1
Exhibit 10.7
SERIES A1 WARRANT
to Purchase Common Shares of
ADVANCED LIGHTING TECHNOLOGIES, INC.
2
TABLE OF CONTENTS
SECTION PAGE
------- ----
1. DEFINITIONS .....................................................................1
2. EXERCISE OF WARRANT..............................................................5
2.1. Manner of Exercise......................................................5
2.2. Payment of Taxes........................................................6
2.3. Fractional Shares.......................................................6
2.4. Continued Validity......................................................6
3. TRANSFER, DIVISION AND COMBINATION...............................................7
3.1. Transfer................................................................7
3.2. Division and Combination................................................7
3.3. Expenses................................................................7
3.4. Maintenance of Books....................................................7
4. ADJUSTMENTS......................................................................7
4.1. Share Dividends, Subdivisions and Combinations..........................7
4.2 Certain Other Distributions and Adjustments.............................8
4.3. Issuance of Additional Common Shares....................................8
4.4. Issuance of Warrants or Other Rights....................................9
4.5. Issuance of Convertible Securities......................................9
4.6. Superseding Adjustment.................................................10
4.7. Other Provisions Applicable to Adjustments Under This Section .........11
4.8. Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets..................................................13
4.9. Other Action Affecting Common Shares...................................13
5. NOTICES TO WARRANT HOLDERS......................................................14
5.1. Notice of Adjustments..................................................14
5.2. Notice of Corporate Action.............................................14
6. NO IMPAIRMENT...................................................................15
7. RESERVATION AND AUTHORIZATION OF COMMON SHARES; REGISTRATION
WITH OR APPROVAL OF ANY GOVERNMENTAL AUTHORITY..................................15
8. TAXING OF RECORD; STOCK AND WARRANT TRANSFER BOOKS..............................16
9. RESTRICTIONS ON TRANSFERABILITY.................................................16
9.1. Restrictive Legend.....................................................16
9.2. Notice of Proposed Transfers; Requests for Registration................16
10. SUPPLYING INFORMATION...........................................................17
11. LOSS OR MUTILATION..............................................................17
12. OFFICE OF THE COMPANY...........................................................17
13. FINANCIAL AND BUSINESS INFORMATION..............................................17
13.1. Quarterly Information..................................................17
13.2. Annual Information.....................................................18
13.3. Filings................................................................18
14. LIMITATION OF LIABILITY.........................................................18
15. MISCELLANEOUS...................................................................18
15.1. Nonwaiver and Expenses.................................................18
15.2. Notice Generally.......................................................19
-i-
3
15.3. Remedies...............................................................19
15.4. Successors and Assigns.................................................19
15.5. Amendment..............................................................19
15.6. Severability...........................................................20
15.7. Headings...............................................................20
15.8. Governing Law..........................................................20
SIGNATURES
EXHIBITS
Exhibit A - Subscription Form
Exhibit B - Assignment Form
-ii-
4
THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE TRANSFERRED IN
VIOLATION OF SUCH ACT, THE RULES AND REGULATIONS THEREUNDER OR THE PROVISIONS OF
THIS WARRANT.
SERIES A1 WARRANT
To Purchase Common Shares of
ADVANCED LIGHTING TECHNOLOGIES, INC.
THIS IS TO CERTIFY THAT GENERAL ELECTRIC COMPANY, or
registered assigns, is entitled, at any time during the Exercise Period (as
hereinafter defined), to purchase from ADVANCED LIGHTING TECHNOLOGIES, INC., an
Ohio corporation (the "Company"), up to 1,000,000 Common Shares (as hereinafter
defined and subject to adjustment as provided herein) as described herein, in
whole or in part, including fractional parts, at a purchase price of $.01 per
share (subject to adjustment as provided herein) all on the terms and conditions
and pursuant to the provisions hereinafter set forth.
1. DEFINITIONS
-----------
Terms used in this Warrant have the respective meanings set
forth below:
"Additional Issuance" shall have the meaning set forth in
Section 4.3(a).
"Additional Common Shares" shall mean all Common Shares issued
by the Company after the date hereof, other than Conversion Shares, Contingent
Shares or Warrant Shares.
"Appraised Value" shall mean, in respect of any Common Share
on any date herein specified, the fair saleable value of such Common Share
(determined without giving affect to the discount for (i) a minority interest or
(ii) any lack of liquidity of the Common Share or (iii) to the fact that the
Company may have no class of equity registered under the Exchange Act) based on
the equity value of the Company, as determined by an investment banking or
valuation firm selected in accordance with the following sentences, divided by
the number of Common Shares outstanding on a Fully Diluted Basis as determined
in accordance with GAAP (assuming the payment of the exercise prices for such
shares). The determination of the Appraised Value per Common Share shall be made
by an investment banking or valuation firm of nationally recognized standing
selected by the Company and acceptable to the Majority Holders. If the
investment banking or valuation firm selected by Company is not acceptable to
the Majority Holders and the Company and the Majority Holders cannot agree on a
mutually acceptable investment banking or valuation firm, then the Majority
Holders and the Company shall each choose one such investment banking or
valuation firm and the respective chosen firms shall
5
agree on another investment banking or valuation firm which shall make the
determination. The Company shall retain, at its sole cost, such investment
banking or valuation firm as may be necessary for the determination of Appraised
Value required by the terms of this Warrant.
"Business Day" shall mean any day that is not a Saturday or
Sunday or a day on which banks are required to be closed in the State of New
York.
"Commission" shall mean the Securities and Exchange Commission
or any other federal agency then administering the Securities Act, the Exchange
Act and other federal securities laws.
"Common Share" shall mean (except where the context otherwise
indicates) a Common Share, $0.001 par value, of the Company as constituted on
the date hereof, and any capital stock into which such Common Share may
thereafter be changed, and shall also include (i) capital stock of the Company
of any other class (regardless of how denominated) issued to the holders of
Common Shares upon any reclassification thereof which is also not preferred as
to dividends or assets over any other class of capital stock of the Company and
which is not subject to redemption and (ii) capital stock of any successor or
acquiring corporation (as defined in Section 4.8) received by or distributed to
the holders of Common Shares of the Company in the circumstances contemplated by
Section 4.8.
"Contingent Shares" shall mean Common Shares to be issued upon
the exercise of any right to purchase Common Shares pursuant to the Contingent
Warrant Agreement.
"Contingent Warrant Agreement" shall mean the Contingent
Warrant Agreement of even date herewith between the Company and General Electric
Company.
"Conversion Shares" shall mean the Common Shares issued or
issuable upon the conversion of the Series A Shares.
"Convertible Securities" shall mean evidences of indebtedness,
shares of capital stock or other securities that are convertible into or
exchangeable, with or without payment of additional consideration in cash or
property, for Additional Common Shares, either immediately or upon the
occurrence of a specified date or a specified event.
"Current Market Price" shall mean, in respect of any Common
Share on any date herein specified, if there shall then be a public market for
the Common Shares, the average of the daily market prices for 20 consecutive
Business Days immediately preceding such date or, if there is no such public
market, the Appraised Value per Common Share. The daily market price for each
such Business Day shall be (i) the last sale price on such day on the principal
stock exchange or NASDAQ-NMS on which such Common Shares are then listed or
admitted to trading, or (ii) if no sale takes place on such day on any such
exchange or NASDAQ-NMS, the average of the last reported closing bid and asked
prices on such day as officially quoted on any such exchange or NASDAQ-NMS, or
(iii) if the Common Shares are not then listed or admitted to trading on any
stock exchange or NASDAQ-NMS, the average of the last reported closing bid and
asked prices on such day in the over-the-counter market, as furnished by the
NASDAQ or
-2-
6
the National Quotation Bureau, Inc., or (iv) if neither such corporation at the
time is engaged in the business of reporting such prices, as furnished by any
similar firm then engaged in such business, or (v) if there is no such firm, as
furnished by any member of the NASD selected mutually by the Majority Holders
and the Company or, if they cannot agree upon such selection, as selected by two
such members of the NASD, one of which shall be selected by the Majority Holders
and one of which shall be selected by the Company.
"Current Warrant Price" shall mean $.01 per Common Share.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect from time to time.
"Exercise Period" shall mean the period during which this
Warrant is exercisable pursuant to Section 2.1.
"Expiration Date" shall mean September 30, 2009.
"Fully Diluted Basis" means, with respect to any determination
or calculation, that such determination or calculation is performed on a fully
diluted basis (assuming the issuance of all Common Shares issuable under any
then outstanding options, warrants or convertible securities of any kind)
determined in accordance with GAAP for purposes of determining book value or net
income per share.
"GAAP" shall mean generally accepted accounting principles in
the United States of America as from time to time in effect.
"GE" shall mean General Electric Company, a New York
corporation.
"Holder" shall mean the Person in whose name the Warrant set
forth herein is registered on the books of the Company maintained for such
purpose.
"HSR Triggered Put" shall mean a put right under Section
VII(c) of the Company's Second Amended and Restated Articles of Incorporation.
"Majority Holders" shall mean the holders of Warrants
exercisable for in excess of 50% of the aggregate number of Common Shares then
purchasable upon exercise of all Warrants, whether or not then exercisable.
"NASD" shall mean the National Association of Securities
Dealers, Inc., or any successor corporation thereto.
"NASDAQ" shall mean the National Association of Securities
Dealers Automated Quotation System.
-3-
7
"NASDAQ Approval" shall mean approval of the transactions
contemplated by the Stock Purchase Agreement by the shareholders of the Company
pursuant to NASDAQ Rule 4460(i)(D).
"NASDAQ-NMS" shall mean the NASDAQ National Market System.
"Other Property" shall have the meaning set forth in Section
4.8.
"Permitted Issuances" shall mean (a) the issuance or
conversion of options issued to employees pursuant to any stock option plan or
employee incentive plan approved by the Company's board of directors, (b) the
issuance of Warrant Shares, Contingent Shares or Conversion Shares and (c) the
issuance of Common Shares to satisfy obligations in respect of acquisitions of
securities or assets of any Person, provided that (i) such contracts were
entered into prior to September 30, 1999, and (ii) the number of Common Shares
subject to this Subparagraph (c) shall not exceed 110,000 in the aggregate.
"Person" shall mean any individual, sole proprietorship,
partnership, limited liability company, joint venture, trust, incorporated
organization, association, corporation, institution, public benefit corporation,
entity or government (whether federal, state, county, city, municipal or
otherwise, including, without limitation, any instrumentality, division, agency,
body or department thereof).
"Purchase Price" shall mean $6.75 per Common Share (as the
same may be adjusted from time to time to take into account any action taken by
the Company in respect of its Common Shares, including, without limitation,
stock splits, dividends, combinations and reclassifications).
"Registration Statement" shall have the meaning set forth in
Section 9.4.
"Restricted Common Shares" shall mean Common Shares that are,
or upon their issuance on the exercise of this Warrant would be, evidenced by a
certificate bearing the restrictive legend set forth in Section 9.1(a).
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect from time to time.
"Series A Shares" shall mean shares of Series A Convertible
Preferred Stock, par value $.001, of the Company.
"Stock Purchase Agreement" shall mean the Stock Purchase
Agreement, of even date herewith, between GE and the Company.
"Subsidiary" of any Person means any corporation, partnership,
joint venture, limited liability company, association or other business entity
in respect of which that Person owns securities or other ownership interests
having ordinary voting power to elect a majority of
-4-
8
the board of directors, partnership committee, board of managers or trustees or
other managerial body thereof, whether directly or indirectly through one or
more of the other Subsidiaries of such Person or a combination thereof. Unless
otherwise specified, "Subsidiary" means a Subsidiary of the Company and
"Subsidiaries" means all Subsidiaries of the Company.
"Transfer" shall mean any disposition of any Warrant or
Warrant Share or of any interest in either thereof that would constitute a sale
thereof within the meaning of the Securities Act.
"Transfer Notice" shall have the meaning set forth in Section
9.2.
"Warrants" shall mean this Warrant and all warrants issued
upon transfer, division or combination of, or in substitution for, this Warrant.
All Warrants shall at all times be identical as to terms and conditions and
date, except as to the number of Common Shares for which they may be exercised.
"Warrant Price" shall mean an amount equal to (i) the number
of Common Shares being purchased upon exercise of this Warrant pursuant to
Section 2.1, multiplied by (ii) the Current Warrant Price as of the date of such
exercise.
"Warrant Shares" shall mean the Common Shares issued or
issuable to the Holders of Warrants upon exercise of the Warrants.
2. EXERCISE OF WARRANT
-------------------
2.1. MANNER OF EXERCISE. From and after the date hereof and
until 5:00 P.M., New York time, on the Expiration Date (the "Exercise Period"),
subject to the last sentence of this Section 2.1, Holder may exercise this
Warrant, on any Business Day, for all or any part of 1,000,000 Common Shares. In
order to exercise this Warrant, in whole or in part, Holder shall deliver to the
Company at its principal office at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, or at
the office or agency designated by the Company pursuant to Section 12: (i) a
written notice of ▇▇▇▇▇▇'s election to exercise this Warrant, which notice shall
specify the number of Common Shares to be purchased, (ii) payment of the Warrant
Price and (iii) this Warrant. Such notice shall be substantially in the form of
the subscription form appearing at the end of this Warrant as Exhibit A, duly
executed by Holder or its agent or attorney. Upon receipt thereof, the Company
shall, as promptly as practicable, and in any event within five Business Days
thereafter, execute or cause to be executed and deliver or cause to be delivered
to Holder a certificate or certificates representing the aggregate number of
full Common Shares issuable upon such exercise, together with cash in lieu of
any fraction of a share, as hereinafter provided. The share certificate or
certificates so delivered shall be, to the extent possible, in such denomination
or denominations as such Holder shall request in the notice and shall be
registered in the name of Holder or, subject to Section 9, such other name as
shall be designated in the notice. This Warrant shall be deemed to have been
exercised and such certificate or certificates shall be deemed to have been
issued, and Holder or any other Person so designated to be named therein shall
be deemed to have become a holder of record of such shares for all purposes, as
of the date the notice, together with the cash or check or other payment as
provided below and this Warrant, is received by the
-5-
9
Company as described above and all taxes required to be paid by ▇▇▇▇▇▇, if any,
pursuant to Section 2.2 prior to the issuance of such shares have been paid. If
this Warrant shall have been exercised in part, the Company shall, at the time
of delivery of the certificate or certificates representing Warrant Shares,
deliver to Holder a new Warrant evidencing the rights of Holder to purchase the
unpurchased Common Shares called for by this Warrant, which new Warrant shall in
all other respects be identical with this Warrant, or, at the request of Holder,
appropriate notation may be made on this Warrant and the same returned to
Holder. Payment of the Warrant Price shall be made at the option of Holder by
(i) certified or official bank check, and/or (ii) by ▇▇▇▇▇▇'s surrender to the
Company of that number of Warrant Shares (or the right to receive such number of
shares) or Common Shares having an aggregate Current Market Price equal to or
greater than the Current Warrant Price for all shares then being purchased
(including those being surrendered), or (iii) any combination thereof, duly
endorsed by or accompanied by appropriate instruments of transfer duly executed
by ▇▇▇▇▇▇ or by ▇▇▇▇▇▇'s attorney duly authorized in writing. This Warrant and
▇▇▇▇▇▇'s right to exercise this Warrant shall, to the extent not previously
exercised, terminate at such time as GE has received the Put Option Purchase
Price (as defined in Section VII(c) of the Company's Second Amended and Restated
Articles) upon an HSR Triggered Put.
2.2. PAYMENT OF TAXES. All Common Shares issuable upon the
exercise of this Warrant pursuant to the terms hereof shall be validly issued,
fully paid and nonassessable and without any preemptive rights. The Company
shall pay all expenses in connection with, and all taxes and other governmental
charges that may be imposed with respect to, the issue or delivery thereof,
unless such tax or charge is imposed by law upon Holder, in which case such
taxes or charges shall be paid by ▇▇▇▇▇▇. The Company shall not be required,
however, to pay any tax or other charge imposed in connection with any transfer
involved in the issue of any certificate for Common Shares issuable upon
exercise of this Warrant in any name other than that of Holder, and in such case
the Company shall not be required to issue or deliver any share certificate
until such tax or other charge has been paid or it has been established to the
reasonable satisfaction of the Company that no such tax or other charge is due.
2.3. FRACTIONAL SHARES. The Company shall not be required to
issue a fractional Common Share upon exercise of any Warrant. If any fraction of
a share would, but for this Section, be issuable upon exercise of this Warrant,
in lieu of such fractional share, the Company may, at its option, pay a cash
adjustment in respect of such final fraction in an amount equal to the same
fraction of the Current Market Price per Common Share on the date of exercise
or, if there is no Current Market Price on such date, $6.75 per whole Common
Share, adjusted to reflect equitably share dividends, subdivisions and
combinations after the date hereof.
2.4. CONTINUED VALIDITY. A holder of Common Shares issued upon
the exercise of this Warrant, in whole or in part (other than a holder who
acquires such shares after the same have been publicly sold pursuant to a
Registration Statement under the Securities Act or sold pursuant to Rule 144
thereunder), shall continue to be entitled with respect to such shares to all
rights to which it would have been entitled as Holder under Sections 9, 10 and
15 of this Warrant. The Company will, at the time of each exercise of this
Warrant, in whole or in part, upon the request of the holder of the Common
Shares issued upon such exercise hereof, acknowledge in writing, in form
reasonably satisfactory to such holder, its continuing obligation
-6-
10
to afford to such holder all such rights; PROVIDED, HOWEVER, that if such holder
shall fail to make any such request, such failure shall not affect the
continuing obligation of the Company to afford to such holder all such rights.
3. TRANSFER, DIVISION AND COMBINATION
----------------------------------
3.1. TRANSFER. Subject to compliance with Section 9 hereof,
transfer of this Warrant and all rights hereunder, in whole or in part, shall be
registered on the books of the Company to be maintained for such purpose, upon
surrender of this Warrant at the principal office of the Company referred to in
Section 2.1 or the office or agency designated by the Company pursuant to
Section 12, together with a written assignment of this Warrant substantially in
the form of Exhibit B hereto duly executed by ▇▇▇▇▇▇ or its agent or attorney
and funds sufficient to pay any transfer taxes payable upon the making of such
transfer. Upon such surrender and, if required, such payment, the Company shall,
subject to Section 9, execute and deliver a new Warrant or Warrants in the name
of the assignee or assignees and in the denomination specified in such
instrument of assignment, and shall issue to the assignor a new Warrant
evidencing the portion of this Warrant not so assigned, and this Warrant shall
promptly be cancelled. A Warrant, if properly assigned in compliance with
Section 9, may be exercised by a new Holder for the purchase of Common Shares
without having a new Warrant issued.
3.2. DIVISION AND COMBINATION. Subject to Section 9, this
Warrant may be divided or combined with other Warrants upon presentation hereof
at the aforesaid office or agency of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by ▇▇▇▇▇▇ or its agent or attorney. Subject to compliance with Section
3.1 and with Section 9, as to any transfer that may be involved in such division
or combination, the Company shall execute and deliver a new Warrant or Warrants
in exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice.
3.3. EXPENSES. The Company shall prepare, issue and deliver at
its own expense (other than transfer taxes) the new Warrant or Warrants under
this Section 3.
3.4. MAINTENANCE OF BOOKS. The Company agrees to maintain, at
its aforesaid office or agency, books for the registration and the registration
of transfer of the Warrants.
4. ADJUSTMENTS
-----------
Subject to NASDAQ Approval, the number of Common Shares for
which this Warrant is exercisable shall be subject to adjustment from time to
time as set forth in this Section 4. The Company shall give each Holder notice
of any event described below in accordance with Section 5.1.
4.1. SHARE DIVIDENDS, SUBDIVISIONS AND COMBINATIONS. If at any
time the Company shall:
-7-
11
(a) take a record of the holders of its Common Shares for the
purpose of entitling them to receive a dividend payable in, or other
distribution of, Additional Common Shares,
(b) subdivide its outstanding Common Shares into a larger
number of Common Shares, or
(c) combine its outstanding Common Shares into a smaller
number of Common Shares,
then the number of Common Shares for which this Warrant is exercisable
immediately after the occurrence of any such event shall be adjusted to equal
the number of Common Shares that a record holder of the same number of Common
Shares for which this Warrant is exercisable immediately prior to the occurrence
of such event would own or be entitled to receive after the happening of such
event.
4.2 CERTAIN OTHER DISTRIBUTIONS AND ADJUSTMENTS. (a) If at any
time the Company shall take a record of the holders of its Common Shares for the
purpose of entitling them to receive any dividend or other distribution of:
(i) cash,
(ii) any evidences of its indebtedness, any shares of its
stock or any other securities or property of any nature whatsoever
(other than cash, Convertible Securities or Additional Common Shares),
or
(iii) any warrants or other rights to subscribe for or
purchase any evidences of its indebtedness, any shares of its stock or
any other securities or property of any nature whatsoever (other than
cash, Convertible Securities or Additional Common Shares),
then Holder shall be entitled to receive such dividend or distribution as if
Holder had exercised this Warrant.
(b) A reclassification of the Common Shares (other than a
change in par value, or from par value to no par value or from no par value to
par value) into Common Shares and shares of any other class of stock shall be
deemed a distribution by the Company to the holders of its Common Shares of such
shares of such other class of stock within the meaning of paragraph (a) above
and, if the outstanding Common Shares shall be changed into a larger or smaller
number of Common Shares as a part of such reclassification, such change shall be
deemed a subdivision or combination, as the case may be, of the outstanding
Common Shares within the meaning of Section 4.1.
4.3. ISSUANCE OF ADDITIONAL COMMON SHARES. (a) If at any time
the Company shall (except as hereinafter provided) issue or sell any Additional
Common Shares or any security convertible or exchangeable into Additional Common
Shares (an "Additional Issuance"), other than Permitted Issuances, in exchange
for consideration in an amount per
-8-
12
Additional Common Share less than either the Purchase Price or the Current
Market Price on the date of such Additional Issuance (before giving effect to
such Additional Issuance), then, effective upon such Additional Issuance, the
number of Common Shares subject to purchase upon exercise of this Warrant shall
be increased to a number determined by multiplying the number of Common Shares
subject to purchase immediately before such Additional Issuance by a fraction,
the numerator of which shall be the number of Common Shares outstanding
immediately prior to such Additional Issuance plus the number of Additional
Common Shares so issued and the denominator of which shall be the number of
Common Shares outstanding immediately prior to such issuance of Additional
Common Shares plus the number of Common Shares which the aggregate consideration
received by the Company for the total number of Additional Common Shares so
issued would purchase at the greater of the Purchase Price or the Current Market
Value at the time of such Additional Issuance. In computing adjustments under
this paragraph, fractional interests in Common Shares shall be taken into
account to the nearest one-thousandth of a share.
(b) The provision of paragraph (a) of Section 4.3 shall not
apply to any issuance of Additional Common Shares for which an adjustment is
provided under Section 4.1 or 4.2. No adjustment of the number of Common Shares
for which this Warrant shall be exercisable shall be made under paragraph (a) of
Section 4.3 upon the issuance of any Additional Common Shares that are issued
pursuant to the exercise of any warrants or other subscription or purchase
rights or pursuant to the exercise of any conversion or exchange rights in any
Convertible Securities, if any such adjustment shall previously have been made
upon the issuance of such warrants or other rights or upon the issuance of such
Convertible Securities (or upon the issuance of any warrant or other rights
therefor) pursuant to Section 4.4 or Section 4.5.
4.4. ISSUANCE OF WARRANTS OR OTHER RIGHTS. If at any time the
Company shall take a record of the holders of its Common Shares for the purpose
of entitling them to receive a distribution of, or shall in any manner (whether
directly or by assumption in a merger in which the Company is the surviving
corporation) issue or sell, any warrants or other rights to subscribe for or
purchase any Additional Common Shares or any Convertible Securities, whether or
not the rights to exchange or convert thereunder are immediately exercisable,
and the price per share for which a Common Share is issuable upon the exercise
of such warrants or other rights or upon conversion or exchange of such
Convertible Securities shall be less than either the Purchase Price or the
Current Market Price on the date of such issue or sale, then the number of
Common Shares for which this Warrant is exercisable shall be adjusted as
provided in Section 4.3 on the basis that the maximum number of Additional
Common Shares issuable pursuant to all such warrants or other rights necessary
to effect the conversion or exchange of all such Convertible Securities shall be
deemed to have been issued and outstanding and the Company shall be deemed to
have received all of the consideration payable therefor, if any, as of the date
of the issuance of such warrants or other rights. No further adjustments of the
number of Common Shares for which this Warrant is exercisable shall be made upon
the actual issue of such Common Shares or of such Convertible Securities upon
exercise of such warrants or other rights or upon the actual issue of such
Common Shares upon such conversion or exchange of such Convertible Securities.
4.5. ISSUANCE OF CONVERTIBLE SECURITIES. If at any time the
Company shall take a record of the holders of its Common Shares for the purpose
of entitling them to receive a
-9-
13
distribution of, or shall in any manner (whether directly or by assumption in a
merger in which the Company is the surviving corporation) issue or sell, any
Convertible Securities, whether or not the rights to exchange or convert
thereunder are immediately exercisable, and the price per share for which a
Common Share is issuable upon such conversion or exchange shall be less than
either the Purchase Price or the Current Market Price on the date of such issue
or sale, then the number of Common Shares for which this Warrant is exercisable
shall be adjusted as provided in Section 4.3 on the basis that the maximum
number of Additional Common Shares necessary to effect the conversion or
exchange of all such Convertible Securities shall be deemed to have been issued
and outstanding and the Company shall have received all of the consideration
payable therefor, if any, as of the date of issuance of such Convertible
Securities. No adjustment of the number of Common Shares for which this Warrant
is exercisable shall be made under this Section 4.5 upon the issuance of any
Convertible Securities that are issued pursuant to the exercise of any warrants
or other subscription or purchase rights therefor, if any such adjustment shall
previously have been made upon the issuance of such warrants or other rights
pursuant to Section 4.4. No further adjustments of the number of Common Shares
for which this Warrant is exercisable shall be made upon the actual issue of
such Common Shares upon conversion or exchange of such Convertible Securities
and, if any issue or sale of such Convertible Securities is made upon exercise
of any warrant or other right to subscribe for or to purchase any such
Convertible Securities for which adjustments of the number of Common Shares for
which this Warrant is exercisable have been or are to be made pursuant to other
provisions of this Section 4, no further adjustments of the number of Common
Shares for which this Warrant is exercisable and the Current Warrant Price shall
be made by reason of such issue or sale.
4.6. SUPERSEDING ADJUSTMENT. If, at any time after any
adjustment of the number of Common Shares for which this Warrant is exercisable
shall have been made pursuant to Section 4.4 or Section 4.5 as the result of any
issuance of warrants, rights or Convertible Securities,
(a) such warrants or rights, or the right of conversion or
exchange in such other Convertible Securities, shall expire, and all or a
portion of such warrants or rights, or the right of conversion or exchange with
respect to all or a portion of such other Convertible Securities, as the case
may be, shall not have been exercised, or
(b) the consideration per share for which Common Shares are
issuable pursuant to such warrants or rights, or the terms of such other
Convertible Securities, shall be increased solely by virtue of provisions
therein contained for an automatic increase in such consideration per share upon
the occurrence of a specified date or event,
then for each outstanding Warrant such previous adjustment shall be rescinded
and annulled and the Additional Common Shares that were deemed to have been
issued by virtue of the computation made in connection with the adjustment so
rescinded and annulled shall no longer be deemed to have been issued by virtue
of such computation. Thereupon, a recomputation shall be made of the effect of
such rights or options or other Convertible Securities on the basis of
(c) treating the number of Additional Common Shares or other
property, if any, theretofore actually issued or issuable pursuant to the
previous exercise of any such
-10-
14
warrants or rights or any such right of conversion or exchange, as having been
issued on the date or dates of any such exercise and for the consideration
actually received and receivable therefor, and
(d) treating any such warrants or rights or any such other
Convertible Securities that then remain outstanding as having been granted or
issued immediately after the time of such increase of the consideration per
share for which Common Shares or other property are issuable under such warrants
or rights or other Convertible Securities; whereupon a new adjustment of the
number of Common Shares for which this Warrant is exercisable shall be made,
which new adjustment shall supersede the previous adjustment so rescinded and
annulled.
4.7. OTHER PROVISIONS APPLICABLE TO ADJUSTMENTS UNDER THIS
SECTION. The following provisions shall be applicable to the making of
adjustments of the number of Common Shares for which this Warrant is exercisable
and the Current Warrant Price provided for in this Section 4:
(a) COMPUTATION OF CONSIDERATION. To the extent that any
Additional Common Shares or any Convertible Securities or any warrants or other
rights to subscribe for or purchase any Additional Common Shares or any
Convertible Securities shall be issued for cash consideration, the consideration
received by the Company therefor shall be the amount of the cash received by the
Company therefor, or, if such Additional Common Shares or Convertible Securities
are offered by the Company for subscription, the subscription price, or, if such
Additional Common Shares or Convertible Securities are sold to underwriters or
dealers for public offering without a subscription offering, the initial public
offering price (in any such case subtracting any amounts paid or receivable for
accrued interest or accrued dividends and without taking into account any
compensation, discounts or expenses paid or incurred by the Company for and in
the underwriting of, or otherwise in connection with, the issuance thereof). To
the extent that such issuance shall be for a consideration other than cash,
then, except as herein otherwise expressly provided, the amount of such
consideration shall be deemed to be the fair value of such consideration at the
time of such issuance as determined in good faith by the Board of Directors of
the Company. In case any Additional Common Shares or any Convertible Securities
or any warrants or other rights to subscribe for or purchase such Additional
Common Shares or Convertible Securities shall be issued in connection with any
merger in which the Company issues any securities, the amount of consideration
therefor shall be deemed to be the fair value, as determined in good faith by
the Board of Directors of the Company, of such portion of the assets and
business of the nonsurviving corporation as such Board in good faith shall
determine to be attributable to such Additional Common Shares, Convertible
Securities, warrants or other rights, as the case may be. The consideration for
any Additional Common Shares issuable pursuant to any warrants or other rights
to subscribe for or purchase the same shall be the consideration received by the
Company for issuing such warrants or other rights plus the additional
consideration payable to the Company upon exercise of such warrants or other
rights. The consideration for any Additional Common Shares issuable pursuant to
the term of any Convertible Securities shall be the consideration received by
the Company for issuing warrants or other rights to subscribe for or purchase
such Convertible Securities, plus the consideration paid or payable to the
Company in respect of the subscription for or purchase of such Convertible
Securities, plus the additional consideration, if any, payable to the Company
upon
-11-
15
the exercise of the right of conversion or exchange in such Convertible
Securities. In case of the issuance at any time of any Additional Common Shares
or Convertible Securities in payment or satisfaction of any dividends upon any
class of stock other than Common Shares, the Company shall be deemed to have
received for such Additional Common Shares or Convertible Securities a
consideration equal to the amount of such dividend so paid or satisfied.
(b) WHEN ADJUSTMENTS TO BE MADE. The adjustments required by
this Section 4 shall be made whenever and as often as any specified event
requiring an adjustment shall occur, except that any adjustment of the number of
Common Shares for which this Warrant is exercisable that would otherwise be
required may be postponed (except in the case of a subdivision or combination of
Common Shares, as provided for in Section 4.1) up to, but not beyond the date of
exercise if such adjustment either by itself or with other adjustments not
previously made adds or subtracts less than 1% of the Common Shares for which
this Warrant is exercisable immediately prior to the making of such adjustment.
Any adjustment representing a change of less than such minimum amount (except as
aforesaid) that is postponed shall be carried forward and made as soon as such
adjustment, together with other adjustments required by this Section 4 and not
previously made, would result in a minimum adjustment or on the date of
exercise. For the purpose of any adjustment, any specified event shall be deemed
to have occurred at the close of business on the date of its occurrence.
(c) FRACTIONAL INTERESTS. In computing adjustments under this
Section 4, fractional interests in Common Shares shall be taken into account to
the nearest 1/1000th of a share.
(d) WHEN ADJUSTMENT NOT REQUIRED. If the Company shall take a
record of the holders of its Common Shares for the purpose of entitling them to
receive a dividend or distribution or subscription or purchase rights and shall,
thereafter and before the distribution to shareholders thereof, legally abandon
its plan to pay or deliver such dividend, distribution, subscription or purchase
rights, then thereafter no adjustment shall be required by reason of the taking
of such record and any such adjustment previously made in respect thereof shall
be rescinded and annulled.
(e) ESCROW OF WARRANT SHARES. If after any property becomes
distributable pursuant to this Section 4 by reason of the taking of any record
of the holders of Common Shares, but prior to the occurrence of the event for
which such record is taken, and Holder exercises this Warrant, any Additional
Common Shares issuable upon exercise by reason of such adjustment shall be
deemed the last Common Shares for which this Warrant is exercised
(notwithstanding any other provision to the contrary herein) and such shares or
other property shall be held in escrow for Holder by the Company to be issued to
Holder upon and to the extent that the event actually takes place, upon payment
of the then Current Warrant Price. Notwithstanding any other provision to the
contrary herein, if the event for which such record was taken fails to occur or
is rescinded, then such escrowed shares shall be cancelled by the Company and
escrowed property returned to the Company.
(f) CHALLENGE TO GOOD FAITH DETERMINATION. Whenever the Board
of Directors of the Company shall be required to make a determination in good
faith of the fair value of any
-12-
16
item under this Section 4, such determination may be challenged in good faith by
the Majority Holders, and any dispute shall be resolved by an investment banking
or valuation firm of recognized national standing selected by the Company and
acceptable to the Majority Holders.
(g) PROHIBITION ON ADJUSTMENT. The provisions of Section 4.3,
4.4 and 4.5 shall not operate to reduce the number of Common Shares subject to
purchase upon exercise of this Warrant.
4.8. REORGANIZATION, RECLASSIFICATION, MERGER, CONSOLIDATION
OR DISPOSITION OF ASSETS. In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there
is a change in or distribution with respect to the Common Shares), or sell,
transfer or otherwise dispose of all or substantially all its property, assets
or business to another corporation and, pursuant to the terms of such
reorganization, reclassification, merger, consolidation or disposition of
assets, Common Shares of the successor or acquiring corporation, or any cash,
shares of stock or other securities or property of any nature whatsoever
(including warrants or other subscription or purchase rights) in addition to or
in lieu of common stock of the successor or acquiring corporation ("Other
Property"), are to be received by or distributed to the holders of Common Shares
of the Company, then each Holder shall have the right thereafter to receive,
upon exercise of such Warrant, the number of Common Shares of the successor or
acquiring corporation or of the Company, if it is the surviving corporation, and
Other Property receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a holder of
the number of Common Shares for which this Warrant is exercisable immediately
prior to such event. In case of any such reorganization, reclassification,
merger, consolidation or disposition of assets, the successor or acquiring
corporation (if other than the Company) shall expressly assume the due and
punctual observance and performance of each and every covenant and condition of
this Warrant to be performed and observed by the Company and all the obligations
and liabilities hereunder, subject to such modifications as may be deemed
appropriate (as determined by resolution of the Board of Directors of the
Company) in order to provide for adjustments of Common Shares for which this
Warrant is exercisable which shall be as nearly equivalent as practicable to the
adjustments provided for in this Section 4. For purposes of this Section 4.8,
"common stock of the successor or acquiring corporation" shall include stock of
such corporation of any class that is not preferred as to dividends or assets
over any other class of stock of such corporation and that is not subject to
redemption and shall also include any evidences of indebtedness, shares of stock
or other securities that are convertible into or exchangeable for any such
stock, either immediately or upon the arrival of a specified date or the
happening of a specified event and any warrants or other rights to subscribe for
or purchase any such stock. The foregoing provisions of this Section 4.8 shall
similarly apply to successive reorganizations, reclassifications, mergers,
consolidations or disposition of assets.
4.9. OTHER ACTION AFFECTING COMMON SHARES. In case at any time
or from time to time the Company shall take any action in respect of its Common
Shares, other than any action described in this Section 4, then, unless such
action will not have a materially adverse effect upon the rights of Holders, the
number of Common Shares or other stock for which this Warrant is exercisable
and/or the purchase price thereof shall be adjusted in such manner as may be
equitable in the circumstances.
-13-
17
5. NOTICES TO WARRANT HOLDERS
--------------------------
5.1. NOTICE OF ADJUSTMENTS. Not less than 10 nor more than 30
days prior to the record date or effective date, as the case may be, of any
action that requires or might require an adjustment or readjustment pursuant to
Section 4, the Company shall forthwith prepare and deliver to each Holder a
signed copy of a certificate executed by the chief financial officer of the
Company setting forth, in reasonable detail, the event requiring the adjustment
and the method by which such adjustment was calculated (including a description
of the basis on which the Board of Directors of the Company determined the fair
value of any evidences of indebtedness, shares of stock, other securities or
property or warrants or other subscription or purchase rights referred to in
Section 4.7 (a)), specifying the number of Common Shares for which this Warrant
is exercisable and (if such adjustment was made pursuant to Section 4.8 or 4.9)
describing the number and kind of any other shares of stock or Other Property
for which this Warrant is exercisable, and any change in the purchase price or
prices thereof, after giving effect to such adjustment or change. The Company
shall keep at its office or agency designated pursuant to Section 12 copies of
all such certificates and cause the same to be available for inspection at said
office during normal business hours by any Holder or any prospective purchaser
of a Warrant designated by a Holder thereof.
5.2. NOTICE OF CORPORATE ACTION. If at any time
(a) the Company shall take a record of the holders of its
Common Shares for the purpose of entitling them to receive a dividend or other
distribution, or any right to subscribe for or purchase any evidences of its
indebtedness, any shares of stock of any class or any other securities or
property, or to receive any other right, or
(b) there shall be any capital reorganization of the Company,
any reclassification or recapitalization of the capital stock of the Company or
any consolidation or merger of the Company with, or any sale, transfer or other
disposition of all or substantially all the property, assets or business of the
Company to, another corporation, person or entity, or
(c) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in any one or more of such cases, the Company shall give to Holder (i) at
least 20 days prior written notice of the date on which a record date shall be
selected for such dividend, distribution or right or for determining rights to
vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up, and (ii) in the case of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up, at least 30 days prior written notice of the date when the same shall take
place. Such notice in accordance with the foregoing clause also shall specify
(i) the date on which any such record is to be taken for the purpose of such
dividend, distribution or right, the date on which the holders of Common Shares
shall be entitled to any such dividend, distribution or right, and the amount
and character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale,
-14-
18
transfer, disposition, dissolution, liquidation or winding up is to take place
and the time, if any such time is to be fixed, as of which the holders of Common
Shares shall be entitled to exchange their Common Shares for securities or other
property deliverable upon such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up. Each such written notice shall be sufficiently given if addressed to Holder
at the last address of Holder appearing on the books of the Company and
delivered in accordance with Section 15.2.
6. NO IMPAIRMENT
-------------
The Company shall not by any action, including, without
limitation, amending its articles of incorporation or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such actions as may be necessary or appropriate to protect the
rights of Holder against impairment. Without limiting the generality of the
foregoing, the Company will (a) take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable Common Shares upon the exercise of this Warrant, including
taking such action as is necessary for the Current Warrant Price to be not less
than the par value of the Common Shares issuable upon exercise of this Warrant,
and (b) use its best efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may be
necessary to enable the Company to perform its obligations under this Warrant.
Upon the request of ▇▇▇▇▇▇, the Company will at any time
during the period this Warrant is outstanding acknowledge in writing, in form
satisfactory to Holder, the continuing validity of this Warrant and the
obligations of the Company hereunder.
7. RESERVATION AND AUTHORIZATION OF COMMON SHARES;
-----------------------------------------------
REGISTRATION WITH OR APPROVAL OF ANY GOVERNMENTAL AUTHORITY
-----------------------------------------------------------
From and after the date hereof, the Company shall at all times
reserve and keep available for issue upon the exercise of Warrants such number
of its authorized but unissued Common Shares as will be sufficient to permit the
exercise in full of all outstanding Warrants. All Common Shares that shall be so
issuable, when issued upon exercise of any Warrant and payment therefor in
accordance with the terms of such Warrant, shall be duly and validly issued and
fully paid and nonassessable, and not subject to preemptive rights.
Before taking any action that would result in an adjustment in
the number of Common Shares for which this Warrant is exercisable, the Company
shall obtain all such authorizations or exemptions thereof, or consents thereto,
as may be necessary from any public regulatory body or bodies having
jurisdiction thereof.
If any Common Shares required to be reserved for issuance upon
exercise of Warrants require registration or qualification with any governmental
authority or other governmental approval or filing under any federal or state
law (otherwise than as provided in
-15-
19
Section 9) before such shares may be so issued, the Company will in good faith
and as expeditiously as possible and at its expense endeavor to cause such
shares to be duly registered or such approval to be obtained or filing made.
8. TAKING OF RECORD; STOCK AND WARRANT TRANSFER BOOKS
--------------------------------------------------
In the case of all dividends or other distributions by the
Company to the holders of its Common Shares with respect to which any provision
of Section 4 refers to the taking of a record of such holders, the Company will
in each such case take such a record and will take such record as of the close
of business on a Business Day. The Company will not at any time, except upon
dissolution, liquidation or winding up of the Company, close its stock transfer
books or Warrant transfer books so as to result in preventing or delaying the
exercise or transfer of any Warrant.
9. RESTRICTIONS ON TRANSFERABILITY; REGISTRATIONS
----------------------------------------------
The Warrants and the Warrant Shares shall not be transferred,
hypothecated or assigned before satisfaction of the conditions specified in this
Section 9, which conditions are intended to ensure compliance with the
provisions of the Securities Act with respect to the Transfer of any Warrant or
any Warrant Share. Holder, by acceptance of this Warrant, agrees to be bound by
the provisions of this Section 9.
9.1. RESTRICTIVE LEGEND. (a) Except as otherwise provided in
this Section 9, each certificate for Warrant Shares initially issued upon the
exercise of this Warrant, and each certificate for Warrant Shares issued to any
subsequent transferee of any such certificate, shall be stamped or otherwise
imprinted with a legend in substantially the following form:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended,
and may not be transferred in violation of such Act
or the rules and regulations thereunder."
(b) Except as otherwise provided in this Section 9, each
Warrant shall be stamped or otherwise imprinted with a legend in substantially
the following form:
"This warrant and the securities represented hereby have not
been registered under the Securities Act of 1933, as amended,
and may not be transferred in violation of such Act, the rules
and regulations thereunder or the provisions of this Warrant."
9.2. NOTICE OF PROPOSED TRANSFERS; REQUESTS FOR REGISTRATION.
Prior to any Transfer of any Warrant or any Restricted Common Share, the holder
of such Warrant or Restricted Common Share shall give written notice (a
"Transfer Notice") to the Company of such Transfer. Each certificate, if any,
evidencing such Restricted Common Share issued upon such Transfer shall bear the
restrictive legend set forth in Section 9.1(a), and each Warrant issued upon
such Transfer shall bear the restrictive legend set forth in Section 9.1(b),
unless in the
-16-
20
opinion of counsel to such holder that is reasonably acceptable to the Company
such legend is not required in order to ensure compliance with the Securities
Act.
9.3. REGISTRATION. Each holder of Warrant Shares has certain
registration rights under the Registration Rights Agreement of even date
herewith between the Company and General Electric Company, as amended from time
to time. Any Holder may obtain a copy of such agreement by notice to the
Company.
10. SUPPLYING INFORMATION
---------------------
The Company shall cooperate with each Holder of a Warrant and
each holder of Restricted Common Shares in supplying such information as may be
reasonably necessary for such holder to complete and file any information
reporting forms presently or hereafter required by the Commission as a condition
to the availability of an exemption from the Securities Act for the sale of any
Warrant or Restricted Common Shares.
11. LOSS OR MUTILATION
------------------
Upon receipt by the Company from any Holder of evidence
reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of this Warrant and indemnity reasonably satisfactory
to it (it being understood that the written agreement of GE shall be sufficient
indemnity), and in case of mutilation upon surrender and cancellation hereof,
the Company will execute and deliver in lieu hereof a new Warrant of like tenor
to such Holder; PROVIDED, in the case of mutilation, no indemnity shall be
required if this Warrant in identifiable form is surrendered to the Company for
cancellation.
12. OFFICE OF THE COMPANY
---------------------
As long as any of the Warrants remain outstanding, the Company
shall maintain an office or agency (which may be the principal executive offices
of the Company) where the Warrants may be presented for exercise, registration
of transfer, division or combination as provided in this Warrant.
13. FINANCIAL AND BUSINESS INFORMATION
----------------------------------
13.1. QUARTERLY INFORMATION. The Company will deliver to each
Holder, as soon as practicable after the end of each of the first three quarters
of the Company, and in any event within 45 days thereafter, one copy of an
unaudited consolidated balance sheet of the Company and its subsidiaries as at
the close of such quarter, and the related unaudited consolidated statements of
income and cash flows of the Company for such quarter and, in the case of the
second and third quarters, for the portion of the fiscal year ending with such
quarter, setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year. Such financial statements
shall be prepared by the Company in accordance with GAAP (without period-end
adjustments or footnotes) and accompanied by the certification of the Company's
chief executive officer or chief financial officer that such financial
statements are complete and correct and present fairly the consolidated
financial position, results of operations
-17-
21
and cash flows of the Company and its subsidiaries as at the end of such quarter
and for such year-to-date period, as the case may be.
13.2. ANNUAL INFORMATION. The Company will deliver to each
Holder as soon as practicable after the end of each fiscal year of the Company,
and in any event within 90 days thereafter, one copy of:
(a) an audited consolidated balance sheet of the Company and
its subsidiaries as at the end of such year, and
(b) audited consolidated statements of income and cash flows
of the Company and its subsidiaries for such year;
setting forth in each case in comparative form the figures for the corresponding
periods in the previous fiscal year, all prepared in accordance with GAAP, and
which audited financial statements shall be accompanied by (i) an opinion
thereon of the independent certified public accountants regularly retained by
the Company, or any other firm of independent certified public accountants of
recognized national standing selected by the Company and (ii) a report of such
independent certified public accountants confirming any adjustment made pursuant
to Section 4 during such year.
13.3. FILINGS. The Company will file with the Commission all
regular or periodic reports required pursuant to the Exchange Act and will
deliver to Holder promptly upon their becoming available one copy of each
report, notice or proxy statement sent by the Company to its shareholders
generally, and of each regular or periodic report (pursuant to the Exchange
Act), filed by the Company with (i) the Commission or (ii) any securities
exchange on which Common Shares are listed.
14. LIMITATION OF LIABILITY
-----------------------
No provision hereof, in the absence of affirmative action by
Holder to purchase Common Shares, and no enumeration herein of the rights or
privileges of Holder hereof, shall give rise to any liability of such Holder for
the purchase price of any Common Share or as a shareholder of the Company,
whether such liability is asserted by the Company or by creditors of the
Company.
15. MISCELLANEOUS
-------------
15.1. NONWAIVER AND EXPENSES. No course of dealing or any
delay or failure to exercise any right hereunder on the part of Holder shall
operate as a waiver of such right or otherwise prejudice ▇▇▇▇▇▇'s rights, powers
or remedies. If the Company fails to comply with any provision of this Warrant,
the Company shall pay to Holder such amounts as shall be sufficient to cover any
costs and expenses including, but not limited to, reasonable attorneys' fees,
including those of appellate proceedings, incurred by ▇▇▇▇▇▇ in enforcing any of
its rights, powers or remedies hereunder.
-18-
22
15.2. NOTICE GENERALLY. Any notice, demand, request, consent,
approval, declaration, delivery or other communication hereunder to be made
pursuant to the provisions of this Warrant shall be sufficiently given or made
if in writing and either delivered in person with receipt acknowledged or sent
by registered or certified mail, return receipt requested, postage prepaid, or
by telecopy and confirmed by telecopy answerback, addressed as follows:
(a) If to any Holder or holder of Warrant Shares, at its last
known address appearing on the books of the Company maintained for such purpose.
(b) If to the Company at
Advanced Lighting Technologies, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: President
Telecopy Number: (▇▇▇)▇▇▇-▇▇▇▇
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration, delivery or other communication hereunder shall
be deemed to have been duly given or served on the date on which personally
delivered, with receipt acknowledged, telecopied and confirmed by telecopy
answerback, one Business Day after the same shall have been delivered to a
nationally recognized courier service, or three Business Days after the same
shall have been deposited, postage prepaid, in the United States mail. Failure
or delay in receipt of copies of any notice, demand, request, approval,
declaration, delivery or other communication to the Person designated above
shall in no way adversely affect the effectiveness of such notice, demand,
request, approval, declaration, delivery or other communication.
15.3. REMEDIES. Each holder of a Warrant or a Warrant Share,
in addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under Section 9 of this Warrant. The Company agrees that monetary damages would
not be adequate compensation for any loss incurred by reason of a breach by it
of the provisions of Section 9 of this Warrant and hereby agrees to waive the
defense in any action for specific performance that a remedy at law would be
adequate.
15.4. SUCCESSORS AND ASSIGNS. Subject to the provisions of
Sections 3.1 and 9, this Warrant and the rights evidenced hereby shall inure to
the benefit of and be binding upon the successors of the Company and the
successors and assigns of ▇▇▇▇▇▇. The provisions of this Warrant are intended to
be for the benefit of all Holders from time to time of this Warrant and, with
respect to Section 9 hereof, holders of Warrant Shares, and shall be enforceable
by any such Holder or holder of Warrant Shares.
15.5. AMENDMENT. This Warrant may be modified or amended or
the provisions hereof waived only with the written consent of the Company and
the Majority Holders; PROVIDED that no such Warrant may be modified or amended
to reduce the number of Common Shares for
-19-
23
which such Warrant is exercisable or to increase the price at which such Common
Shares may be purchased upon exercise of such Warrant (before giving effect to
any adjustment as provided therein) without the prior written consent of each
Holder.
15.6. SEVERABILITY. Wherever possible, each provision of this
Warrant shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Warrant.
15.7. HEADINGS. The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.
15.8. GOVERNING LAW. This Warrant shall be governed by the
laws of the State of New York, without regard to the provisions thereof relating
to conflict of laws.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
duly executed and attested by its Secretary or an Assistant Secretary.
Dated: October 6, 1999
ADVANCED LIGHTING TECHNOLOGIES, INC.
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman and Chief Executive
Officer
Attest:
By: /s/▇▇▇▇▇ ▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Assistant Secretary
-20-
24
EXHIBIT A
SUBSCRIPTION FORM
[To be executed only upon exercise of Warrant]
The undersigned registered owner of this Warrant irrevocably
exercises this Warrant for the purchase of ______ Common Shares of ADVANCED
LIGHTING TECHNOLOGIES, INC. and herewith makes payment therefor, all at the
price and on the terms and conditions specified in this Warrant and requests
that certificates for the Common Shares hereby purchased (and any securities or
other property issuable upon such exercise) be issued in the name of and
delivered to ______________________________ whose address is
____________________________ and, if such Common Shares shall not include all of
the Common Shares issuable as provided in this Warrant, that a new Warrant of
like tenor and date for the balance of the Common Shares issuable hereunder be
delivered to the undersigned.
_________________________________________
(Name of Registered Owner)
_________________________________________
(Signature of Registered Owner)
_________________________________________
(Street Address)
_________________________________________
(City) (State) (Zip Code)
NOTICE: The signature on this subscription must correspond with the
name as written upon the face of the within warrant in every
particular, without alteration or enlargement or any change
whatsoever.
-21-
25
EXHIBIT B
ASSIGNMENT FORM
FOR VALUE RECEIVED the undersigned registered owner of this
Warrant hereby sells, assigns and transfers unto the Assignee named below all of
the rights of the undersigned under this Warrant, with respect to the number of
Common Shares set forth below:
Name and Address of Assignee No. of Common Shares
---------------------------- --------------------
and does hereby irrevocably constitute and appoint ________________________
attorney-in-fact to register such transfer on the books of ADVANCED LIGHTING
TECHNOLOGIES, INC. maintained for the purpose, with full power of substitution
in the premises.
Dated:____________________ Print Name:_______________________
Signature:_________________________
Witness:___________________________
NOTICE: The signature on this assignment must correspond with the name
as written upon the face of the within Warrant in every
particular, without alteration or enlargement or any change
whatsoever.
-22-