WARRANT AGREEMENT Dated as of September 16, 2009 by and between American Axle & Manufacturing Holdings, Inc. and General Motors Company
10-Q
Execution
Copy
Dated as
of September 16, 2009
by and
between
American
Axle & Manufacturing Holdings, Inc.
and
General
Motors Company
1
TABLE
OF CONTENTS
2
WARRANT
AGREEMENT (this “Agreement”) dated
as of September
16, 2009 by and between American Axle & Manufacturing Holdings, Inc., a
Delaware corporation (the “Company”), and
General Motors Company, a Delaware corporation (“GM”).
WHEREAS,
the Company is issuing the Warrants pursuant to the Settlement and Commercial
Agreement, dated September 16, 2009, by and among the Company, American Axle
& Manufacturing, Inc. and GM;
WHEREAS,
on the date hereof, the Company shall issue to GM 4,093,729 Warrants;
and
WHEREAS,
upon various drawdowns under the Credit Facility, the Company shall issue to GM
up to 6,915,083 additional Warrants.
NOW,
THEREFORE, in consideration of the premises and the mutual agreements herein set
forth, the parties hereto agree as follows:
SECTION
1. Defined
Terms
ARTICLE
1 .
“Action” shall mean
any action, suit, arbitration, inquiry, proceeding or investigation by or before
any Governmental Authority.
“Affiliate” shall
mean, with respect to any specified Person, any other Person that directly, or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, such specified Person.
“Additional Shares”
shall mean all shares of Common Stock issued or sold by the Company on or after
the date hereof.
“Agreement” shall have
the meaning set forth in the preamble hereto.
“beneficial owner”,
with respect to any Shares, shall have the meaning ascribed to such term under
Rule 13d-3(a) of the Exchange Act.
“Blackout Period”
shall have the meaning set forth in Section 17.3 of this
Agreement.
“Board” shall mean the
board of directors of the Company.
“Business Day” shall
mean any day other than a Saturday, Sunday or a day on which commercial banks in
either the City of New York or the State of Michigan are authorized or required
by Law to close.
“Capital Stock” shall
mean (a) with respect to any Person that is a corporation, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock; and (b) with respect to any other Person, any and all
partnership, membership or other equity interests of such Person.
“Common Stock” shall
mean the common stock, par value $0.01 per share, of the Company.
“Company” shall have
the meaning set forth in the preamble hereto.
“control” (including
the terms “controlled
by”, “controlling” and
“under common control
with”) shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, as trustee or executor, by
contract or otherwise, including the ownership, directly or indirectly, of
securities having the power to elect a majority of the board of directors or
similar body governing the affairs of such Person.
“Credit Facility”
shall mean the Credit Agreement, dated as of the date hereof, by and among the
Company, American Axle & Manufacturing, Inc. and GM.
“Current Market Price”
per share of Common Stock, on any date specified herein, shall mean the average
daily Market Price during the period of the most recent ten days, ending on such
date, on which the national securities exchanges were open for trading, except
that if the Common Stock is not 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.
“Demand Registration”
shall have the meaning set forth in Section 17.1(a) of
this Agreement.
“Demand Registration
Statement” shall have the meaning set forth in Section 17.1(a) of
this Agreement.
“Disposal Period”
shall have the meaning set forth in Section 16.2(h) of
this Agreement.
“Equity Interests”
shall mean Capital Stock or warrants, options or other rights to acquire Capital
Stock.
“Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended, and any similar or
successor federal statute, and the rules and regulations of the SEC thereunder,
all as the same shall be in effect at any applicable time.
3
“Exercise Date” shall
have the meaning set forth in Section 7.8 of this
Agreement.
“Exercise Period”
shall mean the period commencing on September 16, 2009 and continuing until 5:00
p.m. New York City time on September 16, 2014.
“Exercise Price” shall
have the meaning set forth in Section 3(a) of this
Agreement, as adjusted pursuant to Section
8.
“Expiration Date”
shall mean 5:00 p.m. New York City time on September 16, 2014.
“FINRA” shall mean the
Financial Industry Regulatory Authority, Inc.
“GM” shall have the
meaning set forth in the preamble hereto.
“Governmental
Authority” shall mean any United States or non-United States, federal,
national, state, provincial, municipal, local, or other government,
governmental, regulatory or administrative authority, agency or commission or
any non-governmental self-regulatory agency, instrumentality or commission, any
stock exchange, or any court, tribunal or judicial or arbitral
body.
“Holder” shall mean
initially GM, and thereafter any Person to whom Registrable Securities are
permitted to be transferred in accordance with the terms of this Agreement and
that is the registered holder(s) of any Warrants or Warrant Shares as registered
on the Warrant Register maintained by the Company in accordance with this
Agreement.
“Indemnified Party”
shall have the meaning set forth in Section 17.7(d) of
this Agreement.
“Indemnifying Party ”
shall have the meaning set forth in Section 17.7(d) of
this Agreement.
“Initial Number” shall
have the meaning set forth in Section 8.2(a)(i) of
this Agreement.
“Law” shall mean any
federal, national, supranational, state, provincial or local statute, law,
ordinance, regulation, rule, code, order or requirement (including common
law).
“Loss” shall have the
meaning set forth in Section 17.7(a) of
this Agreement.
“Majority Holders”
shall mean Holders of Warrants evidencing a majority in number of the total
number of Warrant Shares at the time purchasable upon the exercise of all then
outstanding Warrants.
“Market Price” shall
mean, on any date specified herein, the amount per share equal to (a) if the
Common Stock is then listed on the NYSE, the last sale price of shares of Common
Stock on such date or, if no such sale takes place on such date, the average of
the closing bid and asked prices thereof on such date, in each case as
officially reported on the NYSE, (b) if the Common Stock is then listed or
admitted to trading on any national securities exchange (other than the NYSE),
the last sale price of shares of Common Stock on such date or, if no such sale
takes place on such date, the average of the closing bid and asked prices
thereof on such date, in each case as officially reported on the principal
national securities exchange on which the Common Stock is then listed or
admitted to trading (other than the NYSE), (c) if the Common Stock is not then
listed or admitted to trading on any national securities exchange but is
designated as a national market system security by FINRA, the last trading price
of shares of Common Stock on such date, (d) 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 shares of Common Stock on such date as shown by
FINRA automated quotation system, or (e) if Common Stock is not then listed or
admitted to trading on any national exchange or quoted in the over-the-counter
market, the fair value thereof determined by a nationally recognized investment
bank selected by the Board and reasonably acceptable to the largest Holder of
Warrants at such time.
“Maximum Number of
Securities” shall have the meaning set forth in Section 17.1(b) of
this Agreement.
“NYSE” shall mean the
New York Stock Exchange.
“Officers” shall mean,
with respect to any Person, the Chief Executive Officer, the Chief Financial
Officer, the President, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary, any Assistant Secretary, or any Vice-President of such
Person.
“Other Securities”
shall mean any shares of Common Stock (other than Warrant Shares) and other
Equity Interests of the Company or any other Person (corporate or otherwise)
which a Holder at any time shall be entitled to receive, or shall have received,
upon exercise of the Warrants held by such Holder or pursuant to Section 9 hereof, in
lieu of or in addition to Warrant Shares, or which at any time shall be issuable
or shall have been issued in exchange for or in replacement of Warrant Shares or
Other Securities received in an earlier exchange, exercise or replacement of
Warrant Shares.
“Participating Demand
Holders” shall have the meaning set forth in Section 17.1(a) of
this Agreement.
“Participating Piggy-Back
Holders” shall have the meaning set forth in Section 17.2(b) of
this Agreement.
“Person” shall include
an individual, a corporation, an association, a partnership, a limited liability
company, a trust or estate, a government, foreign or domestic, and any agency or
political subdivision thereof, or any other entity.
4
“Piggy-Back
Registration” shall have the meaning set forth in Section 17.2(a) of
this Agreement.
“Piggy-Back Registration
Statement” shall have the meaning set forth in Section 17.2(a) of
this Agreement.
“Pro Rata Repurchase”
means any purchase of shares of Common Stock by the Company or any Affiliate
thereof pursuant to (a) any tender offer or exchange offer subject to Section
13(e) or 14(e) of the Exchange Act or Regulation 14E promulgated thereunder or
(b) any other offer available to substantially all holders of Common Stock, in
the case of both (a) or (b), whether for cash, shares of Capital Stock of the
Company, other securities of the Company, evidences of indebtedness of the
Company or any other Person or any other property (including, without
limitation, shares of Capital Stock, other securities or evidences of
indebtedness of a subsidiary), or any combination thereof, effected while a
Warrant is outstanding. The “Effective Date” of a
Pro Rata Repurchase shall mean the date of acceptance of shares for purchase or
exchange by the Company under any tender or exchange offer which is a Pro Rata
Repurchase or the date of purchase with respect to any Pro Rata Repurchase that
is not a tender or exchange offer.
“Qualified Purchaser”
shall mean any institutional “Accredited Investor” as defined in Rule 501(a)(1),
(2), (3) or (7) under the Securities Act.
“Registrable
Securities” shall mean (a) the Warrants, (b) the shares of Common Stock
held by a Holder upon exercise of the Warrants and (c) any securities issuable
or issued or distributed in respect of any of the Warrants identified in clause
(a) or the Common Stock identified in clause (b) by way of stock dividend or
stock split or in connection with a combination of shares, recapitalization,
reorganization, merger, consolidation or otherwise. For purposes of
this Agreement, (i) Registrable Securities shall cease to be Registrable
Securities when a Registration Statement covering such Registrable Securities
has been declared effective under the Securities Act by the SEC and such
Registrable Securities have been disposed of pursuant to such effective
Registration Statement and/or they otherwise cease to be outstanding and (ii)
the Registrable Securities of a Holder shall not be deemed to be Registrable
Securities at any time when the entire amount of such Registrable Securities
may, in the written opinion of counsel satisfactory to the Company (in its
reasonable judgment), be distributed to the public pursuant to Rule 144 (or any
successor provision then in effect) under the Securities Act without limitation
thereunder on volume or manner of sale or any such Registrable Securities have
been sold in a sale made pursuant to Rule 144 of the Securities
Act.
“Registration
Statement” shall mean a Demand Registration Statement, a Piggy-Back
Registration Statement and/or a Shelf Registration Statement, as the case may
be.
“Regulatory Approvals”
with respect to a Holder, means, to the extent applicable and required to permit
such Holder to exercise a Warrant for Warrant Shares without such Holder being
in violation of applicable Law, the receipt of any necessary approvals and
authorizations of any Governmental Authority and any notifications to, or
expiration or termination of, any applicable waiting period under, the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended, and the rules
and regulations thereunder.
“SEC” shall mean the
Securities and Exchange Commission.
“Securities Act” shall
mean the Securities Act of 1933, as amended, and any similar or successor
federal statute, and the rules and regulations of the SEC thereunder, all as the
same shall be in effect at any applicable time.
“Shelf Registration
Statement” shall have the meaning set forth in Section 17.1(c) of
this Agreement.
“Special Registration”
means the registration of (a) equity securities and/or options or other rights
in respect thereof solely registered on Form S-4 or Form S-8 (or successor form)
or (b) shares of equity securities and/or options or other rights in respect
thereof to be offered to directors, members of management, employees,
consultants, customers, lenders or vendors of the Company or its subsidiaries or
in connection with dividend reinvestment plans.
“Trading Day” shall
mean a day during which trading in securities generally occurs on the NYSE or,
if the Common Stock is not listed on the NYSE, on the principal other national
or regional securities exchange on which the Common Stock is then listed or, if
the Common Stock is not listed on a national or regional securities exchange, on
the National Association of Securities Dealers Automated Quotation System or, if
the Common Stock is not quoted on the National Association of Securities Dealers
Automated Quotation System, on any Business Day.
“Transfer” shall have
the meaning set forth in Section 6.1(a) of
this Agreement.
“Transfer Agent” shall
have the meaning set forth in Section 13.2 of this
Agreement.
“Warrants” shall mean
the warrants issued pursuant to this Agreement and represented by Warrant
Certificates, and all warrants issued upon transfer, division or combination of,
or in substitution thereof.
“Warrant Certificates”
shall have the meaning set forth in Section 2 of this
Agreement.
“Warrant Register”
shall have the meaning set forth in Section 5 of this
Agreement.
“Warrant Shares” shall
mean the shares of Common Stock issuable upon exercise of the
Warrants.
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SECTION
2. Warrant
Certificates
The certificates evidencing the Warrants to be delivered pursuant to this
Agreement shall be in registered form only and shall be substantially in the
form set forth in Exhibit A
attached hereto (“Warrant
Certificates”) and may have such letters, numbers, or other marks of
identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as the Officers of the Company executing the
same may approve (with execution thereof to be conclusive evidence of such
approval) and as are not inconsistent with the provisions of this Agreement, or
as may be required to comply with any applicable Law or with any rule or
regulation of any exchange, inter-dealer quotation system or regulated quotation
service on which the Warrants or the Common Stock may be listed or quoted, as
the case may be.
SECTION
3. Issuance of
Warrants
(a) Subject
to adjustment in accordance with Section 8, each
Warrant shall entitle the holder of such Warrant, upon proper exercise during
the Exercise Period, to purchase from the Company one (1) share of Common Stock
at a price of $2.76 per share (the “Exercise
Price”).
(b) Each
Warrant Certificate shall be dated the date of execution by the Company and
shall evidence one or more Warrants. Each Warrant evidenced thereby
entitles the Holder, upon proper exercise to receive from the Company the stated
number of Warrant Shares at the Exercise Price, as adjusted as provided
herein.
SECTION
4. Execution of Warrant
Certificates
Warrant
Certificates shall be signed on behalf of the Company by any Officer thereof
under its corporate seal. The seal of the Company may be in the form
of a facsimile thereof and may be impressed, affixed, imprinted or otherwise
reproduced on the Warrant Certificates. The Warrant Certificates may
be executed in any number of original, facsimile or electronic counterparts and
each of such counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and the same
instruments; provided, however, if the
Warrant Certificate is executed in counterparts, the corporate seal may be
imprinted on only one such counterpart. Each such signature upon any
Warrant Certificate may be of the present or any future Officer of the Company,
notwithstanding the fact that at the time any Warrant Certificate shall be
delivered or disposed of by the Company such Officer shall have ceased to hold
such office, so long as, and the Company hereby represents that, under the
Company’s certificate of incorporation and bylaws, any Warrants or Warrant
Shares so issued would be validly issued. Any Warrant Certificate may
be signed on behalf of the Company by any Person who, at the actual date of the
execution of such Warrant Certificate, shall be a proper Officer of the Company
to sign such Warrant Certificate, although at the date of the execution of this
Agreement any such Person was not such Officer, so long as, and the Company
hereby represents that, under the Company’s certificate of incorporation and
bylaws, any Warrants or Warrant Shares so issued would be validly
issued.
SECTION
5. Registration
The
Company shall number and register the Warrant Certificates in a register (the
“Warrant
Register”) as they are issued by the Company. The Warrant
Register will show the names and addresses of the Holders, the numbers of
Warrants and Warrant Shares evidenced on the face of each Warrant Certificate
and the date of each Warrant Certificate. The Company may deem and
treat the Holders as the absolute owner(s) of the Warrant Certificates
(notwithstanding any notation of ownership or other writing thereon made by
anyone), for all purposes, and the Company shall not be affected by any notice
to the contrary.
SECTION
6. Transfers and
Exchanges
6.1 Limitation on
Transfers.
(a) A Holder
may not transfer, assign or encumber all or any part of a Warrant
Certificate (a “Transfer”).
(b) Notwithstanding
the foregoing, a Holder may Transfer all or any portion of a Warrant Certificate
to (i) any of its Affiliates, (ii) any Qualified Purchaser, (iii) pursuant to a
registration statement under the Securities Act; provided, however, that such
transfer shall be in compliance with the Securities Act or any state (or other
jurisdiction) securities or “blue sky” laws applicable to the Company or the
Warrants or (iv) pursuant to the Holder’s lending arrangements with the Holder’s
secured lenders (to the extent the Warrants are pledged as collateral to such
lenders).
(c) Any
purported Transfer other than in accordance with the terms of this Agreement
shall be null and void, and the Company shall refuse to recognize any such
Transfer for any purpose and shall not reflect in its records any change in
record ownership pursuant to any such Transfer.
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6.2 Registration of
Transfers. The Company shall from time to time register the
transfer of any outstanding Warrant Certificates in the Warrant Register, upon
surrender thereof accompanied by a written instrument or instruments of transfer
in form reasonably satisfactory to the Company, including with respect to the
matters referred to in Section 6.1(b), any
legal opinion reasonably requested by the Company, duly executed by the Holders
thereof or by the duly appointed legal representative thereof or by a duly
authorized attorney. Upon any such registration of transfer, a new
Warrant Certificate shall be issued to the transferee(s) and the surrendered
Warrant Certificate shall be cancelled and disposed of by the Company in
accordance with applicable Law.
6.3 Exchange of Warrant
Certificates. Warrant Certificates may be exchanged at the
option of the Holder(s), when surrendered to the Company during normal business
hours for another Warrant Certificate or other Warrant Certificates of like
tenor and representing in the aggregate a like number of
Warrants. Warrant Certificates surrendered for exchange shall be
cancelled by the Company. Such cancelled Warrant Certificates shall
then be disposed of by the Company in accordance with applicable
Law.
SECTION
7. Exercise of
Warrants
7.1 Exercise of
Warrants. A Warrant may be exercised upon surrender to the
Company of the Warrant Certificate evidencing the Warrant to be exercised with
the form of election to purchase on the reverse thereof duly completed and
signed, and upon payment to the Company of the Exercise Price, as adjusted from
time to time as provided herein, for each Warrant Share then
purchased. Payment of the aggregate Exercise Price for all Warrant
Shares being purchased in respect of a Warrant shall be made (a) by wire
transfer of immediately available funds in United States Dollars or (b) by
certified or official bank check for United States Dollars made payable to the
order of the Company. Each Warrant not exercised prior to the
Expiration Date shall become void and all rights thereunder and all rights in
respect thereof under this Agreement shall cease as of such
time. Notwithstanding anything in this Agreement to the contrary,
each Holder hereby acknowledges and agrees that its exercise of a Warrant for
Warrant Shares is subject to the condition that such Holder will have first
received any applicable Regulatory Approvals; provided, however, that in the
event a Holder has delivered a notice of exercise to the Company prior to the
Expiration Date and any Regulatory Approvals with respect to such exercise are
pending as of the Expiration Date, the Expiration Date with respect to such
Warrants shall automatically be extended for a period of 30 days following final
approval or disapproval of any such Regulatory Approval.
7.2 Issuance of Certificates
Representing Shares. Upon such surrender of Warrant
Certificates and payment of the aggregate Exercise Price, the Company shall
issue and cause to be delivered promptly to or upon the written order of the
Holder and in such name or names, as the Holder may designate, a certificate or
certificates for the number of full Warrant Shares issuable upon the exercise of
such Warrants together with cash in lieu of fractional shares as provided in
Section
7.7. Such certificate or certificates shall be deemed to have
been issued and any Person so designated to be named therein shall be deemed to
have become a Holder of such Warrant Shares as of the date of the surrender of
such Warrants Certificates and payment of the aggregate Exercise
Price.
7.3 Issuance of New Warrant
Certificates. Each Warrant shall be exercisable at the
election of the Holder thereof, either in full or from time to time in part (in
whole Warrant Shares), and, in the event that a Warrant is exercised (and a
Warrant Certificate is surrendered) in respect of fewer than all of the Warrant
Shares issuable on such exercise at any time prior to the Expiration Date, a new
Warrant Certificate evidencing the remaining Warrant or Warrants will be issued
and delivered by the Company.
7.4 Cancellation of Warrant
Certificates. All Warrant Certificates surrendered upon
exercise of Warrants shall be cancelled and disposed of by the Company in
accordance with applicable Law.
7.5 Warrant
Agreement. The Company shall keep copies of this Agreement and
any notices given or received hereunder available for inspection by the Holders
of the Warrants during normal business hours at its office.
7.6 Alternative Cashless
Exercise. Notwithstanding any provision herein to the
contrary, in lieu of exercising a Warrant as set forth above, a Holder may
exercise a Warrant by electing to receive that number of shares of Common Stock
as determined below by surrendering to the Company such Warrant, with the
applicable election to purchase such Common Stock duly completed and signed by
the Holder, in which event the Company shall issue to the Holder the number of
shares of Common Stock computed using the following formula:
CS = WCS x (MP- PP)
MP
where:
“CS” equals the number
of shares of Common Stock to be issued to the Holder;
“WCS” equals the
number of Warrant Shares purchasable under the Warrant or, if only a portion of the
Warrant is being exercised, the portion of the Warrant being
exercised;
“MP” equals the
Current Market Price; and
“PP” equals the
Exercise Price.
7
Following
the surrender of any Warrant pursuant to this Section 7.6, the
Company shall promptly record the name of the Holder in the Warrant Register for
that number of shares, as calculated above in such name or names as may be
designated by such Holder.
7.7 Fractional
Shares. The Company shall not be required to issue fractional
Warrant Shares on the exercise of any Warrant. If more than one
Warrant shall be presented for exercise in full at the same time by the same
Holder, the number of full Warrant Shares which shall be issuable upon the
exercise thereof shall be computed on the basis of the aggregate number of
Warrant Shares purchasable on exercise of the Warrants so presented. If any
fraction of a Warrant Share would, except for the provisions of this Section 7.7 be
issuable on the exercise of any Warrants (or specified portion thereof), the
Company shall pay an amount in cash equal to the Market Price multiplied by such
fraction.
7.8 When Exercise
Effective. The exercise of any Warrant shall be deemed to have
been effective immediately prior to the close of business on the Business Day on
which such Warrant is surrendered to and the Exercise Price is received by the
Company as provided in this Section 7 (the “Exercise Date”) and
the Person in whose name the shares of Common Stock shall be issuable upon such
exercise shall be deemed to be the Holder of such shares for all purposes on the
Exercise Date.
SECTION
8. Adjustment of Exercise
Price
. If
any of the events set forth in this Section 8 occur
during the Exercise Period, the Exercise Price and the number of Warrant Shares
for which any Warrant is exercisable, as applicable, shall be subject to
adjustment from time to time as set forth in this Section 8; provided, however, that if more
than one subsection of this Section 8 is
applicable to a single event, the subsection shall be applied that produces the
largest adjustment. All of the adjustments referred to in this Section 8 shall only
apply to Warrants which have not yet been exercised and shall not apply to the
grant or issuance of the Warrants or the issuance of any Warrant Shares upon
exercise of any Warrant.
8.1 Adjustments for Change in
Capital Stock. If at any time the Company shall:
(a) pay a
dividend or make a distribution on its Common Stock payable in Additional Shares
or shares of other Capital Stock;
(b) subdivide
its outstanding shares of Common Stock into a greater number of
shares;
(c) combine
its outstanding shares of Common Stock into a smaller number of
shares; or
(d) issue by
reclassification of the Common Stock any shares of its Capital Stock (other than
rights, warrants or options for its Capital Stock);
then (i)
the aggregate number of Warrant Shares for which any Warrant is exercisable
immediately prior to such action shall be adjusted so that the Holder shall be
entitled to receive upon exercise of such Warrant the number of shares or other
units of Capital Stock of the Company which such Holder would have owned or
would have been entitled to receive immediately following such action if such
Holder had exercised such Warrant immediately prior to such action and (ii) the
Exercise Price payable upon the exercise of such Warrant shall be adjusted by
multiplying such Exercise Price immediately prior to such adjustment by a
fraction, the numerator of which shall be the number of Warrant Shares issuable
upon the exercise of such Warrant immediately prior to such adjustment and the
denominator of which shall be the number of Warrant Shares issuable immediately
thereafter.
8.2 Adjustment for Rights
Issue.
(a) If the
Company distributes any rights, warrants, options or other securities
exercisable or convertible into or exchangeable (collectively, an “exercise”) for shares
of Common Stock (collectively, “rights”) to all
holders of its Common Stock entitling them to purchase shares of Common Stock at
a price per share (or having a exercise price per share) less than the Market
Price of the Common Stock as of the last Trading Day preceding the date of the
agreement on pricing such rights, then, in such event:
(i) the
number of Warrant Shares for which any Warrant is exercisable immediately prior
to the date of the agreement on pricing of such rights (the “Initial Number”)
shall be increased to the number obtained by multiplying the Initial Number by a
fraction (A) the numerator of which shall be the sum of (1) the number
of shares of Common Stock outstanding on such date and (2) the number of
Additional Shares for which rights may be exercised and (B) the denominator
of which shall be the sum of (1) the number of shares of Common Stock
outstanding on such date and (2) the number of shares of Common Stock which the
aggregate consideration receivable by the Company for the total number of shares
of Common Stock into which rights may be exercised would purchase at the Market
Price on the last Trading Day preceding the date of the agreement on pricing
such rights; and
(ii) the
Exercise Price payable upon exercise of a Warrant shall be adjusted by
multiplying such Exercise Price in effect immediately prior to the date of the
agreement on pricing of such rights by a fraction, the numerator of which shall
be the number of Warrant Shares prior to such date and the denominator of which
shall be the number of Warrant Shares immediately after the adjustment described
in Section
8.2(a)(i).
(b) For
purposes of the foregoing, the aggregate consideration receivable by the Company
in connection with the issuance of such rights shall be deemed to be equal to
the sum of the net offering price (including the fair market value, as
determined by a nationally recognized investment bank selected by the Board and
reasonably acceptable to the largest Holder of Warrants at the time of such
adjustment, of any non-cash consideration and after deduction of any related
expenses payable to third parties) of all such rights plus the minimum aggregate
amount, if any, payable upon exercise of any such rights into shares of Common
Stock. Any adjustment made pursuant to this Section 8.2 shall
become effective immediately upon the date of such issuance.
8.3 Adjustment for Other
Non-Cash Distributions.
(a) If the
Company distributes to all holders of its Common Stock any of its non-cash
assets or debt securities or any rights, warrants or options to purchase
securities of the Company (including securities but excluding distributions of
Capital Stock referred to in Section 8.1,
distributions of rights, warrants or options referred to in Section 8.2 and in
the case of any spin-off as described in Section 8.3(c)), the
Exercise Price shall be adjusted in accordance with the formula:
E′ =
E - F
where:
E' = the
adjusted Exercise Price;
E = the
current Exercise Price; and
F = the
fair market value (on the record date for the distribution to which this Section 8.3(a)
applies) of the assets, securities, rights, warrants or options to be
distributed in respect of each share of Common Stock in the distribution to
which this Section
8.3(a) is being applied.
8
(b) A
nationally recognized investment bank selected by the Board and reasonably
acceptable to the largest Holder of Warrants at the time of such adjustment
shall determine fair market values for the purposes of this Section
8.3. The adjustment shall become effective immediately after
the record date for the determination of stockholders entitled to receive the
distribution to which this Section 8.3
applies.
(c) In
respect of a dividend or other distribution of shares of Capital Stock of any
class or series, or similar equity interests, of or relating to a subsidiary of
the Company or other business unit, referred to herein as a “spin-off,” for
purposes of the adjustment in Section 8.3(a) above,
“F” shall be equal to the average of the closing price of the portion of those
shares of Capital Stock or similar equity interests so distributed applicable to
one share of the Common Stock for the ten (10) consecutive Trading Days
beginning on the effective day of the spin-off. The adjustment to the
Exercise Price in the event of a spin-off will occur on the tenth Trading Day
from, and including, the effective date of the spin-off.
8.4 Adjustment for Cash
Distributions. In case the Company shall pay an annual cash
dividend in excess of $0.08 per share of Common Stock, excluding any dividend or
distribution in connection with the liquidation, dissolution or winding up of
the Company, whether voluntary or involuntary, then, in such case, the Exercise
Price shall be decreased by the amount of the cash dividend in excess of $0.08
per share payable to the holder of one share of Common Stock, such adjustment to
be effective immediately prior to the opening of business on the day following
such record date. If any such dividend is not so paid, the Exercise
Price shall again be adjusted to be the Exercise Price that would then be in
effect if such dividend had not been declared.
8.5 Certain Repurchases of
Common Stock.
(a) In case
the Company effects a Pro Rata Repurchase in which the cash and value of any
other consideration included in the payment per share of Common Stock exceeds
the Market Price on the Trading Day next succeeding the last date on which
tenders or exchanges may be made pursuant to such Pro Rata Repurchase, then the
Exercise Price shall be reduced to the price determined by multiplying the
Exercise Price in effect immediately prior to the Effective Date of such Pro
Rata Repurchase by a fraction of which (i) the numerator shall be (A) the
product of (1) the number of shares of Common Stock outstanding immediately
before such Pro Rata Repurchase and (2) the Market Price of a share of Common
Stock on the Trading Day immediately preceding the first public announcement by
the Company or any of its Affiliates of the intent to effect such Pro Rata
Repurchase, minus (B) the aggregate purchase price of the Pro Rata Repurchase,
and of which (ii) the denominator shall be the product of (A) the number of
shares of Common Stock outstanding immediately prior to such Pro Rata Repurchase
minus the number of shares of Common Stock so repurchased and (B) the Market
Price per share of Common Stock on the Trading Day immediately preceding the
first public announcement by the Company or any of its Affiliates of the intent
to effect such Pro Rata Repurchase.
(b) In such
event, the number of Warrant Shares for which any Warrant is exercisable shall
be increased to the number obtained by dividing (i) the product of (A) the
number of Warrant Shares before such adjustment, and (B) the Exercise Price in
effect immediately prior to the Pro Rata Repurchase giving rise to this
adjustment by (ii) the new Exercise Price determined in accordance with the
immediately preceding sentence.
(c) For the
avoidance of doubt, no increase to the Exercise Price or decrease in the number
of Warrant Shares shall be made pursuant to this Section
8.5.
8.6 Other Provisions Applicable
to Adjustments Under this Section 8. The following provisions
shall be applicable to the making of adjustments of the Exercise Price
hereinbefore provided for in this Section 8,
irrespective of the accounting treatment of any consideration described
below:
(a) When Adjustments to be
Made. The adjustments required by this Section 8 shall be
made whenever and as often as any specified event requiring an adjustment shall
occur. 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.
(b) When Adjustments May Be
Deferred. No adjustment in the Exercise Price needs to be made
if the amount of such adjustment would be less than $0.01. Any
adjustments that are not made shall be carried forward and taken into account in
any subsequent adjustment and all adjustments that are made and carried forward
shall be taken in the aggregate in order to determine if the $0.01 threshold is
met. In computing adjustments under this Section 8, fractional
interests in shares of Common Stock shall be taken into account to the nearest
one-hundredth of a share.
(c) When Adjustment Not
Required. If the Company shall take a record of the holders of
Common Stock for the purpose of entitling them to receive a dividend or
distribution or subscription or purchase rights and shall, thereafter and before
the distribution thereof to the holders of Common Stock, legally abandon its
plan to pay or deliver such dividend, distribution, subscription or purchase
rights, then no adjustment shall be required by reason of the taking of such
record and any such adjustment previously made in respect thereof shall be
rescinded and annulled, and no adjustment to the Exercise Price under this Section 8 shall be
made in respect of the Warrants held by such Holder.
9
SECTION
9. Consolidation and
Merger.
9.1 Consolidation and
Merger. In case a consolidation, merger or other transaction
that has substantially the same effect of the Company shall be effected with
another Person after the date hereof and the Company shall not be the surviving
entity, or the Company shall be the surviving entity but its Common Stock shall
be changed into securities or other property of another Person, then, as a
condition of such consolidation, merger or other transaction that has
substantially the same effect, lawful and adequate provision shall be made
whereby each Holder shall thereafter have the right to purchase and receive,
upon the exercise of its Warrants, on the basis and the terms and conditions
specified herein (and in lieu of each Warrant Share immediately theretofore
purchasable and receivable upon the exercise of the Warrants), such securities,
cash or other property receivable upon such consolidation, merger or other
transaction that has substantially the same effect as such Holder would have
been entitled to receive if its Warrants had been exercised immediately prior to
such event. In any such case, appropriate and equitable provision
also shall be made with respect to the rights and interests of each Holder to
the end that the provisions hereof (including Section 8 hereof)
shall thereafter be applicable, as nearly as may be, in relation to any
securities, cash or other property thereafter deliverable upon the exercise of
any Warrants. The Company shall not effect any such consolidation,
merger or other transaction that has substantially the same effect unless prior
to or simultaneously with the consummation thereof the successor Person (if
other than the Company) resulting from such consolidation, merger or other
transaction that has substantially the same effect shall assume, by written
instrument, the obligation to deliver to such Holder such securities, cash or
other property as, in accordance with the foregoing provisions, such Holder may
be entitled to upon the exercise of its Warrants. The above
provisions of this Section 9.1 shall
similarly apply to successive consolidations, mergers or other transactions that
have substantially the same effect.
9.2 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 Common Stock (or Other
Securities) of the Company (or any issuer of Other Securities or any other
Person referred to in Section 9.1 hereof)
or to subscription, purchase or other acquisition pursuant to any rights,
options, warrants to subscribe for, purchase or otherwise acquire either
Additional Shares or securities directly or indirectly convertible into or
exchangeable for Additional Shares, 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 Section 8, the
purchase rights granted by the Warrants, then, and in each such case, the
computations, adjustments and readjustments provided for in Section 8 with
respect to the Exercise Price and Warrant Shares shall be made as nearly as
possible in the manner so provided and applied to determine the Exercise Price
and amount of Other Securities from time to time receivable upon the exercise of
the Warrants, so as to protect the Holders against the effect of such dilution;
or, in the event such Other Securities are issued or sold prior to the exercise
of any Warrants and are not subsequently obtainable upon exercise of such
Warrants, such adjustments shall instead be made to determine the adjusted
amount of shares of Common Stock represented by a Warrant Share, so as to
protect the Holders against the effect of such dilution in accordance with Section 8
hereof.
SECTION
10. Notice of
Adjustments
Whenever
the Exercise Price shall be adjusted pursuant to Section 8, the
Company shall forthwith provide a certificate signed by an Officer, setting
forth, in reasonable detail, the event requiring the adjustment and the method
by which such adjustment was calculated and describing the number and kind of
any other securities issuable upon exercise of the Warrants and any change in
the Exercise Price after giving effect to such adjustment or
change. The Company shall promptly, and in any case within ten
Business Days after the making of such adjustment, cause a signed copy of such
certificate to be delivered to each Holder in accordance with Section 18.1. The
Company shall keep at its principal executive offices referred to in Section 18.1 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.
SECTION
11. Payment of
Taxes
No
service charge shall be made to any Holder for any exercise, exchange or
registration of transfer of Warrant Certificates, and the Company will pay all
documentary stamp taxes attributable to the initial issuance of Warrant Shares
upon the exercise of Warrants; provided, however, that the
Company shall not be required to pay any tax or taxes which may be payable in
respect of any transfer involved in the issue of any Warrant Certificates or any
certificates for Warrant Shares in a name other than that of the registered
holder of a Warrant Certificate surrendered upon the exercise of a
Warrant.
SECTION
12. Mutilated or Missing Warrant
Certificates
If any of
the Warrant Certificates shall be mutilated, lost, stolen or destroyed, the
Company shall issue, in exchange and substitution for and upon cancellation of
the mutilated Warrant Certificate, or in lieu of and substitution for the
Warrant Certificate lost, stolen or destroyed, a new Warrant Certificate of like
date and tenor and representing an equivalent number of Warrants, but only upon
receipt of evidence satisfactory to the Company of such loss, theft or
destruction of such Warrant Certificate and such indemnity and security therefor
as is customary and reasonably satisfactory to the Company, if
requested. Applicants for such substitute Warrant Certificate shall
also comply with such other reasonable regulations and pay such other reasonable
charges as the Company may prescribe.
SECTION
13. Reservation of Shares
13.1 Reservation of
Shares. The Company will, commencing on the first day of the
Exercise Period and at all times subsequent thereto until the sooner of the
expiration of the Exercise Period or the exercise of all of the Warrants by the
Holders thereof, reserve and keep available, out of the aggregate of its
authorized but unissued Common Stock or its authorized and issued Common Stock
held in treasury, for the purpose of enabling it to satisfy any obligation to
issue Warrant Shares upon exercise of Warrants, the maximum number of shares of
Common Stock which may then be deliverable upon the exercise of all outstanding
Warrants.
10
13.2 Transfer
Agent. The Company or the transfer agent for the Common Stock
and every subsequent transfer agent for any Common Stock issuable upon the
exercise of any of the rights of purchase represented by the Warrants as
aforesaid (the “Transfer Agent”) will
be irrevocably authorized and directed at all times commencing on the first day
of the Exercise Period, and continuing until the sooner of the expiration of the
Exercise Period or the exercise of all of the Warrants by the Holders thereof,
to reserve such number of authorized shares of Common Stock as shall be required
for such purpose. The Company will keep a copy of this Agreement on
file with the Transfer Agent for any Common Stock issuable upon the exercise of
the rights of purchase represented by the Warrants. The Company will
supply such Transfer Agent with duly executed certificates for such purposes and
will provide or otherwise make available any cash which may be payable as
provided in Section 7.7.
SECTION
14. Notices of Certain Corporate
Actions
14.1 .
(a) In
case:
(i) the
Company proposes to take any action that would require an adjustment to the
Exercise Price or the number of Warrant Shares issuable upon exercise of the
Warrants pursuant to Section
8;
(ii) of any
consolidation or merger to which the Company is a party and for which approval
of any stockholders of the Company is required, or of the sale, lease, exchange,
conveyance or transfer of the properties and assets of the Company substantially
as an entirety, or of any reclassification or change of the Common Stock
issuable upon exercise of the Warrants (other than a change in par value, or
from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination), or a tender offer or exchange offer for
the Common Stock; or
(iii) of the
voluntary or involuntary dissolution, liquidation or winding up of the Company;
then, in
each case, the Company shall cause to be delivered to each Holder at his address
appearing on the Warrant Register, at least 20 Business Days prior to the
applicable record date hereinafter specified, or promptly in the case of events
for which there is no record date, by first-class mail, postage prepaid, a
written notice stating (A)(1) the date as of which the Holders to be
entitled to receive any such rights, options, warrants or distribution are to be
determined or (2) the initial expiration date set forth in any tender offer
or exchange offer for Common Stock or (3) the date on which any such
consolidation, merger, conveyance, transfer, dissolution, liquidation or winding
up is expected to become effective or consummated, and the date as of which it
is expected that Holders shall be entitled to exchange such Common Stock for
securities or other property, if any, deliverable upon such reclassification,
consolidation, merger, conveyance, transfer, dissolution, liquidation or winding
up and (B) the facts with respect thereto as shall reasonably be necessary to
indicate the effect on the Exercise Price and the number, kind or class of
shares or other securities or property which shall be deliverable upon exercise
of any Warrants. The failure to give the notice required by this
Section 14(a) or
any defect therein shall not affect the legality or validity of any
distribution, right, option, warrant, consolidation, merger, conveyance,
transfer, lease, dissolution, liquidation or winding up, or the vote upon any
action.
(b) Nothing
contained in this Agreement shall be construed as conferring upon the Holder the
right to vote or consent to or receive notice as a stockholder in respect of the
meetings of stockholders or the election of directors of the Company or any
other matter, or any rights whatsoever as stockholders of the
Company.
SECTION
15. Expenses
All expenses incident to the Company’s performance of or compliance with this
Agreement will be borne by the Company, including: (a) all expenses of
printing Warrant Certificates; (b) messenger and delivery services and
telephone calls; (c) all fees and disbursements of counsel for the Company;
(d) all fees and disbursements of independent certified public accountants
or knowledgeable experts selected by the Company; and (e) the Company’s
internal expenses (including all salaries and expenses of their officers and
employees performing legal or accounting duties).
SECTION
16. Representations, Warranties
and Covenants.
16.1 Representations, Warranties
and Covenants of the Company. The Company represents, warrants
and covenants the following to each Holder:
(a) The
Company has all requisite power and authority to execute, deliver and perform
its obligations under this Agreement.
(b) This
Agreement has been duly authorized, executed and delivered by the Company and,
assuming due authorization, execution and delivery by the Holder, constitutes a
valid and binding agreement of the Company.
(c) The
execution and delivery by the Company of this Agreement do not, and the
consummation and performance of the transactions contemplated hereby, will not
(i) contravene the Company’s certificate of incorporation or bylaws,
(ii) violate any Law or (iii) conflict with or result in the breach
of, or constitute a default or require any payment to be made under, any
contract, loan agreement, indenture, mortgage, deed of trust, lease or other
instrument binding on or affecting the Company.
(d) During
the Exercise Period, the Warrant Shares have been duly and validly authorized
for issuance and, when issued and delivered in accordance with the provisions of
this Agreement and the Warrants, will be duly and validly issued and will
conform to the existing Common Stock.
(e) No
consent, approval, authorization, finding of suitability, registration,
exemption or permit or (other than informational filings or notices) any filing
with or notice to any Governmental Authority or any third party that is a party
to any of the documents, to which the Company or any of its subsidiaries is a
party, is required in connection with, or as a condition to, the execution,
delivery or performance by the parties of this Agreement and the consummation of
the transactions contemplated hereby.
(f) The
Company agrees that if the exercise of any Warrant requires any Regulatory
Approvals that it will use its reasonable efforts to cooperate with the Holder
to obtain such Regulatory Approvals.
16.2 Representations, Warranties
and Covenants of the Holder. The Holder hereby represents,
warrants and covenants the following to the Company:
(a) The
Holder has all requisite power and authority to execute, deliver and perform its
obligations under this Agreement.
(b) This
Agreement has been duly authorized, executed and delivered by the Holder and,
assuming due authorization, execution and delivery by the Company, constitutes a
valid and binding agreement of the Holder.
(c) The
execution and delivery by the Holder of this Agreement do not, and the
consummation and performance of the transactions contemplated hereby, will not
(i) contravene the Holder’s certificate of incorporation or bylaws,
(ii) violate any Law or (iii) conflict with or result in the breach
of, or constitute a default or require any payment to be made under, any
contract, loan agreement, indenture, mortgage, deed of trust, lease or other
instrument binding on or affecting the Holder.
11
(d) The
Warrants being acquired by the Holder pursuant to this Agreement are being
acquired for its own account and with no intention of distributing or reselling
such Warrants or the Warrant Shares issuable upon exercise thereof or any part
thereof in any transaction that would be in violation of the securities Laws of
the United States, any state of the United States or any foreign jurisdiction,
without prejudice, however, to the rights of such Holder at all times to sell or
otherwise dispose of all or any part of such Warrants or Warrant Shares in a
transaction that does not violate the Securities Act under an effective
registration statement under the Securities Act, or under an exemption from such
registration available under the Securities Act. If such Holder
should in the future decide to dispose of any of such Warrants or Warrant
Shares, such Holder understands and agrees that it may do so only in compliance
with the Securities Act and applicable state and foreign securities Laws, as
then applicable and in effect.
(e) Such
Holder understands that (i) the Warrants and the Warrant Shares will not be
registered at the time of their issuance under the Securities Act for the reason
that the sale provided for in this Agreement and upon exercise of Warrants is
exempt pursuant to Section 4(2) of the Securities Act, (ii) the reliance of the
Company on such exemption is predicated in part on such Holder’s representations
set forth herein, and (iii) such Warrants and Warrant Shares must be held
indefinitely unless a subsequent disposition thereof is registered under the
Securities Act or is exempt from such registration.
(f) Such
Holder has such knowledge and experience in financial and business matters that
it is capable of evaluating the merits and risks of the transactions
contemplated by this Agreement, has the ability to bear the economic risks of
the investment and is an “accredited investor” as defined in Rule 501 of
Regulation D, promulgated under the Securities Act.
(g) While GM
(or any of its Affiliates) holds any Warrants or Warrant Shares, it shall not,
and shall direct its Affiliates not to, without the prior written consent of the
Company, directly or indirectly:
(i) acquire,
offer to acquire, or agree to acquire, directly or indirectly, by purchase or
otherwise, any securities or direct or indirect rights to acquire any securities
of the Company or any subsidiary thereof, or of any successor to the Company, or
any assets of the Company or any division thereof or of any such successor if,
following such acquisition, GM and its Affiliates would be the beneficial owners
of more than 20% of the then outstanding Common Stock;
(ii) seek or
propose to influence or control the management or policies of the Company, make
or in any way participate, directly or indirectly, in any “solicitation” of
“proxies” (as such terms are used in the rules of the SEC) to vote any voting
securities of the Company or any subsidiary thereof, or seek to advise or
influence any Person or entity with respect to the voting of any voting
securities of the Company or any subsidiary thereof; the Company hereby
acknowledges and agrees that the commercial relationship between the Company and
GM, and GM’s exercise of its rights under its various commercial agreements with
the Company as they may be in effect from time to time, are not the seeking or
proposing of influence or control over the management or policies of the
Company;
(iii) make any
public announcement with respect to, or submit a proposal for or offer of (with
or without conditions), any merger, recapitalization, reorganization, business
combination or other extraordinary transaction involving the Company or any
subsidiary thereof or any of their securities or assets;
(iv) enter
into any negotiations, arrangements or understandings with any third party with
respect to any of the foregoing, or otherwise form, join or in any way engage in
discussions relating to the formation of, or participate in, a “group” within
the meaning of Section 13(d)(3) of the Exchange Act in connection with any of
the foregoing; or
(v) publicly
disclose that it has requested that the Company amend or waive any provision of
this Section
16.2(g) or make any such request in a manner that would require public
disclosure thereof by the Company.
(h) If GM (or
any of its Affiliates) exercises a Warrant at any time prior to the 30th
calendar day prior to the Expiration Date, it shall not hold any Warrant Shares
issued pursuant to such Warrant for more than 30 calendar days following such
exercise (the “Disposal Period”);
provided, however, that if GM
(or any of its Affiliates) is prohibited from selling all or any portion of its
Warrant Shares pursuant to Section 17.1(b),
Section
17.2(c), Section 17.3 or Section 17.8 during
the Disposal Period, then the Disposal Period with respect to such Warrant
Shares shall be extended by the length of time GM (or any of its Affiliates) is
prohibited from selling Warrant Shares. GM and its Affiliates shall
have no rights (including the right to vote in the election of directors or
receive dividends) with respect to any Warrant Shares held in violation of this
Section
16.2(h).
(i) If GM (or
any of its Affiliates) holds any Warrant Shares either during the Disposal
Period or following the Expiration Date, it shall vote such Warrant Shares
proportionally with all other stockholders of the Company.
12
SECTION
17. Registration
Rights.
17.1 Demand Registration
Rights.
(a) After
receipt of a written request from a Holder requesting that the Company effect a
registration (a “Demand Registration”)
under the Securities Act covering all or part of the Registrable Securities
which specifies the intended method or methods of disposition thereof, the
Company shall, (i) as expeditiously as is possible, but in any event no later
than 30 days (excluding any days which occur during a permitted Blackout Period)
after receipt of a written request for a Demand Registration, file with the SEC
a registration statement (a “Demand Registration
Statement”) relating to all shares of Registrable Securities which the
Company has been so requested to register by such Holders (“Participating Demand
Holders”) for sale, to the extent required to permit the disposition (in
accordance with the intended method or methods thereof, as aforesaid) of the
Registrable Securities so registered and (ii) use its reasonable best efforts to
cause such Demand Registration Statement to be declared effective within 60 days
after the date of filing of the Demand Registration Statement; provided, however, that in the
case the Company is not permitted to use Form S-3 to register such Registrable
Securities of the Participating Demand Holders, the Company shall be entitled to
register the resale of the Registrable Securities on another form, including a
registration statement on Form S-1, and the Company shall have 90 days to cause
such Demand Registration Statement to be declared effective after the date of
filing such Demand Registration Statement; provided, further, however, that the
Company shall not be required to file a Demand Registration Statement unless the
aggregate number of the Registrable Securities requested to be registered (i)
constitute at least 25% of the Registrable Securities or (ii) include all
Registrable Securities which remain outstanding at such time.
(b) If the
majority of the Participating Demand Holders in a Demand Registration relating
to a public offering so request that the offering be underwritten with a
managing underwriter selected in the manner set forth in Section 17.9 below
and such managing underwriter of such Demand Registration advises the Company in
writing that, in its opinion, the number of securities to be included in such
offering is greater than the total number of securities which can be sold
therein without having a material adverse effect on the distribution of such
securities or otherwise having a material adverse effect on the marketability
thereof (the “Maximum
Number of Securities”), then the Company shall include in such Demand
Registration the Registrable Securities that the Participating Demand Holders
have requested to be registered thereunder only to the extent the number of such
Registrable Securities does not exceed the Maximum Number of
Securities. If such amount exceeds the Maximum Number of Securities,
the number of Registrable Securities included in such Demand Registration shall
be allocated among all the Participating Demand Holders on a pro rata basis
(based on the number of Registrable Securities held by each Participating Demand
Holder). If the amount of such Registrable Securities does not
exceed the Maximum Number of Securities, the Company may include in such Demand
Registration any other securities of the Company and other securities held by
other security holders of the Company, as the Company may in its discretion
determine or be obligated to allow, in an amount which together with the
Registrable Securities included in such Demand Registration shall not exceed the
Maximum Number of Securities.
(c) To the
extent the Company is permitted to do so under the Securities Act, any Demand
Registration Statement may be required by Participating Demand Holders
constituting a majority of the Registrable Securities to be in an appropriate
form under the Securities Act (a “Shelf Registration
Statement”) relating to any or all of the Registrable Securities in
accordance with the methods and distribution set forth in the Shelf Registration
Statement and Rule 415 under the Securities Act.
(d) Holders
shall be entitled to an aggregate of two registrations of Registrable Securities
pursuant to this Section 17.1; provided, that a
registration requested pursuant to this Section 17.1 shall
not be deemed to have been effected for purposes of this Section 17.1(d)
unless (i) it has been declared effective by the SEC, (ii) it has remained
effective for the period set forth in Section 17.4(a), and
(iii) the offering of Registrable Securities pursuant to such registration is
not subject to any stop order, injunction or other order or requirement of the
SEC (other than any such stop order, injunction, or other requirement of the SEC
prompted by act or omission of Holders of Registrable Securities).
(e) Notwithstanding
anything to the contrary contained herein, the Company shall not be required to
prepare and file (i) more than one Demand Registration Statement in any
twelve-month period, or (ii) any Demand Registration Statement within 180 days
following the date of effectiveness of any other Registration
Statement.
17.2 Piggy-Back Registration
Rights.
(a) If the
Company, proposes to file on its behalf and/or on behalf of any holder of its
securities a registration statement under the Securities Act on any form
relating solely to the Common Stock of the Company (other than a registration
statement on Form S-4 or S-8 or any successor form for securities to be offered
in a transaction of the type referred to in Rule 145 under the Securities Act or
to employees of the Company pursuant to any employee benefit plan, respectively)
for the registration of any securities of the Company (a “Piggy-Back
Registration”), it will give written notice to all Holders at least 15
days before the initial filing with the SEC of such piggy-back registration
statement (a “Piggy-Back Registration
Statement”), which notice shall set forth the intended method of
disposition of the securities proposed to be registered by the
Company. The notice shall offer to include in such filing the
aggregate number of Registrable Securities as such Holders may
request.
(b) Each
Holder desiring to have Registrable Securities registered under this Section 17.2 (“Participating Piggy-Back
Holders”) shall advise the Company in writing within ten days after the
date of receipt of such notice from the Company, setting forth the amount of
such Registrable Securities for which registration is requested. The
Company shall thereupon include in such filing the number or amount of
Registrable Securities for which registration is so requested, subject to Section 17.2(c)
below, and shall use its reasonable efforts to effect registration of such
Registrable Securities under the Securities Act.
(c) If the
Piggy-Back Registration relates to an underwritten public offering and the
managing underwriter of such proposed public offering advises in writing that,
in its opinion, the amount of Registrable Securities requested to be included in
the Piggy-Back Registration in addition to the securities being registered by
the Company would be greater than the Maximum Number of Securities (having the
same meaning as defined in Section 17.1(b), but
replacing the term “Demand Registration” with “Piggy-Back Registration”),
then:
13
(i) in the
event Company initiated the Piggy-Back Registration, the Company shall include
in such Piggy-Back Registration first, the securities
the Company proposes to register and second, the
securities of all other selling security holders, including the Participating
Piggy-Back Holders, to be included in such Piggy-Back Registration in an amount
which together with the securities the Company proposes to register, shall not
exceed the Maximum Number of Securities, such amount to be allocated among such
selling security holders, including the Participating Piggy-Back Holders, on a
pro rata basis (based on the number of securities of the Company held by each
such selling security holder); and
(ii) in the
event any holder of securities of the Company, including any Holder, initiated
the Piggy-Back Registration, the Company shall include in such Piggy-Back
Registration first, the securities
such initiating security holder proposes to register, second, the securities of any other
selling security holders, including the Participating Piggy-Back Holders, in an
amount which together with the securities the initiating security holder
proposes to register, shall not exceed the Maximum Number of Securities, such
amount to be allocated among such other selling security holders, including the
Participating Piggy-Back Holders, on a pro rata basis (based on the number of
securities of the Company held by each such selling security holder) and third, any securities
the Company proposes to register, in an amount which together with the
securities the initiating security holder and the other selling security
holders, including the Participating Piggy-Back Holders, propose to register,
shall not exceed the Maximum Number of Securities.
(d) The
Company will not hereafter enter into any agreement, which is inconsistent with
the rights of priority provided in Section
17.2(c).
17.3 Blackout
Periods. The Company shall have the right to delay the filing
or effectiveness of a Registration Statement required pursuant to Section 17.1 or Section 17.2 hereof
during no more than two periods aggregating to not more than 90 days in any
twelve-month period (a “Blackout Period”) in
the event that (i) the Company would, in accordance with the advice of its
counsel, be required to disclose in the prospectus information not otherwise
then required by Law to be publicly disclosed and (ii) in the judgment of the
Board, there is a reasonable likelihood that such disclosure, or any other
action to be taken in connection with the prospectus, would materially and
adversely affect or interfere with any financing, acquisition, merger,
disposition of assets (not in the ordinary course of business), corporate
reorganization or other similar transaction involving the Company; provided, however, that the
Company shall delay during such Blackout Period the filing or effectiveness of
any Registration Statement required pursuant to the registration rights of the
holders of any securities of the Company; provided, further, that the
Company will not exercise its right to delay unless at the time of such delay
the Company concurrently exercises similar black-out rights against holders of
securities with similar rights as the Holders. The Company shall
promptly give the Holders written notice of such determination containing a
general statement of the reasons for such postponement and an approximation of
the anticipated duration of the delay. The Company shall have no
obligation to include in any such notice any reference to or description of the
facts based upon which the Company is delivering such notice.
17.4 Registration
Procedures. The Company shall use its reasonable best efforts,
for so long as there are Registrable Securities outstanding, to take such
actions as are under its control to not become an ineligible issuer (as defined
in Rule 405 under the Securities Act) and to remain a well-known seasoned issuer
(as defined in Rule 405 under the Securities Act) if it becomes eligible for
such status in the future. Additionally, If the Company is required
by the provisions of Section 17.1 or Section 17.2 to
effect the registration of any of its securities under the Securities Act, the
Company will, as expeditiously as possible:
(a) prepare
and file with the SEC a Registration Statement with respect to such securities
and use its reasonable efforts to cause such Registration Statement promptly to
become and remain effective for a period of time required for the disposition of
such securities by the holders thereof but not to exceed 45 days (except with
respect to a Shelf Registration Statement which shall remain effective for a
period not to exceed 180 days); provided, however, that before
filing such Registration Statement or any amendments or supplements thereto (for
purposes of this subsection, amendments and supplements shall not be deemed to
include any filing that the Company is required to make pursuant to the Exchange
Act), the Company shall furnish the representatives of the Holders referred to
in Section 17.4(l)
copies of all documents proposed to be filed, which documents will be subject to
the review of such counsel. The Company shall not be deemed to have
used its reasonable efforts to keep a Registration Statement effective during
the applicable period if it voluntarily takes any action that would result in
the Holders of such Registrable Securities not being able to sell such
Registrable Securities during that period, unless such action is required under
applicable Law;
(b) prepare
and file with the SEC such amendments and supplements to such Registration
Statement and the prospectus used in connection therewith as may be necessary to
keep such Registration Statement effective and to comply with the provisions of
the Securities Act with respect to the sale or other disposition of all
securities covered by such Registration Statement until the earlier of such time
as all of such securities have been disposed of in a public offering or the
expiration of 45 days (except with respect to the Shelf Registration Statement,
for which such period shall be 180 days) after such Registration Statement
becomes effective;
(c) furnish
to such selling Holders such number of conformed copies of the applicable
Registration Statement and each such amendment and supplement thereto, and of
any summary prospectus or other prospectus, including any preliminary
prospectus, in conformity with the requirements of the Securities Act in order
to facilitate the public sale or other disposition of such Registrable
Securities;
(d) use its
reasonable best efforts to register or qualify the securities covered by such
Registration Statement under such other securities or blue sky laws of such
jurisdictions within the United States as each Holder of such securities shall
reasonably request, to keep such registration or qualification in effect for so
long as such Registration Statement remains in effect, and to take any other
action which may be reasonably necessary to enable such selling Holder to
consummate the disposition in such jurisdictions of the securities owned by such
Holder; provided, however, that the
Company shall not be required in connection therewith or as a condition thereto
to qualify to do business, subject itself to taxation in or to file a general
consent to service of process in any jurisdiction wherein it would not but for
the requirements of this Section 17.4(d) be
obligated to do so; and provided, further, that the
Company shall not be required to qualify such Registrable Securities in any
jurisdiction in which the securities regulatory authority requires that any
Holder submit any Registrable Securities to the terms, provisions and
restrictions of any escrow, lockup or similar agreement(s) for consent to sell
Registrable Securities in such jurisdiction unless such Holder agrees to do
so;
(e) furnish,
at the request of any Holder requesting registration of Registrable Securities
pursuant to Section 17.1 or
Section 17.2,
if the method of distribution is by means of an underwriting, on the date that
the Registrable Securities are delivered to the underwriters for sale pursuant
to such registration, (i) a signed opinion, dated such date, of the
independent legal counsel representing the Company for the purpose of such
registration, addressed to the underwriters, if any, as to such matters as such
underwriters may reasonably request and as would be customary in such a
transaction; and (ii) letters dated such date and the date the offering is
priced from the independent certified public accountants of the Company,
addressed to the underwriters, if any (A) stating that they are independent
certified public accountants within the meaning of the Securities Act and that,
in the opinion of such accountants, the financial statements and other financial
data of the Company included in the Registration Statement or the prospectus, or
any amendment or supplement thereto, comply as to form in all material respects
with the applicable accounting requirements of the Securities Act and
(B) covering such other financial matters (including information as to the
period ending not more than five Business Days prior to the date of such
letters) with respect to the registration in respect of which such letter is
being given as such underwriters or the Holders holding a majority of the
Registrable Securities included in such registration, as the case may be, may
reasonably request and as would be customary in such a transaction;
14
(f) enter
into customary agreements (including if the method of distribution is by means
of an underwriting, an underwriting agreement in customary form) and take such
other actions as are reasonably required in order to expedite or facilitate the
disposition of such Registrable Securities (including in any underwritten
offering, making members of management and executives of the Company available
to participate in “road shows”, similar sales events and other marketing
activities);
(g) otherwise
use its reasonable efforts to comply with all applicable rules and regulations
of the SEC, and make generally available to the Holders no later than 45 days
after the end of any twelve-month period (or 90 days, if such period is a fiscal
year) earnings statements satisfying the provisions of Section 11(a) of the
Securities Act, (i) commencing at the end of any fiscal quarter in which
Registrable Securities are sold to underwriters in an underwritten public
offering, or (ii) if not sold to underwriters in such an offering, beginning
with the first month of the Company’s first fiscal quarter commencing after the
effective date of the Registration Statement, which statements shall cover said
twelve-month periods;
(h) use its
reasonable efforts to cause all such Registrable Securities to be listed on each
securities exchange or quotation system on which similar securities issued by
the Company are listed or traded;
(i) notify
the Holders at any time when a prospectus relating to Registrable Securities is
required to be delivered under the Securities Act because of the happening of
any event as a result of which the applicable prospectus, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing;
(j) give
notice to the Holders:
(i) when such
Registration Statement or any amendment thereto has been filed with the SEC and
when such Registration Statement or any post-effective amendment thereto has
become effective;
(ii) of any
request by the SEC for amendments or supplements to such Registration Statement
or the prospectus included therein, or for additional information, except for
amendments or supplements or additional information required to be delivered
pursuant to the Exchange Act;
(iii) of the
issuance by the SEC of any stop order suspending the effectiveness of such
Registration Statement or the initiation of any proceedings for that
purpose;
(iv) of the
receipt by the Company or its legal counsel of any notification with respect to
the suspension of the qualification of the Common Stock for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; and
(v) of the
happening of any event that requires the Company to make changes in such
Registration Statement or the prospectus in order to make the statements therein
not misleading (which notice shall be accompanied by an instruction to suspend
the use of the prospectus until the requisite changes have been
made);
(k) use its
reasonable efforts to prevent the issuance or obtain the withdrawal of any order
suspending the effectiveness of such Registration Statement at the earliest
possible time;
(l) upon the
occurrence of any event contemplated by Section 17.4(j)(v),
promptly prepare a post-effective amendment to such Registration Statement, if
necessary, or a supplement to the related prospectus or file any other required
document so that, as thereafter delivered to the Holders, the prospectus will
not contain an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. If the Company notifies
the Holders in accordance with Section 17.4(j)(v) to
suspend the use of the prospectus until the requisite changes to the prospectus
have been made, then each Holder shall suspend use of such prospectus and use
their reasonable efforts to return to the Company all copies of such prospectus
other than permanent file copies then in the Holder’s possession, and the period
of effectiveness of such Registration Statement provided for above shall be
extended by the number of days from and including the date of the giving of such
notice to the date Holders shall have received such amended or supplemented
prospectus pursuant to this Section
17.4(l);
(m) make
reasonably available for inspection by the representatives of the Holders, any
underwriter participating in any disposition pursuant to such Registration
Statement and any attorney, accountant or other agent retained by such
representative or any such underwriter, upon prior notice and during normal
business hours, all relevant financial and other records, pertinent corporate
documents and properties of the Company and cause the Company’s officers,
directors and employees to supply all relevant information reasonably requested
by such representative or any such underwriter, attorney, accountant or agent in
connection with the registration;
(n) use
reasonable efforts to procure the cooperation of the Transfer Agent in settling
any offering or sale of Registrable Securities, including with respect to the
transfer of physical stock certificates into book-entry form in accordance with
any procedures reasonably requested by the Holders or the underwriters;
and
15
(o) if
requested by Holders of a majority of the Registrable Securities being
registered and/or sold in connection therewith, or the managing underwriter(s),
if any, promptly include in a prospectus supplement or amendment such
information as the Holders of a majority of the Registrable Securities being
registered and/or sold in connection therewith or managing underwriter(s), if
any, may reasonably request, in good faith, in order to permit the intended
method of distribution of such securities and make all required filings of such
prospectus supplement or such amendment as soon as practicable after the Company
has received such request.
To the
extent permitted by the SEC rules and regulations, the parties agree that the
Company may satisfy the obligations of filing a registration statement relating
to Registrable Securities under this Section 17 by filing
any prospectus supplement to its existing effective registration
statement.
It shall be a condition precedent to
the obligation of the Company to take any action pursuant to this Agreement in
respect of the securities which are to be registered at the request of any
Holder, that such Holder shall furnish to the Company such information regarding
the securities held by such Holder and the intended method of disposition
thereof as the Company shall reasonably request and as shall be required in
connection with the action taken by the Company.
17.5 Expenses of
Registration. All expenses incurred in connection with each
registration pursuant to Section 17.1 and
Section 17.2 of
this Agreement, excluding underwriters’ discounts and commissions, but including
all registration, filing and qualification fees, word processing, duplicating,
printers’ and accounting fees (including the expenses of any special audits or
“comfort” letters required by or incident to such performance and compliance),
fees of FINRA or listing fees, messenger and delivery expenses, all fees and
expenses of complying with state securities or blue sky laws and fees and
disbursements of counsel for the Company, shall be paid by the Company, except
that:
(a) all such
expenses in connection with any amendment or supplement to a Registration
Statement or prospectus filed more than 45 days (or in the case of a Shelf
Registration Statement, 180 days) after the effective date of such Registration
Statement because any Holder has not effected the disposition of the securities
requested to be registered shall be paid by such Holder;
(b) if a
registration request pursuant to Section 17.1 of this
Agreement is subsequently withdrawn at the request of the Holders of a number of
shares of Registrable Securities such that the remaining Holders requesting
registration would not have been able to request registration under the
provisions of Section
17.1 of this Agreement, such withdrawing Holders shall bear such expenses
unless such withdrawing Holders shall forfeit their right to the Demand
Registration requests otherwise required to be used pursuant to Section 17.1 of this
Agreement;
(c) The
Holders shall bear and pay the (i) underwriting commissions and discounts
applicable to securities offered for their account in connection with any
registrations, filings and qualifications made pursuant to this Agreement and
(ii) any fees and expenses incurred in respect of counsel or other advisors to
the Holders.
17.6 Rule 144 and Rule 144A
Information.
(a) With
a view to making available the benefits of certain rules and regulations of the
SEC which may at any time permit the sale of the Registrable Securities to the
public without registration, at all times after the date of this Agreement, the
Company agrees to:
(i) make and
keep public information available, as those terms are understood and defined in
Rule 144 under the Securities Act;
(ii) use its
best efforts to file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(iii) furnish
to each Holder of Registrable Securities forthwith upon request a written
statement by the Company as to its compliance with the reporting requirements of
such Rule 144 and of the Securities Act and the Exchange Act, a copy of the
most recent annual or quarterly report of the Company, and such other reports
and documents so filed by the Company as such Holder may reasonably request in
availing itself of any rule or regulation of the SEC allowing such Holder to
sell any Registrable Securities without registration.
(b) At all
times during which the Company is neither subject to the reporting requirements
of Section 13 or 15(d) of the Exchange Act, nor exempt from reporting pursuant
to Rule 12g3-2(b) under the Exchange Act, it will provide, upon the written
request of any holder of Registrable Securities in written form (as promptly as
practicable and in any event within 15 Business Days), to any prospective buyer
of the securities designated by the Holder, all information required by Rule
144A(d)(4)(i) of the General Regulations promulgated by the SEC under the
Securities Act.
17.7 Indemnification and
Contribution.
(a) The
Company shall indemnify and hold harmless each Holder, such Holder’s directors
and officers, each Person who participates in the offering of such Registrable
Securities, including underwriters (as defined in the Securities Act), and each
Person, if any, who controls such Holder or participating Person within the
meaning of the Securities Act, against any losses, claims, damages, liabilities,
costs and expenses, interest, awards, judgments and penalties (including
reasonable attorneys’ and consultants’ fees and expenses) (hereinafter, a “Loss”) to which they
may become subject under the Securities Act or otherwise, insofar as such Losses
(or proceedings in respect thereof) arise out of or are based on any untrue or
alleged untrue statement of any material fact contained in such Registration
Statement on the effective date thereof (including any prospectus filed under
Rule 424 under the Securities Act or any amendments or supplements thereto
and any information contained in a form of prospectus or prospectus supplement
that is deemed to be a part of a Registration Statement pursuant to Rule 430B
under the Securities Act) or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and shall reimburse
each such Holder, such Holder’s directors and officers, such participating
Person or controlling Person for any legal and other expenses reasonably
incurred by them (but not in excess of expenses incurred in respect of one firm
of legal counsel for all of them unless there is an actual conflict of interest
between any Indemnified Parties, which Indemnified Parties may be represented by
separate counsel) in connection with investigating or defending any such Loss;
provided, however, that the
indemnity agreement contained in this Section 17.7(a)
shall not apply to amounts paid in settlement of any such Loss if such
settlement is effected without the consent of the Company; provided, further, that the
Company shall not be liable to any Holder, such Holder’s directors and officers,
participating Person or controlling Person in any such case for any such Loss to
the extent that it arises out of, or is based upon, an untrue statement or
alleged untrue statement or omission or alleged omission made in connection with
such Registration Statement, preliminary prospectus, final prospectus or
amendments or supplements thereto, in reliance upon and in conformity with
written information furnished expressly for use in connection with such
registration by any such Holder or such Holder’s directors and officers,
participating Person or controlling Person.
16
(b) Each
Holder requesting or joining in a registration, severally and not jointly, shall
indemnify and hold harmless the Company, each of its directors and officers, and
each Person who participates in the offering of such Registrable Securities,
including agents and underwriters (as defined in the Securities Act), and each
other Person, if any, who controls the Company within the meaning of the
Securities Act against any Losses to they may become subject, under the
Securities Act or otherwise, insofar as such Losses (or proceedings in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in such Registration Statement on the
effective date thereof (including any prospectus filed under Rule 424 under
the Securities Act or any amendments or supplements thereto and any information
contained in a form of prospectus or prospectus supplement that is deemed to be
a part of a Registration Statement pursuant to Rule 430B under the Securities
Act) or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in such Registration Statement, preliminary or final
prospectus, or amendments or supplements thereto, in reasonable reliance upon
and in conformity with written information furnished by or on behalf of such
Holder expressly for use in connection with such registration; and each such
Holder shall reimburse any legal and other expenses reasonably incurred by the
Company or any such director, officer, controlling Person, agent or underwriter
(but not in excess of expenses incurred in respect of one counsel for all of
them unless there is an actual conflict of interest between any Indemnified
Parties, which Indemnified Parties may be represented by separate counsel) in
connection with investigating or defending any such Loss; provided, however, that the
indemnity agreement contained in this Section 17.7(b)
shall not apply to amounts paid in settlement of any such Loss if such
settlement is effected without the consent of such Holder (which consent shall
not be unreasonably withheld), and provided, further, that the
liability of each Holder hereunder shall be limited to the aggregate proceeds
received by such Holder in connection with any such registration under the
Securities Act.
(c) If the
indemnification provided for in this Section 17.7 from the
Indemnifying Party is unavailable to an Indemnified Party hereunder in respect
of any Losses referred to therein, then the Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such Losses in such proportion
as is appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions which resulted in such Losses,
as well as any other relevant equitable considerations. The relative
fault of such Indemnifying Party and Indemnified Party shall be determined by
reference to, among other things, whether any action in question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact, has been made by, or relates to information
supplied by, such Indemnifying Party or Indemnified Party, and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such action. The amount paid or payable by a party as a
result of the Losses referred to above shall be deemed to include any legal and
other fees or expenses reasonably incurred by such party in connection with any
investigation or proceeding. If the allocation provided in this Section 17.7(c) is
not permitted by applicable Law, the parties shall contribute based upon the
relevant benefits received by the Company from the initial offering of the
securities, on the one hand, and the net proceeds received by the Holders from
the sale of securities, on the other hand.
The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 17.7(c) were
determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph. No
Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
(d) Any
Person entitled to indemnification hereunder (the “Indemnified Party”)
agrees to give prompt written notice to the indemnifying party (the “Indemnifying Party”)
after the receipt by the Indemnified Party of any written notice of the
commencement of any Action or threat thereof made in writing for which the
Indemnified Party intends to claim indemnification or contribution pursuant to
this Agreement; provided, however, that the
failure so to notify the Indemnifying Party shall not relieve the Indemnifying
Party of any liability that it may have to the Indemnified Party hereunder
unless and to the extent such failure is materially prejudicial to the
Indemnifying Party. If notice of commencement of any such Action is
given to the Indemnifying Party as above provided, the Indemnifying Party shall
be entitled to participate in and, to the extent it may wish, to assume the
defense of such Action at its own expense, with counsel chosen by it and
reasonably satisfactory to such Indemnified Party. The Indemnified
Party shall have the right to employ separate counsel in any such Action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be paid by the Indemnified Party unless (i) the Indemnifying Party
agrees to pay the same, (ii) the Indemnifying Party fails to assume the
defense of such Action, or (iii) the named parties to any such Action
(including any impleaded parties) have been advised by such counsel that either
(A) representation of such Indemnified Party and the Indemnifying Party by
the same counsel would be inappropriate under applicable standards of
professional conduct or (B) there are one or more legal defenses available
to it which are substantially different from or additional to those available to
the Indemnifying Party. No Indemnifying Party shall be liable for any
settlement entered into without its written consent, which consent shall not be
unreasonably withheld and no Indemnifying Party shall be liable for the fees and
expenses of more than one counsel.
(e) The
agreements contained in this Section 17.7 shall
survive the transfer of the Registrable Securities by any Holder and sale of all
the Registrable Securities pursuant to any Registration Statement and shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any Holder or such director, officer or participating or controlling
Person.
17.8 Certain Additional
Limitations on Registration Rights. Notwithstanding the other
provisions of this Agreement, the Company shall not be obligated to register the
Registrable Securities of any Holder (a) if such Holder or any underwriter
of such Registrable Securities shall fail to furnish to the Company necessary
information in respect of the distribution of such Registrable Securities, or
(b) if such registration involves an underwritten offering, such
Registrable Securities are not included in such underwritten offering on the
same terms and conditions as shall be applicable to the other securities being
sold through underwriters in the registration or such Holder fails to enter into
an underwriting agreement in customary form with the underwriter or underwriters
selected for such underwritten offering. In addition, each Holder
agrees not to effect any public sale or distribution of any Registrable
Securities or of any securities convertible into or exchangeable or exercisable
for such Registrable Securities, including a sale pursuant to Rule 144
under the Securities Act, and to enter into a customary lock-up agreement with
the managing underwriter for an offering, during the 90-day period beginning on
the effective date of any Demand Registration Statement or Piggy-Back
Registration Statement or other underwritten offering (except as part of such
registration), if and to the extent requested by the managing underwriter for
such offering and if the Company enters into similar agreements.
17.9 Selection of Managing
Underwriters. In the event the Participating Demand Holders
have requested an underwritten offering, the underwriter or underwriters shall
be selected by the Company and shall be approved by the Holders of a majority of
the shares being so registered, which approval shall not be unreasonably
withheld or delayed.
17.10 Clear
Market. If any underwritten offering of Registrable Securities
is effected by Holders pursuant to this Agreement, the Company agrees not to
effect (other than pursuant to such registration or pursuant to a Special
Registration) any public sale or distribution, or to file any Shelf Registration
Statement (other than such registration or a Special Registration) covering
shares of Common Stock or any securities convertible into or exchangeable or
exercisable for shares of Common Stock, during the period not to exceed ten days
prior and 90 days following the effective date of such offering or such longer
period up to 180 days as may be requested by the managing underwriter for such
underwritten offering. The Company also agrees to cause such of its directors
and senior executive officers to execute and deliver customary lock-up
agreements in such form and for such time period up to 90 days as may be
requested by the managing underwriter.
17
SECTION
18. Miscellaneous
18.1 Notices. All
notices, requests, claims, demands and other communications hereunder shall be
in writing and shall be given (and shall be deemed to have been duly given upon
receipt) by delivery in person, by an internationally recognized courier
service, by fax or by registered or certified mail (postage prepaid, return
receipt requested) to the respective parties at the following addresses (or at
such other address for a party as shall be specified by notice given in
accordance with this Section
18.1:
If to any
Holder, at its last known address appearing on the books of the Company
maintained for such purpose.
If to the
Company, at
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General
Counsel
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
with a
copy to:
Shearman
& Sterling LLP
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇
▇. ▇▇▇▇▇, Esq.
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
or at
such other address as may be substituted by notice given as herein
provided.
18.2 Specific
Performance. The parties hereto agree that irreparable damage
would occur in the event any provision of the Agreement was not performed in
accordance with the terms hereof and that the parties hereto shall be entitled
to specific performance of the terms hereof, in addition to any other remedy at
law or in equity.
18.3 Amendment. This
Agreement may not be amended or modified except (i) in an instrument in writing
signed by, or on behalf of, the Company and the Majority Holders or (ii) by a
waiver in accordance with Section
18.4.
18.4 Waiver. Any
party to this Agreement may (i) extend the time for the performance of any
of the obligations or other acts of the other party, (ii) waive any
inaccuracies in the representations and warranties of the other party contained
herein or in any document delivered by the other party pursuant hereto or
(iii) waive compliance with any of the agreements of the other party or
conditions to such party’s obligations contained herein. Any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed by the party to be bound thereby. Any waiver of any term or
condition shall not be construed as a waiver of any subsequent breach or a
subsequent waiver of the same term or condition, or a waiver of any other term
or condition of this Agreement. The failure of either party hereto to
assert any of its rights hereunder shall not constitute a waiver of any of such
rights.
18.5 Successors and
Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of the parties hereto as
hereinafter provided. The registration rights of any Holder with
respect to any Registrable Securities shall be transferred to any Person who is
the transferee of such Registrable Securities as provided under this
Agreement. All of the obligations of the Company hereunder shall
survive any such transfer.
18.6 Headings. The
descriptive headings and subheadings in this Agreement are included for
convenience and identification only and are in no way intended to describe,
interpret, define or limit the scope, extent or intent of this Agreement or any
provision hereof.
18
18.7 Governing Law;
Jurisdiction. This Agreement shall be governed by, and
construed in accordance with, the Laws of the State of Michigan. All
Actions arising out of or relating to this Agreement shall be heard and
determined exclusively in any federal court sitting in ▇▇▇▇▇ County, Michigan;
provided, however, that if such
federal court does not have jurisdiction over such Action, such Action shall be
heard and determined exclusively in any state court sitting in ▇▇▇▇▇ County,
Michigan. Consistent with the preceding sentence, the parties hereto
hereby (a) submit to the exclusive jurisdiction of any federal or state court
sitting in ▇▇▇▇▇ County, Michigan for the purpose of any Action arising out of
or relating to this Agreement brought by any party hereto and
(b) irrevocably waive, and agree not to assert by way of motion, defense,
or otherwise, in any such Action, any claim that it is not subject personally to
the jurisdiction of the above-named courts, that its property is exempt or
immune from attachment or execution, that the Action is brought in an
inconvenient forum, that the venue of the Action is improper, or that this
Agreement or the transactions contemplated by this Agreement may not be enforced
in or by any of the above-named courts.
18.8 Severability. If
any term or other provision of this Agreement is held to be invalid, illegal or
incapable of being enforced by any Law, or public policy, all other terms and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated by
this Agreement is not affected in any manner materially adverse to either party
hereto. Upon a determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the transactions contemplated by this Agreement be consummated as
originally contemplated to the fullest extent possible.
18.9 Entire
Agreement. This Agreement constitutes the entire agreement
among the parties hereto pertaining to the subject matter hereof and supersedes
all prior agreements and understandings pertaining thereto.
18.10 No Third Party
Beneficiaries. This Agreement shall be binding upon and inure
solely to the benefit of the parties hereto and their respective successors and
permitted assigns and nothing herein, express or implied (except as provided in
Section 17.7
relating to indemnified parties), is intended to or shall confer upon any other
Person any legal or equitable right, benefit or remedy of any nature whatsoever,
including any rights of employment for any specified period, under or by reason
of this Agreement.
18.11 Termination. This
Agreement shall terminate on the Expiration Date, after which time this
Agreement and all Warrants shall no longer be of any force or effect; provided, however, that this
Agreement will terminate on such earlier date on which all outstanding Warrants
have been exercised; provided, further, that
provisions of Sections 15, 16 and
17 and this Section 18 shall
survive such termination; provided, further, that the
rights and obligations under Section 17 shall,
except for Section
17.7, terminate upon the earlier of (i) all Registerable Securities
having been exchanged or disposed, (ii) all Registerable Securities being
eligible to be sold pursuant to Rule 144 (or any similar provision then in
force, but not Rule 144A) under the Securities Act without being subject to any
restrictions under such rule, and (iii) all Registerable Securities ceasing to
be outstanding.
18.12 Interpretation and Rules of
Construction. In this Agreement, except to the extent
otherwise provided or that the context otherwise requires:
(a) when a
reference is made in this Agreement to a Section, such reference is to a Section
of this Agreement unless otherwise indicated;
(b) whenever
the words “include,” “includes” or “including” are used in this Agreement, they
are deemed to be followed by the words “without limitation”;
(c) the words
“hereof,” “herein” and “hereunder” and words of similar import, when used in
this Agreement, refer to this Agreement as a whole and not to any particular
provision of this Agreement;
(d) the
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms; and
(e) references
to a Person are also to its successors and permitted assigns.
18.13 Counterparts. This
Agreement may be executed and delivered (including by facsimile transmission) in
two or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original, but
all of which taken together shall constitute one and the same
agreement.
NYDOCS02/877498.12
19
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, as of the day and year first above written.
AMERICAN
AXLE & MANUFACTURING HOLDINGS, INC.
By: /s/___________________________
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Name:
Authorized Signatory
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Title:
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GENERAL
MOTORS COMPANY
By: _/s/___________________________
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Name:
Authorized Signatory
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Title:
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EXHIBIT A
Form
of Warrant Certificate
[Face of
Warrant Certificate]
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THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES
LAWS, AND ACCORDINGLY, SUCH SECURITIES MAY NOT BE OFFERED, TRANSFERRED,
SOLD OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE REGISTRATION
OR QUALIFICATION PROVISIONS OF APPLICABLE FEDERAL AND STATE SECURITIES
LAWS OR APPLICABLE EXEMPTIONS
THEREFROM.
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THE
TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO
THE CONDITIONS SPECIFIED IN THAT CERTAIN WARRANT AGREEMENT DATED AS OF
SEPTEMBER 16, 2009, BY AND BETWEEN AMERICAN AXLE & MANUFACTURING
HOLDINGS, INC., A DELAWARE CORPORATION, AS THE ISSUER, AND GENERAL MOTORS
COMPANY, A DELAWARE CORPORATION, AS HOLDER, AS SUCH WARRANT AGREEMENT MAY
BE MODIFIED AND SUPPLEMENTED AND IN EFFECT FROM TIME TO TIME, AND NO
TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE SHALL BE VALID
OR EFFECTIVE UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED. THE
HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF THIS CERTIFICATE, AGREES TO
BE BOUND BY THE PROVISIONS OF SUCH WARRANT
AGREEMENT.
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No. of
Warrants: Warrant No: __
WARRANT
TO
PURCHASE SHARES OF
AMERICAN
AXLE & MANUFACTURING HOLDINGS, INC.
This
certifies that , or its
registered assigns, is the registered holder (the “Holder”) of [___]
warrants (the “Warrants”) of
American Axle & Manufacturing, Inc., a Delaware corporation (the “Company”), that would
entitle the Holder, upon proper exercise, during Exercise Period (as defined in
below) to receive from the Company [_____] shares (the “Warrant Shares”) of
Company’s common stock, par value $0.01 per share (“Common Stock”), at
the Exercise Price (as defined below). The Exercise Period shall mean
the period commencing on September 16, 2009 and continuing until 5:00 p.m., New
York City Time, on September 16, 2014. The Exercise Price shall mean $2.76 per
Warrant Share an shall be payable (i) by wire transfer of immediately
available funds in United States Dollars or (ii) by certified or official
bank check for United States Dollars made payable to the order of “American Axle
& Manufacturing Holdings, Inc.” The Exercise Price is subject to
adjustment upon the occurrence of certain events set forth in the Warrant
Agreement. No Warrant may be exercised after 5:00 p.m., New York City
Time, on September 16, 2014, and to the extent not exercised by such time such
Warrants shall become void. Reference is made to the further
provisions of this Warrant Certificate set forth on the reverse hereof, which
further provisions shall for all purposes have the same effect as though fully
set forth at this place. This Warrant Certificate shall be governed
and construed in accordance with the internal laws of the State of New
York.
21
IN
WITNESS WHEREOF, the Company has caused this Warrant Certificate No.[__] to be
signed by the undersigned President and the undersigned Secretary of the Company
and has caused its corporation seal to be imprinted hereon.
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Dated:
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AMERICAN
AXLE & MANUFACTURING HOLDINGS, INC.
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[corporation
seal]
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By:
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______________________________
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______________________________
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President
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Secretary
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22
[Reverse
of Warrant Certificate]
AMERICAN
AXLE & MANUFACTURING HOLDINGS, INC. (WARRANT)
By
accepting a Warrant Certificate, each Holder shall be bound by all of the terms
and provisions of the Warrant Agreement (a copy of which is available on request
to the Secretary of the Company) and any amendments thereto as fully and
effectively as if such Holder had signed the same.
The
Warrants evidenced by this Warrant Certificate are part of a duly authorized
issue of Warrants by the Company expiring at 5:00 p.m., New York City Time, on
September 16, 2014, entitling the Holder upon proper exercise to receive Warrant
Shares and are issued or to be issued pursuant to the Warrant Agreement, which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Company and each
Holder of the Warrants.
The
Holder of the Warrants evidenced by this Warrant Certificate may exercise them
by surrendering this Warrant Certificate, with the form of election to purchase
set forth below on this Warrant Certificate properly completed and executed,
together with payment of the aggregate Exercise Price in accordance with the
provisions set forth on the face of this Warrant Certificate. In the
event that upon any exercise of Warrants evidenced hereby the number of Warrants
exercised shall be less than the total number of Warrants evidenced hereby,
there shall be issued to the Holder hereof or his assignee a new Warrant
Certificate evidencing the number of Warrants not exercised.
The
Warrant Agreement provides that upon the occurrence of certain events the
Exercise Price and the number of Warrant Shares issuable upon exercise of this
Warrant, each as set forth on the face hereof, may, subject to certain
conditions, be adjusted. No fractions of a Warrant Share will be
issued upon the exercise of any Warrant, but the Company will pay the cash value
in lieu thereof determined as provided in the Warrant Agreement.
Warrant
Certificates, when surrendered to the Company by the Holder thereof in person or
by legal representative or attorney duly authorized in writing, may be
exchanged, in the manner and subject to the limitations provided in the Warrant
Agreement, but without payment of any service charge, for another Warrant
Certificate or Warrant Certificates of like tenor evidencing in the aggregate a
like number of Warrants.
Upon due
presentation for registration of transfer of this Warrant Certificate to the
Company a new Warrant Certificate or Warrant Certificates of like tenor and
evidencing in the aggregate a like number of Warrants shall be issued to the
transferee(s) in exchange for this Warrant Certificate, subject to the
limitations provided in the Warrant Agreement, without charge except for any tax
or other governmental charge imposed in connection therewith.
The
Company may deem and treat the Holder(s) hereof as the absolute owner(s) of this
Warrant Certificate (notwithstanding any notation of ownership or other writing
hereon made by anyone), for the purpose of any exercise hereof, of any
distribution to the Holder(s) hereof, and for all other purposes, and the
Company shall not be affected by any notice to the contrary.
The
Warrant Agreement permits, with certain exceptions therein provided, the
supplementing or amendment thereof at any time by the Company with the written
consent of the Majority Holders. Any such consent by or on behalf of
a Holder shall be conclusive and binding upon such Holder and upon all future
Holders of this Warrant and any Warrant issued upon the registration of transfer
thereof or in exchange thereof whether or not notation of such consent is made
upon such Warrant or any other Warrant.
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[Form of
Assignment to be Executed if Holder
Desires
to Transfer Warrants Evidenced Hereby]
ASSIGNMENT
(To
Be Executed by the Holder in Order to Assign Warrants)
FOR VALUE
RECEIVED the undersigned hereby sell(s), assign(s) and transfer(s)
unto
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PLEASE
INSERT SOCIAL SECURITY, TAXPAYER IDENTIFICATION
OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
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(PLEASE
PRINT OR TYPE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF
ASSIGNEE)
of the
Warrants represented by this Warrant Certificate, and hereby irrevocably
constitutes and appoints ____________________________________________________
Attorney to transfer this Warrant Certificate on the books of the Company, with
full power of substitution in the premises.
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Dated:_______,
______
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_______________________________________________________
Signature(s)*
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_______________________________________________________
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_______________________________________________________
(Social
Security or Taxpayer Identification Number)
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[Form of
Election to Purchase, To Be Executed Upon Exercise Of Warrant]
NOTICE
OF EXERCISE
(To
Be Executed by the Holder in Order to Exercise Warrants)
p The
undersigned hereby irrevocably elects to exercise the right, represented by this
Warrant Certificate, to receive Common Stock and herewith tenders payment for
such Common Stock to the order of American Axle & Manufacturing, Inc. in the
amount of $[__] per share of Common Stock in accordance with the terms of the
Warrant Agreement, in cash or by certified or official bank check made payable
to the order of the Company.
p The
undersigned hereby irrevocably elects to exercise the right, represented by this
Warrant Certificate, to receive Common Stock and hereby elect to use the
“cashless exercise” option to purchase the shares of Common Stock under Section
7.6 of the Warrant Agreement.
The
undersigned requests that a certificate for such Common Stock be registered in
the name of:
PLEASE
INSERT SOCIAL SECURITY
OR OTHER
IDENTIFYING NUMBER
and be
delivered
to:
(PLEASE PRINT OR TYPE NAME AND
ADDRESS, INCLUDING POSTAL ZIP CODE OF ASSIGNEE)
and, if
such number of Warrants shall not be all the Warrants evidenced by this Warrant
Certificate, that a new Warrant Certificate for the balance of such Warrants be
registered in the name of, and delivered to, the Holder at the address stated
below:
(PLEASE PRINT OR TYPE
ADDRESS)
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Dated:_______,
______
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_______________________________________________________
Signature(s)*
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_______________________________________________________
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_______________________________________________________
(Social
Security or Taxpayer Identification Number)
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25