Adjustment of Number of Warrant Shares. (a) In case the Company shall (i) make a dividend or other distribution on the Common Stock exclusively in Common Stock, (ii) make a dividend or other distribution on the Common Stock in shares of its capital stock other than Common Stock, (iii) subdivide its outstanding shares of Common Stock or (iv) combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock, the number and kind of shares of Common Stock or capital stock of the Company issuable upon the exercise of a Warrant (as in effect immediately prior to such dividend or distribution) shall be proportionately adjusted so that the holder of any Warrant thereafter exercised may receive the aggregate number and kind of shares of capital stock of the Company that such holder would have owned immediately following such dividend or distribution if such Warrant had been exercised immediately prior thereto. (b) Subject to the last sentence of paragraph (g) of this Section, in case the Company shall make a dividend or other distribution on the Common Stock consisting exclusively of, or shall otherwise issue to all holders of the Common Stock, rights, options or warrants entitling the holders thereof to subscribe for or purchase Common Stock or securities convertible into or exchangeable for Common Stock at a price per share (determined on an as-converted or as-exercised basis if the rights, options or warrants pertain to securities convertible into or exchangeable for shares of Common Stock) less than the Current Market Price (determined as provided in paragraph (h) of this Section) on the date fixed for the determination of shareholders entitled to receive such rights, options or warrants, the Number of Shares shall be determined by multiplying the Number of Shares purchasable immediately prior to the date so fixed by a fraction, of which the numerator shall be the number of shares of Common Stock outstanding on the date fixed for determining stockholders entitled to receive such rights, options or warrants plus the number of additional shares of Common Stock offered for subscription or purchase, and of which the denominator shall be the number of shares of Common Stock outstanding on the date fixed for determining stockholders entitled to receive such rights, options or warrants plus the number of shares which the aggregate offering price of the total number of shares of Common Stock so offered would purchase at the Current Market Price; provided, however, that no further adjustment to the Number of Shares shall be -------- ------- made upon the subsequent issue or sale of Common Stock pursuant to such options or warrants. For the purposes of this paragraph (b), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of Common Stock. The Company shall not issue any rights, options or warrants in respect of Common Stock held in the treasury of the Company. (c) [Intentionally Omitted.] (i) Subject to the last sentence of this paragraph (d) (i) and the last sentence of paragraph (g) of this Section, in case the Company shall, by dividend or otherwise, distribute to all holders of Common Stock evidences of its indebtedness, cash or other assets (including securities, but excluding any rights, options or warrants referred to in paragraph (b) of this Section, excluding any dividend or distribution paid exclusively in cash out of consolidated current or retained earnings as shown on the books of the Company prepared in accordance with GAAP (other than any Extraordinary Cash Dividend (as hereinafter defined)) and excluding any dividend or distribution referred to in paragraph (a) of this Section, the Number of Shares shall be increased by multiplying the Number of Shares issuable immediately prior to the close of business on the date fixed for the determination of shareholders entitled to such distribution by a fraction of which the numerator shall be the Current Market Price (determined as provided in paragraph (h) of this Section) on such date and the denominator shall be the Current Market Price on such date less the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a resolution of the Board of Directors) on such date of the portion of the evidences of indebtedness, shares of capital stock, cash and other assets to be distributed applicable to one share of Common Stock, such increase to become effective immediately prior to the opening of business on the day following such date; provided, that, in the event that the -------- amount of such dividend as so determined is equal to or greater than 100% of such Current Market Price, in lieu of the foregoing adjustment, adequate provision shall be made so that the holder of a Warrant shall receive a pro rata share of such dividend based upon the maximum number of shares of Common Stock, at the time issuable to such holder (determined without regard to whether the Warrant is exercisable at such time). If the Board of Directors determines the fair market value of any distribution for purposes of this paragraph (d) (i) by reference to the actual or when-issued trading market for any securities comprising part or all of such distribution, it must in doing so consider the prices in such market over the same period used in computing the Current Market Price pursuant to paragraph (h) of this Section, to the extent possible. For purposes of this paragraph (d) (i), an "Extraordinary Cash Dividend" shall be that portion, if any, of the aggregate amount of all cash dividends paid in any fiscal year which exceed $25,000,000. For purposes of this paragraph (d), any dividend or distribution that includes Common Stock, rights, options or warrants to subscribe for or purchase Common Stock or securities convertible into or exchangeable for Common Stock shall be deemed to be (x) a dividend or distribution of the evidences of indebtedness, cash, assets or shares of capital stock other than such Common Stock, such rights, options or warrants or such convertible or exchangeable securities (making any increase in the Number of Shares required by this paragraph (d) (i) immediately followed by (y) in the case of such Common Stock or such rights, options or warrants, a dividend or distribution thereof (making any further adjustment to the Number of Shares required by paragraph (a) and (b) of this Section, except any shares of Common Stock included in such dividend or distribution shall not be deemed "outstanding at the close of business on the date fixed for such determination" within the meaning of paragraph (a) of this Section), or (z) in the case of such convertible or exchangeable securities, a dividend or distribution of the number of shares of Common Stock as would then be issuable upon the exercise or exchange thereof, whether or not the exercise or exchange of such securities is subject to any conditions (making any further reduction in Number of Shares required by paragraph (a) of this Section, except the shares deemed to constitute such dividend or distribution shall not be deemed "outstanding at the close of business on the date fixed for such determina tion" within the meaning of paragraph (a) of this Section). (ii) In case the Company shall issue Common Stock for a consideration per share less than the Current Market Price (determined as provided in paragraph (h) of this Section), the Number of Shares shall be increased by multiplying the Number of Shares issuable immediately prior to the close of business on the date on which the Company fixes the offering price of such additional shares by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately after giving effect to such issuance and the denominator of which shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus a fraction equal to the aggregate consideration received by the Company from the issuance of such additional shares of Common Stock over the Current Market Price on the date on which the Company fixes the offering price of such additional shares (determined as provided in paragraph (h) of this Section), and the increase in the Number of Shares provided for in the preceding sentence shall not apply upon (i) the issuance of securities in transactions described in paragraphs (a), (b), (d) (i), and d (iii), or (f) of this Section or pursuant to the exercise, exchange or conversion of any such securities (to the extent applicable, including the 9% Preferred Stock (as defined below)); (ii) the issuance of Common Stock upon the exercise or exchange of securities (including options) convertible or exchangeable for shares of Common Stock outstanding on the date of this Warrant Agreement, or issuable pursuant to binding agreements in effect on the date of this Warrant Agreement as set forth on a schedule to the Senior Note Indenture; (iii) the issuance of Common Stock upon the exercise of options issued to the Company's directors, officers and employees under bona fide employee benefit plans adopted by the Board of Directors and approved by the holders of Common Stock when required by law or otherwise where such issuances have been approved by the Board of Directors (but only to the extent that the aggregate number of shares excluded pursuant to this subclause (iii) and issued after the date of this Warrant Agreement shall not exceed 3% of the Common Stock outstanding at the time of issuance; provided, -------- that options granted pursuant to this subclause (iii) exercisable for no more than 2% of such outstanding Common Stock may have exercise prices less than 50% of the price per share based on a valuation of the Company of $122,500,000); (iv) the issuance of Common Stock to shareholders of any person that immediately or subsequently merges with or into the Company or any subsidiary thereof in proportion to their stock holdings of such person immediately prior to such merger, upon such merger; (v) the issuance of Common Stock in a bona fide underwritten public offering; (vi) the issuance of Common Stock in a bona fide private placement through a placement agent that is a member firm of the National Association of Securities Dealers, Inc. (except to the extent that any discount from the Current Market Price (determined as provided in paragraph (h) of this Section) attributable to restrictions on transferability of the Common Stock, as determined in good faith by the Board of Directors and described in a resolution thereof which shall be filed with the Warrant Agent, shall exceed 20%), or issuable pursuant to a binding agreement in effect on the date of this Warrant Agreement; (vii) the issuance of Common Stock as a dividend on any securities outstanding on the date of this Warrant Agreement required to be made pursuant to the certificate of designation pertaining to such securities in effect at the time such securities were issued; (viii) the issuance of Common Stock upon the exercise of Initial Warrants; (ix) the issuance of Common Stock upon the exercise of Contingent Warrants; (x) the issuance of Common Stock upon the exercise of Additional Warrants or the conversion of convertible securities that may be issued pursuant to Section 4.15 of the Convertible Note Indenture; or (xi) the issuance of Common Stock upon the conversion of the Convertible Notes. (iii) In case the Company shall issue any securities convertible into or exchangeable for Common Stock for a consideration per share of Common Stock (including the minimum consideration per share payable upon exercise or exchange of any securities convertible into or exchangeable for Common Stock) initially deliverable upon exercise or exchange of such securities less than the Current Market Price (determined as provided in paragraph (h) of this Section), the Number of Shares shall be increased by multiplying the Number of Shares issuable immediately prior to the close of business on the date on which the Company fixes the offering price of such additional shares by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately prior to the issuance of such securities plus the maximum number of shares of Common Stock deliverable upon exercise of or in exchange for such securities at the initial exercise or exchange rate and the denominator of which shall be the number of shares of Common Stock outstanding immediately prior to the issuance of such securities plus a fraction equal to the aggregate consideration received for the issuance of such securities (including the minimum consideration per share payable upon exercise or exchange of any securities convertible into or exchangeable for Common Stock) over the Current Market Price on the date on which the Company fixes the offering price of such additional shares (determined as provided in paragraph (h) of this Section). The increase in Number of Shares provided for in the preceding sentence shall not apply to (i) securities issued in transactions described in paragraphs (a), (b), (d) (i) and (d) (ii) of this Section or any shares of 9% Cumulative Convertible PIK Preferred Stock, par value $1.00 per share (the "9% Preferred Stock"), received as a dividend on the 9% Preferred Stock; (ii) convertible securities issued to shareholders of any person that merges into the Company, or with a Subsidiary of the Company, in proportion to their stock holdings of such person immediately prior to such merger, upon such merger; (iii) convertible securities issued in a bona fide underwritten public offering; (iv) convertible securities issued in a bona fide private placement through a placement agent that is a member firm of the National Association of Securities Dealers, Inc. (except to the extent that any discount from the Current Market Price (determined as provided in paragraph (h) of this Section) attributable to restrictions on transferability of Common Stock issuable upon exercise, as determined in good faith by the Board of Directors and described in a resolution thereof which shall be filed with the Warrant Agent, shall exceed 20% of the then Current Market Price, or issuable pursuant to a binding agreement in effect on the date of this Warrant Agreement; (v) stock options issued to the Company's directors, officers or employees; (vi) the grant of any Supplemental Initial Warrants; (vii) the grant of Contingent Warrants; (viii) the grant of Additional Warrants or the issuance of convertible securities that may be issued pursuant to Section 4.15 of the Convertible Note Indenture; or (ix) the issuance of additional Convertible Notes pursuant to the Convertible Note Indenture. (e) In case the Company shall, by dividend or otherwise, at any time distribute to all holders of Common Stock cash (excluding any cash that is distributed as part of a distribution referred to in paragraph (d) (i) of this Section or in connection with a transaction to which Section 14 applies) in an aggregate amount that, together with (i) the aggregate amount of any other distributions to all holders of Common Stock made exclusively in cash within the 12 months preceding the date fixed for the determination of shareholders entitled to such distribution and in respect of which no adjustment in the Number of Shares pursuant to paragraph (d) (i) or this paragraph (e) has been made previously and (ii) the aggregate of any cash plus the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a resolution of the Board of Directors) as of such date of determination of consideration payable in respect of any tender offer by the Company or a Subsidiary for all or any portion of the Common Stock, and any purchase by the Company of Common Stock in the open market, consummated within the 12 months preceding such date of determination and in respect of which no adjustment in the Number of Shares pursuant to paragraph (f) of this Section has been made previously, exceeds 12.5% of the product of the Current Market Price (determined as provided in paragraph (h) of this Section) on such date of determination time
Appears in 1 contract
Sources: Warrant Agreement (United Usn Inc)
Adjustment of Number of Warrant Shares. The number of Warrant Shares purchasable pursuant hereto shall be subject to adjustment from time to time on and after the Date of Issuance as hereinafter provided in this Section 4.1.
(a) In case the Company shall at any time after the Date of Issuance (i) declare or pay a dividend in shares of Common Stock or make a dividend or other distribution on the Common Stock exclusively in shares of Common Stock, (ii) make a dividend or other distribution on the Common Stock in shares of its capital stock other than Common Stock, (iii) subdivide its outstanding shares of Common Stock or into a greater number of shares of Common Stock, (iviii) combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock, the number and kind of Stock or (iv) issue any shares of Common Stock or capital stock other assets in a reclassification or reorganization of such shares of Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing entity), the securities purchasable pursuant hereto shall be adjusted to the number of Warrant Shares and amount of any other securities, cash or other property of the Company issuable upon which the exercise Holder would have owned or have been entitled to receive after the happening of a any of the events described above, had this Warrant (as in effect been exercised immediately prior to the happening of such dividend event or distributionany record date with respect thereto. An adjustment made pursuant to this paragraph (a) shall become effective immediately after the effective date of such event, retroactive to the record date, if any, for such event. Any Warrant Shares purchasable as a result of such adjustment shall not be proportionately adjusted so that issued prior to the holder effective date of such event. If, as a result of an adjustment made pursuant to this Section 4.1(a), the Holder of any Warrant thereafter exercised may surrendered for exercise shall become entitled to receive the aggregate number and kind of shares of capital stock two or more classes of securities of the Company, the Board of Directors of the Company that (with the consent of the Required Holders) shall determine the allocation of the adjusted Exercise Price between or among shares of such holder would have owned immediately following such dividend or distribution if such Warrant had been exercised immediately prior theretoclasses of securities.
(b) Subject to the last sentence of paragraph (g) of this Section, in In case the Company shall make a dividend or other distribution on the issue shares of Common Stock consisting exclusively of, or shall otherwise issue to all holders of the Common Stock, rights, options or warrants entitling the holders thereof to subscribe for or purchase purchase, or other securities exchangeable for or convertible into, shares of Common Stock (any such rights, options, warrants or other securities being herein called "Rights") (excluding (i) shares issued in a transaction covered by Section 4.1(a) hereof, (ii) shares issued upon conversion, exercise, or exchange of Rights issued after the date hereof (provided that appropriate adjustments were made hereunder upon the issuance of such Rights), (iii) the Warrants and any Warrant Shares issued on exercise thereof, (iv) shares issued upon conversion, exercise or exchange of Rights issued prior to the date hereof, (v) shares issued to the holders of the Wellington Subordinated Debt in respect of the interest payment that is due on February 15, 1996 for such Debt and (vi) shares issued pursuant to an employee benefit plan of the Company that has been approved by the Board of Directors of the Company) at an issuance, subscription, offering, exercise or conversion price (the "Offering Price") per share which is lower than the Fair Market Value on the date such shares of Common Stock or securities convertible into Rights, as the case may be, are issued, whether or exchangeable for Common Stock at a price per share (determined on an as-converted not such Rights are immediately exercisable or as-exercised basis if the rights, options or warrants pertain to securities convertible into or exchangeable for shares of Common Stock) less than the Current Market Price (determined as provided in paragraph (h) of this Section) on the date fixed for the determination of shareholders entitled to receive such rights, options or warrantsconvertible, the Number number of Warrant Shares shall be adjusted and shall be determined by multiplying the Number number of Warrant Shares purchasable immediately prior to the date so fixed any adjustment in connection with such issuance by a fraction, the numerator of which the numerator shall be the number of shares of Common Stock outstanding on (exclusive of any treasury shares) immediately prior to the date fixed for determining stockholders entitled to receive of issuance of such shares of Common Stock or Rights (assuming that all shares of Common Stock into which all outstanding rights, options options, warrants and convertible securities excluding the Rights are exercisable or warrants convertible are outstanding) plus the number of additional shares of Common Stock offered for subscription or purchaseissued and the number of shares of Common Stock that would be issued upon exercise of the Rights, and the denominator of which the denominator shall be the number of shares of Common Stock outstanding on (exclusive of any treasury shares) immediately prior to the date fixed for determining stockholders entitled to receive of issuance of such Common Stock or Rights (assuming that all shares of Common Stock into which all outstanding rights, options options, warrants and convertible securities excluding the Rights are exercisable or warrants convertible is outstanding) plus the number of shares which the aggregate offering price Offering Price of the total number of shares of Common Stock so offered would purchase at the Current Fair Market PriceValue on the date of such issuance; provided, however, provided that no further adjustment to the Number extent any such Rights so issued expire or are cancelled or redeemed without having been exercised or converted, the number of Warrant Shares issuable hereunder shall again be adjusted to reflect such expiration, cancellation or redemption of such Rights. Such adjustment shall be -------- ------- made upon the subsequent issue or sale whenever such shares of Common Stock pursuant to such options or warrantsRights are issued. For the purposes of this paragraph (b), the "Offering Price" per share of Common Stock shall in the case of Rights be determined by dividing (x) the total amount received or receivable by the Company in consideration of the issuance of such Rights plus the total consideration payable to the Company upon exercise thereof by (y) the total number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of Common Stock. The Company shall not issue any rights, options or warrants in respect of Common Stock held in the treasury of the Companycovered by such Rights.
(c) [Intentionally Omitted.]
(i) Subject to the last sentence of this paragraph (d) (i) and the last sentence of paragraph (g) of this Section, in In case the Company shall, by dividend or otherwise, shall distribute generally to all holders of any class of its shares of Common Stock Stock, any rights, options, warrants to subscribe for or purchase, or other securities exchangeable for or convertible into, shares of Common Stock, evidences of its indebtedness, cash indebtedness or other assets (including securitiessecurities and cash dividends), but excluding any dividends or distributions referred to in paragraph (a) above or rights, options options, warrants or warrants other securities referred to in paragraph (b) above (collectively, "Distributions"), then the number of this Section, excluding Warrant Shares issuable hereunder after any dividend or distribution paid exclusively in cash out of consolidated current or retained earnings as shown on the books of the Company prepared in accordance with GAAP (other than any Extraordinary Cash Dividend (as hereinafter defined)) and excluding any dividend or distribution referred to in paragraph (a) of this Section, the Number of Shares such Distribution shall be increased adjusted and shall be determined by multiplying the Number number of Warrant Shares issuable immediately prior to the close of business on the date fixed for the determination of shareholders entitled to such distribution by a fraction fraction, the numerator of which the numerator shall be the Current Fair Market Price (determined as provided in paragraph (h) of this Section) Value on the record date for such date Distribution, and the denominator of which shall be the Current such Fair Market Price on such date Value, less the then fair market value (as reasonably determined in good faith by the Board of Directors, whose determination shall be conclusive and described in a resolution Directors of the Board of DirectorsCompany) on such date of the portion of the assets or evidences of indebtedness, shares of capital stock, cash and other assets to be indebtedness so distributed applicable to one share of Common Stock, . Such adjustments shall be made successively whenever any such increase to Distribution is made and shall become effective immediately prior on the date of Distribution retroactive to the opening record date for the determination of business on the day following stockholders entitled to receive such date; provided, that, in Distribution. In the event that the -------- amount Required Holders disagree with the Company's determination of such dividend as so determined is equal to or greater than 100% of such Current Market Price, in lieu of the foregoing adjustment, adequate provision shall be made so that the holder of a Warrant shall receive a pro rata share of such dividend based upon the maximum number of shares of Common Stock, at the time issuable to such holder (determined without regard to whether the Warrant is exercisable at such time). If the Board of Directors determines the fair market value of any distribution for purposes assets or evidences of indebtedness pursuant to this paragraph subsection 4.1(c), then such fair market value shall be determined by an Independent Financial Expert selected by the Required Holders and the Company in accordance with the procedure set forth in the first sentence of clause (iii) of the definition of "Fair Market Value". The Company shall bear the costs of the Independent Financial Expert.
(d) (i) by reference to the actual or when-issued trading market for any securities comprising part or all of such distribution, it must in doing so consider the prices in such market over the same period used in computing the Current Market Price pursuant to paragraph (h) of this Section, to the extent possible. For purposes of this paragraph (d) (i), an "Extraordinary Cash Dividend" shall be that portion, if any, of the aggregate amount of all cash dividends paid in any fiscal year which exceed $25,000,000. For purposes of this paragraph (d), any dividend or distribution that includes Common Stock, rights, options or warrants to subscribe for or purchase Common Stock or securities convertible into or exchangeable for Common Stock shall be deemed to be (x) a dividend or distribution of the evidences of indebtedness, cash, assets or shares of capital stock other than such Common Stock, such rights, options or warrants or such convertible or exchangeable securities (making any increase in the Number of Shares required by this paragraph (d) (i) immediately followed by (y) in the case of such Common Stock or such rights, options or warrants, a dividend or distribution thereof (making any further adjustment to the Number of Shares required by paragraph (a) and (b) of this Section, except any shares of Common Stock included in such dividend or distribution shall not be deemed "outstanding at the close of business on the date fixed for such determination" within the meaning of paragraph (a) of this Section), or (z) in the case of such convertible or exchangeable securities, a dividend or distribution of Whenever the number of shares of Common Stock Warrant Shares are adjusted as would then be issuable herein provided, the Exercise Price payable upon the exercise or exchange thereof, whether or not the exercise or exchange of such securities is subject to any conditions (making any further reduction in Number of Shares required by paragraph (a) of this Section, except the shares deemed to constitute such dividend or distribution shall not be deemed "outstanding at the close of business on the date fixed for such determina tion" within the meaning of paragraph (a) of this Section).
(ii) In case the Company shall issue Common Stock for a consideration per share less than the Current Market Price (determined as provided in paragraph (h) of this Section), the Number of Shares Warrant shall be increased adjusted by multiplying the Number of Shares issuable such Exercise Price immediately prior to the close of business on the date on which the Company fixes the offering price of such additional shares adjustment by a fraction fraction, the numerator of which the numerator shall be the number of shares of Common Stock outstanding Warrant Shares immediately after giving effect prior to such issuance adjustment, and the denominator of which shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus a fraction equal to the aggregate consideration received by the Company from the issuance of such additional shares of Common Stock over the Current Market Price on the date on which the Company fixes the offering price of such additional shares (determined as provided in paragraph (h) of this Section), and the increase in the Number of Warrant Shares provided for in the preceding sentence shall not apply upon (i) the issuance of securities in transactions described in paragraphs (a), (b), (d) (i), and d (iii), or (f) of this Section or pursuant to the exercise, exchange or conversion of any such securities (to the extent applicable, including the 9% Preferred Stock (as defined below)); (ii) the issuance of Common Stock upon the exercise or exchange of securities (including options) convertible or exchangeable for shares of Common Stock outstanding on the date of this Warrant Agreement, or issuable pursuant to binding agreements in effect on the date of this Warrant Agreement as set forth on a schedule to the Senior Note Indenture; (iii) the issuance of Common Stock upon the exercise of options issued to the Company's directors, officers and employees under bona fide employee benefit plans adopted by the Board of Directors and approved by the holders of Common Stock when required by law or otherwise where such issuances have been approved by the Board of Directors (but only to the extent that the aggregate number of shares excluded pursuant to this subclause (iii) and issued after the date of this Warrant Agreement shall not exceed 3% of the Common Stock outstanding at the time of issuance; provided, -------- that options granted pursuant to this subclause (iii) exercisable for no more than 2% of such outstanding Common Stock may have exercise prices less than 50% of the price per share based on a valuation of the Company of $122,500,000); (iv) the issuance of Common Stock to shareholders of any person that immediately or subsequently merges with or into the Company or any subsidiary thereof in proportion to their stock holdings of such person immediately prior to such merger, upon such merger; (v) the issuance of Common Stock in a bona fide underwritten public offering; (vi) the issuance of Common Stock in a bona fide private placement through a placement agent that is a member firm of the National Association of Securities Dealers, Inc. (except to the extent that any discount from the Current Market Price (determined as provided in paragraph (h) of this Section) attributable to restrictions on transferability of the Common Stock, as determined in good faith by the Board of Directors and described in a resolution thereof which shall be filed with the Warrant Agent, shall exceed 20%), or issuable pursuant to a binding agreement in effect on the date of this Warrant Agreement; (vii) the issuance of Common Stock as a dividend on any securities outstanding on the date of this Warrant Agreement required to be made pursuant to the certificate of designation pertaining to such securities in effect at the time such securities were issued; (viii) the issuance of Common Stock upon the exercise of Initial Warrants; (ix) the issuance of Common Stock upon the exercise of Contingent Warrants; (x) the issuance of Common Stock upon the exercise of Additional Warrants or the conversion of convertible securities that may be issued pursuant to Section 4.15 of the Convertible Note Indenture; or (xi) the issuance of Common Stock upon the conversion of the Convertible Notes.
(iii) In case the Company shall issue any securities convertible into or exchangeable for Common Stock for a consideration per share of Common Stock (including the minimum consideration per share payable upon exercise or exchange of any securities convertible into or exchangeable for Common Stock) initially deliverable upon exercise or exchange of such securities less than the Current Market Price (determined as provided in paragraph (h) of this Section), the Number of Shares shall be increased by multiplying the Number of Shares issuable immediately prior to the close of business on the date on which the Company fixes the offering price of such additional shares by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately prior to the issuance of such securities plus the maximum number of shares of Common Stock deliverable upon exercise of or in exchange for such securities at the initial exercise or exchange rate and the denominator of which shall be the number of shares of Common Stock outstanding immediately prior to the issuance of such securities plus a fraction equal to the aggregate consideration received for the issuance of such securities (including the minimum consideration per share payable upon exercise or exchange of any securities convertible into or exchangeable for Common Stock) over the Current Market Price on the date on which the Company fixes the offering price of such additional shares (determined as provided in paragraph (h) of this Section). The increase in Number of Shares provided for in the preceding sentence shall not apply to (i) securities issued in transactions described in paragraphs (a), (b), (d) (i) and (d) (ii) of this Section or any shares of 9% Cumulative Convertible PIK Preferred Stock, par value $1.00 per share (the "9% Preferred Stock"), received as a dividend on the 9% Preferred Stock; (ii) convertible securities issued to shareholders of any person that merges into the Company, or with a Subsidiary of the Company, in proportion to their stock holdings of such person immediately prior to such merger, upon such merger; (iii) convertible securities issued in a bona fide underwritten public offering; (iv) convertible securities issued in a bona fide private placement through a placement agent that is a member firm of the National Association of Securities Dealers, Inc. (except to the extent that any discount from the Current Market Price (determined as provided in paragraph (h) of this Section) attributable to restrictions on transferability of Common Stock issuable upon exercise, as determined in good faith by the Board of Directors and described in a resolution thereof which shall be filed with the Warrant Agent, shall exceed 20% of the then Current Market Price, or issuable pursuant to a binding agreement in effect on the date of this Warrant Agreement; (v) stock options issued to the Company's directors, officers or employees; (vi) the grant of any Supplemental Initial Warrants; (vii) the grant of Contingent Warrants; (viii) the grant of Additional Warrants or the issuance of convertible securities that may be issued pursuant to Section 4.15 of the Convertible Note Indenture; or (ix) the issuance of additional Convertible Notes pursuant to the Convertible Note Indenturethereafter.
(e) In No adjustment in the number of Warrant Shares shall be required hereunder unless such adjustment would result in an increase or decrease of at least one percent (1%) of the Exercise Price; provided, however, that any adjustments which by reason of this subsection (e) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations shall be made to the nearest one-hundredth of a cent or to the nearest one-thousandth of a share, as the case may be.
(f) For the Company shallpurpose of this subsection 4.1 and subsection 4.2 hereof, by dividend or otherwise, at any time distribute to all holders the term "shares of Common Stock cash (excluding any cash that is distributed as part of a distribution referred to in paragraph (d) (i) of this Section or in connection with a transaction to which Section 14 applies) in an aggregate amount that, together with Stock" shall mean (i) the aggregate amount classes of any other distributions to all holders of stock designated as the Class A Common Stock made exclusively in cash within or Class B Nonvoting Common Stock of the 12 months preceding Company as of the date fixed for the determination of shareholders entitled to such distribution and in respect of which no adjustment in the Number of Shares pursuant to paragraph (d) (i) or this paragraph (e) has been made previously and hereof, (ii) the aggregate any other class of any cash plus the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a resolution stock of the Board of Directors) as Company resulting from successive changes or reclassification of such date shares consisting solely of determination changes in par value, or from par value to no par value, or from no par value to par value, or (iii) any other capital stock of consideration payable in respect of any tender offer by the Company which is not by its terms restricted in amount or a Subsidiary for all timing to the entitlement to dividends or any portion in the distribution of assets upon the voluntary or involuntary liquidation, dissolution or winding up of the Company. In the event that at any time, as a result of an adjustment made pursuant to this subsection 4.1, the Holder shall become entitled to receive any securities of the Company other than shares of Common Stock, and any purchase by thereafter the Company number of Common Stock in the open market, consummated within the 12 months preceding such date of determination and in respect of which no adjustment in the Number of Shares pursuant to paragraph (f) other securities so receivable upon exercise of this Warrant and the Exercise Price of such shares shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Warrant Shares contained in this Section has been made previously, exceeds 12.5% of the product of the Current Market Price (determined as provided in paragraph (h) of this Section) on such date of determination time4.
Appears in 1 contract
Sources: Warrant Agreement (Autotote Corp)
Adjustment of Number of Warrant Shares. The number of Warrant Shares purchasable pursuant hereto shall be subject to adjustment from time to time on and after the Date of Issuance as hereinafter provided in this Section 7.1.
(a) In case the Company shall at any time after the Date of Issuance (i) declare or pay a dividend in shares of Common Stock or make a dividend or other distribution on the Common Stock exclusively in shares of Common Stock, (ii) make a dividend or other distribution on the Common Stock in shares of its capital stock other than Common Stock, (iii) subdivide its outstanding shares of Common Stock or Stock, (iviii) combine its outstanding shares of Common Stock into a smaller number of shares of Common StockStock or (iv) issue any shares of its capital stock or other assets in a reclassification or reorganization of the Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing entity), the securities purchasable pursuant hereto shall be adjusted to the number of Warrant Shares and kind amount of shares of Common Stock any other securities, cash or capital stock other property of the Company issuable upon the exercise of a Warrant (as in effect immediately prior to which such dividend or distribution) shall be proportionately adjusted so that the holder of any Warrant thereafter exercised may receive the aggregate number and kind of shares of capital stock of the Company that such holder Holder would have owned immediately following such dividend or distribution if such have been entitled to receive after the happening of any of the events described above, had this Warrant had been exercised immediately prior to the happening of such event or any record date with respect thereto. An adjustment made pursuant to this paragraph (a) shall become effective immediately after the effective date of such event retroactive to the record date, if any, for such event. Any Warrant Shares purchasable as a result of such adjustment shall not be issued prior to the effective date of such event.
(b) Subject to the last sentence of paragraph (g) of this Section, in In case the Company shall make a dividend or other distribution on the issue shares of its Common Stock consisting exclusively of, or shall otherwise issue to all holders of the Common Stock, rights, options (including options issued to employees under the Company's 1995 Stock Option Plan on or after the date hereof) or warrants entitling the holders thereof to subscribe for or purchase purchase, or other securities exchangeable for or convertible into, shares of its Common Stock (any such rights, options, warrants or other securities convertible into being herein called "Rights") (excluding (i) shares issued in a transaction covered by Section 7.1(a), (ii) shares issued upon conversion, exercise, or exchangeable for Common Stock exchange of Rights issued after the date hereof (provided that appropriate adjustments were made hereunder upon the issuance of such Rights) and (iii) the Warrants and any Warrant Shares issued on exercise thereof at a an issuance, subscription, offering, exercise or conversion price (the "Offering Price") per share which is lower than the current market price per share (determined on an as-converted or as-exercised basis if the rights, options or warrants pertain to securities convertible into or exchangeable for shares of Common Stock) less than the Current Market Price Stock (determined as provided defined in paragraph (hd) of this Sectionbelow) on the date fixed for the determination of shareholders entitled to receive issuance or grant, whether or not such rights, options Rights are immediately exercisable or warrantsconvertible, the Number number of Warrant Shares issuable hereunder after such issuance or grant shall be determined by multiplying the Number number of Warrant Shares purchasable issuable hereunder immediately prior to the date so fixed any adjustment in connection with such issuance or grant by a fraction, the numerator of which the numerator shall be the number of shares of Common Stock outstanding on (exclusive of any treasury shares) immediately prior to the date fixed for determining stockholders entitled to receive of issuance or grant of such shares of Common Stock or Rights (assuming that all Common Stock into which all outstanding rights, options options, warrants and convertible securities excluding such Rights are exercisable or warrants convertible is outstanding) plus the number of additional shares of Common Stock offered for subscription or purchaseissued and the number of shares of Common Stock that would be issued upon exercise of such Rights, and of which the denominator shall be the number of shares of Common Stock outstanding on (exclusive of any treasury shares) immediately prior to the date fixed for determining stockholders entitled to receive of issuance or grant of such Common Stock or Rights (assuming that all Common Stock into which all outstanding rights, options options, warrants and convertible securities excluding such Rights are exercisable or warrants convertible is outstanding) plus the number of shares which the aggregate offering price Offering Price of the total number of shares of Common Stock so offered would purchase at the Current Market Price; provided, however, that no further adjustment to the Number of Shares shall be -------- ------- made upon the subsequent issue or sale current market price per share of Common Stock pursuant on the date of issuance; provided that to the extent any such options Rights, so issued expire or warrantsare cancelled or redeemed without having been exercised or converted, the number of Warrant Shares issuable hereunder shall again be adjusted to reflect such expiration, cancellation or redemption of such Rights. Such adjustment shall be made whenever such shares of Common Stock or Rights are issued or granted. For the purposes of this paragraph (b), the "Offering Price" per share of Common Stock shall in the case of Rights be determined by dividing (x) the total amount received or receivable by the Company in consideration of the issuance of such Rights plus the total consideration payable to the Company upon exercise thereof, by (y) the total number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of Common Stock. The Company shall not issue any rights, options or warrants in respect of Common Stock held in the treasury of the Companycovered by such Rights.
(c) [Intentionally Omitted.]
(i) Subject to the last sentence of this paragraph (d) (i) and the last sentence of paragraph (g) of this Section, in In case the Company shall, by dividend or otherwise, shall distribute to all holders any holder of its shares of Common Stock or Rights, evidences of its indebtedness, cash indebtedness or other assets (including securitiessecurities and cash dividends other than regular quarterly cash dividends paid in the ordinary course of business out of the Company's consolidated earnings), but excluding any rightsdividends or distributions referred to in paragraph (a) above or Rights, options or warrants referred to in paragraph (b) above (collectively, "Distributions"), then in each case the number of this SectionWarrant Shares issuable hereunder after any such Distribution shall be determined by multiplying the number of Warrant Shares issuable hereunder prior to such Distribution by a fraction, excluding any dividend or distribution paid exclusively in cash out the numerator of consolidated which shall be the current or retained earnings as shown on the books market price per share of the Company prepared in accordance with GAAP (other than any Extraordinary Cash Dividend Common Stock (as hereinafter defined)) and excluding any dividend or distribution referred to defined in paragraph (ad) of this Section, the Number of Shares shall be increased by multiplying the Number of Shares issuable immediately prior to the close of business below) on the record date fixed for the determination of shareholders entitled to such distribution by a fraction distribution, and of which the numerator shall be the Current Market Price (determined as provided in paragraph (h) of this Section) on such date and the denominator shall be the Current Market Price on such date current market price per share of Common Stock, less the then fair market value (as reasonably determined in good faith by the Board of Directors, whose determination shall be conclusive and described in a resolution Directors of the Board of DirectorsCompany) on such date of the portion of the assets or evidences of indebtedness, shares of capital stock, cash and other assets to be indebtedness so distributed applicable to one share of Common Stock, . Such adjustments shall be made successively whenever any such increase to Distribution is made and shall become effective immediately prior on the date of distribution retroactive to the opening record date for the determination of business on the day following stockholders entitled to receive such date; provided, that, in Distribution. In the event that the -------- amount of such dividend as so determined is equal to or greater than 100% of such Current Market Price, in lieu of the foregoing adjustment, adequate provision shall be made so that the holder Holders of a Majority of Warrant shall receive a pro rata share Interests disagree with the Company's determination of such dividend based upon the maximum number of shares of Common Stock, at the time issuable to such holder (determined without regard to whether the Warrant is exercisable at such time). If the Board of Directors determines the fair market value of any distribution assets or evidences of indebtedness pursuant to this subsection 7.1(c), then such fair market value shall be determined by an independent appraisal firm (which may be an investment banking firm of national recognition) selected by such Holders and the Company (the "Appraisal Firm"). If the Appraisal Firm determines such fair market value to be greater than 105% of the Company's determination, then the Company shall bear the costs of the Appraisal Firm. If the Appraisal Firm determines the current market value to be less than 105% of the Company's determination, the Holders of the Warrant Interests shall reimburse the Company for purposes the cost of this paragraph the Appraisal Firm.
(d) For the purpose of any computation under paragraphs (ib) by reference to the actual or when-issued trading market for any securities comprising part or all of such distribution, it must in doing so consider the prices in such market over the same period used in computing the Current Market Price pursuant to paragraph and (hc) of this Section, the current market price per share of Common Stock at any date shall be the average of the daily closing prices for the 10 consecutive trading day prior to the extent possible. For purposes earlier to occur of this (i) the date as of which the market price is to be computed or (ii) the last full trading day before the commencement of "ex-dividend" trading in the Common Stock relating to the event giving rise to the adjustment required by paragraph (db) or (ic), an "Extraordinary Cash Dividend" . The closing price for each day shall be that portionthe last such reported sales price regular way or, in case no such reported sale takes place on such day, the average of the closing bid and asked prices regular way for such day, in each case on the principal national securities exchange or in the NASDAQ-National Market System on which the shares of Common Stock are listed or to which such shares are admitted to trading, or, if anynot listed or admitted to trading, the average of the aggregate amount closing bid and asked prices of all cash dividends paid the Common Stock in the over-the-counter market as reported by NASDAQ or any fiscal year which exceed $25,000,000comparable system, or if the Common Stock is not listed on NASDAQ or a comparable system, the average of the closing bid and asked prices as furnished by two members of the National Association of Securities Dealers, Inc. selected from time to time by the a Majority of the Warrant Interests for that purpose. For purposes In the event the Company's Common Stock is not then publicly traded or if for any other reason the current market price per share cannot be determined pursuant to the foregoing provisions of this paragraph (d), any dividend or distribution that includes Common Stock, rights, options or warrants to subscribe for or purchase Common Stock or securities convertible into or exchangeable for Common Stock the appropriate current market price per share shall be deemed the fair market value thereof (without regard to be (xany transfer restrictions imposed by law or contract thereon or lack of liquidity thereof) a dividend or distribution as determined by the Board of Directors of the evidences Company. In the event that the Holders of indebtedness, cash, assets or shares Majority of capital stock other than such Common Stock, such rights, options or warrants or such convertible or exchangeable securities (making any increase in Warrant Interests disagree with the Number Company's determination of Shares required by this paragraph (d) (i) immediately followed by (y) in the case of such Common Stock or such rights, options or warrants, a dividend or distribution thereof (making any further adjustment to the Number of Shares required by paragraph (a) and (b) of this Section, except any shares current market price per share of Common Stock included in made pursuant to the immediately preceding sentence, then such dividend current market price or distribution shall not be deemed "outstanding at the close of business on the date fixed for such determination" within the meaning of paragraph (a) of this Section)fair market value, or (z) in as the case may be, shall be determined by an independent appraisal firm (which may be an investment banking firm of national recognition) selected by such convertible or exchangeable securities, a dividend or distribution Holders and the Company (the "Appraisal Firm"). If the Appraisal Firm determines such fair market value to be greater than 105% of the number Company's determination, then the Company shall bear the costs of shares the Appraisal Firm. If the Appraisal Firm determines the current market value to be less than 105% of Common Stock as would then be issuable upon the exercise or exchange thereofCompany's determination, whether or not the exercise or exchange Holders of such securities is subject to any conditions (making any further reduction in Number the Warrant Interests shall reimburse the Company for the cost of Shares required by paragraph (a) of this Section, except the shares deemed to constitute such dividend or distribution shall not be deemed "outstanding at the close of business on the date fixed for such determina tion" within the meaning of paragraph (a) of this Section)Appraisal Firm.
(iie) In case Whenever the Company shall issue Common Stock for a consideration per share less than numbers of Warrant Shares are adjusted as herein provided, the Current Market Exercise Price (determined as provided in paragraph (h) payable upon exercise of this Section), the Number of Shares Warrant shall be increased adjusted by multiplying the Number of Shares issuable such Exercise Price immediately prior to the close of business on the date on which the Company fixes the offering price of such additional shares adjustment by a fraction fraction, of which the numerator shall be the number of shares of Common Stock outstanding Warrant Shares immediately after giving effect prior to such issuance adjustment, and of which the denominator of which shall be the number of Warrant Shares immediately thereafter.
(f) No adjustment in the number of Warrant Shares shall be required hereunder unless such adjustment would result in an increase or decrease of at least one percent (1%) of the Exercise Price; provided, however, that any adjustments which by reason of this paragraph (f) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations shall be made to the nearest one-hundredth of a cent or to the nearest one-thousandth of a share, as the case may be.
(g) For the purpose of this subsection 7.1, the term "shares of Common Stock outstanding at the close of business on the date fixed for such determination plus a fraction equal to the aggregate consideration received by the Company from the issuance of such additional shares of Common Stock over the Current Market Price on the date on which the Company fixes the offering price of such additional shares (determined as provided in paragraph (h) of this Section), and the increase in the Number of Shares provided for in the preceding sentence Stock" shall not apply upon mean (i) the issuance classes of securities in transactions described in paragraphs (a), (b), (d) (i), and d (iii), or (f) of this Section or pursuant to stock designated as the exercise, exchange or conversion of any such securities (to the extent applicable, including the 9% Preferred Stock (as defined below)); (ii) the issuance of Common Stock upon of the exercise or exchange of securities (including options) convertible or exchangeable for shares of Common Stock outstanding on Company at the date of this Warrant Agreement, (ii) any other class of stock resulting from successive changes or issuable reclassifications of such shares consisting solely of changes in par value, or from par value to no par value, or from no par value to par value or (iii) any other class of capital stock of the Company which is not by its terms restricted in amount or timing to the entitlement to dividends or in the distribution of assets upon the voluntary or involuntary liquidation, dissolution or winding up of the Company. In the event that at any time, as a result of an adjustment made pursuant to binding agreements in effect on this subsection 7.1, the date Holders shall become entitled to receive any securities of the Company other than shares of Common Stock, thereafter the number of such other securities so receivable upon exercise of this Warrant Agreement and the Exercise Price of such shares shall be subject to adjustment from time to time in a manner and on terms as set forth on a schedule nearly equivalent as practicable to the Senior Note Indenture; (iii) the issuance of Common Stock upon the exercise of options issued provisions with respect to the Company's directors, officers and employees under bona fide employee benefit plans adopted by the Board of Directors and approved by the holders of Common Stock when required by law or otherwise where such issuances have been approved by the Board of Directors (but only to the extent that the aggregate number of shares excluded pursuant to this subclause (iii) and issued after the date of this Warrant Agreement shall not exceed 3% of the Common Stock outstanding at the time of issuance; provided, -------- that options granted pursuant to this subclause (iii) exercisable for no more than 2% of such outstanding Common Stock may have exercise prices less than 50% of the price per share based on a valuation of the Company of $122,500,000); (iv) the issuance of Common Stock to shareholders of any person that immediately or subsequently merges with or into the Company or any subsidiary thereof Shares contained in proportion to their stock holdings of such person immediately prior to such merger, upon such merger; (v) the issuance of Common Stock in a bona fide underwritten public offering; (vi) the issuance of Common Stock in a bona fide private placement through a placement agent that is a member firm of the National Association of Securities Dealers, Inc. (except to the extent that any discount from the Current Market Price (determined as provided in paragraph (h) of this Section) attributable to restrictions on transferability of the Common Stock, as determined in good faith by the Board of Directors and described in a resolution thereof which shall be filed with the Warrant Agent, shall exceed 20%), or issuable pursuant to a binding agreement in effect on the date of this Warrant Agreement; (vii) the issuance of Common Stock as a dividend on any securities outstanding on the date of this Warrant Agreement required to be made pursuant to the certificate of designation pertaining to such securities in effect at the time such securities were issued; (viii) the issuance of Common Stock upon the exercise of Initial Warrants; (ix) the issuance of Common Stock upon the exercise of Contingent Warrants; (x) the issuance of Common Stock upon the exercise of Additional Warrants or the conversion of convertible securities that may be issued pursuant to Section 4.15 of the Convertible Note Indenture; or (xi) the issuance of Common Stock upon the conversion of the Convertible Notes.
(iii) In case the Company shall issue any securities convertible into or exchangeable for Common Stock for a consideration per share of Common Stock (including the minimum consideration per share payable upon exercise or exchange of any securities convertible into or exchangeable for Common Stock) initially deliverable upon exercise or exchange of such securities less than the Current Market Price (determined as provided in paragraph (h) of this Section), the Number of Shares shall be increased by multiplying the Number of Shares issuable immediately prior to the close of business on the date on which the Company fixes the offering price of such additional shares by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately prior to the issuance of such securities plus the maximum number of shares of Common Stock deliverable upon exercise of or in exchange for such securities at the initial exercise or exchange rate and the denominator of which shall be the number of shares of Common Stock outstanding immediately prior to the issuance of such securities plus a fraction equal to the aggregate consideration received for the issuance of such securities (including the minimum consideration per share payable upon exercise or exchange of any securities convertible into or exchangeable for Common Stock) over the Current Market Price on the date on which the Company fixes the offering price of such additional shares (determined as provided in paragraph (h) of this Section). The increase in Number of Shares provided for in the preceding sentence shall not apply to (i) securities issued in transactions described in paragraphs (a), (b), (d) (i) and (d) (ii) of this Section or any shares of 9% Cumulative Convertible PIK Preferred Stock, par value $1.00 per share (the "9% Preferred Stock"), received as a dividend on the 9% Preferred Stock; (ii) convertible securities issued to shareholders of any person that merges into the Company, or with a Subsidiary of the Company, in proportion to their stock holdings of such person immediately prior to such merger, upon such merger; (iii) convertible securities issued in a bona fide underwritten public offering; (iv) convertible securities issued in a bona fide private placement through a placement agent that is a member firm of the National Association of Securities Dealers, Inc. (except to the extent that any discount from the Current Market Price (determined as provided in paragraph (h) of this Section) attributable to restrictions on transferability of Common Stock issuable upon exercise, as determined in good faith by the Board of Directors and described in a resolution thereof which shall be filed with the Warrant Agent, shall exceed 20% of the then Current Market Price, or issuable pursuant to a binding agreement in effect on the date of this Warrant Agreement; (v) stock options issued to the Company's directors, officers or employees; (vi) the grant of any Supplemental Initial Warrants; (vii) the grant of Contingent Warrants; (viii) the grant of Additional Warrants or the issuance of convertible securities that may be issued pursuant to Section 4.15 of the Convertible Note Indenture; or (ix) the issuance of additional Convertible Notes pursuant to the Convertible Note Indenture7.
(e) In case the Company shall, by dividend or otherwise, at any time distribute to all holders of Common Stock cash (excluding any cash that is distributed as part of a distribution referred to in paragraph (d) (i) of this Section or in connection with a transaction to which Section 14 applies) in an aggregate amount that, together with (i) the aggregate amount of any other distributions to all holders of Common Stock made exclusively in cash within the 12 months preceding the date fixed for the determination of shareholders entitled to such distribution and in respect of which no adjustment in the Number of Shares pursuant to paragraph (d) (i) or this paragraph (e) has been made previously and (ii) the aggregate of any cash plus the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a resolution of the Board of Directors) as of such date of determination of consideration payable in respect of any tender offer by the Company or a Subsidiary for all or any portion of the Common Stock, and any purchase by the Company of Common Stock in the open market, consummated within the 12 months preceding such date of determination and in respect of which no adjustment in the Number of Shares pursuant to paragraph (f) of this Section has been made previously, exceeds 12.5% of the product of the Current Market Price (determined as provided in paragraph (h) of this Section) on such date of determination time
Appears in 1 contract
Sources: Warrant Purchase Agreement (Community Distributors Inc)
Adjustment of Number of Warrant Shares. (a) In case the Company shall (i) make a dividend or other distribution on the Common Stock exclusively in Common Stock, (ii) make a dividend or other distribution on the Common Stock in shares of its capital stock other than Common Stock, (iii) subdivide its outstanding shares of Common Stock or (iv) combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock, the number and kind of shares of Common Stock or capital stock of the Company issuable upon the exercise of a Warrant (as in effect immediately prior to such dividend or distribution) shall be proportionately adjusted so that the holder of any Warrant thereafter exercised may receive the aggregate number and kind of shares of capital stock of the Company that such holder would have owned immediately following such dividend or distribution if such Warrant had been exercised immediately prior thereto.
(b) Subject to the last sentence of paragraph (g) of this Section, in case the Company shall make a dividend or other distribution on the Common Stock consisting exclusively of, or shall otherwise issue to all holders of the Common Stock, rights, options or warrants entitling the holders thereof to subscribe for or purchase Common Stock or securities convertible into or exchangeable for Common Stock at a price per share (determined on an as-converted or as-exercised basis if the rights, options or warrants pertain to securities convertible into or exchangeable for shares of Common Stock) less than the Current Market Price (determined as provided in paragraph (h) of this Section) on the date fixed for the determination of shareholders entitled to receive such rights, options or warrants, the Number of Shares shall be determined by multiplying the Number of Shares purchasable immediately prior to the date so fixed by a fraction, of which the numerator shall be the number of shares of Common Stock outstanding on the date fixed for determining stockholders entitled to receive such rights, options or warrants plus the number of additional shares of Common Stock offered for subscription or purchase, and of which the denominator shall be the number of shares of Common Stock outstanding on the date fixed for determining stockholders entitled to receive such rights, options or warrants plus the number of shares which the aggregate offering price of the total number of shares of Common Stock so offered would purchase at the Current Market Price; provided, however, that no further adjustment to the Number of Shares shall be -------- ------- made upon the subsequent issue or sale of Common Stock pursuant to such options or warrants. For the purposes of this paragraph (b), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of Common Stock. The Company shall not issue any rights, options or warrants in respect of Common Stock held in the treasury of the Company.
(c) [Intentionally Omitted.]
(i) Subject to the last sentence of this paragraph (d) (i) and the last sentence of paragraph (g) of this Section, in case the Company shall, by dividend or otherwise, distribute to all holders of Common Stock evidences of its indebtedness, cash or other assets (including securities, but excluding any rights, options or warrants referred to in paragraph (b) of this Section, excluding any dividend or distribution paid exclusively in cash out of consolidated current or retained earnings as shown on the books of the Company prepared in accordance with GAAP (other than any Extraordinary Cash Dividend (as hereinafter defined)) and excluding any dividend or distribution referred to in paragraph (a) of this Section, the Number of Shares shall be increased by multiplying the Number of Shares issuable immediately prior to the close of business on the date fixed for the determination of shareholders entitled to such distribution by a fraction of which the numerator shall be the Current Market Price (determined as provided in paragraph (h) of this Section) on such date and the denominator shall be the Current Market Price on such date less the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a resolution of the Board of Directors) on such date of the portion of the evidences of indebtedness, shares of capital stock, cash and other assets to be distributed applicable to one share of Common Stock, such increase to become effective immediately prior to the opening of business on the day following such date; provided, that, in the event that the -------- amount of such dividend as so determined is equal to or greater than 100% of such Current Market Price, in lieu of the foregoing adjustment, adequate provision shall be made so that the holder of a Warrant shall receive a pro rata share of such dividend based upon the maximum number of shares of Common Stock, at the time issuable to such holder (determined without regard to whether the Warrant is exercisable at such time). If the Board of Directors determines the fair market value of any distribution for purposes of this paragraph (d) (i) by reference to the actual or when-issued trading market for any securities comprising part or all of such distribution, it must in doing so consider the prices in such market over the same period used in computing the Current Market Price pursuant to paragraph (h) of this Section, to the extent possible. For purposes of this paragraph (d) (i), an "Extraordinary Cash Dividend" shall be that portion, if any, of the aggregate amount of all cash dividends paid in any fiscal year which exceed $25,000,000. For purposes of this paragraph (d), any dividend or distribution that includes Common Stock, rights, options or warrants to subscribe for or purchase Common Stock or securities convertible into or exchangeable for Common Stock shall be deemed to be (x) a dividend or distribution of the evidences of indebtedness, cash, assets or shares of capital stock other than such Common Stock, such rights, options or warrants or such convertible or exchangeable securities (making any increase in the Number of Shares required by this paragraph (d) (i) immediately followed by (y) in the case of such Common Stock or such rights, options or warrants, a dividend or distribution thereof (making any further adjustment to the Number of Shares required by paragraph (a) and (b) of this Section, except any shares of Common Stock included in such dividend or distribution shall not be deemed "outstanding at the close of 11 business on the date fixed for such determination" within the meaning of paragraph (a) of this Section), or (z) in the case of such convertible or exchangeable securities, a dividend or distribution of the number of shares of Common Stock as would then be issuable upon the exercise or exchange thereof, whether or not the exercise or exchange of such securities is subject to any conditions (making any further reduction in Number of Shares required by paragraph (a) of this Section, except the shares deemed to constitute such dividend or distribution shall not be deemed "outstanding at the close of business on the date fixed for such determina tiondetermination" within the meaning of paragraph (a) of this Section).
(ii) In case the Company shall issue Common Stock for a consideration per share less than the Current Market Price (determined as provided in paragraph (h) of this Section), the Number of Shares shall be increased by multiplying the Number of Shares issuable immediately prior to the close of business on the date on which the Company fixes the offering price of such additional shares by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately after giving effect to such issuance and the denominator of which shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus a fraction equal to the aggregate consideration received by the Company from the issuance of such additional shares of Common Stock over the Current Market Price on the date on which the Company fixes the offering price of such additional shares (determined as provided in paragraph (h) of this Section), and the increase in the Number of Shares provided for in the preceding sentence shall not apply upon (i) the issuance of securities in transactions described in paragraphs (a), (b), (d) (i), and d (iii), or (f) of this Section or pursuant to the exercise, exchange or conversion of any such securities (to the extent applicable, including the 9% Preferred Stock (as defined below) and the New Equity (as defined below)); (ii) the issuance of Common Stock upon the exercise or exchange of securities (including options) convertible or exchangeable for shares of Common Stock outstanding on the date of this Warrant Agreement, or issuable pursuant to binding agreements in effect on the date of this Warrant Agreement as set forth on Schedule F hereto or subsequently issued by the Company for a schedule consideration per share equal to the Senior Note IndentureCurrent Market Price (determined as provided in paragraph (h) of this Section); (iii) the issuance of Common Stock upon the exercise of options issued to the Company's directors, officers and employees under bona fide employee benefit plans adopted by the Board of Directors and approved by the holders of Common Stock when required by law or otherwise where such issuances have been approved by the Board of Directors (but only to the extent that the aggregate number of shares excluded pursuant to this subclause (iii) and issued after the date of this Warrant Agreement shall not exceed 3% of the Common Stock outstanding at the time of issuance; provided, -------- that options granted pursuant to this subclause (iii) exercisable for no more than 2% of such outstanding Common Stock may have exercise prices less than 50% of the price per share based on a valuation of the Company Company, after the issuance of shares of New Equity for approximately $30 million, of $122,500,000160,000,000); (iv) the issuance of Common Stock to shareholders of any person that immediately or subsequently merges with or into the Company or any subsidiary thereof in proportion to their stock holdings of such person immediately prior to such merger, upon such merger; (v) the issuance of Common Stock in a bona fide underwritten public offering; (vi) the issuance of Common Stock in a bona 12 fide private placement through a placement agent that is a member firm of the National Association of Securities Dealers, Inc. (except to the extent that any discount from the Current Market Price (determined as provided in paragraph (h) of this Section) attributable to restrictions on transferability of the Common Stock, as determined in good faith by the Board of Directors and described in a resolution thereof which shall be filed with the Warrant Agent, shall exceed 20%), or issuable pursuant to a binding agreement in effect on the date of this Warrant Agreement; (vii) the issuance of Common Stock as a dividend on any securities outstanding on the date of this Warrant Agreement required to be made pursuant to the certificate of designation pertaining to such securities in effect at the time such securities were issued; (viii) the issuance of Common Stock upon the exercise conversion of Initial Warrantsthe New Convertible Notes (as defined below); (ix) the issuance of Common Stock upon the exercise of warrants issued, and the Contingent Warrants that may be issued, pursuant to the Warrant Agreement, dated as of August 15, 1997, between the Company and ▇▇▇▇▇▇ Trust and Savings Bank, in connection with the offering of the Company's Senior Notes and the Indenture (collectively, the "New Warrants"); or (x) the issuance of Common Stock upon the exercise of Additional Warrants or the conversion of convertible securities that may be issued pursuant to Section 4.15 of the Convertible Note Indenture; or (xi) the issuance of Common Stock upon the conversion of the Convertible NotesWarrants.
(iii) In case the Company shall issue any securities convertible into or exchangeable for Common Stock for a consideration per share of Common Stock (including the minimum consideration per share payable upon exercise or exchange of any securities convertible into or exchangeable for Common Stock) initially deliverable upon exercise or exchange of such securities less than the Current Market Price (determined as provided in paragraph (h) of this Section), including, but not limited to, the issuance of any equity securities of the Company after the date of original issuance of the Warrants (the "Issue Date") and on or prior to September 15, 1997 resulting in net proceeds to the Company of up to $20,000,000, the Number of Shares shall be increased by multiplying the Number of Shares issuable immediately prior to the close of business on the date on which the Company fixes the offering price of such additional shares by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately prior to the issuance of such securities plus the maximum number of shares of Common Stock deliverable upon exercise of or in exchange for such securities at the initial exercise or exchange rate and the denominator of which shall be the number of shares of Common Stock outstanding immediately prior to the issuance of such securities plus a fraction equal to the aggregate consideration received for the issuance of such securities (including the minimum consideration per share payable upon exercise or exchange of any securities convertible into or exchangeable for Common Stock) over the Current Market Price on the date on which the Company fixes the offering price of such additional shares (determined as provided in paragraph (h) of this Section). The increase in Number of Shares provided for in the preceding sentence shall not apply to (i)
(A) securities issued in transactions described in paragraphs (a), (b), (d) (i) and (d) (ii) of this Section or Section, (B) any shares of 9% Cumulative Convertible PIK Pay-In-Kind Preferred Stock, par value $1.00 per share (the "9% Preferred Stock"), received as a dividend on the 9% Preferred Stock or (C) any shares of 9% Cumulative Convertible Pay-In-Kind Preferred Stock, Series A (the "New Equity") received as a dividend thereon; (ii) convertible securities issued to shareholders of any person that merges into the Company, or with a Subsidiary of the Company, in proportion to their stock holdings of such person immediately prior to such merger, upon such merger; (iii) convertible securities issued in a bona fide underwritten public offering; (iv) convertible securities issued in a bona fide private placement through a placement agent that is a member firm of the National Association of Securities Dealers, Inc. (except to the extent that any discount from the Current Market Price (determined as provided in paragraph (h) of this Section) attributable to restrictions on transferability of Common Stock issuable upon exercise, as determined in good faith by the Board of Directors and described in a resolution thereof which shall be filed with the Warrant Agent, shall exceed 20% of the then Current Market Price), or issuable pursuant to a binding agreement in effect on the date of this Warrant Agreement; (v) stock options issued to the Company's directors, officers or employees; (vi) the grant of any Supplemental Initial Contingent Warrants; (vii) convertible notes issuable to MLAM (the grant "New Convertible Notes") upon the exercise of Contingent Warrantsan option granted pursuant to the Consent Agreement; (viii) the grant of Additional Warrants or the issuance of convertible securities that may be issued pursuant to Section 4.15 of the Convertible Note IndentureNew Warrants; or (ix) the issuance of additional Convertible Notes warrants exercisable for up to 5% of the Company's Common Stock (on a fully diluted basis) issued in connection with an offering of the Company's debt securities; or (x) the grant of any securities convertible into or exchangeable for Common Stock outstanding on the date of this Warrant Agreement or issuable pursuant to binding agreements in effect on the Convertible Note Indenturedate of this Warrant Agreement as set forth on Schedule F hereto.
(e) In case the Company shall, by dividend or otherwise, at any time distribute to all holders of Common Stock cash (excluding any cash that is distributed as part of a distribution referred to in paragraph (d) (i) of this Section or in connection with a transaction to which Section 14 applies) in an aggregate amount that, together with (i) the aggregate amount of any other distributions to all holders of Common Stock made exclusively in cash within the 12 months preceding the date fixed for the determination of shareholders entitled to such distribution and in respect of which no adjustment in the Number of Shares pursuant to paragraph (d) (i) or this paragraph (e) has been made previously and (ii) the aggregate of any cash plus the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a resolution of the Board of Directors) as of such date of determination of consideration payable in respect of any tender offer by the Company or a Subsidiary for all or any portion of the Common Stock, and any purchase by the Company of Common Stock in the open market, consummated within the 12 months preceding such date of determination and in respect of which no adjustment in the Number of Shares pursuant to paragraph (f) of this Section has been made previously, exceeds 12.5% of the product of the Current Market Price (determined as provided in paragraph (h) of this Section) on such date of determination time
Appears in 1 contract
Adjustment of Number of Warrant Shares. (a) In case the Company shall (i) make a dividend or other distribution on the Common Stock exclusively in Common Stock, (ii) make a dividend or other distribution on the Common Stock in shares of its capital stock other than Common Stock, (iii) subdivide its outstanding shares of Common Stock or (iv) combine its outstanding shares of Common Stock into a smaller The number of shares of Common Stock, the number and kind of shares of Common Stock or capital stock of the Company issuable upon the exercise of a Warrant (as in effect immediately prior to such dividend or distribution) Shares purchasable pursuant hereto shall be proportionately adjusted so that subject to adjustment from time to time on and after the holder Date of any Warrant thereafter exercised may receive the aggregate number and kind of shares of capital stock of the Company that such holder would have owned immediately following such dividend or distribution if such Warrant had been exercised immediately prior theretoIssuance as hereinafter provided in this Section 4.1.
(b) Subject to the last sentence of this paragraph (g) b), the "Offering Price" per share of this Section, in case the Company shall make a dividend or other distribution on the Common Stock consisting exclusively of, or shall otherwise issue to all holders in the case of the Common Stock, rights, options or warrants entitling the holders thereof to subscribe for or purchase Common Stock or securities convertible into or exchangeable for Common Stock at a price per share (determined on an as-converted or as-exercised basis if the rights, options or warrants pertain to securities convertible into or exchangeable for shares of Common Stock) less than the Current Market Price (determined as provided in paragraph (h) of this Section) on the date fixed for the determination of shareholders entitled to receive such rights, options or warrants, the Number of Shares shall Rights be determined by multiplying dividing (x) the Number total amount received or receivable by the Company in consideration of Shares purchasable immediately prior the issuance of such Rights plus the total consideration payable to the date so fixed Company upon exercise thereof by a fraction, of which the numerator shall be the number of shares of Common Stock outstanding on the date fixed for determining stockholders entitled to receive such rights, options or warrants plus the number of additional shares of Common Stock offered for subscription or purchase, and of which the denominator shall be the number of shares of Common Stock outstanding on the date fixed for determining stockholders entitled to receive such rights, options or warrants plus the number of shares which the aggregate offering price of (y) the total number of shares of Common Stock so offered would purchase at the Current Market Price; provided, however, that no further adjustment to the Number of Shares shall be -------- ------- made upon the subsequent issue or sale of Common Stock pursuant to covered by such options or warrants. For the purposes of this paragraph (b), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of Common Stock. The Company shall not issue any rights, options or warrants in respect of Common Stock held in the treasury of the CompanyRights.
(c) [Intentionally Omitted.]
(i) Subject to the last sentence of this paragraph (d) (i) and the last sentence of paragraph (g) of this Section, in In case the Company shall, by dividend or otherwise, shall distribute to all holders any holder of its shares of Common Stock or rights, options, warrants to subscribe for or purchase, or other securities exchangeable for or convertible into, shares of Common Stock, evidences of its indebtedness, cash indebtedness or other assets (including securitiessecurities and cash dividends), but excluding any dividends or distributions referred to in paragraph (a) above or rights, options options, warrants or warrants other securities referred to in paragraph (b) above (collectively, "Distributions"), then the number of this Section, excluding Warrant Shares issuable hereunder after any dividend or distribution paid exclusively in cash out of consolidated current or retained earnings as shown on the books of the Company prepared in accordance with GAAP (other than any Extraordinary Cash Dividend (as hereinafter defined)) and excluding any dividend or distribution referred to in paragraph (a) of this Section, the Number of Shares such Distribution shall be increased adjusted and shall be determined by multiplying the Number number of Warrant Shares issuable immediately prior to the close of business on the date fixed for the determination of shareholders entitled to such distribution by a fraction fraction, the numerator of which the numerator shall be the Current Fair Market Price (determined as provided in paragraph (h) of this Section) on such date and the denominator shall be the Current Market Price on such date less the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a resolution of the Board of Directors) on such date of the portion of the evidences of indebtedness, shares of capital stock, cash and other assets to be distributed applicable to one share of Common Stock, such increase to become effective immediately prior to the opening of business Value on the day following such date; provided, that, in the event that the -------- amount of such dividend as so determined is equal to or greater than 100% of such Current Market Price, in lieu of the foregoing adjustment, adequate provision shall be made so that the holder of a Warrant shall receive a pro rata share of such dividend based upon the maximum number of shares of Common Stock, at the time issuable to such holder (determined without regard to whether the Warrant is exercisable at such time). If the Board of Directors determines the fair market value of any distribution for purposes of this paragraph (d) (i) by reference to the actual or when-issued trading market for any securities comprising part or all of such distribution, it must in doing so consider the prices in such market over the same period used in computing the Current Market Price pursuant to paragraph (h) of this Section, to the extent possible. For purposes of this paragraph (d) (i), an "Extraordinary Cash Dividend" shall be that portion, if any, of the aggregate amount of all cash dividends paid in any fiscal year which exceed $25,000,000. For purposes of this paragraph (d), any dividend or distribution that includes Common Stock, rights, options or warrants to subscribe for or purchase Common Stock or securities convertible into or exchangeable for Common Stock shall be deemed to be (x) a dividend or distribution of the evidences of indebtedness, cash, assets or shares of capital stock other than such Common Stock, such rights, options or warrants or such convertible or exchangeable securities (making any increase in the Number of Shares required by this paragraph (d) (i) immediately followed by (y) in the case of such Common Stock or such rights, options or warrants, a dividend or distribution thereof (making any further adjustment to the Number of Shares required by paragraph (a) and (b) of this Section, except any shares of Common Stock included in such dividend or distribution shall not be deemed "outstanding at the close of business on the record date fixed for such determination" within the meaning of paragraph (a) of this Section)Distribution, or (z) in the case of such convertible or exchangeable securities, a dividend or distribution of the number of shares of Common Stock as would then be issuable upon the exercise or exchange thereof, whether or not the exercise or exchange of such securities is subject to any conditions (making any further reduction in Number of Shares required by paragraph (a) of this Section, except the shares deemed to constitute such dividend or distribution shall not be deemed "outstanding at the close of business on the date fixed for such determina tion" within the meaning of paragraph (a) of this Section).
(ii) In case the Company shall issue Common Stock for a consideration per share less than the Current Market Price (determined as provided in paragraph (h) of this Section), the Number of Shares shall be increased by multiplying the Number of Shares issuable immediately prior to the close of business on the date on which the Company fixes the offering price of such additional shares by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately after giving effect to such issuance and the denominator of which shall be such Fair Market Value, less the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus a fraction equal to the aggregate consideration received by the Company from the issuance of such additional shares of Common Stock over the Current Market Price on the date on which the Company fixes the offering price of such additional shares (determined as provided in paragraph (h) of this Section), and the increase in the Number of Shares provided for in the preceding sentence shall not apply upon (i) the issuance of securities in transactions described in paragraphs (a), (b), (d) (i), and d (iii), or (f) of this Section or pursuant to the exercise, exchange or conversion of any such securities (to the extent applicable, including the 9% Preferred Stock then fair market value (as defined below)); (ii) the issuance of Common Stock upon the exercise or exchange of securities (including options) convertible or exchangeable for shares of Common Stock outstanding on the date of this Warrant Agreement, or issuable pursuant to binding agreements in effect on the date of this Warrant Agreement as set forth on a schedule to the Senior Note Indenture; (iii) the issuance of Common Stock upon the exercise of options issued to the Company's directors, officers and employees under bona fide employee benefit plans adopted by the Board of Directors and approved by the holders of Common Stock when required by law or otherwise where such issuances have been approved by the Board of Directors (but only to the extent that the aggregate number of shares excluded pursuant to this subclause (iii) and issued after the date of this Warrant Agreement shall not exceed 3% of the Common Stock outstanding at the time of issuance; provided, -------- that options granted pursuant to this subclause (iii) exercisable for no more than 2% of such outstanding Common Stock may have exercise prices less than 50% of the price per share based on a valuation of the Company of $122,500,000); (iv) the issuance of Common Stock to shareholders of any person that immediately or subsequently merges with or into the Company or any subsidiary thereof in proportion to their stock holdings of such person immediately prior to such merger, upon such merger; (v) the issuance of Common Stock in a bona fide underwritten public offering; (vi) the issuance of Common Stock in a bona fide private placement through a placement agent that is a member firm of the National Association of Securities Dealers, Inc. (except to the extent that any discount from the Current Market Price (determined as provided in paragraph (h) of this Section) attributable to restrictions on transferability of the Common Stock, as reasonably determined in good faith by the Board of Directors and described in a resolution thereof which of the Company) of the portion of the assets or evidences of indebtedness so distributed applicable to one share of Common Stock. Such adjustments shall be filed with the Warrant Agent, made successively whenever any such Distribution is made and shall exceed 20%), or issuable pursuant to a binding agreement in effect become effective on the date of this Warrant Agreement; (vii) Distribution retroactive to the issuance record date for the determination of Common Stock as a dividend on stockholders entitled to receive such Distribution. In the event that the Required Holders disagree with the Company's determination of the fair market value of any securities outstanding on the date assets or evidences of this Warrant Agreement required to be made indebtedness pursuant to this subsection 4.1(c), then such fair market value shall be determined by an Independent Financial Expert selected by the certificate Required Holders and the Company in accordance with the procedure set forth in the first sentence of designation pertaining to such securities in effect at the time such securities were issued; (viii) the issuance of Common Stock upon the exercise of Initial Warrants; (ix) the issuance of Common Stock upon the exercise of Contingent Warrants; (x) the issuance of Common Stock upon the exercise of Additional Warrants or the conversion of convertible securities that may be issued pursuant to Section 4.15 of the Convertible Note Indenture; or (xi) the issuance of Common Stock upon the conversion of the Convertible Notes.
clause (iii) In case of the definition of "Fair Market Value". The Company shall issue any securities convertible into or exchangeable for Common Stock for a consideration per share of Common Stock (including bear the minimum consideration per share payable upon exercise or exchange of any securities convertible into or exchangeable for Common Stock) initially deliverable upon exercise or exchange of such securities less than the Current Market Price (determined as provided in paragraph (h) of this Section), the Number of Shares shall be increased by multiplying the Number of Shares issuable immediately prior to the close of business on the date on which the Company fixes the offering price of such additional shares by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately prior to the issuance of such securities plus the maximum number of shares of Common Stock deliverable upon exercise of or in exchange for such securities at the initial exercise or exchange rate and the denominator of which shall be the number of shares of Common Stock outstanding immediately prior to the issuance of such securities plus a fraction equal to the aggregate consideration received for the issuance of such securities (including the minimum consideration per share payable upon exercise or exchange of any securities convertible into or exchangeable for Common Stock) over the Current Market Price on the date on which the Company fixes the offering price of such additional shares (determined as provided in paragraph (h) of this Section). The increase in Number of Shares provided for in the preceding sentence shall not apply to (i) securities issued in transactions described in paragraphs (a), (b), (d) (i) and (d) (ii) of this Section or any shares of 9% Cumulative Convertible PIK Preferred Stock, par value $1.00 per share (the "9% Preferred Stock"), received as a dividend on the 9% Preferred Stock; (ii) convertible securities issued to shareholders of any person that merges into the Company, or with a Subsidiary costs of the Company, in proportion to their stock holdings of such person immediately prior to such merger, upon such merger; (iii) convertible securities issued in a bona fide underwritten public offering; (iv) convertible securities issued in a bona fide private placement through a placement agent that is a member firm of the National Association of Securities Dealers, Inc. (except to the extent that any discount from the Current Market Price (determined as provided in paragraph (h) of this Section) attributable to restrictions on transferability of Common Stock issuable upon exercise, as determined in good faith by the Board of Directors and described in a resolution thereof which shall be filed with the Warrant Agent, shall exceed 20% of the then Current Market Price, or issuable pursuant to a binding agreement in effect on the date of this Warrant Agreement; (v) stock options issued to the Company's directors, officers or employees; (vi) the grant of any Supplemental Initial Warrants; (vii) the grant of Contingent Warrants; (viii) the grant of Additional Warrants or the issuance of convertible securities that may be issued pursuant to Section 4.15 of the Convertible Note Indenture; or (ix) the issuance of additional Convertible Notes pursuant to the Convertible Note IndentureIndependent Financial Expert.
(e) In No adjustment in the number of Warrant Shares shall be required hereunder unless such adjustment would result in an increase or decrease of at least one percent (1%) of the Exercise Price; provided, however, that any adjustments which by reason of this subsection (e) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations shall be made to the nearest one-hundredth of a cent or to the nearest one-thousandth of a share, as the case may be.
(f) For the Company shallpurpose of this subsection 4.1 and subsection 4.2 hereof, by dividend or otherwise, at any time distribute to all holders the term "shares of Common Stock cash (excluding any cash that is distributed as part of a distribution referred to in paragraph (d) (i) of this Section or in connection with a transaction to which Section 14 applies) in an aggregate amount that, together with Stock" shall mean (i) the aggregate amount classes of any other distributions to all holders of stock designated as the Class A Common Stock made exclusively in cash within or Class B Nonvoting Common Stock of the 12 months preceding Company as of the date fixed for the determination of shareholders entitled to such distribution and in respect of which no adjustment in the Number of Shares pursuant to paragraph (d) (i) or this paragraph (e) has been made previously and hereof, (ii) the aggregate any other class of any cash plus the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a resolution stock of the Board of Directors) as Company resulting from successive changes or reclassification of such date shares consisting solely of determination changes in par value, or from par value to no par value, or from no par value to par value, or (iii) any other capital stock of consideration payable in respect of any tender offer by the Company which is not by its terms restricted in amount or a Subsidiary for all timing to the entitlement to dividends or any portion in the distribution of assets upon the voluntary or involuntary liquidation, dissolution or winding up of the Company. In the event that at any time, as a result of an adjustment made pursuant to this subsection 4.1, the Holder shall become entitled to receive any securities of the Company other than shares of Common Stock, and any purchase by thereafter the Company number of Common Stock in the open market, consummated within the 12 months preceding such date of determination and in respect of which no adjustment in the Number of Shares pursuant to paragraph (f) other securities so receivable upon exercise of this Warrant and the Exercise Price of such shares shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Warrant Shares contained in this Section has been made previously, exceeds 12.5% of the product of the Current Market Price (determined as provided in paragraph (h) of this Section) on such date of determination time4.
Appears in 1 contract
Sources: Warrant Agreement (Autotote Corp)
Adjustment of Number of Warrant Shares. (a) In case If at any time following the Effective Date and prior to the Expiration Date the Company shall (i) make pay a dividend or other make a distribution on the Common Stock exclusively in Common Stock, (ii) make a dividend or other distribution on the Common Stock its capital stock in shares of its capital stock other than Common Stock, ; (iiiii) subdivide its outstanding shares of Common Stock or into a greater number of shares; (iviii) combine its outstanding shares of Common Stock into a smaller number of Shares; or (iv) issue by reclassification of its Common Stock any shares of Common Stockcapital stock of the Company, then, and in each such case, the Warrant Shares Number shall be adjusted immediately upon the occurrence of such event, retroactive to the record date, if any, for such event. Such adjustment shall be made by multiplying the Warrant Shares Number by a fraction, the numerator of which shall be the number and kind of shares of Common Stock or capital stock issued and outstanding immediately after the occurrence of such event and the denominator of which shall be the number of shares of Common Stock issued and outstanding immediately before the occurrence of such event. Upon the occurrence of any reclassification described in (iv) above, the Holder shall be entitled to receive upon exercise of the Company issuable upon the exercise of a Warrant (as in effect immediately prior to such dividend or distribution) shall be proportionately adjusted so that the holder of any Warrant thereafter exercised may receive the aggregate number and kind of shares of capital stock of the Company that such holder the Holder would have owned been entitled to receive immediately following such dividend or distribution if such occurrence had all of the rights represented by this Warrant had been exercised immediately prior thereto or any record date with respect thereto.
(b) Subject to If at any time after the last sentence of paragraph (g) of this Section, in case Effective Date the Company shall make fix a dividend or other distribution on record date for the Common Stock consisting exclusively of, or shall otherwise issue to all holders issuance of the Common Stock, rights, options or warrants to all holders of Common Stock entitling the holders thereof them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Stock (or securities convertible into or exchangeable for Common Stock Stock) at a price per share (determined on an as-converted or as-exercised basis having a conversion price per share, if the rights, options or warrants pertain to securities a security convertible into or exchangeable for shares of Common Stock) less than the Current Market Price then current per share market price of the Common Stock (determined as provided defined in paragraph (h) of this SectionSection 4(d)) on the date fixed for the determination of shareholders entitled to receive such rights, options or warrantsrecord date, the Number of Shares Per Share Warrant Price to be in effect after such record date shall be determined by multiplying the Number of Shares purchasable Per Share Warrant Price in effect immediately prior to the such record date so fixed by a fraction, the numerator of which the numerator shall be the number of shares of Common Stock outstanding on the such record date fixed for determining stockholders entitled to receive such rights, options or warrants plus the number of additional shares of Common Stock offered for subscription or purchase, and of which the denominator shall be the number of shares of Common Stock outstanding on the date fixed for determining stockholders entitled to receive such rights, options or warrants plus the number of shares which the aggregate offering price of the total number of shares of Common Stock so to be offered (and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at the Current Market Price; provided, however, that no further adjustment to the Number of Shares shall be -------- ------- made upon the subsequent issue or sale of Common Stock pursuant to such options or warrants. For the purposes of this paragraph (b), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of Common Stock. The Company shall not issue any rights, options or warrants in respect of Common Stock held in the treasury of the Company.
(c) [Intentionally Omitted.]
(i) Subject to the last sentence of this paragraph (d) (i) and the last sentence of paragraph (g) of this Section, in case the Company shall, by dividend or otherwise, distribute to all holders of Common Stock evidences of its indebtedness, cash or other assets (including securities, but excluding any rights, options or warrants referred to in paragraph (b) of this Section, excluding any dividend or distribution paid exclusively in cash out of consolidated current or retained earnings as shown on the books of the Company prepared in accordance with GAAP (other than any Extraordinary Cash Dividend (as hereinafter defined)) and excluding any dividend or distribution referred to in paragraph (a) of this Section, the Number of Shares shall be increased by multiplying the Number of Shares issuable immediately prior to the close of business on the date fixed for the determination of shareholders entitled to such distribution by a fraction of which the numerator shall be the Current Market Price (determined as provided in paragraph (h) of this Section) on such date and the denominator shall be the Current Market Price on such date less the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a resolution of the Board of Directors) on such date of the portion of the evidences of indebtedness, shares of capital stock, cash and other assets to be distributed applicable to one share of Common Stock, such increase to become effective immediately prior to the opening of business on the day following such date; provided, that, in the event that the -------- amount of such dividend as so determined is equal to or greater than 100% of such Current Market Price, in lieu of the foregoing adjustment, adequate provision shall be made so that the holder of a Warrant shall receive a pro rata share of such dividend based upon the maximum number of shares of Common Stock, at the time issuable to such holder (determined without regard to whether the Warrant is exercisable at such time). If the Board of Directors determines the fair market value of any distribution for purposes of this paragraph (d) (i) by reference to the actual or when-issued trading market for any securities comprising part or all of such distribution, it must in doing so consider the prices in such market over the same period used in computing the Current Market Price pursuant to paragraph (h) of this Section, to the extent possible. For purposes of this paragraph (d) (i), an "Extraordinary Cash Dividend" shall be that portion, if any, of the aggregate amount of all cash dividends paid in any fiscal year which exceed $25,000,000. For purposes of this paragraph (d), any dividend or distribution that includes Common Stock, rights, options or warrants to subscribe for or purchase Common Stock or securities convertible into or exchangeable for Common Stock shall be deemed to be (x) a dividend or distribution of the evidences of indebtedness, cash, assets or shares of capital stock other than such Common Stock, such rights, options or warrants or such convertible or exchangeable securities (making any increase in the Number of Shares required by this paragraph (d) (i) immediately followed by (y) in the case of such Common Stock or such rights, options or warrants, a dividend or distribution thereof (making any further adjustment to the Number of Shares required by paragraph (a) and (b) of this Section, except any shares of Common Stock included in such dividend or distribution shall not be deemed "outstanding at the close of business on the date fixed for such determination" within the meaning of paragraph (a) of this Section), or (z) in the case of such convertible or exchangeable securities, a dividend or distribution of the number of shares of Common Stock as would then be issuable upon the exercise or exchange thereof, whether or not the exercise or exchange of such securities is subject to any conditions (making any further reduction in Number of Shares required by paragraph (a) of this Section, except the shares deemed to constitute such dividend or distribution shall not be deemed "outstanding at the close of business on the date fixed for such determina tion" within the meaning of paragraph (a) of this Section).
(ii) In case the Company shall issue Common Stock for a consideration per share less than the Current Market Price (determined as provided in paragraph (h) of this Section), the Number of Shares shall be increased by multiplying the Number of Shares issuable immediately prior to the close of business on the date on which the Company fixes the offering price of such additional shares by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately after giving effect to such issuance and the denominator of which shall be the number of shares of Common Stock outstanding at on such record date plus the close number of business on the date fixed for such determination plus a fraction equal to the aggregate consideration received by the Company from the issuance of such additional shares of Common Stock over the Current Market Price on the date on to be offered for subscription or purchase (or into which the Company fixes convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the offering price value of such additional shares (determined as provided in paragraph (h) of this Section), and the increase in the Number of Shares provided for in the preceding sentence consideration shall not apply upon (i) the issuance of securities in transactions described in paragraphs (a), (b), (d) (i), and d (iii), or (f) of this Section or pursuant to the exercise, exchange or conversion of any such securities (to the extent applicable, including the 9% Preferred Stock (as defined below)); (ii) the issuance of Common Stock upon the exercise or exchange of securities (including options) convertible or exchangeable for shares of Common Stock outstanding on the date of this Warrant Agreement, or issuable pursuant to binding agreements in effect on the date of this Warrant Agreement as set forth on a schedule to the Senior Note Indenture; (iii) the issuance of Common Stock upon the exercise of options issued to the Company's directors, officers and employees under bona fide employee benefit plans adopted by the Board of Directors and approved by the holders of Common Stock when required by law or otherwise where such issuances have been approved by the Board of Directors (but only to the extent that the aggregate number of shares excluded pursuant to this subclause (iii) and issued after the date of this Warrant Agreement shall not exceed 3% of the Common Stock outstanding at the time of issuance; provided, -------- that options granted pursuant to this subclause (iii) exercisable for no more than 2% of such outstanding Common Stock may have exercise prices less than 50% of the price per share based on a valuation of the Company of $122,500,000); (iv) the issuance of Common Stock to shareholders of any person that immediately or subsequently merges with or into the Company or any subsidiary thereof in proportion to their stock holdings of such person immediately prior to such merger, upon such merger; (v) the issuance of Common Stock in a bona fide underwritten public offering; (vi) the issuance of Common Stock in a bona fide private placement through a placement agent that is a member firm of the National Association of Securities Dealers, Inc. (except to the extent that any discount from the Current Market Price (determined as provided in paragraph (h) of this Section) attributable to restrictions on transferability of the Common Stock, be as determined in good faith by the Board of Directors and described in a resolution thereof which of the Company. Common Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be filed with made successively whenever such a record date is fixed; and in the event that such rights, options or warrants are not so issued, the Per Share Warrant Price shall be adjusted to be the Per Share Warrant Price which would then be in effect if such record date had not been fixed.
(c) Notwithstanding anything to the contrary in this Section 4, no adjustment to the Warrant AgentShares Number shall be required unless such adjustment would require an increase or decrease of at least one percent (1%) in the number of Warrant Shares issuable upon exercise of the rights represented by this Warrant; provided, shall exceed 20%)however, or issuable pursuant to a binding agreement in effect on the date that any adjustments which by reason of this Warrant Agreement; (viiSection 4(b) the issuance of Common Stock as a dividend on any securities outstanding on the date of this Warrant Agreement are not required to be made pursuant shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 4 shall be made to the certificate nearest 1/100th of designation pertaining to such securities in effect at the time such securities were issued; (viii) the issuance of Common Stock upon the exercise of Initial Warrants; (ix) the issuance of Common Stock upon the exercise of Contingent Warrants; (x) the issuance of Common Stock upon the exercise of Additional Warrants or the conversion of convertible securities that may be issued pursuant to Section 4.15 of the Convertible Note Indenture; or (xi) the issuance of Common Stock upon the conversion of the Convertible Notesa share.
(iiid) In case For the Company shall issue purpose of any securities convertible into or exchangeable for computation hereunder, the "current per share market price" of the Common Stock for a consideration on any date shall be deemed to be the average of the daily closing prices per share of Common Stock (including the minimum consideration per share payable upon exercise or exchange of any securities convertible into or exchangeable for Common Stock) initially deliverable upon exercise or exchange of such securities less than the Current Market Price (determined as provided in paragraph (h) of this Section), the Number of Shares shall be increased by multiplying the Number of Shares issuable immediately prior to the close of business on the date on which the Company fixes the offering price of such additional shares by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately prior to the issuance of such securities plus the maximum number of shares of Common Stock deliverable upon exercise of or in exchange for such securities at the initial exercise or exchange rate and the denominator of which shall be the number of shares of Common Stock outstanding immediately prior to the issuance of such securities plus a fraction equal to the aggregate consideration received for the issuance of 30 consecutive Trading Days (as such securities (including the minimum consideration per share payable upon exercise or exchange of any securities convertible into or exchangeable for Common Stockterm is hereinafter defined) over the Current Market Price on the date on which the Company fixes the offering price of such additional shares (determined as provided in paragraph (h) of this Section). The increase in Number of Shares provided for in the preceding sentence shall not apply to (i) securities issued in transactions described in paragraphs (a), (b), (d) (i) and (d) (ii) of this Section or any shares of 9% Cumulative Convertible PIK Preferred Stock, par value $1.00 per share (the "9% Preferred Stock"), received as a dividend on the 9% Preferred Stock; (ii) convertible securities issued to shareholders of any person that merges into the Company, or with a Subsidiary of the Company, in proportion to their stock holdings of such person immediately prior to such mergerdate; provided, upon however, that in the event that the current per share market price of the Common Stock is determined during a period following the announcement by the issuer of such merger; Common Stock of (iiii) a dividend or distribution on such Common Stock payable in Common Stock or securities convertible into Common Stock, or (ii) any subdivision, combination or reclassification of Common Stock and prior to the expiration of 30 Trading Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the current per share market price shall be appropriately adjusted to reflect the current market price per share of Common Stock. The closing price for each Trading Day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities issued listed or admitted to trading on the New York Stock Exchange or, if the Common Stock is not listed or admitted to trading on the New York Stock Exchange, as reported in a bona fide underwritten public offering; (iv) convertible the principal consolidated transaction reporting system with respect to securities issued listed on the principal national securities exchange on which the Common Stock is listed or admitted to trading or, if the Common Stock is not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in a bona fide private placement through a placement agent that is a member firm of the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotations System (except to "Nasdaq") or such other system then in use, or, if on any such date the extent that any discount from the Current Market Price (determined as provided in paragraph (h) of this Section) attributable to restrictions on transferability of Common Stock issuable upon exerciseis not quoted by any such organization, the average of the closing bid and asked prices as determined furnished by a professional market maker making a market in good faith the Common Stock selected by the Board of Directors and described in a resolution thereof which shall be filed with the Warrant Agent, shall exceed 20% of the then Current Market Price, or issuable pursuant to Company. The term "Trading Day" shall mean a binding agreement in effect day on which the date of this Warrant Agreement; (v) stock options issued to principal national securities exchange on which the Company's directors, officers or employees; (vi) the grant of any Supplemental Initial Warrants; (vii) the grant of Contingent Warrants; (viii) the grant of Additional Warrants or the issuance of convertible securities that may be issued pursuant to Section 4.15 of the Convertible Note Indenture; or (ix) the issuance of additional Convertible Notes pursuant to the Convertible Note Indenture.
(e) In case the Company shall, by dividend or otherwise, at any time distribute to all holders of Common Stock cash (excluding any cash that is distributed listed or admitted to trading or Nasdaq, as part the case may be, is open for the transaction of a distribution referred to in paragraph (d) (i) of this Section or in connection with a transaction to which Section 14 applies) in an aggregate amount thatbusiness or, together with (i) if the aggregate amount of any other distributions to all holders of Common Stock made exclusively in cash within is not listed or admitted to trading on any national securities exchange or Nasdaq, as the 12 months preceding the date fixed for the determination of shareholders entitled to such distribution and in respect of which no adjustment in the Number of Shares pursuant to paragraph (d) (i) or this paragraph (e) has been made previously and (ii) the aggregate of any cash plus the fair market value (as determined by the Board of Directorscase may be, whose determination shall be conclusive and described in a resolution of the Board of Directors) as of such date of determination of consideration payable in respect of any tender offer by the Company or a Subsidiary for all or any portion of the Common Stock, and any purchase by the Company of Common Stock in the open market, consummated within the 12 months preceding such date of determination and in respect of which no adjustment in the Number of Shares pursuant to paragraph (f) of this Section has been made previously, exceeds 12.5% of the product of the Current Market Price (determined as provided in paragraph (h) of this Section) on such date of determination timeBusiness Day.
Appears in 1 contract
Sources: Warrant Agreement (Hk Systems Inc)
Adjustment of Number of Warrant Shares. The number of Warrant Shares purchasable pursuant hereto shall be subject to adjustment from time to time on and after the Date of Issuance as hereinafter provided in this Section 7.1.
(a) In case the Company shall at any time after the Date of Issuance (i) declare or pay a dividend in shares of Common Stock or make a dividend or other distribution on the Common Stock exclusively in shares of Common Stock, (ii) make a dividend or other distribution on the Common Stock in shares of its capital stock other than Common Stock, (iii) subdivide its outstanding shares of Common Stock or Stock, (iviii) combine its outstanding shares of Common Stock into a smaller number of shares of Common StockStock or (iv) issue any shares of its capital stock or other assets in a reclassification or reorganization of the Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing entity), the securities purchasable pursuant hereto shall be adjusted to the number of Warrant Shares and kind amount of shares of Common Stock any other securities, cash or capital stock other property of the Company issuable upon the exercise of a Warrant (as in effect immediately prior to which such dividend or distribution) shall be proportionately adjusted so that the holder of any Warrant thereafter exercised may receive the aggregate number and kind of shares of capital stock of the Company that such holder Holder would have owned immediately following such dividend or distribution if such have been entitled to receive after the happening of any of the events described above, had this Warrant had been exercised immediately prior to the happening of such event or any record date with respect thereto. An adjustment made pursuant to this paragraph (a) shall become effective immediately after the effective date of such event retroactive to the record date, if any, for such event. Any Warrant Shares purchasable as a result of such adjustment shall not be issued prior to the effective date of such event.
(b) Subject to the last sentence of paragraph (g) of this Section, in In case the Company shall make a dividend or other distribution on the issue shares of its Common Stock consisting exclusively of, or shall otherwise issue to all holders of the Common Stock, rights, options (including options issued to employees under the Company's 1995 Stock Option Plan on or after the date hereof) or warrants entitling the holders thereof to subscribe for or purchase purchase, or other securities exchangeable for or convertible into, shares of its Common Stock (any such rights, options, warrants or other securities convertible into being herein called "Rights") (excluding (i) shares issued in a transaction covered by Section 7.1 ((ii),) shares issued upon conversion, exercise, or exchangeable for Common Stock exchange of Rights issued after the date hereof (provided that appropriate adjustments were made hereunder upon the issuance of such Rights) and (iii) the Warrants and any Warrant Shares issued on exercise thereof at a an issuance, subscription, offering, exercise or conversion price (the "Offering Prices) per share which is lower than the current market price per share (determined on an as-converted or as-exercised basis if the rights, options or warrants pertain to securities convertible into or exchangeable for shares of Common Stock) less than the Current Market Price Stock (determined as provided defined in paragraph (hd) of this Sectionbelow) on the date fixed for the determination of shareholders entitled to receive issuance or grant, whether or not such rights, options Rights are immediately exercisable or warrantsconvertible, the Number number of Warrant Shares issuable hereunder after such issuance or grant shall be determined by multiplying the Number number of Warrant Shares purchasable issuable hereunder immediately prior to the date so fixed any adjustment in connection with such issuance or grant by a fraction, the numerator of which the numerator shall be the number of shares of Common Stock outstanding on (exclusive of any treasury shares) immediately prior to the date fixed for determining stockholders entitled to receive of issuance or grant of such shares of Common Stock or Rights (assuming that all Common Stock into which all outstanding rights, options options, warrants and convertible securities excluding such Rights are exercisable or warrants convertible is outstanding) plus the number of additional shares of Common Stock offered for subscription or purchaseissued and the number of shares of Common Stock that would be issued upon exercise of such Rights, and of which the denominator shall be the number of shares of Common Stock outstanding on (exclusive of any treasury shares) immediately prior to the date fixed for determining stockholders entitled to receive of issuance or grant of such Common Stock or Rights (assuming that all Common Stock into which all outstanding rights, options options, warrants and convertible securities excluding such Rights are exercisable or warrants convertible is outstanding) plus the number of shares which the aggregate offering price Offering Price of the total number of shares of Common Stock so offered would purchase at the Current Market Price; provided, however, that no further adjustment to the Number of Shares shall be -------- ------- made upon the subsequent issue or sale current market price per share of Common Stock pursuant on the date of issuance; provided that to the extent any such options Rights, so issued expire or warrantsare cancelled or redeemed without having been exercised or converted, the number of Warrant Shares issuable hereunder shall again be adjusted to reflect such expiration, cancellation or redemption of such Rights. Such adjustment shall be made whenever such shares of Common Stock or Rights are issued or granted. For the purposes of this paragraph (b), the "Offering Price" per share of Common Stock shall in the case of Rights be determined by dividing (x) the total amount received or receivable by the Company in consideration of the issuance of such Rights plus the total consideration payable to the Company upon exercise thereof, by (y) the total number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of Common Stock. The Company shall not issue any rights, options or warrants in respect of Common Stock held in the treasury of the Companycovered by such Rights.
(c) [Intentionally Omitted.]
(i) Subject to the last sentence of this paragraph (d) (i) and the last sentence of paragraph (g) of this Section, in In case the Company shall, by dividend or otherwise, shall distribute to all holders any holder of its shares of Common Stock or Rights, evidences of its indebtedness, cash indebtedness or other assets (including securitiessecurities and cash dividends other than regular quarterly cash dividends paid in the ordinary course of business out of the Company's consolidated earnings), but excluding any rightsdividends or distributions referred to in paragraph (a) above or Rights, options or warrants referred to in paragraph (b) above (collectively, "Distributions"), then in each case the number of this SectionWarrant Shares issuable hereunder after any such Distribution shall be determined by multiplying the number of Warrant Shares issuable hereunder prior to such Distribution by a fraction, excluding any dividend or distribution paid exclusively in cash out the numerator of consolidated which shall be the current or retained earnings as shown on the books market per share of the Company prepared in accordance with GAAP (other than any Extraordinary Cash Dividend Common Stock (as hereinafter defined)) and excluding any dividend or distribution referred to defined in paragraph (ad) of this Section, the Number of Shares shall be increased by multiplying the Number of Shares issuable immediately prior to the close of business below) on the record date fixed for the determination of shareholders entitled to such distribution by a fraction distribution, and of which the numerator shall be the Current Market Price (determined as provided in paragraph (h) of this Section) on such date and the denominator shall be the Current Market Price on such date current market price per share of Common Stock, less the then fair market value (as reasonably determined in good faith by the Board of Directors, whose determination shall be conclusive and described in a resolution Directors of the Board of DirectorsCompany) on such date of the portion of the assets or evidences of indebtedness, shares of capital stock, cash and other assets to be indebtedness so distributed applicable to one share of Common Stock, . Such adjustments shall be made successively whenever any such increase to Distribution is made and shall become effective immediately prior on the date of distribution retroactive to the opening record date for the determination of business on the day following stockholders entitled to receive such date; provided, that, in Distribution. In the event that the -------- amount of such dividend as so determined is equal to or greater than 100% of such Current Market Price, in lieu of the foregoing adjustment, adequate provision shall be made so that the holder Holders of a Majority of Warrant shall receive a pro rata share Interests disagree with the Company's determination of such dividend based upon the maximum number of shares of Common Stock, at the time issuable to such holder (determined without regard to whether the Warrant is exercisable at such time). If the Board of Directors determines the fair market value of any distribution assets or evidences of indebtedness pursuant to this subsection 7. l(c), then such fair market value shall be determined by an independent appraisal firm (which may be an investment banking firm of national recognition) selected by such Holders and the Company (the "Appraisal Firm"). If the Appraisal Firm determines such fair market value to be greater than 105% of the Company's determination, then the Company shall bear the costs of the Appraisal Firm. If the Appraisal Firm determines the current market value to be less than 105% of the Company's determination, the Holders of the Warrant Interests shall reimburse the Company for purposes the cost of this paragraph the Appraisal Firm.
(d) For the purpose of any computation under paragraphs (ib) by reference to the actual or when-issued trading market for any securities comprising part or all of such distribution, it must in doing so consider the prices in such market over the same period used in computing the Current Market Price pursuant to paragraph and (hc) of this Section, the current market price per share of Common Stock at any date shall be the average of the daily closing prices for the 10 consecutive trading day prior to the extent possible. For purposes earlier to occur of this (i) the date as of which the market price is to be computed or (ii) the last full trading day before the commencement of "ex-dividend" trading in the Common Stock relating to the event giving rise to the adjustment required by paragraph (db) or (ic), an "Extraordinary Cash Dividend" . The closing price for each day shall be that portionthe last such reported sales price regular way or, in case no such reported sale takes place on such day, the average of the closing bid and asked prices regular way for such day, in each case on the principal national securities exchange or in the NASDAQ-National Market System on which the shares of Common Stock are listed or to which such shares are admitted to trading, or, if anynot listed or admitted to trading, the average of the aggregate amount closing bid and asked prices of all cash dividends paid the Common Stock in the over-the-counter market as reported by NASDAQ or any fiscal year which exceed $25,000,000comparable system, or if the Common Stock is not listed on NASDAQ or a comparable system, the average of the closing bid and asked prices as furnished by two members of the National Association of Securities Dealers, Inc. selected from time to time by the a Majority of the Warrant Interests for that purpose. For purposes In the event the Company's Common Stock is not then publicly traded or if for any other reason the current market price per share cannot be determined pursuant to the foregoing provisions of this paragraph (d), any dividend or distribution that includes Common Stock, rights, options or warrants to subscribe for or purchase Common Stock or securities convertible into or exchangeable for Common Stock the appropriate current market price per share shall be deemed the fair market value thereof (without regard to be (xany transfer restrictions imposed by law or contract thereon or lack of liquidity thereof) a dividend or distribution as determined by the Board of Directors of the evidences Company. In the event that the Holders of indebtedness, cash, assets or shares Majority of capital stock other than such Common Stock, such rights, options or warrants or such convertible or exchangeable securities (making any increase in Warrant Interests disagree with the Number Company's determination of Shares required by this paragraph (d) (i) immediately followed by (y) in the case of such Common Stock or such rights, options or warrants, a dividend or distribution thereof (making any further adjustment to the Number of Shares required by paragraph (a) and (b) of this Section, except any shares current market price per share of Common Stock included in made pursuant to the immediately preceding sentence, then such dividend current market price or distribution shall not be deemed "outstanding at the close of business on the date fixed for such determination" within the meaning of paragraph (a) of this Section)fair market value, or (z) in as the case may be, shall be determined by an independent appraisal firm (which may be an investment banking firm of national recognition) selected by such convertible or exchangeable securities, a dividend or distribution Holders and the Company (the "Appraisal Firm"). If the Appraisal Firm determines such fair market value to be greater than 105% of the number Company's determination, then the Company shall bear the costs of shares the Appraisal Firm. If the Appraisal Firm determines the current market value to be less than 105% of Common Stock as would then be issuable upon the exercise or exchange thereofCompany's determination, whether or not the exercise or exchange Holders of such securities is subject to any conditions (making any further reduction in Number the Warrant Interests shall reimburse the Company for the cost of Shares required by paragraph (a) of this Section, except the shares deemed to constitute such dividend or distribution shall not be deemed "outstanding at the close of business on the date fixed for such determina tion" within the meaning of paragraph (a) of this Section)Appraisal Firm.
(iie) In case Whenever the Company shall issue Common Stock for a consideration per share less than numbers of Warrant Shares are adjusted as herein provided, the Current Market Exercise Price (determined as provided in paragraph (h) payable upon exercise of this Section), the Number of Shares Warrant shall be increased adjusted by multiplying the Number of Shares issuable such Exercise Price immediately prior to the close of business on the date on which the Company fixes the offering price of such additional shares adjustment by a fraction fraction, of which the numerator shall be the number of shares of Common Stock outstanding Warrant Shares immediately after giving effect prior to such issuance adjustment, and of which the denominator of which shall be the number of Warrant Shares immediately thereafter.
(f) No adjustment in the number of Warrant Shares shall be required hereunder unless such adjustment would result in an increase or decrease of at least one percent (1%) of the Exercise Price; provided, however, that any adjustments which by reason of this paragraph (f) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations shall be made to the nearest one-hundredth of a cent or to the nearest one-thousandth of a share, as the case may be.
(g) For the purpose of this subsection 7.1, the term "shares of Common Stock outstanding at the close of business on the date fixed for such determination plus a fraction equal to the aggregate consideration received by the Company from the issuance of such additional shares of Common Stock over the Current Market Price on the date on which the Company fixes the offering price of such additional shares (determined as provided in paragraph (h) of this Section), and the increase in the Number of Shares provided for in the preceding sentence Stock" shall not apply upon mean (i) the issuance classes of securities in transactions described in paragraphs (a), (b), (d) (i), and d (iii), or (f) of this Section or pursuant to stock designated as the exercise, exchange or conversion of any such securities (to the extent applicable, including the 9% Preferred Stock (as defined below)); (ii) the issuance of Common Stock upon of the exercise or exchange of securities (including options) convertible or exchangeable for shares of Common Stock outstanding on Company at the date of this Warrant Agreement, (ii) any other class of stock resulting from successive changes or issuable reclassifications of such shares consisting solely of changes in par value, or from par value to no par value, or from no par value to par value or (iii) any other class of capital stock of the Company which is not by its terms restricted in amount or timing to the entitlement to dividends or in the distribution of assets upon the voluntary or involuntary liquidation, dissolution or winding up of the Company. In the event that at any time, as a result of an adjustment made pursuant to binding agreements in effect on this subsection 7.1, the date Holders shall become entitled to receive any securities of the Company other than shares of Common Stock, thereafter the number of such other securities so receivable upon exercise of this Warrant Agreement and the Exercise Price of such shares shall be subject to adjustment from time to time in a manner and on terms as set forth on a schedule nearly equivalent as practicable to the Senior Note Indenture; (iii) the issuance of Common Stock upon the exercise of options issued provisions with respect to the Company's directors, officers and employees under bona fide employee benefit plans adopted by the Board of Directors and approved by the holders of Common Stock when required by law or otherwise where such issuances have been approved by the Board of Directors (but only to the extent that the aggregate number of shares excluded pursuant to this subclause (iii) and issued after the date of this Warrant Agreement shall not exceed 3% of the Common Stock outstanding at the time of issuance; provided, -------- that options granted pursuant to this subclause (iii) exercisable for no more than 2% of such outstanding Common Stock may have exercise prices less than 50% of the price per share based on a valuation of the Company of $122,500,000); (iv) the issuance of Common Stock to shareholders of any person that immediately or subsequently merges with or into the Company or any subsidiary thereof Shares contained in proportion to their stock holdings of such person immediately prior to such merger, upon such merger; (v) the issuance of Common Stock in a bona fide underwritten public offering; (vi) the issuance of Common Stock in a bona fide private placement through a placement agent that is a member firm of the National Association of Securities Dealers, Inc. (except to the extent that any discount from the Current Market Price (determined as provided in paragraph (h) of this Section) attributable to restrictions on transferability of the Common Stock, as determined in good faith by the Board of Directors and described in a resolution thereof which shall be filed with the Warrant Agent, shall exceed 20%), or issuable pursuant to a binding agreement in effect on the date of this Warrant Agreement; (vii) the issuance of Common Stock as a dividend on any securities outstanding on the date of this Warrant Agreement required to be made pursuant to the certificate of designation pertaining to such securities in effect at the time such securities were issued; (viii) the issuance of Common Stock upon the exercise of Initial Warrants; (ix) the issuance of Common Stock upon the exercise of Contingent Warrants; (x) the issuance of Common Stock upon the exercise of Additional Warrants or the conversion of convertible securities that may be issued pursuant to Section 4.15 of the Convertible Note Indenture; or (xi) the issuance of Common Stock upon the conversion of the Convertible Notes.
(iii) In case the Company shall issue any securities convertible into or exchangeable for Common Stock for a consideration per share of Common Stock (including the minimum consideration per share payable upon exercise or exchange of any securities convertible into or exchangeable for Common Stock) initially deliverable upon exercise or exchange of such securities less than the Current Market Price (determined as provided in paragraph (h) of this Section), the Number of Shares shall be increased by multiplying the Number of Shares issuable immediately prior to the close of business on the date on which the Company fixes the offering price of such additional shares by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately prior to the issuance of such securities plus the maximum number of shares of Common Stock deliverable upon exercise of or in exchange for such securities at the initial exercise or exchange rate and the denominator of which shall be the number of shares of Common Stock outstanding immediately prior to the issuance of such securities plus a fraction equal to the aggregate consideration received for the issuance of such securities (including the minimum consideration per share payable upon exercise or exchange of any securities convertible into or exchangeable for Common Stock) over the Current Market Price on the date on which the Company fixes the offering price of such additional shares (determined as provided in paragraph (h) of this Section). The increase in Number of Shares provided for in the preceding sentence shall not apply to (i) securities issued in transactions described in paragraphs (a), (b), (d) (i) and (d) (ii) of this Section or any shares of 9% Cumulative Convertible PIK Preferred Stock, par value $1.00 per share (the "9% Preferred Stock"), received as a dividend on the 9% Preferred Stock; (ii) convertible securities issued to shareholders of any person that merges into the Company, or with a Subsidiary of the Company, in proportion to their stock holdings of such person immediately prior to such merger, upon such merger; (iii) convertible securities issued in a bona fide underwritten public offering; (iv) convertible securities issued in a bona fide private placement through a placement agent that is a member firm of the National Association of Securities Dealers, Inc. (except to the extent that any discount from the Current Market Price (determined as provided in paragraph (h) of this Section) attributable to restrictions on transferability of Common Stock issuable upon exercise, as determined in good faith by the Board of Directors and described in a resolution thereof which shall be filed with the Warrant Agent, shall exceed 20% of the then Current Market Price, or issuable pursuant to a binding agreement in effect on the date of this Warrant Agreement; (v) stock options issued to the Company's directors, officers or employees; (vi) the grant of any Supplemental Initial Warrants; (vii) the grant of Contingent Warrants; (viii) the grant of Additional Warrants or the issuance of convertible securities that may be issued pursuant to Section 4.15 of the Convertible Note Indenture; or (ix) the issuance of additional Convertible Notes pursuant to the Convertible Note Indenture7.
(e) In case the Company shall, by dividend or otherwise, at any time distribute to all holders of Common Stock cash (excluding any cash that is distributed as part of a distribution referred to in paragraph (d) (i) of this Section or in connection with a transaction to which Section 14 applies) in an aggregate amount that, together with (i) the aggregate amount of any other distributions to all holders of Common Stock made exclusively in cash within the 12 months preceding the date fixed for the determination of shareholders entitled to such distribution and in respect of which no adjustment in the Number of Shares pursuant to paragraph (d) (i) or this paragraph (e) has been made previously and (ii) the aggregate of any cash plus the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a resolution of the Board of Directors) as of such date of determination of consideration payable in respect of any tender offer by the Company or a Subsidiary for all or any portion of the Common Stock, and any purchase by the Company of Common Stock in the open market, consummated within the 12 months preceding such date of determination and in respect of which no adjustment in the Number of Shares pursuant to paragraph (f) of this Section has been made previously, exceeds 12.5% of the product of the Current Market Price (determined as provided in paragraph (h) of this Section) on such date of determination time
Appears in 1 contract
Sources: Common Stock Purchase Warrant (Community Distributors Inc)
Adjustment of Number of Warrant Shares. The number of -------------------------------------- Warrant Shares purchasable pursuant hereto shall be subject to adjustment from time to time on and after the Date of Issuance as hereinafter provided in this Section 4.1.
(a) In case the Company shall at any time after the Date of Issuance (i) declare or pay a dividend in shares of Common Stock or make a dividend or other distribution on the Common Stock exclusively in shares of Common Stock, (ii) make a dividend or other distribution on the Common Stock in shares of its capital stock other than Common Stock, (iii) subdivide its outstanding shares of Common Stock or into a greater number of shares of Common Stock, (iviii) combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock, the number and kind of Stock or (iv) issue any shares of Common Stock or capital stock other assets in a reclassification or reorganization of such shares of Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing entity), the securities purchasable pursuant hereto shall be adjusted to the number of Warrant Shares and amount of any other securities, cash or other property of the Company issuable upon which the exercise Holder would have owned or have been entitled to receive after the happening of a any of the events described above, had this Warrant (as in effect been exercised immediately prior to the happening of such dividend event or distributionany record date with respect thereto. An adjustment made pursuant to this paragraph (a) shall become effective immediately after the effective date of such event, retroactive to the record date, if any, for such event. Any Warrant Shares purchasable as a result of such adjustment shall not be proportionately adjusted so that issued prior to the holder effective date of such event. If, as a result of an adjustment made pursuant to this Section 4.1(a), the Holder of any Warrant thereafter exercised may surrendered for exercise shall become entitled to receive the aggregate number and kind of shares of capital stock two or more classes of securities of the Company, the Board of Directors of the Company that (with the consent of the Required Holders) shall determine the allocation of the adjusted Exercise Price between or among shares of such holder would have owned immediately following such dividend or distribution if such Warrant had been exercised immediately prior theretoclasses of securities.
(b) Subject to the last sentence of paragraph (g) of this Section, in In case the Company shall make a dividend or other distribution on the issue shares of Common Stock consisting exclusively of, or shall otherwise issue to all holders of the Common Stock, rights, options or warrants entitling the holders thereof to subscribe for or purchase purchase, or other securities exchangeable for or convertible into, shares of Common Stock (any such rights, options, warrants or other securities being herein called "Rights") (excluding (i) shares issued in a transaction covered by Section 4.1(a) hereof, (ii) shares issued upon conversion, exercise, or exchange of Rights issued after the date hereof (provided that appropriate adjustments were made hereunder upon the issuance of such Rights), (iii) the Warrants and any Warrant Shares issued on exercise thereof, (iv) shares issued upon conversion, exercise or exchange of Rights issued prior to the date hereof, (v) shares issued to the holders of the Wellington Subordinated Debt in respect of the interest payment that is due on February 15, 1996 for such Debt and (vi) shares issued pursuant to an employee benefit plan of the Company that has been approved by the Board of Directors of the Company) at an issuance, subscription, offering, exercise or conversion price (the "Offering Price") per share which is lower than the Fair Market Value on the date such shares of Common Stock or securities convertible into Rights, as the case may be, are issued, whether or exchangeable for Common Stock at a price per share (determined on an as-converted not such Rights are immediately exercisable or as-exercised basis if the rights, options or warrants pertain to securities convertible into or exchangeable for shares of Common Stock) less than the Current Market Price (determined as provided in paragraph (h) of this Section) on the date fixed for the determination of shareholders entitled to receive such rights, options or warrantsconvertible, the Number number of Warrant Shares shall be adjusted and shall be determined by multiplying the Number number of Warrant Shares purchasable immediately prior to the date so fixed any adjustment in connection with such issuance by a fraction, the numerator of which the numerator shall be the number of shares of Common Stock outstanding on (exclusive of any treasury shares) immediately prior to the date fixed for determining stockholders entitled to receive of issuance of such shares of Common Stock or Rights (assuming that all shares of Common Stock into which all outstanding rights, options options, warrants and convertible securities excluding the Rights are exercisable or warrants convertible are outstanding) plus the number of additional shares of Common Stock offered for subscription or purchaseissued and the number of shares of Common Stock that would be issued upon exercise of the Rights, and the denominator of which the denominator shall be the number of shares of Common Stock outstanding on (exclusive of any treasury shares) immediately prior to the date fixed for determining stockholders entitled to receive of issuance of such Common Stock or Rights (assuming that all shares of Common Stock into which all outstanding rights, options options, warrants and convertible securities excluding the Rights are exercisable or warrants convertible is outstanding) plus the number of shares which the aggregate offering price Offering Price of the total number of shares of Common Stock so offered would purchase at the Current Fair Market PriceValue on the date of such issuance; provided, however, provided that no further adjustment to the Number extent any such Rights so issued expire or are cancelled or -------- redeemed without having been exercised or converted, the number of Warrant Shares issuable hereunder shall again be adjusted to reflect such expiration, cancellation or redemption of such Rights. Such adjustment shall be -------- ------- made upon the subsequent issue or sale whenever such shares of Common Stock pursuant to such options or warrantsRights are issued. For the purposes of this paragraph (b), the "Offering Price" per share of Common Stock shall in the case of Rights be determined by dividing (x) the total amount received or receivable by the Company in consideration of the issuance of such Rights plus the total consideration payable to the Company upon exercise thereof by (y) the total number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of Common Stock. The Company shall not issue any rights, options or warrants in respect of Common Stock held in the treasury of the Companycovered by such Rights.
(c) [Intentionally Omitted.]
(i) Subject to the last sentence of this paragraph (d) (i) and the last sentence of paragraph (g) of this Section, in In case the Company shall, by dividend or otherwise, shall distribute generally to all holders of any class of its shares of Common Stock Stock, any rights, options, warrants to subscribe for or purchase, or other securities exchangeable for or convertible into, shares of Common Stock, evidences of its indebtedness, cash indebtedness or other assets (including securitiessecurities and cash dividends), but excluding any dividends or distributions referred to in paragraph (a) above or rights, options options, warrants or warrants other securities referred to in paragraph (b) above (collectively, "Distributions"), then the number of this Section, excluding Warrant Shares issuable hereunder after any dividend or distribution paid exclusively in cash out of consolidated current or retained earnings as shown on the books of the Company prepared in accordance with GAAP (other than any Extraordinary Cash Dividend (as hereinafter defined)) and excluding any dividend or distribution referred to in paragraph (a) of this Section, the Number of Shares such Distribution shall be increased adjusted and shall be determined by multiplying the Number number of Warrant Shares issuable immediately prior to the close of business on the date fixed for the determination of shareholders entitled to such distribution by a fraction fraction, the numerator of which the numerator shall be the Current Fair Market Price (determined as provided in paragraph (h) of this Section) Value on the record date for such date Distribution, and the denominator of which shall be the Current such Fair Market Price on such date Value, less the then fair market value (as reasonably determined in good faith by the Board of Directors, whose determination shall be conclusive and described in a resolution Directors of the Board of DirectorsCompany) on such date of the portion of the assets or evidences of indebtedness, shares of capital stock, cash and other assets to be indebtedness so distributed applicable to one share of Common Stock, . Such adjustments shall be made successively whenever any such increase to Distribution is made and shall become effective immediately prior on the date of Distribution retroactive to the opening record date for the determination of business on the day following stockholders entitled to receive such date; provided, that, in Distribution. In the event that the -------- amount Required Holders disagree with the Company's determination of such dividend as so determined is equal to or greater than 100% of such Current Market Price, in lieu of the foregoing adjustment, adequate provision shall be made so that the holder of a Warrant shall receive a pro rata share of such dividend based upon the maximum number of shares of Common Stock, at the time issuable to such holder (determined without regard to whether the Warrant is exercisable at such time). If the Board of Directors determines the fair market value of any distribution for purposes assets or evidences of indebtedness pursuant to this paragraph subsection 4.1(c), then such fair market value shall be determined by an Independent Financial Expert selected by the Required Holders and the Company in accordance with the procedure set forth in the first sentence of clause (iii) of the definition of "Fair Market Value". The Company shall bear the costs of the Independent Financial Expert.
(d) (i) by reference to the actual or when-issued trading market for any securities comprising part or all of such distribution, it must in doing so consider the prices in such market over the same period used in computing the Current Market Price pursuant to paragraph (h) of this Section, to the extent possible. For purposes of this paragraph (d) (i), an "Extraordinary Cash Dividend" shall be that portion, if any, of the aggregate amount of all cash dividends paid in any fiscal year which exceed $25,000,000. For purposes of this paragraph (d), any dividend or distribution that includes Common Stock, rights, options or warrants to subscribe for or purchase Common Stock or securities convertible into or exchangeable for Common Stock shall be deemed to be (x) a dividend or distribution of the evidences of indebtedness, cash, assets or shares of capital stock other than such Common Stock, such rights, options or warrants or such convertible or exchangeable securities (making any increase in the Number of Shares required by this paragraph (d) (i) immediately followed by (y) in the case of such Common Stock or such rights, options or warrants, a dividend or distribution thereof (making any further adjustment to the Number of Shares required by paragraph (a) and (b) of this Section, except any shares of Common Stock included in such dividend or distribution shall not be deemed "outstanding at the close of business on the date fixed for such determination" within the meaning of paragraph (a) of this Section), or (z) in the case of such convertible or exchangeable securities, a dividend or distribution of Whenever the number of shares of Common Stock Warrant Shares are adjusted as would then be issuable herein provided, the Exercise Price payable upon the exercise or exchange thereof, whether or not the exercise or exchange of such securities is subject to any conditions (making any further reduction in Number of Shares required by paragraph (a) of this Section, except the shares deemed to constitute such dividend or distribution shall not be deemed "outstanding at the close of business on the date fixed for such determina tion" within the meaning of paragraph (a) of this Section).
(ii) In case the Company shall issue Common Stock for a consideration per share less than the Current Market Price (determined as provided in paragraph (h) of this Section), the Number of Shares Warrant shall be increased adjusted by multiplying the Number of Shares issuable such Exercise Price immediately prior to the close of business on the date on which the Company fixes the offering price of such additional shares adjustment by a fraction fraction, the numerator of which the numerator shall be the number of shares of Common Stock outstanding Warrant Shares immediately after giving effect prior to such issuance adjustment, and the denominator of which shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus a fraction equal to the aggregate consideration received by the Company from the issuance of such additional shares of Common Stock over the Current Market Price on the date on which the Company fixes the offering price of such additional shares (determined as provided in paragraph (h) of this Section), and the increase in the Number of Warrant Shares provided for in the preceding sentence shall not apply upon (i) the issuance of securities in transactions described in paragraphs (a), (b), (d) (i), and d (iii), or (f) of this Section or pursuant to the exercise, exchange or conversion of any such securities (to the extent applicable, including the 9% Preferred Stock (as defined below)); (ii) the issuance of Common Stock upon the exercise or exchange of securities (including options) convertible or exchangeable for shares of Common Stock outstanding on the date of this Warrant Agreement, or issuable pursuant to binding agreements in effect on the date of this Warrant Agreement as set forth on a schedule to the Senior Note Indenture; (iii) the issuance of Common Stock upon the exercise of options issued to the Company's directors, officers and employees under bona fide employee benefit plans adopted by the Board of Directors and approved by the holders of Common Stock when required by law or otherwise where such issuances have been approved by the Board of Directors (but only to the extent that the aggregate number of shares excluded pursuant to this subclause (iii) and issued after the date of this Warrant Agreement shall not exceed 3% of the Common Stock outstanding at the time of issuance; provided, -------- that options granted pursuant to this subclause (iii) exercisable for no more than 2% of such outstanding Common Stock may have exercise prices less than 50% of the price per share based on a valuation of the Company of $122,500,000); (iv) the issuance of Common Stock to shareholders of any person that immediately or subsequently merges with or into the Company or any subsidiary thereof in proportion to their stock holdings of such person immediately prior to such merger, upon such merger; (v) the issuance of Common Stock in a bona fide underwritten public offering; (vi) the issuance of Common Stock in a bona fide private placement through a placement agent that is a member firm of the National Association of Securities Dealers, Inc. (except to the extent that any discount from the Current Market Price (determined as provided in paragraph (h) of this Section) attributable to restrictions on transferability of the Common Stock, as determined in good faith by the Board of Directors and described in a resolution thereof which shall be filed with the Warrant Agent, shall exceed 20%), or issuable pursuant to a binding agreement in effect on the date of this Warrant Agreement; (vii) the issuance of Common Stock as a dividend on any securities outstanding on the date of this Warrant Agreement required to be made pursuant to the certificate of designation pertaining to such securities in effect at the time such securities were issued; (viii) the issuance of Common Stock upon the exercise of Initial Warrants; (ix) the issuance of Common Stock upon the exercise of Contingent Warrants; (x) the issuance of Common Stock upon the exercise of Additional Warrants or the conversion of convertible securities that may be issued pursuant to Section 4.15 of the Convertible Note Indenture; or (xi) the issuance of Common Stock upon the conversion of the Convertible Notes.
(iii) In case the Company shall issue any securities convertible into or exchangeable for Common Stock for a consideration per share of Common Stock (including the minimum consideration per share payable upon exercise or exchange of any securities convertible into or exchangeable for Common Stock) initially deliverable upon exercise or exchange of such securities less than the Current Market Price (determined as provided in paragraph (h) of this Section), the Number of Shares shall be increased by multiplying the Number of Shares issuable immediately prior to the close of business on the date on which the Company fixes the offering price of such additional shares by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately prior to the issuance of such securities plus the maximum number of shares of Common Stock deliverable upon exercise of or in exchange for such securities at the initial exercise or exchange rate and the denominator of which shall be the number of shares of Common Stock outstanding immediately prior to the issuance of such securities plus a fraction equal to the aggregate consideration received for the issuance of such securities (including the minimum consideration per share payable upon exercise or exchange of any securities convertible into or exchangeable for Common Stock) over the Current Market Price on the date on which the Company fixes the offering price of such additional shares (determined as provided in paragraph (h) of this Section). The increase in Number of Shares provided for in the preceding sentence shall not apply to (i) securities issued in transactions described in paragraphs (a), (b), (d) (i) and (d) (ii) of this Section or any shares of 9% Cumulative Convertible PIK Preferred Stock, par value $1.00 per share (the "9% Preferred Stock"), received as a dividend on the 9% Preferred Stock; (ii) convertible securities issued to shareholders of any person that merges into the Company, or with a Subsidiary of the Company, in proportion to their stock holdings of such person immediately prior to such merger, upon such merger; (iii) convertible securities issued in a bona fide underwritten public offering; (iv) convertible securities issued in a bona fide private placement through a placement agent that is a member firm of the National Association of Securities Dealers, Inc. (except to the extent that any discount from the Current Market Price (determined as provided in paragraph (h) of this Section) attributable to restrictions on transferability of Common Stock issuable upon exercise, as determined in good faith by the Board of Directors and described in a resolution thereof which shall be filed with the Warrant Agent, shall exceed 20% of the then Current Market Price, or issuable pursuant to a binding agreement in effect on the date of this Warrant Agreement; (v) stock options issued to the Company's directors, officers or employees; (vi) the grant of any Supplemental Initial Warrants; (vii) the grant of Contingent Warrants; (viii) the grant of Additional Warrants or the issuance of convertible securities that may be issued pursuant to Section 4.15 of the Convertible Note Indenture; or (ix) the issuance of additional Convertible Notes pursuant to the Convertible Note Indenturethereafter.
(e) In No adjustment in the number of Warrant Shares shall be required hereunder unless such adjustment would result in an increase or decrease of at least one percent (1%) of the Exercise Price; provided, however, that any -------- ------- adjustments which by reason of this subsection (e) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations shall be made to the nearest one-hundredth of a cent or to the nearest one-thousandth of a share, as the case may be.
(f) For the Company shallpurpose of this subsection 4.1 and subsection 4.2 hereof, by dividend or otherwise, at any time distribute to all holders the term "shares of Common Stock cash (excluding any cash that is distributed as part of a distribution referred to in paragraph (d) (i) of this Section or in connection with a transaction to which Section 14 applies) in an aggregate amount that, together with Stock" shall mean (i) the aggregate amount classes of any other distributions to all holders of stock designated as the Class A Common Stock made exclusively in cash within or Class B Nonvoting Common Stock of the 12 months preceding Company as of the date fixed for the determination of shareholders entitled to such distribution and in respect of which no adjustment in the Number of Shares pursuant to paragraph (d) (i) or this paragraph (e) has been made previously and hereof, (ii) the aggregate any other class of any cash plus the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a resolution stock of the Board of Directors) as Company resulting from successive changes or reclassification of such date shares consisting solely of determination changes in par value, or from par value to no par value, or from no par value to par value, or (iii) any other capital stock of consideration payable in respect of any tender offer by the Company which is not by its terms restricted in amount or a Subsidiary for all timing to the entitlement to dividends or any portion in the distribution of assets upon the voluntary or involuntary liquidation, dissolution or winding up of the Company. In the event that at any time, as a result of an adjustment made pursuant to this subsection 4.1, the Holder shall become entitled to receive any securities of the Company other than shares of Common Stock, and any purchase by thereafter the Company number of Common Stock in the open market, consummated within the 12 months preceding such date of determination and in respect of which no adjustment in the Number of Shares pursuant to paragraph (f) other securities so receivable upon exercise of this Warrant and the Exercise Price of such shares shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Warrant Shares contained in this Section has been made previously, exceeds 12.5% of the product of the Current Market Price (determined as provided in paragraph (h) of this Section) on such date of determination time4.
Appears in 1 contract
Sources: Credit Agreement (Autotote Corp)
Adjustment of Number of Warrant Shares. (a) In case the Company shall (i) make a dividend or other distribution on the Common Stock exclusively in Common Stock, (ii) make a dividend or other distribution on the Common Stock in shares of its capital stock other than Common Stock, (iii) subdivide its outstanding shares of Common Stock or (iv) combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock, the number and kind of shares of Common Stock or capital stock of the Company issuable upon the exercise of a Warrant (as in effect immediately prior to such dividend or distribution) shall be proportionately adjusted so that the holder of any Warrant thereafter exercised may receive the aggregate number and kind of shares of capital stock of the Company that such holder would have owned immediately following such dividend or distribution if such Warrant had been exercised immediately prior thereto.
(b) Subject to the last sentence of paragraph (g) of this Section, in case the Company shall make a dividend or other distribution on the Common Stock consisting exclusively of, or shall otherwise issue to all holders of the Common Stock, rights, options or warrants entitling the holders thereof to subscribe for or purchase Common Stock or securities convertible into or exchangeable for Common Stock at a price per share (determined on an as-as converted or as-as exercised basis if the rights, options or warrants pertain to securities convertible into or exchangeable for shares of Common Stock) less than the Current Market Price (determined as provided in paragraph (h) of this Section) on the date fixed for the determination of shareholders entitled to receive such rights, options or warrants, the Number of Shares shall be determined by multiplying the Number of Shares purchasable immediately prior to the date so fixed by a fraction, of which the numerator shall be the number of shares of Common Stock outstanding on the date fixed for determining stockholders entitled to receive such rights, options or warrants plus the number of additional shares of Common Stock offered for subscription or purchase, and of which the denominator shall be the number of shares of Common Stock outstanding on the date fixed for determining stockholders entitled to receive such rights, options or warrants plus the number of shares which the aggregate offering price of the total number of shares of Common Stock so offered would purchase at the Current Market Price; provided, however, that no further adjustment to the Number of Shares shall be -------- ------- made upon the subsequent issue or sale of Common Stock pursuant to such options or warrants. For the purposes of this paragraph (b), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of Common Stock. The Company shall not issue any rights, options or warrants in respect of Common Stock held in the treasury of the Company.
(c) [Intentionally Omitted.]
(i) Subject to the last sentence of this paragraph (d) (i) and the last sentence of paragraph (g) of this Section, in case the Company shall, by dividend or otherwise, distribute to all holders of Common Stock evidences of its indebtedness, cash or other assets (including securities, but excluding any rights, options or warrants referred to in paragraph (b) of this Section, excluding any dividend or distribution paid exclusively in cash out of consolidated current or retained earnings as shown on the books of the Company prepared in accordance with GAAP (other than any Extraordinary Cash Dividend (as hereinafter defined)) and excluding any dividend or distribution referred to in paragraph (a) of this Section, the Number of Shares shall be increased by multiplying the Number of Shares issuable immediately prior to the close of business on the date fixed for the determination of shareholders entitled to such distribution by a fraction of which the numerator shall be the Current Market Price (determined as provided in paragraph (h) of this Section) on such date and the denominator shall be the Current Market Price on such date less the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a resolution of the Board of Directors) on such date of the portion of the evidences of indebtedness, shares of capital stock, cash and other assets to be distributed applicable to one share of Common Stock, such increase to become effective immediately prior to the opening of business on the day following such date; provided, that, in the event that the -------- amount of such dividend as so determined is equal to or greater than 100% of such Current Market Price, in lieu of the foregoing adjustment, adequate provision shall be made so that the holder of a Warrant shall receive a pro rata share of such dividend based upon the maximum number of shares of Common Stock, at the time issuable to such holder (determined without regard to whether the Warrant is exercisable at such time). If the Board of Directors determines the fair market value of any distribution for purposes of this paragraph (d) (i) by reference to the actual or when-when issued trading market for any securities comprising part or all of such distribution, it must in doing so consider the prices in such market over the same period used in computing the Current Market Price pursuant to paragraph (h) of this Section, to the extent possible. For purposes of this paragraph (d) (i), an "Extraordinary Cash Dividend" shall be that portion, if any, of the aggregate amount of all cash dividends paid in any fiscal year which exceed $25,000,000. For purposes of this paragraph (d), any dividend or distribution that includes Common Stock, rights, options or warrants to subscribe for or purchase Common Stock or securities convertible into or exchangeable for Common Stock shall be deemed to be (x) a dividend or distribution of the evidences of indebtedness, cash, assets or shares of capital stock other than such Common Stock, such rights, options or warrants or such convertible or exchangeable securities (making any increase in the Number of Shares required by this paragraph (d) (i) immediately followed by (y) in the case of such Common Stock or such rights, options or warrants, a dividend or distribution thereof (making any further adjustment to the Number of Shares required by paragraph (a) and (b) of this Section, except any shares of Common Stock included in such dividend or distribution shall not be deemed "outstanding at the close of business on the date fixed for such determination" within the meaning of paragraph (a) of this Section), or (z) in the case of such convertible or exchangeable securities, a dividend or distribution of the number of shares of Common Stock as would then be issuable upon the exercise or exchange thereof, whether or not the exercise or exchange of such securities is subject to any conditions (making any further reduction in Number of Shares required by paragraph (a) of this Section, except the shares deemed to constitute such dividend or distribution shall not be deemed "outstanding at the close of business on the date fixed for such determina tiondetermination" within the meaning of paragraph (a) of this Section).
(ii) In case the Company shall issue Common Stock for a consideration per share less than the Current Market Price (determined as provided in paragraph (h) of this Section), the Number of Shares shall be increased by multiplying the Number of Shares issuable immediately prior to the close of business on the date on which the Company fixes the offering price of such additional shares by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately after giving effect to such issuance and the denominator of which shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus a fraction equal to the aggregate consideration received by the Company from the issuance of such additional shares of Common Stock over the Current Market Price on the date on which the Company fixes the offering price of such additional shares (determined as provided in paragraph (h) of this Section), and the increase in the Number of Shares provided for in the preceding sentence shall not apply upon (i) the issuance of securities in transactions described in paragraphs (a), (b), (d) (i), and d (iii), or (f) of this Section or pursuant to the exercise, exchange or conversion of any such securities (to the extent applicable, including the 9% Preferred Stock (as defined below) and the New Equity (as defined below)); (ii) the issuance of Common Stock upon the exercise or exchange of securities (including options) convertible or exchangeable for shares of Common Stock outstanding on the date of this Warrant Agreement, or issuable pursuant to binding agreements in effect on the date of this Warrant Agreement as set forth on a schedule to the Senior Note Indenture, or subsequently issued by the Company for a consideration per share equal to the Current Market Price (determined as provided in paragraph (h) of this Section); (iii) the issuance of Common Stock upon the exercise of options issued to the Company's directors, officers and employees under bona fide employee benefit plans adopted by the Board of Directors and approved by the holders of Common Stock when required by law or otherwise where such issuances have been approved by the Board of Directors (but only to the extent that the aggregate number of shares excluded pursuant to this subclause (iii) and issued after the date of this Warrant Agreement shall not exceed 3% of the Common Stock outstanding at the time of issuance; provided, -------- that options granted pursuant to this subclause (iii) exercisable for no more than 2% of such outstanding Common Stock may have exercise prices less than 50% of the price per share based on a valuation of the Company of $122,500,000160,000,000); (iv) the issuance of Common Stock to shareholders of any person that immediately or subsequently merges with or into the Company or any subsidiary thereof in proportion to their stock holdings of such person immediately prior to such merger, upon such merger; (v) the issuance of Common Stock in a bona fide underwritten public offering; (vi) the issuance of Common Stock in a bona fide private placement through a placement agent that is a member firm of the National Association of Securities Dealers, Inc. (except to the extent that any discount from the Current Market Price (determined as provided in paragraph (h) of this Section) attributable to restrictions on transferability of the Common Stock, as determined in good faith by the Board of Directors and described in a resolution thereof which shall be filed with the Warrant Agent, shall exceed 20%), or issuable pursuant to a binding agreement in effect on the date of this Warrant Agreement; (vii) the issuance of Common Stock as a dividend on any securities outstanding on the date of this Warrant Agreement required to be made pursuant to the certificate of designation pertaining to such securities in effect at the time such securities were issued; (viii) the issuance of Common Stock upon the exercise conversion of Initial Warrantsthe New Convertible Notes (as defined below); (ix) the issuance of Common Stock upon the exercise of Contingent warrants (the "Consent Warrants") granted to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Global Allocation Fund, Inc. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Equity/Convertible Series (Global Allocation Portfolio) (together "MLAM") pursuant to the Consent Agreement (as defined in the Indenture); or (x) the issuance of Common Stock upon the exercise of Additional Warrants or the conversion of convertible securities that may be issued pursuant to Section 4.15 of the Convertible Note Indenture; or (xi) the issuance of Common Stock upon the conversion of the Convertible NotesWarrants.
(iii) In case the Company shall issue any securities convertible into or exchangeable for Common Stock for a consideration per share of Common Stock (including the minimum consideration per share payable upon exercise or exchange of any securities convertible into or exchangeable for Common Stock) initially deliverable upon exercise or exchange of such securities less than the Current Market Price (determined as provided in paragraph (h) of this Section), including, but not limited to, the issuance of any equity securities of the Company after the date of original issuance of the Initial Warrants (the "Issue Date") and on or prior to September 15, 1997 resulting in net proceeds to the Company of up to $20,000,000, the Number of Shares shall be increased by multiplying the Number of Shares issuable immediately prior to the close of business on the date on which the Company fixes the offering price of such additional shares by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately prior to the issuance of such securities plus the maximum number of shares of Common Stock deliverable upon exercise of or in exchange for such securities at the initial exercise or exchange rate and the denominator of which shall be the number of shares of Common Stock outstanding immediately prior to the issuance of such securities plus a fraction equal to the aggregate consideration received for the issuance of such securities (including the minimum consideration per share payable upon exercise or exchange of any securities convertible into or exchangeable for Common Stock) over the Current Market Price on the date on which the Company fixes the offering price of such additional shares (determined as provided in paragraph (h) of this Section). The increase in Number of Shares provided for in the preceding sentence shall not apply to (i)
(A) securities issued in transactions described in paragraphs (a), (b), (d) (i) and (d) (ii) of this Section or Section, (B) any shares of 9% Cumulative Convertible PIK Preferred Stock, par value $1.00 per share (the "9% Preferred Stock"), received as a dividend on the 9% Preferred Stock, or (C) any shares of preferred stock (the "New Equity") issued to existing stockholders of the Company concurrent with the issuance of the Notes or received as a dividend thereon or shares issued as a dividend on the additional equity securities of up to $20,000,000 described in the first sentence of this clause, provided that such securities are the same securities as the New Equity; (ii) convertible securities issued to shareholders of any person that merges into the Company, or with a Subsidiary of the Company, in proportion to their stock holdings of such person immediately prior to such merger, upon such merger; (iii) convertible securities issued in a bona fide underwritten public offering; (iv) convertible securities issued in a bona fide private placement through a placement agent that is a member firm of the National Association of Securities Dealers, Inc. (except to the extent that any discount from the Current Market Price (determined as provided in paragraph (h) of this Section) attributable to restrictions on transferability of Common Stock issuable upon exercise, as determined in good faith by the Board of Directors and described in a resolution thereof which shall be filed with the Warrant Agent, shall exceed 20% of the then Current Market Price, or issuable pursuant to a binding agreement in effect on the date of this Warrant Agreement; (v) stock options issued to the Company's directors, officers or employees; (vi) the grant of any Supplemental Initial Contingent Warrants; (vii) convertible notes issuable to MLAM (the grant "New Convertible Notes") upon the exercise of Contingent Warrantsan option granted pursuant to the Consent Agreement; (viii) the grant of Additional Warrants or the issuance of convertible securities that may be issued pursuant to Section 4.15 of the Convertible Note IndentureConsent Warrants; or (ix) the issuance of additional Convertible Notes warrants excercisable for up to 5% of the Company's Common Stock (on a fully diluted basis) issued in connection with an offering of the Company's debt securities; or (x) the grant of any securities convertible into or exchangeable for Common Stock outstanding on the date of this Warrant Agreement or issuable pursuant to binding agreements in effect on the Convertible Note date of this Warrant Agreement as set forth on a schedule to the Indenture.
(e) In case the Company shall, by dividend or otherwise, at any time distribute to all holders of Common Stock cash (excluding any cash that is distributed as part of a distribution referred to in paragraph (d) (i) of this Section or in connection with a transaction to which Section 14 applies) in an aggregate amount that, together with (i) the aggregate amount of any other distributions to all holders of Common Stock made exclusively in cash within the 12 months preceding the date fixed for the determination of shareholders entitled to such distribution and in respect of which no adjustment in the Number of Shares pursuant to paragraph (d) (i) or this paragraph (e) has been made previously and (ii) the aggregate of any cash plus the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a resolution of the Board of Directors) as of such date of determination of consideration payable in respect of any tender offer by the Company or a Subsidiary for all or any portion of the Common Stock, and any purchase by the Company of Common Stock in the open market, consummated within the 12 months preceding such date of determination and in respect of which no adjustment in the Number of Shares pursuant to paragraph (f) of this Section has been made previously, exceeds 12.5% of the product of the Current Market Price (determined as provided in paragraph (h) of this Section) on such date of determination timea
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