Exhibit 10.69
EXHIBIT D
---------
FORM OF WARRANT
---------------
--------------------------------------------------------------------------------
Overhill Farms, Inc.
Common Stock Purchase Warrant
Dated as of December __, 1997
--------------------------------------------------------------------------------
THIS WARRANT AND ANY SECURITIES ACQUIRED UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAW OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION TO THE
REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS. THIS WARRANT AND SUCH
SECURITIES MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN
COMPLIANCE WITH THE CONDITIONS SPECIFIED IN THIS WARRANT AND IN THE REGISTRATION
RIGHTS AGREEMENT, DATED THE DATE HEREOF, BY AND BETWEEN OVERHILL FARMS, INC.,
AND THE HOLDERS SPECIFIED THEREIN.
TABLE OF CONTENTS
-----------------
Page
----
1. Exercise of Warrant................................................................................ 1
1.1. Manner of Exercise........................................................................ 1
1.2. When Exercise Effective................................................................... 1
1.3. Delivery of Stock Certificates, etc....................................................... 2
1.4. Company to Reaffirm Obligations........................................................... 2
1.5. Payment by Application of Note............................................................ 2
1.6. Payment by Application of Shares Otherwise Issuable....................................... 3
1.7. Tax Basis................................................................................. 3
2. Adjustment of Common Stock Issuable Upon Exercise.................................................. 3
2.1. General; Warrant Quantity................................................................. 3
2.2. Adjustment of Warrant Quantity............................................................ 3
2.2.1 Issuance of Additional Shares of Common Stock.................................... 3
2.2.2 Extraordinary Dividends and Distributions........................................ 4
2.3. Treatment of Option and Convertible Securities............................................ 4
2.4. Treatment of Stock Dividends, Stock Splits, etc........................................... 6
2.5. Computation of Consideration.............................................................. 6
2.6. Adjustments for Combinations, etc......................................................... 7
2.7 Dilution in Case of Other Securities...................................................... 7
2.8 Minimum Adjustment of Warrant Quantity.................................................... 8
2.9. Abandoned Dividend or Distribution........................................................ 8
3. Consolidation, Merger, etc......................................................................... 8
3.1. Adjustments for Consolidation, Merger, Sale of Assets, Reorganization, etc................ 8
3.2. Assumption of Obligations................................................................. 9
4. Other Dilutive Events.............................................................................. 9
5. No Dilution or Impairment.......................................................................... 9
6. Accountants' Report as to Adjustments.............................................................. 10
i
7. Financial and Business Information................................................................. 10
7.1 Quarterly Information..................................................................... 10
7.2 Annual Information........................................................................ 11
7.3. Filings................................................................................... 11
7.4. Notices of Corporate Action............................................................... 12
8. Registration of Common Stock....................................................................... 12
9. Restrictions on Transfer........................................................................... 13
9.1. Restrictive Legends....................................................................... 13
9.2. Transfers to Comply With the Securities Act............................................... 14
9.3. Termination of Restrictions............................................................... 14
10. Reservation of Stock, etc.......................................................................... 14
11. Registration and Transfer of Warrants, etc......................................................... 15
11.1. Warrant Register; Ownership of Warrants................................................... 15
11.2. Transfer of Warrants...................................................................... 15
11.3. Replacement of Warrants................................................................... 15
11.4. Adjustments To Warrant Quantity........................................................... 15
11.5 Fractional Shares......................................................................... 15
12. Definitions........................................................................................ 15
13. Remedies; Specific Performance..................................................................... 18
14. No Rights or Liabilities as Shareholder............................................................ 18
15. Notices............................................................................................ 19
16. Amendments......................................................................................... 19
17. Descriptive Headings, Etc.......................................................................... 19
18. GOVERNING LAW...................................................................................... 19
19. Judicial Proceedings; Waiver of Jury............................................................... 19
ii
20. Registration Rights Agreement...................................................................... 20
21. Redemption......................................................................................... 20
iii
EXHIBIT D
OVERHILL FARMS, INC.
Common Stock Purchase Warrant
Void After December ___, 2002
No. W-1 New York, New York
December __, 1997
OVERHILL FARMS, INC. (the "Company"), a Nevada corporation, for value
received, hereby certifies that THE LONG HORIZONS FUND, L.P., a __________
limited partnership, or registered assigns (the "Holder"), is entitled to
purchase from the Company Two Hundred and Thirty Two and One Half (232.5) shares
of Common Stock of the Company (the "Warrant Quantity") duly authorized, validly
issued, fully paid and nonassessable shares of common stock, par value $0.01 per
share, of the Company (the "Common Stock") at the purchase price per share of
$0.01, at any time or from time to time prior to 5:30 PM, New York City time, on
December __, 2002 (the "Expiration Date"), all subject to the terms, conditions
and adjustments set forth below in this Warrant.
This Warrant is the Warrant (the "Warrant", such term to include any
such warrants issued in substitution therefor) originally issued in connection
with the Term Loan Agreement, dated as of the date hereof, by and among the
Company, Polyphase Corporation, as guarantor, and the Holder (as amended or
otherwise modified from time to time, the "Term Loan Agreement"). The Warrant
originally so issued evidences the right to purchase a number of shares of
Common Stock equal to the Warrant Quantity, subject to adjustment as provided
herein. Certain capitalized terms used in this Warrant are defined in Section
12; references to an "Exhibit" are, unless otherwise specified, to one of the
Exhibits attached to this Warrant and references to a "Section" are, unless
otherwise specified, to one of the Sections of this Warrant.
1. Exercise of Warrant.
-------------------
1.1. Manner of Exercise. This Warrant may be exercised by the
------------------
Holder, in whole or in part, during normal business hours on any Business Day,
by surrender of this Warrant to the Company at its principal office, accompanied
by the Form of Subscription in substantially the form attached as Exhibit A to
this Warrant (or a reasonable facsimile thereof) duly executed by the Holder and
accompanied by payment, in cash, by certified or official bank check payable to
the order of the Company, or in the manner provided in Section 1.5 or Section
1.6 (or by any combination of such methods), in the amount obtained by
multiplying (a) the number of shares of Common Stock (adjusted as provided in
-
Sections 2 through 4) designated in such Form of Subscription by (b) $0.01, and
-
such Holder shall thereupon be entitled to receive such number of duly
authorized, validly issued, fully paid and nonassessable shares of Common Stock
(or Other Securities).
1.2. When Exercise Effective. Each exercise of this Warrant shall be
-----------------------
deemed to have been effected immediately prior to the close of business on the
Business Day on which this
Warrant shall have been surrendered to the Company as provided in Section 1.1.
At such time the Person or Persons in whose name or names any certificate or
certificates for shares of Common Stock (or Other Securities) shall be issuable
upon such exercise, as provided in Section 1.3, shall be deemed to have become
the Holder or holders of record thereof.
1.3. Delivery of Stock Certificates, etc. As soon as practicable
-----------------------------------
after each exercise of this Warrant, in whole or in part, and in any event
within three Business Days thereafter, the Company at its expense (including the
payment by it of any applicable transfer taxes) will cause to be issued in the
name of and delivered to the Holder hereof or, subject to Section 9, as such
Holder (upon payment by such Holder of any applicable transfer taxes) may
direct,
(a) a certificate or certificates for the number of duly
authorized, validly issued, fully paid and nonassessable shares, including,
if the Company so elects, fractional shares, of Common Stock (or Other
Securities) to which such Holder shall be entitled upon such exercise plus,
at the discretion of the Company, in lieu of any fractional share to which
such Holder would otherwise be entitled, cash in an amount equal to the
same fraction of the Current Market Price per share on the Business Day
next preceding the date of such exercise, and
(b) in case such exercise is in part only, a new Warrant or
Warrants of like tenor, calling in the aggregate on the face or faces
thereof for the number of shares of Common Stock equal (without giving
effect to any adjustment thereof) to the number of such shares called for
on the face of this Warrant minus the number of such shares designated by
the Holder upon such exercise as provided in Section 1.1.
1.4. Company to Reaffirm Obligations. The Company will, at the time
-------------------------------
of each exercise of this Warrant, upon the request of the Holder, acknowledge in
writing its continuing obligation to afford to such Holder all rights
(including, without limitation, any rights to registration of the shares of
Common Stock or Other Securities issued upon such exercise) to which such Holder
shall continue to be entitled after such exercise in accordance with the terms
of this Warrant, provided that if the Holder shall fail to make any such
--------
request, such failure shall not affect the continuing obligation of the Company
to afford such rights to such Holder.
1.5. Payment by Application of Note. Upon any exercise of this
------------------------------
Warrant, the Holder may, at its option, instruct the Company, by written notice
accompanying the surrender of this Warrant at the time of such exercise, to
apply to the payment required by Section 1.1 all or any part of the unpaid
principal amount of the Note at the time held by such Holder, in which case the
Company will accept the principal amount specified in such notice in
satisfaction of a like amount of such payment. In case less than the entire
unpaid principal amount of the Note shall be so specified, the principal amount
so specified shall be credited, as of the date of such exercise, against the
required prepayments of principal then remaining unpaid on such Note in the
inverse order of their maturity dates. Upon any partial application of the
Note, the Holder shall surrender the Note and the Company, at its expense, shall
forthwith issue and deliver to or upon the order of the Holder a new Note or
Notes in principal amount equal to the unpaid principal amount of such
surrendered Note which has not been applied against such payment, such new Note
or Notes to be dated and to bear interest from the date to which interest has
been paid on such surrendered
2
Note. Within two Business Days after receipt of any such notice, the Company
will pay to the Holder of the Note giving such notice, in the manner provided in
the Note and in the Term Loan Agreement, all unpaid interest on the principal
amount so specified in such notice, accrued to the date of the exercise of this
Warrant.
1.6. Payment by Application of Shares Otherwise Issuable. Upon any
---------------------------------------------------
exercise of this Warrant, the Holder may, at its option, instruct the Company,
by written notice accompanying the surrender of this Warrant at the time of such
exercise, to apply to the payment required by Section 1.1 such number of the
shares of Common Stock otherwise issuable to such Holder upon such exercise as
shall be specified in such notice, in which case an amount equal to the excess
of the aggregate Current Market Price of such specified number of shares on the
date of exercise over the portion of the payment required by Section 1.1
attributable to such shares shall be deemed to have been paid to the Company and
the number of shares issuable upon such exercise shall be reduced by such
specified number.
1.7. Tax Basis. The Company and the Holder shall mutually agree as
---------
to the tax basis of this Warrant for purposes of the Internal Revenue Code of
1986, as amended (the "Code"), and the treatment of this Warrant under the Code
by each of the Company and the Holder shall be consistent with such agreement.
2. Adjustment of Common Stock Issuable Upon Exercise.
-------------------------------------------------
2.1. General; Warrant Quantity. This Warrant initially evidences
-------------------------
the right to purchase a number of shares of Common Stock equal to the Warrant
Quantity, subject to adjustment as provided in this Section 2. The "Warrant
Price" shall be fixed at $0.01 per share of Common Stock received upon exercise
of this Warrant.
2.2. Adjustment of Warrant Quantity.
------------------------------
2.2.1 Issuance of Additional Shares of Common Stock. In case the
---------------------------------------------
Company at any time or from time to time after the date hereof shall issue or
sell Additional Shares of Common Stock (including Additional Shares of Common
Stock deemed to be issued pursuant to Section 2.3 or 2.4) without consideration
or for a consideration per share less than the Current Market Price in effect
immediately prior to such issue or sale, then, and in each such case, subject to
Section 2.8, the Warrant Quantity shall be increased, concurrently with such
issue or sale, to an amount determined by multiplying the Warrant Quantity by a
fraction
(a) the numerator of which shall be the number of shares of
Common Stock outstanding immediately after such issue or sale, provided
--------
that, for the purposes of this Section 2.2.1, (x) immediately after any
-
Additional Shares of Common Stock are deemed to have been issued pursuant
to Section 2.3 or 2.4, such Additional Shares shall be deemed to be
outstanding, and (y) treasury shares shall not be deemed to be outstanding,
-
and
(b) the denominator of which shall be (i) the number of shares
-
of Common Stock outstanding immediately prior to such issue or sale plus
(ii) the number of shares of Common Stock which the aggregate consideration
--
received by the Company for
3
the total number of such Additional Shares of Common Stock so issued or
sold would purchase at such Current Market Price.
2.2.2 Extraordinary Dividends and Distributions. In case the Company
-----------------------------------------
at any time or from time to time after the date hereof shall declare, order, pay
or make a dividend or other distribution (including, without limitation, any
distribution of other or additional stock or other securities or property or
Options by way of dividend or spin-off, reclassification, recapitalization or
similar corporate rearrangement) on the Common Stock other than (a) a dividend
-
payable in Additional Shares of Common Stock or (b) a regularly scheduled cash
-
dividend payable out of consolidated earnings or earned surplus, determined in
accordance with generally accepted accounting principles, then, in each such
case, subject to Section 2.8, the Warrant Quantity in effect immediately prior
to the close of business on the record date fixed for the determination of
holders of any class of securities entitled to receive such dividend or
distribution shall be increased, effective as of the close of business on such
record date, to an amount determined by multiplying such Warrant Quantity by a
fraction
(x) the numerator of which shall be the Current Market Price in
effect on such record date or, if the Common Stock trades on an ex-dividend
basis, on the date prior to the commencement of ex-dividend trading, and
(y) the denominator of which shall be such Current Market
Price, less the amount of such dividend or distribution (as determined in
good faith by the Board of Directors of the Company) applicable to one
share of Common Stock,
provided that, in the event that the amount of such dividend as so determined is
--------
equal to or greater than 10% of such Current Market Price or in the event that
such fraction is greater than 10/9, in lieu of the foregoing adjustment,
adequate provision shall be made so that the Holder of this 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.
2.3. Treatment of Options and Convertible Securities. In case the
-----------------------------------------------
Company at any time or from time to time after the date hereof shall issue,
sell, grant or assume, or shall fix a record date for the determination of
holders of any class of securities entitled to receive, any Options or
Convertible Securities (whether or not the rights thereof are immediately
exercisable) then, and in each such case, the maximum number of Additional
Shares of Common Stock (as set forth in the instrument relating thereto, without
regard to any provisions contained therein for a subsequent adjustment of such
number) issuable upon the exercise of such Options or, in the case of
Convertible Securities and Options therefor, the conversion or exchange of such
Convertible Securities, shall be deemed to be Additional Shares of Common Stock
issued as of the time of such issue, sale, grant or assumption or, in case such
a record date shall have been fixed, as of the close of business on such record
date (or, if the Common Stock trades on an ex-dividend basis, on the date prior
to the commencement of ex-dividend trading), provided that such Additional
--------
Shares of Common Stock shall not be deemed to have been issued unless the
consideration per share (determined pursuant to Section 2.5) of such shares
would be less than the Current Market Price in effect on the date of and
immediately prior to such issue, sale, grant or assumption or immediately prior
to the close of business on such record date (or, if the Common Stock trades on
an ex-dividend basis, on the date prior to the commencement of ex-
dividend trading), as the case
4
may be, and provided, further, that in any such case in which Additional Shares
-------- -------
of Common Stock are deemed to be issued
(a) whether or not the Additional Shares of Common Stock
underlying such Options or Convertible Securities are deemed to be issued,
no further adjustment of the Warrant Quantity shall be made upon the
subsequent issue or sale of Convertible Securities or shares of Common
Stock upon the exercise of such Options or the conversion or exchange of
such Convertible Securities, except in the case of any such Options or
Convertible Securities which contain provisions requiring an adjustment,
subsequent to the date of the issue or sale thereof, of the number of
Additional Shares of Common Stock issuable upon the exercise of such
Options or the conversion or exchange of such Convertible Securities by
reason of (x) a change of control of the Company, (y) the acquisition by
- -
any Person or group of Persons of any specified number or percentage of the
Voting Securities of the Company or (z) any similar event or occurrence,
-
each such case to be deemed hereunder to involve a separate issuance of
Additional Shares of Common Stock, Options or Convertible Securities, as
the case may be;
(b) if such Options or Convertible Securities by their terms
provide, with the passage of time or otherwise, for any increase in the
consideration payable to the Company, or decrease in the number of
Additional Shares of Common Stock issuable, upon the exercise, conversion
or exchange thereof (by change of rate or otherwise), the Warrant Quantity
computed upon the original issue, sale, grant or assumption thereof (or
upon the occurrence of the record date, or date prior to the commencement
of ex-dividend trading, as the case may be, with respect thereto), and any
subsequent adjustments based thereon, shall, upon any such increase or
decrease becoming effective, be recomputed to reflect such increase or
decrease insofar as it affects such Options, or the rights of conversion or
exchange under such Convertible Securities, which are outstanding at such
time;
(c) upon the expiration (or purchase by the Company and
cancellation or retirement) of any such Options which shall not have been
exercised or the expiration of any rights of conversion or exchange under
any such Convertible Securities which (or purchase by the Company and
cancellation or retirement of any such Convertible Securities the rights of
conversion or exchange under which) shall not have been exercised, the
Warrant Quantity computed upon the original issue, sale, grant or
assumption thereof (or upon the occurrence of the record date, or date
prior to the commencement of ex-dividend trading, as the case may be, with
respect thereto), and any subsequent adjustments based thereon, shall, upon
such expiration (or such cancellation or retirement, as the case may be),
be recomputed as if:
(i) in the case of Options for Common Stock or Convertible
Securities, the only Additional Share of Common Sock issued or
sold were the Additional Shares of Common Stock, if any, actually
issued or sold upon the exercise of such Options or the
conversion or exchange of such Convertible Securities and the
consideration received therefor was the consideration actually
received by the Company for the issue, sale, grant or assumption
of all such Options, whether or not exercised, plus the
consideration actually received by the
5
Company upon such exercise, or for the issue or sale of all such
Convertible Securities which were actually converted or exchanged,
plus the additional consideration, if any, actually received by the
Company upon such conversion or exchange, and
(ii) in the case of Options for Convertible Securities, only
the Convertible Securities, if any, actually issued or sold upon the
exercise of such Options were issued at the time of the issue or sale,
grant or assumption of such Options, and the consideration received by
the Company for the Additional Shares of Common Stock deemed to have
then been issued was the consideration actually received by the
Company for the issue, sale, grant or assumption of all such Options,
whether or not exercised, plus the consideration deemed to have been
received by the Company (pursuant to Section 2.5) upon the issue or
sale of such Convertible Securities with respect to which such Options
were actually exercised;
(d) no readjustment pursuant to subdivision (b) or (c) above
shall have the effect of decreasing the Warrant Quantity by an amount in
excess of the amount of the adjustment thereof originally made in respect
of the issue, sale, grant or assumption of such Options or Convertible
Securities; and
(e) in the case of any such Options which expire by their terms
not more than 30 days after the date of issue, sale, grant or assumption
thereof, no adjustment of the Warrant Quantity shall be made until the
expiration or exercise of all such Options, whereupon such adjustment shall
be made in the manner provided in subdivision (c) above.
2.4. Treatment of Stock Dividends, Stock Splits, etc. In case the
------------------------------------------------
Company at any time or from time to time after the date hereof shall declare or
pay any dividend on the Common Stock payable in Common Stock, or shall effect a
subdivision of the outstanding shares of Common Stock into a greater number of
shares of Common Stock (by reclassification or otherwise than by payment of a
dividend in Common Stock), then, and in each such case, Additional Shares of
Common Stock shall be deemed to have been issued (a) in the case of any such
-
dividend, immediately after the close of business on the record date for the
determination of holders of any class of securities entitled to receive such
dividend, or (b) in the case of any such subdivision, at the close of business
-
on the day immediately prior to the day upon which such corporate action becomes
effective.
2.5. Computation of Consideration. For the purposes of this Section
----------------------------
2,
(a) the consideration for the issue or sale of any Additional
Shares of Common Stock shall, irrespective of the accounting treatment of
such consideration,
(i) insofar as it consists of cash, be computed at the net
amount of cash received by the Company, without deducting any expenses
paid or incurred by the Company or any commissions or compensations
paid or concessions or discounts allowed to underwriters, dealers or
others performing similar services in connection with such issue or
sale,
6
(ii) insofar as it consists of property (including
securities) other than cash, be computed at the fair value thereof at
the time of such issue or sale, as determined in good faith by the
Board of Directors of the Company, and
(iii) in case Additional Shares of Common Stock are issued
or sold together with other stock or securities or other assets of the
Company for a consideration which covers both, be the portion of such
consideration so received, computed as provided in clauses (i) and
(ii) above, allocable to such Additional Shares of Common Stock, all
as determined in good faith by the Board of Directors of the Company;
(b) Additional Shares of Common Stock deemed to have been issued
pursuant to Section 2.3, relating to Options and Convertible Securities,
shall be deemed to have been issued for a consideration per share
determined by dividing
(i) the total amount, if any, received and receivable by
the Company as consideration for the issue, sale, grant or assumption
of the Options or Convertible Securities in question, plus the minimum
aggregate amount of additional consideration (as set forth in the
instruments relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such consideration to
protect against dilution) payable to the Company upon the exercise in
full of such Options or the conversion or exchange of such Convertible
Securities or, in the case of Options for Convertible Securities, the
exercise of such Options for Convertible Securities and the conversion
or exchange of such Convertible Securities, in each case computing
such consideration as provided in the foregoing subdivision (a),
by
(ii) the maximum number of shares of Common Stock (as set
forth in the instruments relating thereto, without regard to any
provision contained therein for a subsequent adjustment of such number
to protect against dilution) issuable upon the exercise of such
Options or the conversion or exchange of such Convertible Securities;
and
(c) Additional Shares of Common Stock deemed to have been issued
pursuant to Section 2.4, relating to stock dividends, stock splits, etc.,
shall be deemed to have been issued for no consideration.
2.6. Adjustments for Combinations, etc. In case the outstanding
----------------------------------
shares of Common Stock shall be combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of Common Stock, the Warrant Quantity
in effect immediately prior to such combination or consolidation shall,
concurrently with the effectiveness of such combination or consolidation, be
proportionately decreased.
2.7. Dilution in Case of Other Securities. In case any Other
------------------------------------
Securities shall be issued or sold or shall become subject to issue or sale upon
the conversion or exchange of any stock (or Other Securities) of the Company (or
any issuer of Other Securities or any other Person
7
referred to in Section 3) or to subscription, purchase or other acquisition
pursuant to any Options issued or granted by the Company (or any such other
issuer or Person) for a consideration such as to dilute, on a basis consistent
with the standards established in the other provisions of this Section 2, the
purchase rights granted by this Warrant, then, and in each such case, the
computations, adjustments and readjustments provided for in this Section 2 with
respect to the Warrant Quantity shall be made as nearly as possible in the
manner so provided and applied to determine the amount of Other Securities from
time to time receivable upon the exercise of the Warrant, so as to protect the
Holder against the effect of such dilution.
2.8. Minimum Adjustment of Warrant Quantity. If the amount of any
--------------------------------------
adjustment of the Warrant Quantity required pursuant to this Section 2 would be
less than one tenth (1/10) of one percent (1%) of the Warrant Quantity in effect
at the time such adjustment is otherwise so required to be made, such amount
shall be carried forward and adjustment with respect thereto made at the time of
and together with any subsequent adjustment which, together with such amount and
any other amount or amounts so carried forward, shall aggregate at least one
tenth (1/10) of one percent (1%) of such Warrant Quantity. All calculations
under this Warrant shall be made to the nearest one-hundredth of a share.
2.9. Abandoned Dividend or Distribution. If the Company shall take a
----------------------------------
record of the holders of its Common Stock for the purpose of entitling them to
receive a dividend or other distribution (which results in an adjustment to the
Warrant Quantity under the terms of this Warrant) and shall, thereafter, and
before such dividend or distribution is paid or delivered to shareholders
entitled thereto, legally abandon its plan to pay or deliver such dividend or
distribution, then any adjustment made to the Warrant Quantity by reason of the
taking of such record shall be reversed, and any subsequent adjustments, based
thereon, shall be recomputed.
3. Consolidation, Merger, etc.
--------------------------
3.1. Adjustments for Consolidation, Merger, Sale of Assets,
------------------------------------------------------
Reorganization, etc. In case the Company after the date hereof (a) shall
-------------------
consolidate with or merge into any other Person and shall not be the continuing
or surviving corporation of such consolidation or merger, or (b) shall permit
any other Person to consolidate with or merge into the Company and the Company
shall be the continuing or surviving Person but, in connection with such
consolidation or merger, the Common Stock or Other Securities shall be changed
into or exchanged for stock or other securities of any other Person or cash or
any other property, or (c) shall transfer all or substantially all of its
properties or assets to any other Person, or (d) shall effect a capital
reorganization or reclassification of the Common Stock or Other Securities
(other than a capital reorganization or reclassification resulting in the issue
of Additional Shares of Common Stock for which adjustment in the Warrant
Quantity is provided in Section 2.2.1 or 2.2.2), then, and in the case of each
such transaction, proper provision shall be made so that, upon the basis and the
terms and in the manner provided in this Warrant, the Holder, upon the exercise
hereof at any time after the consummation of such transaction, shall be entitled
to receive (at the aggregate Warrant Price in effect at the time of such
consummation for all Common Stock or Other
Securities issuable upon such exercise immediately prior to such consummation),
in lieu of the Common Stock or Other Securities issuable upon such exercise
prior to such consummation, the highest amount of securities, cash or other
property to which such Holder would actually have been entitled as a shareholder
upon such consummation if such Holder had exercised the rights represented by
this
8
Warrant immediately prior thereto, subject to adjustments (subsequent to such
consummation) as nearly equivalent as possible to the adjustments provided for
--------
in Sections 2 through 4, provided that if a purchase, tender or exchange offer
shall have been made to and accepted by the holders of more than 50% of the
outstanding shares of Common Stock, and if the Holder so designates in a notice
given to the Company on or before the date immediately preceding the date of the
consummation of such transaction, the Holder shall be entitled to receive the
highest amount of securities, cash or other property to which such Holder would
actually have been entitled as a shareholder if the Holder had exercised this
Warrant prior to the expiration of such purchase, tender or exchange offer and
accepted such offer, subject to adjustments (from and after the consummation of
such purchase, tender or exchange offer) as nearly equivalent as possible to the
adjustments provided for in Sections 2 through 4.
3.2. Assumption of Obligations. Notwithstanding anything contained
-------------------------
in the Warrant or in the Term Loan Agreement to the contrary, the Company will
not effect any of the transactions described in clauses (a) through (d) of
Section 3.1 unless, prior to the consummation thereof, each Person (other than
the Company) which may be required to deliver any stock, securities, cash or
property upon the exercise of this Warrant as provided herein shall assume, by
written instrument delivered to, and reasonably satisfactory to, the Holder, (a)
-
the obligations of the Company under this Warrant (and if the Company shall
survive the consummation of such transaction, such assumption shall be in
addition to, and shall not release the Company from, any continuing obligations
of the Company under this Warrant), (b) the obligations of the Company under the
-
Registration Rights Agreement, and (c) the obligation to deliver to such Holder
-
such shares of stock, securities, cash or property as, in accordance with the
foregoing provisions of this Section 3, such Holder may be entitled to receive,
and such Person shall have similarly delivered to such Holder an opinion of
counsel for such Person, which counsel shall be reasonably satisfactory to such
Holder, stating that this Warrant shall thereafter continue in full force and
effect and the terms hereof (including, without limitation, all of the
provisions of this Section 3) shall be applicable to the stock, securities, cash
or property which such Person may be required to deliver upon any exercise of
this Warrant or the exercise of any rights pursuant hereto. Nothing in this
Section 3 shall be deemed to authorize the Company to enter into any transaction
not otherwise permitted by the Term Loan Agreement.
4. Other Dilutive Events. In case any event shall occur as to
---------------------
which the provisions of Section 2 or Section 3 are not strictly applicable but
the failure to make any adjustment would not fairly protect the purchase rights
represented by this Warrant in accordance with the essential intent and
principles of such Sections, then, in each such case, the Company shall appoint
a firm of independent certified public accountants of recognized national
standing (which may be the regular auditors of the Company), which shall give
their opinion upon the adjustment, if any, on a basis consistent with the
essential intent and principles established in Sections 2 and 3, necessary to
preserve, without dilution, the purchase rights represented by this Warrant.
Upon receipt of such opinion, the Company will promptly mail a copy thereof to
the Holder and shall make the adjustments described therein.
5. No Dilution or Impairment. The Company will not, by amendment
-------------------------
of its certificate of incorporation or through any consolidation, merger,
reorganization, transfer of assets, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Warrant, but will at all times in good
9
faith assist in the carrying out of all such terms and in the taking of all such
action as may be necessary or appropriate in order to protect the rights of the
Holder against dilution or other impairment. Without limiting the generality of
the foregoing, the Company (a) shall not permit the par value of any shares of
-
stock receivable upon the exercise of this Warrant to exceed the amount payable
therefor upon such exercise, (b) will take all such action as may be necessary
-
or appropriate in order that the Company may validly and legally issue fully
paid and nonassessable shares of stock, free from all taxes, liens, security
interests, encumbrances, preemptive rights and charges on the exercise of the
Warrants from time to time outstanding, (c) will not take any action which
-
results in any adjustment of the Warrant Quantity if the total number of shares
of Common Stock (or Other Securities) issuable after the action upon the
exercise of all of the Warrants would exceed the total number of shares of
Common Stock (or Other Securities) then authorized by the Company's certificate
of incorporation and available for the purpose of issue upon such exercise, and
(d) will not issue any capital stock of any class which is preferred as to
-
dividends or as to the distribution of assets upon voluntary or involuntary
dissolution, liquidation or winding-up, unless the rights of the holders thereof
shall be limited to a fixed sum or percentage of par value or a sum determined
by reference to a formula based on a published index of interest rates, an
interest rate publicly announced by a financial institution or a similar
indicator of interest rates in respect of participation in dividends and to a
fixed sum or percentage of par value in any such distribution of assets.
6. Accountants' Report as to Adjustments. In each case of any
-------------------------------------
adjustment or readjustment in the shares of Common Stock (or Other Securities)
issuable upon the exercise of this Warrant, the Company at its expense will
promptly compute such adjustment or readjustment in accordance with the terms of
this Warrant and cause independent certified public accountants of recognized
national standing (which may be the regular auditors of the Company) selected by
the Company to verify such computation (other than any computation of the fair
value of property as determined in good faith by the Board of Directors of the
Company) and prepare a report setting forth such adjustment or readjustment and
showing in reasonable detail the method of calculation thereof and the facts
upon which such adjustment or readjustment is based, including a statement of
(a) the consideration received or to be received by the Company for any
-
Additional Shares of Common Stock issued or sold or deemed to have been issued,
(b) the number of shares of Common Stock outstanding or deemed to be
-
outstanding, and (c) the Warrant Quantity in effect immediately prior to such
-
issue or sale and as adjusted and readjusted (if required by Section 2) on
account thereof. The Company will forthwith mail a copy of each such report to
each Holder of a Warrant and will, upon the written request at any time of any
Holder of a Warrant, furnish to such Holder a like report setting forth the
Warrant Quantity at the time in effect and showing in reasonable detail how it
was calculated. The Company will also keep copies of all such reports at its
principal office and will cause the same to be available for inspection at such
office during normal business hours by any Holder of a Warrant or any
prospective purchaser of a Warrant designated by the Holder thereof.
7. Financial and Business Information
----------------------------------
7.1 Quarterly Information. Except during any period when the
---------------------
Company either (i) is subject to the reporting requirements of Section 15(d) of
the Exchange Act or (ii) has securities registered under Section 12(b) or 12(g)
of the Exchange Act (such status being referred
10
to as being a "Public Company"), the Company will deliver to the Holder, as soon
as practicable after the end of each quarterly fiscal period in each fiscal year
of the Company, and in any event within 60 days thereafter, a copy of the
unaudited consolidated balance sheet as at the close of such quarter, and the
related unaudited consolidated statements of income, shareholders' equity and
cash flow of the Company and its subsidiaries for that portion of the fiscal
year ending as of the close of such quarter. Such financial statements shall be
prepared by the Company in accordance with generally accepted accounting
principles, applied on a consistent basis ("GAAP") (subject to normal year end
adjustments and the inclusion of footnotes) and accompanied by the certification
of the Company's chief executive officer or chief financial officer that, to the
best of his knowledge, such financial statements are complete and correct in all
material respects and fairly present in accordance with GAAP (subject to normal
year end adjustments and the inclusions of footnotes) the consolidated financial
position, the consolidated statements of income, shareholder equity and cash
flow 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.
7.2. Annual Information. Except during any period when the Company is
------------------
a Public Company, the Company will deliver to the Holder as soon as practicable
after the end of each fiscal year of the Company, and in any event within 120
days thereafter, one copy of:
(i) an audited consolidated balance sheet of the Company
and its subsidiaries as at the end of such year, and
(ii) audited consolidated statements of income,
shareholders' equity and cash flow 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) a certification
of the chief executive officer or chief financial officer of the Company that,
to the best of his knowledge, all such financial statements are complete and
correct in all material respects and present fairly in accordance with GAAP the
consolidated financial position of the Company and its subsidiaries as at the
end of such fiscal year and for the period then ended, (ii) 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 (iii) a report of such
independent certified public accountants confirming any adjustment made pursuant
to Section 2 during such year.
7.3. Filings. During any period when the Company is a Public
-------
Company, the Company will file on or before the required date all required
regular or periodic reports (pursuant to the Exchange Act) with the Commission
and will deliver to the Holder promptly upon their becoming available one copy
of each report, notice or proxy statement sent by the Company to its
stockholders generally, and of each regular or periodic report (pursuant to the
Exchange Act) and any registration statement, prospectus or written
communication (other than transmittal letters) (pursuant to the Securities Act),
filed by the Company with (i) the Commission or (ii) any securities exchange on
which shares of Common Stock are listed.
11
7.4. Notices of Corporate Action. In the event of
---------------------------
(a) any taking by the Company of a record of the holders of any
class of securities for the purpose of determining the holders thereof who
are entitled to receive any dividend (other than a regular periodic
dividend payable in cash out of earned surplus in an amount not exceeding
the amount of the immediately preceding cash dividend for such period) or
other distribution, or any right to subscribe for, purchase or otherwise
acquire any shares of stock of any class or any other securities or
property, or to receive any other right, or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or
any consolidation or merger involving the Company and any other Person, any
transaction or series of transactions in which more than 50% of the Voting
Securities of the Company are transferred to another Person or any
transfer, sale or other disposition of all or substantially all the assets
of the Company to any other Person, or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
the Company will mail to the Holder a notice specifying (i) the date or expected
-
date on which any such record is to be taken for the purpose of such dividend,
distribution or right, and the amount and character of such dividend,
distribution or right, and (ii) the date or expected date on which any such
--
reorganization, reclassification, recapitalization, consolidation, merger,
transfer, dissolution, liquidation or winding-up is to take place and the time,
if any such time is to be fixed, as of which the holders of record of Common
Stock (or Other Securities) shall be entitled to exchange their shares of Common
Stock (or Other Securities) for the securities or other property deliverable
upon such reorganization, reclassification, recapitalization, consolidation,
merger, transfer, dissolution, sale, disposition, liquidation or winding-up.
Such notice shall be mailed at least 45 days prior to the date therein
specified.
8. Registration of Common Stock. If any shares of Common Stock
----------------------------
required to be reserved for purposes of exercise of this Warrant require
registration with or approval of any governmental authority under any federal or
state law (other than the Securities Act) before such shares may be issued upon
exercise, the Company will, at its expense and as expeditiously as possible, use
its best efforts to cause such shares to be duly registered or approved, as the
case may be. At any such time as Common Stock is listed on any national
securities exchange, the Company will, at its expense, obtain promptly and
maintain the approval for listing on each such exchange, upon official notice of
issuance, the shares of Common Stock issuable upon exercise of the then
outstanding Warrants and maintain the listing of such shares after their
issuance; and the Company will also list on such national securities exchange,
will register under the Exchange Act and will maintain such listing of, any
Other Securities that at any time are issuable upon exercise of the Warrants, if
and at the time that any securities of the same class shall be listed on such
national securities exchange by the Company.
12
9. Restrictions on Transfer.
------------------------
9.1. Restrictive Legends. Except as otherwise permitted by this
-------------------
Section 9, each Warrant (including each Warrant issued upon the transfer of any
Warrant) shall be stamped or otherwise imprinted with a legend in substantially
the following form:
"THIS WARRANT AND ANY SECURITIES ACQUIRED UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAW OF ANY STATE AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS
OR PURSUANT TO AN APPLICABLE EXEMPTION TO THE REGISTRATION REQUIREMENTS OF
SUCH ACT AND SUCH LAWS. THIS WARRANT AND SUCH SECURITIES MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE
CONDITIONS SPECIFIED IN THIS WARRANT AND IN THE REGISTRATION RIGHTS
AGREEMENT, DATED THE DATE HEREOF, BY AND BETWEEN OVERHILL FARMS, INC., AND
THE HOLDERS SPECIFIED THEREIN."
Except as otherwise permitted by this Section 9, each certificate for Common
Stock (or Other Securities) issued upon the exercise of any Warrant, and each
certificate issued upon the transfer of any such Common Stock (or Other
Securities), shall be stamped or otherwise imprinted with a legend in
substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAW OF ANY STATE, AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION TO
THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS. SUCH SECURITIES
MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE
WITH THE CONDITIONS SPECIFIED IN CERTAIN COMMON STOCK PURCHASE WARRANTS
ISSUED BY OVERHILL FARMS, INC., PURSUANT TO THE COMMON STOCK PURCHASE
WARRANT, DATED DECEMBER __, 1997, AND PURSUANT TO THE REGISTRATION RIGHTS
AGREEMENT DATED THE DATE THEREOF, BY AND BETWEEN OVERHILL FARMS, INC. AND
THE HOLDERS SPECIFIED THEREIN. A COMPLETE AND CORRECT COPY OF
THE FORM OF SUCH WARRANT AND REGISTRATION RIGHTS AGREEMENT IS AVAILABLE FOR
INSPECTION AT THE PRINCIPAL OFFICE OF OVERHILL FARMS, INC., OR AT THE
OFFICE OR AGENCY
13
MAINTAINED BY OVERHILL FARMS, INC., AS PROVIDED IN SUCH WARRANTS AND SUCH
REGISTRATION RIGHTS AGREEMENT AND WILL BE FURNISHED TO THE HOLDER OF SUCH
SECURITIES UPON WRITTEN REQUEST AND WITHOUT CHARGE."
9.2. Transfer to Comply With the Securities Act. Restricted
------------------------------------------
Securities may not be sold, assigned, pledged, hypothecated, encumbered or in
any manner transferred or disposed of, in whole or in part, except in compliance
with the provisions of the Securities Act and state securities or Blue Sky laws
and the terms and conditions hereof.
9.3. Termination of Restrictions. The restrictions imposed by this
---------------------------
Section 9 on the transferability of Restricted Securities shall cease and
terminate as to any particular Restricted Securities (a) when a registration
statement with respect to the sale of such securities shall have been declared
effective under the Securities Act and such securities shall have been disposed
of in accordance with such registration statement, (b) when such securities are
sold pursuant to Rule 144 (or any similar provision then in force) under the
Securities Act, or (c) when, in the opinion of both counsel for the Holder and
counsel for the Company, such restrictions are no longer required or necessary
in order to protect the Company against a violation of the Securities Act upon
any sale or other disposition of such securities without registration
thereunder. Whenever such restrictions shall cease and terminate as to any
Restricted Securities, the Holder shall be entitled to receive from the Company,
without expense, new securities of like tenor not bearing the applicable legends
required by Section 9.1.
10. Reservation of Stock, etc. The Company shall at all times
--------------------------
reserve and keep available, solely for issuance and delivery upon exercise of
the Warrants, the number of shares of Common Stock (or Other Securities) from
time to time issuable upon exercise of all Warrants at the time outstanding.
All shares of Common Stock (or Other Securities) issuable upon exercise of any
Warrants shall be duly authorized and, when issued upon such exercise, shall be
validly issued and, in the case of shares, fully paid and nonassessable with no
liability on the part of the holders thereof, and, in the case of all
securities, shall be free from all taxes, liens, security interests,
encumbrances, preemptive rights and charges. The transfer agent for the Common
Stock, which may be the Company ("Transfer Agent"), and every subsequent
Transfer Agent for any shares of the Company's capital stock issuable upon the
exercise of any of the purchase rights represented by this Warrant, are hereby
irrevocably authorized and directed at all times until the Expiration Date to
reserve such number of authorized and unissued shares as shall be requisite for
such purpose. The Company shall keep copies of this Warrant on file with the
Transfer Agent for the Common Stock and with every subsequent Transfer Agent for
any shares of the Company's capital stock issuable upon the exercise of the
rights of purchase represented by this Warrant. The Company shall supply such
Transfer Agent with duly executed stock certificates for such purpose. All
Warrant certificates surrendered upon the exercise of the rights thereby
evidenced shall be canceled, and such canceled Warrants shall constitute
sufficient evidence of the number of shares of stock which have been issued upon
the exercise of such Warrants. Subsequent to the Expiration Date, no shares of
stock need be reserved in respect of any unexercised Warrant.
14
11. Registration and Transfer of Warrants, etc.
-------------------------------------------
11.1. Warrant Register; Ownership of Warrants. Each Warrant issued
---------------------------------------
by the Company shall be numbered and shall be registered in a warrant register
(the "Warrant Register") as it is issued and transferred, which Warrant Register
shall be maintained by the Company at its principal office or, at the Company's
election and expense, by a Warrant Agent or the Company's transfer agent. The
Company shall be entitled to treat the registered Holder of any Warrant on the
Warrant Register as the owner in fact thereof for all purposes and shall not be
bound to recognize any equitable or other claim to or interest in such Warrant
on the part of any other Person, and shall not be affected by any notice to the
contrary, except that, if and when any Warrant is properly assigned in blank,
the Company may (but shall not be obligated to) treat the bearer thereof as the
owner of such Warrant for all purposes. Subject to Section 9, a Warrant, if
properly assigned, may be exercised by a new holder without a new Warrant first
having been issued.
11.2. Transfer of Warrants. Subject to compliance with Section 9, if
--------------------
applicable, this Warrant and all rights hereunder are transferable in whole or
in part, without charge to the Holder hereof, upon surrender of this Warrant
with a properly executed Form of Assignment attached hereto as Exhibit B at the
principal office of the Company. Upon any partial transfer, the Company shall at
its expense issue and deliver to the Holder a new Warrant of like tenor, in the
name of the Holder, which shall be exercisable for such number of shares of
Common Stock with respect to which rights under this Warrant were not so
transferred.
11.3. Replacement of Warrants. On receipt by the Company of evidence
-----------------------
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and, in the case of any such loss, theft or
destruction of this Warrant, on delivery of an indemnity agreement reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, on surrender of such Warrant to the Company at its principal office
and cancellation thereof, the Company at its expense shall execute and deliver,
in lieu thereof, a new Warrant of like tenor.
11.4. Adjustments To Warrant Quantity. Notwithstanding any
-------------------------------
adjustment in the Warrant Quantity or in the number or kind of shares of Common
Stock purchasable upon exercise of this Warrant, any Warrant theretofore or
thereafter issued may continue to express the same number and kind of shares of
Common Stock as are stated in this Warrant, as initially issued.
11.5. Fractional Shares. Notwithstanding any adjustment pursuant to
-----------------
Section 2 in the number of shares of Common Stock covered by this Warrant or any
other provision of this Warrant, the Company may, but shall not be required to,
issue fractions of shares upon exercise of this Warrant or to distribute
certificates which evidence fractional shares. In lieu of fractional shares, the
Company shall make payment to the Holder, at the time of exercise of this
Warrant as herein provided, in an amount in cash equal to such fraction
multiplied by the Current Market Price of a share of Common Stock on the date of
Warrant exercise.
12. Definitions. As used herein, unless the context otherwise
-----------
requires, the following terms have the following respective meanings:
15
Additional Shares of Common Stock: All shares (including treasury
---------------------------------
shares) of Common Stock issued or sold (or, pursuant to Section 2.3 or 2.4,
deemed to be issued) by the Company after the date hereof, whether or not
subsequently reacquired or retired by the Company, other than
(a) shares issued upon the exercise of the Warrant,
(b) such additional number of shares as may become issuable upon
the exercise of the Warrant by reason of adjustments required pursuant to
anti-dilution provisions applicable to the Warrant as in effect on the date
hereof,
(c) shares, warrants, options and other securities issued at any
time to the Holder or any Affiliate thereof.
Affiliate: Any person that directly or indirectly, through one or
---------
more intermediaries, controls, is controlled by, or is under common control
with, the applicable person. For purposes of this definition "control" has the
meaning specified in Rule 12b-2 under the Exchange Act.
Business Day: Any day other than a Saturday or a Sunday or a day on
------------
which commercial banking institutions in the City of New York are authorized by
law to be closed. Any reference to "days" (unless Business Days are specified)
shall mean calendar days.
Code: As defined in Section 1.7.
----
Commission: The Securities and Exchange Commission or any other
----------
federal agency at the time administering the Securities Act.
Common Stock: As defined in the introduction to this Warrant, such
------------
term to include any stock into which such Common Stock shall have been changed
or any stock resulting from any reclassification of such Common Stock, and all
other stock of any class or classes (however designated) of the Company the
holders of which have the right, without limitation as to amount, either to all
or to a share of the balance of current dividends and liquidating dividends
after the payment of dividends and distributions on any shares entitled to
preference.
Company: As defined in the introduction to this Warrant, such term
-------
to include any corporation which shall succeed to or assume the obligations of
the Company hereunder in compliance with Section 3.
Convertible Securities: Any evidences of indebtedness, shares of
----------------------
stock (other than Common Stock) or other securities directly or indirectly
convertible into or exchangeable for Additional Shares of Common Stock.
Current Market Price: On any date specified herein, the average
--------------------
daily Market Price during the period of the most recent 20 days, ending on such
date, on which the national securities exchanges were open for trading, except
that if no Common Stock is then listed or admitted to trading on any national
securities exchange or quoted in the over-the-counter market, the Current Market
Price shall be the Market Price on such date.
16
Exchange Act: The Securities Exchange Act of 1934, or any similar
------------
federal statute, and the rules and regulations of the Commission thereunder, all
as the same shall be in effect at the time.
Expiration Date: As defined in the introduction to this Warrant.
---------------
Holder: As defined in the introduction to this Warrant.
------
Market Price: On any date specified herein, the amount per share of
------------
the Common Stock, equal to (a) the last reported sale price of such Common
Stock, regular way, on such date or, in case no such sale takes place on such
date, the average of the closing bid and asked prices thereof regular way on
such date, in either case as officially reported on the principal national
securities exchange on which such Common Stock is then listed or admitted for
trading, or (b) if such Common Stock is not then listed or admitted for trading
on any national securities exchange but is designated as a national market
system security by the NASD, the last reported trading price of the Common Stock
on such date, or (c) if there shall have been no trading on such date or if the
Common Stock is not so designated, the average of the closing bid and asked
prices of the Common Stock on such date as shown by the NASD automated quotation
system, or (d) if such Common Stock is not then listed or admitted for trading
on any national exchange or quoted in the over-the-counter market, the higher of
(x) the book value thereof as determined by any firm of independent public
accountants of recognized standing selected by the Board of Directors of the
Company as of the last day of any month ending within 60 days preceding the date
as of which the determination is to be made and (y) the fair value thereof (as
of a date which is within 20 days of the date as of which the determination is
to be made) determined in good faith by the Board of Directors of the Company.
NASD: The National Association of Securities Dealers, Inc.
----
Note: The Term Note (as defined in the Term Loan Agreement),
----
including any notes issued in substitution for or replacement of the Term Note.
Options: Rights, options or warrants to subscribe for, purchase or
-------
otherwise acquire either Additional Shares of Common Stock or Convertible
Securities.
Other Securities: Any stock (other than Common Stock) and other
----------------
securities of the Company or any other Person (corporate or otherwise) which the
holders of the Warrants at any time shall be entitled to receive, or shall have
received, upon the exercise of the Warrants, in lieu of or in addition to Common
Stock, or which at any time shall be issuable or shall have been issued in
exchange for or in replacement of Common Stock or Other Securities pursuant to
Section 3 or otherwise.
Person: An individual, firm, partnership, corporation, professional
-------
corporation, trust, joint venture, association, joint stock company, limited
liability company, unincorporated organization or any other entity or
organization, including a government or agency or political subdivision thereof,
and shall include any successor (by merger or otherwise) of such entity.
Registration Rights Agreement: The Registration Rights Agreement,
-----------------------------
dated the date hereof, by and between the Company and the holders specified
therein.
17
Restricted Securities: (a) any Warrants bearing the applicable
--------------------- -
legend set forth in Section 9.1, (b) any shares of Common Stock (or Other
-
Securities) issued or issuable upon the exercise of Warrants which are evidenced
by a certificate or certificates bearing the applicable legend set forth in such
Section, and (c) any shares of Common Stock (or Other Securities) issued
-
subsequent to the exercise of any of the Warrants as a dividend or other
distribution with respect to, or resulting from a subdivision of the outstanding
shares of Common Stock (or other Securities) into a greater number of shares by
reclassification, stock splits or otherwise, or in exchange for or in
replacement of the Common Stock (or Other Securities) issued upon such exercise,
which are evidenced by a certificate or certificates bearing the applicable
legend set forth in such Section.
Securities Act: The Securities Act of 1933, or any similar federal
--------------
statute, and the rules and regulations of the Commission thereunder, all as the
same shall be in effect at the time.
Term Loan: The Term Loan as defined in the Term Loan Agreement.
---------
Term Loan Agreement: As defined in the introduction to this Warrant.
-------------------
Voting Securities: Stock of any class or classes (or equivalent
-----------------
interests), if the holders of the stock of such class or classes (or equivalent
interests) are ordinarily, in the absence of contingencies, entitled to vote for
the election of the directors (or persons performing similar functions) of such
business entity, even though the right so to vote has been suspended by the
happening of such a contingency.
Warrant: As defined in the introduction to this Warrant.
-------
Warrant Price: As defined in Section 2.1.
-------------
Warrant Quantity: As defined in the introduction to this Warrant.
----------------
13. Remedies; Specific Performance. The Company stipulates that
------------------------------
there would be no adequate remedy at law to the Holder of this Warrant in the
event of any default or threatened default by the Company in the performance of
or compliance with any of the terms of this Warrant and accordingly, the Company
agrees that, in addition to any other remedy to which the Holder may be entitled
at law or in equity, the Holder shall be entitled to seek to compel specific
performance of the obligations of the Company under this Warrant, without the
posting of any bond, in accordance with the terms and conditions of this Warrant
in any court of the United States or any State thereof having jurisdiction, and
if any action should be brought in equity to enforce any of the provisions of
this Warrant, the Company shall not raise the defense that there is an adequate
remedy at law. Except as otherwise provided by law, a delay or omission by the
Holder hereto in exercising any right or remedy accruing upon any such breach
shall not impair the right or remedy or constitute a waiver of or acquiescence
in any such breach. No remedy shall be exclusive of any other remedy. All
available remedies shall be cumulative.
14. No Rights or Liabilities as Shareholder. Nothing contained in
---------------------------------------
this Warrant shall be construed as conferring upon the Holder hereof any rights
as a shareholder of the Company or as imposing any obligation on the Holder to
purchase any securities or as imposing
18
any liabilities on the Holder as a shareholder of the Company, whether such
obligation or liabilities are asserted by the Company or by creditors of the
Company.
15. Notices. All notices and other communications (and deliveries)
-------
provided for or permitted hereunder shall be made in writing by hand delivery,
telecopier, any courier guaranteeing overnight delivery or first class
registered or certified mail, return receipt requested, postage prepaid,
addressed (a) if to the Company, to the attention of its President at its
principal office located at ββββ ββββββββ βββ, βββββ βββ, ββββββ ββββ,
ββββββββββ βββββ or such other address as may hereafter be designated in writing
by the Company to the Holder in accordance with the provisions of this Section,
or (b) if to the Holder, at its address as it appears in the Warrant Register.
All such notices and communications (and deliveries) shall be deemed
to have been duly given: at the time delivered by hand, if personally delivered;
when receipt is acknowledged, if telecopied; on the next Business Day, if timely
delivered to a courier guaranteeing overnight delivery; and five days after
being deposited in the mail, if sent first class or certified mail, return
receipt requested, postage prepaid; provided, that the exercise of any Warrant
--------
shall be effective in the manner provided in Section 1.
16. Amendments. This Warrant and any term hereof may not be
----------
amended, modified, supplemented or terminated, and waivers or consents to
departures from the provisions hereof may not be given, except by written
instrument duly executed by the party against which enforcement of such
amendment, modification, supplement, termination or consent to departure is
sought.
17. Descriptive Headings, Etc. The headings in this Warrant are for
-------------------------
convenience of reference only and shall not limit or otherwise affect the
meaning of terms contained herein. Unless the context of this Warrant otherwise
requires: (1) words of any gender shall be deemed to include each other gender;
(2) words using the singular or plural number shall also include the plural or
singular number, respectively; (3) the words "hereof", "herein" and "hereunder"
and words of similar import when used in this Warrant shall refer to this
Warrant as a whole and not to any particular provision of this Warrant, and
Section and paragraph references are to the Sections and paragraphs of this
Warrant unless otherwise specified; (4) the word "including" and words of
similar import when used in this Warrant shall mean "including, without
limitation," unless otherwise specified; (5) "or" is not exclusive; and (6)
provisions apply to successive events and transactions.
18. GOVERNING LAW. This Warrant shall be governed by, and
-------------
construed in accordance with, the laws of the State of New York (without giving
effect to the conflict of laws principles thereof).
19. Judicial Proceedings; Waiver of Jury. Any legal action, suit
or proceeding brought against the Company with respect to this Warrant may be
brought in any federal court of the Southern District of New York or any state
court located in New York County, State of New York, and by execution and
delivery of this Warrant, the Company hereby irrevocably and unconditionally
waives any claim (by way of motion, as a defense or otherwise) of improper
venue, that it is not subject personally to the jurisdiction of such court, that
such courts are an
19
inconvenient forum or that this Warrant or the subject matter may not be
enforced in or by such court. The Company irrevocably submits to the exclusive
jurisdiction of the aforementioned courts in such action, suit or proceeding.
The Company hereby irrevocably and unconditionally consents to the service of
process of any of the aforementioned courts in any such action, suit or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, at its address set forth or provided for in Section 15 (with
copies of such process also being sent to the Company's counsel referred to in
such section), such service to become effective 10 days after such mailing.
Nothing herein contained shall be deemed to affect the right of any party to
serve process in any manner permitted by law or commence legal proceedings or
otherwise proceed against any other party in any other jurisdiction to enforce
judgments obtained in any action, suit or proceeding brought pursuant to this
Section. THE COMPANY HEREBY IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION, SUIT
OR PROCEEDING, WHETHER AT LAW OR EQUITY, BROUGHT BY IT OR THE HOLDER IN
CONNECTION WITH THIS WARRANT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
20. Registration Rights Agreement. The shares of Common Stock (and
-----------------------------
Other Securities) issuable upon exercise of this Warrant (or upon conversion of
any shares of Common Stock issued upon such exercise) shall constitute
Registrable Securities (as such term is defined in the Registration Rights
Agreement). Each holder of this Warrant shall be entitled to all of the benefits
afforded to a holder of any such Registrable Securities under the Registration
Rights Agreement and such holder, by its acceptance of this Warrant, agrees to
be bound by and to comply with the terms and conditions of the Registration
Rights Agreement applicable to such holder as a holder of such Registrable
Securities.
21. Redemption. The Company shall be entitled to redeem and
----------
purchase Warrants in accordance with the terms and subject to the conditions set
forth in Section 9.01(b) of the Term Loan Agreement.
OVERHILL FARMS, INC.
By:
-----------------------------------
Name:
Title:
20