restricted Certificate.
"SECURITIES ACT" means the Securities Act of 1933, or any
successor Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"SHAREHOLDERS AGREEMENT" means the Shareholders Agreement
dated as of June 23, 1988 among the Company and its shareholders and
warrantholders named therein, as amended by the Amendment to Shareholders
Agreement dated May 23, 1989, as further amended, supplemented or restated from
time to time.
"STOCK UNIT" means one share of Class A Stock as such Class A
Stock was constituted on the date of original issue of this Warrant, and
thereafter shall mean such number of shares (including any fractional shares) of
Class A Stock as shall result from the adjustments specified in SECTION 4.
"SUBORDINATED LOAN AGREEMENT" means the Second Amended and
Restated Senior Subordinated Loan Agreement dated as of the date hereof between
the Company, the Banks party thereto and The Chase Manhattan Bank (National
Association), as agent, as amended, supplemented or restated from time to time.
"TRANSFER" as used in SECTION 9, includes any disposition of
any Warrant, Warrant Stock or Restricted Stock, or of any interest in any
thereof, which would constitute a sale thereof within the meaning of the
Securities Act.
"VALUATION DATE" means, in respect of a determination of the
Current Market Price of the Common Stock by an Independent Financial Expert, the
last day of the fiscal quarter of the Company ended immediately prior to the
date such Independent Financial Expert is requested to make such determination
or such other date as shall be agreed upon at such time by the Company and the
holder of this Warrant.
"VOTING STOCK" means securities of any class or series of a
corporation or association the holders of which are ordinarily, in the absence
of contingencies, entitled to participate in the election of a majority of the
directors or persons performing similar functions of such corporation or
association.
"WARRANT EXPIRATION DATE" means the later of (i) the tenth
anniversary of the date hereof and (ii) the first Business Day occurring 30 days
after receipt by the holder of this Warrant of the Company's notice pursuant to
SECTION 6C.
"WARRANT REPURCHASE PRICE" has the meaning specified in
SECTION 5.
"WARRANTS" means the Warrants dated as of the date hereof
evidencing rights to purchase up to an aggregate of 440,215 Stock Units, and all
Warrants issued upon transfer, division or combination of, or in substitution
for, any thereof. All Warrants shall at all times be identical as to terms and
conditions and date, except as to the number of Stock Units for which they may
be exercised.
"WARRANT STOCK" means the shares of Class A Stock which
comprise a Stock Unit purchasable by the holders of the Warrants upon the
exercise thereof, and (without duplication) the shares of Class B Stock, Series
1 issuable on conversion of such shares of Class A Stock.
47
SECTION 2. EXERCISE OF WARRANT.
A. MANNER OF EXERCISE. This Warrant may be exercised at any
time or from time to time for all or any part of the number of Stock Units
purchasable upon its exercise; provided that this Warrant shall (except as
provided in SECTION 15) be void and all rights represented hereby shall (except
as aforesaid) cease unless exercised before 5:00 P.M., Chicago, Illinois time,
on the Warrant Expiration Date. In order to exercise this Warrant, in whole or
in part, the holder hereof shall deliver to the Company at its office or agency
maintained for this purpose pursuant to SECTION 12, (i) a written notice of such
holder's election to exercise this Warrant, which notice shall specify the
number of Stock Units to be purchased, (ii) an amount equal to the aggregate
Exercise Price for all shares of Warrant Stock as to which this Warrant is then
being exercised and (iii) this Warrant. Such notice shall be in the form of the
Subscription Form (including Exhibit A thereto) appearing at the end of this
Warrant. At the option of such holder, payment of the Exercise Price may be made
by (a) wire transfer of funds to an account in a bank located in the United
States designated by the Company for such purpose, (b) certified bank check
payable to the order of the Company and drawn on a member of the Chicago
Clearing House, (c) deduction from the number of shares of Warrant Stock
delivered upon exercise of the Warrant a number of shares which has an aggregate
Current Market Price on the date of exercise equal to the aggregate Exercise
Price for all shares as to which the Warrant is then being exercised or (d) by
any combination of the foregoing methods. Upon receipt thereof, the Company
shall, as promptly as practicable, and in any event within five Business Days
thereafter, execute or cause to be executed, and deliver to such holder a
certificate or certificates representing the aggregate number of shares of
Warrant Stock issuable upon such exercise, any and all of which certificates
shall bear the restrictive legend set forth in SECTION 9A, except as provided in
SECTION 9D. The stock certificate or certificates so delivered shall be
registered in the name of such holder or, subject to SECTION 9, such other name
as shall be designated in said notice. Unless otherwise specified in said
notice, and subject to SECTION 9, one certificate representing the aggregate
number of shares of Warrant Stock issuable upon such exercise shall be so
delivered. This Warrant shall be deemed to have been exercised and such
certificate or certificates shall be deemed to have been issued, and such holder
or any other person so designated to be named therein shall be deemed to have
become a holder of record of such shares for all purposes, as of the date said
notice, together with payment of the Exercise Price and this Warrant are
received by the Company as aforesaid. If this Warrant shall have been exercised
and/or surrendered in part, the Company shall, at the time of delivery of the
certificate or certificates representing Warrant Stock issuable upon such
exercise, deliver to or on the order of the holder hereof a new Warrant
evidencing the rights of such holder to purchase the unpurchased and/or
unsurrendered Stock Units called for by this Warrant, which new Warrant shall in
all other respects be identical with this Warrant, or, at the request of such
holder, appropriate notation may be made on the Warrant and the same returned to
such holder.
B. PAYMENT OF TAXES. ETC. All shares of Class A Stock issuable
upon the exercise of this Warrant, and all shares of Class B Stock, Series 1
issuable upon conversion of such Class A Stock, shall be validly issued, fully
paid and nonassessable, and the Company shall pay all expenses in connection
with, and all taxes (other than income or franchise taxes) and other
governmental charges that may be imposed in respect of, the issue or delivery
thereof. The Company shall not be required, however, to pay any tax or other
charge imposed in connection with any transfer involved in the issue of any
certificate for shares of Warrant Stock in any name other than that of the
registered holder of this Warrant (or any affiliate thereof), and in such case
the Company shall not be required to issue or deliver any stock certificate
until such tax oro other charge has been paid or it has been established to the
Company's satisfaction that no such tax or other charge is due.
C. FRACTIONAL SHARES. The Company shall not issue any
certificates for fractional shares of stock upon any exercise of this Warrant.
In lieu of issuing any fractional shares that would otherwise be issuable, the
Company shall pay cash equal to the product of such fraction MULTIPLIED by the
Current Warrant Price on the date of exercise.
48
SECTION 3. TRANSFER, DIVISION AND COMBINATION. Subject to
SECTION 9, this Warrant and all rights hereunder are transferable, in whole or
in part, on the books of the Company to be maintained for such purpose upon
surrender of this Warrant at the office or agency of the Company maintained for
the purpose pursuant to SECTION 12, together with a written assignment of this
Warrant duly executed by the holder hereof or his agent or attorney. Upon such
surrender, the Company shall, subject to SECTION 9, execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees and in the
denominations specified in such instrument of assignment, and this Warrant shall
promptly be cancelled. If and when this Warrant is assigned in blank (in case
the restriction on transferability in SECTION 9 shall have terminated), the
Company may (but shall not be obliged to) treat the bearer hereof as the
absolute owner of this Warrant for all purposes and the Company shall not be
affected by any notice to the contrary. A Warrant, if properly assigned in
compliance with SECTION 9, may be exercised by a new holder for the purchase of
shares of Common Stock as the new holder shall designate, without having a new
Warrant issued.
This Warrant may, subject to SECTION 9, be divided or
combined with other Warrants upon presentation hereof at the aforesaid office or
agency of the Company, together with a written notice specifying the names and
denominations in which new Warrants are to be issued, signed by the holder
thereof or his agent or attorney. Subject to compliance with the preceding
paragraph and with SECTION 9, as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in
accordance with such notice.
The Company shall pay all expenses, taxes (excluding
transfer taxes) and other charges payable in connection with the preparation,
issue and delivery of Warrants under this Section.
The Company agrees to maintain, at such office or agency,
books for the registration and transfer of the Warrants.
SECTION 4. ADJUSTMENT OF STOCK UNIT OR EXERCISE PRICE. The
number of shares of Class A Stock comprising a Stock Unit, or the price at which
a Stock Unit may be purchased upon exercise of this Warrant, shall be subject to
adjustment from time to time as set forth in this Section. The Company will not
take any action with respect to its Nonpreferred Stock of any class requiring an
adjustment pursuant to SUBSECTION A or H of this Section without at the same
time taking like action with respect to its Nonpreferred Stock of each other
class; and the Company will not create any class of Nonpreferred Stock which
carries any rights to dividends or assets greater in any respect than the rights
of the Class A Stock and the Class B Stock on the date hereof. Without limiting
the foregoing so long as any shares of Class A Stock are outstanding or
constitute Warrant Stock, the Company will not take any action with respect to
its Class B Stock, Series 1 without at the same time taking like action with
respect to its Class A Stock, to the end that at all times each share of Class A
Stock shall be convertible into one share of Class B Stock, Series 1.
A. STOCK DIVIDENDS, SUBDIVISIONS AND COMBINATIONS. In case
at any time or from time to time the Company shall
(1) take a record of the holders of its Nonpreferred Stock
for the purpose of entitling them to receive a dividend payable in, or
other distribution of Nonpreferred Stock, or
(2) subdivide its outstanding shares of Nonpreferred Stock
into a larger number of shares of Nonpreferred Stock, or
49
(3) combine its outstanding shares of Nonpreferred Stock into
a smaller number of shares of Nonpreferred Stock, then the number of
shares of Class A Stock comprising a Stock Unit immediately after the
happening of any such event shall be adjusted so as to consist of the
number of shares of Class A Stock which a record holder of the number
of shares of Class A Stock comprising a Stock Unit immediately prior to
the happening of such event would own or be entitled to receive after
the happening of such event.
B. PROHIBITION OF CERTAIN OTHER DIVIDENDS AND DISTRIBUTIONS.
So long as this Warrant shall remain outstanding the Company shall not, without
the prior written consent of the holder of this Warrant, make or commit to make,
or take a record of the holders of its Nonpreferred Stock for the purpose of
entitling them to receive any dividend or other distribution
(1) cash (other than a cash distribution made as a dividend
and payable out of retained earnings or earned surplus legally
available for the payment of dividends under the laws of the
jurisdiction of incorporation of the Company, to the extent, but only
to the extent, that the aggregate of all such dividends paid or
declared after the date hereof, does not exceed the net income of the
Company earned subsequent to the date hereof determined in accordance
with generally accepted accounting principles), or
(2) any evidence of its indebtedness (other than Convertible
Securities), any shares of its stock (other than Additional Shares of
Nonpreferred Stock) or any other securities or property of any nature
whatsoever (other than cash), or
(3) any warrants or other rights to subscribe for or purchase
any evidences of its indebtedness (other than Convertible Securities),
any shares of its stock (other than Additional Shares of Nonpreferred
Stock) or any other securities or property of any nature whatsoever.
A reclassification of the Nonpreferred Stock into shares of Nonpreferred Stock
and shares of any other class of stock shall be deemed a distribution by the
Company to the holders of its Nonpreferred Stock of such shares of such other
class of stock within the meaning of this Subsection and, if the outstanding
shares of Nonpreferred Stock shall be changed into a larger or smaller number of
shares of Nonpreferred Stock as a part of such reclassification, shall be deemed
a subdivision or combination, as the case may be, of the outstanding shares of
Nonpreferred Stock within the meaning of SUBSECTION A of this Section.
If at any time while this Warrant remains outstanding, the
Company shall declare and pay any cash dividend or cash distribution on any
class of Nonpreferred Stock, then the registered holder hereof shall have the
right, upon notice to the Company, to cause the Company, at the time of the
payment of such dividend or distribution, to pay to the registered holder hereof
the cash dividend or cash distribution that such holder exercised this Warrant
immediately prior to the taking of record of those holders of Nonpreferred Stock
entitled to any such dividend or distribution or, if no record is taken, the
date as of which the record holders of Nonpreferred Stock entitled to such
dividends or distributions are to be determined
C. ISSUANCE OF ADDITIONAL SHARES OF NONPREFERRED STOCK. In
case at any time or from time to time the Company shall (except as hereinafter
provided) issue any Additional Shares of Nonpreferred Stock at a price per share
that is lower than the Current Market Price per share of Common Stock, then (A)
the purchase price for each Stock Unit shall be adjusted (calculated to the
nearest $.01) so that it shall equal the price determined by multiplying the
purchase price for each Stock Unit in effect immediately prior thereto by a
fraction, the numerator of which shall be (i) an amount equal to the sum of (x)
the number of shares of Nonpreferred Stock outstanding immediately prior to the
issuance of such shares of Additional Shares of Nonpreferred Stock plus (y) the
number of shares of Nonpreferred Stock which the aggregate consideration
received by the Company for the total number of such Additional Shares
50
of Nonpreferred Stock (as determined in SUBSECTION G below) so issued would
purchase at the Current Market Price per share of Common Stock, and the
denominator of which shall be (ii) the number of shares of Nonpreferred Stock
outstanding immediately after such issuance of such shares of Additional Shares
of Nonpreferred Stock; and (B) the number of shares of Class A Stock thereafter
comprising a Stock Unit shall be adjusted to that number determined by
multiplying the number of shares of Class A Stock comprising a Stock Unit
immediately prior to such adjustment by a fraction (i) the numerator of which
shall be the purchase price for each Stock Unit in effect immediately prior to
such adjustment, and (ii) the denominator of which shall be the purchase price
for each Stock Unit as so adjusted. No adjustment to the purchase price for each
Stock Unit or of the number of shares of Class A Stock comprising a Stock Unit
shall be made under this Subsection upon the issuance of any Additional Shares
of Nonpreferred Stock which are issued pursuant to the exercise of any warrants
or other subscription or purchase rights or pursuant to the exercise of any
conversion or exchange rights in any Convertible Securities, if any such
adjustment shall previously have been made upon the issuance of such warrants or
other rights or upon the issuance of such Convertible Securities (or upon the
issuance of any warrant or other rights therefor) pursuant to SUBSECTION D or E
of this Section.
D. ISSUANCE OF WARRANTS OR OTHER RIGHTS. In case at any time
or from time to time the Company shall take a record of the holders of its
Nonpreferred Stock for the purpose of entitling them to receive a distribution
of, or shall otherwise issue, any warrants or other rights to subscribe for or
purchase any Additional Shares of Nonpreferred Stock or any Convertible
Securities and the consideration per share for which Additional Shares of
Nonpreferred Stock may at any time thereafter be issuable pursuant to such
warrants or other rights or pursuant to the terms of such Convertible Securities
shall be less than the Current Market Price per share of Common Stock, then the
number of shares of Class A Stock thereafter comprising a Stock Unit and the
purchase price for a Stock Unit shall be adjusted as provided in SUBSECTION C of
this Section on the basis that (i) the maximum number of Additional Shares of
Nonpreferred Stock issuable pursuant to all such warrants or other rights or
necessary to effect the conversion or exchange of all such Convertible
Securities shall be deemed to have been issued as of the date for the
determination of the Current Market Price per share of Common Stock as
hereinafter provided, and (ii) the aggregate consideration for such maximum
number of Additional Shares of Nonpreferred Stock shall be deemed to be the
minimum consideration received and receivable by the Company for the issuance of
such Additional Shares of Nonpreferred Stock pursuant to such warrants or other
rights or pursuant to the terms of such Convertible Securities. For purposes of
this Subsection, the date as of which the Current Market Price of Common Stock
shall be computed shall be the earliest of (a) the date on which the Company
shall take a record of the holders of its Nonpreferred Stock for the purpose of
entitling them to receive any such warrants or other rights, (b) the date on
which the Company shall enter into a firm contract for the issuance of such
warrants or other rights, and (c) the date of actual issuance of such warrants
or other rights.
E. ISSUANCE OF CONVERTIBLE SECURITIES. In case at any time or
from time to time the Company shall take a record of the holders of its
Nonpreferred Stock for the purpose of entitling them to receive a distribution
of, or shall otherwise issue any Convertible Securities and the consideration
per share `for which Additional Shares of Nonpreferred Stock may at any time
thereafter be issuable pursuant to such Convertible Securities shall be less
than the Current Market Price per share of Common Stock, then the number of
shares of Class A Stock thereafter comprising a Stock Unit and the purchase
price for a Stock Unit shall be adjusted as provided in SUBSECTION C of this
Section on the basis that (i) the maximum number of Additional Shares of
Nonpreferred Stock necessary to effect the conversion or exchange of all such
Convertible Securities shall be deemed to have been issued as of the date for
the determination of the Current Market Price per share of Common Stock as
hereinafter provided, and (ii) the aggregate consideration for such maximum
number of Additional Shares of Nonpreferred Stock shall be deemed to be the
minimum consideration received and receivable by the Company for the issuance of
such Additional Shares of Nonpref erred Stock pursuant to the terms of such
Convertible Securities. For purpose of this Subsection, the date as of which the
Current Market Price of Common Stock shall be computed shall be the earliest of
(a) the date on which the Company shall take a record of the holders of its
Nonpreferred Stock for the purpose of entitling
51
them to receive any such Convertible Securities, (b) the date on which the
Company shall enter into a firm contract for the issuance of such Convertible
Securities, and (c) the date of actual issuance of such Convertible Securities.
No adjustment of the number of shares of Class A Stock comprising a Stock Unit
or of the purchase price for a Stock Unit shall be made under this Subsection
upon the issuance of any Convertible Securities which are issued pursuant to the
exercise of any warrants or other subscription or purchase rights therefor, if
any such adjustment shall previously have been made upon the issuance of such
warrants or other rights pursuant to SUBSECTION D of this Section.
F. SUPERSEDING ADJUSTMENT OF STOCK UNIT. If, at any time
after any adjustment of the number of shares comprising a Stock Unit or of the
purchase price for a Stock Unit shall have been made pursuant to the foregoing
SUBSECTION D or E of this Section on the basis of the issuance of warrants or
other rights or the issuance of other Convertible Securities, or after any new
adjustment of the number of shares comprising a Stock Unit or of the purchase
price for a Stock Unit shall have been made pursuant to this Subsection, such
warrants or rights or the right of conversion or exchange in such other
Convertible Securities shall expire, and a portion of such warrants or rights,
or the right of conversion or exchange in respect of a portion of such other
Convertible Securities, as the case may be, shall not have been exercised, such
previous adjustment shall be rescinded and annulled and the Additional Shares of
Nonpreferred Stock which were deemed to have been issued by virtue of the
computation made in connection with the adjustment so rescinded and annulled
shall no longer be deemed to have been issued by virtue of such computation.
Thereupon, a recomputation shall be made of the effect of such rights or options
or other Convertible Securities on the basis of
(1) treating the number of Additional Shares of Nonpreferred
Stock, if any, theretofore actually issued or issuable pursuant to the
previous exercise of such warrants or rights or such right of
conversion or exchange, as having been issued on the date or dates of
such exercise, and
(2) treating any such warrants or rights or any such other
Convertible Securities which then remain outstanding as having been
granted or issued immediately after the time of the last date of such
exercise,
and, if and to the extent called for by the foregoing provisions of this Section
on the basis aforesaid, a new adjustment of the number of shares comprising a
Stock Unit or of the purchase price for a Stock Unit shall be made, which new
adjustment shall supersede the previous adjustment so rescinded and annulled.
G. OTHER PROVISIONS APPLICABLE TO ADJUSTMENTS UNDER THIS
SECTION. The following provisions shall be applicable to the making of
adjustments of the number of shares of Class A Stock comprising a Stock Unit and
of the purchase price for a Stock Unit hereinbefore provided for in this
Section:
(1) TREASURY OR COMPANY STOCK. The sale or other disposition
of any issued shares of Nonpreferred Stock owned or held by or for the
account of the Company shall be deemed an issuance thereof for purposes
of this Section.
(2) COMPUTATION OF CONSIDERATION. To the extent that any
Additional Shares of Nonpreferred Stock or any Convertible Securities
or any warrants or other rights to subscribe for or purchase any
Additional Shares of Nonpreferred Stock or any Convertible Securities
shall be issued for a cash consideration, the consideration received
by the Company therefor shall be deemed to be the amount of the cash
received by the Company therefor, or, if such Additional Shares of
Nonpreferred Stock or Convertible Securities are offered by the
Company for subscription, the subscription price, or, if such
Additional Shares of Nonpreferred Stock or Convertible Securities are
sold to underwriters or dealers for public offering without a
subscription offering, the initial public offering price, in any such
case excluding any amounts paid or receivable for accrued interest or
accrued dividends and without deduction of any compensation,
52
discounts or expenses paid or incurred by the Company for and in the
underwriting of, or otherwise in connection with, the issue thereof. To
the extent that such issuance shall be for a consideration other than
cash, then, except as herein otherwise expressly provided, the amount
of such consideration shall be deemed to be the fair value of such
consideration at the time of such issuance as determined in good faith
by the Board of Directors of the Company. The consideration for any
Additional Shares of Nonpreferred Stock issuable pursuant to any
warrants or other rights to subscribe for or purchase the same shall be
the consideration received or receivable by the Company for issuing
such warrants or other rights, plus the additional consideration
payable to the Company upon the exercise of such warrants or other
rights. The consideration for any Additional Shares of Nonpreferred
Stock issuable pursuant to the terms of any Convertible Securities
shall be the consideration received or receivable by the Company for
issuing any warrants or other rights to subscribe for or purchase such
Convertible Securities, plus the consideration paid or payable to the
Company in respect of the subscription for or purchase of such
Convertible Securities, plus the additional consideration, if any,
payable to the Company upon the exercise of the right of conversion or
exchange in such Convertible Securities. In case of the issuance at any
time of any Additional Shares of Nonpreferred Stock or Convertible
Securities in payment or satisfaction of any dividend upon any class of
stock other than Nonpreferred Stock, the Company shall be deemed to
have received for such Additional Shares of Nonpreferred Stock or
Convertible Securities a consideration equal to the amount of such
dividend so paid or satisfied.
(3) WHEN ADJUSTMENTS TO BE MADE. The adjustments required by
the preceding Subsections of this Section shall be made whenever and as
often as any specified event requiring an adjustment shall occur,
except that no adjustment of the number of shares of Class A Stock
comprising a Stock Unit that would otherwise be required shall be made
(except in the case of a subdivision or combination of shares of the
Nonpreferred Stock, as provided for in SUBSECTION A) unless and until
such adjustment, either by itself or with other adjustments not
previously made, adds or subtracts at least $0.01 to or from the
Current Warrant Price of each share of Class A Stock, as determined in
good faith by the Board of Directors of the Company, provided that, in
any event such adjustment shall be made if such adjustment either by
itself or with other adjustments not previously made would require an
increase or decrease of at least 1% in the number of shares of Class A
Stock comprising a Stock Unit immediately prior to the making of such
adjustment. Any adjustment representing a change of less than such
minimum amount (except as aforesaid) shall be carried forward and made
as soon as such adjustment, together with other adjustments required by
this Section and not previously made, would result in a minimum
adjustment. For the purpose of any adjustment, any specified event
shall be deemed to have occurred at the close of business on the date
of its occurrence.
(4) FRACTIONAL INTERESTS. In computing adjustments under this
Section, fractional interests in Nonpreferred Stock shall be taken into
account to the nearest whole share.
(5) WHEN ADJUSTMENT NOT REQUIRED. If the Company shall take a
record of the holders of its Nonpreferred Stock for the purpose of
entitling them to receive a dividend or distribution or subscription or
purchase rights and shall, thereafter and before the distribution
thereof to shareholders, legally abandon its plan to pay or deliver
such dividend, distribution, subscription or purchase rights, then
thereafter no adjustment shall be required by reason of the taking of
such record and any such adjustment previously made in respect thereof
shall be rescinded and annulled
H. MERGER CONSOLIDATION OR DISPOSITION OF ASSETS. In case the
Company shall merge or consolidate into another corporation, or sell, transfer
or otherwise dispose of all or substantially all of its property, assets or
business to another corporation, and pursuant to the terms of such merger,
consolidation or disposition of assets, shares of common stock of the successor
or acquiring corporation are to be received by or distributed to the holders of
53
Nonpreferred Stock of the Company, then each holder of a Warrant shall have the
right thereafter to receive, upon exercise of such Warrant, Stock Units each
comprising the number of shares of common stock of the successor or acquiring
corporation receivable upon or as a result of such merger, consolidation or
disposition of assets by a holder of the number of shares of Class A Stock
comprising a Stock Unit immediately prior to such event (or, if greater, by a
holder of a like number of shares of Class B Stock, Series 1). If, pursuant to
the terms of such merger, consolidation or disposition of assets, any cash,
shares of stock or other securities or property of any nature whatsoever
(collectively the "ADDITIONAL CONSIDERATION") are to be received by or
distributed to the holders of Nonpreferred Stock of the Company in addition to
common stock of the successor or acquiring corporation, each Stock Unit shall
thereafter be deemed to include the right to receive an amount equal to the
Additional Consideration (including for such purpose cash equal to the fair
value of all non-cash Additional Consideration) applicable to the number of
shares of Class A Stock then comprising a Stock Unit (or, if greater, the amount
applicable to a like number of shares of Class B Stock, Series 1). Such fair
value shall be determined in good faith by the Board of Directors of the
Company, provided that if such determination is objected to by the holders of
Warrants entitled to purchase a majority of the Stock Units covered thereby,
such determination shall be made by an Independent Financial Expert selected by
such Board of Directors and not objected to by such holders. One-half of the
fees and expenses of such Independent Financial Expert shall be paid by the
Company and one-half shall be paid by the holders of such Warrants pro rata in
accordance with the respective numbers of Stock Units covered by such Warrants.
In case of any such merger, consolidation or disposition of assets, the
successor acquiring corporation shall expressly assume in writing the due and
punctual observance and performance of each and every covenant and condition of
this Warrant to be performed and observed by the Company and all of the
obligations and liabilities hereunder, subject to such modification as shall be
necessary to provide for adjustments of Stock Units which shall be as nearly
equivalent as practicable to the adjustments provided for in this Section. For
the purposes of this Section "COMMON STOCK OF THE SUCCESSOR OR ACQUIRING
CORPORATION" shall include stock of such corporation of any class, which is not
preferred as to dividends or assets over any other class of stock of such
corporation and which is not subject to redemption, and shall also include any
evidences of indebtedness, shares of stock or other securities which are
convertible into or exchangeable for any such stock, either immediately or upon
the arrival of a specified date or the happening of a specified event, and any
warrants or other rights to subscribe for or purchase any such stock. The
foregoing provisions of this Subsection shall similarly apply to successive
mergers, consolidations or dispositions of assets.
I. OTHER ACTION AFFECTING COMMON STOCK. If the Company takes
any action affecting its Common Stock after the date hereof, other than an
action described in any of SUBSECTIONS A to H of this Section, inclusive, which
would have an adverse effect upon the rights of the holder of this Warrant
hereunder, then the number of shares of Class A Stock comprising a Stock Unit,
or the Current Warrant Price, shall be adjusted in such manner and at such time
as the Board of Directors of the Company shall in good faith determine to be
equitable under the circumstances. Notwithstanding the foregoing provisions of
this Section, there shall be no adjustment of the number of shares of Class A
Common Stock comprising a Stock Unit, or the price at which a Stock Unit may be
purchased upon exercise of this Warrant, as a result of (i) the exercise of this
Warrant or any Warrant issued in respect hereof or the Chase Warrant (as that
term is defined in the Credit and Security Agreement) or (ii) the conversion of
any Class B Stock, Series 2 into Class B Stock, Series 1 or a change in the
Conversion Price (as such term is defined in the Amended and Restated
Certificate of Incorporation of the Company as in effect on the date hereof) as
such Conversion Price relates to shares of Class B Stock, Series 2.
J. ADJUSTMENT FOR BREACH. The Company acknowledges and agrees
that the breach by the Company of its covenants contained in SUBSECTION B of
this Section might irreparably harm the holder of this Warrant, and that in the
event of such breach, in addition to any other remedy that the holder of this
Warrant may have in equity, at law or otherwise, the Current Warrant Price shall
be reduced to an amount equal to l0% of the Current Warrant Price as calculated
on the date of occurrence of such breach.
54
SECTION 5. REPURCHASE OBLIGATION.
At any time on and after August 1, 2001 until 5:00 P.M.,
Chicago, Illinois time, on the Warrant Expiration Date (subject to extension as
herein provided), the Company shall be obligated, upon 60 days prior written
notice to the Company by the holder of this Warrant, to repurchase this Warrant
from the holder hereof for the Warrant Repurchase Price (determined as below
provided) per Stock Unit, on the terms and conditions set forth below; provided
that (i) the Company shall have no repurchase obligation under this Section if
on or before the date of such proposed repurchase the Company has completed an
Initial Public Offering and (ii) such repurchase obligation shall be deemed
suspended if an event of default under the Subordinated Loan Agreement shall
have occurred and be continuing or would result therefrom or at any time when,
in the opinion of counsel for the Company (whose conclusions are not objected to
by reputable outside counsel for the holder of this Warrant), the Board of
Directors of the Company would be liable under Section 500 of the General
Corporation Law of California in respect of such repurchase; provided that if
such repurchase obligation shall be suspended pursuant to the foregoing clause
(ii), (a) the Company shall give notice of such suspension to the holder of this
Warrant and (b) the holder of this Warrant may, by written notice to the
Company, elect to rescind its prior notice requesting that the Company purchase
this Warrant. On the Warrant Expiration Date (unless an Initial Public Offering
shall have theretofore been completed by the Company), the Company shall
(without any further action on the part of the Company or the holder of this
Warrant) be obligated to repurchase this Warrant from the holder thereof for the
Warrant Repurchase Price (determined as below provided) per Stock Unit, on the
terms and conditions set forth below; provided that, if the obligation of the
Company to repurchase this Warrant shall then be suspended by reason of a
condition referred to in clause (ii) of the preceding sentence, (x) the unpaid
portion of the amount that the Company would, but for such suspension, be
obligated to pay to the holder of this Warrant (determined without regard to
such suspension) shall bear interest, for each day during the period from and
including the Warrant Expiration Date to but excluding the date on which such
obligation is paid in full, at a rate per annum equal to the sum of the Base
Rate as in effect on such day plus 6% and (y) the Company shall give notice, in
accordance with SECTION 13 hereof, to the holder of this Warrant when any such
condition no longer exists. The "WARRANT REPURCHASE PRICE" for each Stock Unit
shall be an amount equal to the PRODUCT OF the number of shares of Class A Stock
then constituting a Stock Unit TIMES the higher of:
(a) the Current Market Price per share of Common Stock as of
the date of such determination; or
(b) the Net Book Value of the Company as of the date of such
determination DIVIDED by the number of shares of Common Stock
outstanding on a fully diluted basis (excluding the Warrant Stock), as
of such date.
Payment to the holder of this Warrant under this Section shall be made on the
day 60 days after the date upon which notice of exercise is given to the Company
as above provided, in immediately available funds by wire transfer to such
account as such holder shall specify in such notice, against surrender of this
Warrant.
For the purposes of this SECTION 5, (i) an amount equal to the
exercise price of all options and warrants deemed exercised for purposes of
determining the number of shares issued and outstanding on a fully diluted basis
in connection with a determination of the Warrant Repurchase Price shall be
deemed received and held, on the date of determination of the Warrant Repurchase
Price by the Company in cash and (ii) proceeds to be received by the holder of
this Warrant in connection with any repurchase thereof shall be net of the
purchase price per Stock Unit.
The suspension of the Company's obligations pursuant to clause
(ii) of the first paragraph of this SECTION 5 shall be determined, unless the
Company shall otherwise agree, without reference to any amendment, modification
or waiver of SECTION 10.20(A) of the
55
Subordinated Loan Agreement (whether or not such agreement shall then be in
effect) or (for the purposes of this paragraph) of any defined term used in such
Section.
SECTION 6. NOTICES TO WARRANT HOLDERS.
A. NOTICE OF ADJUSTMENT OF STOCK UNIT OR EXERCISE PRICE.
Whenever the number of shares of Common Stock comprising a Stock Unit,
or the price at which a Stock Unit may be purchased upon exercise of the
Warrants, shall be adjusted pursuant to SECTION 4, the Company shall forthwith
obtain a certificate signed by the Company's chief financial officer setting
forth, in reasonable detail, the event requiring the adjustment and the method
by which such adjustment was calculated (including a description of the basis on
which the Board of Directors of the Company determined the fair value of any
evidences of indebtedness, shares of stock, other securities or property or
warrants or other subscription or purchase rights referred to in SECTION 4H) and
specifying the number of shares of Class A Stock comprising a Stock Unit and (if
such adjustment was made pursuant to SECTION 4H or SECTION 4I) describing the
number and kind of any other shares of stock comprising a Stock Unit, and any
change in the purchase price or prices thereof, after giving effect to such
adjustment or change. The Company shall promptly, and in any case within 45 days
after the making of such adjustment, cause a signed copy of such certificate to
be delivered to each holder of a Warrant in accordance with SECTION 13. The
Company shall keep at its office or agency, maintained for the purpose pursuant
to SECTION 12, copies of all such certificates and cause the same to be
available for inspection at said office during normal business hours by any
holder of a Warrant or any prospective purchaser of a Warrant designated by a
holder thereof.
B. NOTICE OF CERTAIN CORPORATE ACTION. In case the Company
shall propose (a) to pay any dividend payable in stock of any class to the
holders of its Nonpreferred Stock or to make any other distribution to the
holders of its Nonpreferred Stock (other than a cash dividend), or (b) to offer
to the holders of its Nonpreferred Stock rights to subscribe for or to purchase
any Additional Shares of Nonpreferred Stock or shares of stock of any class or
any other securities, rights or options, or (c) to effect any reclassification
of its Nonpreferred Stock (other than a reclassification involving only the
subdivision, or combination, of outstanding shares of Nonpreferred Stock), or
(d) to effect any capital reorganization, or (e) to effect any consolidation,
merger or sale, transfer or other disposition of all or substantially all of its
property, assets or business, or (f) to effect the liquidation, dissolution or
winding up of the Company, then in each such case (but without limiting the
provisions of SECTION 4B), the Company shall give to each holder of a Warrant,
in accordance with SECTION 13, a notice of such proposed action, which shall
specify the date on which a record is to be taken for the purposes of such stock
dividend, distribution or rights, or the date ON which such reclassification,
reorganization, consolidation, merger, sale, transfer, disposition, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of Nonpreferred Stock, if any such date is to be fixed,
and shall also set forth such facts with respect thereto as shall be reasonably
necessary to indicate the effect of such action on the Nonpreferred Stock and
the number and kind of any other shares of stock which will comprise a Stock
Unit, and the purchase price or prices thereof, after giving effect to any
adjustment which will be required as a result of such action. Such notice shall
be so given in the case of any action covered by CLAUSE (A) or (B) above at
least 20 days prior to the record date for determining holders of the
Nonpreferred Stock for purposes of such action, and in the case of any other
such action, at least 20 days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of Nonpreferred
Stock, whichever shall be the earlier.
C. NOTICE OF WARRANT EXPIRATION DATE. The Company shall give
to each holder of a Warrant, in accordance with SECTION 13, notice of the
Warrant Expiration Date. Such notice shall be given by the Company not less than
30 days but not more than 120 days prior to the then scheduled Warrant
Expiration Date.
D. NOTICE OF WARRANT REPURCHASE PRICE. So long as the Company
shall be obligated to purchase Warrants pursuant to SECTION 5, the Company shall
give each holder of a Warrant, from time to time upon request by any such holder
and in accordance with SECTION 13, a
56
notice setting forth the Warrant Repurchase Price (as calculated by the chief
financial officer of the Company) as in effect for the current calendar month,
but without regard to any determination of the Current Market Price.
SECTION 7. RESERVATION AND AUTHORIZATION OF NONPREFEPRED
STOCK; REGISTRATION WITH OR APPROVAL OF ANY GOVERNMENTAL AUTHORITY. The Company
shall at all times reserve and keep available for issue upon the exercise of
Warrants such number of its authorized but unissued shares of Common Stock as
will be sufficient to permit the exercise in full of all outstanding Warrants
and conversion of the shares of Class A Stock issuable upon such exercise into a
like number of shares of Class B Stock, Series 1. The Company will not amend its
articles of incorporation in any respect relating to the Class A Stock or the
convertibility thereof into Class B Stock, Series 1. All shares of Class A Stock
and Class B Stock, Series 1 which shall be so issuable, when issued upon
exercise of any Warrant or upon such conversion, as the case may be, shall be
duly and validly issued and fully paid and nonassessable. The Company will not
effect any original issuance of any shares of Class A Stock except upon exercise
of Warrants as herein provided.
Before taking any action which would cause an adjustment
reducing the Current Warrant Price per share of Class A Stock below the then par
value, if any, of the shares of Class A Stock issuable upon exercise of the
Warrants, or the shares of Class B Stock, Series 1 issuable upon conversion of
said shares of Class A Stock, the Company shall take any corporate action which
may, in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable shares of such Class A
Stock at such adjusted Current Warrant Price and validly and legally issue fully
paid and nonassessable shares of such Class B Stock, Series 1 upon conversion of
such shares of Class A Stock.
Before taking any action which would result in an adjustment
in the number of shares of Class A Stock comprising a Stock Unit or in the
Current Warrant Price per share of Class A Stock, the Company shall obtain all
such authorizations or exceptions thereof, or consents thereto, as may be
necessary from any public regulatory body or bodies having jurisdiction thereof.
SECTION 8. TAKING OF RECORD; STOCK AND WARRANT TRANSFER BOOKS.
In the case of all dividends or other distributions by the Company to the
holders of its Nonpreferred Stock with respect to which any provision of SECTION
4 refers to the taking of a record of such holders, the Company will in each
such case take such a record and will take such record as of the close of
business on a Business Day. The Company will not at any time, except upon
dissolution, liquidation or winding up of the Company, close its stock transfer
books or Warrant transfer books so as to result in preventing or delaying the
exercise or transfer of any Warrant.
SECTION 9. RESTRICTIONS ON TRANSFERABILITY. The Warrants, the
Warrant Stock and the Restricted Stock shall not be transferable except upon the
conditions specified in this Section, which conditions are intended, among other
things, to insure compliance with the provisions of the Securities Act in
respect of the Transfer of any Warrant or any Warrant Stock or any restricted
Stock.
A. RESTRICTIVE LEGEND. Unless and until otherwise permitted
by this Section, each certificate for Class A Stock initially issued upon the
exercise of this Warrant,, and each certificate for Class B Stock, Series 1
issued upon Conversion of such Class A Stock, and each certificate for
Nonpreferred Stock issued to any subsequent transferee of any such certificate,
shall be stamped or otherwise imprinted with a legend in substantially the
following form (in addition to any legend then required pursuant to the
Shareholders Agreement):
"The transfer of the shares represented by this certificate is
subject to the conditions specified in a certain warrant to purchase
common stock dated as of June 30, 1994 originally issued by Portola
Packaging, Inc. (the `Company') and no transfer of the
57
shares represented by this certificate shall be valid or effective
until such conditions have been fulfilled. A copy of the form of said
warrant to purchase common stock is on file and may be inspected at
the principal executive office of the Company. Under certain
circumstances specified in said warrant to purchase common stock the
Company has agreed to deliver to the holder hereof a new certificate,
not bearing this legend, for the number of shares evidenced hereby,
registered in the name of such holder. The holder of this certificate,
by acceptance of this certificate, agrees to be bound by the
provisions of said warrant to purchase common stock."
B. PERMITTED TRANSFERS; RIGHT OF FIRST REFUSAL.
(1) Neither this Warrant nor the Restricted Stock shall be
transferable except (i) to an Affiliate of the holder hereof, (ii) to
a successor corporation to the holder hereof as a result of a merger
or consolidation with, or sale of all or substantially all of the
assets of, the holder hereof, (iii) as is or may be required by the
holder hereof to comply with any Federal or state law or any rule or
regulation of any governmental or public body or authority, (iv) on
thirty (30) days prior written notice to the Company for a period of
ninety (90) days immediately following the date of such notice, to any
other Person if following such transfer the amount of Voting Stock of
the Company (including any Voting Stock issuable pursuant to any
warrants, options, convertible securities or other rights) held by
such Person and its Affiliates does not exceed 2% of the Company's
then outstanding Voting Stock, (v) in a public offering pursuant to an
effective registration statement under the Securities Act, (vi)
pursuant to SECTION 5 or SECTION 17 or (vii) to any banking
institution, insurance company, commercial finance company or other
institutional lender which is an assignee or transferee of or
participant in all or any portion of the rights of Xxxxxx Financial,
Inc. pursuant to the Credit and Security Agreement.
(2) Any notice given pursuant to clause (iv) of subparagraph
(1) above of this SECTION 9 by the holder hereof or of any shares
issuable pursuant hereto shall contain (i) the name and address of the
proposed bona fide purchaser of the Warrant or portion thereof or of
any shares issuable pursuant hereto, (ii) the proposed purchase price
per share of Common Stock subject to or issuable pursuant to this
Warrant ("Proposed Purchase Price"), (iii) the number of shares of
Common Stock subject to or issuable pursuant to this Warrant proposed
to be sold and (iv) a brief description of such proposed transfer. At
any time during the twenty (20) days following the receipt of such
notice, the Company shall have the right to acquire this Warrant (or
portion thereof) or the shares of Common Stock described in such notice
for an amount equal to the Proposed Purchase Price.
(3) The holder hereof of any Restricted Stock by acceptance
hereof or thereof, agrees to give written notice to the Company, prior
to any transfer of this Warrant, such shares of Common Stock or any
portion hereof or thereof, of its intention to make such transfer as
required by clause (iv) of subparagraph (1) above.
Such holder shall request an opinion of counsel
(which shall be rendered by counsel reasonably acceptable to the
Company) that the proposed transfer may be effected without
registration or qualification under any Federal or state securities or
blue sky law. Counsel shall, as promptly as practicable, notify the
Company and the holder of such opinion and of the terms and conditions,
if any, to be observed in such transfer, whereupon the holder shall be
entitled to transfer this Warrant (or portion thereof) or such shares
of Restricted Stock, in the event the Company does not exercise its
option to purchase this Warrant or such Warrant Stock or Restricted
Stock, after the expiration of a twenty (20) day period in accordance
with the terms of the notice delivered to the Company. In the event
this Warrant shall be exercised as an incident to such transfer, any
delay in the effectiveness of such transfer by reason of the provisions
58
of this SECTION 9 shall not result in any delays in or otherwise affect
the effectiveness of such exercise.
C. REGISTRATION RIGHTS. The holder of this Warrant
and all Restricted Stock issuable upon the exercise of this Warrant is
entitled to the benefits of, among other things, registration rights
contained in the Amended and Restated Registration Rights Agreement of
even date herewith, among the Company, Xxxxxx Financial, Inc., Chase
Manhattan Investment Holdings, Inc., Chase Manhattan Capital
Corporation and Xxxxxx Xxxxxxx Nominees Limited. Except as provided in
said Registration Rights Agreement, the Company shall not be obligated
to register this Warrant or any Warrant Stock or Restricted Stock under
the Securities Act or other applicable securities laws.
D. TERMINATION OF RESTRICTIONS. Notwithstanding the
foregoing provisions of this Section, the restrictions imposed by this
Section upon the transferability of the Warrants, the Warrant Stock and
the Restricted Stock shall cease and terminate as to any particular
Warrant (and related Warrant Stock) or Restricted Stock, when (i) such
Warrant (and related Warrant Stock), or such restricted Stock shall
have been effectively registered under the Securities Act or applicable
state securities laws and sold by the holder thereof in accordance with
such registration, or (ii) in the opinion of counsel for the Company
and counsel for the holder of such Warrant or such Restricted Stock
such restrictions are no longer required in order to insure compliance
with the Securities Act, applicable state securities laws or the Bank
Holding Company Act of 1956 and Regulation Y promulgated thereunder.
Whenever the restrictions imposed by this Section shall terminate as to
this Warrant, as hereinabove provided, the Company shall cause to be
stamped or otherwise imprinted upon this Warrant, at the request of the
holder hereof, without expense, a legend in substantially the following
form:
"The restrictions on transferability of the
within Warrant contained in Section 9 thereof
terminated on ____________, 19 and are of no
further force or effect."
All Warrants issued upon transfer, division or combination of, or
in substitution for, any Warrant or Warrants entitled to bear such
legend shall have a similar legend endorsed thereon. Whenever the
restrictions imposed by this Section shall terminate as to any
Restricted Certificate, as hereinabove provided, the holder thereof
shall be entitled to receive from the Company without expense, a
new certificate for Nonpreferred Stock of the same class not
bearing the restrictive legend set forth in SUBSECTION A of this
Section.
SECTION 10. LOSS OR MUTILATION. Upon receipt by the Company of
evidence satisfactory to it (in the exercise of reasonable discretion) of the
ownership of and the loss, theft, destruction or mutilation of this Warrant and
(in case of loss, theft or destruction) of indemnity satisfactory to it
(provided, if the holder hereof is an Institutional Investor, its own agreement
of indemnity shall be deemed to be satisfactory), and in case of mutilation upon
surrender and cancellation hereof, the Company will execute and deliver in lieu
hereof a new Warrant of like tenor.
SECTION 11. COMPLIANCE WITH RULE 144. At all times when the
Company is subject to the reporting requirements of the Exchange Act, the
Company shall take such steps as shall be necessary or appropriate to cause to
be made available (within the meaning of paragraph c) of Rule 144 of the
Commission, or any corresponding provision of any rule or regulation issued in
substitution therefor) adequate current public information with respect to the
Company (within the meaning of and as determined in accordance with said
paragraph) to enable the holders of any Warrant or any shares of Restricted
Stock to sell such securities within the limitations of the exemptions provided
by said Rule 144 or any rule or regulation issued in substitution therefor.
59
SECTION 12. OFFICE OF THE COMPANY. As long as any of the
Warrants remains outstanding, the Company shall maintain an office at 000
Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxxxxxxxxx, 00000, where the Warrants may be
presented for exercise, transfer, division or combination as in this Warrant
provided. Such office shall be maintained at said address unless and until the
Company shall designate and maintain some other office for such purposes and
give written notice thereof to the holders of all outstanding Warrants.
SECTION 13. NOTICES GENERALLY. Any notice, demand or delivery
pursuant to the provisions hereof shall be sufficiently given or made if sent by
first class mail, postage prepaid, addressed to any holder of a Warrant or of
Restricted Stock at such holder's last known address appearing on the books of
the Company, or, except as herein otherwise expressly provided, to the Company
at the address specified in SECTION 12, or such other address as shall have been
furnished to the party giving or making such notice, demand or delivery.
SECTION 14. LIMITATION OF LIABILITY. No provision hereof, in
the absence of affirmative action by the holder hereof to purchase shares of
Common Stock, and no mere enumeration herein of the rights or privileges of the
holder hereof, shall give rise to any liability of such holder for the purchase
price or as a stockholder of the Company, whether such liability is asserted by
the Company or by creditors of the Company.
SECTION 15. SURVIVAL. All covenants and agreements of the
Company, and all rights and duties of the holders from time to time of the
Warrant or any Common Stock contained in SECTION 9, shall be deemed to survive
any surrender hereof to the Company upon exercise hereof by the holder hereof as
contemplated by SECTION 2, or expiration of the right of the holder hereof to
exercise any unexercised balance hereof on the Warrant Expiration Date.
SECTION 16. CERTAIN WARRANTS DEEMED NOT OUTSTANDING For the
purposes of determining whether the holders of outstanding Warrants entitled to
purchase a requisite number of Stock Units at any time have taken any action
authorized by this Warrant, any Warrants owned by the Company or any affiliate
of the Company (other than an Institutional Investor which may be deemed an
affiliate solely by reason of the ownership of Warrants or Restricted Stock)
shall be deemed not to be outstanding.
SECTION 17. COMPANY RIGHT TO REPURCHASE WARRANTS AND
RESTRICTED STOCK. At any time after December 31, 1997 and prior to an Initial
Public Offering the Company shall have the right, at its election, to repurchase
all (but not less than all) of the outstanding Warrants and Restricted Stock
from the holders thereof at a purchase price determined as follows: (a) with
respect to the repurchase of the outstanding Warrants, the purchase price per
Stock Unit for which this Warrant is then exercisable shall be equal to the
Warrant Repurchase Price and (b) with respect to the repurchase of the
outstanding Restricted Stock, the purchase price per share of Restricted Stock
shall be equal to the Warrant Repurchase Price DIVIDED BY the number of shares
of Class A Stock then constituting a Stock Unit. The purchase price of the
Warrants and Restricted Stock in respect of such repurchase shall be payable in
immediately available funds on the repurchase date. If the Company shall give
notice of repurchase and the relevant parties are unable for reasons beyond
their reasonable control to complete the sale giving rise to such repurchase on
or before the original repurchase date specified in such notice, the Company
shall give prompt written notice of such fact to all other holders of Warrants
and Restricted Stock, which notice shall either (i) specify the date (not less
than 10 days after such notice) to which the original repurchase date is to be
postponed in order to permit said parties to complete such sale, whereupon the
repurchase date in respect of such action shall become the postponed repurchase
date, or (ii) state that said parties are proceeding diligently and in good
faith to complete such transactions and the Company undertakes to give a
subsequent written notice to such holders as to the date of such completion,
whereupon the repurchase date shall be not less than 10 days nor more than 15
days after such subsequent written notice. In case the Company shall give notice
to the effect set forth in clause (ii) of the preceding sentence and thereafter
determines that the sale will not be completed, the Company
60
shall give prompt written notice of such determination to all the holders of
Warrants and Restricted Stock, whereupon the original notice of repurchase in
respect of such transactions shall be deemed to be withdrawn. If for any reason
prior to the date of such sale (because of postponement of the date of such
sale, or otherwise) the repurchase price per share of Warrant Stock or
Restricted Stock shall be reduced or the price that holders of Warrant Stock or
Restricted Stock who join in the sale would have received shall be increased,
the Company shall offer all holders the opportunity to join in such sale
notwithstanding their previous decision not to do so.
For purposes of this SECTION 17, (i) an amount equal to the
exercise price of all options and warrants deemed exercised for purposes of
determining the number of shares issued and outstanding on a fully diluted basis
in connection with a determination of the Warrant Repurchase Price shall be
deemed received and held, on the date of determination of the Warrant Repurchase
Price by the Company in cash and (ii) any proceeds to be received by the holder
of this Warrant in connection with any repurchase thereof (but not of any
Restricted Stock) shall be net of the Exercise Price per share of Warrant Stock.
Notwithstanding the foregoing provisions of this Section, in
the event the Company shall propose to effect an Initial Public Offering and the
managing underwriter selected by the Company in respect of such Initial Public
Offering advises all holders of Warrants in writing that the existence of
unexercised Warrants at the time of such Initial Public Offering would
materially jeopardize the ability of the Company successfully to complete such
Initial Public Offering, the Company, upon not less than 10 nor more than 30
days' prior written notice to the holders of all Warrants, may repurchase,
according to the terms of the next succeeding sentence of this paragraph, all or
any part of the Warrants, to the extent deemed necessary by the managing
underwriter to permit successful completion of such Initial Public Offering, at
a purchase price per share of Warrant Stock then comprising a Stock Unit equal
to the then current Warrant Repurchase Price. In the event the Company elects to
repurchase less than all outstanding Warrants, such partial repurchase shall be
effected PRO RATA among all outstanding Warrants in respective amounts equal to
a fraction (i) the numerator of which shall be the number of Warrants so to be
repurchased and (ii) the denominator of which shall be the total number of
outstanding Warrants on such repurchase date. Such purchase shall be made on the
closing date of the sale pursuant to such Initial Public Offering. Accordingly,
if the Company gives notice of repurchase pursuant to this paragraph and such
closing does not take place on the original repurchase date specified in such
notice, the procedures set forth in the next preceding paragraph with respect to
postponement of the repurchase date shall apply, MUTATIS MUTANDIS, with respect
to such closing.
Until an Initial Public Offering has occurred, each
certificate for Class A Stock initially issued upon the exercise of this
Warrant, and each certificate for Class B Stock, Series 1 issued upon conversion
of such Class A Stock, and each certificate for Nonpreferred Stock issued to any
subsequent transferee of any such certificate, shall be stamped or otherwise
imprinted with a legend in substantially the following form:
"The shares represented by this certificate may be repurchased
by the Company, for the purchase price and on the other terms provided
and set forth in a certain warrant to purchase common stock dated as of
June 30, 1994 originally issued by Portola Packaging, Inc., a copy of
which may be inspected at the principal executive office of said
Company. The holder of this certificate, by acceptance hereof,
acknowledges the existence of said repurchase right and agrees to be
bound by the provisions of said warrant to purchase common stock."
SECTION 18. FINANCIAL AND BUSINESS INFORMATION. If this
Warrant shall remain outstanding following termination of the Credit and
Security Agreement, the Company shall deliver to the holder hereof the
information, reports and other financial data that would have been deliverable
under SUBSECTIONS 7.1(B) and (C) of the Credit and Security Agreement, and at
the times when such items would have been deliverable, had the Credit
61
and Security Agreement remained in effect, and, with reasonable promptness, such
other business or financial data as from time to time may be reasonably
requested by such holder.
SECTION 19. CONSENT ARREMENT. The holder of this Warrant, by
its acceptance hereof, agrees that this Warrant shall be subject to (but only to
the extent this Warrant, or the holder of the original Warrant in respect of
which this Warrant has been issued, is referred to in) the Amended and Restated
Consent Agreement dated as of the date hereof, between the Issuer, The Chase
Manhattan Bank (National Association), Chase Manhattan Investment Holdings,
Inc., Chase Manhattan Capital Corporation and Xxxxxx Financial, Inc.
SECTION 20. GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH TEE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF
LAWS PROVISIONS) OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
duly executed and its corporate seal to be impressed hereon and attested by an
authorized officer of the Company.
Dated as of June 30, 1994.
PORTOLA PACKAGING, INC.
By: /s/ Xxxx Xxxxx
----------------------------
Title: CEO
--------------------------
(CORPORATE SEAL)
Attest:
/s/ Xxxxxxx Xxxxxxxxx
-----------------------------------------
Title: Secretary
---------------------------------
62
SUBSCRIPTION FORM
(To be executed only upon exercise of Warrant)
The undersigned registered owner of this Warrant irrevocably
exercises this Warrant for and purchases Stock Units of Portola Packaging, Inc.
purchasable with this Warrant, and herewith makes payment therefor (by wire
transfer of funds in the amount of $________ to the following account:
______________________ (by certified bank check in the amount of $________ [by
deduction from the number of shares of Warrant Stock delivered upon exercise of
the Warrant ____________ shares], all on the terms and conditions specified in
this Warrant and requests that certificates for the shares of Common Stock
hereby purchased (and any securities or other property issuable upon such
exercise) be issued in the name of and delivered to _______________________
whose address is_____________________ and, if such Stock Units shall not include
all of the Stock Units issuable as provided in this Warrant that a new Warrant
of like tenor and date for the balance of the Stock Units issuable thereunder be
delivered to the undersigned.
Dated:
--------------------------------------
(Signature of Registered Owner)
--------------------------------------
(Street Address)
--------------------------------------
(City) (State) (Zip Code)
or
--------------------------------------
(Signature of Transferee)
--------------------------------------
(Street Address)
--------------------------------------
(City) (State) (Zip Code)
63
EXHIBIT A TO SUBSCRIPTION FORM
As a condition to this notice of exercise, I hereby make the
following representations and agreements:
1. I am aware of the Company' s business affairs and financial
condition and have had access to such information about the Company as I have
deemed necessary or desirable to reach an informed and knowledgeable decision to
acquire the Stock Units. I am purchasing the Stock Units for investment for my
own account only and not with a view to, or for resale in connection with, any
"distribution" thereof.
2. I understand that the Stock Units have not been registered
under the Securities Act of 1933 (the "Act") by reason of specific exemptions
therefrom, which exemptions depend upon, among other things, the bona fide
nature of my investment intent as expressed herein.
3. I acknowledge and agree that the Stock Units are restricted
securities which must be held indefinitely unless they are subsequently
registered under the Act or an exemption from such registration is available.
4. I further understand that the certificate(s) representing
the Stock Units, whether upon initial issuance or any transfer thereof, shall
bear on their face legends, prominently stamped or printed thereon in capital
letters, as provided for in the Warrant:
Signed:_________________________
Date: __________________________
64
AMENDMENT NO. 1
TO WARRANT
This Amendment No. 1 to Warrant (this "Amendment") is dated as of August
23, 1994, and entered into by and between PORTOLA PACKAGING, INC., a Delaware
corporation (the "Company"), and XXXXXX FINANCIAL, INC., a Delaware corporation
("Xxxxxx").
PRELIMINARY STATEMENT
The Company delivered to Xxxxxx its Warrant No. 7A to Purchase Class A
Common Stock of the Company dated as of June 30, 1994 (the "Warrant" unless
otherwise defined herein, terms defined therein being used herein as therein
defined). The parties wish to make certain modifications to the terms of the
Warrant, as more particularly set forth herein.
SECTION 1. GENERAL. Reference is made to the Warrant. Upon and after
the effective date hereof, all references to the Warrant in that document shall
mean the Warrant as amended hereby. Except as expressly provided herein, the
execution and delivery of this Amendment does not and will not amend, modify or
supplement any provision of, or constitute a consent to or a waiver of any
noncompliance with the provisions of the Warrant that may exist as of the date
hereof, and, except as specifically provided in the Amendment, the Warrant shall
remain in full, force and effect and is hereby ratified and confirmed.
SECTION 2. AMENDMENT TO WARRANT. Effective as of thc date hereof, but
subject to the satisfaction of the conditions set forth in Section 3 below,
Section 17 of the Warrant is hereby amended by deleting in the first line
thereof "December 31, 1997" and substituting therefor "August 1, 2003".
SECTION 3. CONDITIONS TO EFFECTIVENESS. The amendment set forth herein
shall be effective as of the date hereof upon Xxxxxx'x receipt of the following,
each in form and substance satisfactory to Xxxxxx:
(a) counterpart of this Amendment, duty executed and delivered
by the Company and Xxxxxx;
(b) certified copies of all corporate action taken by the
Company to authorize the execution, delivery and performance of this
Amendment;
(c) a consent of Chase to the execution and delivery of this
Amendment, in form and substance satisfactory to Xxxxxx; and
(d) such other documents and instruments as Xxxxxx may
reasonably request.
SECTION 4. REPRESENTATIONS AND WARRANTIES. The Borrower
hereby represents and warrants to Xxxxxx and Lenders as follows:
(a) AUTHORIZATION OF AMENDMENT. The execution and delivery of
this Amendment by the Company have been duty authorized by all
necessary corporate action on the part or the Company.
(b) NO CONFLICT. The execution and delivery by the Company of
this Amendment do not: (1) violate any provision of law applicable to
the Company or any order judgment or decree of any court or other
agency of government binding on the Company; (2) conflict with, result
in a breach of or constitute (with due notice or lapse of time or both)
a default under any contractual obligation of the Company; (3) result
in or require the creation or imposition of any material lien upon any
of the properties or assets of the Company; or (4) require any approved
or consent of any Person under any contractual obligation of the
Company, except for such approvals or consents that have been obtained
on or prior to the date hereof.
65
(c) GOVERNMENTAL CONSENTS. The execution and delivery by the
Company of this Amendment do not require any registration with, consent
or approval of, or notice to, or other action to, with or by, any
federal, state or other governmental authority or regulatory body.
(d) BINDING OBLIGATION. This Amendment is the legally valid and
binding obligations of the Company, enforceable against the Company in
accordance with its terms, subject to the limitations of bankruptcy,
insolvency, moratorium and other laws affecting the rights of creditors
generally.
SECTION 5. GOVERNING LAW. This Amendment shall be governed
by and construed in accordance with the laws of the State of Illinois.
SECTION 6. COUNTERPARTS. This Amendment may be executed by each party
to this agreement upon a separate copy, and, in such case, one counterpart of
this Amendment shall consist of enough of such copies to reflect the signature
of all of the parties to this Amendment. This Amendment may be executed in two
or more counterparts, each of which shall be deemed an original, and it shall
not be necessary in making proof of this Amendment or its terms to produce or
account for more than one of such counterparts.
[Signatures appear on following page]
66
Witness the due execution and delivery hereof by the respective duly
authorized officer of the undersigned as of the date first written
above.
PORTOLA PACKAGING, INC.
By:
--------------------------------
Title:
-----------------------------
XXXXXX FINANCIAL, INC.
By:
--------------------------------
Title:
-----------------------------
67
AMENDMENT NO. 2 TO WARRANT
This Amendment No. 2 to Warrant ("AMENDMENT") is made and entered into
this 29th day of September, 2000, by and between Portola Packaging, Inc.
("BORROWER") and Xxxxxx Financial, Inc. ("LENDER").
WHEREAS, Borrower issued that certain Warrant No. 7A to Purchase Common
Stock of Portola Packaging, Inc., dated June 30, 1994, as amended by that
Amendment No. 1 to Warrant, dated August 23, 1994, by and between Borrower and
Lender (as amended, the "WARRANT");
WHEREAS, Borrower, Xxxxxx Financial, Inc., as Agent, Issuing Lender and
a Lender, and other financial institutions from time to time, as Lenders, have
entered into that certain Third Amended and Restated Credit Agreement of even
date herewith (as amended, supplemented or restated from time to time, the
"THIRD AMENDED CREDIT AGREEMENT"; capitalized terms used but not defined herein
have the meanings assigned thereto in the Third Amended Credit Agreement); and
WHEREAS, in connection with the execution of the Third Amended Credit
Agreement, the parties desire to amend the Warrant as hereinafter set forth.
NOW THEREFORE, in consideration of the mutual conditions and agreements
set forth in the Warrant and this Amendment, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. DEFINITIONS. Capitalized terms used in this Amendment, unless
otherwise defined herein, shall have the meaning ascribed to such term in the
Warrant.
2. AMENDMENTS. Subject to the conditions set forth below, the Warrant
is hereby amended as follows:
(a) All references in the Warrant to the Credit and Security
Agreement shall mean and be references to the Third Amended Credit Agreement;
(b) Clause (ii) of Section 5 of the Warrant is hereby amended
by adding "either the Credit and Security Agreement or" immediately prior to
"the Subordinated Loan Agreement" in such Clause;
(c) Section 17 of the Warrant is amended by deleting "August
1, 2003" in the first line of such Section and in place thereof inserting
"August 1, 2007"; and
(d) Section 18 of the Warrant is hereby amended by deleting
"SUBSECTIONS 7.1(B) and (C)" in the fifth line of such Section and in place
thereof inserting "SUBSECTIONS 4.5(A) and (B)".
3. CONDITIONS. The effectiveness of this Amendment is subject to the
following conditions precedent (unless specifically waived in writing by
Lender):
68
(a) Borrower shall have executed and delivered such other
documents and instruments as Lender may require;
(b) All proceedings taken in connection with the transactions
contemplated by this Amendment and all documents, instruments and other legal
matters incident thereto shall be satisfactory to Lender and its legal counsel;
and
(c) No Default or Event of Default shall have occurred and
be continuing.
4. CORPORATE ACTION. The execution, delivery, and performance of this
Amendment has been duly authorized by all requisite corporate action on the part
of Borrower and this Amendment has been duly executed and delivered by Borrower.
5. SEVERABILITY. Any provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
6. REFERENCES. Any reference to the Warrant contained in any document,
instrument or Warrant executed in connection with the Warrant, shall be deemed
to be a reference to the Warrant as modified by this Amendment.
7. COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which shall constitute an original, but all of which taken
together shall be one and the same instrument.
8. RATIFICATION. The terms and provisions set forth in this Amendment
shall modify and supersede all inconsistent terms and provisions of the Warrant,
and shall not be deemed to be a consent to the modification or waiver of any
other term or condition of the Warrant. Except as expressly modified and
superseded by this Amendment, the terms and provisions of the Warrant are
ratified and confirmed and shall continue in full force and effect.
69
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed under seal and delivered by their respective duly authorized
officers on the date first written above.
XXXXXX FINANCIAL, INC. PQRTOLA PACKAGING, INC.
By: /s/ Xxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxx
----------------------------------- ------------------------------
Title: AVP Title: VP & CFO
-------------------------------- ---------------------------
Attest: /s/ Xxxxxxx X. Xxx
--------------------------
Assistant Secretary
[CORPORATE SEAL]
70
AMENDMENT NO. 3 TO WARRANT
This Amendment No. 3 to Warrant ("AMENDMENT") is made and entered into
this 30th day of November, 2001, by and between Portola Packaging, Inc.
("BORROWER") and Xxxxxx Financial, Inc. ("LENDER")
WHEREAS, Borrower issued that certain Warrant No. 7A to Purchase Common
Stock of Portola Packaging, Inc., dated June 30, 1994, as amended by that
Amendment No. 1 to Warrant, dated August 23, 1994, and that Amendment No. 2 to
Warrant, dated September 29, 2000, by and between Borrower and Lender (as
amended, the "WARRANT");
WHEREAS, Borrower, Xxxxxx Financial, Inc., as Agent, Issuing Lender and
a Lender, and other financial institutions from time to time, as Lenders,
entered into that certain Third Amended and Restated Credit Agreement dated as
of September 29, 2000 (as amended, supplemented or restated from time to time,
the "THIRD AMENDED CREDIT AGREEMENT"; capitalized terms used but not defined
herein have the meanings assigned thereto in the Third Amended Credit
Agreement); and
WHEREAS, the parties desire to amend the Warrant as hereinafter set
forth to amend the "Warrant Expiration Date" and to correct Section 17 of the
Warrant.
NOW THEREFORE, in consideration of the mutual conditions and agreements
set forth in the Warrant and this Amendment, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. DEFINITIONS. Capitalized terms used in this Amendment, unless
otherwise defined herein, shall have the meaning ascribed to such term in the
Warrant.
2. AMENDMENTS. Subject to the conditions set forth below, the Warrant
is hereby amended as follows:
(a) Section 1 of the Warrant is amended by deleting the
definition of "Warrant Expiration Date" and in place thereof inserting the
following:
"WARRANT EXPIRATION DATE" means the later of (i) June 30,
2008, and (ii) the first Business Day occurring 30 days after
receipt by the holder of this Warrant of the Company's notice
pursuant to SECTION 6C.
(b) Section 17 of the Warrant is amended by deleting in the
first line of such Section "August 1, 2007" and in place thereof inserting
"August 1, 2003"; and
3. CONDITIONS. The effectiveness of this Amendment is subject to the
following conditions precedent (unless specifically waived in writing by
Lender):
(a) Borrower shall have executed and delivered such other
documents and instruments as Lender may require;
71
(b) All proceedings taken in connection with the transactions
contemplated by this Amendment and all documents, instruments and other legal
matters incident thereto shall be satisfactory to Lender and its legal counsel;
and
(c) No Default or Event of Default shall have occurred and
be continuing.
4. CORPORATE ACTION. The execution, delivery, and performance of this
Amendment has been duly authorized by all requisite corporate action on the part
of Borrower and this Amendment has been duly executed and delivered by Borrower.
5. SEVERABILITY. Any provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
6. REFERENCES. Any reference to the Warrant contained in any document,
instrument or Warrant executed in connection with the Warrant, shall be deemed
to be a reference to the Warrant as modified by this Amendment.
7. COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which shall constitute an original, but all of which taken
together shall be one and the same instrument.
8. RATIFICATION. The terms and provisions set forth in this Amendment
shall modify and supersede all inconsistent terms and provisions of the Warrant,
and shall not be deemed to be a consent to the modification or waiver of any
other term or condition of the Warrant. Except as expressly modified and
superseded by this Amendment, the terms and provisions of the Warrant are
ratified and confirmed and shall continue in full force and effect.
72
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed under seal and delivered by their respective duly authorized
officers on the date first written above.
XXXXXX FINANCIAL, INC. PORTOLA PACKAGING, INC.
By: /s/ Xxxxx Xxxxxx By: /s/ Xxxxxx X. Xxxx
--------------------------------- ---------------------------
Title: ASP Title: VP & CFO
------------------------------ ------------------------
ATTEST:
/s/ Xxxxxxx X. Xxx
-------------------------------
Assistant Secretary
[CORPORATE SEAL]
73
