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EXHIBIT 4.3
THIS COMMON STOCK PURCHASE WARRANT AND THE SHARES THAT MAY BE PURCHASED
HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE. THIS COMMON STOCK
PURCHASE WARRANT HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES AND NOT WITH
A VIEW TO DISTRIBUTION, AND THIS COMMON STOCK PURCHASE WARRANT AND THE
SHARES THAT MAY BE PURCHASED HEREUNDER MAY NOT BE SOLD OR OFFERED FOR
SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND REGISTRATION OR QUALIFICATION
UNDER APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL THAT
THE PROPOSED TRANSACTION DOES NOT VIOLATE THE SECURITIES ACT OF 1933,
AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS.
THE SECURITIES THAT MAY BE PURCHASED HEREUNDER ARE SUBJECT TO A
SECURITIES HOLDERS AND REGISTRATION RIGHTS AGREEMENT DATED AS OF
___________, 2000, AMONG BELL SPORTS CORP. AND CERTAIN OF THE COMPANY'S
SHAREHOLDERS, AS AMENDED AND MODIFIED FROM TIME TO TIME. A COPY OF SUCH
SECURITIES HOLDERS AND REGISTRATION RIGHTS AGREEMENT SHALL BE FURNISHED
WITHOUT CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN
REQUEST.
BELL SPORTS CORP.
COMMON STOCK PURCHASE WARRANT
Date of Issuance:______________, 2000 Certificate No. W-__
THIS IS TO CERTIFY that ________________, a ______________
[corporation][limited partnership], and its transferees, successors and assigns
(the "Holder"), for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, is entitled to purchase from BELL SPORTS
CORP., a Delaware corporation (the "Company"), at the price of $0.01 per share
(the "Exercise Price"), at any time after the date hereof (the "Commencement
Date") and expiring on ___________, 2010 (the "Expiration Date"), _________
shares of the fully paid and nonassessable Common Stock, par value $0.01 per
share ("Common Stock"), of the Company (as such number may be adjusted as
provided herein). The ___________ shares of Common Stock which may be purchased
pursuant to this Warrant are referred to herein as the "Aggregate Number," which
represents the number of shares that as of the date hereof would constitute ___%
of all issued and outstanding shares of Common Stock of the Company on a Fully
Diluted basis, which for these purposes assumes (a) the full exercise of this
Warrant and (b) the full granting of any Common Stock and the full exercise of
options
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granted or to be granted under the Company's stock option and incentive plans
representing in the aggregate the right to receive or purchase shares
aggregating up to 15% of the Common Stock of the Company as of the date hereof.
Capitalized terms used herein shall have the meanings ascribed to
such terms in Section 11 hereof unless otherwise defined herein.
SECTION 1. THE WARRANT; TRANSFER AND EXCHANGE.
(a) The Warrant. This Common Stock Purchase Warrant (the
"Warrant") is issued under and pursuant to the Investment Agreement. This
Warrant and the rights and privileges of the Holder and the Company hereunder
may be exercised by the Holder in whole or in part as provided herein; shall
survive any termination of the Investment Agreement; and, as more fully set
forth in Sections 1(b) and 8 hereof, may, subject to the terms and conditions of
the Shareholders Agreement, be transferred by the Holder to any other Person or
Persons at any time or from time to time, in whole or in part, regardless of
whether the Holder retains any or all rights under the Investment Agreement.
(b) Transfer and Exchanges. The Company shall initially
record this Warrant on a register to be maintained by the Company with its other
stock books and, subject to Section 8 hereof, from time to time thereafter shall
reflect the transfer of this Warrant on such register when surrendered for
transfer in accordance with the terms hereof and properly endorsed, accompanied
by appropriate instructions, and further accompanied by payment in cash or by
check, bank draft or money order payable to the order of the Company, in United
States currency, of an amount equal to any stamp or other tax or governmental
charge or fee required to be paid in connection with the transfer thereof. Upon
any such transfer, a new warrant or warrants shall be issued to the transferee
and the Holder (in the event the Warrant is only partially transferred) and the
surrendered warrant shall be canceled. Each such transferee shall succeed to all
of the rights of the Holder with respect to the Warrant being so transferred
under the Investment Agreement; provided, that, in the event this Warrant is
partially transferred, the Holder and such transferee shall hold rights under
the Investment Agreement in proportion to their respective interests in this
Warrant. This Warrant may be exchanged at the option of the Holder, when
surrendered at the Principal Office of the Company, for another warrant or other
warrants of like tenor and representing in the aggregate the right to purchase a
like number of shares of Common Stock.
SECTION 2. EXERCISE.
(a) Right to Exercise. At any time after the Commencement
Date and on or before the Expiration Date, the Holder, in accordance with the
terms hereof, may exercise this Warrant, in whole at any time or in part from
time to time, by delivering this Warrant to the Company during normal business
hours on any Business Day at the Company's Principal Office, together with the
Election to Purchase, in the form attached hereto as Exhibit A and made a part
hereof (the "Election to Purchase"), duly executed, and payment of the Exercise
Price per share for the number of shares to be purchased (the "Exercise
Amount"), as specified in the Election to
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Purchase. If the Expiration Date is not a Business Day, then this Warrant may be
exercised on the next succeeding Business Day.
(b) Payment of Exercise Price. Payment of the Exercise Price
shall be made to the Company in cash or other immediately available funds or as
provided in Section 2(c), or a combination thereof. In the case of payment of
all or a portion of the Exercise Price pursuant to Section 2(c), the direction
by the Holder to make a "Cashless Exercise" shall serve as accompanying payment
for that portion of the Exercise Price. The amount of the Exercise Price to be
paid shall equal the product of (i) the Exercise Amount multiplied by (ii) the
Exercise Price per share.
(c) Cashless Exercise. The Holder shall have the right to
pay all or a portion of the Exercise Price by making a "Cashless Exercise"
pursuant to this Section 2(c), in which case the portion of the Exercise Price
to be so paid shall be paid by reducing the number of shares of Common Stock
otherwise issuable pursuant to the Election to Purchase (the "Exercised Shares")
by an amount (the "Cashless Exercise Shares") equal to (i) the Exercise Price
multiplied the Exercised Shares divided by (ii) the Fair Market Value Per Share.
The number of shares of Common Stock to be issued to the Holder as a result of a
Cashless Exercise will therefore be equal to the Exercised Shares minus the
Cashless Exercise Shares.
(d) Issuance of Shares of Common Stock. Upon receipt by the
Company of this Warrant at its Principal Office in proper form for exercise, and
accompanied by payment of the Exercise Price as aforesaid, the Holder shall be
deemed to be the holder of record of the shares of Common Stock issuable upon
such exercise, notwithstanding that certificates representing such shares of
Common Stock may not then be actually delivered. Upon such surrender of this
Warrant and payment of the Exercise Price as aforesaid, the Company shall issue
and cause to be delivered with all reasonable dispatch to, or upon the written
order of, the Holder (and in such name or names as the Holder may designate) a
certificate or certificates for the Exercise Amount, subject to any reduction as
provided in Section 2(c) for a Cashless Exercise.
(e) Fractional Shares. The Company shall not be required to
deliver fractions of shares of Common Stock upon exercise of this Warrant. If
any fraction of a share of Common Stock would be deliverable upon an exercise of
this Warrant, the Company shall, in lieu of delivering such fraction of a share
of Common Stock, make a cash payment to the Holder in an amount equal to the
same fraction of the Fair Market Value Per Share determined as of the Business
Day immediately preceding the date of exercise of this Warrant.
(f) Partial Exercise. In the event of a partial exercise of
this Warrant, the Company shall issue to the Holder a Warrant in like form for
the unexercised portion thereof.
SECTION 3. PAYMENT OF TAXES. The Company shall pay all stamp taxes
attributable to the initial issuance of shares or other securities issuable upon
the exercise of this Warrant or issuable pursuant to Section 6 hereof, excluding
any tax or taxes which may be payable because of the transfer involved in the
issuance or delivery of any certificates for shares or other securities in a
name other than that of the Holder in respect of which such shares or securities
are issued.
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SECTION 4. REPLACEMENT WARRANT. In case this Warrant is mutilated,
lost, stolen or destroyed, the Company shall issue and deliver in exchange and
substitution for and upon cancellation of the mutilated Warrant, or in lieu of
and in substitution for the Warrant lost, stolen or destroyed, a new Warrant of
like tenor and representing an equivalent right or interest, but only upon
receipt of evidence reasonably satisfactory to the Company of such loss, theft
or destruction of such Warrant and upon receipt of indemnity reasonably
satisfactory to the Company.
SECTION 5. RESERVATION OF COMMON STOCK AND OTHER COVENANTS.
(a) Reservation of Authorized Common Stock. The Company
shall at all times reserve and keep available out of the aggregate of its
authorized but unissued shares, free of preemptive rights, such number of its
duly authorized shares of Common Stock, or other stock or securities deliverable
pursuant to Section 6 hereof, as shall be sufficient to enable the Company at
any time to fulfill all of its obligations under this Warrant.
(b) Affirmative Actions to Permit Exercise and Realization
of Benefits. If any shares of Common Stock reserved or to be reserved for the
purpose of the exercise of this Warrant, or any shares or other securities
reserved or to be reserved for the purpose of issuance pursuant to Section 6
hereof, require registration with or approval of any governmental authority
under any federal or state law (other than securities laws) before such shares
or other securities may be validly delivered upon exercise of this Warrant, then
the Company covenants that it will, at its sole expense, secure such
registration or approval, as the case may be (including but not limited to
filings required under the Xxxx Xxxxx Xxxxxx Antitrust Improvements Act).
(c) Regulatory Requirements and Restrictions. In the event
of any reasonable determination by the Holder that, by reason of any existing or
future federal or state law, statute, rule, regulation, guideline, order, court
or administrative ruling, request or directive (whether or not having the force
of law and whether or not failure to comply therewith would be unlawful)
(collectively, a "Regulatory Requirement"), the Holder is effectively restricted
or prohibited from holding this Warrant or the Warrant Shares (including any
shares of capital stock or other securities distributable to the Holder in any
merger, reorganization, readjustment or other reclassification), or otherwise
realizing upon or receiving the benefits intended under this Warrant, the
Company shall, and shall use its reasonable best efforts to have its
shareholders, take such action as the Holder and the Company shall jointly agree
in good faith to be reasonably necessary to permit the Holder to comply with
such Regulatory Requirement. The reasonable costs of taking such action, whether
by the Company, the Holder or otherwise, shall be borne by the Holder.
(d) Validly Issued Shares. The Company covenants that all
shares of Common Stock that may be delivered upon exercise of this Warrant,
assuming full payment of the Exercise Price, (including those issued pursuant to
Section 6 hereof) shall upon delivery by the Company be duly authorized and
validly issued, fully paid and nonassessable, free from all stamp taxes, liens
and charges with respect to the issue or delivery thereof and otherwise free of
all other security interests, encumbrances and claims of any nature whatsoever
other than such security interests, encumbrances and claims granted by the
Holder.
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SECTION 6. ADJUSTMENTS TO AGGREGATE NUMBER.
Under certain conditions, the Aggregate Number is subject to
adjustment as set forth in this Section 6. No adjustments shall be made under
this Section 6 as a result of (a) the issuance by the Company of the Warrant
Shares upon exercise of this Warrant, (b) the issuance shares of Common Stock
(or options related thereto) upon the granting of Common Stock or the exercise
of options granted or to be granted under the Company's stock option and
incentive plans, (c) the issuance of Common Stock or Convertible Securities as
consideration for the purchase price of assets or businesses being acquired by
the Company or any of its Subsidiaries, and (d) the issuance of nominally priced
Common Stock or Convertible Securities in connection with the issuance of debt
or nonconvertible preferred stock (collectively, the "Exempt Issuances").
(a) Adjustments. The Aggregate Number, after taking into
consideration any prior adjustments pursuant to this Section 6, shall be subject
to adjustment from time to time as follows and, thereafter, as adjusted, shall
be deemed to be the Aggregate Number hereunder.
(i) Stock Dividends. Subdivisions and
Combinations. In case at any time or from time to time the Company shall:
(A) issue to the holders of its
Common Stock a dividend payable in, or other
distribution of, Common Stock (a "Stock Dividend"),
(B) subdivide its outstanding shares
of Common Stock into a larger number of shares of Common
Stock, including without limitation by means of a stock
split (a "Stock Subdivision"), or
(C) combine its outstanding shares
of Common Stock into a smaller number of shares of
Common Stock (a "Stock Combination"),
then the Aggregate Number in effect immediately prior thereto shall be (1)
proportionately increased in the case of a Stock Dividend or a Stock Subdivision
and (2) proportionately decreased in the case of a Stock Combination. In the
event the Company shall declare or pay, without consideration, any dividend on
the Common Stock payable in any right to acquire Common Stock for no
consideration, then the Company shall be deemed to have made a Stock Dividend in
an amount of shares equal to the maximum number of shares issuable upon exercise
of such rights to acquire Common Stock.
(ii) Other Distributions. In case at any time or
from time to time the Company shall take a record of the holders of its Common
Stock for the purpose of entitling them to receive any dividend or other
distribution (collectively, a "Distribution") of:
(A) cash,
(B) any evidences of its
indebtedness (other than Convertible Securities), any
shares of its capital stock (other than additional
shares of
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Common Stock or Convertible Securities) or any other
securities or property of any nature whatsoever (other
than cash) or
(C) any options, warrants or other
rights to subscribe for or purchase any of the
following: any evidences of its indebtedness (other than
Convertible Securities), any shares of its capital stock
(other than additional shares of Common Stock or
Convertible Securities) or any other securities or
property of any nature whatsoever,
then the Holder shall be entitled to elect by written notice to the Company to
receive (1) immediately and without further payment the cash, evidences of
indebtedness, stock, securities, other property, options, warrants and/or other
rights (or any portion thereof) to which the Holder would have been entitled by
way of such Distribution as if the Holder had exercised this Warrant immediately
prior to such Distribution or (2) upon the exercise of this Warrant at any time
on or after the taking of such record, the number of Warrant Shares to be
received upon exercise of this Warrant determined as stated herein and, in
addition and without further payment, the cash, evidences of indebtedness,
stock, securities, other property, options, warrants and/or other rights (or any
portion thereof) to which the Holder would have been entitled by way of such
Distribution and subsequent dividends and distributions through the date of
exercise as if such Holder (x) had exercised this Warrant immediately prior to
such Distribution and (y) had retained the Distribution in respect of the Common
Stock and all subsequent dividends and distributions of any nature whatsoever in
respect of any stock or securities paid as dividends and distributions and
originating directly or indirectly from such Common Stock.
A reclassification of the Common Stock into shares of Common Stock
and shares of any other class of stock shall be deemed a Distribution by the
Company to the holders of its Common Stock of such shares of such other class of
stock and, if the outstanding shares of Common Stock shall be changed into a
larger or smaller number of shares of Common Stock as a part of such
reclassification, such event shall be deemed a Stock Subdivision or Stock
Combination, as the case may be, of the outstanding shares of Common Stock
within the meaning of Section 6(a)(i) hereof.
(iii) Issuance of Common Stock. If at any time or
from time to time the Company shall (except as hereinafter provided in this
Section 6(a)(iii)) issue or sell any additional shares of Common Stock for a
consideration per share less than the Fair Market Value Per Share, then,
effective on the date specified below, the Aggregate Number shall be adjusted by
multiplying (A) the Aggregate Number immediately prior thereto by (B) a
fraction, the numerator of which shall be the sum of the number of shares of
Common Stock outstanding immediately prior to the issuance of such additional
shares of Common Stock, the number of shares of Common Stock issuable upon the
conversion or exercise of options, warrants, rights or other Convertible
Securities (whether or not then exercisable), and the number of such additional
shares of Common Stock so issued and the denominator of which shall be the sum
of the number of shares of Common Stock outstanding immediately prior to the
issuance of such additional shares of Common Stock, the number of shares of
Common Stock issuable upon the conversion or exercise of options, warrants,
rights or other Convertible Securities (whether or not then exercisable), and
the number of shares of Common Stock which the aggregate consideration for
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the total number of such additional shares of Common Stock so issued would
purchase at the Fair Market Value Per Share. The date as of which the Fair
Market Value Per Share shall be computed shall be the earlier of the date on
which the Company shall enter into a firm contract or commitment for the
issuance of such additional shares of Common Stock or the date of actual
issuance of such additional shares of Common Stock.
The provisions of this Section 6(a)(iii) shall not apply to any
issuance of additional shares of Common Stock for which an adjustment is
otherwise provided under Section 6(a)(i) hereof. No adjustment of the Aggregate
Number shall be made under this Section 6(a)(iii) upon the issuance of any
additional shares of Common Stock which are issued pursuant to (1) the exercise
of this Warrant in whole or in part or pursuant to any other Exempt Issuances,
(2) the exercise of other subscription or purchase rights or (3) the exercise of
any conversion or exchange rights in any Convertible Securities, provided that
for purposes of clauses (2) or (3) an adjustment shall previously have been made
upon the issuance of such other rights or upon the issuance of such Convertible
Securities (or upon the issuance of any warrants or other rights therefor)
pursuant to Section 6(a)(iv) or (v) hereof.
(iv) Warrants and Options. If at any time or from time to
time the Company shall take a record of the holders of its Common Stock for the
purpose of entitling them to receive a distribution of, or shall in any manner
(whether directly, by assumption in a merger in which the Company is the
surviving corporation and in which the shareholders of the Company immediately
prior to the merger continue to own more than 50% of the Outstanding Common
Stock immediately after the merger and for a period of 180 days thereafter, or
otherwise) issue or sell any warrants, options or other rights to subscribe for
or purchase (A) any shares of Common Stock or (B) any Convertible Securities,
whether or not the rights to subscribe, purchase, exchange or convert thereunder
are immediately exercisable, and the consideration per share for which
additional shares of Common Stock may at any time thereafter be issuable
pursuant to such warrants, options or other rights or pursuant to the terms of
such Convertible Securities shall be less than the Fair Market Value Per Share,
then the Aggregate Number shall be adjusted as provided in Section 6(a)(iii)
hereof on the basis that (1) the maximum number of additional shares of Common
Stock issuable pursuant to all such warrants, options 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 of the
determination of the Fair Market Value Per Share as hereinafter provided and (2)
the aggregate consideration for such maximum number of additional shares of
Common Stock shall be deemed to be the minimum consideration received and
receivable by the Company for the issuance of such additional shares of Common
Stock pursuant to the terms of such warrants, options or other rights or such
Convertible Securities. For purposes of this Section 6(a)(iv), the effective
date of such adjustment and the date as of which the Fair Market Value Per Share
shall be computed shall be the earliest of (A) the date on which the Company
shall take a record of the holders of its Common Stock for the purpose of
entitling them to receive any such warrants, options or other rights, (B) the
date on which the Company shall enter into a firm contract or commitment for the
issuance of such warrants, options or other rights and (C) the date of actual
issuance of such warrants, options or other rights.
No adjustment of the Aggregate Number shall be made under this
Section 6(a)(iv) upon the issuance of any warrants, options or other rights
which are issued pursuant to the
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exercise of any Convertible Securities if an adjustment shall previously have
been made or is contemporaneously made or if no such adjustment shall have been
required upon the issuance of such Convertible Securities, pursuant to Section
6(a)(v) hereof.
(v) Convertible Securities. If at any time or from time to
time the Company shall take a record of the holders of its Common Stock for the
purpose of entitling them to receive a distribution of or shall in any manner
(whether directly, by assumption in a merger in which the Company is the
surviving corporation and in which the shareholders of the Company immediately
prior to the merger continue to own more than 50% of the Outstanding Common
Stock immediately after the merger and for a period of 180 days thereafter, or
otherwise) issue or sell Convertible Securities, whether or not the rights to
exchange or convert thereunder are immediately exercisable, and the
consideration per share for the additional shares of Common Stock which may at
any time thereafter be issuable pursuant to the terms of such Convertible
Securities shall be less than the Fair Market Value Per Share, then the
Aggregate Number shall be adjusted as provided in Section 6(a)(iii) hereof on
the basis that (A) the maximum number of additional shares of Common Stock
necessary to effect the conversion or exchange of all such Convertible
Securities shall be deemed to have been issued as of the date of the
determination of the Fair Market Value Per Share as herein provided and (B) the
aggregate consideration for such maximum number of additional shares of Common
Stock shall be deemed to be the minimum consideration received and receivable by
the Company for the issuance of such additional shares of Common Stock pursuant
to the terms of such Convertible Securities. For purposes of this Section
6(a)(v), the effective date of such adjustment and the date as of which the Fair
Market Value Per Share shall be computed shall be the earliest of (1) the date
on which the Company shall take a record of the holders of its Common Stock for
the purpose of entitling them to receive any such Convertible Securities, (2)
the date on which the Company shall enter into a firm contract or commitment for
the issuance of such Convertible Securities and (3) the date of actual issuance
of such Convertible Securities.
No adjustment of the Aggregate Number shall be made under this
Section 6(a)(v) upon the issuance of any Convertible Securities which are issued
pursuant to the exercise of any warrants, options or other subscription or
purchase rights if an adjustment shall previously have been made or is
contemporaneously made or if no such adjustment shall have been required upon
the issuance of such warrants, options or other rights pursuant to Section
6(a)(iv) hereof.
(vi) Subsequent Adjustments. If at any time after any
adjustment of the Aggregate Number shall have been made pursuant to Section
6(a)(iv) or (v) hereof on the basis of the issuance of warrants, options or
other rights or the issuance of Convertible Securities, or after any new
adjustments of the Aggregate Number shall have been made pursuant to this
Section 6(a)(vi),
(A) such warrants, options or rights or the
right of conversion or exchange in such Convertible Securities shall
expire, and a portion of such warrants, options or rights, or the
right of conversion or exchange in respect of a portion of such
Convertible Securities, as the case may be, shall not have been
exercised prior to such expiration, and/or
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(B) in the case of adjustments made pursuant to
Section 6(a)(iv) or (v), the consideration per share for which
shares of Common Stock are issuable pursuant to such warrants,
options or rights per the terms of such Convertible Securities shall
be irrevocably increased,
such previous adjustment shall be rescinded and annulled and the additional
shares of Common Stock which were deemed to have been issued by virtue of the
computation made in connection with such adjustment shall no longer be deemed to
have been issued by virtue of such computation. Simultaneously therewith, a
recomputation shall be made of the effect of such warrants, options or rights or
Convertible Securities on the determination of the Aggregate Number, which shall
be made on the basis of:
(1) treating the number of additional shares of
Common Stock, if any, theretofore actually issued pursuant to the
previous exercise of such warrants, options or rights or such right
of conversion or exchange as having been issued on the date or dates
of such exercise and, in the case of a recomputation of a
calculation originally made pursuant to Section 6(a)(iv) or (v), for
the consideration actually received and receivable therefor, and
(2) in the case of a recomputation of a
calculation originally made pursuant to Section 6(a)(iv) or (v),
treating any such warrants, options or rights or any such
Convertible Securities which then remain outstanding as having been
granted or issued immediately after the time of such irrevocable
increase of the consideration per share for which shares of Common
Stock are issuable under such warrants, options or rights or
Convertible Securities;
and, if and to the extent called for by the foregoing provisions of
Section 6(a)(vi) on the basis aforesaid, a new adjustment of the
Aggregate Number shall be made, such new adjustment shall supersede the
previous adjustment so rescinded and annulled.
(vii) Miscellaneous. The following provisions shall be
applicable to the making of adjustments of the Aggregate Number provided above
in this Section 6(a):
(A) The sale or other disposition of any issued
shares of Common Stock (other than treasury shares) owned or held by
or for the account of the Company or any of its Subsidiaries shall
be deemed an issuance thereof for the purposes of this Section 6(a).
(B) To the extent that any additional shares of
Common Stock or any Convertible Securities or any warrants, options or
other rights to subscribe for or purchase any additional shares of
Common Stock or any Convertible Securities (1) are issued solely for
cash consideration, the consideration received by the Company therefor
shall be deemed to be the amount of the cash received by the Company
therefor, (2) are offered by the Company for subscription, the
consideration received by the Company shall be deemed to be the
subscription price or (3) are sold to underwriters or dealers for
public offering, the gross consideration (before giving effect to
underwriting discounts)
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received by the Company shall be deemed to be the consideration
received by the Company therefor, in any such case excluding any
amounts paid or receivable for accrued interest or accrued dividends.
To the extent that such issuance shall be for a consideration other
than cash, or partially for cash and partially for other consideration,
then, except as otherwise expressly provided herein, the amount of such
consideration shall be deemed to be the fair market value of such other
consideration plus, if applicable, the amount of such cash at the time
of such issuance, determined in the manner set forth in Section
6(d)(ii). In case any additional shares of Common Stock or any
Convertible Securities or any warrants, options or other rights to
subscribe for or purchase such additional shares of Common Stock or
Convertible Securities shall be issued in connection with any merger in
which the Company is the survivor and issues any securities, the amount
of consideration therefor shall be deemed to be the fair market value
of such additional shares of Common Stock, Convertible Securities,
warrants, options or other rights, as the case may be, determined in
the manner set forth in Section 6(d)(ii).
The consideration for any shares of Common Stock
issuable pursuant to the terms of any Convertible Securities shall be
equal to (x) the consideration received by the Company for issuing any
warrants, options or other rights to subscribe for or purchase such
Convertible Securities, plus (y) the consideration paid or payable to
the Company in respect of the subscription for or purchase of such
Convertible Securities, plus (z) the consideration, if any, payable to
the Company upon the exercise of the right of conversion or exchange of
such Convertible Securities.
In case of the issuance at any time of any additional
shares of Common Stock or Convertible Securities in payment or
satisfaction of any dividends upon any class of stock other than Common
Stock, the Company shall, be deemed to have received for such
additional shares of Common Stock or Convertible Securities a
consideration equal to the amount of such dividend so paid or
satisfied.
(C) The adjustments required by the preceding
paragraphs of this Section 6(a) shall be made whenever and as often as
any specified event requiring an adjustment shall occur, except that no
adjustment of the Aggregate Number that would otherwise be required
shall be made (except in the case of a Stock Subdivision or Stock
Combination, as provided for in Section 6(a)(i) hereof) unless and
until such adjustment either by itself or with other adjustments not
previously made adds or subtracts at least one one-hundredth of one
share to or from the Aggregate Number 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 6(a) 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.
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(D) In computing adjustments under this Section
6(a), fractional interests in Common Stock shall be taken into account
to the nearest one-thousandth of a share.
(E) If the Company shall take a record of the
holders of its Common Stock for the purpose of entitling them to
receive a dividend or distribution or subscription or purchase rights
and shall, thereafter and before the distribution to shareholders
thereof, legally abandon its plan to pay or deliver such dividend,
distribution, subscription or purchase rights, then no adjustment shall
be required by reason of the taking of such record and any such
adjustment previously made in respect thereof shall be rescinded and
annulled.
(b) Changes in Common Stock. Subject to Section 2(b) of the
Shareholders Agreement, in case at any time the Company shall initiate any
transaction or be a party to any transaction (including, without limitation, a
merger, consolidation, share exchange, sale, lease or other disposition of all
or substantially all of the Company's assets, liquidation, recapitalization or
reclassification of the Common Stock) in connection with which the previous
Outstanding Common Stock shall be changed into or exchanged for different
securities of the Company or capital stock or other securities of another
corporation or interests in a non-corporate entity or other property (including
cash) or any combination of the foregoing (each such transaction being herein
called a "Transaction"), then, as a condition of the consummation of the
Transaction, lawful, enforceable and adequate provision shall be made so that
the Holder shall be entitled to elect by written notice to the Company to
receive (i) a new warrant in form and substance similar to, and in exchange for,
this Warrant to purchase all or a portion of such securities or other property
or (ii) upon exercise of this Warrant at any time on or after the consummation
of the Transaction, in lieu of the Warrant Shares issuable upon such exercise
prior to such consummation, the securities or other property (including cash) to
which such Holder would have been entitled upon consummation of the Transaction
if such Holder had exercised this Warrant immediately prior thereto (subject to
adjustments from and after the consummation date as nearly equivalent as
possible to the adjustments provided for in this Section 6). Subject to Section
2(b) of the Shareholders Agreement, the Company will not effect any Transaction
unless prior to the consummation thereof each corporation or other entity (other
than the Company) which may be required to deliver any new warrant, securities
or other property as provided herein shall assume, by written instrument
delivered to the Holder, the obligation to deliver to such Holder such new
warrant, securities or other property as in accordance with the foregoing
provisions such Holder may be entitled to receive and such corporation or entity
shall have similarly delivered to the Holder an opinion of counsel for such
corporation or entity, satisfactory to the Holder, which opinion shall state
that all of the terms of the new warrant or this Warrant shall be enforceable
against the Company and such corporation or entity in accordance with the terms
hereof and thereof. The foregoing provisions of this Section 6(b) shall
similarly apply to successive Transactions.
(c) Other Action Affecting Common Stock.
(i) Other Action. In case at any time or from time to time the
Company shall take any action of the type contemplated in Section 6(a) or (b)
hereof but not expressly provided for
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by such provisions (including, without limitation, the granting of stock
appreciation rights, phantom stock rights or other rights with equity features)
other than cash bonuses, then, unless in the opinion of the Company's board of
directors such action will not have a material adverse effect upon the rights of
the Holder (taking into consideration, if necessary, any prior actions which the
Board of Directors deemed not to materially adversely affect the rights of the
Holder), the Aggregate Number shall be adjusted in such manner and at such time
as the Board of Directors of the Company may in good faith determine to be
equitable in the circumstances.
(ii) Stock Option Plan. Upon the exercise of the Warrant hereunder,
if the actual number of stock or options (the "Actual Number") granted or
outstanding under the Company's stock option and incentive plans is less than
150,000 shares (or options for such shares) (subject to adjustment for stock
splits, stock dividends and similar events) (the "Assumed Number"), the
Aggregate Number shall be proportionally reduced so that the Aggregate Number
reflects the Actual Number amount of shares of Common Stock that would have been
issued under the Warrant had the Actual Number been used to calculate the number
of aggregate shares, instead of the Assumed Number.
(d) Notices.
(i) Notice of Proposed Actions. In case the Company shall
propose (A) to pay any dividend payable in stock of any class to the holders of
its Common Stock or to make any other distribution to the holders of its Common
Stock, (B) to offer to the holders of its Common Stock rights to subscribe for
or to purchase any Convertible Securities or additional shares of Common Stock
or shares of stock of any class or any other securities, warrants, rights or
options (other than the exercise of pre-emptive rights by a Holder), (C) to
effect any reclassification of its Common Stock, (D) to effect any
recapitalization, stock subdivision, stock combination or other capital
reorganization, (E) to effect any consolidation or merger, share exchange, or
sale, lease or other disposition of all or substantially all of its property,
assets or business, (F) to effect the liquidation, dissolution or winding up of
the Company or (G) to effect any other action which would require an adjustment
under this Section 6, then in each such case the Company shall give to the
Holder written 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, stock
subdivision, stock combination, distribution or rights, or the date on which
such reclassification, recapitalization, reorganization, consolidation, merger,
share exchange, sale, lease, transfer, disposition, liquidation, dissolution,
winding up or other transaction is to take place and the date of participation
therein by the holders of Common Stock, if any such date is to be fixed, or the
date on which the transfer of Common Stock is to occur, and shall also set forth
such facts with respect thereto as shall be reasonably necessary to indicate the
effect of such action on the Common Stock and on the Aggregate Number 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 30 days prior to the record date for
determining holders of the Common Stock for purposes of such action and, in the
case of any other such action, at least 30 days prior to the earlier of the date
of the taking of such proposed action or the date of participation therein by
the holders of Common Stock.
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(ii) Adjustment Notice. Whenever the Aggregate Number is
to be adjusted pursuant to this Section 6, unless otherwise agreed by the
Holder, the Company shall promptly (and in any event within 10 Business Days
after the event requiring the adjustment) prepare a certificate signed by the
chief financial officer of the Company, setting forth, in reasonable detail, the
event requiring the adjustment and the method by which such adjustment is to be
calculated. The certificate shall set forth, if applicable, a description of the
basis on which the Board of Directors in good faith determined, as applicable,
the Fair Market Value Per Share, the fair market value of any evidences of
indebtedness, shares of stock, other securities, warrants, other subscription or
purchase rights, or other property or the equitable nature of any adjustment
under Section 6(b) or (c) hereof, the new Aggregate Number and, if applicable,
any new securities or property to which the Holder is entitled. The Company
shall promptly cause a copy of such certificate to be delivered to the Holder.
In the case of any determination of Fair Market Value Per Share, such
certificate shall be delivered to the Holder within the time period set forth in
the definition of Fair Market Value Per Share and the Holder may object thereto
as provided therein. Any other determination of fair market value shall first be
determined in good faith by the Board of Directors and be based upon an arm's
length sale of such indebtedness, shares of stock, other securities, warrants,
other subscription or purchase rights or other property, such sale being between
a willing buyer and a willing seller. In the case of any such determination of
fair market value, the Holder may object to the determination in such
certificate by giving written notice within 10 Business Days of the receipt of
such certificate and, if the Holder and the Company cannot agree to the fair
market value within 10 Business Days of the date of the Holder's objection, the
fair market value shall be determined by a national or regional investment bank
or a national accounting firm mutually selected by the Holder and the Company,
the fees and expenses of which shall be paid 50% by the Company and 50% by the
Holder unless such determination results in a fair market value more than 110%
of the fair market value determined by the Company in which case such fees and
expenses shall be paid by the Company. The Company shall keep at its Principal
Office copies of all such certificates and cause the same to be available for
inspection at said office during normal business hours by the Holder or any
prospective purchaser of the Warrant (in whole or in part) if so designated by
the Holder.
SECTION 7. NO DILUTION OR IMPAIRMENT. The Company will not, by
amendment of its Certificate of Incorporation or through any reorganization,
recapitalization, transfer of assets, consolidation, merger, share exchange,
dissolution or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, including without limitation
the adjustments required under Section 6 hereof, and will at all times in good
faith assist in the carrying out of all such terms and in taking of all such
action as may be necessary or appropriate to protect the rights of the Holder
against dilution or other impairment. Without limiting the generality of the
foregoing and notwithstanding any other provision of this Warrant to the
contrary (including by way of implication), the Company (a) will not increase
the par value of any shares of Common Stock receivable on the exercise of this
Warrant above the amount payable therefor on such exercise or (b) will take all
such action as may be necessary or appropriate so that the Company may validly
and legally issue fully paid and nonassessable shares of Common Stock on the
exercise of this Warrant.
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SECTION 8. TRANSFERS OF THE WARRANT.
(a) Generally. Subject to the restrictions set forth in this
Section 8, the Holder may at any time and from time to time freely transfer this
Warrant and the Warrant Shares in whole or in part. This Warrant has not been,
and the Warrant Shares at the time of their issuance may not be, registered
under the Securities Act and except as provided in any separate registration
rights agreement, nothing herein contained shall be deemed to require the
Company to so register this Warrant and the Warrant Shares. This Warrant and the
Warrant Shares are issued or issuable subject to the provisions and conditions
contained herein and in the Investment Agreement and to the provisions and
conditions contained in the Shareholders Agreement, and every Holder hereof by
accepting the same agrees with the Company to such provisions and conditions,
and represents to the Company that this Warrant has been acquired and the
Warrant Shares will be acquired for the account of the Holder for investment and
not with a view to or for sale in connection with any distribution thereof.
(b) Compliance with Securities Laws. The Holder agrees that
the Warrant and the Warrant Shares may not be sold or otherwise disposed of
except pursuant to an effective registration statement under the Securities Act
and applicable state securities laws or pursuant to an applicable exemption from
the registration requirements of the Securities Act and such state securities
laws. In the event that the Holder transfers this Warrant or the Warrant Shares
pursuant to an applicable exemption from registration, the Company may request,
at its expense, an opinion of counsel that the proposed transfer does not
violate the Securities Act and applicable state securities laws.
(c) Restrictive Securities Legend. The certificate
representing the shares of Common Stock issued upon the exercise of the Warrant
shall bear the restrictive legends set forth below:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933, or the securities laws of any
State and may not be sold or otherwise disposed of except pursuant
to an effective registration statement under such Act and applicable
State securities laws or pursuant to an applicable exemption from
the registration requirements of such Act and such laws."
"The shares represented by this certificate are subject to the terms
and conditions, including certain transfer restrictions, of that
certain Securities Holders and Registration Rights Agreement, dated
___________2000, among the Company and certain of the Company's
shareholders. A copy of such agreement may be obtained at no cost by
written request to the Company made by the holder of this
certificate."
(d) Joinder to Shareholders Agreement. The Holder agrees
that it will not transfer this Warrant or the Warrant Shares unless the
transferee thereof has agreed to become a party to the Shareholders Agreement
and subject to all the terms and conditions therein
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SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS.
The Company hereby represents, warrants and covenants to the Holder
that so long as Holder holds the Warrant:
(a) Financial Statements and Other Information. The Company
shall deliver to the Holder:
(i) Quarterly Financials. As soon as available
and in any event within 45 days after the end of each fiscal quarter, the
consolidated balance sheet of the Company and its Subsidiaries as at the end of
such fiscal quarter and the related consolidated statements of income,
shareholders' equity and cash flow for such fiscal quarter and for the period
from the beginning of the then current fiscal year to the end of such fiscal
quarter, setting forth in each case comparisons to the annual budget and to the
corresponding period in the preceding year.
(ii) Year-End Financials. As soon as available
and in any event within 90 days after the end of each fiscal year, (i) the
consolidated balance sheet of the Company and its Subsidiaries as at the end of
such year and the related consolidated statements of income, shareholders'
equity and cash flow for such fiscal year, and (ii) a report with respect to the
financial statements from a national accounting firm selected by the Company.
(iii) SEC Filings. Promptly upon their becoming
available, copies of all regular and periodic reports and all registration
statements and prospectuses, if any, filed by the Company or any of its
Subsidiaries with any securities exchange or with the Commission.
(b) Reservation of Shares. The Company shall at all times
reserve and keep available out of the aggregate of its authorized but unissued
shares, free of preemptive rights, such number of its duly authorized shares of
Common Stock as shall be sufficient to enable the Company to issue Common Stock
upon exercise of the Warrant.
(c) Certain Amendments. The Company will not, and will not
permit or cause any of its Subsidiaries (to the extent the Company has any
Subsidiaries after the Closing Date) to amend, modify or change any provision of
its articles or certificate of incorporation, bylaws, or the terms of any class
or series of its Capital Stock to the extent such amendment, modification or
change would have a disproportionate adverse effect on the Holder as compared to
any other holder of the Common Stock of the Company and benefit any Affiliate of
the Company or any of its Affiliates (including, without limitation, the Sponsor
and its Affiliates).
(d) Limitation on Certain Restrictions. The Company will
not, and will not permit or cause any of its Subsidiaries (to the extent the
Company has any Subsidiaries after the Closing Date) to, directly or indirectly,
create or otherwise cause or suffer to exist or become effective any restriction
or encumbrance on the ability of the Company and any such Subsidiaries to
perform and comply with their respective obligations under this Warrant.
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SECTION 10. EVENTS OF NON-COMPLIANCE AND REMEDIES.
(a) Events of Non-Compliance. If the Company fails to keep
and fully and promptly perform and observe in all material respects any of the
terms, covenants or representations contained or referenced herein within 30
days from the earlier to occur of (A) written notice from the Holder specifying
what failure has occurred, or requesting that a specified failure be remedied or
(B) an executive officer of the Company becoming aware of such failure (an
"Event of Non-Compliance"), the Holder shall be entitled to the remedies set
forth in subsection (b) hereof.
(b) Remedies. On the occurrence of an Event of
Non-Compliance, in addition to any remedies the Holder may have under applicable
law, the Holder may bring any action for injunctive relief or specific
performance of any term or covenant contained herein or in the Investment
Agreement, the Company hereby acknowledging that an action for money damages may
not be adequate to protect the interests of the Holder hereunder.
SECTION 11. DEFINITIONS.
As used herein, in addition to the terms defined elsewhere herein,
the following terms shall have the following meanings. Capitalized terms not
appearing below and not otherwise defined herein shall have the meaning ascribed
to them in the Investment Agreement.
"Advisory Agreement" has the meaning set forth in the Investment
Agreement.
"Affiliate" means, with respect to a Person, any other Person (other
than a Subsidiary) which directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such Person. The term "control" means (a) the power to vote more than 50% of the
securities or other equity interests of a Person having ordinary voting power
(on a fully diluted basis), or (b) the possession, directly or indirectly, of
any other power to direct or cause the direction of the management and policies
of a Person, whether through ownership of voting securities, by contract or
otherwise.
"Aggregate Number" has the meaning set forth in the Preamble.
"Business Day" means any day other than a Saturday, Sunday or a day
on which commercial banking institutions in New York, New York are authorized or
required by law or executive order to be closed.
"Capital Stock" has the meaning set forth in the Investment
Agreement.
"Certificate of Incorporation" means the Certificate of
Incorporation of the Company, as in effect on the date hereof.
"Commencement Date" has the meaning set forth in the Preamble.
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"Commission" means the Securities and Exchange Commission or any
similar agency then having jurisdiction to enforce the Securities Act or the
Exchange Act.
"Common Stock" means (a) the Common Stock of the Company, par value
$.01 per share, as described in the Company's Certificate of Incorporation, (b)
any other class of capital stock hereafter authorized having the right to share
in distributions either of earnings or assets without limit as to amount or
percentage or (c) any other capital stock into which such Common Stock is
reclassified or reconstituted.
"Company" has the meaning set forth in the Preamble.
"Convertible Securities" means evidences of indebtedness, shares of
stock or other securities (including, but not limited to options and warrants)
which are directly or indirectly convertible, exercisable or exchangeable, with
or without payment of additional consideration in cash or property, for shares
of Common Stock, either immediately or upon the onset of a specified date or the
happening of a specified event.
"Distribution" has the meaning set forth in Section 6(a)(ii).
"Election to Purchase" has the meaning set forth in Section 2(a).
"ERISA" has the meaning set forth in the Investment Agreement.
"Event of Non-Compliance" has the meaning set forth in Section
10(a).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder.
"Exempt Issuances" has the meaning set forth in Section 6.
"Exercise Amount" has the meaning set forth in Section 2(a).
"Exercise Price" has the meaning set forth in the Preamble.
"Expiration Date" has the meaning set forth in the Preamble.
"Fair Market Value Per Share" means as of a particular date (a) the
fair market value of the Outstanding Common Stock based upon an arm's length
sale of the Company on such date (including its ownership interest in all
Persons) as an entirety, such sale being between a willing buyer and a willing
seller and determined without reference to any discount for minority interest,
restrictions on transfer, disparate voting rights among classes of capital stock
or lack of marketability with respect to capital stock divided by (b) the
aggregate number of shares of Outstanding Common Stock. The Fair Market Value
Per Share shall be determined by the disinterested members of the Board of
Directors of the Company in good faith within 10 days of any event for which
such determination is required and such determination (including the basis
therefor) shall be promptly provided to the Holder. Such determination shall be
binding on the
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Holder unless the Holder objects thereto in writing within 10 Business Days of
receipt. In the event the Company and the Holder cannot agree on the Fair Market
Value Per Share within 10 Business Days of the date of the Holder's objection,
the Fair Market Value Per Share shall be determined by a disinterested appraiser
(which may be a national or regional investment bank or national accounting
firm) mutually selected by the Company and the Holder, the fees and expenses of
which shall be paid 50% by the Company and 50% by the Holder unless such
determination results in a Fair Market Value Per Share more than 110% of the
Fair Market Value Per Share initially determined by the Company in which case
such fees and expenses shall be borne by the Company. Any selection of a
disinterested appraiser shall be made in good faith within seven Business Days
after the end of the last 10 Business Day period referred to above and any
determination of Fair Market Value Per Share by a disinterested appraiser shall
be made within 30 days of the date of selection.
"Fully Diluted" means, with respect to the Common Stock, as of a
particular time the total outstanding shares of Common Stock as of such time,
determined by treating all outstanding options, warrants and other rights for
the purchase or other acquisition of Common Stock as having been exercised and
by treating all outstanding Convertible Securities as having been so converted.
"Governmental Authority" means the government of any nation, state,
city, locality or other political subdivision of any thereof, any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, and any corporation or other entity
owned or controlled, through stock or capital ownership or otherwise, by any of
the foregoing.
"Holder" means __________________ and its successors and assigns.
"Investment Agreement" means the Investment Agreement dated August
__, 2000 among the Company, Bell Sports, Inc., First Union Investors, Inc.,
GarMark Partners, L.P. and Fleet Corporate Finance, Inc., as amended or
supplemented from time to time.
"Management Agreement" means the Management Consulting Agreement
dated _____________ between Bell Sports, Inc. and Chartwell Investors II LLC, as
in effect on the date hereof and as amended or supplemented from time to time;
provided, that any such amendment shall not increase the remuneration, fees or
reimbursement of expenses payable thereunder or otherwise materially adversely
affect the interests of the Purchasers.
"Material Adverse Effect" means a material adverse effect upon the
business, assets or condition (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole.
"Note" has the meaning set forth in Section 1(a) of the Investment
Agreement.
"Outstanding Common Stock" of the Company means, as of the date of
determination, the sum (without duplication) of the following: (a) the number of
shares of Common Stock then outstanding at the date of determination, (b) the
number of shares of Common Stock then issuable upon the exercise of the Warrant
(as such number of shares may be adjusted pursuant to
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the terms hereof) and (c) the number of shares of Common Stock then issuable
upon the exercise or conversion of Convertible Securities and any warrants,
options or other rights to subscribe for or purchase Common Stock or Convertible
Securities (but excluding any unvested options and securities not then
exercisable for or convertible into Common Stock).
"Person" means any individual, firm, corporation, partnership,
limited liability company, joint venture, association, joint stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof, or other entity of any kind and includes any successor (by
merger or otherwise) of such entity.
"Principal Office" means the Company's principal office as set forth
in Section 16 hereof or such other principal office of the Company in the United
States of America the address of which first shall have been set forth in a
notice to the Holder.
"Regulatory Requirement" has the meaning set forth in Section 5(c).
"Required Holders" means the holders of at least 51% of the Warrant
Securities then outstanding determined on a Fully Diluted basis.
"Requirements of Law" means, with respect to a Person, the articles
or certificate of incorporation and bylaws or other organizational or governing
documents of such Person, and any law, treaty, rule, regulation, right,
privilege, qualification, license or franchise or determination of an arbitrator
or a court or other Governmental Authority, in each case applicable to or
binding upon such Person or any of its property or to which such Person or any
of its property is subject or pertaining to any or all of the transactions
contemplated or referred to herein.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder.
"Senior Loan Agreement" means the Credit Agreement dated as of the
date hereof between the Company and certain of its Subsidiaries, as borrowers,
the lenders party thereto and Fleet National Bank, as agent, as in effect on the
date hereof.
"Shareholders Agreement" means the Securities Holders and
Registration Rights Agreement dated the date hereof among the Company, Bell
Sports Holdings, L.L.C., Bell Sports Corp. and the Investors set forth herein,
as amended or supplemented from time to time.
"Sponsor" has the meaning set forth in the Investment Agreement.
"Stock Combination" has the meaning set forth in Section 6(a)(i)(C).
"Stock Dividend" has the meaning set forth in Section 6(a)(i)(A).
"Stock Subdivision" has the meaning set forth in Section 6(a)(i)(B).
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"Subsidiary" means, as to a Person, any corporation, partnership or
other entity of which more than 50% of the outstanding capital stock or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other managers of such corporation, partnership or other
entity is at the time, directly or indirectly, owned by or otherwise controlled
by such Person.
"Warrant" has the meaning set forth in Section 1(a).
"Warrant Securities" means the Warrant and the Warrant Shares,
collectively.
"Warrant Shares" means (a) the shares of Common Stock issued or
issuable upon exercise of this Warrant in accordance with its terms and (b) all
other shares of the Company's capital stock issued with respect to such shares
by way of stock dividend, stock split or other reclassification or in connection
with any merger, consolidation, recapitalization or other reorganization
affecting the Company's capital stock.
SECTION 12. SURVIVAL OF PROVISIONS. Notwithstanding the full
exercise by the Holder of its rights to purchase Common Stock hereunder, the
provisions of Sections 5(c) and 5(d) and 10 through 21 of this Warrant shall
survive such exercise and the Expiration Date.
SECTION 13. DELAYS, OMISSIONS AND INDULGENCES. It is agreed that no
delay or omission to exercise any right, power or remedy accruing to the Holder
upon any breach or default of the Company under this Warrant shall impair any
such right, power or remedy, nor shall it be construed to be a waiver of any
such breach or default, or any acquiescence therein, or of or in any similar
breach or default thereafter occurring; nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring. It is further agreed that any waiver, permit, consent
or approval of any kind or character on the Holder's part of any breach or
default under this Warrant, or any waiver on the Holder's part of any provisions
or conditions of this Warrant must be in writing and that all remedies, either
under this Warrant, or by law or otherwise afforded to the Holder, shall be
cumulative and not alternative.
SECTION 14. RIGHTS OF TRANSFEREES. Subject to Section 8, the rights
granted to the Holder hereunder of this Warrant shall pass to and inure to the
benefit of all subsequent transferees of all or any portion of the Warrant
(provided that the Holder and any transferee shall hold such rights in
proportion to their respective ownership of the Warrant and Warrant Shares)
until extinguished pursuant to the terms hereof.
SECTION 15. CAPTIONS. The titles and captions of the Sections and
other provisions of this Warrant are for convenience of reference only and are
not to be considered in construing this Warrant.
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SECTION 16. NOTICES.
All notices, demands and other communications provided for or
permitted hereunder shall be made in writing and shall be by registered or
certified first-class mail, return receipt requested, telecopy, overnight
courier service or personal delivery:
(a) if to the Company:
Bell Sports Corp.
0000 Xxx Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention:
Telecopy No.:
(b) if to the Holder:
-------------------------
-------------------------
-------------------------
-------------------------
Attention:
----------------
Telecopy No.:
--------------
All such notices and communications shall be deemed to have been
duly given: when delivered by hand, if personally delivered; when delivered by
courier, if delivered by commercial overnight courier service; five Business
Days after being deposited in the mail, postage prepaid, if mailed; and when
receipt is acknowledged, if telecopied.
SECTION 17. SUCCESSORS AND ASSIGNS. This Warrant shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, provided that the Company shall have no right to assign
its rights, or to delegate its obligations, hereunder without the prior written
consent of the Holder.
SECTION 18. SEVERABILITY. If any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired, unless the
provisions held invalid, illegal or unenforceable shall substantially impair the
benefits of the remaining provisions hereof.
SECTION 19. GOVERNING LAW. This Warrant is to be construed and
enforced in accordance with and governed by the laws of the State of Delaware
and without regard to the principles of conflicts of law of such state.
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SECTION 20. ENTIRE AGREEMENT. This Warrant and the Investment
Agreement are intended by the parties as a final expression of their agreement
and are intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein and therein.
SECTION 21. RULES OF CONSTRUCTION. Unless the context otherwise
requires "or" is not exclusive, and references to sections or subsections refer
to sections or subsections of this Warrant. All pronouns and any variations
thereof refer to the masculine, feminine or neuter, singular or plural, as the
context may require.
[Remainder of Page Intentionally Omitted.]
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IN WITNESS WHEREOF, the Company has caused this Warrant to be issued
and executed in its corporate name by its duly authorized officers and its
corporate seal to be affixed hereto as of the date below written.
DATED: BELL SPORTS CORP.
---------------------
[CORPORATE SEAL] By:
------------------------------
Name:
Title:
ATTEST:
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
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EXHIBIT A
NOTICE OF EXERCISE
To:
---------------------------
---------------------------
---------------------------
---------------------------
1. The undersigned, pursuant to the provisions of the attached
Warrant, hereby elects to exercise this Warrant with respect to ________ shares
of Common Stock (the "Exercise Amount"). Capitalized terms used but not
otherwise defined herein have the meanings ascribed thereto in the attached
Warrant.
2. The undersigned herewith tenders payment for such shares in the
following manner (please check type, or types, of payment and indicate the
portion of the Exercise Price to be paid by each type of payment):
Exercise for Cash
-------
Cashless Exercise
-------
3. Please issue a certificate or certificates representing the
shares issuable in respect hereof under the terms of the attached Warrant, as
follows:
---------------------------------------
(Name of Record Holder/Transferee)
and deliver such certificate or certificates to the following address:
---------------------------------------
(Address of Record Holder/Transferee)
4. The undersigned represents that the aforesaid shares are being
acquired for the account of the undersigned for investment and not with a view
to, or for resale in connection with, the distribution thereof and that the
undersigned has no present intention of distributing or reselling such shares.
5. If the Exercise Amount is less than all of the shares of Common
Stock purchasable hereunder, please issue a new warrant representing the
remaining balance of such shares, as follows:
---------------------------------------
(Name of Record Holder/Transferee)
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and deliver such warrant to the following address:
---------------------------------------
(Address of Record Holder/Transferee)
---------------------------------------
(Signature)
-------------------
(Date)
